FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended January 29, 1995 Commission File No. 33-25621
KASH N' KARRY FOOD STORES, INC.
(Exact name of registrant as specified in charter)
Delaware 95-4161591
(State of incorporation) (IRS employer identification number)
6422 Harney Road, Tampa, Florida 33610
(Address of registrant's principal executive offices)
(813) 621-0200
(Registrant's telephone number, including area code)
The registrant has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
and has been subject to such filing requirements for the past 90 days. The
registrant has filed all documents and reports required to be filed by
Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to
the distribution of securities under a plan confirmed by a court.
As of March 10, 1995, there were 3,100,000 shares outstanding of the
registrant's common stock, $0.01 par value.
<PAGE>
KASH N' KARRY FOOD STORES, INC.
BALANCE SHEETS
(Dollar Amounts in Thousands, Except Per Share Amounts)
ASSETS
Reorganized Predecessor
Company Company
------------ -----------
January 29, July 31,
1995 1994
------------ -----------
(Unaudited)
(Note 1)
Current assets:
Cash and cash equivalents $ 10,517 $ 6,852
Accounts receivable 6,701 8,084
Inventories 78,756 76,094
Prepaid expenses and other current assets 3,246 12,805
--------- ---------
Total current assets 99,220 103,835
Property and equipment, at cost, less
accumulated depreciation 143,813 160,491
Favorable lease interests, less accumulated
amortization of $192 and $13,543 29,762 12,312
Deferred financing costs, less accumulated
amortization of $182 and $22,572 4,043 12,630
Reorganization value in excess of amount allocable
to identifiable assets, less accumulated
amortization of $460 at January 29, 1995 102,059 --
Excess of cost over net assets acquired, less
accumulated amortization of $16,288 at
July 31, 1994 -- 96,758
Other assets 2,854 3,867
--------- ---------
Total assets $381,751 $389,893
========= =========
See accompanying notes to condensed financial statements.
<PAGE>
KASH N' KARRY FOOD STORES, INC.
BALANCE SHEETS
(Dollar Amounts in Thousands, Except Per Share Amounts)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Reorganized Predecessor
Company Company
------------ -----------
January 29, July 31,
1995 1994
------------ -----------
(Unaudited)
(Note 1)
Current liabilities:
Current portion of long-term debt $ 12,764 $ 42,740
Accounts payable 39,883 34,908
Accrued payroll and benefits 9,023 5,579
Accrued interest 4,618 15,849
Taxes, other than income 4,052 6,056
Other accrued expenses 21,673 11,450
--------- ---------
Total current liabilities 92,013 116,582
Long-term debt, less current obligations 227,522 317,381
Other long-term liabilities 14,914 12,334
Old Series B Cumulative Preferred Stock of $.01 par
value and a stated value of $100 a share.
Authorized 50,000 shares; 38,750 shares
outstanding at July 31, 1994. -- 3,875
Old Series C Convertible Preferred Stock of
$.01 par value. Authorized 100,000 shares;
77,500 shares outstanding at July 31, 1994. -- 775
Stockholders' equity (deficit):
New Common Stock of $.01 par value.
Authorized 5,500,000 shares; 3,100,000
shares outstanding at January 29, 1995. 31 --
Old Common Stock of $.01 par value.
Authorized 4,000,000 shares; 2,819,589
shares outstanding at July 31, 1994. -- 28
Capital in excess of par value 46,464 77,695
Retained earnings (deficit) 807 (138,740)
Less cost of treasury stock - 2,437 shares
at July 31, 1994 -- (37)
--------- ---------
Total stockholders' equity (deficit) 47,302 (61,054)
--------- ---------
Total liabilities & stockholders' equity $381,751 $389,893
========= =========
See accompanying notes to condensed financial statements.
<PAGE>
KASH N' KARRY FOOD STORES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(In Thousands)
(Unaudited)
Reorganized Predecessor
Company Company
----------- --------------------------
Four Nine Thirteen
Weeks Ended Weeks Ended Weeks Ended
January 29, January 1, January 30,
1995 1995 1994
----------- ----------- -----------
Sales $ 86,354 $186,535 $278,166
Cost of sales 68,940 149,070 221,706
--------- ----------- ----------
Gross profit 17,414 37,465 56,460
Selling, general and
administrative expenses 12,226 28,319 45,300
Depreciation and amortization 1,979 4,161 6,220
--------- --------- ----------
Operating income 3,209 4,985 4,940
Interest expense 2,402 3,159 11,372
--------- --------- ----------
Income (loss) before reorganization
items, income taxes, extra-
ordinary item and change in
accounting principle 807 1,826 (6,432)
Reorganization items -- (219) --
--------- --------- ----------
Income (loss) before income taxes,
extraordinary item and change
in accounting principle 807 1,607 (6,432)
Provision for income taxes -- -- --
--------- --------- ----------
Income (loss) before extra-
ordinary item and change in
accounting principle 807 1,607 (6,432)
Extraordinary item - gain on
debt discharge -- 70,166 --
Cumulative effect of change in
accounting principle -
postretirement medical benefits -- (2,000) --
--------- --------- ----------
Net income (loss) $ 807 $69,773 $ (6,432)
========= ========= ==========
Net income per common share (A)(B) $ 0.03
=========
(A) Based on a weighted average number of shares of common stock of 3,100,000
outstanding.
(B) Net income per common share is not meaningful prior to January 1, 1995
due to the significant change in the capital structure in connection with
the Restructuring.
See accompanying notes to condensed financial statements.
<PAGE>
KASH N' KARRY FOOD STORES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(In Thousands)
(Unaudited)
Reorganized Predecessor
Company Company
----------- --------------------------
Four Twenty-Two Twenty-Six
Weeks Ended Weeks Ended Weeks Ended
January 29, January 1, January 30,
1995 1995 1994
----------- ----------- -----------
Sales $ 86,354 $426,681 $534,801
Cost of sales 68,940 340,802 425,915
--------- ----------- ----------
Gross profit 17,414 85,879 108,886
Selling, general and
administrative expenses 12,226 68,819 90,128
Depreciation and amortization 1,979 10,234 12,111
Store closing and other costs -- -- 11,016
--------- --------- ----------
Operating income (loss) 3,209 6,826 (4,369)
Interest expense 2,402 13,719 22,513
--------- --------- ----------
Income (loss) before reorganization
items, income taxes, extra-
ordinary item and change in
accounting principle 807 (6,893) (26,882)
Reorganization items -- (219) --
--------- --------- ----------
Income (loss) before income taxes,
extraordinary item and change
in accounting principle 807 (7,112) (26,882)
Provision for income taxes -- -- --
--------- --------- ----------
Income (loss) before extra-
ordinary item and change
in accounting principle 807 (7,112) (26,882)
Extraordinary item - gain on
debt discharge -- 70,166 --
Cumulative effect of change in
accounting principle -
postretirement medical benefits -- (2,000) --
--------- --------- ----------
Net income (loss) $ 807 $ 61,054 $ (26,882)
========= ========= ==========
Net income per common share (A)(B) $ 0.03
=========
(A) Based on a weighted average number of shares of common stock of 3,100,000
outstanding.
(B) Net income per common share is not meaningful prior to January 1, 1995
due to the significant change in the capital structure in connection with
the Restructuring.
See accompanying notes to condensed financial statements.
<PAGE>
KASH N' KARRY FOOD STORES, INC.
STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Reorganized Predecessor
Company Company
------------ -----------------------
Four Weeks Twenty-Two Twenty-Six
Ended Weeks Ended Weeks Ended
January 29, January 1, January 30,
1995 1995 1994
----------- ----------- -----------
Net cash flow from operating activities:
Net income (loss) $ 807 $61,054 $(26,882)
Adjustments to reconcile net income
(loss) to net cash provided (used)
by operating activities:
Depreciation and amortization,
excluding deferred financing costs 1,979 11,234 12,111
Store closing and other costs -- -- 11,016
Amortization of deferred financing costs 182 1,152 1,549
Reorganization expense -- 4,329 --
Adjustment of accounts to fair value -- (4,110) --
Change in accounting principle -- 2,000 --
Write-off of transaction costs -- 12,989 --
Gain on discharge of debt -- (70,166) --
(Increase) decrease in assets:
Accounts receivable (939) 2,322 660
Inventories 8,358 (5,917) 9,433
Prepaid expenses and other assets (149) (270) (454)
Increase (decrease) in liabilities:
Accounts payable 3,175 1,800 1,652
Accrued expenses and other
liabilities (1,072) (4,012) 2,697
--------- -------- ---------
Net cash provided (used) by
operating activities 12,341 12,405 11,782
---------- -------- ---------
Cash used by investing activities:
Additions to property and equipment (162) (665) (6,194)
Leased/financed asset additions -- -- (4,412)
Proceeds from sale of property and
equipment -- -- 359
---------- -------- ---------
Net cash used by investing
activities (162) (665) (10,247)
---------- -------- ---------
See accompanying notes to condensed financial statements.
<PAGE>
KASH N' KARRY FOOD STORES, INC.
STATEMENTS OF CASH FLOWS
(Continued)
(In Thousands)
(Unaudited)
Reorganized Predecessor
Company Company
------------ -----------------------
Four Weeks Twenty-Two Twenty-Six
Ended Weeks Ended Weeks Ended
January 29, January 1, January 30,
1995 1995 1994
----------- ----------- -----------
Cash provided (used) by financing activities:
Borrowings under revolving loan facility $ 4,200 $ 800 $ 15,700
Additions to obligations under
capital leases and notes payable -- -- 799
Repayments on revolving loan facility (6,700) (18,000) (9,100)
Repayments on term loan facility -- (3,098) (2,925)
Repayments of other long-term liabilities (151) (2,235) (2,642)
Sale of Common Stock -- 10,000 --
Other financing activities -- (5,070) (512)
--------- --------- ----------
Net cash provided (used) by
financing activities (2,651) (17,603) 1,320
--------- --------- ----------
Net increase (decrease) in cash
and cash equivalents 9,528 (5,863) 2,855
Cash and cash equivalents at beginning
of period 989 6,852 2,145
--------- --------- ----------
Cash and cash equivalents at end of period $ 10,517 $ 989 $ 5,000
========= ========= ==========
See accompanying notes to condensed financial statements.
<PAGE>
KASH N' KARRY FOOD STORES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(In Thousands)
(Unaudited)
1. On September 3, 1994, the Company began to solicit acceptances of all
impaired parties of a restructuring of the Company which would be implemented
through the consummation of a "prepackaged" plan of reorganization under
Chapter 11 of the United States Bankruptcy Code (the "Restructuring"). As a
result of this solicitation, the voting requirements prescribed by Section
1126 of the Bankruptcy Code were satisfied, and on November 9, 1994 (the
"Petition Date") the Company filed with the Bankruptcy Court a voluntary
petition for reorganization under Chapter 11 of the Bankruptcy Code. On
December 12, 1994, the Bankruptcy Court confirmed the plan of reorganization,
and the Company emerged from bankruptcy on December 29, 1994 (the "Effective
Date"). During the pendency of the bankruptcy case, the Company, with the
Bankruptcy Court's approval, operated its business in the ordinary course,
and paid all pre-petition and post-petition claims of the Company's general
unsecured creditors, trade creditors and employees in full. In connection
with the Restructuring:
(i) Each $1,000 principal amount of the Company's Old Senior Floating
Rate Notes was exchanged for (a) new Senior Floating Rate Notes due February
1, 2003 (the "New Senior Floating Rate Notes") in an original principal
amount equal to $1,000 plus 100% of the accrued interest under the Old Senior
Floating Rate Notes from and including February 3, 1994, through but not
including the Petition Date, or, at such holder's election, (b) new 11.5%
Senior Fixed Rate Notes due February 1, 2003 (the "New Senior Fixed Rate
Notes") in the same original principal amount, or, at such holder's election,
(c) an amount of New Senior Floating Rate Notes and an amount of New Senior
Fixed Rate Notes equal, in the aggregate, to 100% of such claim;
(ii) Each $1,000 principal amount of the Company's Old Senior Fixed
Rate Notes was exchanged for (a) New Senior Floating Rate Notes in an
original principal amount equal to $1,000 plus 100% of the accrued interest
under the Old Senior Fixed Rate Notes from and including February 2, 1994,
through but not including the Petition Date, or, at such holder's election,
(b) New Senior Fixed Rate Notes in the same original principal amount, or, at
such holder's election, (c) an amount of New Senior Floating Rate Notes and
an amount of New Senior Fixed Rate Notes equal, in the aggregate, to 100% of
such claim;
(iii) the Old Subordinated Debentures were exchanged for newly-issued
common stock of the Company representing 85 percent of the common stock
outstanding on the Effective Date;
(iv) Green Equity Investors, L.P. invested $10,000 cash in exchange for
newly-issued common stock of the Company representing 15 percent of the
common stock outstanding on the Effective Date;
(v) the Company entered into a new credit agreement with The CIT
Group/Business Credit, Inc. as Administrative Agent, and the lenders under
its old bank credit agreement; and
<PAGE>
KASH N' KARRY FOOD STORES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(In Thousands)
(Unaudited)
(vi) all of the existing preferred stock, common stock, and options and
warrants to purchase common stock of the Company was extinguished.
2. The condensed financial statements presented herein have been prepared
in accordance with the instructions to Form 10-Q and do not include all of
the information and note disclosures required by generally accepted
accounting principles. These statements should be read in conjunction with
the fiscal 1994 Form 10-K filed by the Company. The accompanying condensed
financial statements have not been audited by independent accountants in
accordance with generally accepted auditing standards, but in the opinion of
management the condensed financial statements for the period ended January
30, 1994 includes all adjustments, consisting only of normal recurring
adjustments, necessary to summarize fairly the Company's financial position
and results of operations.
The condensed financial statements as of and for the period ended
January 29, 1995 reflect the Company's emergence from Chapter 11 and were
prepared according to the principles of fresh start reporting contained in
American Institute of Certified Public Accountants' Statement of Position
90-7 "Financial Reporting by Entities in Reorganization Under the Bankruptcy
Code" ("SOP 90-7"). Operations during the period from the Effective Date
through January 1, 1995 had no significant impact on the emergence
transactions and as a result have not been separately identified. As a
result of the implementation of fresh start accounting, the Company's
condensed financial statements are not comparable to the Company's condensed
financial statements of prior periods. Results for the periods ended January
29, 1995 or January 1, 1995 are not necessarily indicative of the results for
the full year.
The total reorganization value assigned to the Company's assets was
estimated by calculating projected cash flows before debt service
requirements discounted back to present value using a discount rate of 13.3%
(representing the estimated weighted cost of capital), as well as by
analyzing market cash flow multiples applied to the Company's adjusted
12-month trailing cash flows. After extensive negotiations between
independent investment banking firms representing the Company and an ad hoc
committee of bondholders, the reorganization value was agreed to by the
parties and confirmed by the Bankruptcy Court. The excess of the
reorganization value over the value of the identifiable assets is reported as
"Reorganization Value in Excess of Amounts Allocable to Identifiable Assets"
and is being amortized over twenty years. Under the principles of fresh
start accounting, the Company's total assets were recorded at this assumed
reorganization value, with the reorganization value allocated to identifiable
tangible and intangible assets on the basis of their estimated fair value.
In addition, the Company's accumulated deficit was eliminated.
The effect of the Restructuring and the implementation of fresh start
accounting on the Company's condensed balance sheet as of January 1, 1995 was
as follows:
<PAGE>
KASH N' KARRY FOOD STORES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(In Thousands)
(Unaudited)
Fresh
Start
Pre-Fresh Balance
Start Balance Adjustments Sheet
Sheet January of Fair Value January
1, 1995 Restructuring Adjustment 1, 1995
(A) (B)
------------- ------------- ---------- --------
Cash and cash equivalents $ 9,166 $ (8,177) $ -- $ 989
Accounts receivable 5,762 -- -- 5,762
Inventories 82,011 -- 5,104 87,115
Prepaid expenses and other
current assets 3,088 -- -- 3,088
--------- --------- --------- --------
Total current assets 100,027 (8,177) 5,104 96,954
Property and equipment, net 162,754 -- (17,775) 144,979
Favorable lease interests, net 11,673 -- 18,280 29,953
Deferred financing costs 17,769 (7,456) (6,088) 4,225
Reorganization value in
excess of amount alloc-
able to identifiable
assets -- -- 102,519 102,519
Excess of cost over net
assets acquired 95,560 -- (95,560) --
Other assets 3,790 -- (928) 2,862
--------- --------- --------- --------
Total assets $391,573 $(15,633) $ 5,552 $381,492
========= ========== ========= ========
Current liabilities, excluding
current portion of long-
term debt $ 82,983 $(12,617) $ 6,779 $ 77,145
Long-term debt, including
current obligations 366,231 (119,486) (3,959) 242,786
Other long-term liabilities 6,226 -- 8,840 15,066
Redeemable Preferred Stock 4,650 (4,650) -- --
Stockholders' equity (deficit) (68,517) 121,120 (6,108) 46,495
--------- --------- --------- --------
Total liabilities
and stockholders'
equity $391,573 $(15,633) $ 5,552 $381,492
========= ========== ========= ========
(A) To record the transactions applicable to the Restructuring as outlined
in footnote 1 and eliminate the deficit in accumulated deficit.
(B) To record the adjustments to state assets and liabilities at fair value,
and to record the cumulative effect of adopting SFAS No. 106 as of the
Effective Date.
3. Inventories consist of merchandise held for resale and are stated at the
lower of cost or market; cost is determined using average cost, which
approximates the first-in, first-out (FIFO) method.
<PAGE>
KASH N' KARRY FOOD STORES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(In Thousands)
(Unaudited)
4. The Company had a policy of classifying capital expenditures to be
refinanced within one year as prepaid expenses and other current assets.
These amounts have been classified as property and equipment at January 29,
1995. At July 31, 1994, prepaid expenses and other current assets included
$9,987 of expenditures for construction in progress expected to be financed
within one year.
5. Long-term debt consists of the following:
January 29, July 31,
1995 1994
----------- --------
New term loan and revolving
credit facilities (A) $ 47,000 $ --
Old bank term and revolving
credit facilities (A) -- 59,629
New Senior Floating
Rate Notes (B) 22,953 --
New Senior Fixed Rate
Notes (C) 121,162 --
Old Senior Floating
Rate Notes (B) -- 85,000
Old Senior Fixed
Rate Notes (C) -- 50,000
Subordinated Debentures -- 105,000
Mortgages payable 33,555 34,368
Capital lease obligations 8,410 13,877
Other 7,206 12,247
--------- ---------
Long-term debt including
current portion 240,286 360,121
Less current portion (12,764) (42,740)
--------- ---------
Long-term debt $227,522 $317,381
========= =========
(A) In connection with the Restructuring, the Company entered into a new
term loan and revolving credit agreement (the "New Credit Agreement") on
December 29, 1994. At January 29, 1995, the Company's New Credit Agreement
provides for borrowings of up to $35,000 under a term loan facility (with
quarterly principal repayments of $1,750 and a $14,000 repayment due when the
facility terminates on December 29, 1997) and a $50,000 revolving credit
facility with a $25,000 sublimit for letters of credit. At January 29, 1995,
the Company had $12,000 in borrowings under the working capital line, and had
$17,300 of letters of credit issued against the revolving credit facility.
Amounts outstanding under the term facility bear interest (11.0% at January
29, 1995) equal to the prime rate (as defined) plus 250 basis points.
Amounts outstanding under the revolving credit facility bear interest (9.50%
at January 29, 1995) equal to the prime rate plus 100 basis points.
<PAGE>
KASH N' KARRY FOOD STORES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(In Thousands)
(Unaudited)
(B) The New Senior Floating Rate Notes mature on February 1, 2003, and bear
interest (7.31% at January 29, 1995) payable semiannually, at a rate equal to
six-month LIBOR (as defined in the New Senior Floating Rate Note Indenture)
plus 200 basis points. The New Senior Floating Rate Notes are redeemable in
whole or in part, at the option of the Company, on not less than 30 nor more
than 60 days' prior notice in amounts of $1,000 or an integral multiple
thereof, at 100% of the principal amount and unpaid interest, if any, to the
redemption date. Through August 1, 1995, all interest on the New Senior
Floating Rate Notes may, at the option of the Company, be paid by issuing in
lieu of cash additional New Senior Floating Rate Notes in an aggregate
principal amount equal to the amount of interest due. The Old Senior
Floating Rate Notes bore interest (5.88% at July 31, 1994) payable
semiannually, at a rate equal to six-month LIBOR plus 250 basis points.
(C) The New Senior Fixed Rate Notes mature on February 1, 2003, and bear
interest at 11.5% per annum, payable semiannually. The New Senior Fixed Rate
Notes are redeemable in whole or in part, at the option of the Company, on
not less than 30 nor more than 60 days' prior notice in amounts of $1,000 or
an integral multiple thereof, at 100% of the principal amount and unpaid
interest, if any, to the redemption date. Through February 1, 1996, all
interest on the New Senior Fixed Rate Notes may, at the option of the
Company, be paid by issuing in lieu of cash additional New Senior Fixed Rate
Notes in an aggregate principal amount equal to the amount of interest due.
The Old Senior Fixed Rate Notes bore interest, payable semiannually, at an
annual rate of 12.375%.
6. Reorganization items included in the condensed statements of operations
consist of restructuring costs, adjustments to fair value, professional fees
and other expenses.
7. The Company has a retiree medical plan under which medical coverage is
available to current retirees and those active employees who, on August 1,
1993, had attained age 65 with at least 15 years of service. In accordance
with SOP 90-7, which the Company adopted on the Effective Date of the
Restructuring, the provisions of Financial Accounting Standards Board
Statement 106 "Employers' Accounting for Postretirement Benefits Other Than
Pensions" were also adopted as of that date. The following table sets
forth the projected actuarial present value of unfunded postretirement
benefit obligations for the plan at January 29, 1995:
Accumulated postretirement
benefit obligation:
Retirees $1,915
Fully eligible active
plan participants 85
-------
Accrued postretirement
benefit obligation $2,000
=======
<PAGE>
KASH N' KARRY FOOD STORES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(In Thousands)
(Unaudited)
The weighted average discount rate used in determining the accumulated
postretirement benefit obligation was 8.0%.
8. During the first quarter of fiscal 1994, the Company recorded a
non-recurring charge of $11,016 which reflects expenses associated with a
program of closing twelve underperforming stores and expensing costs
associated with unsuccessful financing activities.
<PAGE>
KASH N' KARRY FOOD STORES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
This analysis should be read in conjunction with the condensed financial
statements and related notes thereto included elsewhere in this document.
The Company follows a 52/53 week fiscal year ending on the Sunday nearest to
July 31. Historical results of operations are given for the four weeks ended
January 29, 1995 and the nine weeks ended January 1, 1995 (combined, the
"1995 Three-Month Period"); the thirteen weeks ended January 30, 1994 (the
"1994 Three-Month Period"); the four weeks ended January 29, 1995 and the
twenty-two weeks ended January 1, 1995, (combined, the "1995 Six-Month
Period"); and the twenty-six weeks ended January 30, 1994 (the "1994
Six-Month Period"). On November 9, 1994 (the "Petition Date"), the Company
filed with the United States Bankruptcy Court a voluntary petition for
reorganization under Chapter 11 of the Bankruptcy Code; on December 12, 1994,
the Bankruptcy Court confirmed the Company's plan of reorganization (the
"Restructuring"); and the Restructuring became effective on December 29, 1994
(the "Effective Date") when the Company emerged from bankruptcy. The
financial statements as of January 29, 1995 and for the period then ended
reflect the Company's emergence from Chapter 11 and were prepared according
to the principles of fresh start reporting contained in American Institute of
Certified Public Accountant's Statement of Position 90-7 "Financial Reporting
by Entities in Reorganization Under the Bankruptcy Code" ("SOP 90-7").
Results of Operations
The discussion below compares the results of operations for the 1995
Three-Month Period with the 1994 Three-Month Period; and the 1995 Six-Month
Period with the 1994 Six-Month Period. Except as specifically acknowledged
below, management believes that the impact of the Restructuring and the
implementation of fresh start reporting did not significantly affect the
results of operations for the 1995 Three-Month Period or the 1995 Six-Month
Period, and that the operating results of the individual four week period and
nine week period ended January 29, 1995 and January 1, 1995, respectively, is
indicative of the results of operations for the thirteen week period ended
January 29, 1995; and that the operating results of the individual four week
period and twenty-two week period ended January 29, 1995 and January 1, 1995,
respectively, is indicative of the results of operations of the twenty-six
week period ended January 29, 1995.
Operating cash flow (earnings before interest, taxes, depreciation and
amortization, store closing and other costs, reorganization items,
extraordinary items and cumulative effect of change in accounting principle)
for the 1995 Three-Month Period was $14.3 million compared to $11.2 million
for the 1994 Three-Month Period; and for the 1995 Six-Month Period was $22.2
million compared to $18.8 million for the 1994 Six-Month Period. The
increases in operating cash flow were attributable to the factors indicated
as follows:
<PAGE>
Sales.
1995 1994 1995 1994
Three-Month Three-Month Six-Month Six-Month
Period Period Period Period
----------- ------------ ---------- ------------
Sales (in millions) $272.9 $278.2 $513.0 $534.8
Change in same store sales (0.71%) (0.22%)
Average sales per
store week (in thousands) $212 $209 $199 $190
The Company closed seventeen stores and opened two new stores over the
last year as part of an overall strategic consolidation of its store network.
The Company was able to mitigate the sales impact of these store closings by
transferring a portion of the sales of the closed stores to operating stores;
therefore, there was not a substantial adverse impact on the Company's
operating cash flow. In addition, sales have been positively impacted as a
result of a recently initiated store remodeling program and aggressive sales
promotional activities.
Gross Profit. The Company had gross profit of $54.9 million, or 20.1%
as a percentage of sales, for the 1995 Three-Month Period; and gross profit
of $56.5 million, or 20.3% as a percentage of sales, for the 1994 Three-Month
Period. The Company had gross profit of $103.3 million, or 20.1% as a
percentage of sales, for the 1995 Six-Month Period; and gross profit of
$108.9 million, or 20.4% of sales, for the 1994 Six-Month Period. The
decreases in gross margin as a percentage of sales were due to the effect of
lower investment in forward buy inventory and receipt of less promotional
funds, offset by improved perishable margins and increased efficiency in
warehouse and distribution operations.
Selling, General and Administrative Expenses. The Company had selling,
general and administrative expenses of $40.5 million, or 14.9% as a
percentage of sales, for the 1995 Three-Month Period, and $45.3 million, or
16.3% as a percentage of sales, for the 1994 Three-Month Period. The Company
had selling, general and administrative expenses of $81.0 million, or 15.8%
as a percentage of sales, for the 1995 Six-Month Period and $90.1 million, or
16.9% as a percentage of sales, for the 1994 Six-Month Period. The
reductions of selling, general and administrative expenses were due to lower
store labor costs, reduced corporate overhead expenses and lower advertising
expenditures associated with a comprehensive operational restructuring of the
Company initiated during the year; and reduced operating costs associated
with stores that were closed during the last twelve months. These
improvements were partially offset by an increase in workers' compensation
insurance reserves.
Depreciation and Amortization. The Company's depreciation and
amortization expenses were $6.1 million for the 1995 Three-Month Period, $6.2
million for the 1994 Three-Month Period, $12.2 million for the 1995 Six-Month
Period, and $12.1 million for the 1994 Six-Month Period.
<PAGE>
KASH N' KARRY FOOD STORES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Store Closing and Other Costs. During the first quarter of fiscal 1994,
the Company recorded a non-recurring charge of $11.0 million. This charge
included $1.9 million of costs associated with unsuccessful financing
activities, $4.2 million of favorable lease interests written off in
connection with the closing of twelve underperforming stores, $4.0 million
representing an adjustment to the expected lease liability on closed stores,
net of sublease income, and $.9 million of other store closing and related
expenses.
Interest Expense. Interest expense for the 1994 Three-Month Period and
the 1994 Six-Month Period was primarily comprised of interest under the Old
Bank Credit Agreement, the Old Senior Floating Rate Notes, the Old Senior
Fixed Rate Notes, the Old Subordinated Debentures, and various mortgages and
capital leases. For the 1995 Three-Month Period and the 1995 Six-Month
Period, interest expense was reported on the Old Senior Floating Rate Notes,
the Old Senior Fixed Rate Notes, and the Old Subordinated Debentures through,
but not including the Petition Date; and interest expense was reported on the
New Senior Floating Rate Notes and the New Senior Fixed Rate Notes from the
Effective Date through January 29, 1995. In accordance with the provisions
of the Restructuring, no interest was due to the holders of the Old Senior
Floating Rate Notes, Old Senior Fixed Rate Notes, or Old Subordinated
Debentures for the period between the Petition Date and the Effective Date,
and therefore no interest expense was recorded for this period. As provided
in the Restructuring, interest accrued from February 2, 1994, in the case of
the Old Senior Fixed Rate Notes, and from February 3, 1994, in the case of
the Old Senior Floating Rate Notes, through the Petition Date, was paid by
issuing additional New Senior Floating Rate Notes and New Senior Fixed Rate
Notes. Interest accrued on the Old Subordinated Debentures from February 1,
1994 through the Petition Date was converted into shareholders' equity.
Reorganization Costs. In accordance with SOP 90-7, income and costs
directly related to the reorganization have been segregated and are
separately disclosed. The major components are restructuring costs,
adjustments to fair value, professional fees and other expenses.
Gain on Debt Discharge. The gain on debt discharge reflects the
conversion of $105.0 million of Old Subordinated Debentures, plus accrued
interest from February 1, 1994 through the Petition Date, into $39.5 million
of shareholders' equity, resulting in a $70.2 million gain. The gain is
presented net of write-offs and costs associated with the repayment of
borrowings on the Effective Date.
<PAGE>
Financial Condition
During the pendency of its bankruptcy case discussed above, the Company
operated its business in the ordinary course, and paid all pre-petition and
post-petition claims of the Company's general unsecured creditors, trade
creditors, and employees in full. The provisions of the Restructuring, which
are discussed in footnote 1 to the accompanying condensed financial
statements, will have an immediate beneficial impact on the Company's
financial condition, primarily as a result of significantly deleveraging the
Company's balance sheet.
Prior to the Petition Date, the Company's Old Bank Credit Agreement
provided for a revolving credit facility with individual sublimits of $30.0
million for working capital loans and $25.0 million for letters of credit,
with a maximum of $50.0 million outstanding under the total facility at any
one time. During the weeks immediately preceding the bankruptcy filing, the
Company, with the approval of its bank lenders, increased its cash position
by fully drawing the remaining availability under its working capital line.
On the Petition Date, the Bankruptcy Court approved the use of cash
collateral and a letter of credit facility of $17.7 million under the Old
Bank Credit Agreement, and additional debtor-in-possession financing provided
by BankAmerica Business Credit, Inc. of $11.2 million, subject to certain
terms and conditions. The Company entered into a new term loan and revolving
credit agreement with The CIT Group/Business Credit Inc. and other lenders to
provide a 3-year $35 million term loan facility and a 3-year $50 million
revolving credit facility which took effect on the Effective Date.
Beginning August 1, 1994, the Company implemented a short-term business
strategy to improve the Company's financial performance. The focus of this
strategy is to conserve capital, reduce administrative and operating
expenses, and direct management attention toward the operation of existing
stores. During the first six months of fiscal 1995 the Company has
significantly improved its liquidity as a result of the payment moratorium on
interest due on the Old Senior Fixed Rate Notes, Old Senior Floating Rate
Notes, and Old Subordinated Debentures; managing working capital; and
reducing operating expenses and capital expenditures. These actions have
allowed the Company to begin investing in forward buy inventory again.
Consistent with its short-term business strategy, the Company does not
anticipate opening or acquiring any new stores during the current fiscal
year, but expects that capital expenditures of approximately $6.0 million
will be used to upgrade its existing store facilities.
The Company has entered into an interest rate swap through August 1995
to reduce its exposure to increases in short-term interest rates on the
majority of its floating rate debt. The Company does not believe that there
would be any material impact on the accompanying financial statements as of
January 29, 1995 by liquidating this contract.
Based upon the Company's ability to generate working capital through its
operations and its new $50.0 million revolving credit facility, the Company
believes that it has the financial resources necessary to pay its capital
obligations and implement its business plan.
<PAGE>
Effects of Inflation
The Company's primary costs, inventory and labor, are affected by a
number of factors that are beyond its control, including availability and
price of merchandise, the competitive climate and general and regional
economic conditions. As is typical of the supermarket industry, the Company
has generally been able to maintain margins by adjusting its retail prices,
but competitive conditions may from time to time render it unable to do so
while maintaining its market share.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
In its Quarterly Report on Form 10-Q for the quarter ended on October
30, 1994, the Company reported on its voluntary petition for reorganization
pursuant to Chapter 11 of the United States Bankruptcy Code, styled In re:
Kash n' Karry Food Stores, Inc., Chapter 11 Case No. 94-1082 (HSB), which was
then pending with the United States District Court for the District of
Delaware (the "Bankruptcy Court"). The Company's First Amended Plan of
Reorganization, as amended by notices of technical modifications thereto
filed with the Bankruptcy Court on November 9, 1994, (the "Petition Date")
and December 12, 1994 (the "Plan"), was consummated and became effective on
December 29, 1994 (the "Effective Date"), and is no longer pending.
Under the terms of the Plan, on the Effective Date, each of the
following transactions occurred:
(1) each $1,000 principal amount of the Company's $85 million Senior
Floating Rate Notes due August 2, 1996 (the "Old Senior Floating Rate Notes")
was exchanged for (a) new Senior Floating Rate Notes due February 1, 2003
(the "New Senior Floating Rate Notes") in an original principal amount equal
to $1,000 plus 100% of the accrued interest under the Old Senior Floating
Rate Notes from and including February 3, 1994, through but not including the
Petition Date, or, at such holder's election, (b) new 11.5% Senior Fixed Rate
Notes due February 1, 2003 (the "New Senior Fixed Rate Notes") in the same
original principal amount, or, at such holder's election, (c) an amount of
New Senior Floating Rate Notes and an amount of New Senior Fixed Rate Notes
equal, in the aggregate, to 100% of such claim;
(2) each $1,000 principal amount of the Company's $50 million 12-3/8%
Senior Fixed Rate Notes due February 1, 1999 (the "Old Senior Fixed Rate
Notes") was exchanged for (a) New Senior Floating Rate Notes in an original
principal amount equal to $1,000 plus 100% of the accrued interest under the
Old Senior Fixed Rate Notes from and including February 2, 1994, through but
not including the Petition Date, or, at such holder's election, (b) New
Senior Fixed Rate Notes in the same original principal amount, or, at such
holder's election, (c) an amount of New Senior Floating Rate Notes and an
amount of New Senior Fixed Rate Notes equal, in the aggregate, to 100% of
such claim;
(3) the Company's $105 million 14% Subordinated Debentures due February
1, 2001 were exchanged for approximately 2,635,000 shares of newly-issued
common stock of the Company, representing in the aggregate 85 percent of the
common stock to be outstanding on the Effective Date;
(4) Green Equity Investors, L.P., invested $10 million cash in exchange
for 465,000 shares of newly-issued common stock of the Company representing
15 percent of the common stock outstanding on the Effective Date;
(5) all of the existing preferred stock, common stock, and options and
warrants to purchase common stock of the Company were extinguished;
<PAGE>
(6) the Company entered into a new credit agreement with The CIT
Group/Business Credit, Inc., and the lenders under its old bank credit
agreement, pursuant to which the Company has credit availability from and
after the Effective Date on the terms set forth therein; and
(7) the rights of trade creditors and other creditors of the Company
were unimpaired.
The Company's former chief executive officer filed a proof of claim in
the bankruptcy proceeding stating a claim for payments allegedly owed to him
in connection with his severance from the Company. The total principal
amount of such former officer's claim is less than $1.5 million. The Company
has until March 31, 1995 in which to respond to the proof of claim.
Except for the pending proof of claim, there are no material legal
proceedings to which the Company is a party or to which any of its property
is subject. The Company is a party to ordinary and routine litigation
incidental to its business.
Item 3. Defaults Upon Senior Securities.
The Company did not make interest payments due on August 1, 1994, and
August 2, 1994, respectively, under the Old Senior Fixed Rate Notes, the Old
Subordinated Debentures, and the Old Senior Floating Rate Notes. Prior to
and during the pendency of the Company's bankruptcy proceeding, the holders
of such obligations did not enforce any remedies with respect to the
occurrences of an event of default thereunder. Pursuant to the Plan, on the
Effective Date, the principal and accrued interest under the Old Senior Fixed
Rate Notes and the Old Senior Floating Rate Notes were exchanged for either
New Senior Fixed Rate Notes or New Senior Floating Rate Notes, and the
principal and accrued interest under the Old Subordinated Debentures were
exchanged for common stock of the Company. No default by the Company has
occurred under the New Senior Fixed Rate Notes or New Senior Floating Rate
Notes.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
Exhibit No. Description
2 First Amended Plan of Reorganization filed by the Company with
the United States Bankruptcy Court of the District of Delaware
on November 9, 1994, as amended by notices of technical
modifications thereto filed on November 9, 1994, and December
12, 1994 (previously filed as Exhibit 2 to the Company's
Quarterly Report on Form 10-Q for the period ended October 30,
1994).
3(i) Restated Certificate of Incorporation filed with the Delaware
Secretary of State on December 29, 1994.
3(ii)(a) Bylaws adopted October 12, 1988.
3(ii)(b) First Amendment to Bylaws adopted July 30, 1991.
3(ii)(c) Second Amendment to Bylaws adopted December 29, 1994.
<PAGE>
Exhibit No. Description
4.1 Indenture dated as of December 29, 1994, between the Company
and Shawmut Bank Connecticut, N.A., as Trustee, relating to
11.5% Senior Fixed Rate Notes due 2003.
4.2 Indenture dated as of December 29, 1994, between the Company
and IBJ Schroder Bank & Trust Company, as Trustee, relating to
Senior Floating Rate Notes due 2003.
10.1 Credit Agreement dated as of December 29, 1994, among the
Company, certain lenders, The CIT Group/Business Credit, Inc.,
as administrative agent, and Bank of America National Trust
and Savings Association, as co-agent.
10.2 Master Third Amendment to Deferred Compensation Agreements,
dated as of September 2, 1994, between the Company and the key
employees party thereto.
10.3 Management Services Agreement dated as of December 29, 1994,
by and between the Company and Leonard Green & Partners.
27 Financial Data Schedule
(b) Reports on Form 8-K:
On a Form 8-K dated February 17, 1995, the Company reported on its
dismissal of KPMG Peat Marwick LLP, and its engagement of Coopers & Lybrand
L.L.P., as its principal accountants.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KASH N' KARRY FOOD STORES, INC.
Date: March 15, 1995 /s/ Raymond P. Springer
-------------------------------
Raymond P. Springer
Senior Vice President,
Administration
Date: March 15, 1995 /s/ Richard D. Coleman
-------------------------------
Richard D. Coleman
Vice President, Controller
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<NAME> KASH N' KARRY FOOD STORES, INC.
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<PERIOD-START> OCT-31-1994
<PERIOD-END> JAN-29-1995
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<TOTAL-LIABILITY-AND-EQUITY> 381,751
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AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
KASH N' KARRY FOOD STORES, INC.
1. The name of the corporation is Kash n' Karry Food
Stores, Inc.
2. The corporation was originally incorporated in Delaware
under the name "LSI ACQUISITION CORP."; the filing date of its
original Certificate of Incorporation with the Secretary of State
was April 27, 1988.
3. This Amended and Restated Certificate of Incorporation
has been adopted and effected in conformity with Sections 245 and
303 of the General Corporation Law of the State of Delaware,
pursuant to the Order Confirming Kash n' Karry Food Stores,
Inc.'s Plan of Reorganization entered by the United Sates
Bankruptcy Court for the District of Delaware of December 12,
1994 in case No. 94-1082(HSB), file name In re Kash n' Karry Food
Stores, Inc. The Court has jurisdiction over that proceeding
under Title 28 of the United States Code, Section 1334.
4. The Restated Certificate of Incorporation and all
amendments and supplements thereto are hereby superseded, amended
and restated by the following Second Amended and Restated
Certificate of Incorporation (the "Certificate of
Incorporation"):
FIRST: The name of the corporation (hereinafter referred
to as the "Corporation") is Kash n' Karry Food Stores, Inc.
SECOND: The address of the registered office of the
Corporation in the State of Delaware is 1209 Orange Street, in
the City of Wilmington, County of New Castle. The name of its
registered agent at that address is The Corporation Trust
Company.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware (the
"GCL").
FOURTH: The Corporation is authorized to issue an
aggregate of 6,500,000 shares of capital stock, 5,500,000 shares
of which are designated Common Stock, par value $.01 per share,
and 1,000,000 of which are designated Preferred Stock, par value
$.01 per share. All capital stock of the Corporation will be
fully paid and nonassessable.
FIFTH: The shares of Preferred Stock may be issued from
time to time in one or more series. The Board of Directors is
authorized to fix the number of shares of any series of Preferred
Stock and to determine the designation of any such series. The
Board of Directors is also authorized to determine or alter the
rights, preferences, privileges and restrictions granted to or
imposed upon any wholly unissued series of Preferred Stock and,
within the limits and restrictions in any resolution or
resolutions of the Board of Directors originally fixing the
number of shares constituting any series, to increase or decrease
(but not below the number of shares of such series then
outstanding) the number of shares of any such series subsequent
to the issue of shares of that series.
SIXTH: The Corporation shall not issue any non-voting
equity securities to the extent prohibited by Section 1123(a)(6)
of the Bankruptcy Code (11 U.S.C. 1123(a)(6)); provided,
however, that this Article SIXTH (a) will have no further force
and effect beyond that required under Section 1123 of the
Bankruptcy Code; (b) will have such force and effect, if any,
only for so long as Section 1123 of the Bankruptcy Code is in
effect and applicable to the Corporation; and (c) in all events
may be amended or eliminated in accordance with applicable law
from time to time in effect.
SEVENTH: No director of the Corporation shall be liable to
the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the
GCL or (iv) for any transaction from which the director derived
an improper personal benefit. If the GCL is hereafter amended to
authorize the further elimination or limitation of the liability
of a director, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent
permitted by the GCL, as so amended. Any repeal or modification
of this Article SEVENTH by the stockholders of the Corporation
shall not adversely affect any right or protection of a director
of the Corporation existing at the time of such repeal or
modification with respect to any acts or omissions occurring
prior to such repeal or modification. The provisions of this
Article SEVENTH shall not be deemed to limit or preclude
indemnification of a director by the Corporation for any
liability of a director that has not been eliminated or limited
by the provisions of this Article SEVENTH.
EIGHTH: In furtherance and not in limitation of the powers
conferred by the laws of the State of Delaware, the Board of
Directors is expressly authorized to make, amend and repeal the
bylaws, except to the extent that the bylaws or this Certificate
of Incorporation otherwise provide. The business and affairs of
the corporation shall be managed by or under the direction of the
Board of Directors, and the Directors need not be elected by
ballot unless required by the bylaws of the Corporation.
NINTH: The Corporation reserves the right to amend,
alter, change or repeal any provisions contained in this
Certificate of Incorporation, in the manner now or hereafter
prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
IN WITNESS WHEREOF, Kash n' Karry Food Stores, Inc., has
caused this certificate to be signed by its Chief Executive
Officer and attested by its Secretary this 29th day of December,
1994.
KASH N' KARRY FOOD STORES, INC.
By: /s/ Raymond P. Springer
Raymond P. Springer
Executive Vice President,
Administration
ATTEST:
By: /s/ Richard D. Coleman
Richard D. Coleman
Secretary
Effective October 6th, 1988
BYLAWS
OF
KASH N' KARRY FOOD STORES, INC.
a Delaware corporation
BYLAWS OF
KASH N' KARRY FOOD STORES, INC.
a Delaware corporation
Table of Contents
ARTICLE I Offices. . . . . . . . . . . . . . . . . . .1
ARTICLE II Meetings of Stockholders . . . . . . . . . .1
ARTICLE III Directors. . . . . . . . . . . . . . . . . .4
ARTICLE IV Officers . . . . . . . . . . . . . . . . . .7
ARTICLE V Seal . . . . . . . . . . . . . . . . . . . 10
ARTICLE VI Form of Stock Certificate. . . . . . . . . 10
ARTICLE VII Representation of Shares of
Other Corporations . . . . . . . . . . . 10
ARTICLE VIII Transfers of Stock . . . . . . . . . . . . 10
ARTICLE IX Lost, Stolen, or Destroyed
Certificates . . . . . . . . . . . . . . 11
ARTICLE X Record Date. . . . . . . . . . . . . . . . 11
ARTICLE XI Registered Stockholders. . . . . . . . . . 12
ARTICLE XII Fiscal Year. . . . . . . . . . . . . . . . 12
ARTICLE XIII Notices. . . . . . . . . . . . . . . . . . 12
ARTICLE XIV Amendments . . . . . . . . . . . . . . . . 13
ARTICLE XV Indentification and Insurance. . . . . . . 13
<PAGE>
BYLAWS
OF
KASH N' KARRY FOOD STORES, INC.
a Delaware corporation
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of this
Corporation shall be in the City of Wilmington, County of New
Castle, State of Delaware, and the name of the resident agent in
charge thereof is the agent named in the Certificate of
Incorporation until changed by the Board of Directors (the
"Board").
Section 2. Principal Office. The principal office for the
transaction of the business of the Corporation shall be at such
place as may be established by the Board. The Board is granted
full power and authority to change said principal office from one
location to another.
Section 3. Other Offices. The Corporation may also have an
office or offices at such other places, either within or without
the State of Delaware, as the Board may from time to time
designate or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of stockholders
shall be held at such time and place, within or without the State
of Delaware, as shall be stated in the notice of the meeting or
in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. Annual meetings of stockholders
shall be held on such date and at such time set by the Board and
stated in the notice of the meeting, at which the stockholders
shall elect members of the Board, and transact such other
business as may properly be brought before the meeting.
Section 3. Special Meetings. Special meetings of the
stockholders of the Corporation for any purpose or purposes may
be called at any time by the Board, or by a committee of the
Board that has been duly designated by the Board and whose powers
and authority, as provided in a resolution of the Board or in the
Bylaws of the Corporation, include the power to call such
meetings, and shall be called by the president or secretary at
the request in writing of a majority of the Board, or at the
request in writing of stockholders owning a majority in amount of
the entire capital stock of the Corporation issued and
outstanding and entitled to vote but such special meetings may
not be called by any other person or persons; provided, however,
that if and to the extent that any special meeting of
stockholders may be called by any other person or persons
specified in any provisions of the Certificate of Incorporation
or any amendment thereto, or any certificate filed under Section
151(g) of the Delaware General Corporation Law (or its successor
statute as in effect from time to time hereafter), then such
special meeting may also be called by the person or persons in
the manner, at the times and for the purposes so specified.
Business transacted at any special meeting of stockholders shall
be limited to the purposes stated in the notice.
Section 4. Stockholder Lists. The officer who has charge of
the stock ledger of the Corporation shall prepare and make, at
least ten days before every meeting of stockholders, a complete
list of stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each shareholder
and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior
to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the
notice of the meeting, or at the place of the meeting, and the
list shall also be available at the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section 5. Notice of Meetings. Written notice of each
meeting of stockholders, whether annual or special, stating the
place, date and hour of the meeting shall be given to each
stockholder entitled to vote at such meeting not less than ten
nor more than sixty days before the date of the meeting.
Section 6. Quorum and Adjournment. The holders of a
majority of the capital stock issued and outstanding and entitled
to vote thereat, present in person or represented by proxy, shall
constitute a quorum for holding all meetings of stockholders,
except as otherwise provided by applicable law or by the
Certificate of Incorporation. If it shall appear that such quorum
is not present or represented at any meeting of stockholders, the
Chairman of the meeting shall have power to adjourn the meeting
from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such
adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been
transacted at the meeting as originally noticed. The Chairman of
the meeting may determine that a quorum is present based upon any
reasonable evidence of the presence in person or by proxy of
stockholders holding a majority of the outstanding votes,
including without limitation, evidence from any record of
stockholders who have signed a register indicating their presence
at the meeting.
Section 7. Voting. In all matters, the vote of the holders
of a majority of the capital stock having voting power present in
person or represented by proxy shall decide any question brought
before such meeting, unless the question is one upon which by
express provision of applicable law, of the Certificate of
Incorporation, or of these Bylaws a different vote is required in
which case such express provision shall govern and control the
decision of such question. Unless otherwise provided in the
Certificate of Incorporation, each stockholder shall be entitled
to cast one vote for each share of the capital stock entitled to
vote held by such stockholder. The officer of the Corporation
presiding at a meeting of stockholders, in his or her discretion,
may require that any votes cast at such meeting shall be cast by
written ballot.
Section 8. Proxies. Each stockholder entitled to vote at a
meeting of stockholders may authorize in writing another person
or persons to act for him or her by proxy, but no proxy shall be
voted or acted upon after eleven months from its date, unless the
person executing the proxy specifies therein the period of time
for which it is to continue in force.
Section 9. Inspector of Election. The Board may appoint an
Inspector or Inspectors of Election for any meeting of
stockholders. Such Inspectors shall decide upon the qualification
of the voters and report the number of shares represented at the
meeting and entitled to vote, shall conduct the voting and accept
the votes, and when the voting is completed shall ascertain and
report the number of shares voted respectively for and against
each position upon which a vote is taken by ballot. An Inspector
need not be a stockholder, and any officer of the Corporation may
be an Inspector on any position other than a vote for or against
a proposal in which he or she shall have a material interest.
Section 10. Action Without Meeting. Subject to Section 228
of the Delaware General Corporation Law, any action which, under
any provision of the Delaware General Corporation Law, may be
taken at any annual or special meeting of such stockholders, may
be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not
less than a minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted.
ARTICLE III
DIRECTORS
Section 1. Powers. The Board shall have the power to manage
or direct the management of the property, business and affairs of
the Corporation, and except as expressly limited by law, to
exercise all of its corporate powers. The Board may establish
procedures and rules, or may authorize the Chairman of any
meeting of stockholders to establish procedures and rules, for
the fair and orderly conduct of any stockholders' meeting,
including without limitation, registration of the stockholders
attending the meeting, adoption of an agenda, establishing the
order of business at the meeting, recessing and adjourning the
meeting for the purposes of tabulating any votes and receiving
the result thereof, the timing of the opening and closing of the
polls, and the physical layout of the facilities for the meeting.
Section 2. Number. The Board shall consist of one or more
members in such number as shall be determined from time to time
by resolution of the Board. Until otherwise determined by such
resolution, the Board shall consist of six members. Directors
need not be stockholders, and each director shall serve until his
or her successor is elected and qualified or until his or her
death, retirement, resignation or removal.
Section 3. Nominations. Nominations of candidates for
election as directors of the Corporation may be made by the Board
or by any stockholder entitled to vote at a meeting at which one
or more directors are to be elected (an "Election Meeting") who
complies with the notice procedures set forth in this Section 3.
Nominations made by the Board shall be made at a meeting of the
Board or by written consent of directors in lieu of a meeting,
not less than 30 days prior to the date of an Election Meeting.
At the request of the Secretary of the Corporation, each proposed
nominee shall provide the Corporation with such information
concerning him or herself as is required, under the rules of the
Securities and Exchange Commission, to be included in the
Corporation's proxy statement soliciting proxies for the election
of directors. Not less than 30 days nor more than 60 days prior
to the date of an Election Meeting, subject to any other
requirements of law, any stockholder who intends to make a
nomination at the Election Meeting shall deliver a notice to the
Secretary of the Corporation setting forth (i) the name and
address of the stockholder and of each nominee proposed in such
notice, (ii) the class, series and number of shares of capital
stock of the Corporation which are beneficially owned by the
stockholder, (iii) a representation that the stockholder intends
to nominate the persons specified in the notice at the meeting,
(iv) a description of any arrangements between the stockholder
and nominees or any other person with respect to the nomination,
(v) such other information concerning each such nominee as would
be required under the rules of the Securities and Exchange
Commission in a proxy statement soliciting proxies for the
election of such nominees, and (vi) the consent to serve as a
director of the Corporation, if elected, of each such nominee. In
the event that a person is validly designated as a nominee and
shall thereafter become unable or unwilling to stand for election
to the Board, the Board or the stockholder who proposed such
nominee, as the case may be, may designate a substitute nominee.
If the Chairman of the Election Meeting determines that a
nomination was not made in accordance with the foregoing
procedures, such nomination shall be void.
Section 4. Vacancies and Newly Created Directorships. Any
vacancy in the Board caused by death, resignation, removal or
otherwise, or through an increase in the number of directors of a
class, shall be filled by a majority vote of the remaining
directors, or by the sole remaining director. A director so
elected to fill a vacancy shall serve for the remainder of the
then present term of the directorship to which he or she was
elected.
Section 5. Initial Meeting. The Board shall meet as soon as
practicable after the annual election of directors and notice of
such first meeting shall not be required.
Section 6. Regular Meetings. Regular meetings of the Board
shall be held without call or notice at such time and place as
shall from time to time be fixed by standing resolution of the
Board.
Section 7. Special Meetings. Special meetings of the Board
may be called at any time, and for any purpose permitted by law,
by the Chairman of the Board, the President, the Secretary, or
any two members of the Board, which meetings shall be held at the
time and place designated by the person or persons calling the
meeting. Notice of the time, place and purpose of any such
meeting shall be given to the directors by the Secretary, or in
case of his or her absence, refusal or inability to act, by any
other officer. Any such notice may be given by mail, by
telegraph, by telephone, by personal service, or by any thereof
as to different directors. If the notice is by mail, then it
shall be deposited in a United States Post Office at least four
days before the time of the meeting; if by telegraph, by deposit
of the message with the telegraph company at least forty-eight
hours before the time of the meeting; if by telephone or by
personal service, at least forty-eight hours before the time of
the meeting.
Section 8. Quorum. At all meetings of the Board a majority
of the whole Board shall be necessary and sufficient to
constitute a quorum for the transaction of business, and the act
of a majority of the directors present at any meeting at which
there is a quorum shall be the act of the Board, except as may be
otherwise specifically provided by applicable law, by the
Certificate of Incorporation or by these Bylaws. Any meeting of
the Board may be adjourned to meet again at a stated day and
hour. Even though no quorum is present, as required in this
Section, a majority of the directors present at any meeting of
the Board, either regular or special, may adjourn from time to
time until a quorum be had, but no later than the time fixed for
the next regular meeting of the Board. Notice of any adjourned
meeting need not be given.
Section 9. Fees and Compensation. Each Director and each
member of a committee of the Board shall receive such fees and
reimbursement of expenses incurred on behalf of the corporation
or in attending meetings as the Board may from time to time
determine.
Section 10. Meetings by Telephonic Communication. Members
of the Board or any committee thereof may participate in a
regular or special meeting of such Board or committee by means of
conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each
other, if the standing resolutions fixing the time and place of a
regular meeting or if the notice of the time and place of any
regular or special meeting provides for such participation.
Participation in a meeting pursuant to this Section shall
constitute presence in person at such meeting.
Section 11. Committees. The Board may, by resolution passed
by a majority of the whole Board, designate one or more
committees, each committee to consist of one or more of the
directors of the Corporation. The Board may designate one or more
directors as alternate members of any committee, who may replace
any absent or disqualified member at any meeting of the
committee. In the absence or disqualification of a member of a
committee and if the Board has not designated one or more
alternates (or if such a designation has been made, in the
absence or disqualification of such alternate(s)), the member or
members there of present at any meeting and not disqualified from
voting, whether not he, she or they constitute a quorum, may
unanimously appoint another member of the Board to act at the
meeting in the place of any such absent or disqualified member or
alternate. Any such committee, to the extent provided in a
resolution of the Board shall have and may exercise all the
powers and authority of the Board in the management of the
business and affairs of the Corporation,and may authorize the
seal of the Corporation to be affixed to all papers which may
require it; but no such committee shall have the power or
authority in reference to amending the Certificate of
Incorporation or these Bylaws, adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease
or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a
dissolution of the Corporation or a revocation of a dissolution;
and, unless a resolution expressly so provides, no such committee
shall have the power or authority to declare a dividend or to
authorize the issuance of capital stock.
Section 12. Action Without Meetings. Unless otherwise
restricted by applicable law, the Certificate of Incorporation or
these Bylaws, any action required or permitted to be taken at any
meeting of the Board or of any committee thereof may be taken
without meeting if all members of the Board or of such committee
consent thereto in writing as the case may be, and the writing or
writings are filed with the minutes of proceedings of the Board
or committee.
Section 13. Removal. Unless otherwise restricted by the
Certificate of Incorporation or bylaw, any Director or the entire
Board may be removed, with or without cause,by the holders of a
majority of shares entitled to vote at an election of Directors.
ARTICLE IV
OFFICERS
Section 1. Officers. The Corporation shall have a Chairman
of the Board, a President, one or more Vice Presidents, a
Secretary and a Treasurer. The Corporation may also, at the
discretion of the Board of Directors, have as officers of the
Corporation one or more Assistant Secretaries, one or more
Assistant Treasurers and such other officers as may be elected or
appointed in accordance with; the provisions of Section 3 of this
Article. Any two or more of such offices, except those of
President and Secretary, may be held by the same person.
Section 2. Election. The officers of the Corporation,
except such officer as may be elected or appointed in accordance
with the provisions of Section 3 or Section 5 of this Article,
shall be chosen annually by, and shall serve at the pleasure of,
the Board, and shall hold their respective offices until their
resignation, removal, or other disqualification from service, or
until their respective successors shall be elected.
Section 3. Subordinate Officers. The Board may elect, and
may empower the President to appoint, such other officers as the
business of the Corporation may require, each of whom shall hold
office for such period, have such authority and perform such
duties as are provided in these Bylaws or as the Board may from
time to time determine.
Section 4. Removal and Resignation. Any officer may be
removed, either with or without cause, by the Board at any time
or, except in the case of an officer not chosen by the Board, by
any officer upon whom such power of removal may be conferred by
the Board. Any such removal shall be without prejudice to the
rights, if any, of the officer under any contract of employment
of the officer.
Any officer may resign at any time by giving written notice
to the Corporation, but without prejudice to the rights, if any,
of the Corporation under any contract to which the officer is a
party. Any such resignation shall take effect at the date of the
receipt of such notice or at any later time specified therein
and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 5. Vacancies. A vacancy in any office because of
death, resignation, removal, disqualification or any other cause
shall be filled in the manner prescribed in these Bylaws for
regular election or appointment to such office.
Section 6. Chairman of the Board. The Chairman of the Board
shall be the chief executive officer of the Corporation. Subject
to the control of the Board and to the powers vested by the Board
in any committee or committees appointed by the Board, the
Chairman of the Board shall have general supervision, direction
and control of the business and officers of the Corporation and
shall preside at all meetings of the stockholders and of the
Board. The Chairman of the Board shall have the general powers
and duties of management usually vested in the chief executive
officer of a corporation and shall have such other powers and
duties as may be prescribed by the Board or the Bylaws.
Section 7. President. The President shall be the chief
operating officer of the Corporation and, subject to the
direction of the Board, the committees of the Board and the chief
executive officer of the Corporation, the President shall have
and exercise general supervision over the operations and
subordinate officers of the Corporation and shall have such other
powers and duties as may be prescribed by the Board of Bylaws. In
the absence or disability of the chief executive officer, the
President shall perform all the duties of the chief executive
officer and when so acting shall have all the powers of and be
subject to all the restrictions upon the chief executive officer.
Section 8. Vice Presidents. In the absence or disability of
the chief executive officer and the President,the Vice
Presidents, in order of their rank as fixed by the Board, or, if
not ranked, the Vice President designated by the Board shall
perform all the duties of the President and when so acting shall
have all the powers of and be subject to all the restrictions
upon the President. The Vice Presidents shall have such other
powers and perform such duties as may be prescribed for them,
respectively, from time to time, by the Board or the Bylaws.
Section 9. Secretary. The Secretary shall keep or cause to
be kept, at the principal executive office and such other place
as the Board may order, a book of minutes of all meetings of
stockholders, the Board and its committees, with the time and
place of holding, whether regular or special, and if special, how
authorized, the notice thereof given, the names of those present
at Board and committee meetings, the number of shares present or
represented at stockholders' meetings, and the proceedings
thereof. The Secretary shall keep, or cause to be kept, a copy of
the Bylaws of the Corporation at the principal executive office
or business office.
The Secretary shall keep, or cause to be kept, at the
principal executive office or at the office of the Corporation's
transfer agent or registrar, if one be appointed, a share
register, or a duplicate share register,showing the names of the
stockholders and their addresses,the number and classes of shares
held by each, the number and date of certificates issued for the
same, and the number and date of cancellation of every
certificate surrendered for cancellation.
The Secretary shall give, or cause to be given,notice of all
meetings of the stockholders and of the Board and any committees
thereof required by these Bylaws or bylaw to be given, shall keep
the seal of the Corporation in safe custody, and shall have such
other powers and perform such other duties as may be prescribed
by the Board.
Section 10. Treasurer. The Treasurer is the chief financial
officer of the Corporation and shall keep and maintain, or cause
to be kept and maintained, adequate and correct accounts of the
properties and business transactions of the Corporation, and
shall send or cause to be sent to the stockholders of the
Corporation such financial statements and reports as are by law
or these Bylaws required to be sent to them. The books of account
shall at all times be open to inspection by any director.
The Treasurer shall deposit all moneys and other valuables
in the name and to the credit of the Corporation with such
depositaries as may be designated by the Board.The Treasurer
shall disburse the funds of the Corporation as may be ordered by
the Board, shall render to the President and the directors,
whenever they request it, an account of all transactions as
Treasurer and of the financial condition of the Corporation, and
shall have such other powers and perform such other duties as may
be prescribed by the Board.
ARTICLE V
SEAL
It shall not be necessary to the validity of any instrument
executed by any authorized officer or officers of the
Corporation, that the execution of such instrument be evidenced
by the corporate seal, and all documents, instruments, contracts,
and writings of all kinds signed on behalf of the Corporation by
any authorized officer or officers thereof shall be as effectual
and binding on the Corporation without the corporate seal, as if
the execution of the same had been evidenced by affixing the
corporate seal thereto.
ARTICLE VI
FORM OF STOCK CERTIFICATE
Every holder of capital stock in the Corporation shall be
entitled to have a certificate signed by, or in the name of, the
Corporation by the President or a Vice President, and by the
Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary of the Corporation,certifying the number of
shares owned by him or her in the Corporation. Any or all of the
signatures on the certificate may be a facsimile. In case any
officer, transfer agent, or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent, or registrar before
such certificate is issued, it may be issued by the Corporation
with the same effect as if he or she were such officer, transfer
agent, or registrar at the date of the issue.
ARTICLE VII
REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The Chairman of the Board, the President or any other
officer or officers authorized by the Board are each authorized
to vote, represent, and exercise on behalf of the Corporation all
rights incident to any and all shares of any other corporation or
corporations standing in the name of the Corporation. The
authority herein granted may be exercised either by any such
officer in person or by any other person authorized so to do by
proxy or power of attorney duly executed by said officer.
ARTICLE VIII
TRANSFERS OF STOCK
Upon surrender to the Corporation or a transfer agent of the
Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession,assignment, or
authority to transfer, it shall be the duty of the Corporation to
issue a new certificate to the person entitled thereto, cancel
the old certificate, and record the transaction upon its books.
ARTICLE IX
LOST, STOLEN, OR DESTROYED CERTIFICATES
The Board may direct a new certificate or certificates to be
issued in place of any certificate or certificates theretofore
issued by the Corporation alleged to have been lost, stolen, or
destroyed, upon the making of an affidavit of the fact by the
person claiming the certificate of stock to be lost, stolen, or
destroyed. When authorizing such issue of a new certificate or
certificates, the Board may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such
lost, stolen, or destroyed certificate or certificates, or his or
her legal representative, to give the Corporation a bond in such
sum as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate
alleged to have been lost, stolen, or destroyed.
ARTICLE X
RECORD DATE
The Board may fix in advance a date, which shall not be more
than sixty days nor less than ten days preceding the date of any
meeting of stockholders, or the date for the payment of any
dividend, or the date for the allotment of rights, or the date
when any change or conversion or ex-change of capital stock shall
go into effect, or a date in connection with obtaining such
consent, as a record date for the determination of stockholders
entitled to notice of, and to vote at, any such meeting and any
adjournment thereof, or entitled to receive payment of any such
dividend, or to any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of
capital stock, or to give such consent, and in such case such
stockholders, and only such stockholders as shall be stockholders
of record on the date so fixed shall be entitled to such notice
of, and to vote at, such meeting and any adjournment thereof, or
to receive payment of such dividend,or to receive such allotment
of rights, or to exercise such rights, or to give such consent,
as the case may be, notwithstanding any transfer of any stock on
the books of the Corporation after any such record date fixed as
aforesaid.
ARTICLE XI
REGISTERED STOCKHOLDERS
The Corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact
thereof and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such share on the part
of any other person, whether or not it shall have express or
other notice thereof, save as expressly provided by applicable
law.
ARTICLE XII
FISCAL YEAR
The fiscal year of the Corporation shall be fixed by
resolution of the Board.
ARTICLE XIII
NOTICES
Section 1. Manner of Notice. Whenever under the provisions
of applicable law, the Certificate of Incorporation or these
Bylaws, notice is required to be given to any director, committee
member, officer, or stockholder, it shall not be construed to
mean personal notice, but such notice may be given, in the case
of stockholders, in writing, by mail, by depositing the same in
the post office or letter box, in a postpaid sealed wrapper,
addressed to such stockholder, at such address as appears on the
books of the Corporation, or, in default of other address, to
such stockholder at the General Post Office in the City of
Wilmington, Delaware, and, in the case of directors, commit-tee
members and officers, by telephone, or by mail or by telegram to
the last business address known to the Secretary of the
Corporation, and such notice shall be deemed to be given at the
time when the same shall be thus mailed or telegraphed or
telephoned.
Section 2. Waiver of Notice. Whenever any notice is required
to be given under the provisions of applicable law, the
Certificate of Incorporation or these Bylaws, a waiver thereof in
writing, signed by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE XIV
AMENDMENTS
The Board shall have the power to make, adopt, alter, amend
and repeal from time to time bylaws of this Corporation, subject
to the right of the stockholders entitled to vote with respect
thereto to adopt, alter, amend, and repeal bylaws made by the
Board; provided, however, that these Bylaws shall not be adopted,
altered, amended, or repealed by the stockholders of the
Corporation, except by the vote of the holders of not less than
two-thirds of the outstanding shares of Common Stock.
ARTICLE XV
INDEMNIFICATION AND INSURANCE
Section 1. Right to Indemnification. Each person who was or
is a party or is threatened to be made a party to or is involved
in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she, or a person of whom he or she
is the legal representative, is or was a director or officer of
the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action or
inaction in an official capacity or in any other capacity while
serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest
extent permitted by the laws of Delaware, as the same exist or
may hereafter be amended, against all costs, charges, expenses,
liabilities and losses (including attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be
paid in settlement) reasonably incurred or suffered by such
person in connection therewith, and such indemnification shall
continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of his or her
heirs, executors and administrators; provided, however, that,
except as provided in Section 2 hereof, the Corporation shall
indemnify any such person seeking indemnification in connection
with a proceeding (or part thereof) initiated by such person only
if such proceeding (or part thereof) was authorized by the Board
of Directors of the Corporation. The right to indemnification
conferred in this Article shall be a contract right and shall
include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final
disposition; provided, however, that, if the Delaware General
Corporation Law requires, the payment of such expenses incurred
by a director or officer in his or her capacity as a director or
officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including,
without limitation, service to an employee benefit plan) in
advance of the final disposition of a proceeding; shall be made
only upon delivery to the Corporation of an undertaking, by or on
behalf of such director or officer, to repay all amounts so
advanced if it shall ultimately be determined that such director
or officer is not entitled to be indemnified under this Section
or otherwise. The Corporation may, by action of its Board of
Directors, provide indemnification to employees and agents of the
Corporation with the same scope and effect as the foregoing
indemnification of directors and officers.
Section 2. Right of Claimant to Bring Suit. If a claim
under Section 1 of this Article is not paid in full by the
Corporation within thirty days after a written claim has been
received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole or in
part, the claimant shall be entitled to be paid also the expense
of prosecuting such claim. It shall be a defense to any such
action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its
final disposition where the required undertaking, if any is
required, has been tendered to the Corporation) that the claimant
has failed to meet a standard of conduct which makes it
permissible under Delaware law for the Corporation to indemnify
the claimant for the amount claimed. Neither the failure of the
Corporation (including its Board of Directors, independent legal
counsel, and its stockholders) to have made a determination prior
to the commencement of such action that indemnification of the
claimant is permissible in the circumstances because he or she
has met such standard of conduct, nor an actual determination by
the Corporation (including its Board of Directors, independent
legal counsel, and its stockholders) that the claimant has not
met such standard of conduct, shall be a defense to the action or
create a presumption that the claimant has failed to meet such
standard of conduct.
Section 3. Non-Exclusivity of Rights. The right to
indemnification and the payment of expenses incurred in defending
a proceeding in advance of its final disposition conferred in
this Article shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, provision
of the Certificate of Incorporation, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise.
Section 4. Insurance. The Corporation may maintain
insurance, at its expense, to protect itself and any director,
officer, employee or agent of the Corporation or another
corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability, loss, whether or
not the Corporation would have the power to indemnify such person
against such expense, liability or loss under Delaware law.
Section 5. Expenses as a Witness. To the extent that any
director, officer, employee or agent of the Corporation is by
reason of such position, or a position with another entity at the
request of the Corporation, a witness in any action, suit or
proceeding, he or she shall be indemnified against all costs and
expenses actually and reasonably incurred by him or her or on his
or her behalf in connection therewith.
Section 6. Indemnity Agreements. The Corporation may enter
into agreements with any director, officer, employee or agent of
the Corporation providing for indemnification to the full extent
permitted by Delaware law.
FIRST AMENDMENT TO BYLAWS
OF
KASH N' KARRY FOOD STORES, INC.
A Delaware Corporation
The following amendments to the Bylaws of the Corporation were
adopted on July 30, 1991, by the Written consent of the holders of
two-thirds of the outstanding common stock of the Corporation, as
permitted by Section 228 of the Delaware General Corporation Law
and Article XIV of the Bylaws:
1. The second sentence of Article III, Section 2, of the
Bylaws of the Corporation is hereby amended to read in its entirety
as follows: "Until otherwise determined by resolution of the Board
adopted after August 1, 1991, the Board shall consist of three
members."
2. The first sentence of Article III, Section 4, of the
Bylaws of the Corporation is hereby amended to read in its entirety
as follows: "Any vacancy in the Board caused by death,
resignation, removal or otherwise, or through an increase in the
number of directors, shall be filled by a majority vote of the
remaining directors, by the sole remaining director, or by the
stockholders."
DATED: October 17, 1991.
/s/ Richard D. Coleman
Richard D. Coleman, Secretary of
Kash n' Karry Food Stores, Inc.
SECOND AMENDMENT TO BYLAWS
OF
KASH N' KARRY FOOD STORES, INC.,
a Delaware corporation
The following amendment to the Bylaws of Kash n' Karry Food
Stores, Inc. (the "Corporation") was adopted on December 9, 1994,
by the unanimous written consent of the members of the Board of
Directors of the Corporation, acting pursuant to Article III,
Section 12, of the Bylaws and Section 141(f) of the Delaware
General Corporation Law, as permitted by Article XIV of the Bylaws:
1. The first sentence of Article III, Section 8, of the
Bylaws of the Corporation is hereby deleted and replaced with the
following:
"At all meetings of the Board a majority of the whole
Board shall be necessary and sufficient to constitute a
quorum for the transaction of business; provided,
however, that whenever the full Board is nine (9) in
number, seven (7) directors shall be necessary and
sufficient to constitute a quorum. The act of a majority
of the directors present at any meeting at which there is
a quorum shall be the act of the Board, except as may be
otherwise specifically provided by applicable law, by the
Certificate of Incorporation or by these Bylaws."
2. The foregoing amendment became effective on December 29,
1994.
DATED: ________________________, 1995.
_________________________________
Raymond P. Springer, Secretary of
Kash n' Karry Food Stores, Inc.
INDENTURE, dated as of December 29, 1994, between Kash n' Karry Food
Stores, Inc., a corporation duly organized and existing under the laws of
the State of Delaware (herein called the "Company"), having its principal
office at 6422 Harney Road, Tampa, Florida 33610, telephone number (813)
621-0200, telecopier number (813) 626-9550, and Shawmut Bank Connecticut,
N.A., as Trustee (herein called the "Trustee").
RECITALS
On November 9, 1994, the Company filed for protection under Chapter 11
of Title 11 of the United States Code in the United States Bankruptcy Court
for the District of Delaware. On December 12, 1994, the United States
Bankruptcy Court for the District of Delaware entered an order confirming
the Plan of Reorganization, dated as of December 12, 1994, of the Company
filed in the United States Bankruptcy Court for the District of Delaware in
respect of Case No. 94-1082 (HSB) (the "Plan"), which provides for the
issuance of the Notes (as hereinafter defined).
The Company has duly authorized the creation of an issue of 11.5%
Senior Fixed Rate Notes due 2003 (herein called the "Notes") of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company as duly authorized the execution and delivery of this
Indenture.
All things necessary to make the Notes, when executed by the Company
and authenticated and delivered hereunder and duly issued by the Company,
the valid obligations of the Company, and to make this Indenture a valid
agreement of the Company, in accordance with their and its terms, have been
done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal
and proportionate benefit of all Holders, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the
meanings assigned to them in this Article, the singular includes
the plural and the plural includes the
singular;
(2) all other terms used herein that are-
defined in the Trust Indenture Act, either directly or by
reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with GAAP;
and
(4) the words "herein," "hereof" and "hereunder"
and other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other
subdivision.
"Acceleration Notice" has the meaning specified in Section 502.
"Acquired Indebtedness" means Indebtedness of a Person
existing at the time such Person becomes a Subsidiary of the
Company or assumed in connection with the acquisition of assets
from such Person other than Indebtedness incurred in connection
with, or in contemplation of, (i) such Person becoming a Subsidiary
of the Company or (ii) such acquisition of assets.
"Act", when used with respect to any Holder, has the
meaning specified in Section 104.
"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person. For
the purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Asset Sale" means any conveyance, transfer or lease to a
Person other than the Company or any Subsidiary thereof, directly
or indirectly, in any consecutive 12-month period, in one or a
series of related transactions, of (i) any capital stock of any
Subsidiary of the Company; (ii) all or substantially all of the
properties and assets of any division or line of business of the
Company and its Subsidiaries taken as a whole; or (iii) any other
properties and assets of the Company or any Subsidiary thereof,
other than in the ordinary course of business, the gross proceeds
of which accounted for 15% or more of the book value of the total
assets of the Company and its Subsidiaries on a consolidated basis
as set forth in the most recent set of financial statements of the
Company supplied pursuant to Section 704 preceding the date as of
which such determination is made. For the purposes of this
definition, the term "Asset Sale" shall not include any
consolidation, merger, conveyance, transfer or lease of properties
and assets of the Company substantially as an entirety that is
permitted by Article Eight.
"Authenticating Agent" means any Person authorized by the
Trustee to act on behalf of the Trustee to authenticate the Notes.
"Bank Credit Agreement" means (i) until clause (ii) below
shall become applicable in accordance with its terms, the Credit
Agreement dated as of December 29, 1994 among the Company, the
financial institutions from time to time parties thereto as Banks,
and The CIT Group/Business Credit, Inc., as Administrative Agent,
and Bank of America National Trust and Savings Association, as Co-
Agent for such Banks, as such Credit Agreement may from time to
time be amended, renewed, supplemented or otherwise modified in
accordance with the terms thereof, or (ii) after the agent under
the Bank Credit Agreement or under any successor agreement to such
agreement shall have acknowledged, in writing, that all principal,
interest and commitment or similar fees owing under such agreement
have been paid in full, any successor thereto or replacement
thereof (as designated by a duly adopted Board Resolution), as each
such successor or replacement may from time to time be amended,
renewed, supplemented or otherwise modified in accordance with the
terms thereof.
"Bank Credit Agreement Indebtedness" means all
indebtedness at any time outstanding or arising under or with
respect to the Bank Credit Agreement, including (without
limitation) Bank Loans and Letter of Credit Liability.
"Bank Loans" means borrowings under the Bank Credit Agreement.
"Bankruptcy Law" means Title 11, United States Code, or
any similar Federal or state law for the relief of debtors.
"Banks" means the financial institutions and Persons,
whether or not they are banks, which are or from time to time
become holders of Bank Credit Agreement Indebtedness.
"Board of Directors" means either the board of directors
of the Company or any duly authorized committee of such board.
"Board Resolution" means a copy of a resolution certified
by the Secretary or an Assistant Secretary of the Company to have
been duly adopted by the Board of Directors and to be in full force
and effect on the date of such certification, and delivered to the
Trustee.
"Bondholder Committee" means the unofficial committee of
holders of the Old Notes, which committee participated in the
negotiation of the terms of the Plan.
"Business Day" means each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institu-
tions in the City of New York or the city in which the Corporate
Trust Office is located are authorized or obligated by law or
executive order to close.
"Capitalized Lease Obligation" means any obligation to
pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real or personal property that is
required to be classified and accounted for as a capital lease
obligation under GAAP, and, for the purposes hereof, the amount of
such obligation at any date shall be the capitalized amount thereof
at such date, determined in accordance with GAAP.
"Cash Equivalents" means money, checks, demand deposit
accounts and other instruments or investments of equivalent
liquidity and safety.
"Change of Control" has the meaning specified in Sec-
tion 1109.
"Change of Control Notice" has the meaning specified in
Section 1109.
"Change of Control Purchase Date" has the meaning
specified in Section 1109.
"Change of Control Purchase Notice" has the meaning
specified in Section 1109.
"Change of Control Purchase Price" has the meaning
specified in Section 1109.
"Commission" means the Securities and Exchange Commis-
sion, or, if at any time after the execution of this instrument
such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means the Person named as the "Company" in the
first paragraph of this instrument until a successor Person shall
have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Company" shall mean such successor
Person.
"Company Request" or "Company Order" means a written
request or order signed in the name of the Company by its Chairman
of the Board, its President or a Vice President, and by its
Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Consolidated Interest Expense" of any Person means, for
any period, the sum (without duplication) of the aggregate of the
interest expense of such Person and its consolidated Subsidiaries
for such period, on a consolidated basis, as determined in
accordance with GAAP, including but not limited to the interest
portion of Capitalized Lease Obligations and amortization of
original issue discount but excluding amortization of debt issuance
cost.
"Consolidated Net Income" of any Person means, for any
period, the consolidated net income of such Person and its
consolidated Subsidiaries for such period, as determined in
accordance with GAAP, adjusted by excluding (a) any gain or loss
realized upon the termination of any employee pension plan, (b) net
extraordinary gains or net extraordinary losses, as the case may
be, and (c) net gains or losses in respect of dispositions of
assets other than in the ordinary course of business.
"Consolidated Net Loss" of any Person means, for any
period, the consolidated net loss of such Person and its
consolidated Subsidiaries for such period, as determined in
accordance with GAAP, adjusted by excluding (a) any gain or loss
realized upon the termination of any employee pension plan, (b) net
extraordinary gains or net extraordinary losses, as the case may
be, and (c) net gains or losses in respect of dispositions of
assets other than in the ordinary course of business.
"Consolidated Net Worth" of any Person means the
consolidated stockholders' equity of such Person and its consoli-
dated Subsidiaries, as determined in accordance with GAAP.
"Consolidated Non-cash Charges" of any Person means, for
any period, the aggregate depreciation, amortization and other non-
cash charges of such Person and its Subsidiaries for such period,
as determined in accordance with GAAP.
"Consolidated Tax Expense" of any Person means, for any
period, the aggregate of the tax expense of such Person and its
consolidated Subsidiaries for such period, as determined in
accordance with GAAP.
"Corporate Trust Office" means the principal office or
offices of the Trustee at which at any particular time its
corporate trust business shall be principally administered, which,
as of the date of this Indenture, is located at 777 Main Street,
Hartford, Connecticut 06115.
"Corporation" means a corporation, association, company,
joint-stock company or business trust.
"Cumulative Net Available Cash" of any Person means (1)
the sum (without duplication) of (i) 50% of Consolidated Net Income
of such Person accrued during the Reference Period (less any
previous Restricted Payments and 100% of any Consolidated Net Loss
of such Person) plus (ii) all Consolidated Non-cash Charges
deducted in computing Consolidated Net Income (or Consolidated Net
Loss, as the case may be) of such Person during the Reference
Period plus (iii) the aggregate net proceeds (other than with
respect to sales to Subsidiaries of such Persons), including cash
and the fair market value of property other than cash, received by
such Person during the Reference Period from the issuance of
capital stock (other than redeemable stock and other than stock
issued by the Company pursuant to the Plan) or debt securities
(other than the Company's 14% Subordinated Debentures due February
1, 2001) that have been converted into capital stock (other than
redeemable stock) other than amounts used to retire or acquire
capital stock or Subordinated Debt, less (2) the sum (without
duplication) of (i) all capital expenditures (other than with the
Net Cash Proceeds from Asset Sales) for any property made by such
Person and its Subsidiaries during the Reference Period, (ii) the
change (which will be added to the amounts in (i) and (iii) of this
clause (2) if an increase, but subtracted therefrom if a decrease)
in Working Capital at the end of the Reference Period compared to
Working Capital at January 29, 1995 and (iii) the sum (without
duplication) of all payments of principal of Indebtedness of such
Person or any Subsidiary thereof other than the Notes actually made
during the Reference Period, excluding payments under the Revolving
Credit Loans but only to the extent the Banks' revolving loan
commitments under the Bank Credit Agreement shall not have been
reduced on or after the date hereof in connection with such
payments.
"Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator, custodian or similar official under any
Bankruptcy Law.
"Defaulted Interest" has the meaning specified in Section
307.
"Deficiency" has the meaning specified in Section 1013.
"Effective Date" means the date on which the Plan becomes
effective.
"Event of Default" has the meaning specified in Article
Five.
"Excess Proceeds" has the meaning specified in Section
1013.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Fixed Charge Coverage Ratio" of any Person means, for
any period, the ratio of (a) the sum of Consolidated Net Income of
such Person for such period plus Consolidated Interest Expense,
Consolidated Tax Expense and Consolidated Non-cash Charges of such
Person deducted in computing Consolidated Net Income of such Person
for such period, to (b) Consolidated Interest Expense of such
Person for such period; provided, that in making such computation,
the Consolidated Interest Expense of such Person attributable to
interest on any Indebtedness computed on a pro forma basis and
bearing a floating interest rate shall be computed as if the rate
in effect on the date of computation had been the applicable rate
for the entire period.
"GAAP" means generally accepted accounting principles as
in effect in the United States on the date of the relevant
computation, consistently applied.
"Guarantee" has the meaning set forth in Section 1014
hereof.
"Holder" means a Person in whose name a Note is regis-
tered in the Note Register and, when used with respect to any Note
or Notes, means the Person or Persons in whose name such Note is,
or Notes are, registered in the Note Register.
"Incur" means, directly or indirectly, to create, incur,
assume, guarantee or otherwise become liable for any obligation of
any kind whatsoever; "incurrence" has a correlative meaning.
"Indebtedness" means, without duplication (a) any
liability of any Person, to the extent it would appear as a
liability upon a balance sheet of such Person prepared on a
consolidated basis in accordance with GAAP (i) for borrowed money,
(ii) evidenced by a bond, note, debenture or similar instrument
(including a purchase money obligation) given in connection with
the acquisition of any businesses, properties or assets of any kind
(other than a trade payable or a current liability arising in the
ordinary course of business), or (iii) for the payment of money
relating to a Capitalized Lease Obligation; (b) any liability of
any Person under any reimbursement obligation relating to a letter
of credit; (c) any liability of others described in the preceding
clauses (a) and (b) that the Person has guaranteed or that is
otherwise its legal liability; and (d) any amendment, supplement,
modification, deferral, renewal, extension or refunding of any
liability of the types referred to in clauses (a), (b) and (c),
above.
"Indenture" means this instrument as originally executed
and as it may from time to time be supplemented or amended by one
or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Notes.
"Interest Rate Protection Obligations" means, with
respect to any Person, any obligation of such Person pursuant to
any arrangement whereby, directly or indirectly, such Person is
entitled to receive from time to time periodic payments calculated
by applying either a fixed or floating rate of interest on a stated
notional amount in exchange for periodic payments made by such
Person calculated by applying a floating or fixed rate of interest
on the same notional amount.
"Investment" means, as applied to any Person, any direct
or indirect purchase or other acquisition by that Person of
Securities, or of a beneficial interest in Securities, of any other
Person, and any direct or indirect loan, advance (other than
deposits with financial institutions available for withdrawal on
demand, prepaid expenses, advances to employees and similar items
made or incurred in the ordinary course of business), or capital
contribution by such Person to any other Person, including all
Indebtedness and accounts owed by that other Person which are not
current assets or did not arise from sales of goods or services to
that person in the ordinary course of business. The amount of any
investment shall be determined in conformity with GAAP.
"Investment Cash Equivalents" means (i) U.S. Government
Obligations maturing within one year after the date of acquisition
thereof; (ii) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing within 90
days after the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from
either Standard & Poor's Corporation ("S&P") or Moody's Investors
Service, Inc. ("Moody's") (or, if at any time neither S&P nor
Moody's shall be rating such obligations, then from such other
nationally recognized rating services acceptable to the Trustee)
and not listed in Credit Watch published by S&P; (iii) commercial
paper, other than commercial paper issued by the Company or any of
its Affiliates, maturing no more than 90 days after the date of
creation thereof and, at the time of acquisition, having a rating
of at least A-1 or P-1 from either S&P or Moody's (or, if at any
time neither S&P nor Moody's shall be rating such obligations, then
the highest rating from other nationally recognized rating services
acceptable to the Trustee); (iv) domestic and Eurodollar
certificates of deposit or time deposits or bankers' acceptances
maturing within 90 days after the date of acquisition thereof
issued by any commercial bank (including the Trustee and its
affiliates) organized under the laws of the United States of
America or any state thereof or the District of Columbia having
combined capital and surplus of not less than $500,000,000 and (v)
repurchase agreements and reverse repurchase agreements with any
commercial bank organized under the laws of the United States of
America or any state thereof or the District of Columbia having
combined capital and surplus of not less than $500,000,000 or with
any Bank which is a party to the Bank Credit Agreement relating to
U.S. Government Obligations; provided, that the terms of such
agreements comply with the guidelines set forth in the Federal
Financial Institutions Examination Council Supervisory
Policy-Repurchase Agreements of Depository Institutions with
Securities Dealers and Others as adopted by the Comptroller of the
Currency on October 31, 1985.
"Letter of Credit Liability" means the Letter of Credit
Liability as defined in and under the Bank Credit Agreement as
originally executed or any similar letter of credit reimbursement
obligations, whether or not contingent, under the Bank Credit
Agreement.
"Material Subsidiary" means, at any time, any Subsidiary
of the Company that, together with the Subsidiaries of such
Subsidiary, (a) accounted for more than 5% of the consolidated
revenues of the Company and its Subsidiaries for the most recently
completed fiscal year of the Company or (b) was the owner of more
than 5% of the consolidated assets of the Company and its
Subsidiaries at the end of such fiscal year, all as shown on the
consolidated financial statements of the Company and its Sub-
sidiaries for such fiscal year.
"Maturity", when used with respect to any Note, means the
date on which the principal of such Note becomes due and payable as
therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption, required
repurchase or otherwise.
"Net Cash Proceeds" means, with respect to any Asset
Sale, the proceeds thereof in the form of cash or Cash Equivalents
including payments in respect of deferred payment obligations when
received in the form of cash or Cash Equivalents (except to the
extent that such obligations are financed or sold with recourse to
the Company or any Subsidiary thereof) net of (i) brokerage
commissions and other reasonable fees and expenses (including fees
and expenses of counsel and investment bankers) related to such
Asset Sale, (ii) provisions for all taxes payable as a result of
such Asset Sale, (iii) payments made to retire Indebtedness where
payment of such Indebtedness is required in connection with such
Asset Sale, and (iv) appropriate amounts to be provided by the
Company or any Subsidiary thereof, as the case may be, as a
reserve, in accordance with GAAP, against any liabilities
associated with such Asset Sale and retained by the Company or any
Subsidiary thereof, as the case may be, after such Asset Sale,
including, without limitation, pension and other post-employment
benefit liabilities, liabilities related to environmental matters
and liabilities under any indemnification obligations associated
with such Asset Sale.
"New Notes" means, collectively, the Notes and the Senior
Floating Rate Notes.
"Note Register" and "Note Registrar" have the respective
meanings specified in section 305.
"Notes" has the meaning specified in the second recital
of this Indenture, and includes the Secondary Notes.
"Offer" has the meaning specified in Section 1013.
"Offered Price" has the meaning specified in Section 1013.
"Officers' Certificate" means a certificate which
complies with Section 102 and which is signed by the Chairman of
the Board, the President, a Vice President or the Treasurer, and by
the Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee.
"Old Notes" means, collectively, the Company's 12 3/8%
Senior Notes due 1999, the Company's Senior Floating Rate Notes due
August 2, 1996 and the Company's 14% Subordinated Debentures due
February 1, 2001.
"Opinion of Counsel" means a written opinion, which
complies with Section 102, of legal counsel, who may be counsel for
the Company, and who shall be reasonably acceptable to the Trustee.
"Original Stockholder" means any member of (x) any group
consisting of members of the Board of Directors or (y) the
Bondholder Committee or any other group of Holders consisting in
whole or in part of members of the Bondholder Committee.
"Outstanding", when used with respect to Notes, means, as
of the date of determination, all Notes theretofore authenticated
and delivered under this Indenture, except:
(i) Notes theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation;
(ii) Notes, or portions thereof, for which payment or redemption
money in the necessary amount has been theretofore deposited with
the Trustee or any Paying Agent (other than the Company) in trust
or set aside and segregated in trust by the Company (if the Company
shall act as its own Paying Agent) for the Holders of such Notes;
provided, that, if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made;
provided, further, that if for any reason the Company shall default
in the payment of the Redemption Price and accrued interest, such
Notes will be deemed Outstanding; and
(iii) Notes which have been replaced or paid pursuant to Section
306 or in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture, other than
any such Notes in respect of which there shall have been presented
to the Trustee proof satisfactory to it that such Notes are held by
a bona fide purchaser in whose hands such Notes are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite principal amount of the Outstanding Notes have given any
request, demand, authorization, direction, notice, consent or
waiver hereunder, Notes owned by the Company or any other obligor
upon the Notes or any Affiliate of the Company, or of such other
obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes which the Trustee knows to be
so owned shall be so disregarded. Notes so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Notes and that the pledgee is not
the Company or any other obligor upon the Notes or any Affiliate of
the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company
pursuant to this Indenture to pay the principal of, premium (if
any) or interest on, any Notes on behalf of the Company, which term
may include the Company.
"Permitted Indebtedness" means:
(a) Indebtedness of the Company or any Subsidiary
thereof (excluding Bank Loans and Letter of Credit Liability),
outstanding at the time of, and after giving effect to, the initial
issuance of the Notes.
(b) Indebtedness of the Company evidenced by the Notes
(including, without limitation, Indebtedness evidenced by
additional Notes issued in accordance with the provisions hereof
(including, without limitation, Secondary Notes)).
(c) Indebtedness of the Company evidenced by the Senior
Floating Rate Notes.
(d) Bank Loans and Letter of Credit Liability, in an
aggregate principal amount at any one time outstanding, not to
exceed the sum of (i) $125,000,000 less the aggregate principal
amount of Bank Loans and Letter of Credit Liability actually paid
on or after the date hereof, but without deduction for payments
under the Revolving Credit Loans or in respect of Letter of Credit
Liability except to the extent the Banks' revolving loan
commitments or commitments to extend or participate in letters of
credit under the Bank Credit Agreement shall have been reduced on
or after the date hereof in connection with such payments, minus
(ii) the aggregate principal amount of commercial paper outstanding
under clause (f) below less such aggregate principal amount that is
supported by letters of credit issued for the account of the
Company under and pursuant to the Bank Credit Agreement.
(e) Indebtedness of the Company either (i) arising out
of sale and leaseback transactions or (ii) bearing a fixed rate of
interest for a term of not less than ten years and secured by
stores and other real property owned by the Company; provided, that
the aggregate principal amount of such Indebtedness at any one time
outstanding shall not exceed the sum of $25,000,000 plus the amount
of such In- debtedness outstanding on the Effective Date.
(f) Indebtedness of the Company evidenced by commercial paper.
(g) Interest Rate Protection Obligations to the extent
that the notional principal amount thereof does not exceed the
aggregate amount of Indebtedness referred to in clauses (c) and (d)
above.
(h) Indebtedness of the Company or any Subsidiary
thereof, the proceeds of which are used to pay Store Opening Costs
in connection with the opening or acquisition of Permitted Stores.
(i) Indebtedness of the Company or any Subsidiary
thereof evidenced by promissory notes representing the Company's or
such Subsidiary's obligations under casualty insurance policies to
reimburse the issuing casualty insurance companies for claims
against the Company or such Subsidiary paid by such insurance
companies.
(j) Indebtedness of the Company or any Subsidiary
thereof in respect of performance or surety bonds provided by the
Company or such Subsidiary in the ordinary course of business.
(k) Indebtedness of the Company or any Subsidiary
thereof for reimbursement of payments made under commercial
documentary letters of credit issued for the account of the Company
or such Subsidiary in the ordinary course of business, having
expiry dates not more than one year after the date of issuance, and
issued for the purpose of financing the purchase of goods.
(l) Indebtedness of the Company constituting obligations
of the Company to redeem shares, or cancel options to purchase
shares, of the Company's capital stock under the terms and
conditions of management equity subscription agreements and
management stock option agreements.
(m) Indebtedness of the Company or any Subsidiary
thereof represented by or in respect of industrial revenue or
development bonds not to exceed an aggregate principal amount at
any one time outstanding of $5,000,000.
(n) Indebtedness of (i) any Subsidiary of the Company to
the Company or any other Subsidiary of the Company or (ii) the
Company to any Subsidiary thereof.
(o) Indebtedness of the Company (which may be Bank
Credit Agreement Indebtedness), in addition to that described in
clauses (a) through (n) above; provided, that the aggregate
principal amount of such Indebtedness at any one time outstanding
shall not exceed the sum of $25,000,000 plus the amount of such
Indebtedness outstanding on the Effective Date.
(p) All renewals, extensions, substitutions,
refinancings or replacements (collectively, "refinancings") of any
Indebtedness described in clauses (a) through (m) and (o) above,
including replacements with creditors other than the Banks (or
successive refinancings) so long as any such refinancing does not
result in an increase of the amount of such Indebtedness and, in
the case of refinancings of Subordinated Debt, such Indebtedness
(i) is Subordinated Debt containing subordination provisions no
less favorable to the Holders than the subordination provisions of
the Indebtedness being refinanced, (ii) does not require principal
repayments or sinking fund payments to be made prior to the Stated
Maturity of any payments of principal of the Notes and (iii)
otherwise conforms to the requirements hereof. For the purpose of
determining at any time the Indebtedness that is permitted to be
incurred pursuant to any of the foregoing clauses (each, the
"specified clause"), there shall be included in each specified
clause: (x) all then outstanding Indebtedness that has been
incurred pursuant to such specified clause and (y) all then
outstanding Indebtedness incurred pursuant to this clause (p) to
refinance Indebtedness incurred pursuant to such specified clause
and all then outstanding subsequent refinancings thereof.
No limitation contained in the foregoing clauses (a)
through (p) shall prohibit the Company from incurring Indebtedness
pursuant to any other such clause.
"Permitted Stores" means (a) during the period from the
date hereof through August 2, 1998, seven stores and (b)
thereafter, an average of no more than four stores per year during
each three-year period ending on the last day of each fiscal year
of the Company, with the first such three-year period ending on
July 29, 2001.
"Person" means any individual, corporation, partnership
joint venture, trust, unincorporated organization or any other
entity, or any government or any agency or political subdivision
thereof.
"Plan" has the meaning specified in the first recital of this
Indenture.
"Predecessor Note" of any particular Note means every
previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purposes of this
definition, any Note authenticated and delivered under Section 306
in exchange for a mutilated security or in lieu of a destroyed,
lost or stolen Note shall be deemed to evidence the same debt as
the mutilated, destroyed, lost or stolen Note.
"Redemption Date", when used with respect to any Note to
be redeemed, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Note to
be redeemed, means the price at which it is to be redeemed pursuant
to this Indenture, including as applicable and without duplication,
any accrued interest due upon such redemption pursuant to the terms
of this Indenture.
"Reference Period" means, with respect to any Restricted
Payment, the period from the Effective Date through the end of the
last full fiscal quarter immediately preceding the date of such
Restricted Payment (taken as one accounting period).
"Regular Record Date" for the interest payable on any
Interest Payment Date means the January 15 or July 15 (whether or
not a Business Day), as the case may be, next preceding such
Interest Payment Date.
"Responsible Officer", when used with respect to the
Trustee, means any officer assigned to the Corporate Trust Office
and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because
of his or her knowledge of and familiarity with the particular
subject.
"Restricted Payments" has the meaning specified in Section 1010.
"Retirement" has the meaning specified in Section 1010.
"Revolving Credit Loans" means the Revolving Credit Loans
(as defined in the Bank Credit Agreement), or any similar revolving
credit facility or swing line facility under the Bank Credit
Agreement.
"Secondary Notes" has the meaning specified in Section 303.
"Securities" means any stock, shares, voting trust
certificates, bonds, debentures, notes or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as
"securities", or any certificates of interest, shares, or
participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase
or acquire any of the foregoing.
"Senior Floating Rate Notes" means the Senior Floating
Rate Notes due 2003, created and issued by the Company pursuant to
the Senior Floating Rates Notes Indenture.
"Senior Floating Rate Notes Indebtedness" means the
Indebtedness of the Company on the Senior Floating Rate Notes.
"Senior Floating Rate Notes Indenture" means the
Indenture, dated as of the Effective Date, as such indenture may
from time to time be amended, renewed, supplemented or otherwise
modified, between the Company and IBJ Schroder Bank & Trust
Company, as Trustee.
"Special Record Date" has the meaning specified in Section 307.
any Note or any installment of interest thereon, means the date
specified in such Note as the fixed date on which the principal
of such Note or such installment of interest is due and payable.
"Store Opening Costs" means the costs and expenses
(including, without limitation, capitalized interest) incurred by
the Company in connection with (i) the opening of a new store,
including the purchase price or lease expense with respect to the
real property on which such store is located and the costs of
furniture, fixtures, equipment and inventory used in connection
with such store, or (ii) the acquisition of the fee or leasehold
interest in the real property on which an existing store is
located, together with the costs of furniture, fixtures, equipment
and inventory used in connection with such acquired store.
"Subordinated Debt" means Indebtedness that ranks junior
or is expressly subordinate in right of payment to the Notes upon
terms substantially in the form of Exhibit A attached hereto,
provided, however, that the definition of "Senior Debt" for the
purposes of such Indebtedness may include Indebtedness other than
the New Notes.
"Subsidiary" of any Person means (i) a corporation a
majority of the Voting Stock of which is at the time owned,
directly or indirectly, by such Person or by one or more other
Subsidiaries, or by such Person and one or more other Subsidiaries
or (ii) any other Person (other than a corporation) in which such
Person, a Subsidiary of such Person or such Person and one or more
Subsidiaries of such Person, directly or indirectly, has the power
to elect or direct the election of at least a majority of the
persons comprising the governing body of such Person.
"Trustee" means the Person named as the "Trustee" in the
first paragraph of this instrument until a successor Trustee shall
have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Trustee" shall mean such successor
Trustee.
"Trust Indenture Act" means the Trust Indenture Act of
1939 as in force at the date as of which this instrument was
executed, until such time as this Indenture is qualified under such
Act, and thereafter means such Act as in force at the date on which
this Indenture is so qualified, in each case except as provided in
Section 905.
"U.S. Government Obligations" means direct noncallable
obligations of, or non-callable obligations guaranteed by, the
United States of America or any agency thereof for the payment of
which obligation or guarantee the full faith and credit of the
United States of America is pledged.
"Voting Stock" means stock of the class or classes having
general voting power under ordinary circumstances to elect at least
a majority of the board of directors, managers or trustees of a
corporation (irrespective of whether or not at the time stock of
any other class or classes shall have or might have voting power by
reason of the happening of any contingency).
"Working Capital" (which may be a positive or negative
amount) means the consolidated current assets (excluding cash and
Cash Equivalents) of the Company less the consolidated current
liabilities of the Company (excluding the current portion of
Indebtedness under the Bank Credit Agreement and of long-term
debt).
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture,
the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in this
Indenture (including any covenants compliance with which
constitutes a condition precedent) relating to the proposed action
have been complied with and an Opinion of Counsel stating that in
the opinion of such counsel all such conditions precedent, if any,
have been complied with, except that in the case of any such
applica- tion or request as to which the furnishing of such
documents is specifically required by any provision of this
Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion rendered by or on behalf of
the Company with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certifi- cate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
or she has made such examination or investigation as is necessary
to enable him or her to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it
is not necessary that all such matters be certified by, or covered
by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or
more other such Persons as to other matters, and any such Person
may certify or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an officer of the Company
may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless
such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to the matters upon which his or her certificate or opinion
is based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect
to such factual matters is in the possession of the Company, unless
such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to such matters are erroneous.
Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but
need not, be consolidated and form one instrument.
Section 104. Acts of Holders.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture
to be given or taken by holders may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by
such holders in person or by an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instru- ment or of a
writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 601) conclusive
in favor of the Trustee and the Company, if made in the manner
provided in this Section 104.
(b) The fact and date of the execution by any person of
any such instrument or writing shall be established in any
reasonable manner which the Trustee deems sufficient, which shall
include but not be limited to, notarization of such instrument.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the holder of any Note
shall bind every future Holder of the same Note and the Holder of
every Note issued upon the transfer thereof or in exchange therefor
or in lieu thereof in respect of anything done, omitted or suffered
to be done by the Trustee, any Paying Agent or the Company in
reliance thereon, whether or not notation of such action is made
upon such Note.
(e) The Company may, but shall not be obligated to, fix
a record date for the purpose of determining the Holders entitled
to sign any instrument evidencing or embodying an Act of Holders.
If a record date is fixed, those Persons who were Holders at such
record date (or their duly appointed agents), and only those
Persons, shall be entitled to sign any such instrument evidencing
or embodying an Act of Holders or to revoke any such instrument
previously signed, whether or not such Persons continue to be
Holders after such record date.
Section 105. Notices, Etc., to Trustee and the Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or
permitted by this Indenture to be made upon, given or furnished to,
or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing and hand delivered, mailed first-class postage
prepaid, sent by telecopier or delivered by recognized overnight
courier to or with the Trustee at its corporate trust office,
located at 777 Main Street, Hartford, Connecticut 06115, Attention:
Corporate Trust Administration, or at any other address previously
furnished in writing to the Holders, the Company or any other
obligor of the Notes by the Trustee, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and hand delivered, mailed
first-class postage prepaid, sent by telecopier or delivered by
recognized overnight courier to the Company, addressed to it at the
address of its principal office specified in the first paragraph of
this Indenture or at any other address previously furnished in
writing to the Trustee by the Company, in any case, Attention:
President.
All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail,
registered or certified with postage prepaid, if mailed; when
receipt acknowledged, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of
any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and hand
delivered, mailed first-class postage prepaid, sent by telecopier
or delivered by recognized overnight courier to each Holder
affected by such event, at its address as it appears in the Note
Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any
case where notice to Holders is given by mail, neither the failure
to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event,
and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable
to give such notice by mail as may be required by any provision of
this Indenture, then any method of giving such notice as shall be
reasonably satisfactory to the Trustee shall, under such
circumstances, be deemed to be a sufficient giving of such notice.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts
with the duties imposed by the Trust Indenture Act or another
provision which is required or deemed to be included in this
Indenture by any of the provisions of the Trust Indenture Act, the
imposed duties shall control. If any provision of this Indenture
modifies or excludes any provision of the Trust Indenture Act that
may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded,
as the case may be.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the
construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the
Company and any other obligor of the Notes shall bind its
successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Notes
shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
Section 111. Benefits of Indenture.
Nothing contained in this Indenture or in the Notes,
expressly or impliedly, shall give to any Person, other than the
parties hereto and their successors hereunder and the Holders, any
benefit or any legal or equitable right, remedy or claim under this
Indenture.
Section 112. Governing Law.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CON- FLICTS OF LAWS THEREOF.
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption
Date, Maturity or Stated Maturity of any Note shall not be a
Business Day, then (notwithstanding any other provision of this
Indenture or of the Notes) payment of principal of, or premium (if
any) or interest on, the Notes need not be made on such date, but
may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date, Maturity or
Redemption Date, or at the Stated Maturity, provided that no
interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date, Maturity or Stated Maturity, as the
case may be, if such payment is made on the next succeeding
Business Day.
Section 114. Incorporators, Stockholders, Officers and Directors
of the Company Exempt from Individual Liability.
No recourse under or upon any obligation, covenant or
agreement of this Indenture or any indenture supplemental hereto or
of any Note, or for any claim based thereon or otherwise in respect
thereof, shall be had against any incorporator, stockholder,
officer or director, as such, past, present or future, of the
Company or of any successor corporation to the Company, either
directly or through the Company, or any successor corporation,
whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it
being expressly understood that this Indenture and the obligations
issued hereunder are solely corporate obligations, and that no such
personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, stockholders, officers or
directors, as such, of the Company or of any such successor
corporation, or any of them, because of the creation of the
indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or
in any of the Notes or implied therefrom; and that any and all such
personal liability of every name and nature, either at common law
or in equity or by constitution or statute, of, and any and all
such rights and claims against, every such incorporator,
stockholder, officer or director, as such, because of the creation
of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or
in any of the Notes or implied therefrom are hereby expressly
waived and released as a condition of, and as consideration for,
the execution of this Indenture and the issue of such Notes.
Section 115. Counterparts.
This Indenture may be executed in any number of
counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same
agreement.
ARTICLE TWO
FORMS OF NOTES
Section 201. Forms Generally.
The Notes and the Trustee's certificates of
authentication thereon shall be in substantially the forms set
forth in this Article, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any securities
exchange or as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution
thereof. Any portion of the text of any Note may be set forth on
the reverse thereof, with an appropriate reference thereto on the
face of the Note.
The definitive Notes shall be printed, lithographed or
engraved or produced by any combination of these methods on
engraved steel borders or may be produced in any other manner
permitted by the rules of any securities exchange on which the
Notes may be listed, all as determined by the officers executing
such Notes, as evidenced by their execution thereof.
Section 202. Form of Face of Note.
KASH N' KARRY FOOD STORES, INC. 11.5% Senior Fixed Rate
Notes due 2003
No. ____ $__________
Kash n' Karry Food Stores, Inc., a Delaware corporation
(herein called the "Company," which term includes any successor
corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to ,
or registered assigns, the principal sum of
Dollars on February 1, 2003, and to pay interest thereon from
December 29, 1994 or from the most recent Interest Payment Date
to which interest has been paid semi-annually on February 1 and
August 1 in each year,
commencing August 1, 1995, at the rate of 11.5% per annum, until
the principal hereof is paid or made available for payment.
Interest shall be computed on the basis of a 360-day year of twelve
30-day months.
The interest so payable on any Interest Payment Date
will, as provided in the Indenture, be paid to the Person in whose
name this Note (or one or more Predecessor Notes) is registered at
the close of business on the Regular Record Date for such interest,
which shall be the January 15 or July 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid will forthwith
cease to be payable to the Holder so registered on such Regular
Record Date and may either be paid to the Person in whose name this
Note (or one or more Predecessor Notes) is registered at the close
of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall
be given to Holders not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which the Notes may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said
Indenture.
On or prior to February 1, 1996, the Company may, at its
option and in its sole discretion, in lieu of paying interest in
cash, issue additional Notes (the "Secondary Notes") in an
aggregate principal amount equal to the amount of cash interest due
and payable on any Interest Payment Date, provided that the Company
may not issue Secondary Notes in lieu of paying interest in cash if
an Event of Default, or an event or condition which with notice or
lapse of time or both would become an Event of Default, shall have
occurred and be continuing immediately prior to or as a result of
such issuance of Secondary Notes. In any such case, the Trustee or
any Authenticating Agent (upon Company Order given not less than 5
nor more than 45 Business Days prior to such Interest Payment Date)
shall authenticate for original issue Secondary Notes in an
aggregate principal amount equal to the amount of cash interest due
and payable on such Interest Payment Date. Such Company Order
shall specify the amount of the Notes to be authenticated and the
date on which such Secondary Notes are to be authenticated. Each
issuance of Secondary Notes in lieu of payment of interest in cash
shall be made pro rata with respect to the outstanding Notes;
provided, however, that the Company may at its option pay cash in
lieu of issuing Secondary Notes in any denomination of less than
$100.
Subject to the provisions of the immediately preceding
paragraph, payment of the principal of, premium, if any, and
interest on, and the Change of Control Purchase Price, if any, and
Redemption Price with respect to, this Note will be made at the
office or agency of the Company maintained for that purpose in the
Borough of Manhattan, The City of New York or at any other office
or agency maintained by the Company for such purpose, in such coin
or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Note Register.
Notwithstanding the foregoing, at the option of any Holder of at
least $1,000,000 aggregate principal amount of Notes upon written
notice to the Company at least 30 days prior to the respective
payment date, but subject to the immediately preceding paragraph,
payments of principal, premium, if any, and interest will be made
by wire transfer to an account within the United States maintained
by such Holder with a bank which is a member of the Federal Reserve
System.
Reference is hereby made to the further provisions of
this Note set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this
place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof, or by
the Authenticating Agent appointed as provided in the Indenture, by
manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.
Dated:
KASH N' KARRY FOOD STORES, INC.
By_________________________________ [SEAL] Attest:
____________________________
Authorized Signatory
Section 203. Form of Reverse of Note.
This Note is one of a duly authorized issue of Notes of
the Company designated as its 11.5% Senior Fixed Rate Notes due
2003 (herein called the "Notes"), limited (except as otherwise
provided in the Indenture referred to below) in aggregate principal
amount to $135,000,000 issued and to be issued under an Indenture,
dated as of December 29, 1994 (herein called the "Indenture"),
between the Company and Shawmut Bank Connecticut, N.A., as Trustee
(herein called the "Trustee," which term includes any successor
trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee, and the Holders of the
Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered.
The Notes are general unsecured obligations of the Company.
If at any time either (a) any person or any persons
acting together (excluding the Original Stockholders) that
constitute a "group" for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended, shall beneficially own
at least 50% of the total voting stock of the Company or (b) any
person or any persons acting together (excluding the Original
Stockholders) that constitute a "group" for purposes of Section
13(d) of the Securities Exchange Act of 1934, as amended, shall
succeed in having a sufficient number of its nominees elected to
the Board of Directors of the Company to constitute a majority of
the Board of Directors of the Company (each, a "Change of
Control"), then the Company shall make an offer to repurchase any
or all of the Outstanding Notes at a price, payable in cash, in an
amount equal to 100% of the principal amount thereof plus accrued
and unpaid interest, if any, to the Change of Control Purchase Date
(the "Change of Control Purchase Price") in accordance with the
procedures set forth in the Indenture; provided that such
repurchase shall be conditioned upon receipt by the Company of the
Notes representing at least 50% of the aggregate principal amount
of the Outstanding Notes.
The Notes are subject to redemption upon not less than 30
nor more than 60 days' notice by first-class mail, at any time, as
a whole or in part, at the election of the Company, at 100% of the
principal amount thereof together, in the case of any such
redemption, with accrued and unpaid interest, if any, to the
Redemption Date, but interest installments whose Stated Maturity is
on or prior to such Redemption Date will be payable to the Holders
of such Notes, or one or more Predecessor Notes, of record at the
close of business on the relevant Regular Record Dates referred to
on the face hereof, all as provided in the Indenture.
In the event of redemption of this Note in part only, a
new Note or Notes for the unredeemed portion hereof, if any, will
be issued in the name of the Holder hereof upon the cancellation
hereof. Notes may be redeemed in part in integral multiples of
$1,000 only. The Notes to be redeemed shall, on the Redemption
Date, become due and payable at the Redemption Price herein
specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price) such Notes shall
cease to bear interest.
If, at any time prior to maturity hereof, the Company
engages in an Asset Sale which results in Excess Proceeds, then at
the option of the Holder, this Note shall be subject to repurchase
by the Company out of such Excess Proceeds pursuant to the
Indenture.
If an Event of Default shall occur and be continuing, the
principal of all the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including
certain amendments permitted without the consent of any Holders) as
therein provided, the amendment thereof and the modification of the
rights and obligations of the Company and the rights of the Holders
of the Notes under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of not less than a majority
in aggregate principal amount of the Notes at the time Outstanding.
The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Notes at
the time Outstanding, on behalf of the Holders of all the Notes, to
waive compliance by the Company with certain provisions of the
Indenture and the Notes and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by or
on behalf of the Holder of this Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or
in exchange herefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of
this Note or of the Indenture shall alter or impair the obligation
of the Company or other obligor of the Notes, which is absolute and
unconditional, to pay the principal of, and premium, if any, and
interest on this Note at the times, place, and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Note is
registrable in the Note Register, upon surrender of this Note for
registration of transfer at the office or agency of the Company in
the Borough of Manhattan, The City of New York or at any other
office or agency maintained by the Company for such purpose, duly
endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Note Registrar, duly
executed by the Holder hereof or its attorney duly authorized in
writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Notes are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple
thereof, provided, however, that if the Company elects to pay
interest to the Holder hereof by issuing Secondary Notes and the
amount of such interest is not an integral multiple of $1,000, the
Company may issue to the Holder hereof a Secondary Note in a
denomination of less than $1,000 and in a principal amount equal to
the excess of the amount of such interest over an integral multiple
of $1,000, and provided further that if the aggregate principal
amount of Notes to be issued to any beneficial holder of the
Company's 12 3/8% Senior Notes due 1999 or the Company's Senior
Floating Rate Notes due August 2, 1996 on December 29, 1994,
pursuant to the Plan (whether on account of interest accrued
thereon at the contract rate from February 3, 1994 and February 2,
1994, respectively, through but not including November 9, 1994, or
on account of an election of such holder to receive both Notes and
Senior Floating Rate Notes, or both) is not an integral multiple of
$1,000, the Company may issue to such beneficial holder a Note in a
denomination of less than $1,000 and in a principal amount equal to
the excess of such aggregate principal amount over an integral
multiple of $1,000. As provided in the Indenture and subject to
certain limitations therein set forth, Notes are exchangeable for a
like aggregate principal amount of Notes of a different authorized
denomination, as requested by a Holder surrendering the same.
No service charge shall be made for any such registration
of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to and at the time of due presentment of this Note
for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose
name this Note is registered as the owner hereof for all purposes,
whether or not any amount due in respect of this Note be overdue,
and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
All terms used in this Note which are defined in the
Indenture and not otherwise defined herein shall have the meanings
assigned to them in the Indenture.
Section 204. Form of Trustee's Certificate of Authentication.
Certificate of Authentication
This is one of the 11.5% Senior Fixed Rate Notes due 2003
referred to in the within-mentioned Indenture.
Dated: , as Trustee
By_________________________ Authorized Signatory
Section 205. Form of Assignment.
To assign this Note, fill in the form below:
I or we assign and transfer this Note to:
-------------------------- : :
-------------------------- (Insert assignee's social security or
tax ID no.) _____________________________________
_____________________________________
_____________________________________ (Print or type assignee's
name, address and zip code)
and irrevocably appoint
_____________________________________
_____________________________________ agent to transfer this Note
on the books of the Company. The agent may substitute another to
act for him or her.
Date:______________ Your Signature:_______________________* (Sign
exactly as your name appears on the other side of this Security)
* Your signature must be guaranteed by an eligible guarantor
institution which is a member of the Securities Transfer Agents
Medallion Program, the Stock Exchange Medallion Program or the New
York Stock Exchange Medallion Signature Program.
Section 2 Form of Option of Holder to Elect Redemption.
If you wish to elect to have this Note purchased by the
Company pursuant to Section 1013 or Section 1109 of the Indenture,
check the box:
______
$___________
Date:___________________ Signature _________________________ (Sign
exactly as your name appears on the other side of this
Note)
Signature Guarantee: ______________________________________ Member
firm of an eligible guarantor institution which is a member of the
Securities Transfer Agents Medallion Program, the Stock Exchange
Medallion Program or the New York Stock Exchange Medallion
Signature Program
ARTICLE THREE
THE NOTES Section 301. Title and
Terms.
The aggregate principal amount of Notes that may be
authenticated and delivered under this Indenture is limited (except
as otherwise provided in this Indenture or the Plan) to
$135,000,000, except for Notes authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of,
other Notes pursuant to Sections 304, 305, 306, 906, 1013 or 1108.
The Notes shall be known and designated as the "11.5%
Senior Fixed Rate Notes due 2003" of the Company. Their Stated
Maturity shall be February 1, 2003, and they shall bear interest at
the rate of 11.5% per annum, from the date of issuance or from the
most recent Interest Payment Date to which interest has been paid,
payable semiannually on February 1 and August 1 in each year,
commencing August 1, 1995 until the principal thereof is paid or
made available for payment.
On or prior to February 1, 1996, the Company may, at its
option and in its sole discretion, in lieu of paying interest in
cash, issue additional Notes (the "Secondary Notes") in an
aggregate principal amount equal to the amount of cash interest due
and payable on any Interest Payment Date, provided that the Company
may not issue Secondary Notes in lieu of paying interest in cash if
an Event of Default, or an event or condition which with notice or
lapse of time or both would become an Event of Default, shall have
occurred and be continuing immediately prior to or as a result of
such issuance of Secondary Notes. In any such case, the Trustee or
any Authenticating Agent (upon Company Order given not less than 5
nor more than 45 Business Days prior to such Interest Payment Date)
shall authenticate for original issue Secondary Notes in an
aggregate principal amount equal to the amount of cash interest due
and payable on such Interest Payment Date. Such Company Order
shall specify the amount of the Notes to be authenticated and the
date on which such Secondary Notes are to be authenticated. Each
issuance of Secondary Notes in lieu of payment of interest in cash
shall be made pro rata with respect to the outstanding Notes;
provided, however, that the Company may at its option pay cash in
lieu of issuing Secondary Notes in any denomination of less than
$100.
The principal of, premium, if any, and interest on the
Notes shall be payable at the office or agency of the Company in
the Borough of Manhattan, The City of New York maintained for such
purpose or at any other office or agency maintained by the Company
for such purpose; provided, however, that, at the option of the
Company and subject to the immediately preceding paragraph, payment
of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Note
Register. Notwithstanding the foregoing, at the option of any
Holder of at least $1,000,000 aggregate principal amount of Notes
upon written notice to the Company at least 30 days prior to the
respective payment date, but subject to the immediately preceding
paragraph, payments of principal, premium, if any, and interest
will be made by wire transfer to an account within the United
States maintained by such Holder with a bank which is a member of
the Federal Reserve System.
Section 302. Denominations.
The Notes shall be issuable only in registered form
without coupons and only in denominations of $1,000 and any
integral multiple thereof, provided, however, that if the Company
elects to pay interest to the Holder of a Note by issuing Secondary
Notes and the amount of such interest is not an integral multiple
of $1,000, the Company may issue to such Holder a Secondary Note in
a denomination of less than $1,000 and in a principal amount equal
to the excess of the amount of such interest over an integral
multiple of $1,000, and provided further that if the aggregate
principal amount of Notes to be issued to any beneficial holder of
the Company's 12 3/8% Senior Notes due 1999 or the Company's Senior
Floating Rate Notes due August 2, 1996 on December 29, 1994,
pursuant to the Plan (whether on account of interest accrued
thereon at the contract rate from February 3, 1994 and February 2,
1994, respectively, through but not including November 9, 1994, or
on account of an election of such holder to receive both Notes and
Senior Floating Rate Notes, or both) is not an integral multiple of
$1,000, the Company may issue to such beneficial holder a Note in a
denomination of less than $1,000 and in a principal amount equal to
the excess of such aggregate principal amount over an integral
multiple of $1,000.
Section 303. Execution, Authentication, Delivery and Dating.
The Notes shall be executed on behalf of the Company by
its Chairman of the Board, its President or one of its Vice
Presidents under its corporate seal, and attested by its Secretary
or one of its Assistant Secretaries. The signature of any of these
officers on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company
shall bind the Company, notwith- standing that such individuals or
any of them have ceased to hold such offices prior to the
authentication and delivery of such Notes or did not hold such
offices at the date of such Notes.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Notes executed
by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Notes,
and the Trustee in accordance with such Company Order shall
authenticate and deliver such Notes as provided in this Indenture
and not otherwise.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there
appears on such Note a certificate of authenti- cation
substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Note
shall be conclusive evidence, and the only evidence, that such Note
has been duly authenticated and delivered hereunder.
In case the Company, pursuant to Article Eight, shall be
consolidated or merged with or into any other Person or shall
convey, transfer or lease substantially all of its properties and
assets to any Person, and the successor Person resulting from such
consolidation, or surviving such merger, or into which the Company
shall have been merged, or the Person which shall have received a
conveyance, transfer or lease as aforesaid, shall have executed an
indenture supplemental hereto with the Trustee pursuant to Article
Eight, any of the Notes authenticated or delivered prior to such
consolidation, merger, conveyance, transfer or lease may, from time
to time, at the request of the successor Person, be exchanged for
other Notes executed in the name of the successor Person with such
changes in phraseology and form as may be appropriate, but
otherwise in substance of like tenor as the Notes surrendered for
such exchange and of like principal amount; and the Trustee or
Authenticating Agent, upon Company Request of the successor Person,
shall authenticate and deliver Notes as specified in such request
for the purpose of such exchange. If Notes shall at any time be
authenticated and delivered in any new name of a successor Person
pursuant to this Section in exchange or substitution for or upon
registration of transfer of any Notes, such successor Person, at
the option of the Holders but without expense to them, shall
provide for the exchange of all Notes at the time Outstanding for
Notes authenticated and delivered in such new name.
Section 304. Temporary Notes.
Pending the preparation of definitive Notes, the Company
may execute, and upon Company Order the Trustee shall authenticate
and make available for delivery, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination, substantially of the tenor of the
definitive Notes in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other
variations as the officers executing such Notes may determine, as
evidenced by their execution of such Notes.
If temporary Notes are issued, the Company will cause
definitive Notes to be prepared without unreasonable delay. After
the preparation of definitive Notes, the temporary Notes shall be
exchangeable for definitive Notes upon surrender of the temporary
Notes at any office or agency of the Company designated pursuant to
Section 1002, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes, the Company shall
execute, and the Trustee shall authenticate and make available for
delivery in exchange therefor, a like principal amount of defini-
tive Notes of authorized denominations. Until so exchanged the
temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as definitive Notes endorsed thereon.
Section 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such
office and in any other office or agency designated pursuant to
Section 1002 being herein sometimes collectively referred to as the
"Note Register") in which, subject to such reasonable regulations
as it may prescribe, the Company shall provide for the registration
of Notes and of transfers of Notes. The Trustee is hereby
appointed "Note Registrar" for the purpose of registering Notes and
transfers of Notes as herein provided. The Note Registrar may
resign as Note Registrar at any time by giving written notice
thereof to the Company.
Upon surrender for registration of transfer of any Note
at an office or agency of the Company designated pursuant to
Section 1002 for such purpose, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Notes of any
authorized denominations and of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for
other Notes of any authorized denominations and of a like aggregate
principal amount, upon surrender of the Notes to be exchanged at
such office or agency. Whenever any Notes are so surrendered for
exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Notes which the Holder making the
exchange is entitled to receive.
All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Company
evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Notes surrendered upon such registration of
transfer or exchange.
Every Note presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or
the Trustee) be duly endorsed by, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the
Note Registrar duly executed by, the Holder thereof or its attorney
duly authorized in writing.
No service charge shall be made to a Holder for any
registration of transfer or exchange of Notes, but the Company may
require payment of a sum sufficient to cover any documentary, stamp
or similar issue or transfer tax or other governmental charge that
may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 304,
the second sentence of Section 906 or Sections 1013 or 1108 not
involving any transfer.
The Company shall not be required to (i) issue, register
the transfer of or exchange any Note during a period beginning at
the opening of business 15 days before the day of the mailing of a
notice of redemption of Notes selected for redemption and ending at
the close of business on the day of such mailing, or (ii) register
the transfer of or exchange any Note so selected for redemption in
whole or in part, except the unredeemed portions of any Note being
redeemed in part.
Section 306. Mutilated, Destroyed, Lost and Stolen Notes.
If any mutilated Note is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Note, of like tenor and
principal amount and bearing a number not contemporaneously
outstanding.
If there shall be delivered to the Company and the
Trustee (i) evidence to their satisfaction of the destruction, loss
or theft of any Note and (ii) such security or indemnity as may be
reasonably required by them to save each of them and any agent of
either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Note has been acquired by a bona
fide purchaser, the Company shall execute, and upon its request the
Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Note, a new Note of like tenor and
principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen
Note has become due and payable, the Company in its discretion may,
instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section, the
Company may require the payment of its reasonable expenses
(including the reasonable fees and ex- penses of the Trustee)
connected therewith and any documentary, stamp or similar issue or
transfer tax or governmental charge imposed in relation to such
issuance.
Every new Note issued pursuant to this Section in lieu of
any destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Notes
duly issued hereunder.
Section 307. Payment of Interest; Interest Rights Preserved.
Interest on any Note that is payable on any Interest
Payment Date shall be paid by the Paying Agent to the Person in
whose name that Note (or one or more Predecessor Notes) is
registered at the close of business on the Regular Record Date for
such interest.
Any interest on any Note that is payable, but is not
punctually paid, on any Interest Payment Date and interest on such
defaulted interest at the then applicable interest rate borne by
the Notes plus 2%, to the extent lawful (such defaulted interest
and interest thereon herein collectively called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date notwithstanding the fact that such
Holder was a Holder on such Regular Record Date, and such Defaulted
Interest may be paid by the Company, at its election, as provided
in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes (or their
respective Predecessor Notes) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Note and the date of
the proposed payment, and (subject to the provisions of the third
paragraph of Section 301) at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as provided in this Clause.
Thereupon the Trustee shall fix a record date (the "Special Record
Date") for the payment of such Defaulted Interest which shall be
not more than 15 days and not less than 10 days prior to the date
of the pro- posed payment and not less than 5 days after the
receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder at its address as it appears in the Note
Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Notes (or
their respective Predecessor Notes) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may then be listed, and upon
such notice as may be required by such exchange, if, after notice
given by the Company to the Trustee of the proposed payment
pursuant to this Clause, such manner of payment shall be deemed
practicable by the Trustee (acting reasonably).
Subject to the foregoing provisions of this Section, each
Note delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Note shall carry the
rights to interest accrued and unpaid, and to accrue, which were
carried by such other Note.
Section 308. Persons Deemed Owners.
Prior to and at the time of due presentment of a Note for
registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such
Note is registered as the owner of such Note for the purpose of
receiving payment of principal of, premium, if any, and (subject to
Section 307) interest on such Note and for all other purposes
whatsoever, whether or not any payment due in respect of such Note
be overdue, and neither the Company, the Trustee nor any agent of
the Company or the Trustee shall be affected by notice to the
contrary.
Section 309. Cancellation.
All Notes surrendered for payment, purchase, redemption,
registration of transfer or exchange shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and
shall be promptly cancelled by it. The Company may at any time
deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder, which the Company may have
acquired in any manner whatsoever, and all Notes so delivered shall
be promptly cancelled by the Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled as
provided in this Section, except as expressly permitted by this
Indenture. All cancelled Notes held by the Trustee shall be
returned promptly to the Company upon its written request.
Section 310. Computation of Interest.
Interest on the Notes shall be computed on the basis of a
360-day year of twelve 30-day months.
Section 311. CUSIP Numbers.
The Company in issuing the Notes may use "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either
as printed on the Notes or as contained in any notice of a
redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such
redemption shall not be affected by any defect in or omission of
such numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction, Discharge of the Indenture and
Defeasance of the Notes.
The Company shall be deemed to have paid and discharged
the entire indebtedness on the Notes and the provisions of this
Indenture shall cease to be of further effect (subject to this
Section 401 and Section 403), if:
(1) The Company irrevocably deposits in trust with the Trustee
for the benefit of the Holders, pursuant to an irrevocable trust
and security agreement in form and substance reasonably
satisfactory to the Trust- ee, cash in United States dollars, U.S.
Government Obligations, or a combination thereof, in an amount
sufficient (in the opinion of a nationally recognized firm of
independent public accountants, which opinion shall be expressed in
a certificate delivered to the Trustee) to pay the principal of,
premium, if any, and each installment of principal, premium (if
any) and interest on the Notes then outstanding at the Maturity or
the Redemption Date, as the case may be, of such principal,
premium, if any, or installment of principal, premium (if any) or
interest in accordance with the terms of the Indenture and of the
Notes;
(2) Such deposits shall not cause the Trustee to have a
"conflicting interest" as defined in and for purposes of the Trust
Indenture Act;
(3) Such deposit will not result in a default under this
Indenture or a breach or violation of, or constitute a default
under, any other material instrument to which either the Company or
any Subsidiary is a party or by which it or its property is bound;
(4) The Company shall have delivered to the Trustee an opinion of
independent counsel reasonably satisfactory to the Trustee based on
the fact that (x) a ruling has been published by the Internal
Revenue Service or (y) since the date hereof, there has been a
change in the applicable Federal income tax law, in either case, to
the effect that, and such opinion shall confirm that, the deposit,
defeasance and discharge will not be deemed, or result in, a
taxable event to the Holders of the Notes and the Holders will be
subject to income tax on the same amounts and in the same manner
and at the same times as would have been the case if such deposit,
defeasance and discharge had not occurred;
(5) The Company shall not be subject to regulation pursuant to
the provisions of the Investment Company Act of 1940;
(6) The Company shall have delivered to the Trustee an opinion of
independent counsel to the effect that after the passage of 90 days
(or any greater period of time in which any such deposit of trust
funds may remain subject to Bankruptcy Laws insofar as those laws
apply to the Company) following the deposit of the trust funds,
such funds will not be sub- ject to any Bankruptcy Laws affecting
creditors' rights generally;
(7) The Company shall have delivered to the Trustee an opinion of
independent counsel to the effect that the Holders of the Notes
will have a valid, perfected and unavoidable (under applicable
Bankruptcy Laws), subject to the passage of time referred to in
clause (6), first-priority security interest in the trust funds;
(8) No Event of Default, or an event or condition which with
notice or lapse of time or both would become an Event of Default,
shall have occurred and be continuing (A) on the date of the
deposit of such trust funds with the Trustee or (B) during the
period ending on the 91st day (or one day after such other greater
period of time in which any such deposit of trust funds may remain
subject to bankruptcy or insolvency laws) after such date; and
(9) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel (who may be outside counsel
to the Company), each in form and substance satisfactory to the
Trustee, each stating that all conditions precedent specified
herein relating to the satisfaction and discharge contemplated by
this Section 401 have been complied with.
In the event all or any portion of the Notes are to be
redeemed through such irrevocable trust, the Company must make
arrangements satisfactory to the Trustee, at the time of such
deposit, for the giving of the notice of such redemption or
redemptions by the Trustee in the name and at the expense of the
Company.
In the event that the Company takes the necessary action
to comply with the provisions described in this Section 401 and the
Notes are declared due and payable because of the occurrence of an
Event of Default, the Company will remain liable for all amounts
due on the Notes at the time of acceleration resulting from such
Event of Default in excess of the amount of money and U.S.
Government Obligations deposited with the Trustee pursuant to this
Section 401 at the time of such acceleration.
Section 402. Termination of Obligations upon Cancellation of the
Notes.
In addition to the Company's rights under Section 401,
the Company may terminate all of its obligations under this
Indenture (subject to Section 403) when:
(1) all Notes theretofore authenticated and delivered (other than
Notes which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306) have been delivered to
the Trustee for cancellation;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel (who may be outside counsel
to the Company), each in form and substance satisfactory to the
Trustee, each stating that all conditions precedent specified
herein relating to the satisfaction and discharge of this Indenture
have been complied with.
Section 403. Survival of Certain Obligations.
Notwithstanding the satisfaction and discharge of this
Indenture and of the Notes referred to in Sections 401 and 402, the
respective obligations of the Company and the Trustee under
Sections 303, 305, 306, 307, 405, 406, 407, 408, 607, 609, 610,
701, 1001, 1002, 1003 and 1101 shall survive until the Notes are no
longer outstanding, and thereafter the obligations of the Company
and the Trustee under Sections 305, 405, 406, 407, 408 and 607
shall survive. Nothing contained in this Article Four shall
abrogate any of the obligations or duties of the Trustee under this
Indenture.
Section 404. Acknowledgement of Discharge by Trustee.
After (i) the conditions of Sections 401 or 402 have been
satisfied, (ii) the Company has paid or caused to be paid all other
sums payable hereunder by the Company and (iii) the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent referred to in
Sections 401 or 402, as applicable, relating to the satisfaction
and discharge of this Indenture have been complied with, the
Trustee upon request shall acknowledge in writing the discharge of
the Company's obligations under this Indenture except for those
surviving obligations specified in Section 403.
Section 405. Application of Trust Money.
Subject to the provisions of the last paragraph of
Section 1003, all money deposited with the Trustee pursuant to
Section 401 shall be held in trust and applied by it, in accordance
with the provisions of the Notes and this Indenture, to the payment
to the persons entitled thereto (as determined by the Trustee),
either directly or through any Paying Agent as the Trustee may
determine, of the principal, premium, if any, and interest for
whose payment such money has been deposited with the Trustee.
Section 406. Repayment to the Company.
Upon termination of the trust established pursuant to
Sections 401 or 402, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess money or U.S.
Government Obligations held by them.
Section 407. Reinstatement.
If the Trustee or Paying Agent is unable to apply any
money or U.S. Government Obligations in accordance with Sections
401 or 402 by reason of any legal proceeding or by reason of any
order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant
to Sections 401 or 402 until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government
obligations in accordance with Sections 401 or 402; provided,
however, that if the Company has made any payment of principal of,
premium, if any, or interest on any Notes because of the
reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment
from the money or U.S. Government obligations held by the Trustee
or Paying Agent.
Section 408. Indemnity.
The Company shall pay and indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the
U.S. Government Obligations deposited pursuant to Section 401 or
the principal or interest received in respect of such obligations,
and shall pay and indemnify the Holders against any tax, fee or
charge that would not have been imposed or assessed but for the
deposit of cash or U.S. Government Obligations pursuant to Section
401.
ARTICLE FIVE REMEDIES
Section 501. Events of Default.
"Event of Default," wherever used herein, means any one
of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or
order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon any Note when it
becomes due and payable, and continuance of any such default for a
period of 30 days; or
(2) default in the payment of the principal of, or premium, if
any, on any Note at its Maturity; or
(3) default in the performance of, or breach of, any covenant,
agreement or warranty of the Company contained in this Indenture
(other than a default in the performance of any covenant, agreement
or warranty, the breach of which is specifically dealt with
elsewhere in this Section 501), and continuance of such default or
breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee, or to
the Company and the Trustee by Holders of at least 40% in aggregate
principal amount of the Outstanding Notes, a written notice
specifying such default or breach, requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(4) default by the Company or any Subsidiary thereof in the
payment of any principal of, or premium, if any, or interest due
(and such default, with respect to payments of interest, shall
continue after the applicable grace period, if any) on any
Indebtedness of the Company or such Subsidiary in excess of
$5,000,000 in the aggregate, or the holder of any lien securing In-
debtedness of $5,000,000 or more shall have commenced foreclosure
of such lien upon property of the Company or such Subsidiary; or
(5) an event of default as defined in any indenture, loan
agreement, mortgage, bond, promissory note or other agreement or
instrument under which there may be issued, or by which there may
be secured or evi- denced, any Indebtedness of the Company or any
Subsidiary thereof in excess of $5,000,000 in the aggregate shall
happen and shall result in such Indebtedness becoming or being
declared due and payable prior to the date on which it would
otherwise become due and payable; or
(6) final judgments or orders rendered against the Company or any
Subsidiary thereof which require the payment in money, either
individually or in an aggregate amount, that is more than
$5,000,000 and there shall have been a period of 60 days during
which a stay of the enforcement of such judgment or order, by
reason of pending appeal or otherwise, was not in effect; or
(7) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company or any
Material Subsidiary in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization
or other similar law or (B) a decree or order adjudging the Company
or any Material Subsidiary a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any
Material Subsidiary under any applicable Federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any
Material Subsidiary or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such
other decree or order unstayed and in effect for a period of 30
consecutive days; or
(8) the commencement by the Company or any Material Subsidiary of
a voluntary case or proceeding under any applicable Federal or
state bankruptcy, insolvency, reorganization or other similar law
or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by the Company or any Material Subsidiary
to the entry of a decree or order for relief in respect of the
Company or such Material Subsidiary in an involuntary case or
proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding
against it, or the filing of the Company or any Material Subsidiary
of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or state law, or the consent by the
Company or any Material Subsidiary to the filing of such petition
or the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or such Material Subsidiary or of any
substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the adoption by the
Board of Directors (or any committee thereof) of the Company or any
Material Subsidiary of any resolution to ap- prove any of the
foregoing.
Section 502. Acceleration of Maturity Date; Rescission and
Annulment.
If an Event of Default (other than an Event of Default
specified in Section 501(7) or (8)) occurs and is continuing, then,
the Trustee or the Holders of not less than 33-1/3% in aggregate
principal amount of the Outstanding Notes, by a notice in writing
to the Company (and to the Trustee if given by Holders) (an
"Acceleration Notice"), in the case of an Event of Default
described in clause (i), (ii) or (iii) above and 40% in aggregate
principal amount of the Outstanding Notes in the case of any other
Event of Default, may declare all of the principal of all the Notes
(or the Change of Control Purchase Price if the Event of Default
includes failure to pay the Change of Control Purchase Price),
determined as set forth below, together with accrued interest
thereon, to be due and payable immediately, and upon any such
declaration such amount shall become due and payable. If an Event
of Default specified in Section 501(7) or (8) occurs and is
continuing, then the principal and accrued interest of all the
Notes shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or
any Holder.
At any time after such a declaration of acceleration has
been made and before a judgment or decree for payment of the money
due has been obtained by the Trustee as hereinafter in this Article
Five provided, the Holders of a majority in aggregate principal
amount of the Outstanding Notes, by written notice to the Company
and the Trustee, may rescind and annul such declaration and its
consequences if:
(a) the Company has paid or deposited with the Trustee a
sum sufficient to pay
(1) all overdue interest on all Notes,
(2) the principal of, and premium, if any, on any
Notes, which would become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Notes,
(3) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate borne by the
Notes plus 2%,
(4) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and
(b) all Events of Default, other than the nonpayment of
the principal of the Notes which have become due solely by such
declaration of acceleration, have been cured or waived as provided
in Section 513.
Notwithstanding the foregoing, in the event of a
declaration of acceleration in respect of the Notes because of an
Event of Default specified in Section 501(4) or (5) shall have
occurred and be continuing, such declaration of acceleration shall
be automatically annulled if the past due indebtedness that is the
subject of such Event of Default has been discharged or the holders
thereof have rescinded their declaration of acceleration in respect
of such Indebtedness or, with respect to an Event of Default
consisting solely of the commencement of a foreclosure proceeding
as described in Section 501(4) (a "Foreclosure Default"), if such
foreclosure shall have been stayed or the Company shall have
obtained a bond in the full amount claimed in such foreclosure
proceeding, and written notice of such discharge, rescission, stay
or bond, as the case may be, shall have been given to the Trustee
by the Company and by the holders of such Indebtedness or a
trustee, fiduciary or agent for such holders, within 60 days after
such declaration of acceleration in respect of the Notes, and no
other Event of Default has occurred during such 60-day period which
has not been cured or waived during such period.
Section 503. Collection of Indebtedness and Suits for Enforcement
by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest
on any Note when such interest becomes due and payable and such
default continues for a period of 30 days, or
(2) default is made in the payment of the principal
of, or premium, if any, on any Note at the Maturity thereof, the
Company shall, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Notes, the whole amount then due and
payable on such Notes for principal, premium, if any, and interest,
and, to the extent that payment of such interest shall be legally
enforceable, interest on any overdue principal and premium, if any,
and on any overdue interest, at the rate borne by the Notes, and,
in addition thereto, such further amount as shall be sufficient to
cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon
such demand, the Trustee, in its own name and as trustee of an
express trust, may institute a judicial proceeding for the
collection of the sums so due and unpaid, may prosecute such
proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Notes and collect
the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon
the Notes, wherever situated.
If an Event of Default occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders by such appropriate judicial
proceedings as the Trustee shall deem most effective to protect and
enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other
proper remedy.
The rights and remedies under this Section 503 are in
addition to the other rights and remedies under this Article Five.
Section 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other similar judicial proceeding relative to the
Company or any other obligor upon the Notes or the property of the
Company or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Notes shall then be
due and payable as therein expressed or by declaration or otherwise
and irrespective of whether the Trustee shall have made any demand
on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding
or otherwise,
(i) to file and prove a claim for the whole amount
of principal and premium, if any, and interest owing and unpaid in
respect of the Notes and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agent and
counsel) and of the Holders allowed in such judicial proceeding,
and
(ii) to collect and receive any moneys or other
property payable or deliverable on any such claims and to
distribute the same;
and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under
Section 607.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of
any Holder any plan of reorganization, liquidation, arrangement,
adjustment, or composition affecting the Notes or the rights of any
Holder thereof or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding.
Section 505. Trustee May Enforce Claims Without Possession of
Notes.
All rights of action and claims under this Indenture or
the Notes may be prosecuted and enforced by the Trustee without the
possession of any of the Notes or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by
the Trustee shall be brought in its own name and as trustee of an
express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel,
be for the ratable benefit of the Holders of the Notes in respect
of which such judgment has been recovered.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this
Article Five or otherwise on behalf of the Holders or the Trustee
pursuant to this Article or through any proceeding or any amendment
or restructuring in anticipation or in lieu of any proceeding
contemplated by this Article shall be applied, subject to
applicable laws, in the following order, at the date or dates fixed
by the Trustee and, in case of the distribution of such money on
account of principal, premium, if any, or interest, upon
presentation of the Notes and the notation thereon of the payment
if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee
under Section 607;
SECOND: To the payment of the amounts then due and unpaid
for principal of, and premium, if any, and interest on, the Notes
in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Notes for
principal, premium, if any, and interest, respectively; and
THIRD: To the payment of the remainder, if any, to the
Company, its successors or assigns or to whomsoever may be lawfully
entitled thereto, or as a court of competent jurisdiction may
direct.
Section 507. Limitation on Suits.
No Holder of any Note shall have any right to institute
any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for
any other remedy hereunder, unless
(1) such Holder has previously given written notice
to the Trustee of a continuing Event of Default;
(2) the Holders of not less than 33-1/3% in the
case of an Event of Default described in Section 501(l), (2) or (3)
and 40% in the case of any other Event of Default in principal
amount of the outstanding Notes shall have made written request to
the Trustee to institute proceedings in respect of such Event of
Defaults in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the
Trustee reasonable security or indemnity against the costs,
expenses and liabilities to be incurred in compliance with such
request;
(4) the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute
any such proceeding; and
(5) no direction inconsistent with such written
request has been given to the Trustee during such 60-day period by
the Holders of a majority in principal amount of the Outstanding
Notes;
it being understood and intended that no one or more Holders shall
have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other Holders, or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any
right under this Indenture, except in the manner herein provided
and for the equal and ratable benefit of all the Holders.
Section 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture,
the Holder of any Notes shall have the right, which is absolute and
unconditional, to receive payment of the principal of, and premium,
if any, and (subject to Section 307) interest on, such Note on the
respective Stated Maturities of such payments as expressed in such
Notes (and in the case of redemption, the Redemption Price on the
applicable Redemption Date and in the case of a Change of Control,
the Change of Control Purchase Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be
impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture and
such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder,
then, and in every such case, subject to any determination in such
proceeding, (a) the Company, the Trustee and the Holders shall be
restored severally and respectively to their former positions
hereunder and (b) thereafter all rights and remedies of the Trustee
and the Holders shall continue as though no such proceeding had
been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen
Notes in the last paragraph of Section 306, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders
is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion
or employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of
any Note to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article Five or by law to the
Trustee or to the Holders may be exercised from time to time, and
as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
Section 512. Control by Holders.
The Holders of a majority in aggregate principal amount
of the Outstanding Notes shall have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred
on the Trustee, provided that
(1) such direction shall not be in conflict with
any rule of law or with this Indenture, and
(2) subject to the provisions of Section 315 of the
Trust Indenture Act, the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such
direction.
The Company shall set a record date for purposes of
determining the identity of Holders entitled to vote or consent to
any action by vote or consent authorized or permitted by this
Indenture. Unless the Company provides otherwise, in the form of
an Officers' Certificate provided to the Trustee, such record date
shall be 30 days prior to the first such vote or solicitation of
such consent.
Section 513. Waiver of Past Default.
The Holders of not less than a majority in aggregate
principal amount of the Outstanding Notes may, on behalf of all
Holders, waive any past default hereunder and its consequences,
except a default
(1) in the payment of the principal of, premium, if
any, or interest on, any Security as specified in clauses (1), (2)
or (3) of Section 501, or
(2) in respect of a covenant or provision hereof
which, under Article Nine, cannot be modified or amended without
the consent of the Holder of each Outstanding Note affected.
Upon any such waiver, such default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have
been cured, for every purpose of this Indenture; but no such waiver
shall extend to any subsequent or other default or impair any right
consequent thereon.
Section 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of
any Note by its acceptance thereof shall be deemed to have agreed,
that any court may in its discre- tion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken, suffered or omitted
by it as Trustee, the filing by any party litigant in such suit of
an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section
shall not apply to any suit instituted by the Company, to any suit
instituted by the Trustee, to any suit instituted by any Holder, or
group of Holders, holding in the aggregate more than 10% in
aggregate principal amount of the Outstanding Notes, or to any suit
instituted by any Holder for enforcement of the payment of
principal of, or premium (if any) or interest on, any Note on or
after the respective Stated Maturities expressed in such Note (or,
in the case of redemption, on or after the Redemption Date).
Section 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law or any usury law wherever enacted, now or
at any time hereafter in force, which may affect the covenants or
the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(2) in the absence of bad faith or willful
misconduct on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but
in the case of any such certificates or opinions which, by any
provision hereof, are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or
her own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct,
except that
(1) this Subsection (c) shall not be construed to
limit the effect of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority in
principal amount of the Outstanding Notes relating to the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture.
(d) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(e) whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting
the liability of or affording pro- tection to the Trustee shall be
subject to the provisions of this Section.
Section 602. Notice of Defaults.
Within 90 days after the occurrence of any default
hereunder known to the Trustee, the Trustee shall transmit by mail
to (i) all Holders, as their names and addresses appear in the Note
Register, (ii) each Holder who has, within the two years preceding
such transmission, filed its name and address with the Trustee for
that purpose, and (iii) all Holders whose names and addresses have
been furnished to or obtained by the Trustee pursuant to Section
701, notice of such default hereunder known to the Trustee, unless
such default shall have been cured or waived; provided, however,
that, except in the case of a default in the payment of the
principal of, or premium, if any, or interest on, any Note at its
Maturity, Redemption Date or otherwise or in the payment of the
Change of Control Purchase Price on the Change of Control Purchase
Date, the Trustee shall be protected in withholding such notice if
and so long as the board of directors, the executive committee or a
trust committee of directors or Responsible Officers of the Trustee
in good faith determine that the withholding of such notice is in
the interest of the Holders; and provided, further, that in the
case of any default of the character specified in Section 501(3),
no such notice to Holders shall be given until at least 30 days
after the occurrence thereof. For the purpose of this Section, the
term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or
Company Order, and any resolution of the Board of Directors of the
Company may be sufficiently evidenced by a Board Resolution
thereof;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate or an Opinion of Counsel
or both;
(d) the Trustee may consult with counsel of its
selection and the advice of such counsel or any Opinion of Counsel
shall be full and complete autho- rization and protection in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders pursuant to this
Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records
and premises of the Company, personally or by agent or attorney;
and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder.
Section 604. Not Responsible for Recitals or Issuance of Notes.
The recitals contained herein and in the Notes, except
the Trustee's certificates of authentication, shall be taken as the
statements of the Company, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture
or of the Notes, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the
Notes and perform its obligations hereunder and that the statements
made by it in a Statement of Eligibility and Qualification on Form
T- 1, if any, supplied to the Company will be true and accurate
subject to the qualifications set forth therein. The Trustee shall
not be accountable for the use or application by the Company of
Notes or the proceeds thereof.
Section 605. May Hold Notes.
The Trustee, any Authenticating Agent, any Paying Agent,
any Note Registrar or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee
of Notes and, subject to Section 612, may other- wise deal with the
Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Note Registrar or such other
agent.
Section 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law.
The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with
the Company.
Section 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such
reasonable compensation as the Company and the Trustee shall from
time to time agree upon in writing for all services rendered by it
hereunder (which compensation shall not be limited by any provision
of law in regard to the compensation of a trustee of an express
trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
dis- bursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
non-employee agents and counsel), except to the extent any such
expense, disbursement or advance may be attributable to its
negligence, willful misconduct or bad faith; and
(3) to indemnify each of the Trustee or any predecessor
Trustee for, and to hold it harmless against, any and all loss,
damage, claims, liability or expense, including taxes (other than
taxes based upon or determined by the income of the Trustee),
except to the extent arising out of negligence, willful misconduct
or bad faith on the part of the Trustee, arising out of or in
connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
The Trustee shall have a claim prior to the Notes as to
all property and funds properly held by it hereunder for any amount
owing it or any predecessor Trustee pursuant to this Section 607,
except with respect to funds held in trust for the benefit of the
Holders of particular Notes.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(7) or
Section 501(8), the expenses (including the reasonable charges and
expenses of its counsel) and the compensation for the services are
intended to constitute expenses of administration under any
applicable Federal or state bankruptcy, insolvency or other similar
law.
The provisions of this Section shall survive the
termination of this Indenture.
Section 608. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which
shall be a corporation or association organized and doing business
under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by
Federal or state authority and, to the extent there is such an
institution eligible, and willing to serve, having its Corporate
Trust Office in the City of Los Angeles, California, the City of
New York, New York or the City of Hartford, Connecticut. If such
corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the
effect hereinafter specified in this Article Six. The Trustee
shall comply with Sections 310(a)(5) and 310(b) of the Trust
Indenture Act.
Section 609. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the
successor Trustee under Section 610.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If an instrument of acceptance by a
successor Trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction
for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Holders of a majority in aggregate principal amount of the
outstanding Notes, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall cease to be eligible under
Section 608 and shall fail to resign after written request therefor
by the Company or by any Holder, or
(2) the Trustee shall become incapable of acting or
shall be judged a bankrupt or insolvent or a receiver of the
Trustee or of its property shall be appointed or any public officer
shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may
remove the Trustee, or (ii) subject to Section 514, any Holder who
has been a bona fide Holder of a Note for at least six months may,
on behalf of itself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee. If an instrument of
acceptance by a Successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of
removal, the Trustee being removed may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee. If, within one year after
such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Notes
delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the
successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders
and accepted appointment in the manner hereinafter provided, any
Holder who has been a bona fide Holder of a Note for at least six
months may, on behalf of itself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of
a successor Trustee.
(f) The Company shall give notice of each resignation
and each removal of the Trustee and each appointment of a successor
Trustee by mailing written notice of such event by first-class
mail, postage prepaid, to all Holders as their names and addresses
appear in the Note Register. Each notice shall include the name of
the successor Trustee and the address of its Corporate Trust
Office.
Section 610. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall
execute, acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on request of the
Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges pursuant to Section 607, execute and deliver
an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder. Upon request of
any such successor Trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be
qualified and eligible under this Article Six.
Section 611. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the
Trustee shall be a party or any corporation succeeding to all or
substantially all the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this
Article Six, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any
Notes shall have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such
authentication and deliver the Notes so authenticated with the same
effect as if such successor Trustee had itself authenticated such
Notes.
Section 612. Preferential Collection of Claims Against Company.
The Trustee shall comply with Trust Indenture Act
311(a), excluding any creditor relationship listed in Trust
Indenture Act 311(b). A Trustee who has resigned or been
removed shall be subject to Trust Indenture Act 311(a) to the
extent indicated.
Section 613. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents
acceptable to the Company which shall be authorized to act on
behalf of the Trustee to authenticate Notes issued upon original
issue and upon exchange, registration of transfer or partial
redemption or pursuant to Section 306, and Notes so authenticated
shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to
the authentication and delivery of Notes by the Trustee or the
Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the
Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an
Authenticating Agent.
The Company agrees to pay each Authenticating Agent, as
appointed from time to time, such reasonable fees as may be agreed
to in writing by the Company, for services rendered under this
Section 613.
If an appointment is made pursuant to this Section 613,
the Notes may have endorsed thereon, in addition to the Trustee's
certificate of authentication, an alternate certificate of
authentication in the following form:
This is one of the Notes described in the within-mentioned
Indenture.
, as Trustee
By:
As Authenticating Agent
By:
Authorized Officer
Section 614. Paying Agent.
(a) There shall at all times be a Paying Agent hereunder
which shall be a corporation or association organized and doing
business under the laws of the United States of America or of any
State and having a combined capital and surplus of at least
$50,000,000, to the extent there is such an institution eligible
and willing to serve. If there is no such institution eligible and
willing to serve, the Company may act as its own Paying Agent.
(b) The Paying Agent may resign at any time by giving
written notice thereof to the Company. The Company, by a Board
Resolution and upon giving written notice thereof to the Paying
Agent, may remove the Paying Agent at any time.
(c) If the Paying Agent shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the
office of Paying Agent for any cause, the Company, by a Board
Resolution, shall promptly appoint a successor Paying Agent.
(d) The Company shall give notice of each resignation
and each removal of the Paying Agent and each appointment of a
successor Paying Agent by mailing written notice of such event by
first-class mail, postage prepaid, to the Trustee. Each notice
shall include the name and address of the successor Paying Agent.
(e) The Trustee is hereby initially appointed "Paying Agent".
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND
COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of
Holders.
(a) The Company shall furnish or cause to be furnished
to the Trustee
(i) semi-annually, not more than 15 days
after each Regular Record Date, a list, in such form as the Trustee
may reasonably require, of the names and addresses of the Holders
as of such Regular Record Date, and
(ii) at such other times as the Trustee may
request in writing, within 30 days after the receipt by the Company
of any such request, a list in similar form and content as of a
date not more than 15 days prior to the time such list is
furnished;
provided, however, that if and so long as the Trustee shall be the
Note Registrar, no such list need be furnished.
(b) If and whenever the Company or any Affiliate
acquires any Notes, the Company shall promptly, and in any event
within 15 days, provide the Trustee with written notice of such
acquisition, the aggregate principal amount acquired, the Holder
from whom such Notes were acquired and the date of such
acquisition.
Section 702. Preservation of Information; Communications to
Holders.
(a) The Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of Holders
contained in the most recent list furnished to the Trustee as
provided in Section 701 and the names and addresses of Holders
received by the Trustee in its capacity as Note Registrar. The
Trustee may destroy any list furnished to it as provided in Section
701 upon receipt of a new list so furnished.
(b) If one Holder (herein referred to as an "applicant")
applies in writing to the Trustee, and furnishes to the Trustee
reasonable proof that such appli- cant has owned a Note for a
period of at least six months preceding the date of such
application, and such application states that the applicant desires
to communicate with other Holders with respect to their rights
under this Indenture or under the Notes and is accompanied by a
copy of the form of proxy or other communication which such
applicant proposes to transmit, then the Trustee shall, within five
Business Days after the receipt of such application, at its
election, either
(i) afford to such applicant access to the
information preserved at the time by the Trustee in accordance with
Section 702(a), or
(ii) inform such applicant as to the approximate
number of Holders whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with
Section 702(a), and as to the ap- proximate cost of mailing to such
Holders the form of proxy or other communication, if any, specified
in such application.
If the Trustee shall elect not to afford such applicant
access to such information, the Trustee shall, upon the written
request of such applicant, mail to each Holder whose name and
address appears in the information preserved at the time by the
Trustee in accordance with Section 702(a) a copy of the form of
proxy or other communication which is specified in such request,
with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment,
of the reasonable expenses of mailing, unless within five days
after such tender the Trustee shall mail to such applicant and file
with the Commission, together with a copy of the material to be
mailed, a written statement to the effect that, in the opinion of
the Trustee, such a mailing would be contrary to the best interest
of the Holders or would be in violation of applicable law. Such
written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections
specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry
of an order sustaining one or more of such objections, the
Commission shall find, after notice and opportunity for hearing,
that all the objections so sustained have been met and shall enter
an order so declaring, the Trustee shall mail copies of such
material to all such Holders with reasonable promptness after the
entry of such order and the renewal of such tender.
(c) Every Holder of Notes, by receiving and holding the
same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any agent of any of them shall be held
accountable by reason of the disclosure of any such information as
to the names and addresses of the Holders in accordance with
Section 702(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request
made under Section 702(b).
Section 703. Reports by Trustee.
This Section 703 shall not be operative as a part of this
Indenture until this Indenture is qualified under the Trust
Indenture Act, and, until such qualification, this Indenture shall
be construed as if this Section 703 were not contained herein.
Within 60 days after May 15 of each year commending with
the year 1995, the Trustee shall transmit by mail to (i) all
Holders, as their names and addresses appear in the Note Register,
(ii) all Holders who have, within the two years preceding such
transmission, filed their names and addresses with the Trustee for
that purpose, and (iii) all Holders whose names and addresses have
been furnished to or obtained by the Trustee pursuant to Section
701, a brief report dated as of such May 15 with respect to:
(1) its eligibility under Section 608 and its
qualifications under the Trust Indenture Act or, in lieu thereof,
if to the best of its knowledge it has continued to be eligible and
qualified under said statute, a written statement to such effect;
(2) the creation of or any material change to a
relationship specified in paragraphs (1) through (10) of Trust
Indenture Act 310(b);
(3) the character and amount of any advances (and
if the Trustee elects so to state, the circumstances surrounding
the making thereof) made by the Trustee (as such) which remain
unpaid on the date of such report, and for the reimbursement of
which it claims or may claim a lien or charge, prior to that of the
Notes, on any property or funds held or collected by it as Trustee,
except that the Trustee shall not be required (but may elect) to
report such advances if such advances so remaining unpaid aggregate
not more than one-half of 1% of the principal amount of the Notes
outstanding on the date of such report;
(4) any change to the amount, interest rate and
maturity date of all other indebtedness owing by the Company (or by
any other obligor on the Notes) to the Trustee in its individual
capacity, on the date of such report, with a brief description of
any property held as collateral security therefor, except an
indebtedness based upon a creditor relationship arising in any
manner described in Section 612;
(5) any change to the property and funds physically
in the possession of the Trustee as such on the date of such
report;
(6) any additional issue of Notes which the Trustee
has not previously reported; and
(7) any action taken by the Trustee in the
performance of its duties hereunder which it has not previously
reported and which in its opinion materially affects the Notes,
except action in respect of a default, notice of which has been or
is to be withheld by the Trustee in accordance with Section 602.
(b) The Trustee shall transmit by mail to all Holders,
as their names and addresses appear in the Note Register, a brief
report with respect to the character and amount of any advances
(and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee (as such) since
the date of the last report transmitted pursuant to Subsection (a)
of this Section 703 (or if no such report has yet been so
transmitted, since the date of execution of this Indenture) for the
reimbursement of which it claims or may claim a lien or charge,
prior to that of the Notes, on property or funds held or collected
by it as Trustee and which it has not previously reported pursuant
to this subsection (b), except that the Trustee shall not be
required (but may elect) to report such advances if such advances
remaining unpaid at any time aggregate 10% or less of the principal
amount of the Notes outstanding at such time, such report to be
transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of
such transmission to Holders, be filed by the Trustee with each
stock exchange, if any, upon which the Notes are listed, with the
Commission and with the Company. The Company shall promptly notify
the Trustee when the Notes are listed on any stock exchange.
Section 704. Reports by Company.
(a) The Company shall:
(1) file with the Commission copies of the audited
annual reports, unaudited quarterly reports and other information,
documents and reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and
regulations prescribe) that the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
Exchange Act; or, if the Company is not required to file
information, documents or reports pursuant to either of such
Sections, then the Company shall file with the Commission, in
accordance with rules and regula- tions prescribed from time to
time by the Commission and to the extent permitted under the
Exchange Act, such of the supplementary and periodic information,
documents and reports which the Company would have been required to
file with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act if the Company had a class of securities listed
and registered on a national securities exchange; and in either of
the foregoing cases the Company (a) shall file such information,
documents and reports with the Commission on or prior to the
respective dates by which the Company is or would have been
required so to file such documents, and (b) shall deliver to the
Trustee copies of such information, documents and reports which the
Company is required to file with the Commission (or would have been
required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act if the Company had a class of
securities listed and registered on a national securities exchange)
within 15 days after the Company is (or would have been) required
to file the same with the Commission;
(2) file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time
by the Commission, such additional information, documents and
reports with respect to compliance by the Company with the
conditions and covenants of this Indenture as may be required from
time to time by such rules and regulations; and
(3) transmit by mail to (i) all Holders, as their
names and addresses appear in the Note Register, (ii) all Holders
who have, within the two years preceding such transmission, filed
their name and address with the Trustee for that purpose, and (iii)
all Holders whose names and addresses have been furnished to or
obtained by the Trustee pursuant to Section 701, within 30 days
after the filing thereof with the Trustee, such summaries of any
information, documents and reports required to be filed by the
Company pursuant to paragraphs (1) and (2) of this Section as may
be required by rules and regulations prescribed from time to time
by the Commission.
(b) If filing such information, documents or reports by
the Company with the Commission is not permitted under the Exchange
Act or the rules and regulations prescribed from time to time by
the Commission thereunder, the Company shall promptly upon written
request supply copies of such information, documents or reports to
any Holder and to any prospective purchaser of a Note designated by
a Holder unless the provision of such information shall no longer
be required by law to effect resales of the Notes without
registration under the Securities Act.
Section 705. Certain Obligations of the Trustee.
(a) The Trustee, within five Business Days of its
receipt thereof, will mail to each Holder, as its name and address
appears in the Note Register, copies of all notices, reports,
financial statements, certificates and other documents received by
the Trustee from the Company under this Indenture.
(b) The Trustee, concurrently with any notice or other
document provided by the Trustee to the Company hereunder, will
mail to each Holder as its name appears on the Note Register a copy
of such notice or other document.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. The Company May Consolidate, etc., Only on Certain
Terms.
The Company shall not, in a single transaction or a
series of related transactions, directly or indirectly (i)
consolidate with or merge with or into any other Person or convey,
transfer or lease its properties and assets substantially as an
entirety to any Person or permit any Subsidiaries to enter into any
such transaction or transactions if such transaction or
transactions in the aggregate would result in a sale of all or
substantially all of the assets of the Company and any Subsidiaries
on a consolidated basis or (ii) adopt a plan of liquidation unless:
(a) either (1) the Company shall be the continuing
corporation or (2) the Person (if other than the Company) formed by
such consolidation or into which the Company is merged or the
Person which acquires by conveyance, transfer or lease the
properties and assets of the Company substantially as an entirety
(i) shall be a corporation, partnership or trust organized and
validly existing under the laws of the United States of America,
any State thereof or the District of Columbia and (ii) shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, the due and punctual payment of the
principal of, and premium, if any, and interest on all the Notes
and the performance of every covenant of the Indenture on the part
of the Company to be performed or observed;
(b) immediately after giving effect to such transaction
(and treating any Indebtedness which becomes an obligation of the
Company or a Subsidiary of the Company in connection with or as a
result of such transaction as having been incurred at the time of
such transaction), the Company (in the case of clause (1) of
Subsection (a) above) or such Person (in the case of clause (2)
thereof) shall have a Consolidated Net Worth equal to or greater
than the Consolidated Net Worth of the Company immediately prior to
such transaction;
(c) immediately after giving effect to such transaction
(and treating any Indebtedness which becomes an obligation of the
Company or a Subsidiary of the Company in connection with or as a
result of such transaction as having been incurred at the time of
such transaction), no Event of Default under the Indenture, and no
event which, after notice or lapse of time, or both, would become
an Event of Default, shall have occurred and be continuing;
(d) immediately after giving effect to any such
transaction on a pro forma basis, the Fixed Charge Coverage Ratio
of the surviving entity is at least 1:1; provided, that, if the
Fixed Charge Coverage Ratio of the Company is within the range set
forth in Column A below, then the Fixed Charge Coverage Ratio of
the surviving entity, shall be at least equal to the percentage of
the Fixed Charge Coverage Ratio of the Company set forth in Column
B below:
(A) (B) 1.1111:1 to
1.9999:1.............................90% 2:1 to
2.9999:1.............................80% 3:1 to
3.9999:1.............................70% 4:1 to
4.9999:1.............................60% 5:1 or
more.................................50%
and provided, further, that if the Fixed Charge Coverage Ratio of
the surviving entity is 3:1 or more, the calculation in the
preceding proviso shall be inapplicable and such transaction shall
be deemed to have complied with the requirements of such provision;
and
(e) the Company or such Person shall have delivered to
the Trustee an Officers' Certificate stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture complies with this Article
Eight and that all conditions precedent herein provided for
relating to such transaction have been satisfied.
Section 802. Successor Substituted for the Company.
Upon any consolidation of the Company with, or merger of
the Company into, any other Person or any sale, lease, transfer or
other conveyance of all or substantially all of the assets of the
Company in accordance with Section 801, the surviving entity shall
succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture with the same effect
as if such successor Person had been named as the Company herein;
when a successor corporation assumes all of the obligations of the
Company hereunder and under the Notes, in accordance with Section
801, the predecessor shall be released from such obligations.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holder, the Company, in each
case when authorized by Board Resolutions, and the Trustee, at any
time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any
of the following purposes:
(1) to evidence the succession of another Person to
the Company and the assumption by any such successor of the
obligations of the Company herein and in the Notes, in accordance
with Article Eight; or
(2) to add to the covenants of the Company for the
benefit of the Holders, or to surrender any right or power herein
conferred upon the Company; or
(3) to cure any ambiguity, to correct or supplement
any provision herein which may be defective or inconsistent with
any other provision herein, or to make any other provisions with
respect to matters or questions arising under this Indenture which
shall not be inconsistent with the provisions of this Indenture,
provided such action pursuant to this clause (3) shall not
adversely affect the interests of the Holders; or
appointment of a successor Trustee hereunder.
Section 902. Amendments, Supplemental Indentures and Waivers with
Consent of Holders.
Subject to Section 508, with the consent of the Holders
of not less than a majority in aggregate principal amount of the
Outstanding Notes, by Act of said Holders delivered to the Company
and the Trustee, the Company, when authorized by Board Resolution,
and the Trustee may amend this Indenture or enter into an indenture
or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the
rights of the Holders under this Indenture; provided, however, that
no such supplemental indenture shall without the consent of the
Holder of each Outstanding Note affected thereby:
(1) change the Stated Maturity of the principal of,
or any in- stallment of interest on, any Note, or reduce the
principal amount thereof or the rate of interest thereon, or change
the place of payment where, or the coin or currency in which, the
principal of any Note or the interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment
on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or alter the
redemption provisions hereof in a manner which is adverse to any
Holder, or
(2) amend, change or modify the obligation of the
Company to make and consummate a Change of Control Offer in the
event of a Change of Control in accordance with Section 1109,
including amending, changing or modifying any of the definitions
with respect thereto, or
(3) reduce the percentage in principal amount of
Outstanding Notes, the consent of whose Holders is required for any
such amendment, supplemental indenture or waiver (of compliance
with certain provisions of this Indenture or certain defaults
hereunder and their consequences) provided for in this Indenture,
or
(4) modify any of the provisions of this Section or
Section 513, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified
or waived without the consent of the Holder of each Outstanding
Note affected thereby.
It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed
amendment, supplemental indenture or waiver, but it shall be
sufficient if such Act shall approve the substance thereof.
After an amendment, supplemental indenture or waiver
under this Section becomes effective, the Company shall mail to the
Holders affected thereby a notice briefly describing the amendment,
supplemental indenture or waiver. Any failure of the Company to
mail such notice, or defect therein, shall not, however, in any way
impair or affect the validity of such amendment, supplemental
indenture or waiver.
Section 903. Execution of Amendment or Supplemental Indentures.
In executing, or accepting the additional trusts created
by, any amendment or supplemental indenture permitted by this
Article Nine or the modifications thereby of the trusts created by
this Indenture, the Trustee shall be en- titled to receive, and
(subject to Section 601) shall be fully protected in relying upon,
an Opinion of Counsel or Officers' Certificate or both of the
Company stating that the execution of such amendment or
supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter
into any such amendment or supplemental indenture which adversely
affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Section 904. Effect of Amendment or Supplemental Indentures.
Upon the execution of any amendment or supplemental
indenture under this Article Nine, this Indenture shall be modified
in accordance therewith, and such amendment or supplemental
indenture shall form a part of this Indenture for all purposes; and
every Holder of Notes theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every amendment or supplemental indenture executed
pursuant to this Article shall conform to the requirements of the
Trust Indenture Act as then in effect.
Section 906. Reference in Notes to Amendments or Supplemental
Indentures.
Notes authenticated and delivered after the execution of
any amendment or supplemental indenture pursuant to this Article
Nine may, and shall if required by the Trustee, bear a notation in
form approved by the Trustee as to any matter provided for in such
amendment or supplemental indenture. If the Company shall so
determine, new Notes so modified as to conform, in the opinion of
the Trustee and the Company, to any such amendment or supplemental
indenture may be prepared and executed by the Company, and
authenticated and made available for delivery by the Trustee in
exchange for Outstanding Notes.
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay, in immediately
available funds, the principal of, premium, if any, and interest
on, the Notes and the Redemption Price and Change of Control
Purchase Price as and when due, in accordance with the terms of the
Notes and this Indenture.
The Company shall pay interest on overdue amounts at the
rate set forth in paragraph 1 of the Notes, and it shall pay
interest on overdue interest at the same rate compounded
semiannually (to the extent that the payment of such interest shall
be legally enforceable), which interest on overdue interest shall
accrue from the date such amounts became overdue.
Section 1002. Maintenance of Office or Agency.
The Company shall maintain in the City of New York an
office or agency where Notes may be presented or surrendered for
payment, where Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon on
the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the
Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the
Corporate Trust office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or
more other offices or agencies (in or outside the City of New York)
where the Notes may be presented or surrendered for any or all such
purposes and may from time to time re- scind such designations;
provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an
office or agency in the City of New York for such purposes. The
Company shall give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any
such other office or agency.
Section 1003. Money for Note Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying
Agent, it shall, on or before each due date of the principal of,
premium, if any, or interest on, any of the Notes, segregate and
hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal, premium, if any, or interest so
becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided, and will promptly notify
the Trustee of its action or failure so to act; provided, that,
with respect to any such sums, such trust shall arise and be
enforceable only on and after the date on which payment is due with
regard to such sums; and only to the extent payment is then due and
only as to funds actually segregated and appropriated to such
payments.
Whenever the Company shall have one or more Paying
Agents, it shall, on or prior to each due date of the principal of,
premium, if any, or interest on, any Note, deposit with a Paying
Agent a sum sufficient to pay the principal, premium, if any, or
interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium (if any)
or interest, and (unless such Paying Agent is the Trustee) the
Company shall promptly notify the Trustee of its action or failure
so to act.
The Company shall cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent shall:
(1) hold all sums held by it for the payment of the
principal of, premium, if any, or interest on, Notes in trust for
the benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as herein
provided;
(2) give the Trustee notice of any default by the
Company (or any other obligor upon the Notes) in the making of any
payment of principal, premium, if any, or interest; and
(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to
the Trustee all sums so held in trust by such Paying Agent.
The Company may, at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for
any other purpose, pay, or by Company Order direct any Paying Agent
to pay, to the Trustee all sums held in trust by the Company or
such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company
or such Paying Agent; and, upon such payment by any Paying Agent to
the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent,
or then held by the Company in trust for the payment of the
principal of, premium, if any, or interest on, any Note and
remaining unclaimed for two years after such principal, premium, if
any, or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, be or
being required to make any such repayment, may, at the expense of
the Company, cause to be published once, in a newspaper customarily
published on each Business Day and of general circulation in the
Borough of Manhattan, The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining shall be repaid
to the Company.
Section 1004. Statements of Officers of the Company as to Default;
Notice of Default.
(a) The Company shall deliver to the Trustee, within 120
days after the end of each fiscal year of the Company, as the case
may be, a certificate, signed by the principal executive officer
and by either the principal financial officer or the principal
accounting officer, stating that such officers have conducted or
supervised a review of the activities of the Company and its
Subsidiaries and of performance under this Indenture and whether or
not to the best knowledge of the signers thereof the Company has
fulfilled all of its obligations under this Indenture or is in
default (without regard to periods of grace or requirements of
notice) in the performance and observance of any of the terms,
provisions and conditions hereof, and if the Company shall be in
default, specifying all such defaults and the nature and status
thereof of which they may have knowledge.
(b) The Company shall file with the Trustee written
notice of the occurrence of any default or Event of Default or
event or condition which with notice or the lapse of time or both
would become an Event of Default within five Business Days of its
becoming aware of any such default, Event of Default or event or
condition.
Section 1005. Existence.
Subject to Article Eight, the Company shall do or cause
to be done all things necessary to preserve and keep in full force
and effect its existence, rights (charter and statutory) and
franchises of the Company and each Subsidiary thereof; provided,
however, that the Company shall not be required to preserve any
such right or franchise if its Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct
of the business of the Company and its Subsidiaries as a whole and
that the loss thereof is not disadvantageous in any material
respect to the Holders; provided, further, that any Subsidiary of
the Company with a net worth greater than zero may consolidate
with, merge into, or transfer or distribute all or part of its
properties and assets to, the Company or any Subsidiary thereof.
Section 1006. Maintenance of Properties; Insurance.
(a) The Company shall cause all properties used or
useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and shall
cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the
Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this Section 1006
shall prevent the Company from discontinuing the operation or
maintenance of any of such properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its
business or the business of any Subsidiary and not disadvantageous
in any material respect to the Holders.
(b) The Company will at all times keep all of its and
its Subsidiaries' properties which are of an insurable nature
insured with insurers, believed by the Company to be responsible,
against loss or damage to the extent that property of similar
character is usually so insured by corporations similarly situated
and owning like properties. In lieu of or supplemental to such
insurance the Company may adopt such other plan or method of
protection, whether by the establishment of an insurance fund or
reserve to be held and applied to make good losses from casualties,
or otherwise, and conforming to the practices of similar
corporations maintaining systems of self-insurance, as may be
determined by the Board of Directors.
Section 1007. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all taxes,
assessments and governmental charges levied or imposed (i) upon the
Company or any Subsidiary thereof or (ii) upon the income, profits
or property of the Company or any Subsidiary, and (b) all lawful
claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Sub-
sidiary; provided, however, that the Company shall not be required
to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity
is being contested in good faith by appropriate proceedings or any
such tax, assessment, charge or claim referred to in clause (a)(i)
or (b) above if the failure to so pay or discharge such tax
assessment, charge or claim would not have or would not be likely
to have material adverse effect on the business operations,
properties or condition (financial or otherwise) of the Company and
its Subsidiaries taken as a whole.
Section 1008. Further Instruments and Acts.
Upon request of the Trustee, the Company shall execute
and deliver such further instruments and perform such further acts
as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
Section 1009. Limitation on Indebtedness.
The Company will not, and will not permit any Subsidiary
of the Company to, create, incur, assume or directly or indirectly
guarantee or in any other manner become directly or indirectly
liable for the payment of any Indebtedness (including Acquired
Indebtedness), other than Permitted Indebtedness, unless at the
time of such event and after giving effect thereto the Company's
Fixed Charge Coverage Ratio on a pro forma basis for its last four
completed fiscal quarters, taken as a whole and calculated on the
assumption that such Indebtedness had been incurred on the first
day of such four-quarter period, and in the case of Acquired
Indebtedness, on the assumption that the related acquisition
(whether by means of purchase, merger or otherwise) also had
occurred on such date, would have been greater than the ratios set
forth below during the periods commencing on the dates indicated
below:
Period Commencing Ending Ratio Effective Date
January 28, 1996 2.000 January 29, 1996
January 26, 1997 2.150 January 27, 1997
January 25, 1998 2.250 January 26, 1998
January 31, 1999 2.350
Thereafter 2.450
Section 1010. Limitation on Restricted Payments.
The Company will not, directly or indirectly, (i) declare
or pay any dividend on or make any distributions in respect of the
capital stock of the Company or any Subsidiary thereof (except for
(x) dividends or distributions payable solely to the Company or any
Subsidiary of the Company and (y) dividends or distributions of a
Subsidiary of the Company solely on the capital stock of such
Subsidiary), or purchase, redeem or retire for value, or make any
payment on account of the purchase, redemption or other acquisition
or retirement for value of, any capital stock or warrants, rights
or options to purchase such capital stock, (ii) make any principal
payment on, or redeem, repurchase or defease, or otherwise acquire
or retire for value, Subordinated Debt, prior to any scheduled
principal payment, scheduled sinking fund payment or maturity
thereof, or (iii) make any loan or advance to, or any other
Investment in, any of its Affiliates other than a Subsidiary of the
Company (such payments or any other actions described in (i), (ii)
and (iii), collectively, "Restricted Payments") unless (1) at the
time of and after giving effect to the proposed Restricted Payment,
no Event of Default or event that, after notice or lapse of time,
or both, would become an Event of Default, shall have occurred and
be continuing, and (2) at the time of and after giving effect to
the proposed Restricted Payment (the amount of any such payment, if
other than cash, to be determined by the Board of Directors, whose
determination shall be conclusive and evidenced by a Board
Resolution) (A) the Consolidated Net Worth of the Company shall be
at least $75,000,000 and (B) the aggregate amount of all Restricted
Payments after the Effective Date shall not exceed 50% of
Cumulative Net Available Cash of the Company and (C) the Fixed
Charge Coverage Ratio calculated on a pro forma basis for the full
twelve-month period ending on the last day of the Company's fiscal
quarter immediately preceding such proposed Restricted Payment
shall be at least 1.50 to 1. Notwithstanding the foregoing, this
provision will not prohibit the redemption, by the Company, of its
common stock (on a fully diluted basis) from time to time under the
terms and conditions of management equity subscription agreements
or stock option agreements and related exhibits, so long as such
redemption does not otherwise result in an Event of Default or
event that, after notice or lapse of time or both, would become an
Event of Default.
The foregoing provisions shall not be deemed to prohibit
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at such declaration date such declaration
complied with the provisions of the Indenture, or (2) the
redemption, repurchase or other acquisition or retirement (a
"retirement") of any shares of any class of capital stock of the
Company or of any Subsidiary thereof in exchange for (including any
such exchange pursuant to the exercise of a conversion right or
privilege in connection with which cash is paid in lieu of the
issuance of fractional shares or scrip), or out of the proceeds of
a substantially concurrent issue and sale (other than to a
Subsidiary of the Company) of, other shares of capital stock of the
Company, or (3) the retirement of Subordinated Debt out of the
proceeds of a substantially concurrent sale (other than to a
Subsidiary of the Company) of shares of capital stock of the
Company or issuance other than to a Subsidiary of the Company of
new Indebtedness which has a weighted average life to maturity at
least as long as the Stated Maturity of the Notes and no sinking
fund or scheduled principal payments prior to the maturity of the
Notes and the payment of which is subordinated in right of payment
and otherwise to the Notes at least to the same extent as such
Subordinated Debt, or (4) the payment of dividends or the making of
distributions on shares of capital stock of the Company solely in
shares of capital stock of the Company.
Section 1011. Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries.
The Company will not, and will not permit any Subsidiary
of the Company to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any
kind on the ability of any Subsidiary of the Company to (a) pay
dividends or make any other distribution on its capital stock, (b)
pay any Indebtedness owed to the Company or any other Subsidiary of
the Company, (c) make loans or advances to the Company or any other
Subsidiary of the Company or (d) transfer any of its property or
assets to the Company or any other Subsidiary of the Company except
as set forth in the instrument evidencing or the agreement
governing Acquired Indebtedness of any acquired entity which be-
comes a Subsidiary of the Company, provided, that any restriction
or encumbrance under such instrument or agreement existed at the
time of acquisition, was not put in place in anticipation of such
acquisition, and is not applicable to any Person, other than the
Person or property or assets of the Person so acquired.
Section 1012. Limitation on Transactions with Affiliates.
The Company will not enter into, renew or extend, or
permit any Subsidiary of the Company to enter into, renew or extend
any agreement relating to the sale, purchase or lease of any
assets, property or services from or to any Affiliate of the
Company (other than a wholly owned Subsidiary of the Company) on
terms that are less favorable to the Company or such Subsidiary of
the Company, as the case may be, than would be available in a
comparable transaction with an unaffiliated third party; provided,
however, that the Company will not enter into, renew or extend any
such agreement or series of related agreements which, individually
or in the aggregate, involve payments in excess of $500,000, unless
the Board of Directors determines that such transaction is fair to
the Company; provided, further, that notwithstanding the foregoing,
the Company may enter into and perform the Management Services
Agreement, dated as of the Effective Date, between the Company and
Leonard Green & Partners, L.P., in the form attached as Exhibit A
to the Plan.
Section 1013. Disposition of Proceeds of Asset Sale.
(a) If all or a portion of the Net Cash Proceeds of any
Asset Sale are not required to be applied to repay any outstanding
Bank Credit Agreement Indebtedness as required by the terms
thereof, or the Company determines not to apply such Net Cash
Proceeds to the prepayment of such Indebtedness or if no such
Indebtedness is outstanding, then the Company may (i) use the Net
Cash Proceeds, or a portion thereof, as working capital in the
ordinary course of business or (ii) within 12 months of the Asset
Sale, invest the Net Cash Proceeds in properties and assets to
replace the properties and assets that were the subject of the
Asset Sale or in properties and assets that (as determined by the
Board of Directors, whose determination shall be conclusive and
evidenced by a Board Resolution) will be used in the business of
the Company and its Subsidiaries existing on the date of the
Indenture or in businesses similar or related thereto. The amount
of such Net Cash Proceeds neither used to repay such Indebtedness
nor used or invested as set forth in the foregoing clause (i) or
(ii) constitutes "Excess Proceeds".
When the aggregate amount of Excess Proceeds equals
$3,000,000 or more, the Company shall offer to purchase (an
"Offer") from all holders of New Notes the maximum principal amount
(expressed as a multiple of $1,000) of New Notes that may be
purchased out of the Excess Proceeds, provided that the Company may
satisfy its obligations to make an Offer in whole or in part by
delivering to the Trustee (or the trustee under the Senior Floating
Rate Notes Indenture, as the case may be) for cancellation New
Notes purchased by it not earlier than six months prior to the date
of the Offer; provided, further, that if the Company elects to
satisfy its obligations to make an Offer in the manner set forth in
the preceding clause, the Company shall deliver for cancellation
the Notes and the Senior Floating Rate Notes so purchased in
proportionate amounts. In the event the Excess Proceeds are less
than the aggregate Offered Price (as defined below) of all New
Notes tendered, the New Notes to be purchased shall be purchased
out of the Excess Proceeds pro rata in integral multiples of $1,000
only. The offer price (the "Offered Price") shall be an amount in
cash equal to 100% of the principal amount thereof plus accrued and
unpaid interest, if any, to the date of the Offer. To the extent
that the aggregate Offered Price of all New Notes tendered pursuant
to an Offer plus the principal amount of all New Notes purchased by
the Company and canceled in satisfaction of the Offer is less than
the Excess Proceeds relating thereto (such shortfall constituting a
"Deficiency"), the Company may use such Deficiency, or a portion
thereof, for general corporate purposes. Upon completion of the
purchase of all New Notes tendered pursuant to an Offer, the amount
of Excess Proceeds shall be reset at zero.
(b) Within 30 days after the date on which the amount of
Excess Proceeds equals $3,000,000 or more, the Company shall send
by first-class mail, postage prepaid, to each Holder of the New
Notes, at his address appearing in the Note Registrar, a notice
stating:
(1) that the Holder has the right to require the Company
to repurchase such Holder's New Notes at the Offered Price, subject
to proration in the event the Excess Proceeds are less than the
aggregate Offered Price of all New Notes tendered;
(2) the date of the Offer (the "Offer Date") which shall
be no earlier than 45 days nor later than 60 days from
the date such notice is mailed; and
(3) the instructions a Holder must follow in order to
have its New Notes purchased in accordance with paragraph
(c) of this Section.
(c) Holders electing to have their New Notes purchased
will be required to give notice of such election (an "Election
Notice") to the Company at the address specified in the notice at
least five Business Days prior to the Offer Date. Holders will be
entitled to withdraw their election if the Company receives, not
later than three Business Days prior to the Offer Date, a telegram,
telex, facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the New Notes as to which his
election is to be withdrawn and a statement that such Holder is
withdrawing his election to have such New Notes purchased. If the
aggregate principal amount of their New Notes as to which Holders
have given an Election Notice exceeds the amount of Excess
Proceeds, the Company shall purchase the New Notes to be purchased
out of the Excess Proceeds pro rata. Holders whose New Notes are
purchased only in part will be issued New Notes equal in principal
amount to the unpurchased portion of the New Notes surrendered.
(d) In the event that the Company shall be unable to
purchase Notes from Holders in an Offer because of provisions of
the Bank Credit Agreement or in the event the Company shall be
unable to purchase Notes from Holders in an Offer because of
provisions of applicable law, the Company need not make an Offer.
The Company shall then be obligated to use the Excess Proceeds as
working capital or to invest the Excess Proceeds in replacement
properties and assets, in accordance with clause (i) or (ii) of
Subsection (a) of this Section.
(e) Whenever Net Cash Proceeds received by the Company,
and prior to the purchase of New Notes or an allocation to the
payment of Bank Credit Agreement Indebtedness, as set forth in
Subsection (a) of this Section 1013, exceeds $1,500,000, such Net
Cash Proceeds shall be set aside by the Company in a separate
account pending (i) deposit with the depositary for the amount
required to repay the New Notes tendered in an Offer, (ii) delivery
by the Company of the Offered Price to the Holders of the Notes and
the holders of the other New Notes tendered in an Offer or (iii)
allocation, as set forth in Subsection (a) of this Section, of Net
Cash Proceeds to the payment of Bank Credit Agreement Indebtedness
or to working capital or investment in properties and assets. Such
Net Cash Proceeds may be invested in (A) any U.S. Government
Obligations maturing not more than one year after the date of
issue, (B) any certificate of deposit, maturing not more than 90
days after the Offer Date, issued by, or time deposit of, a
commercial banking institution that is a member of the Federal
Reserve System and that has combined capital and surplus and
undivided profits of not less than $200,000,000, (C) commercial
paper, maturing not more than 90 days after the date of the Offer,
issued by a corporation (other than an Affiliate or Subsidiary of
the Company) organized and existing under the laws of the United
States of America that is rated, at the time as of that any
investment therein is made, "P-2" (or higher) by Moody's Investors
Service, Inc., or "A-2" (or higher) by Standard and Poor's
Corporation, and (D) adjustable rate preferred stock that is
readily marketable, provided that the maturity date of any
investment permitted by clauses (A), (B) and (C) shall not be later
than the Offer Date in the case of an Offer.
Section 1014. Guarantees of Indebtedness.
The Company (x) will not permit an Affiliate of the
Company (a "guarantor") to guarantee or secure the payment of any
Indebtedness of the Company or any Subsidiary thereof and (y) will
not, and will not permit a Subsidiary of the Company (each of the
Company and its Subsidiaries, a "guarantor") to, guarantee or
secure the payment of any Indebtedness of any Person, unless, in
either case, the payment of the Notes is also guaranteed by any
such guarantor pursuant to a guarantee in form and substance
satisfactory to the Trustee (a "Guarantee"); provided, however,
that any such Guarantee shall provide by its terms that it shall be
automatically and unconditionally released and discharged upon
either (i) the release or discharge of such guarantee of, or
security for (or both such guarantee and such security, if
applicable), the payment of such Indebtedness, except a discharge
by or as a result of payment under such guarantee or security or
payment of such Indebtedness or (ii) any sale, exchange or
transfer, to any person not an Affiliate of the Company, of the
Company's stock in, or of all or substantially all the assets of,
such guarantor if such guarantor is a Subsidiary of the Company
which sale, exchange or transfer does not result in a breach of
Sections 1005, 1012, 1013, 1014, 1015, 1016 and 1017.
Section 1015. Limitation on Certain Liens.
(a) The Company will not, and will not permit any
Subsidiary of the Company to, permit to exist any security interest
or pledge any asset to secure the payment of any Indebtedness which
ranks junior to or is subordinate in right of payment to the Notes.
(b) The Company will not, and will not permit any
Subsidiary of the Company to, permit to exist any security interest
or pledge any asset to secure the Senior Floating Rate Notes or any
Indebtedness incurred to refinance the Senior Floating Rate Notes
unless it shall make effective provision whereby the Notes shall be
directly secured equally and ratably with the Indebtedness so
secured (the "Secured Debt"), and in the same proportion as the
Secured Debt in an amount equal to the product of (i) a ratio the
numerator of which is the aggregate principal amount of Secured
Debt and the denominator of which is the aggregate principal amount
of Senior Floating Rate Notes and the Indebtedness incurred to
refinance the Senior Floating Rate Notes, outstanding immediately
after such security interest is granted multiplied by (ii) the
aggregate principal amount of Notes outstanding at the time such
security is granted.
Section 1016. Investments.
The Company will not, and will not permit any Subsidiary
of the Company to, directly or indirectly make or own any
Investment in any Person except:
(a) Investments in Investment Cash Equivalents; (b)
promissory notes of purchasers in sales by the Company of
properties or assets not exceeding an aggregate principal balance
of $5,000,000 outstanding at any one time;
(c) amounts due from landlords for remodelling work done
by the Company for account of a landlord, not exceeding an
aggregate principal balance of $4,000,000 outstanding at any one
time;
(d) other Investments not in excess of an aggregate
amount of $1,000,000 outstanding at any one time; and
(e) Investments in respect of Securities of another
Person received by the Company in connection with a plan of
reorganization or readjustment of such Person or its debts. Section
1017. Conduct of Business.
The Company shall not engage in any business other than
(a) the business engaged in by the Company on the date hereof, and
(b) any business activities substantially similar or related
thereto.
Section 1018. Limitations on Subordinated Debt.
The Company shall not, and shall not permit any
Subsidiary of the Company to, (a) create, incur, assume or directly
or indirectly guarantee or in any other manner become directly or
indirectly liable for the payment of any Indebtedness that is
expressly subordinate in right of payment to any Indebtedness of
the Company or any Subsidiary thereof unless such subordinate
Indebtedness both constitutes Subordinated Debt and does not
require principal repayments or sinking fund payments to be made
prior to the Stated Maturity of the Notes, or (b) amend the
provisions of any instrument evidencing or agreement governing
Subordinated Debt to (i) require principal repayments or sinking
fund payments to be made prior to the Stated Maturity of the Notes
or (ii) alter the subordination provisions of such Subordinated
Debt.
ARTICLE ELEVEN
REDEMPTION OF NOTES
Section 1101. Right of Redemption.
The Notes may be redeemed, otherwise than upon a Change
in Control as defined in and required by Section 1109, at the
election of the Company, as a whole or from time to time in part,
at the Redemption Price specified in the form of Note set forth in
Article Two for redemptions, together with accrued interest to the
Redemption Date.
Section 1102. Applicability of Article.
Redemption of Notes at the election of the Company or
otherwise, as permitted or required by any provision of this
Indenture, shall be made in accordance with such provision and this
Article Eleven.
Section 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Notes pursuant
to Section 1101 shall be evidenced by a Board Resolution of the
Company. In case of any redemption at the election of the Company,
the Company shall, at least 30 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satis-
factory to the Trustee), notify the Trustee of such Redemption Date
and of the principal amount of Notes to be redeemed.
Section 1104. Selection by Trustee of Notes to Be Redeemed.
If less than all the Notes are to be redeemed, the
particular Notes to be redeemed shall be selected not more than 60
days prior to the Redemption Date by the Trustee, from the
Outstanding Notes not previously called for redemption, by such
method as the Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to
$1,000 or any integral multiple thereof) of the principal amount of
Notes of a denomination larger than $1,000.
The Trustee shall promptly notify the Company and the
Note Registrar (if other than the Trustee) in writing of the Notes
selected for redemption and, in the case of any Notes selected for
partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of
Notes shall relate, in the case of any Notes redeemed or to be
redeemed only in part, to the portion of the principal amount of
such Notes which has been or is to be redeemed.
Section 1105. Notice of Redemption.
Notice of Redemption shall be given by first class mail,
postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date, to each Holder of Notes to be
redeemed, at its address appearing in the Note Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Notes are to be redeemed, the
identification (and, in the case of partial redemption, the
principal amounts) of the particular Notes to be redeemed,
(4) that New Notes called for redemption must be surrendered to
the Paying Agent to collect the Redemption Price plus accrued
interest, if any,
(5) that, unless the Company defaults in making the
redemption payment, interest on New Notes called for redemption
ceases to accrue on and after the Redemption Date, and the only
remaining right of the Holders of such New Notes is to receive
payment of the Redemption Price plus accrued interest, if any, upon
surrender to the Paying Agent of the Notes redeemed,
(6) if any New Note is being redeemed in part, the
portion of the principal amount of such New Note to be redeemed and
that, after the Redemption Date, and upon surrender of such New
Note, a New Note or New Notes in the aggregate principal amount
equal to the unredeemed portion thereof will be issued,
(7) if fewer than all the New Notes are to be redeemed,
the identification of the particular New Notes (or portion thereof)
to be redeemed, as well as the aggregate principal amount of New
Notes to be redeemed and the aggregate principal amount of New
Notes to be outstanding after such partial redemption,
(8) that on the Redemption Date the Redemption Price
will become due and payable upon each such Note to be redeemed and
that interest thereon will cease to accrue on and after said date,
(9) the place or places where such Notes are to be
surrendered for payment of the Redemption Price, and
(10) the CUSIP number, if any, of the Notes to be
redeemed.
Notice of redemption of Notes to be redeemed at the
election of the Company shall be given by the Company or, at the
Company's request, by the Trustee in the name and at the expense of
the Company.
Section 1106. Deposit of Redemption Price.
On or prior to 11:00 a.m. (New York time) on the Business
Day immediately preceding any Redemption Date, the Company shall
deposit with the Trustee or with a Paying Agent (or, if the Company
is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money in same day funds
sufficient to pay the Redemption Price of, and accrued interest on,
all the Notes or portions thereof which are to be redeemed on that
date.
Section 1107. Notes Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Notes so to be redeemed shall, on the Redemption Date, become due
and payable at the Redemption Price therein specified, and from and
after such date (unless the Company shall default in the payment of
the Redemption Price and accrued interest) such Notes shall cease
to bear interest. Upon surrender of any such Note for redemption
in accordance with said notice, such Note shall be paid for by the
Company at the Redemption Price, together with accrued interest to
the Redemption Date; provided, however, that installments of
interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Notes, or one or more
Predecessor Notes, registered as such at the close of business on
the relevant Regular Record Dates or Special Record Dates, as the
case may be, according to their terms and the provisions of Section
307.
If any Note called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and premium
(if any) shall, until paid, bear interest from the Redemption Date
at the rate borne by the Note.
Section 1108. Notes Redeemed in Part.
Any Note which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for
that purpose pursuant to Section 1002 (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or its attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall
authenticate and make available for delivery to the Holder of such
Note without service charge, a new Note or Notes of any authorized
denomination as requested by such Holder, in an aggregate principal
amount equal to and in exchange for the unredeemed portion of the
principal of the Note so surrendered.
Section 1109. Offer to Purchase Upon a Change in Control.
(a) If at any time either (a) any person or any persons
acting together (excluding the Original Stockholders) that
constitute a "group" for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended, shall beneficially own
at least 50% of the total voting stock of the Company or (b) any
person or any persons acting together (excluding the Original
Stockholders) that constitute a "group" for purposes of Section
13(d) of the Securities Exchange Act of 1934, as amended, shall
succeed in having a sufficient number of its nominees elected to
the board of directors of the Company to constitute a majority of
the board of directors of the Company (each, a "Change of
Control"), then the Company shall make an offer to repurchase any
or all of the Outstanding Notes at a price, payable in cash, equal
to 100% of the principal amount thereof plus accrued and unpaid
interest, if any, to the Change of Control Purchase Date (the
"Change of Control Purchase Price"), in accordance with the
procedures set forth in this Section 1109; provided that such
repurchase shall be conditioned upon receipt by the Company of
Notes representing at least 50% of the aggregate principal amount
of the Outstanding Notes.
(b) Within 30 days after a Change of Control, the
Company shall send by first-class mail postage prepaid, to each
Holder of the Outstanding Notes, at its address appearing in the
Note Register, a notice (a "Change of Control Purchase Notice")
stating:
(1) that a Change of Control has occurred and that the
Holder has the right to require the Company to repurchase such
Holder's Notes at the Change of Control Purchase Price subject to
the conditions contained herein;
(2) that unless Notes representing at least 50% of the
aggregate principal amount of the Outstanding Notes are tendered,
the Company shall not redeem any Notes pursuant to this Section;
(3) the purchase date (the "Change of Control Purchase
Date") which shall be no earlier than 30 days nor later than 50
days from the date such notice is mailed or such later date as is
necessary to comply with requirements under the Exchange Act or any
applicable securities laws or regulations; and
(4) the instructions a Holder must follow in order to
have its Notes purchased in accordance with paragraph (c) of this
Section.
(c) Holders electing to have Notes purchased will be
required to give notice of such election to the Company at the
address specified in the Change of Control Purchase Notice at least
five Business Days prior to the Change of Control Purchase Date.
Holders will be entitled to withdraw their election if the Company
receives, not later than three Business Days prior to the Change of
Control Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount
of the Notes as to which its election is to be withdrawn and a
statement that such Holder is withdrawing its election to have such
Notes purchased.
INDENTURE SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year
first above written.
KASH N' KARRY FOOD STORES, INC.
By:
Attest:
Name:
Title:
By
Name:
Title:
SHAWMUT BANK CONNECTICUT, N.A.
By:
Name:
Title:
By:
Name:
Title:
TERMS OF SUBORDINATED DEBT
Payment of the principal of and premium, if any, and
interest on and any other amounts payable with respect to any
Subordinated Debt or on account of the purchase or other
acquisition of such Subordinated Debt shall be (to the extent set
forth below) subordinate and subject in right of payment to the
prior payment in full, in cash or Cash Equivalents, of all
principal or, premium, if any, and interest on, and any other
amounts due on or in respect of all New Notes (including interest
on unpaid principal and interest at the rate provided in the
respective instruments creating the New Notes accruing on or after
the filing of any petition in bankruptcy or reorganization relating
to the Company whether or not a claim for post-filing interest is
allowed in such proceeding) (the "Senior Debt").
1.In the event of (a) any insolvency, bankruptcy or similar case or
proceeding relative to the Company or to its creditors, as such, or
to its assets, or (b) any liquidation, dissolution or other winding
up of the Company, or (c) any assignment for the benefit of
creditors or any other action or proceeding involving the
readjustment of all or any of the indebtedness of the Company, the
holders of New Notes shall be entitled to receive payment in full,
in cash or Cash Equivalents, of all the Senior Debt before the
holders of such Subordinated Debt are entitled to receive any
direct or indirect payment or distribution (in cash, property or
securities or by set-off or otherwise) of any assets of the Company
of any kind or character on account of principal of, premium, if
any, or interest on or any other amounts payable with respect to
such Subordinated Debt (other than securities of the Company or any
other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the
extent provided in these subordination provisions with respect to
such Subordinated Debt, to the payment of all amounts due on or in
respect of New Notes at the time outstanding and to any securities
issued in respect thereof under any such plan of reorganization or
readjustment (collectively, "Permitted Junior Securities").
2.Unless paragraph 1 is applicable, upon the occurrence of any
default in the payment of any principal of (or premium, if any) or
interest on any New Note when due (each a "Payment Default"), no
direct or indirect payment or distribution (in cash, property or
securities or by set-off or otherwise) of any assets of the Company
of any kind or character shall be made by the Company on account of
principal of, premium, if any, or interest on or any other amounts
payable with respect to such Subordinated Debt or on account of the
purchase or other acquisition of such Subordinated Debt unless and
until such Payment Default shall have been cured or waived in
writing or shall have ceased to exist or all of the New Notes shall
have been discharged.
3.Unless either paragraph 1 or paragraph 2 is applicable, upon the
occurrence of any event the occurrence of which entitles the
Holders of the requisite aggregate principal amount of the
Outstanding Notes as set forth in Section 502 (the "Requisite
Holders") to accelerate the maturity of any New Note (each a
"Non-payment Event of Default"), no direct or indirect payment or
distribution (in cash, property or securities or by set-off or
otherwise) of any assets of the Company of any kind or character
shall be made by the Company on account of any principal of,
premium, if any, or interest on or any other amounts payable with
respect to such Subordinated Debt or on account of the purchase or
other acquisition of such Subordinated Debt for a period (the
"Payment Blockage Period") commencing on the date written notice of
such default shall have been given to the Company by the Requisite
Holders unless and until (i) more than 179 days shall have elapsed
since receipt of such written notice by the Company, (ii) such
Non-payment Event of Default shall have been cured or waived in
writing or shall have ceased to exist or all of the New Notes shall
have been discharged or (iii) such Payment Blockage Period shall
have been terminated by written notice to the Company from the
Requisite Holders; provided, that, subject to the following
sentence, the commencement of a Payment Blockage Period hereunder
shall not bar the commencement of another Payment Blockage Period
by the Requisite Holders due to another Non-payment Event of
Default. Notwithstanding anything herein to the contrary, in no
event will any one or more consecutive Payment Blockage Periods
extend beyond 179 days from a date on which any payment with
respect to the Subordinated Debt was due.
4.Any payment or distribution, whether in cash, securities or other
property (other than Permitted Junior Securities), which would
otherwise (but for these subordination provisions) be payable or
deliverable in respect of such Subordinated Debt shall be paid or
delivered directly to the holders of New Notes in accordance with
the priorities then existing among such holders until all the
Senior Debt shall have been paid in full. If any payment or
distribution of any character or any security, whether in cash,
securities or other property (other than Permitted Junior
Securities), shall be received by any holder of such Subordinated
Debt in contravention of any of the terms hereof and before all the
Senior Debt shall have been paid in full, such payment or
distribution or security shall be received in trust for the benefit
of, and shall be paid over or delivered and transferred to, the
holders of the New Notes at the time outstanding in accordance with
the priorities then existing among such holders for application to
the payment of all Senior Debt remaining unpaid, to the extent
necessary to pay all such Senior Debt in full.
Reconciliation and tie between Trust Indenture Act of
1939 and Indenture, dated as of
Trust Indenture Act Section Indenture Section
310(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . .608
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . .608
(a)(3). . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4). . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(5). . . . . . . . . . . . . . . . . . . . . . . . . .608
(b) . . . . . . . . . . . . . . . . . . . . . . . . 608, 609
(c) . . . . . . . . . . . . . . . . . . . . . Not Applicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . .612
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . .612
(c) . . . . . . . . . . . . . . . . . . . . . Not Applicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . 701, 702(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 702(c)
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(b)(1). . . . . . . . . . . . . . . . . . . . Not Applicable
(b)(2). . . . . . . . . . . . . . . . . . . . . . . . 703(b)
(c) . . . . . . . . . . . . . . . . . . . . . 703(a), 703(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 703(c)
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . .704
(b) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . .102
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . .102
(c)(3). . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . .102
(f) . . . . . . . . . . . . . . . . . . . . . Not Applicable
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . 601(a)
(b) . . . . . . . . . . . . . . . . . . . . . . .602, 703(a)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 601(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 601(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . 514
316(a)(last sentence). . . . . . . . . . . . . . . . . . . .101
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . 513
(a)(2). . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 512
317(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . .503
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 1003
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . .107
Note:This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
TABLE OF CONTENTS
PAGE
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions. . . . . . . . . . . . . . . . 2
Section 102. Compliance Certificates and Opinions . . . 19
Section 103. Form of Documents Delivered to Trustee . . 20
Section 104. Acts of Holders. . . . . . . . . . . . . . 21
Section 105. Notices, Etc., to Trustee and the Company. 22
Section 106. Notice to Holders; Waiver. . . . . . . . . 23
Section 107. Conflict with Trust Indenture Act. . . . . 23
Section 108. Effect of Headings and Table of Contents . 24
Section 109. Successors and Assigns . . . . . . . . . . 24
Section 110. Separability Clause. . . . . . . . . . . . 24
Section 111. Benefits of Indenture. . . . . . . . . . . 24
Section 112. Governing Law. . . . . . . . . . . . . . . 24
Section 113. Legal Holidays . . . . . . . . . . . . . . 24
Section 114. Incorporators, Stockholders, Officers and
Directors of the Company Exempt from
Individual Liability . . . . . . . . . . . 25
Section 115. Counterparts . . . . . . . . . . . . . . . 26
ARTICLE TWO
FORMS OF NOTES
Section 201. Forms Generally. . . . . . . . . . . . . . 26
Section 202. Form of Face of Note . . . . . . . . . . . 26
Section 203. Form of Reverse of Note. . . . . . . . . . 29
Section 204. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . 33
Section 205. Form of Assignment . . . . . . . . . . . . 33
Section 206. Form of Option of Holder to Elect Redemption 34
ARTICLE THREE
THE NOTES
Section 301. Title and Terms. . . . . . . . . . . . . . . . 34
Section 302. Denominations. . . . . . . . . . . . . . . . . 36
Section 303. Execution, Authentication, Delivery and
Dating . . . . . . . . . . . . . . . . . . . . 36
Section 304. Temporary Notes. . . . . . . . . . . . . . . . 37
Section 305. Registration, Registration of Transfer and
Exchange . . . . . . . . . . . . . . . . . . . 38
Section 306. Mutilated, Destroyed, Lost and Stolen Notes . .39
Section 307. Payment of Interest; Interest Rights Preserved 40
Section 308. Persons Deemed Owners. . . . . . . . . . . . . 42
Section 309. Cancellation . . . . . . . . . . . . . . . . . 42
Section 310. Computation of Interest. . . . . . . . . . . . 43
Section 311. CUSIP Numbers. . . . . . . . . . . . . . . . . 43
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction, Discharge of the Indenture and
Defeasance of the Notes. . . . . . . . . . . 43
Section 402. Termination of Obligations upon Cancellation
of the Notes. .. . . . . . . . . . . . . . . 45
Section 403. Survival of Certain Obligations. . . . . . . 46
Section 404. Acknowledgement of Discharge by Trustee. . . 46
Section 405. Application of Trust Money . . . . . . . . . 46
Section 406. Repayment to the Company . . . . . . . . . . 47
Section 407. Reinstatement. . . . . . . . . . . . . . . . 47
Section 408. Indemnity. . . . . . . . . . . . . . . . . . 47
ARTICLE FIVE
REMEDIES
Section 501. Events of Default. . . . . . . . . . . . . 48
Section 502. Acceleration of Maturity Date; Rescission and
Annulment. . . . . . . . . . . . . . . . . 50
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . 52
Section 504. Trustee May File Proofs of Claim . . . . . 53
Section 505. Trustee May Enforce Claims Without Possession
of Notes. .. . . . . . . . . . . . . . . . 54
Section 506. Application of Money Collected . . . . . . 54
Section 507. Limitation on Suits. . . . . . . . . . . . 55
Section 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest. . . . . . 56
Section 509. Restoration of Rights and Remedies . . . . 56
Section 510. Rights and Remedies Cumulative . . . . . . 56
Section 511. Delay or Omission Not Waiver . . . . . . . 57
Section 512. Control by Holders . . . . . . . . . . . . 57
Section 513. Waiver of Past Default.. . . . . . . . . . 57
Section 514. Undertaking for Costs. . . . . . . . . . . 58
Section 515. Waiver of Stay or Extension Laws . . . . . 58
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities. . . . 59
Section 602. Notice of Defaults . . . . . . . . . . . . 60
Section 603. Certain Rights of Trustee. . . . . . . . . 61
Section 604. Not Responsible for Recitals or Issuance of
Notes . . . . . . . . . . . . . . . . . . 62
Section 605. May Hold Notes . . . . . . . . . . . . . . 62
Section 606. Money Held in Trust. . . . . . . . . . . . 63
Section 607. Compensation and Reimbursement . . . . . . 63
Section 608. Corporate Trustee Required; Eligibility. . 64
Section 609. Resignation and Removal; Appointment of
Successor. . . . . . . . . . . . . . . . . 65
Section 610. Acceptance of Appointment by Successor . . 66
Section 611. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . 67
Section 612. Preferential Collection of Claims Against
Company . . . . . . . . . . . . . . . . . 67
Section 613. Appointment of Authenticating Agent. . . . 67
Section 614. Paying Agent . . . . . . . . . . . . . . . 68
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and
Addresses of Holders . . . . . . . . . . 69
Section 702. Preservation of Information; Communications
to Holders. . . . . . . . . . . . . . . . 70
Section 703. Reports by Trustee . .. . . . . . . . . . 71
Section 704. Reports by Company . . . . . . . . . . . 73
Section 705. Certain Obligations of the Trustee . . . 75
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. The Company May Consolidate, etc., Only on
Certain Terms. . . . . . . . . . . . . .. 75
Section 802. Successor Substituted for the Company. . . . . 77
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of
Holders. . . . . . . . . . . . . . . . . . . .77
Section 902. Amendments, Supplemental Indentures and
Waivers with Consent of Holders. . . . . . . .78
Section 903. Execution of Amendment or Supplemental
Indentures. . . . . . . . . . . . . . . . . .79
Section 904. Effect of Amendment or Supplemental
Indentures . . . . . . . . . . . . . . . . . 80
Section 905. Conformity with Trust Indenture Act. . . . . .80
Section 906. Reference in Notes to Amendments or Supplemental
Indentures . . . . . . . . . . . . . . . . . 80
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest . .80
Section 1002. Maintenance of Office or Agency. . . . . . . .81
Section 1003. Money for Note Payments to Be Held in Trust . 81
Section 1004. Statements of Officers of the Company as to De-
fault; Notice of Default . . . . . . . . . . .83
Section 1005. Existence. . . . . . . . . . . . . . . . . . .84
Section 1006. Maintenance of Properties; Insurance . . . . 84
Section 1007. Payment of Taxes and Other Claims. . . . . . .85
Section 1008. Further Instruments and Acts . . . . . . . . .85
Section 1009. Limitation on Indebtedness . . . . . . . . . .85
Section 1010. Limitation on Restricted Payments. . . . . . .86
Section 1011. Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries. . . . . 88
Section 1012. Limitation on Transactions with Affiliates . .88
Section 1013. Disposition of Proceeds of Asset Sale. . . . .89
Section 1014. Guarantees of Indebtedness . . . . . . . . . .91
Section 1015. Limitation on Certain Liens. . . . . . . . . 92
Section 1016. Investments. . . . . . . . . . . . . . . . . .93
Section 1017. Conduct of Business. . . . . . . . . . . . . .93
Section 1018. Limitations on Subordinated Debt . . . . . . .93
ARTICLE ELEVEN
REDEMPTION OF NOTES
Section 1101. Right of Redemption. . . . . . . . . . . . . 94
Section 1102. Applicability of Article . . . . . . . . . . .94
Section 1103. Election to Redeem; Notice to Trustee. . . . 94
Section 1104. Selection by Trustee of Notes to Be Redeemed .94
Section 1105. Notice of Redemption.. . . . . . . . . . . . 95
Section 1106. Deposit of Redemption Price. . . . . . . . . 96
Section 1107. Notes Payable on Redemption Date . . . . . . 96
Section 1108. Notes Redeemed in Part . . . . . . . . . . . 97
Section 1109. Offer to Purchase Upon a Change in Control . 97
EXHIBIT A
INDENTURE
KASH N' KARRY FOOD STORES, INC., Issuer
AND
SHAWMUT BANK CONNECTICUT, N.A., Trustee
11.5% Senior Fixed Rate Notes due 2003
Dated as of December 29, 1994
INDENTURE, dated as of December 29, 1994, between Kash n'
Karry Food Stores, Inc., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the
"Company"), having its principal office at 6422 Harney Road, Tampa,
Florida 33610, telephone number (813) 621-0200, telecopier number
(813) 626-9550, and IBJ Schroder Bank & Trust Company, as Trustee
(herein called the "Trustee").
RECITALS
On November 9, 1994, the Company filed for protection
under Chapter 11 of Title 11 of the United States Code in the
United States Bankruptcy Court for the District of Delaware. On
December 12, 1994, the United States Bankruptcy Court for the
District of Delaware entered an order confirming the Plan of
Reorganization, dated as of December 12, 1994, of the Company filed
in the United States Bankruptcy Court for the District of Delaware
in respect of Case No. 94-1082(HSB) (the "Plan"), which provides
for the issuance of the Notes (as hereinafter defined).
The Company has duly authorized the creation of an issue
of Senior Floating Rate Notes due 2003 (herein called the "Notes")
of substantially the tenor and amount hereinafter set forth, and to
provide therefor the Company as duly authorized the execution and
delivery of this Indenture.
All things necessary to make the Notes, when executed by
the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to
make this Indenture a valid agreement of the Company, in accordance
with their and its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase
of the Notes by the Holders thereof, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
1. the terms defined in this Article have the
meanings assigned to them in this Article, the singular
includes the plural and the plural includes the singular;
2. all other terms used herein that are defined in
the Trust Indenture Act, either directly or by reference
therein, have the meanings assigned to them therein;
3. all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with
GAAP; and
4. the words "herein," "hereof" and "hereunder"
and other words of similar import refer to this Indenture as
a whole and not to any particular Article, Section or other
subdivision.
"Acceleration Notice" has the meaning specified in
Section 502.
"Acquired Indebtedness" means Indebtedness of a Person
existing at the time such Person becomes a Subsidiary of the
Company or assumed in connection with the acquisition of assets
from such Person other than Indebtedness incurred in connection
with, or in contemplation of, (i) such Person becoming a Subsidiary
of the Company or (ii) such acquisition of assets.
"Act", when used with respect to any Holder, has the
meaning specified in Section 104.
"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person. For
the purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to
the foregoing.
"Asset Sale" means any conveyance, transfer or lease to
a Person other than the Company or any Subsidiary thereof, directly
or indirectly, in any consecutive 12-month period, in one or a
series of related transactions, of (i) any capital stock of any
Subsidiary of the Company; (ii) all or substantially all of the
properties and assets of any division or line of business of the
Company and its Subsidiaries taken as a whole; or (iii) any other
properties and assets of the Company or any Subsidiary thereof,
other than in the ordinary course of business, the gross proceeds
of which accounted for 15% or more of the book value of the total
assets of the Company and its Subsidiaries on a consolidated basis
as set forth in the most recent set of financial statements of the
Company supplied pursuant to Section 704 preceding the date as of
which such determination is made. For the purposes of this
definition, the term "Asset Sale" shall not include any
consolidation, merger, conveyance, transfer or lease of properties
and assets of the Company substantially as an entirety that is
permitted by Article Eight.
"Authenticating Agent" means any Person authorized by the
Trustee to act on behalf of the Trustee to authenticate the Notes.
"Bank Credit Agreement" means (i) until clause (ii) below
shall become applicable in accordance with its terms, the Credit
Agreement dated as of December 29, 1994 among the Company, the
financial institutions from time to time parties thereto as Banks,
and The CIT Group/Business Credit, Inc., as Administrative Agent,
and Bank of America National Trust and Savings Association, as Co-
Agent, for such Banks, as such Credit Agreement may from time to
time be amended, renewed, supplemented or otherwise modified in
accordance with the terms thereof, or (ii) after the agent under
the Bank Credit Agreement or under any successor agreement to such
agreement shall have acknowledged, in writing, that all principal,
interest and commitment or similar fees owing under such agreement
have been paid in full, any successor thereto or replacement
thereof (as designated by a duly adopted Board Resolution), as each
such successor or replacement may from time to time be amended,
renewed, supplemented or otherwise modified in accordance with the
terms thereof.
"Bank Credit Agreement Indebtedness" means all indebted-
ness at any time outstanding or arising under or with respect to
the Bank Credit Agreement, including (without limitation) Bank
Loans and Letter of Credit Liability.
"Bank Loans" means borrowings under the Bank Credit
Agreement.
"Bankruptcy Law" means Title 11, United States Code, or
any similar Federal or state law for the relief of debtors.
"Banks" means the financial institutions and Persons,
whether or not they are banks, which are or from time to time
become holders of Bank Credit Agreement Indebtedness.
"Board of Directors" means either the board of directors
of the Company or any duly authorized committee of such board.
"Board Resolution" means a copy of a resolution certified
by the Secretary or an Assistant Secretary of the Company to have
been duly adopted by the Board of Directors and to be in full force
and effect on the date of such certification, and delivered to the
Trustee.
"Bondholder Committee" means the unofficial committee of
holders of the Old Notes, which committee participated in the
negotiation of the terms of the Plan.
"Business Day" means each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institu-
tions in the City of New York are authorized or obligated by law or
executive order to close.
"Capitalized Lease Obligation" means any obligation to
pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real or personal property that is
required to be classified and accounted for as a capital lease
obligation under GAAP, and, for the purposes hereof, the amount of
such obligation at any date shall be the capitalized amount thereof
at such date, determined in accordance with GAAP.
"Cash Equivalents" means money, checks, demand deposit
accounts and other instruments or investments of equivalent
liquidity and safety.
"Change of Control" has the meaning specified in Sec-
tion 1109.
"Change of Control Notice" has the meaning specified in
Section 1109.
"Change of Control Purchase Date" has the meaning
specified in Section 1109.
"Change of Control Purchase Notice" has the meaning
specified in Section 1109.
"Change of Control Purchase Price" has the meaning
specified in Section 1109.
"Commission" means the Securities and Exchange Commis-
sion, or, if at any time after the execution of this instrument
such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means the Person named as the "Company" in the
first paragraph of this instrument until a successor Person shall
have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Company" shall mean such successor
Person.
"Company Request" or "Company Order" means a written
request or order signed in the name of the Company by its Chairman
of the Board, its President or a Vice President, and by its
Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Consolidated Interest Expense" of any Person means, for
any period, the sum (without duplication) of the aggregate of the
interest expense of such Person and its consolidated Subsidiaries
for such period, on a consolidated basis, as determined in
accordance with GAAP, including but not limited to the interest
portion of Capitalized Lease Obligations and amortization of
original issue discount but excluding amortization of debt issuance
cost.
"Consolidated Net Income" of any Person means, for any
period, the consolidated net income of such Person and its
consolidated Subsidiaries for such period, as determined in
accordance with GAAP, adjusted by excluding (a) any gain or loss
realized upon the termination of any employee pension plan, (b) net
extraordinary gains or net extraordinary losses, as the case may
be, and (c) net gains or losses in respect of dispositions of
assets other than in the ordinary course of business.
"Consolidated Net Loss" of any Person means, for any
period, the consolidated net loss of such Person and its
consolidated Subsidiaries for such period, as determined in
accordance with GAAP, adjusted by excluding (a) any gain or loss
realized upon the termination of any employee pension plan, (b) net
extraordinary gains or net extraordinary losses, as the case may
be, and (c) net gains or losses in respect of dispositions of
assets other than in the ordinary course of business.
"Consolidated Net Worth" of any Person means the
consolidated stockholders' equity of such Person and its consoli-
dated Subsidiaries, as determined in accordance with GAAP.
"Consolidated Non-cash Charges" of any Person means, for
any period, the aggregate depreciation, amortization and other non-
cash charges of such Person and its Subsidiaries for such period,
as determined in accordance with GAAP.
"Consolidated Tax Expense" of any Person means, for any
period, the aggregate of the tax expense of such Person and its
consolidated Subsidiaries for such period, as determined in
accordance with GAAP.
"Corporate Trust Office" means the principal office of
the Trustee at which at any particular time its corporate trust
business shall be principally administered, which, as of the date
of this Indenture, is located at One State Street, New York, New
York 10004, Attention: Corporate Trust Department.
"Corporation" means a corporation, association, company,
joint-stock company or business trust.
"Cumulative Net Available Cash" of any Person means
(1) the sum (without duplication) of (i) 50% of Consolidated Net
Income of such Person accrued during the Reference Period (less any
previous Restricted Payments and 100% of any Consolidated Net Loss
of such Person) plus (ii) all Consolidated Non-cash Charges
deducted in computing Consolidated Net Income (or Consolidated Net
Loss, as the case may be) of such Person during the Reference
Period plus (iii) the aggregate net proceeds (other than with
respect to sales to Subsidiaries of such Persons), including cash
and the fair market value of property other than cash, received by
such Person during the Reference Period from the issuance of
capital stock (other than redeemable stock and other than stock
issued by the Company pursuant to the Plan) or debt securities
(other than the Company's 14% Subordinated Debentures due February
1, 2001) that have been converted into capital stock (other than
redeemable stock) other than amounts used to retire or acquire
capital stock or Subordinated Debt, less (2) the sum (without
duplication) of (i) all capital expenditures (other than with the
Net Cash Proceeds from Asset Sales) for any property made by such
Person and its Subsidiaries during the Reference Period, (ii) the
change (which will be added to the amounts in (i) and (iii) of this
clause (2) if an increase, but subtracted therefrom if a decrease)
in Working Capital at the end of the Reference Period compared to
Working Capital at January 29, 1995 and (iii) the sum (without
duplication) of all payments of principal of Indebtedness of such
Person or any Subsidiary thereof other than the Notes actually made
during the Reference Period, excluding payments under the Revolving
Credit Loans but only to the extent the Banks' revolving loan
commitments under the Bank Credit Agreement shall not have been
reduced on or after the date hereof in connection with such
payments.
"Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator, custodian or similar official under any
Bankruptcy Law.
"Defaulted Interest" has the meaning specified in Section
307.
"Deficiency" has the meaning specified in Section 1013.
"Effective Date" means the date on which the Plan becomes
effective.
"Event of Default" has the meaning specified in Article
Five.
"Excess Proceeds" has the meaning specified in Section
1013.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Fixed Charge Coverage Ratio" of any Person means, for
any period, the ratio of (a) the sum of Consolidated Net Income of
such Person for such period plus Consolidated Interest Expense,
Consolidated Tax Expense and Consolidated Non-cash Charges of such
Person deducted in computing Consolidated Net Income of such Person
for such period, to (b) Consolidated Interest Expense of such
Person for such period; provided, that in making such computation,
the Consolidated Interest Expense of such Person attributable to
interest on any Indebtedness computed on a pro forma basis and
bearing a floating interest rate shall be computed as if the rate
in effect on the date of computation had been the applicable rate
for the entire period.
"GAAP" means generally accepted accounting principles as
in effect in the United States on the date of the relevant
computation, consistently applied.
"Guarantee" has the meaning set forth in Section 1014
hereof.
"Holder" means a Person in whose name a Note is regis-
tered in the Note Register and, when used with respect to any Note
or Notes, means the Person or Persons in whose name such Note is,
or Notes are, registered in the Note Register.
"Incur" means, directly or indirectly, to create, incur,
assume, guarantee or otherwise become liable for any obligation of
any kind whatsoever; "incurrence" has a correlative meaning.
"Indebtedness" means, without duplication (a) any
liability of any Person, to the extent it would appear as a
liability upon a balance sheet of such Person prepared on a
consolidated basis in accordance with GAAP (i) for borrowed money,
(ii) evidenced by a bond, note, debenture or similar instrument
(including a purchase money obligation) given in connection with
the acquisition of any businesses, properties or assets of any kind
(other than a trade payable or a current liability arising in the
ordinary course of business), or (iii) for the payment of money
relating to a Capitalized Lease Obligation; (b) any liability of
any Person under any reimbursement obligation relating to a letter
of credit; (c) any liability of others described in the preceding
clauses (a) and (b) that the Person has guaranteed or that is
otherwise its legal liability; and (d) any amendment, supplement,
modification, deferral, renewal, extension or refunding of any
liability of the types referred to in clauses (a), (b) and (c),
above.
"Indenture" means this instrument as originally executed
and as it may from time to time be supplemented or amended by one
or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Notes.
"Interest Rate Determination Date" means, with respect to
any Semi-Annual Period, the January 31 or July 31 next preceding
such Semi-Annual Period or, if such date is not a Business Day, the
next preceding Business Day.
"Interest Rate Protection Obligations" means, with
respect to any Person, any obligation of such Person pursuant to
any arrangement whereby, directly or indirectly, such Person is
entitled to receive from time to time periodic payments calculated
by applying either a fixed or floating rate of interest on a stated
notional amount in exchange for periodic payments made by such
Person calculated by applying a floating or fixed rate of interest
on the same notional amount.
"Investment" means, as applied to any Person, any direct
or indirect purchase or other acquisition by that Person of
Securities, or of a beneficial interest in Securities, of any other
Person, and any direct or indirect loan, advance (other than
deposits with financial institutions available for withdrawal on
demand, prepaid expenses, advances to employees and similar items
made or incurred in the ordinary course of business), or capital
contribution by such Person to any other Person, including all
Indebtedness and accounts owed by that other Person which are not
current assets or did not arise from sales of goods or services to
that person in the ordinary course of business. The amount of any
investment shall be determined in conformity with GAAP.
"Investment Cash Equivalents" means (i) U.S. Government
Obligations maturing within one year after the date of acquisition
thereof; (ii) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing within 90
days after the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from
either Standard & Poor's Corporation ("S&P") or Moody's Investors
Service, Inc. ("Moody's") (or, if at any time neither S&P nor
Moody's shall be rating such obligations, then from such other
nationally recognized rating services acceptable to the Trustee)
and not listed in Credit Watch published by S&P; (iii) commercial
paper, other than commercial paper issued by the Company or any of
its Affiliates, maturing no more than 90 days after the date of
creation thereof and, at the time of acquisition, having a rating
of at least A-1 or P-1 from either S&P or Moody's (or, if at any
time neither S&P nor Moody's shall be rating such obligations, then
the highest rating from other nationally recognized rating services
acceptable to the Trustee); (iv) domestic and Eurodollar certifi-
cates of deposit or time deposits or bankers' acceptances maturing
within 90 days after the date of acquisition thereof issued by any
commercial bank organized under the laws of the United States of
America or any state thereof or the District of Columbia having
combined capital and surplus of not less than $500,000,000 and
(v) repurchase agreements and reverse repurchase agreements with
any commercial bank organized under the laws of the United States
of America or any state thereof or the District of Columbia having
combined capital and surplus of not less than $500,000,000 or with
any Bank which is a party to the Bank Credit Agreement relating to
U.S. Government Obligations; provided, that the terms of such
agreements comply with the guidelines set forth in the Federal
Financial Institutions Examination Council Supervisory Policy-
Repurchase Agreements of Depository Institutions with Securities
Dealers and Others as adopted by the Comptroller of the Currency on
October 31, 1985.
"Letter of Credit Liability" means the Letter of Credit
Liability as defined in and under the Bank Credit Agreement as
originally executed or any similar letter of credit reimbursement
obligations, whether or not contingent, under the Bank Credit
Agreement.
"LIBOR" means for each Semi-Annual Period during which
any Notes are Outstanding, the rate determined by the Company equal
to the arithmetic mean (rounded upwards, if necessary, to the
nearest 1/100,000 of 1%) of the offered rates for deposits in U.S.
dollars for a period of six months, as set forth on the Reuters
Screen LIBO Page as of 11:00 a.m., London time, on the Interest
Rate Determination Date for such Semi-Annual Period; provided, that
if fewer than two offered rates appear on the Reuters Screen LIBO
Page, LIBOR for such Semi-Annual Period shall mean the arithmetic
mean (rounded upwards, if necessary, to the nearest 1/100,000 of
1%) of the interest rates per annum at which deposits in a
Representative Amount in U.S. dollars are offered by the Reference
Banks to prime banks in London interbank market for a period of six
months as of 11:00 a.m., London time, on the Interest Rate
Determination Date for such Semi-Annual Period. If on any Interest
Rate Determination Date at least two of the Reference Banks provide
such offered quotations, then LIBOR for such Semi-Annual Period
shall be determined in accordance with the preceding sentence on
the basis of the offered quotation of those Reference Banks
providing such quotation, provided, that, if less than two of the
Reference Banks are so quoting such interest rate as mentioned
above, then LIBOR for such Semi-Annual Period shall be deemed to be
LIBOR for the next preceding Semi-Annual Period. All U.S. dollar
amounts used in or resulting from the calculations set forth in
this paragraph will be rounded to the nearest cent (with one half
cent being rounded up). For purposes of this definition
"Representative Amount" means an amount that is representative for
a single transaction in the relevant market at the relevant time.
"Material Subsidiary" means, at any time, any Subsidiary
of the Company that, together with the Subsidiaries of such
Subsidiary, (a) accounted for more than 5% of the consolidated
revenues of the Company and its Subsidiaries for the most recently
completed fiscal year of the Company or (b) was the owner of more
than 5% of the consolidated assets of the Company and its Sub-
sidiaries at the end of such fiscal year, all as shown on the
consolidated financial statements of the Company and its Sub-
sidiaries for such fiscal year.
"Maturity", when used with respect to any Note, means the
date on which the principal of such Note becomes due and payable as
therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption, required
repurchase or otherwise.
"Net Cash Proceeds" means, with respect to any Asset
Sale, the proceeds thereof in the form of cash or Cash Equivalents
including payments in respect of deferred payment obligations when
received in the form of cash or Cash Equivalents (except to the
extent that such obligations are financed or sold with recourse to
the Company or any Subsidiary thereof) net of (i) brokerage
commissions and other reasonable fees and expenses (including fees
and expenses of counsel and investment bankers) related to such
Asset Sale, (ii) provisions for all taxes payable as a result of
such Asset Sale, (iii) payments made to retire Indebtedness where
payment of such Indebtedness is required in connection with such
Asset Sale, and (iv) appropriate amounts to be provided by the
Company or any Subsidiary thereof, as the case may be, as a
reserve, in accordance with GAAP, against any liabilities associat-
ed with such Asset Sale and retained by the Company or any
Subsidiary thereof, as the case may be, after such Asset Sale,
including, without limitation, pension and other post-employment
benefit liabilities, liabilities related to environmental matters
and liabilities under any indemnification obligations associated
with such Asset Sale.
"New Notes" means, collectively, the Notes and the Senior
Fixed Rate Notes.
"Note Register" and "Note Registrar" have the respective
meanings specified in section 305.
"Notes" has the meaning specified in the second recital
of this Indenture, and includes the Secondary Notes.
"Offer" has the meaning specified in Section 1013.
"Offered Price" has the meaning specified in Section
1013.
"Officers' Certificate" means a certificate which
complies with Section 102 and which is signed by the Chairman of
the Board, the President, a Vice President or the Treasurer, and by
the Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee.
"Old Notes" means, collectively, the Company's 12 3/8%
Senior Notes due 1999, the Company's Senior Floating Rate Notes due
August 2, 1996 and the Company's 14% Subordinated Debentures due
February 1, 2001.
"Opinion of Counsel" means a written opinion, which
complies with Section 102, of legal counsel, who may be counsel for
the Company, and who shall be reasonably acceptable to the Trustee.
"Original Stockholder" means any member of (x) any group
consisting of members of the Board of Directors or (y) the
Bondholder Committee or any other group of Holders consisting in
whole or in part of members of the Bondholder Committee.
"Outstanding", when used with respect to Notes, means, as
of the date of determination, all Notes theretofore authenticated
and delivered under this Indenture, except:
a. Notes theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation;
b. Notes, or portions thereof, for which
payment or redemption money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Notes; provided, that,
if such Notes are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made; provided,
further, that if for any reason the Company shall default in
the payment of the Redemption Price and accrued interest, such
Notes will be deemed Outstanding; and
c. Notes which have been replaced or paid
pursuant to Section 306 or in exchange for or in lieu of which
other Notes have been authenticated and delivered pursuant to
this Indenture, other than any such Notes in respect of which
there shall have been presented to the Trustee proof satis-
factory to it that such Notes are held by a bona fide pur-
chaser in whose hands such Notes are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the
requisite principal amount of the Outstanding Notes have given any
request, demand, authorization, direction, notice, consent or
waiver hereunder, Notes owned by the Company or any other obligor
upon the Notes or any Affiliate of the Company, or of such other
obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes which the Trustee knows to be
so owned shall be so disregarded. Notes so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Notes and that the pledgee is not
the Company or any other obligor upon the Notes or any Affiliate of
the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company
pursuant to this Indenture to pay the principal of, premium (if
any) or interest on, any Notes on behalf of the Company, which term
may include the Company.
"Permitted Indebtedness" means:
A. Indebtedness of the Company or any Subsidiary thereof
(excluding Bank Loans and Letter of Credit Liability), outstanding
at the time of, and after giving effect to, the initial issuance of
the Notes.
B. Indebtedness of the Company evidenced by the Notes
(including, without limitation, Indebtedness evidenced by addition-
al Notes issued in accordance with the provisions hereof
(including, without limitation, Secondary Notes)).
C. Indebtedness of the Company evidenced by the Senior
Fixed Rate Notes.
D. Bank Loans and Letter of Credit Liability, in an
aggregate principal amount at any one time outstanding, not to
exceed the sum of (i) $125,000,000 less the aggregate principal
amount of Bank Loans and Letter of Credit Liability actually paid
on or after the date hereof, but without deduction for payments
under the Revolving Credit Loans or in respect of Letter of Credit
Liability except to the extent the Banks' revolving loan
commitments or commitments to extend or participate in letters of
credit under the Bank Credit Agreement shall have been reduced on
or after the date hereof in connection with such payments, minus
(ii) the aggregate principal amount of commercial paper outstanding
under clause (f) below less such aggregate principal amount that is
supported by letters of credit issued for the account of the
Company under and pursuant to the Bank Credit Agreement.
E. Indebtedness of the Company either (i) arising out of
sale and leaseback transactions or (ii) bearing a fixed rate of
interest for a term of not less than ten years and secured by
stores and other real property owned by the Company; provided, that
the aggregate principal amount of such Indebtedness at any one time
outstanding shall not exceed the sum of $25,000,000 plus the amount
of such Indebtedness outstanding on the Effective Date.
F. Indebtedness of the Company evidenced by commercial
paper.
G. Interest Rate Protection Obligations to the extent
that the notional principal amount thereof does not exceed the
aggregate amount of Indebtedness referred to in clauses (c) and (d)
above.
H. Indebtedness of the Company or any Subsidiary
thereof, the proceeds of which are used to pay Store Opening Costs
in connection with the opening or acquisition of Permitted Stores.
I. Indebtedness of the Company or any Subsidiary thereof
evidenced by promissory notes representing the Company's or such
Subsidiary's obligations under casualty insurance policies to
reimburse the issuing casualty insurance companies for claims
against the Company or such Subsidiary paid by such insurance
companies.
J. Indebtedness of the Company or any Subsidiary thereof
in respect of performance or surety bonds provided by the Company
or such Subsidiary in the ordinary course of business.
K. Indebtedness of the Company or any Subsidiary thereof
for reimbursement of payments made under commercial documentary
letters of credit issued for the account of the Company or such
Subsidiary in the ordinary course of business, having expiry dates
not more than one year after the date of issuance, and issued for
the purpose of financing the purchase of goods.
L. Indebtedness of the Company constituting obligations
of the Company to redeem shares, or cancel options to purchase
shares, of the Company's capital stock under the terms and
conditions of management equity subscription agreements and
management stock option agreements.
M. Indebtedness of the Company or any Subsidiary thereof
represented by or in respect of industrial revenue or development
bonds not to exceed an aggregate principal amount at any one time
outstanding of $5,000,000.
N. Indebtedness of (i) any Subsidiary of the Company to
the Company or any other Subsidiary of the Company or (ii) the
Company to any Subsidiary thereof.
O. Indebtedness of the Company (which may be Bank Credit
Agreement Indebtedness), in addition to that described in clauses
(a) through (n) above; provided, that the aggregate principal
amount of such Indebtedness at any one time outstanding shall not
exceed the sum of $25,000,000 plus the amount of such Indebtedness
outstanding on the Effective Date.
P. All renewals, extensions, substitutions, refinancings
or replacements (collectively, "refinancings") of any Indebtedness
described in clauses (a) through (m) and (o) above, including
replacements with creditors other than the Banks (or successive
refinancings) so long as any such refinancing does not result in an
increase of the amount of such Indebtedness and, in the case of
refinancings of Subordinated Debt, such Indebtedness (i) is
Subordinated Debt containing subordination provisions no less
favorable to the Holders than the subordination provisions of the
Indebtedness being refinanced, (ii) does not require principal
repayments or sinking fund payments to be made prior to the Stated
Maturity of any payments of principal of the Notes and (iii) other-
wise conforms to the requirements hereof. For the purpose of
determining at any time the Indebtedness that is permitted to be
incurred pursuant to any of the foregoing clauses (each, the
"specified clause"), there shall be included in each specified
clause: (x) all then outstanding Indebtedness that has been
incurred pursuant to such specified clause and (y) all then
outstanding Indebtedness incurred pursuant to this clause (p) to
refinance Indebtedness incurred pursuant to such specified clause
and all then outstanding subsequent refinancings thereof.
No limitation contained in the foregoing clauses (a)
through (p) shall prohibit the Company from incurring Indebtedness
pursuant to any other such clause.
"Permitted Stores" means (a) during the period from the
date hereof through August 2, 1998, seven stores and
(b) thereafter, an average of no more than four stores per year
during each three-year period ending on the last day of each fiscal
year of the Company, with the first such three-year period ending
on July 29, 2001.
"Person" means any individual, corporation, partnership
joint venture, trust, unincorporated organization or any other
entity, or any government or any agency or political subdivision
thereof.
"Plan" has the meaning specified in the first recital of
this Indenture.
"Predecessor Note" of any particular Note means every
previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purposes of this
definition, any Note authenticated and delivered under Section 306
in exchange for a mutilated security or in lieu of a destroyed,
lost or stolen Note shall be deemed to evidence the same debt as
the mutilated, destroyed, lost or stolen Note.
"Redemption Date", when used with respect to any Note to
be redeemed, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Note to
be redeemed, means the price at which it is to be redeemed pursuant
to this Indenture, including as applicable and without duplication,
any accrued interest due upon such redemption pursuant to the terms
of this Indenture.
"Reference Banks" means four major banks in the London
interbank market.
"Reference Period" means, with respect to any Restricted
Payment, the period from the Effective Date through the end of the
last full fiscal quarter immediately preceding the date of such
Restricted Payment (taken as one accounting period).
"Regular Record Date" for the interest payable on any
Interest Payment Date means the January 15 or July 15 (whether or
not a Business Day), as the case may be, next preceding such
Interest Payment Date.
"Responsible Officer", when used with respect to the
Trustee, means any officer assigned to the Corporate Trust Office
and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because
of his or her knowledge of and familiarity with the particular
subject.
"Restricted Payments" has the meaning specified in
Section 1010.
"Retirement" has the meaning specified in Section 1010.
"Reuters Screen LIBO Page" means the display designated
as page "LIBO" on the Reuters Monitor Money Rates Service (or such
other page as may replace the LIBO page on that service for the
purpose of displaying London Interbank offered rates of major
banks).
"Revolving Credit Loans" means the Revolving Credit Loans
(as defined in the Bank Credit Agreement), or any similar revolving
credit facility or swing line facility under the Bank Credit
Agreement.
"Secondary Notes" has the meaning specified in
Section 303.
"Securities" means any stock, shares, voting trust
certificates, bonds, debentures, notes or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as
"securities", or any certificates of interest, shares, or partici-
pations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire
any of the foregoing.
"Semi-Annual Period" means the period from and including
an Interest Payment Date through and including the day next
preceding the following Interest Payment Date; provided that the
initial Semi-Annual Period commences on the date the Notes are
issued.
"Senior Fixed Rate Notes" means the Senior Fixed Rate
Notes due 2003, created and issued by the Company pursuant to the
Senior Fixed Rates Notes Indenture.
"Senior Fixed Rate Notes Indebtedness" means the
Indebtedness of the Company on the Senior Fixed Rate Notes.
"Senior Fixed Rate Notes Indenture" means the Indenture,
dated as of the Effective Date, as such indenture may from time to
time be amended, renewed, supplemented or otherwise modified,
between the Company and Shawmut Bank Connecticut, N.A., as Trustee.
"Special Record Date" has the meaning specified in
Section 307.
"Stated Maturity", when used with respect to any Note or
any installment of interest thereon, means the date specified in
such Note as the fixed date on which the principal of such Note or
such installment of interest is due and payable.
"Store Opening Costs" means the costs and expenses
(including, without limitation, capitalized interest) incurred by
the Company in connection with (i) the opening of a new store,
including the purchase price or lease expense with respect to the
real property on which such store is located and the costs of
furniture, fixtures, equipment and inventory used in connection
with such store, or (ii) the acquisition of the fee or leasehold
interest in the real property on which an existing store is
located, together with the costs of furniture, fixtures, equipment
and inventory used in connection with such acquired store.
"Subordinated Debt" means Indebtedness that ranks junior
or is expressly subordinate in right of payment to the Notes upon
terms substantially in the form of Exhibit A attached hereto,
provided, however, that the definition of "Senior Debt" for the
purposes of such Indebtedness may include Indebtedness other than
the New Notes.
"Subsidiary" of any Person means (i) a corporation a
majority of the Voting Stock of which is at the time owned,
directly or indirectly, by such Person or by one or more other
Subsidiaries, or by such Person and one or more other Subsidiaries
or (ii) any other Person (other than a corporation) in which such
Person, a Subsidiary of such Person or such Person and one or more
Subsidiaries of such Person, directly or indirectly, has the power
to elect or direct the election of at least a majority of the
persons comprising the governing body of such Person.
"Trustee" means the Person named as the "Trustee" in the
first paragraph of this instrument until a successor Trustee shall
have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Trustee" shall mean such successor
Trustee.
"Trust Indenture Act" means the Trust Indenture Act of
1939 as in force at the date as of which this instrument was
executed, until such time as this Indenture is qualified under such
Act, and thereafter means such Act as in force at the date on which
this Indenture is so qualified, in each case except as provided in
Section 905.
"U.S. Government Obligations" means direct noncallable
obligations of, or non-callable obligations guaranteed by, the
United States of America or any agency thereof for the payment of
which obligation or guarantee the full faith and credit of the
United States of America is pledged.
"Voting Stock" means stock of the class or classes having
general voting power under ordinary circumstances to elect at least
a majority of the board of directors, managers or trustees of a
corporation (irrespective of whether or not at the time stock of
any other class or classes shall have or might have voting power by
reason of the happening of any contingency).
"Working Capital" (which may be a positive or negative
amount) means the consolidated current assets (excluding cash and
Cash Equivalents) of the Company less the consolidated current
liabilities of the Company (excluding the current portion of
Indebtedness under the Bank Credit Agreement and of long-term
debt).
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture,
the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in this
Indenture (including any covenants compliance with which consti-
tutes a condition precedent) relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have
been complied with, except that in the case of any such application
or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating
to such particular application or request, no additional certifi-
cate or opinion need be furnished.
Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall
include:
1. a statement that each individual signing such
certificate or opinion has read such covenant or condition and
the definitions herein relating thereto;
2. a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
3. a statement that, in the opinion of each such
individual, he or she has made such examination or investi-
gation as is necessary to enable him or her to express an
informed opinion as to whether or not such covenant or
condition has been complied with; and
4. a statement as to whether, in the opinion of
each such individual, such condition or covenant has been
complied with.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it
is not necessary that all such matters be certified by, or covered
by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or
more other such Persons as to other matters, and any such Person
may certify or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an officer of the Company
may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless
such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to the matters upon which his or her certificate or opinion
is based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect
to such factual matters is in the possession of the Company, unless
such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to such matters are erroneous.
Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but
need not, be consolidated and form one instrument.
Section 104. Acts of Holders.
A. Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture
to be given or taken by holders may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by
such holders in person or by an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 601) conclusive
in favor of the Trustee and the Company, if made in the manner
provided in this Section 104A.
B. The fact and date of the execution by any person of
any such instrument or writing shall be established in any
reasonable manner which the Trustee deems sufficient, which shall
include but not be limited to, notarization of such instrument.
C. The ownership of Notes shall be proved by the Note
Register.
D. Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the holder of any Note
shall bind every future Holder of the same Note and the Holder of
every Note issued upon the transfer thereof or in exchange therefor
or in lieu thereof in respect of anything done, omitted or suffered
to be done by the Trustee, any Paying Agent or the Company in
reliance thereon, whether or not notation of such action is made
upon such Note.
E. The Company may, but shall not be obligated to, fix
a record date for the purpose of determining the Holders entitled
to sign any instrument evidencing or embodying an Act of Holders.
If a record date is fixed, those Persons who were Holders at such
record date (or their duly appointed agents), and only those
Persons, shall be entitled to sign any such instrument evidencing
or embodying an Act of Holders or to revoke any such instrument
previously signed, whether or not such Persons continue to be
Holders after such record date.
Section 105. Notices, Etc., to Trustee and the Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or
permitted by this Indenture to be made upon, given or furnished to,
or filed with,
1. the Trustee by any Holder or by the Company
shall be sufficient for every purpose hereunder if made,
given, furnished or filed in writing and hand delivered,
mailed first-class, registered or certified with postage
prepaid, sent by telecopier or delivered by recognized
overnight courier to or with the Trustee at its corporate
trust office, located at One State Street, New York, New York
10004, Attention: Corporate Trust Department, or at any other
address previously furnished in writing to the Holders, the
Company or any other obligor of the Notes by the Trustee, or
2. the Company by the Trustee or by any Holder
shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if in writing and hand
delivered, mailed first-class postage prepaid, sent by
telecopier or delivered by recognized overnight courier to the
Company, addressed to it at the address of its principal
office specified in the first paragraph of this Indenture or
at any other address previously furnished in writing to the
Trustee by the Company, in any case, Attention: President.
All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail,
registered or certified with postage prepaid, if mailed; when
receipt acknowledged, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of
any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and hand
delivered, mailed first-class postage prepaid, sent by telecopier
or delivered by recognized overnight courier to each Holder
affected by such event, at its address as it appears in the Note
Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any
case where notice to Holders is given by mail, neither the failure
to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event,
and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable
to give such notice by mail as may be required by any provision of
this Indenture, then any method of giving such notice as shall be
reasonably satisfactory to the Trustee shall, under such
circumstances, be deemed to be a sufficient giving of such notice.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts
with the duties imposed by the Trust Indenture Act or another
provision which is required or deemed to be included in this
Indenture by any of the provisions of the Trust Indenture Act, the
imposed duties shall control. If any provision of this Indenture
modifies or excludes any provision of the Trust Indenture Act that
may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded,
as the case may be.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the
construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the
Company and any other obligor of the Notes shall bind its
successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Notes
shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
Section 111. Benefits of Indenture.
Nothing contained in this Indenture or in the Notes,
expressly or impliedly, shall give to any Person, other than the
parties hereto and their successors hereunder and the Holders, any
benefit or any legal or equitable right, remedy or claim under this
Indenture.
Section 112. Governing Law.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption
Date, Maturity or Stated Maturity of any Note shall not be a
Business Day, then (notwithstanding any other provision of this
Indenture or of the Notes) payment of principal of, or premium (if
any) or interest on, the Notes need not be made on such date, but
may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date, Maturity or
Redemption Date, or at the Stated Maturity, provided that no
interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date, Maturity or Stated Maturity, as the
case may be, if such payment is made on the next succeeding
Business Day.
Section 114. Incorporators, Stockholders, Officers and Directors
of the Company Exempt from Individual Liability.
No recourse under or upon any obligation, covenant or
agreement of this Indenture or any indenture supplemental hereto or
of any Note, or for any claim based thereon or otherwise in respect
thereof, shall be had against any incorporator, stockholder,
officer or director, as such, past, present or future, of the
Company or of any successor corporation to the Company, either
directly or through the Company, or any successor corporation,
whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it
being expressly understood that this Indenture and the obligations
issued hereunder are solely corporate obligations, and that no such
personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, stockholders, officers or direct-
ors, as such, of the Company or of any such successor corporation,
or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or
agreements contained in this Indenture or in any of the Notes or
implied therefrom; and that any and all such personal liability of
every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims
against, every such incorporator, stockholder, officer or director,
as such, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or
agreements contained in this Indenture or in any of the Notes or
implied therefrom are hereby expressly waived and released as a
condition of, and as consideration for, the execution of this
Indenture and the issue of such Notes.
Section 115. Counterparts.
This Indenture may be executed in any number of counter-
parts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
ARTICLE TWO
FORMS OF NOTES
Section 201. Forms Generally.
The Notes and the Trustee's certificates of authentica-
tion thereon shall be in substantially the forms set forth in this
Article, with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Inden-
ture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange
or as may, consistently herewith, be determined by the officers
executing such Notes, as evidenced by their execution thereof. Any
portion of the text of any Note may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the
Note.
The definitive Notes shall be printed, lithographed or
engraved or produced by any combination of these methods on
engraved steel borders or may be produced in any other manner
permitted by the rules of any securities exchange on which the
Notes may be listed, all as determined by the officers executing
such Notes, as evidenced by their execution thereof.
Section 202. Form of Face of Note.
KASH N' KARRY FOOD STORES, INC.
Senior Floating Rate Notes due 2003
No. ____ $__________
Kash n' Karry Food Stores, Inc., a Delaware corporation
(herein called the "Company," which term includes any successor
corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to , or
registered assigns, the principal sum of
Dollars on February 1, 2003, and to pay interest thereon from
December 29, 1994 or from the most recent Interest Payment Date to
which interest has been paid semi-annually on February 1 and August
1 in each year, commencing August 1, 1995, at the rate of LIBOR (as
defined below) plus 2% per annum, until the principal hereof is
paid or made available for payment. Interest shall be computed on
the basis of a 360-day year of twelve 30-day months.
"LIBOR" means for each Semi-Annual Period during which
any Notes are Outstanding, the rate determined by the Company equal
to the arithmetic mean (rounded upwards, if necessary, to the
nearest 1/100,000 of 1%) of the offered rates for deposits in U.S.
dollars for a period of six months, as set forth on the Reuters
Screen LIBO Page as of 11:00 a.m., London time, on the Interest
Rate Determination Date for such Semi-Annual Period; provided, that
if fewer than two offered rates appear on the Reuters Screen LIBO
Page. LIBOR for such Semi-Annual Period shall mean the arithmetic
mean (rounded upwards, if necessary, to the nearest 1/100,000 of
1%) of the interest rates per annum at which deposits in a
Representative Amount in U.S. dollars are offered by the Reference
Banks to prime banks in London interbank market for a period of six
months as of 11:00 a.m., London time, on the Interest Rate
Determination Date for such Semi-Annual Period. If on any Interest
Rate Determination Date at least two of the Reference Banks provide
such offered quotations, then LIBOR for such Semi-Annual Period
shall be determined in accordance with the preceding sentence on
the basis of the offered quotation of those Reference Banks
providing such quotation, provided, that, if less than two of the
Reference Banks are so quoting such interest rate as mentioned
above, then LIBOR for such Semi-Annual Period shall be deemed to be
LIBOR for the next preceding Semi-Annual Period. All U.S. dollar
amounts used in or resulting from the calculations set forth in
this paragraph will be rounded to the nearest cent (with one half
cent being rounded up). For purposes of this definition
"Representative Amount" means an amount that is representative for
a single transaction in the relevant market at the relevant time.
The interest so payable on any Interest Payment Date
will, as provided in the Indenture, be paid to the Person in whose
name this Note (or one or more Predecessor Notes) is registered at
the close of business on the Regular Record Date for such interest,
which shall be the January 15 or July 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid will forthwith
cease to be payable to the Holder so registered on such Regular
Record Date and may either be paid to the Person in whose name this
Note (or one or more Predecessor Notes) is registered at the close
of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall
be given to Holders not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which the Notes may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said
Indenture.
On or prior to August 1, 1995, the Company may, at its
option and in its sole discretion, in lieu of paying interest in
cash, issue additional Notes (the "Secondary Notes") in an
aggregate principal amount equal to the amount of cash interest due
and payable on any Interest Payment Date, provided that the Company
may not issue Secondary Notes in lieu of paying interest in cash if
an Event of Default, or an event or condition which with notice or
lapse of time or both would become an Event of Default, shall have
occurred and be continuing immediately prior to or as a result of
such issuance of Secondary Notes. In any such case, the Trustee or
any Authenticating Agent (upon Company Order given not less than 10
nor more than 45 days prior to such Interest Payment Date) shall
authenticate for original issue Secondary Notes in an aggregate
principal amount equal to the amount of cash interest due and
payable on such Interest Payment Date. Such Company Order shall
specify the amount of the Notes to be authenticated and the date on
which such Secondary Notes are to be authenticated. Each issuance
of Secondary Notes in lieu of payment of interest in cash shall be
made pro rata with respect to the outstanding Notes; provided,
however, that the Company may at its option pay cash in lieu of
issuing Secondary Notes in any denomination of less than $100.
Subject to the provisions of the immediately preceding
paragraph, payment of the principal of, premium, if any, and
interest on, and the Change of Control Purchase Price, if any, and
Redemption Price with respect to, this Note will be made at the
office or agency of the Company maintained for that purpose in the
Borough of Manhattan, The City of New York or at any other office
or agency maintained by the Company for such purpose, in such coin
or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Note Register.
Notwithstanding the foregoing, at the option of any Holder of at
least $1,000,000 aggregate principal amount of Notes upon written
notice to the Company at least 30 days prior to the respective
payment date, but subject to the immediately preceding paragraph,
payments of principal, premium, if any, and interest will be made
by wire transfer to an account maintained by such Holder with a
bank which is a member of the Federal Reserve System.
Reference is hereby made to the further provisions of
this Note set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this
place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof, or by
the Authenticating Agent appointed as provided in the Indenture, by
manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instru-
ment to be duly executed under its corporate seal.
Dated:
KASH N' KARRY FOOD STORES, INC.
By_________________________________
[SEAL]
Attest:
____________________________
Authorized Signatory
Section 203. Form of Reverse of Note.
This Note is one of a duly authorized issue of Notes of
the Company designated as its Senior Floating Rate Notes due 2003
(herein called the "Notes"), limited (except as otherwise provided
in the Indenture referred to below) in aggregate principal amount
to $135,000,000 issued and to be issued under an Indenture, dated
as of December 29, 1994 (herein called the "Indenture"), between
the Company and IBJ Schroder Bank & Trust Company, as Trustee
(herein called the "Trustee," which term includes any successor
trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee, and the Holders of the
Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered.
The Notes are general unsecured obligations of the
Company.
If at any time either (a) any person or any persons
acting together (excluding the Original Stockholders) that
constitute a "group" for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended, shall beneficially own
at least 50% of the total voting stock of the Company or (b) any
person or any persons acting together (excluding the Original
Stockholders) that constitute a "group" for purposes of Section
13(d) of the Securities Exchange Act, as amended, shall succeed in
having a sufficient number of its nominees elected to the Board of
Directors of the Company to constitute a majority of the Board of
Directors of the Company (each, a "Change of Control"), then the
Company shall make an offer to repurchase any or all of the
Outstanding Notes at a price, payable in cash, in an amount equal
to 100% of the principal amount thereof plus accrued and unpaid
interest, if any, to the Change of Control Purchase Date (the
"Change of Control Purchase Price") in accordance with the
procedures set forth in the Indenture; provided that such repur-
chase shall be conditioned upon receipt by the Company of Notes
representing at least 50% of the aggregate principal amount of the
Outstanding Notes.
The Notes are subject to redemption upon not less than 30
nor more than 60 days' notice by first-class mail, at any time, as
a whole or in part, at the election of the Company, at 100% of the
principal amount thereof together, in the case of any such
redemption, with accrued and unpaid interest, if any, to the
Redemption Date, but interest installments whose Stated Maturity is
on or prior to such Redemption Date will be payable to the Holders
of such Notes, or one or more Predecessor Notes, of record at the
close of business on the relevant Regular Record Dates referred to
on the face hereof, all as provided in the Indenture.
In the event of redemption of this Note in part only, a
new Note or Notes for the unredeemed portion hereof, if any, will
be issued in the name of the Holder hereof upon the cancellation
hereof. Notes may be redeemed in part in integral multiples of
$1,000 only. The Notes to be redeemed shall, on the Redemption
Date, become due and payable at the Redemption Price herein
specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price) such Notes shall
cease to bear interest.
If, at any time prior to maturity hereof, the Company
engages in an Asset Sale which results in Excess Proceeds, then at
the option of the Holder, this Note shall be subject to repurchase
by the Company out of such Excess Proceeds pursuant to the
Indenture.
If an Event of Default shall occur and be continuing, the
principal of all the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including
certain amendments permitted without the consent of any Holders) as
therein provided, the amendment thereof and the modification of the
rights and obligations of the Company and the rights of the Holders
of the Notes under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of not less than a majority
in aggregate principal amount of the Notes at the time Outstanding.
The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Notes at
the time Outstanding, on behalf of the Holders of all the Notes, to
waive compliance by the Company with certain provisions of the
Indenture and the Notes and certain past defaults under the Inden-
ture and their consequences. Any such consent or waiver by or on
behalf of the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of
this Note or of the Indenture shall alter or impair the obligation
of the Company or other obligor of the Notes, which is absolute and
unconditional, to pay the principal of, and premium, if any, and
interest on this Note at the times, place, and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Note is
registrable in the Note Register, upon surrender of this Note for
registration of transfer at the office or agency of the Company in
the Borough of Manhattan, The City of New York or at any other
office or agency maintained by the Company for such purpose, duly
endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Note Registrar, duly
executed by the Holder hereof or its attorney duly authorized in
writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Notes are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple
thereof, provided, however, that if the Company elects to pay
interest to the Holder hereof by issuing Secondary Notes and the
amount of such interest is not an integral multiple of $1,000, the
Company may issue to the Holder hereof a Secondary Note in a
denomination of less than $1,000 and in a principal amount equal to
the excess of the amount of such interest over an integral multiple
of $1,000, and provided further that if the aggregate principal
amount of Notes to be issued to any beneficial holder of the
Company's 12 3/8% Senior Notes due 1999 or the Company's Senior
Floating Rate Notes due August 2, 1996 on December 29, 1994,
pursuant to the Plan (whether on account of interest accrued
thereon at the contract rate from February 3, 1994 and February 2,
1994, respectively, through but not including November 9, 1994, or
on account of an election of such holder to receive both Notes and
Senior Fixed Rate Notes, or both) is not an integral multiple of
$1,000, the Company may issue to such beneficial holder a Note in
a denomination of less than $1,000 and in a principal amount equal
to the excess of such aggregate principal amount over an integral
multiple of $1,000. As provided in the Indenture and subject to
certain limitations therein set forth, Notes are exchangeable for
a like aggregate principal amount of Notes of a different
authorized denomination, as requested by a Holder surrendering the
same.
No service charge shall be made for any such registration
of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to and at the time of due presentment of this Note
for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose
name this Note is registered as the owner hereof for all purposes,
whether or not any amount due in respect of this Note be overdue,
and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
All terms used in this Note which are defined in the
Indenture and not otherwise defined herein shall have the meanings
assigned to them in the Indenture.
Section 204. Form of Trustee's Certificate of Authentication.
Certificate of Authentication
This is one of the Senior Floating Rate Notes due 2003
referred to in the within-mentioned Indenture.
Dated: ,
as Trustee
By_______________________
Authorized Signatory
Section 205. Form of Assignment.
To assign this Note, fill in the form below:
I or we assign and transfer this Note to:
--------------------------
: :
--------------------------
(Insert assignee's social
security or tax ID no.)
_____________________________________
_____________________________________
_____________________________________
(Print or type assignee's name,
address and zip code)
and irrevocably appoint
_____________________________________
_____________________________________
agent to transfer this Note on the books of the Company. The agent
may substitute another to act for him or her.
Date:______________ Your Signature:_______________________*
(Sign exactly as your name
appears on the other side of
this Security)
* Your signature must be guaranteed by an eligible guarantor
institution which is a member of the Securities Transfer Agents
Medallion Program, the Stock Exchange Medallion Program or the New
York Stock Exchange Medallion Signature Program.
Section 206. Form of Option of Holder to Elect Redemption.
If you wish to elect to have this Note purchased by the
Company pursuant to Section 1013 or Section 1109 of the Indenture,
check the box: ____
$___________
Date:___________________ Signature _________________________
(Sign exactly as your name
appears on the other side of
this Security)
Signature Guarantee:
Member firm of an eligible guarantor
institution which is a member of the
Securities Transfer Agents Medallion
Program, the Stock Exchange Medallion
Program or the New York Stock Exchange
Medallion Signature Program.
ARTICLE THREE
THE NOTES
Section 301. Title and Terms.
The aggregate principal amount of Notes that may be
authenticated and delivered under this Indenture is limited (except
as otherwise provided in this Indenture or the Plan) to
$135,000,000, except for Notes authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of,
other Notes pursuant to Sections 304, 305, 306, 906, 1013 or 1108.
The Notes shall be known and designated as the "Senior
Floating Rate Notes due 2003" of the Company. Their Stated
Maturity shall be February 1, 2003, and they shall bear interest at
the rate of LIBOR plus 2% per annum, from the date of issuance or
from the most recent Interest Payment Date to which interest has
been paid, payable semiannually on February 1 and August 1 in each
year, commencing August 1, 1995 until the principal thereof is paid
or made available for payment.
On or prior to August 1, 1995, the Company may, at its
option and in its sole discretion, in lieu of paying interest in
cash, issue additional Notes (the "Secondary Notes") in an
aggregate principal amount equal to the amount of cash interest due
and payable on any Interest Payment Date, provided that the Company
may not issue Secondary Notes in lieu of paying interest in cash if
an Event of Default, or an event or condition which with notice or
lapse of time or both would become an Event of Default, shall have
occurred and be continuing immediately prior to or as a result of
such issuance of Secondary Notes. In any such case, the Trustee or
any Authenticating Agent (upon Company Order given not less than 5
nor more than 45 days prior to such Interest Payment Date) shall
authenticate for original issue Secondary Notes in an aggregate
principal amount equal to the amount of cash interest due and
payable on such Interest Payment Date. Such Company Order shall
specify the amount of the Notes to be authenticated and the date on
which such Secondary Notes are to be authenticated. Each issuance
of Secondary Notes in lieu of payment of interest in cash shall be
made pro rata with respect to the outstanding Notes; provided,
however, that the Company may at its option pay cash in lieu of
issuing Secondary Notes in any denomination of less than $100.
The principal of, premium, if any, and interest on the
Notes shall be payable at the office or agency of the Company in
the Borough of Manhattan, The City of New York maintained for such
purpose or at any other office or agency maintained by the Company
for such purpose; provided, however, that, at the option of the
Company and subject to the immediately preceding paragraph, payment
of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Note
Register. Notwithstanding the foregoing, at the option of any
Holder of at least $1,000,000 aggregate principal amount of Notes
upon written notice to the Company at least 30 days prior to the
respective payment date, but subject to the immediately preceding
paragraph, payments of principal, premium, if any, and interest
will be made by wire transfer to an account maintained by such
Holder with a bank which is a member of the Federal Reserve System.
Section 302. Denominations.
The Notes shall be issuable only in registered form
without coupons and only in denominations of $1,000 and any
integral multiple thereof, provided, however, that if the Company
elects to pay interest to the Holder of a Note by issuing Secondary
Notes and the amount of such interest is not an integral multiple
of $1,000, the Company may issue to such Holder a Secondary Note in
a denomination of less than $1,000 and in a principal amount equal
to the excess of the amount of such interest over an integral
multiple of $1,000, and provided further that if the aggregate
principal amount of Notes to be issued to any beneficial holder of
the Company's 12 3/8% Senior Notes due 1999 or the Company's Senior
Floating Rate Notes due August 2, 1996 on December 29, 1994,
pursuant to the Plan (whether on account of interest accrued
thereon at the contract rate from February 3, 1994 and February 2,
1994, respectively, through but not including November 9, 1994, or
on account of an election of such holder to receive both Notes and
Senior Fixed Rate Notes, or both) is not an integral multiple of
$1,000, the Company may issue to such beneficial holder a Note in
a denomination of less than $1,000 and in a principal amount equal
to the excess of such aggregate principal amount over an integral
multiple of $1,000.
Section 303. Execution, Authentication, Delivery and Dating.
The Notes shall be executed on behalf of the Company by
its Chairman of the Board, its President or one of its Vice
Presidents under its corporate seal, and attested by its Secretary
or one of its Assistant Secretaries. The signature of any of these
officers on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company
shall bind the Company, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authenti-
cation and delivery of such Notes or did not hold such offices at
the date of such Notes.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Notes executed
by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Notes,
and the Trustee in accordance with such Company Order shall
authenticate and deliver such Notes as provided in this Indenture
and not otherwise.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there
appears on such Note a certificate of authentication substantially
in the form provided for herein executed by the Trustee by manual
signature, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly au-
thenticated and delivered hereunder.
In case the Company, pursuant to Article Eight, shall be
consolidated or merged with or into any other Person or shall
convey, transfer or lease substantially all of its properties and
assets to any Person, and the successor Person resulting from such
consolidation, or surviving such merger, or into which the Company
shall have been merged, or the Person which shall have received a
conveyance, transfer or lease as aforesaid, shall have executed an
indenture supplemental hereto with the Trustee pursuant to Article
Eight, any of the Notes authenticated or delivered prior to such
consolidation, merger, conveyance, transfer or lease may, from time
to time, at the request of the successor Person, be exchanged for
other Notes executed in the name of the successor Person with such
changes in phraseology and form as may be appropriate, but
otherwise in substance of like tenor as the Notes surrendered for
such exchange and of like principal amount; and the Trustee or
Authenticating Agent, upon Company Request of the successor Person,
shall authenticate and deliver Notes as specified in such request
for the purpose of such exchange. If Notes shall at any time be
authenticated and delivered in any new name of a successor Person
pursuant to this Section in exchange or substitution for or upon
registration of transfer of any Notes, such successor Person, at
the option of the Holders but without expense to them, shall
provide for the exchange of all Notes at the time Outstanding for
Notes authenticated and delivered in such new name.
Section 304. Temporary Notes.
Pending the preparation of definitive Notes, the Company
may execute, and upon Company Order the Trustee shall authenticate
and make available for delivery, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination, substantially of the tenor of the
definitive Notes in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other
variations as the officers executing such Notes may determine, as
evidenced by their execution of such Notes.
If temporary Notes are issued, the Company will cause
definitive Notes to be prepared without unreasonable delay. After
the preparation of definitive Notes, the temporary Notes shall be
exchangeable for definitive Notes upon surrender of the temporary
Notes at any office or agency of the Company designated pursuant to
Section 1002, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes, the Company shall
execute, and the Trustee shall authenticate and make available for
delivery in exchange therefor, a like principal amount of defini-
tive Notes of authorized denominations. Until so exchanged the
temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as definitive Notes endorsed thereon.
Section 305. Registration, Registration of Transfer and Ex-
change.
The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such
office and in any other office or agency designated pursuant to
Section 1002 being herein sometimes collectively referred to as the
"Note Register") in which, subject to such reasonable regulations
as it may prescribe, the Company shall provide for the registration
of Notes and of transfers of Notes. The Trustee is hereby
appointed "Note Registrar" for the purpose of registering Notes and
transfers of Notes as herein provided. The Note Registrar may
resign as Note Registrar at any time by giving written notice
thereof to the Company.
Upon surrender for registration of transfer of any Note
at an office or agency of the Company designated pursuant to
Section 1002 for such purpose, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Notes of any
authorized denominations and of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for
other Notes of any authorized denominations and of a like aggregate
principal amount, upon surrender of the Notes to be exchanged at
such office or agency. Whenever any Notes are so surrendered for
exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Notes which the Holder making the ex-
change is entitled to receive.
All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Company
evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Notes surrendered upon such registration of
transfer or exchange.
Every Note presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or
the Trustee) be duly endorsed by, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the
Note Registrar duly executed by, the Holder thereof or its attorney
duly authorized in writing.
No service charge shall be made to a Holder for any
registration of transfer or exchange of Notes, but the Company may
require payment of a sum sufficient to cover any documentary, stamp
or similar issue or transfer tax or other governmental charge that
may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 304,
the second sentence of Section 906 or Sections 1013 or 1108 not
involving any transfer.
The Company shall not be required to (i) issue, register
the transfer of or exchange any Note during a period beginning at
the opening of business 15 days before the day of the mailing of a
notice of redemption of Notes selected for redemption and ending at
the close of business on the day of such mailing, or (ii) register
the transfer of or exchange any Note so selected for redemption in
whole or in part, except the unredeemed portions of any Note being
redeemed in part.
Section 306. Mutilated, Destroyed, Lost and Stolen Notes.
If any mutilated Note is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Note, of like tenor and
principal amount and bearing a number not contemporaneously
outstanding.
If there shall be delivered to the Company and the
Trustee (i) evidence to their satisfaction of the destruction, loss
or theft of any Note and (ii) such security or indemnity as may be
reasonably required by them to save each of them and any agent of
either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Note has been acquired by a bona
fide purchaser, the Company shall execute, and upon its request the
Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Note, a new Note of like tenor and
principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen
Note has become due and payable, the Company in its discretion may,
instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section, the
Company may require the payment of its reasonable expenses
(including the reasonable fees and expenses of the Trustee)
connected therewith and any documentary, stamp or similar issue or
transfer tax or governmental charge imposed in relation to such
issuance.
Every new Note issued pursuant to this Section in lieu of
any destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Notes
duly issued hereunder.
Section 307. Payment of Interest; Interest Rights Preserved.
Interest on any Note that is payable on any Interest
Payment Date shall be paid by the Paying Agent to the Person in
whose name that Note (or one or more Predecessor Notes) is
registered at the close of business on the Regular Record Date for
such interest.
Any interest on any Note that is payable, but is not
punctually paid, on any Interest Payment Date and interest on such
defaulted interest at the then applicable interest rate borne by
the Notes plus 2%, to the extent lawful (such defaulted interest
and interest thereon herein collectively called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date notwithstanding the fact that such
Holder was a Holder on such Regular Record Date, and such Defaulted
Interest may be paid by the Company, at its election, as provided
in Clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Notes (or
their respective Predecessor Notes) are registered at the
close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each
Note and the date of the proposed payment, and (subject to the
provisions of the third paragraph of Section 301) at the same
time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such
Defaulted Interest as provided in this Clause. Thereupon the
Trustee shall fix a record date (the "Special Record Date")
for the payment of such Defaulted Interest which shall be not
more than 15 days and not less than 10 days prior to the date
of the proposed payment and not less than 5 days after the re-
ceipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such Special
Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder at its
address as it appears in the Note Register, not less than 10
days prior to such Special Record Date. Notice of the pro-
posed payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Notes
(or their respective Predecessor Notes) are registered at the
close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may
then be listed, and upon such notice as may be required by
such exchange, if, after not less than five days' notice given
by the Company to the Trustee of the proposed payment pursuant
to this Clause, such manner of payment shall be deemed
practicable by the Trustee (acting reasonably).
Subject to the foregoing provisions of this Section, each
Note delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Note shall carry the
rights to interest accrued and unpaid, and to accrue, which were
carried by such other Note.
Section 308. Persons Deemed Owners.
Prior to and at the time of due presentment of a Note for
registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such
Note is registered as the owner of such Note for the purpose of
receiving payment of principal of, premium, if any, and (subject to
Section 307) interest on such Note and for all other purposes
whatsoever, whether or not any payment due in respect of such Note
be overdue, and neither the Company, the Trustee nor any agent of
the Company or the Trustee shall be affected by notice to the
contrary.
Section 309. Cancellation.
All Notes surrendered for payment, purchase, redemption,
registration of transfer or exchange shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and
shall be promptly cancelled by it. The Company may at any time
deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder, which the Company may have
acquired in any manner whatsoever, and all Notes so delivered shall
be promptly cancelled by the Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled as
provided in this Section, except as expressly permitted by this
Indenture. All cancelled Notes held by the Trustee shall be
returned promptly to the Company upon its written request.
Section 310. Computation of Interest.
Interest on the Notes shall be computed on the basis of
a 360-day year of twelve 30-day months.
Section 311. CUSIP Numbers.
The Company in issuing the Notes may use "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no repre-
sentation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice of a redemption
and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be
affected by any defect in or omission of such numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction, Discharge of the Indenture and De-
feasance of the Notes.
The Company shall be deemed to have paid and discharged
the entire indebtedness on the Notes and the provisions of this
Indenture shall cease to be of further effect (subject to this
Section 401 and Section 403), if:
(1) The Company irrevocably deposits in trust
with the Trustee for the benefit of the Holders, pursuant to
an irrevocable trust and security agreement in form and
substance reasonably satisfactory to the Trustee, cash in
United States dollars, U.S. Government Obligations, or a
combination thereof, in an amount sufficient (in the opinion
of a nationally recognized firm of independent public
accountants) to pay the principal of, premium, if any, and
each installment of principal, premium (if any) and interest
on the Notes then outstanding at the Maturity or the Redemp-
tion Date, as the case may be, of such principal, premium,
if any, or installment of principal, premium (if any) or
interest in accordance with the terms of the Indenture and
of the Notes;
(2) Such deposits shall not cause the Trustee to
have a "conflicting interest" as defined in and for purposes
of the Trust Indenture Act;
(3) Such deposit will not result in a default
under this Indenture or a breach or violation of, or
constitute a default under, any other material instrument to
which either the Company or any Subsidiary is a party or by
which it or its property is bound;
(4) The Company shall have delivered to the
Trustee an opinion of independent counsel reasonably
satisfactory to the Trustee based on the fact that (x) a
ruling has been published by the Internal Revenue Service or
(y) since the date hereof, there has been a change in the
applicable Federal income tax law, in either case, to the
effect that, and such opinion shall confirm that, the
deposit, defeasance and discharge will not be deemed, or
result in, a taxable event to the Holders of the Notes and
the Holders will be subject to income tax on the same
amounts and in the same manner and at the same times as
would have been the case if such deposit, defeasance and
discharge had not occurred;
(5) The Company shall not be subject to regu-
lation pursuant to the provisions of the Investment Company
Act of 1940;
(6) The Company shall have delivered to the
Trustee an opinion of independent counsel to the effect that
after the passage of 90 days (or any greater period of time
in which any such deposit of trust funds may remain subject
to Bankruptcy Laws insofar as those laws apply to the
Company) following the deposit of the trust funds, such
funds will not be subject to any Bankruptcy Laws affecting
creditors' rights generally;
(7) The Company shall have delivered to the
Trustee an opinion of independent counsel to the effect that
the Holders of the Notes will have a valid, perfected and
unavoidable (under applicable Bankruptcy Laws), subject to
the passage of time referred to in clause (6), first-
priority security interest in the trust funds;
(8) No Event of Default, or an event or condition
which with notice or lapse of time or both would become an
Event of Default, shall have occurred and be continuing
(A) on the date of the deposit of such trust funds with the
Trustee or (B) during the period ending on the 91st day (or
one day after such other greater period of time in which any
such deposit of trust funds may remain subject to bankruptcy
or insolvency laws) after such date; and
(9) The Company shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel
(who may be outside counsel to the Company), each in form
and substance satisfactory to the Trustee, each stating that
all conditions precedent specified herein relating to the
satisfaction and discharge contemplated by this Section 401
have been complied with.
In the event all or any portion of the Notes are to be
redeemed through such irrevocable trust, the Company must make
arrangements satisfactory to the Trustee, at the time of such
deposit, for the giving of the notice of such redemption or
redemptions by the Trustee in the name and at the expense of the
Company.
In the event that the Company takes the necessary
action to comply with the provisions described in this Section
401 and the Notes are declared due and payable because of the
occurrence of an Event of Default, the Company will remain liable
for all amounts due on the Notes at the time of acceleration
resulting from such Event of Default in excess of the amount of
money and U.S. Government Obligations deposited with the Trustee
pursuant to this Section 401 at the time of such acceleration.
Section 402. Termination of Obligations upon Cancellation of
the Notes.
In addition to the Company's rights under Section 401,
the Company may terminate all of its obligations under this
Indenture (subject to Section 403) when:
(1) all Notes theretofore authenticated and
delivered (other than Notes which have been destroyed, lost
or stolen and which have been replaced or paid as provided
in Section 306) have been delivered to the Trustee for
cancellation;
(2) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel (who may be
outside counsel to the Company), each in form and substance
satisfactory to the Trustee, each stating that all
conditions precedent specified herein relating to the
satisfaction and discharge of this Indenture have been
complied with.
Section 403. Survival of Certain Obligations.
Notwithstanding the satisfaction and discharge of this
Indenture and of the Notes referred to in Sections 401 and 402,
the respective obligations of the Company and the Trustee under
Sections 303, 305, 306, 307, 405, 406, 407, 607, 609, 610, 701,
1001, 1002, 1003 and 1101 shall survive until the Notes are no
longer outstanding, and thereafter the obligations of the Company
and the Trustee under Sections 305, 405, 406, 407 and 607 shall
survive. Nothing contained in this Article Four shall abrogate
any of the rights (including, without limitation, those set forth
in Article 104), obligations or duties of the Trustee under this
Indenture.
Section 404. Acknowledgement of Discharge by Trustee.
After (i) the conditions of Sections 401 or 402 have
been satisfied, (ii) the Company has paid or caused to be paid
all other sums payable hereunder by the Company and (iii) the
Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent
referred to in Sections 401 or 402, as applicable, relating to
the satisfaction and discharge of this Indenture have been com-
plied with, the Trustee upon request shall acknowledge in writing
the discharge of the Company's obligations under this Indenture
except for those surviving obligations specified in Section 403.
Section 405. Application of Trust Money.
Subject to the provisions of the last paragraph of
Section 1003, all money deposited with the Trustee pursuant to
Section 401 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture,
to the payment to the persons entitled thereto (as determined by
the Trustee), either directly or through any Paying Agent as the
Trustee may determine, of the principal, premium, if any, and
interest for whose payment such money has been deposited with the
Trustee.
Section 406. Repayment to the Company.
Upon termination of the trust established pursuant to
Sections 401 or 402, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess money or U.S.
Government Obligations held by them.
Section 407. Reinstatement.
If the Trustee or Paying Agent is unable to apply any
money or U.S. Government Obligations in accordance with Sections
401 or 402 by reason of any legal proceeding or by reason of any
order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application,
the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred
pursuant to Sections 401 or 402 until such time as the Trustee or
Paying Agent is permitted to apply all such money or U.S. Govern-
ment obligations in accordance with Sections 401 or 402;
provided, however, that if the Company has made any payment of
principal of, premium, if any, or interest on any Notes because
of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive
such payment from the money or U.S. Government obligations held
by the Trustee or Paying Agent.
Section 408. Indemnity.
The Company shall pay and indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the
U.S. Government Obligations deposited pursuant to Section 401 or
the principal or interest received in respect of such
obligations, and shall pay and indemnify the Holders against any
tax, fee or charge that would not have been imposed or assessed
but for the deposit of cash or U.S. Government Obligations
pursuant to Section 401.
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
"Event of Default," wherever used herein, means any one
of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon
any Note when it becomes due and payable, and continuance of
any such default for a period of 30 days; or
(2) default in the payment of the principal of,
or premium, if any, on any Note at its Maturity; or
(3) default in the performance of, or breach of,
any covenant, agreement or warranty of the Company contained
in this Indenture (other than a default in the performance
of any covenant, agreement or warranty, the breach of which
is specifically dealt with elsewhere in this Section 501),
and continuance of such default or breach for a period of 60
days after there has been given, by registered or certified
mail, to the Company by the Trustee, or to the Company and
the Trustee by Holders of at least 40% in aggregate
principal amount of the Outstanding Notes, a written notice
specifying such default or breach, requiring it to be
remedied and stating that such notice is a "Notice of
Default" hereunder; or
(4) default by the Company or any Subsidiary
thereof in the payment of any principal of, or premium, if
any, or interest due (and such default, with respect to
payments of interest, shall continue after the applicable
grace period, if any) on any Indebtedness of the Company or
such Subsidiary in excess of $5,000,000 in the aggregate, or
the holder of any lien securing Indebtedness of $5,000,000
or more shall have commenced foreclosure of such lien upon
property of the Company or such Subsidiary; or
(5) an event of default as defined in any inden-
ture, loan agreement, mortgage, bond, promissory note or
other agreement or instrument under which there may be
issued, or by which there may be secured or evidenced, any
Indebtedness of the Company or any Subsidiary thereof in
excess of $5,000,000 in the aggregate shall happen and shall
result in such Indebtedness becoming or being declared due
and payable prior to the date on which it would otherwise
become due and payable; or
(6) final judgments or orders rendered against
the Company or any Subsidiary thereof which require the
payment in money, either individually or in an aggregate
amount, that is more than $5,000,000 and there shall have
been a period of 60 days during which a stay of the
enforcement of such judgment or order, by reason of pending
appeal or otherwise, was not in effect; or
(7) the entry by a court having jurisdiction in
the premises of (A) a decree or order for relief in respect
of the Company or any Material Subsidiary in an involuntary
case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law
or (B) a decree or order adjudging the Company or any
Material Subsidiary a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of
the Company or any Material Subsidiary under any applicable
Federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar
official of the Company or any Material Subsidiary or of any
substantial part of its property, or ordering the winding up
or liquidation of its affairs, and the continuance of any
such decree or order for relief or any such other decree or
order unstayed and in effect for a period of 30 consecutive
days; or
(8) the commencement by the Company or any
Material Subsidiary of a voluntary case or proceeding under
any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the
consent by the Company or any Material Subsidiary to the
entry of a decree or order for relief in respect of the
Company or such Material Subsidiary in an involuntary case
or proceeding under any applicable Federal or state
bankruptcy, insolvency, reorganization or other similar law
or to the commencement of any bankruptcy or insolvency case
or proceeding against it, or the filing of the Company or
any Material Subsidiary of a petition or answer or consent
seeking reorganization or relief under any applicable
Federal or state law, or the consent by the Company or any
Material Subsidiary to the filing of such petition or the
appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Company or such Material Subsidiary
or of any substantial part of its property, or the making by
it of an assignment for the benefit of creditors, or the
adoption by the Board of Directors (or any committee
thereof) of the Company or any Material Subsidiary of any
resolution to approve any of the foregoing.
Section 502. Acceleration of Maturity Date; Rescission and
Annulment.
If an Event of Default (other than an Event of Default
specified in Section 501(7) or (8)) occurs and is continuing,
then, the Trustee or the Holders of not less than 33-1/3% in
aggregate principal amount of the Outstanding Notes, by a notice
in writing to the Company (and to the Trustee if given by
Holders) (an "Acceleration Notice"), in the case of an Event of
Default described in clause (1) or (2) above and 40% in aggregate
principal amount of the Outstanding Notes in the case of any
other Event of Default, may declare all of the principal of all
the Notes (or the Change of Control Purchase Price if the Event
of Default includes failure to pay the Change of Control Purchase
Price), determined as set forth below, together with accrued
interest thereon, to be due and payable immediately, and upon any
such declaration such amount shall become due and payable. If an
Event of Default specified in Section 501(7) or (8) occurs and is
continuing, then the principal and accrued interest of all the
Notes shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee
or any Holder.
At any time after such a declaration of acceleration
has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this
Article Five provided, the Holders of a majority in aggregate
principal amount of the Outstanding Notes, by written notice to
the Company and the Trustee, may rescind and annul such
declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee
a sum sufficient to pay
(1) all overdue interest on all Notes,
(2) the principal of, and premium, if any, on any
Notes, which would become due otherwise than by such
declaration of acceleration and interest thereon at the rate
borne by the Notes,
(3) to the extent that payment of such interest
is lawful, interest upon overdue interest at the rate borne
by the Notes plus 2%,
(4) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel, and
(b) all Events of Default, other than the nonpayment
of the principal of the Notes which have become due solely by
such declaration of acceleration, have been cured or waived as
provided in Section 513.
Notwithstanding the foregoing, in the event of a
declaration of acceleration in respect of the Notes because of an
Event of Default specified in Section 501(4) or (5) shall have
occurred and be continuing, such declaration of acceleration
shall be automatically annulled if the past due indebtedness that
is the subject of such Event of Default has been discharged or
the holders thereof have rescinded their declaration of accelera-
tion in respect of such Indebtedness or, with respect to an Event
of Default consisting solely of the commencement of a foreclosure
proceeding as described in Section 501(4) (a "Foreclosure
Default"), if such foreclosure shall have been stayed or the
Company shall have obtained a bond in the full amount claimed in
such foreclosure proceeding, and written notice of such
discharge, rescission, stay or bond, as the case may be, shall
have been given to the Trustee by the Company and by the holders
of such Indebtedness or a trustee, fiduciary or agent for such
holders, within 60 days after such declaration of acceleration in
respect of the Notes, and no other Event of Default has occurred
during such 60-day period which has not been cured or waived
during such period.
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any
interest on any Note when such interest becomes due and
payable and such default continues for a period of 30 days,
or
(2) default is made in the payment of the
principal of, or premium, if any, on any Note at the
Maturity thereof,
the Company shall, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Notes, the whole amount then due
and payable on such Notes for principal, premium, if any, and
interest, and, to the extent that payment of such interest shall
be legally enforceable, interest on any overdue principal and
premium, if any, and on any overdue interest, at the rate borne
by the Notes, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel.
If the Company fails to pay such amounts forthwith upon
such demand, the Trustee, in its own name and as trustee of an
express trust, may institute a judicial proceeding for the
collection of the sums so due and unpaid, may prosecute such
proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Notes and
collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any
other obligor upon the Notes, wherever situated.
If an Event of Default occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders by such appropriate judicial
proceedings as the Trustee shall deem most effective to protect
and enforce any such rights, whether for the specific enforcement
of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other
proper remedy.
The rights and remedies under this Section 503 are in
addition to the other rights and remedies under this Article
Five.
Section 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insol-
vency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other similar judicial proceeding
relative to the Company or any other obligor upon the Notes or
the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of
the Notes shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment
of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole
amount of principal and premium, if any, and interest owing
and unpaid in respect of the Notes and to file such other
papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agent and counsel) and of the
Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other
property payable or deliverable on any such claims and to
distribute the same;
and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607.
Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, liquidation,
arrangement, adjustment, or composition affecting the Notes or
the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such
proceeding.
Section 505. Trustee May Enforce Claims Without Possession of
Notes.
All rights of action and claims under this Indenture or
the Notes may be prosecuted and enforced by the Trustee without
the possession of any of the Notes or the production thereof in
any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name and as
trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the
Notes in respect of which such judgment has been recovered.
Section
Any money collected by the Trustee pursuant to this
Article Five or otherwise on behalf of the Holders or the Trustee
pursuant to this Article or through any proceeding or any
amendment or restructuring in anticipation or in lieu of any
proceeding contemplated by this Article shall be applied, subject
to applicable laws, in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such
money on account of principal, premium, if any, or interest, upon
presentation of the Notes and the notation thereon of the payment
if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee
under Section 607;
SECOND: To the payment of the amounts then due and
unpaid for principal of, and premium, if any, and interest
on, the Notes in respect of which or for the benefit of
which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts
due and payable on such Notes for principal, premium, if
any, and interest, respectively; and
THIRD: To the payment of the remainder, if any, to the
Company, its successors or assigns or to whomsoever may be
lawfully entitled thereto, or as a court of competent juris-
diction may direct.
Section 507. Limitation on Suits.
No Holder of any Note shall have any right to institute
any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless
(1) such Holder has previously given written
notice to the Trustee of a continuing Event of Default;
(2) the Holders of not less than 33-1/3% in the
case of an Event of Default described in Section 501(l), (2)
or (3) and 40% in the case of any other Event of Default in
principal amount of the outstanding Notes shall have made
written request to the Trustee to institute proceedings in
respect of such Event of Defaults in its own name as Trustee
hereunder;
(3) such Holder or Holders have offered to the
Trustee reasonable security or indemnity against the costs,
expenses and liabilities to be incurred in compliance with
such request;
(4) the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to
institute any such proceeding; and
(5) no direction inconsistent with such written
request has been given to the Trustee during such 60-day
period by the Holders of a majority in principal amount of
the Outstanding Notes;
it being understood and intended that no one or more Holders
shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other Holders, or to obtain or to
seek to obtain priority or preference over any other Holders or
to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all the
Holders.
Section 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture,
the Holder of any Notes shall have the right, which is absolute
and unconditional, to receive payment of the principal of, and
premium, if any, and (subject to Section 307) interest on, such
Note on the respective Stated Maturities of such payments as
expressed in such Notes (and in the case of redemption, the
Redemption Price on the applicable Redemption Date and in the
case of a Change of Control, the Change of Control Purchase Date)
and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such
Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to
such Holder, then, and in every such case, subject to any
determination in such proceeding, (a) the Company, the Trustee
and the Holders shall be restored severally and respectively to
their former positions hereunder and (b) thereafter all rights
and remedies of the Trustee and the Holders shall continue as
though no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen
Notes in the last paragraph of Section 306, no right or remedy
herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law,
be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity
or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of
any Note to exercise any right or remedy accruing upon any Event
of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article Five or by law to
the Trustee or to the Holders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
Section 512. Control by Holders.
Subject to Section 601, the Holders of a majority in
aggregate principal amount of the Outstanding Notes shall have
the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with
any rule of law or with this Indenture, and
(2) subject to the provisions of Section 315 of
the Trust Indenture Act, the Trustee may take any other
action deemed proper by the Trustee which is not
inconsistent with such direction.
The Company shall set a record date for purposes of
determining the identity of Holders entitled to vote or consent
to any action by vote or consent authorized or permitted by this
Indenture. Unless the Company provides otherwise, in the form of
an Officers' Certificate provided to the Trustee, such record
date shall be 30 days prior to the first such vote or
solicitation of such consent.
Section 513. Waiver of Past Default.
The Holders of not less than a majority in aggregate
principal amount of the Outstanding Notes may, on behalf of all
Holders, waive any past default hereunder and its consequences,
except a default
(1) in the payment of the principal of, premium,
if any, or interest on, any Security as specified in clauses
(1), (2) or (3) of Section 501, or
(2) in respect of a covenant or provision hereof
which, under Article Nine, cannot be modified or amended
without the consent of the Holder of each Outstanding Note
affected.
Upon any such waiver, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
Section 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of
any Note by its acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture,
or in any suit against the Trustee for any action taken, suffered
or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant
in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted
by the Company, to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in aggregate principal amount of the
Outstanding Notes, or to any suit instituted by any Holder for
enforcement of the payment of principal of, or premium (if any)
or interest on, any Note on or after the respective Stated
Maturities expressed in such Note (or, in the case of redemption,
on or after the Redemption Date).
Section 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury law wherever
enacted, now or at any time hereafter in force, which may affect
the covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law
had been enacted.
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of
Default,
(1) the Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(2) in the absence of bad faith or willful
misconduct on its part, the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates
or opinions which, by any provision hereof, are specifically
required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or
her own affairs.
(c) No provision of this Indenture shall be construed
to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that
(1) this Subsection (c) shall not be construed to
limit the effect of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of
the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of a
majority in principal amount of the Outstanding Notes re-
lating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee,
under this Indenture.
(d) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(e) whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section.
Section 602. Notice of Defaults.
Within 90 days after the occurrence of any default
hereunder known to the Trustee, the Trustee shall transmit by
mail to (i) all Holders, as their names and addresses appear in
the Note Register, (ii) each Holder who has, within the two years
preceding such transmission, filed its name and address with the
Trustee for that purpose, and (iii) all Holders whose names and
addresses have been furnished to or obtained by the Trustee
pursuant to Section 701, notice of such default hereunder known
to the Trustee, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default
in the payment of the principal of, or premium, if any, or
interest on, any Note at its Maturity, Redemption Date or
otherwise or in the payment of the Change of Control Purchase
Price on the Change of Control Purchase Date, the Trustee shall
be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee
of directors or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interest
of the Holders; and provided, further, that in the case of any
default of the character specified in Section 501(3), no such
notice to Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of
time or both would become, an Event of Default.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, certi-
ficate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party
or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or
Company Order, and any resolution of the Board of Directors of
the Company may be sufficiently evidenced by a Board Resolution
thereof;
(c) whenever in the administration of this Indenture
the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate or an Opinion of Counsel
or both;
(d) the Trustee may consult with counsel of its
selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders
pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records
and premises of the Company, personally or by agent or attorney;
and
(g) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder.
Section 604. Not Responsible for Recitals or Issuance of Notes.
The recitals contained herein and in the Notes, except
the Trustee's certificates of authentication, shall be taken as
the statements of the Company, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this
Indenture or of the Notes, except that the Trustee represents
that it is duly authorized to execute and deliver this Indenture,
authenticate the Notes and perform its obligations hereunder and
that the statements made by it in a Statement of Eligibility and
Qualification on Form T-1, if any, supplied to the Company will
be true and accurate subject to the qualifications set forth
therein. The Trustee shall not be accountable for the use or
application by the Company of Notes or the proceeds thereof.
Section 605. May Hold Notes.
The Trustee, any Authenticating Agent, any Paying
Agent, any Note Registrar or any other agent of the Company, in
its individual or any other capacity, may become the owner or
pledgee of Notes and, subject to Section 612, may otherwise deal
with the Company with the same rights it would have if it were
not Trustee, Authenticating Agent, Paying Agent, Note Registrar
or such other agent.
Section 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not
be segregated from other funds except to the extent required by
law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed in
writing with the Company.
Section 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such
reasonable compensation as the Company and the Trustee shall
from time to time agree upon in writing for all services
rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(2) except as otherwise expressly provided
herein, to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the
expenses and disbursements of its non-employee agents and
counsel), except to the extent any such expense,
disbursement or advance may be attributable to its
negligence, willful misconduct or bad faith; and
(3) to indemnify each of the Trustee or any
predecessor Trustee for, and to hold it harmless against,
any and all loss, damage, claims, liability or expense,
including taxes (other than taxes based upon or determined
by the income of the Trustee), except to the extent arising
out of negligence, willful misconduct or bad faith on the
part of the Trustee, arising out of or in connection with
the acceptance or administration of this trust, including
the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
The Trustee shall have a claim prior to the Notes as to
all property and funds properly held by it hereunder for any
amount owing it or any predecessor Trustee pursuant to this
Section 607, except with respect to funds held in trust for the
benefit of the Holders of particular Notes.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(7)
or Section 501(8), the expenses (including the reasonable charges
and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration
under any applicable Federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the
termination of this Indenture.
Section 608. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which
shall be a corporation organized and doing business under the
laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of
at least $75,000,000 and subject to supervision or examination by
Federal or state authority and, to the extent there is such an
institution eligible, and willing to serve, having its Corporate
Trust Office in the City of Los Angeles, California or the City
of New York, New York. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter
specified in this Article Six. The Trustee shall comply with
Sections 310(a)(5) and 310(b) of the Trust Indenture Act.
Section 609. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the
successor Trustee under Section 610.
(b) The Trustee may resign at any time by giving
written notice thereof to the Company. If an instrument of
acceptance by a successor Trustee shall not have been delivered
to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time by Act of
the Holders of a majority in aggregate principal amount of the
outstanding Notes, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall cease to be eligible under
Section 608 and shall fail to resign after written request
therefor by the Company or by any Holder, or
(2) the Trustee shall become incapable of acting
or shall be judged a bankrupt or insolvent or a receiver of
the Trustee or of its property shall be appointed or any
public officer shall take charge or control of the Trustee
or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may
remove the Trustee, or (ii) subject to Section 514, any Holder
who has been a bona fide Holder of a Note for at least six months
may, on behalf of itself and all others similarly situated,
petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee. If an
instrument of acceptance by a Successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of
such notice of removal, the Trustee being removed may petition
any court of competent jurisdiction for the appointment of a
successor Trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee. If, within one year after
such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act of
the Holders of a majority in principal amount of the Outstanding
Notes delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee and
supersede the successor Trustee appointed by the Company. If no
successor Trustee shall have been so appointed by the Company or
the Holders and accepted appointment in the manner hereinafter
provided, any Holder who has been a bona fide Holder of a Note
for at least six months may, on behalf of itself and all others
similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation
and each removal of the Trustee and each appointment of a
successor Trustee by mailing written notice of such event by
first-class mail, postage prepaid, to all Holders as their names
and addresses appear in the Note Register. Each notice shall
include the name of the successor Trustee and the address of its
Corporate Trust Office.
Section 610. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall
execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but,
on request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges pursuant to Section
607, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such
retiring Trustee hereunder. Upon request of any such successor
Trustee, the Company shall execute any and all instruments for
more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee
shall be qualified and eligible under this Article Six.
Section 611. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party or any
corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article Six, without the
execution or filing of any paper or any further act on the part
of any of the parties hereto. In case any Notes shall have been
authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver
the Notes so authenticated with the same effect as if such
successor Trustee had itself authenticated such Notes.
Section 612. Preferential Collection of Claims Against Company.
The Trustee shall comply with Trust Indenture
Act 311(a), excluding any creditor relationship listed in Trust
Indenture Act 311(b). A Trustee who has resigned or been
removed shall be subject to Trust Indenture Act 311(a) to the
extent indicated.
Section 613. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or
Agents acceptable to the Company which shall be authorized to act
on behalf of the Trustee to authenticate Notes issued upon
original issue and upon exchange, registration of transfer or
partial redemption or pursuant to Section 306, and Notes so
authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of
Notes by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed
on behalf of the Trustee by an Authenticating Agent.
The Company agrees to pay each Authenticating Agent, as
appointed from time to time, such reasonable fees as may be
agreed to in writing by the Company, for services rendered under
this Section 613.
If an appointment is made pursuant to this Section 613,
the Notes may have endorsed thereon, in addition to the Trustee's
certificate of authentication, an alternate certificate of
authentication in the following form:
This is one of the Notes described in the within-
mentioned Indenture.
,
as Trustee
By:
As Authenticating Agent
By:
Authorized Officer
Section 614. Paying Agent.
(a) There shall at all times be a Paying Agent
hereunder which shall be a corporation organized and doing
business under the laws of the United States of America or of any
State and having a combined capital and surplus of at least
$75,000,000, to the extent there is such an institution eligible
and willing to serve. If there is no such institution eligible
and willing to serve, the Company may act as its own Paying
Agent.
(b) The Paying Agent may resign at any time by giving
written notice thereof to the Company. The Company, by a Board
Resolution and upon giving written notice thereof to the Paying
Agent, may remove the Paying Agent at any time.
(c) If the Paying Agent shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the
office of Paying Agent for any cause, the Company, by a Board
Resolution, shall promptly appoint a successor Paying Agent.
(d) The Company shall give notice of each resignation
and each removal of the Paying Agent and each appointment of a
successor Paying Agent by mailing written notice of such event by
first-class mail, postage prepaid, to the Trustee. Each notice
shall include the name and address of the successor Paying Agent.
(e) The Trustee is hereby initially appointed "Paying
Agent".
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS
BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of
Holders.
(a) The Company shall furnish or cause to be furnished
to the Trustee
(i) semi-annually, not more than 15 days
after each Regular Record Date, a list, in such form as the
Trustee may reasonably require, of the names and addresses
of the Holders as of such Regular Record Date, and
(ii) at such other times as the Trustee may
request in writing, within 30 days after the receipt by the
Company of any such request, a list in similar form and
content as of a date not more than 15 days prior to the time
such list is furnished;
provided, however, that if and so long as the Trustee shall be
the Note Registrar, no such list need be furnished.
(b) If and whenever the Company or any Affiliate
acquires any Notes, the Company shall promptly, and in any event
within 15 days, provide the Trustee with written notice of such
acquisition, the aggregate principal amount acquired, the Holder
from whom such Notes were acquired and the date of such acquisi-
tion.
Section 702. Preservation of Information; Communications to
Holders.
(a) The Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of Holders
contained in the most recent list furnished to the Trustee as
provided in Section 701 and the names and addresses of Holders
received by the Trustee in its capacity as Note Registrar. The
Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) If one Holder (herein referred to as an "ap-
plicant") applies in writing to the Trustee, and furnishes to the
Trustee reasonable proof that such applicant has owned a Note for
a period of at least six months preceding the date of such
application, and such application states that the applicant
desires to communicate with other Holders with respect to their
rights under this Indenture or under the Notes and is accompanied
by a copy of the form of proxy or other communication which such
applicant proposes to transmit, then the Trustee shall, within
five Business Days after the receipt of such application, at its
election, either
(i) afford to such applicant access to the
information preserved at the time by the Trustee in
accordance with Section 702(a), or
(ii) inform such applicant as to the approximate
number of Holders whose names and addresses appear in the
information preserved at the time by the Trustee in accor-
dance with Section 702(a), and as to the approximate cost of
mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicant
access to such information, the Trustee shall, upon the written
request of such applicant, mail to each Holder whose name and
address appears in the information preserved at the time by the
Trustee in accordance with Section 702(a) a copy of the form of
proxy or other communication which is specified in such request,
with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within
five days after such tender the Trustee shall mail to such
applicant and file with the Commission, together with a copy of
the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such a mailing would be
contrary to the best interest of the Holders or would be in
violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after
opportunity for a hearing upon the objections specified in the
written statement so filed, shall enter an order refusing to
sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the Commission shall
find, after notice and opportunity for hearing, that all the
objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all
such Holders with reasonable promptness after the entry of such
order and the renewal of such tender.
(c) Every Holder of Notes, by receiving and holding
the same, agrees with the Company and the Trustee that neither
the Company nor the Trustee nor any agent of any of them shall be
held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders in
accordance with Section 702(b), regardless of the source from
which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material
pursuant to a request made under Section 702(b).
Section 703. Reports by Trustee.
This Section 703 shall not be operative as a part of
this Indenture until this Indenture is qualified under the Trust
Indenture Act, and, until such qualification, this Indenture
shall be construed as if this Section 703 were not contained
herein.
(a) Within 60 days after May 15 of each year
commencing with the year 1995, the Trustee shall transmit by mail
to (i) all Holders, as their names and addresses appear in the
Note Register, (ii) all Holders who have, within the two years
preceding such transmission, filed their names and addresses with
the Trustee for that purpose, and (iii) all Holders whose names
and addresses have been furnished to or obtained by the Trustee
pursuant to Section 701, a brief report dated as of such May 15
with respect to:
(1) its eligibility under Section 608 and its
qualifications under the Trust Indenture Act or, in lieu
thereof, if to the best of its knowledge it has continued to
be eligible and qualified under said statute, a written
statement to such effect;
(2) the creation of or any material change to a
relationship specified in paragraphs (1) through (10) of
Trust Indenture Act 310(b);
(3) the character and amount of any advances (and
if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee (as
such) which remain unpaid on the date of such report, and
for the reimbursement of which it claims or may claim a lien
or charge, prior to that of the Notes, on any property or
funds held or collected by it as Trustee, except that the
Trustee shall not be required (but may elect) to report such
advances if such advances so remaining unpaid aggregate not
more than one-half of 1% of the principal amount of the
Notes outstanding on the date of such report;
(4) any change to the amount, interest rate and
maturity date of all other indebtedness owing by the Company
(or by any other obligor on the Notes) to the Trustee in its
individual capacity, on the date of such report, with a
brief description of any property held as collateral
security therefor, except an indebtedness based upon a
creditor relationship arising in any manner described in
Section 612;
(5) any change to the property and funds
physically in the possession of the Trustee as such on the
date of such report;
(6) any additional issue of Notes which the
Trustee has not previously reported; and
(7) any action taken by the Trustee in the
performance of its duties hereunder which it has not
previously reported and which in its opinion materially
affects the Notes, except action in respect of a default,
notice of which has been or is to be withheld by the Trustee
in accordance with Section 602.
(b) The Trustee shall transmit by mail to all Holders,
as their names and addresses appear in the Note Register, a brief
report with respect to the character and amount of any advances
(and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee (as such)
since the date of the last report transmitted pursuant to
Subsection (a) of this Section 703 (or if no such report has yet
been so transmitted, since the date of execution of this Inden-
ture) for the reimbursement of which it claims or may claim a
lien or charge, prior to that of the Notes, on property or funds
held or collected by it as Trustee and which it has not
previously reported pursuant to this subsection (b), except that
the Trustee shall not be required (but may elect) to report such
advances if such advances remaining unpaid at any time aggregate
10% or less of the principal amount of the Notes outstanding at
such time, such report to be transmitted within 90 days after
such time.
(c) A copy of each such report shall, at the time of
such transmission to Holders, be filed by the Trustee with each
stock exchange, if any, upon which the Notes are listed, with the
Commission and with the Company. The Company shall promptly
notify the Trustee when the Notes are listed on any stock
exchange.
Section 704. Reports by Company.
(a) The Company shall:
(1) file with the Commission copies of the
audited annual reports, unaudited quarterly reports and
other information, documents and reports (or copies of such
portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) that the
Company may be required to file with the Commission pursuant
to Section 13 or Section 15(d) of the Exchange Act; or, if
the Company is not required to file information, documents
or reports pursuant to either of such Sections, then the
Company shall file with the Commission, in accordance with
rules and regulations prescribed from time to time by the
Commission and to the extent permitted under the Exchange
Act, such of the supplementary and periodic information,
documents and reports which the Company would have been
required to file with the Commission pursuant to Section 13
or Section 15(d) of the Exchange Act if the Company had a
class of securities listed and registered on a national
securities exchange; and in either of the foregoing cases
the Company (a) shall file such information, documents and
reports with the Commission on or prior to the respective
dates by which the Company is or would have been required so
to file such documents, and (b) shall deliver to the Trustee
copies of such information, documents and reports which the
Company is required to file with the Commission (or would
have been required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act if the
Company had a class of securities listed and registered on
a national securities exchange) within 15 days after the
Company is (or would have been) required to file the same
with the Commission;
(2) file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time
to time by the Commission, such additional information,
documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture
as may be required from time to time by such rules and
regulations; and
(3) transmit by mail to (i) all Holders, as their
names and addresses appear in the Note Register, (ii) all
Holders who have, within the two years preceding such trans-
mission, filed their name and address with the Trustee for
that purpose, and (iii) all Holders whose names and
addresses have been furnished to or obtained by the Trustee
pursuant to Section 701, within 30 days after the filing
thereof with the Trustee, such summaries of any information,
documents and reports required to be filed by the Company
pursuant to paragraphs (1) and (2) of this Section as may be
required by rules and regulations prescribed from time to
time by the Commission.
(b) If filing such information, documents or reports
by the Company with the Commission is not permitted under the
Exchange Act or the rules and regulations prescribed from time to
time by the Commission thereunder, the Company shall promptly
upon written request supply copies of such information, documents
or reports to any Holder and to any prospective purchaser of a
Note designated by a Holder unless the provision of such
information shall no longer be required by law to effect resales
of the Notes without registration under the Securities Act.
Section 705. Certain Obligations of the Trustee.
(a) The Trustee, within five Business Days of its
receipt thereof, will mail to each Holder, as its name and
address appears in the Note Register, to the extent required by
the Indenture, copies of all notices, reports, financial
statements, certificates and other documents received by the
Trustee from the Company under this Indenture.
(b) The Trustee, concurrently with any notice or other
document provided by the Trustee to the Company hereunder, will
mail to each Holder as its name appears on the Note Register, to
the extent required by the Indenture, a copy of such notice or
other document.
ARTICLE EIGHT
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
Section 801. The Company May Consolidate, etc., Only on Certain
Terms.
The Company shall not, in a single transaction or a
series of related transactions, directly or indirectly
(i) consolidate with or merge with or into any other Person or
convey, transfer or lease its properties and assets substantially
as an entirety to any Person or permit any Subsidiaries to enter
into any such transaction or transactions if such transaction or
transactions in the aggregate would result in a sale of all or
substantially all of the assets of the Company and any Sub-
sidiaries on a consolidated basis or (ii) adopt a plan of
liquidation unless:
(a) either (1) the Company shall be the continuing
corporation or (2) the Person (if other than the Company) formed
by such consolidation or into which the Company is merged or the
Person which acquires by conveyance, transfer or lease the
properties and assets of the Company substantially as an entirety
(i) shall be a corporation, partnership or trust organized and
validly existing under the laws of the United States of America,
any State thereof or the District of Columbia and (ii) shall
expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, the due and punctual payment of the
principal of, and premium, if any, and interest on all the Notes
and the performance of every covenant of the Indenture on the
part of the Company to be performed or observed;
(b) immediately after giving effect to such trans-
action (and treating any Indebtedness which becomes an obligation
of the Company or a Subsidiary of the Company in connection with
or as a result of such transaction as having been incurred at the
time of such transaction), the Company (in the case of clause (1)
of Subsection (a) above) or such Person (in the case of clause
(2) thereof) shall have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of the Company
immediately prior to such transaction;
(c) immediately after giving effect to such trans-
action (and treating any Indebtedness which becomes an obligation
of the Company or a Subsidiary of the Company in connection with
or as a result of such transaction as having been incurred at the
time of such transaction), no Event of Default under the
Indenture, and no event which, after notice or lapse of time, or
both, would become an Event of Default, shall have occurred and
be continuing;
(d) immediately after giving effect to any such
transaction on a pro forma basis, the Fixed Charge Coverage Ratio
of the surviving entity is at least 1:1; provided, that, if the
Fixed Charge Coverage Ratio of the Company is within the range
set forth in Column A below, then the Fixed Charge Coverage Ratio
of the surviving entity, shall be at least equal to the
percentage of the Fixed Charge Coverage Ratio of the Company set
forth in Column B below:
(A) (B)
1.1111:1 to 1.9999:1......................... 90%
2:1 to 2.9999:1............................. 80%
3:1 to 3.9999:1............................. 70%
4:1 to 4.9999:1............................. 60%
5:1 or more.................................. 50%
and provided, further, that if the Fixed Charge Coverage Ratio of
the surviving entity is 3:1 or more, the calculation in the
preceding proviso shall be inapplicable and such transaction
shall be deemed to have complied with the requirements of such
provision; and
(e) the Company or such Person shall have delivered to
the Trustee an Officers' Certificate stating that such con-
solidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture complies with this
Article Eight and that all conditions precedent herein provided
for relating to such transaction have been satisfied.
Section 802. Successor Substituted for the Company.
Upon any consolidation of the Company with, or merger
of the Company into, any other Person or any sale, lease,
transfer or other conveyance of all or substantially all of the
assets of the Company in accordance with Section 801, the
surviving entity shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under this
Indenture with the same effect as if such successor Person had
been named as the Company herein; when a successor corporation
assumes all of the obligations of the Company hereunder and under
the Notes, in accordance with Section 801, the predecessor shall
be released from such obligations.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of
Holders.
Without the consent of any Holder, the Company, in each
case when authorized by Board Resolutions, and the Trustee, at
any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person
to the Company and the assumption by any such successor of
the obligations of the Company herein and in the Notes, in
accordance with Article Eight; or
(2) to add to the covenants of the Company for
the benefit of the Holders, or to surrender any right or
power herein conferred upon the Company; or
(3) to cure any ambiguity, to correct or
supplement any provision herein which may be defective or
inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions
arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture, provided such action
pursuant to this clause (3) shall not adversely affect the
interests of the Holders; or
(4) to evidence, and provide for the acceptance
of, the appointment of a successor Trustee hereunder.
Section 902. Amendments, Supplemental Indentures and Waivers
with Consent of Holders.
Subject to Section 508, with the consent of the
Holders of not less than a majority in aggregate principal amount
of the Outstanding Notes, by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by Board
Resolution, and the Trustee may amend this Indenture or enter
into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modify-
ing in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall
without the consent of the Holder of each Outstanding Note
affected thereby:
(1) change the Stated Maturity of the principal
of, or any installment of interest on, any Note, or reduce
the principal amount thereof or the rate of interest
thereon, or change the place of payment where, or the coin
or currency in which, the principal of any Note or the
interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or alter the
redemption provisions hereof in a manner which is adverse to
any Holder, or
(2) amend, change or modify the obligation of the
Company to make and consummate a Change of Control Offer in
the event of a Change of Control in accordance with Section
1109, including amending, changing or modifying any of the
definitions with respect thereto, or
(3) reduce the percentage in principal amount of
Outstanding Notes, the consent of whose Holders is required
for any such amendment, supplemental indenture or waiver (of
compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided
for in this Indenture, or
(4) modify any of the provisions of this Section
or Section 513, except to increase any such percentage or to
provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the
Holder of each Outstanding Note affected thereby.
It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed
amendment, supplemental indenture or waiver, but it shall be
sufficient if such Act shall approve the substance thereof.
After an amendment, supplemental indenture or waiver
under this Section becomes effective, the Company shall mail to
the Holders affected thereby a notice briefly describing the
amendment, supplemental indenture or waiver. Any failure of the
Company to mail such notice, or defect therein, shall not,
however, in any way impair or affect the validity of such
amendment, supplemental indenture or waiver.
Section 903. Execution of Amendment or Supplemental Indentures.
In executing, or accepting the additional trusts
created by, any amendment or supplemental indenture permitted by
this Article Nine or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel or Officers Certificate or
both stating that the execution of such amendment or supplemental
indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such
amendment or supplemental indenture which adversely affects the
Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Section 904. Effect of Amendment or Supplemental Indentures.
Upon the execution of any amendment or supplemental
indenture under this Article Nine, this Indenture shall be
modified in accordance therewith, and such amendment or
supplemental indenture shall form a part of this Indenture for
all purposes; and every Holder of Notes theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every amendment or supplemental indenture executed
pursuant to this Article shall conform to the requirements of the
Trust Indenture Act as then in effect.
Section 906. Reference in Notes to Amendments or Supplemental
Indentures.
Notes authenticated and delivered after the execution
of any amendment or supplemental indenture pursuant to this
Article Nine may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter
provided for in such amendment or supplemental indenture. If the
Company shall so determine, new Notes so modified as to conform,
in the opinion of the Trustee and the Company, to any such
amendment or supplemental indenture may be prepared and executed
by the Company, and authenticated and made available for delivery
by the Trustee in exchange for Outstanding Notes.
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal
of, premium, if any, and interest on, the Notes and the
Redemption Price and Change of Control Purchase Price as and when
due, in accordance with the terms of the Notes and this
Indenture.
The Company shall pay interest on overdue amounts at
the rate set forth in paragraph 1 of the Notes, and it shall pay
interest on overdue interest at the same rate compounded semi-
annually (to the extent that the payment of such interest shall
be legally enforceable), which interest on overdue interest shall
accrue from the date such amounts became overdue.
Section 1002. Maintenance of Office or Agency.
The Company shall maintain in the City of New York an
office or agency where Notes may be presented or surrendered for
payment, where Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon on
the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the
Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the
Corporate Trust office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presenta-
tions, surrenders, notices and demands.
The Company may also from time to time designate one or
more other offices or agencies (in or outside the City of New
York) where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the City of New
York for such purposes. The Company shall give prompt written
notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
Section 1003. Money for Note Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying
Agent, it shall, on or before each due date of the principal of,
premium, if any, or interest on, any of the Notes, segregate and
hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal, premium, if any, or interest
so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided, and will promptly
notify the Trustee of its action or failure so to act; provided,
that, with respect to any such sums, such trust shall arise and
be enforceable only on and after the date on which payment is due
with regard to such sums; and only to the extent payment is then
due and only as to funds actually segregated and appropriated to
such payments.
Whenever the Company shall have one or more Paying
Agents, it shall, on or prior to each due date of the principal
of, premium, if any, or interest on, any Note, deposit with a
Paying Agent a sum sufficient to pay the principal, premium, if
any, or interest so becoming due, such sum to be held in trust
for the benefit of the Persons entitled to such principal,
premium (if any) or interest, and (unless such Paying Agent is
the Trustee) the Company shall promptly notify the Trustee of its
action or failure so to act.
The Company shall cause each Paying Agent other than
the Trustee to execute and deliver to the Trustee an instrument
in which such Paying Agent shall agree with the Trustee, subject
to the provisions of this Section, that such Paying Agent shall:
(1) hold all sums held by it for the payment of
the principal of, premium, if any, or interest on, Notes in
trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise
disposed of as herein provided;
(2) give the Trustee notice of any default by the
Company (or any other obligor upon the Notes) in the making
of any payment of principal, premium, if any, or interest;
and
(3) at any time during the continuance of any
such default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by
such Paying Agent.
The Company may, at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for
any other purpose, pay, or by Company Order direct any Paying
Agent to pay, to the Trustee all sums held in trust by the
Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by
the Company or such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying
Agent, or then held by the Company in trust for the payment of
the principal of, premium, if any, or interest on, any Note and
remaining unclaimed for two years after such principal, premium,
if any, or interest has become due and payable shall be paid to
the Company on Company Request, or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Note
shall thereafter, as an unsecured general creditor, look only to
the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent,
be or being required to make any such repayment, may, at the
expense of the Company, cause to be published once, in a
newspaper customarily published on each Business Day and of
general circulation in the Borough of Manhattan, The City of New
York, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money
then remaining shall be repaid to the Company.
Section 1004. Statements of Officers of the Company as to De-
fault; Notice of Default.
(a) The Company shall deliver to the Trustee, within
120 days after the end of each fiscal year of the Company, as the
case may be, a certificate, signed by the principal executive
officer and by either the principal financial officer or the
principal accounting officer, stating that such officers have
conducted or supervised a review of the activities of the Company
and its Subsidiaries and of performance under this Indenture and
whether or not to the best knowledge of the signers thereof the
Company has fulfilled all of its obligations under this Indenture
or is in default (without regard to periods of grace or re-
quirements of notice) in the performance and observance of any of
the terms, provisions and conditions hereof, and if the Company
shall be in default, specifying all such defaults and the nature
and status thereof of which they may have knowledge.
(b) The Company shall file with the Trustee written
notice of the occurrence of any default or Event of Default or
event or condition which with notice or the lapse of time or both
would become an Event of Default within five Business Days of its
becoming aware of any such default, Event of Default or event or
condition.
Section 1005. Existence.
Subject to Article Eight, the Company shall do or cause
to be done all things necessary to preserve and keep in full
force and effect its existence, rights (charter and statutory)
and franchises of the Company and each Subsidiary thereof;
provided, however, that the Company shall not be required to
preserve any such right or franchise if its Board of Directors
shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its
Subsidiaries as a whole and that the loss thereof is not
disadvantageous in any material respect to the Holders; provided,
further, that any Subsidiary of the Company with a net worth
greater than zero may consolidate with, merge into, or transfer
or distribute all or part of its properties and assets to, the
Company or any Subsidiary thereof.
Section 1006. Maintenance of Properties; Insurance.
(a) The Company shall cause all properties used or
useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and
shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that
nothing in this Section 1006 shall prevent the Company from dis-
continuing the operation or maintenance of any of such properties
if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any
Subsidiary and not disadvantageous in any material respect to the
Holders.
(b) The Company will at all times keep all of its and
its Subsidiaries' properties which are of an insurable nature
insured with insurers, believed by the Company to be responsible,
against loss or damage to the extent that property of similar
character is usually so insured by corporations similarly
situated and owning like properties. In lieu of or supplemental
to such insurance the Company may adopt such other plan or method
of protection, whether by the establishment of an insurance fund
or reserve to be held and applied to make good losses from
casualties, or otherwise, and conforming to the practices of
similar corporations maintaining systems of self-insurance, as
may be determined by the Board of Directors.
Section 1007. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid
or discharged, before the same shall become delinquent, (a) all
taxes, assessments and governmental charges levied or imposed
(i) upon the Company or any Subsidiary thereof or (ii) upon the
income, profits or property of the Company or any Subsidiary, and
(b) all lawful claims for labor, materials and supplies which, if
unpaid, might by law become a lien upon the property of the
Company or any Subsidiary; provided, however, that the Company
shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good
faith by appropriate proceedings or any such tax, assessment,
charge or claim referred to in clause (a)(i) or (b) above if the
failure to so pay or discharge such tax assessment, charge or
claim would not have or would not be likely to have material
adverse effect on the business operations, properties or
condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole.
Section 1008. Further Instruments and Acts.
Upon request of the Trustee, the Company shall execute
and deliver such further instruments and perform such further
acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
Section 1009. Limitation on Indebtedness.
The Company will not, and will not permit any
Subsidiary of the Company to, create, incur, assume or directly
or indirectly guarantee or in any other manner become directly or
indirectly liable for the payment of any Indebtedness (including
Acquired Indebtedness), other than Permitted Indebtedness, unless
at the time of such event and after giving effect thereto the
Company's Fixed Charge Coverage Ratio on a pro forma basis for
its last four completed fiscal quarters, taken as a whole and
calculated on the assumption that such Indebtedness had been
incurred on the first day of such four-quarter period, and in the
case of Acquired Indebtedness, on the assumption that the related
acquisition (whether by means of purchase, merger or otherwise)
also had occurred on such date, would have been greater than the
ratios set forth below during the periods commencing on the dates
indicated below:
Period Commencing Ending Ratio
Effective Date January 28, 1996 2.000
January 29, 1996 January 26, 1997 2.150
January 27, 1997 January 25, 1998 2.250
January 26, 1998 January 31, 1999 2.350
Thereafter 2.450
Section 1010. Limitation on Restricted Payments.
The Company will not, directly or indirectly,
(i) declare or pay any dividend on or make any distributions in
respect of the capital stock of the Company or any Subsidiary
thereof (except for (x) dividends or distributions payable solely
to the Company or any Subsidiary of the Company and (y) dividends
or distributions of a Subsidiary of the Company solely on the
capital stock of such Subsidiary), or purchase, redeem or retire
for value, or make any payment on account of the purchase,
redemption or other acquisition or retirement for value of, any
capital stock or warrants, rights or options to purchase such
capital stock, (ii) make any principal payment on, or redeem,
repurchase or defease, or otherwise acquire or retire for value,
Subordinated Debt, prior to any scheduled principal payment,
scheduled sinking fund payment or maturity thereof, or (iii) make
any loan or advance to, or any other Investment in, any of its
Affiliates other than a Subsidiary of the Company (such payments
or any other actions described in (i), (ii) and (iii),
collectively, "Restricted Payments") unless (1) at the time of
and after giving effect to the proposed Restricted Payment, no
Event of Default or event that, after notice or lapse of time, or
both, would become an Event of Default, shall have occurred and
be continuing, and (2) at the time of and after giving effect to
the proposed Restricted Payment (the amount of any such payment,
if other than cash, to be determined by the Board of Directors,
whose determination shall be conclusive and evidenced by a Board
Resolution) (A) the Consolidated Net Worth of the Company shall
be at least $75,000,000 and (B) the aggregate amount of all
Restricted Payments after the Effective Date shall not exceed 50%
of Cumulative Net Available Cash of the Company and (C) the Fixed
Charge Coverage Ratio calculated on a pro forma basis for the
full twelve-month period ending on the last day of the Company's
fiscal quarter immediately preceding such proposed Restricted
Payment shall be at least 1.50 to 1. Notwithstanding the
foregoing, this provision will not prohibit the redemption, by
the Company, of its common stock (on a fully diluted basis) from
time to time under the terms and conditions of management equity
subscription agreements or stock option agreements and related
exhibits, so long as such redemption does not otherwise result in
an Event of Default or event that, after notice or lapse of time
or both, would become an Event of Default.
The foregoing provisions shall not be deemed to
prohibit (1) the payment of any dividend within 60 days after the
date of declaration thereof, if at such declaration date such
declaration complied with the provisions of the Indenture, or
(2) the redemption, repurchase or other acquisition or retirement
(a "retirement") of any shares of any class of capital stock of
the Company or of any Subsidiary thereof in exchange for
(including any such exchange pursuant to the exercise of a
conversion right or privilege in connection with which cash is
paid in lieu of the issuance of fractional shares or scrip), or
out of the proceeds of a substantially concurrent issue and sale
(other than to a Subsidiary of the Company) of, other shares of
capital stock of the Company, or (3) the retirement of
Subordinated Debt out of the proceeds of a substantially
concurrent sale (other than to a Subsidiary of the Company) of
shares of capital stock of the Company or issuance other than to
a Subsidiary of the Company of new Indebtedness which has a
weighted average life to maturity at least as long as the Stated
Maturity of the Notes and no sinking fund or scheduled principal
payments prior to the maturity of the Notes and the payment of
which is subordinated in right of payment and otherwise to the
Notes at least to the same extent as such Subordinated Debt, or
(4) the payment of dividends or the making of distributions on
shares of capital stock of the Company solely in shares of
capital stock of the Company.
Section 1011. Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries.
The Company will not, and will not permit any
Subsidiary of the Company to, create or otherwise cause or suffer
to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any Subsidiary of the
Company to (a) pay dividends or make any other distribution on
its capital stock, (b) pay any Indebtedness owed to the Company
or any other Subsidiary of the Company, (c) make loans or
advances to the Company or any other Subsidiary of the Company or
(d) transfer any of its property or assets to the Company or any
other Subsidiary of the Company except as set forth in the
instrument evidencing or the agreement governing Acquired
Indebtedness of any acquired entity which becomes a Subsidiary of
the Company, provided, that any restriction or encumbrance under
such instrument or agreement existed at the time of acquisition,
was not put in place in anticipation of such acquisition, and is
not applicable to any Person, other than the Person or property
or assets of the Person so acquired.
Section 1012. Limitation on Transactions with Affiliates.
The Company will not enter into, renew or extend, or
permit any Subsidiary of the Company to enter into, renew or
extend any agreement relating to the sale, purchase or lease of
any assets, property or services from or to any Affiliate of the
Company (other than a wholly owned Subsidiary of the Company) on
terms that are less favorable to the Company or such Subsidiary
of the Company, as the case may be, than would be available in a
comparable transaction with an unaffiliated third party;
provided, however, that the Company will not enter into, renew or
extend any such agreement or series of related agreements which,
individually or in the aggregate, involve payments in excess of
$500,000, unless the Board of Directors determines that such
transaction is fair to the Company; provided, further, that
notwithstanding the foregoing, the Company may enter into and
perform the Management Services Agreement, dated as of the
Effective Date, between the Company and Leonard Green & Partners,
L.P., in the form attached as Exhibit A to the Plan.
Section 1013. Disposition of Proceeds of Asset Sale.
(a) If all or a portion of the Net Cash Proceeds of
any Asset Sale are not required to be applied to repay any
outstanding Bank Credit Agreement Indebtedness as required by the
terms thereof, or the Company determines not to apply such Net
Cash Proceeds to the prepayment of such Indebtedness or if no
such Indebtedness is outstanding, then the Company may (i) use
the Net Cash Proceeds, or a portion thereof, as working capital
in the ordinary course of business or (ii) within 12 months of
the Asset Sale, invest the Net Cash Proceeds in properties and
assets to replace the properties and assets that were the subject
of the Asset Sale or in properties and assets that (as determined
by the Board of Directors, whose determination shall be
conclusive and evidenced by a Board Resolution) will be used in
the business of the Company and its Subsidiaries existing on the
date of the Indenture or in businesses similar or related
thereto. The amount of such Net Cash Proceeds neither used to
repay such Indebtedness nor used or invested as set forth in the
foregoing clause (i) or (ii) constitutes "Excess Proceeds".
When the aggregate amount of Excess Proceeds equals
$3,000,000 or more, the Company shall offer to purchase (an
"Offer") from all holders of New Notes the maximum principal
amount (expressed as a multiple of $1,000) of New Notes that may
be purchased out of the Excess Proceeds, provided that the
Company may satisfy its obligations to make an Offer in whole or
in part by delivering to the Trustee (or the trustee under the
Senior Fixed Rate Notes Indenture, as the case may be) for
cancellation New Notes purchased by it not earlier than six
months prior to the date of the Offer, provided further that if
the Company elects to satisfy its obligation to make an Offer in
the manner set forth in the preceding clause, the Company shall
deliver for cancellation the Notes and the Senior Fixed Rate
Notes so purchased in proportionate amounts. In the event the
Excess Proceeds are less than the aggregate Offered Price (as
defined below) of all New Notes tendered, the New Notes to be
purchased shall be purchased out of the Excess Proceeds pro rata
in integral multiples of $1,000 only. The offer price (the
"Offered Price") shall be an amount in cash equal to 100% of the
principal amount thereof plus accrued and unpaid interest, if
any, to the date of the Offer. To the extent that the aggregate
Offered Price of all New Notes tendered pursuant to an Offer plus
the principal amount of all New Notes purchased by the Company
and canceled in satisfaction of the Offer is less than the Excess
Proceeds relating thereto (such shortfall constituting a "De-
ficiency"), the Company may use such Deficiency, or a portion
thereof, for general corporate purposes. Upon completion of the
purchase of all New Notes tendered pursuant to an Offer, the
amount of Excess Proceeds shall be reset at zero.
(b) Within 30 days after the date on which the amount
of Excess Proceeds equals $3,000,000 or more, the Company shall
send by first-class mail, postage prepaid, to each Holder of the
New Notes, at his address appearing in the Note Registrar, a
notice stating:
(1) that the Holder has the right to require the
Company to repurchase such Holder's New Notes at the Offered
Price, subject to proration in the event the Excess Proceeds
are less than the aggregate Offered Price of all New Notes
tendered;
(2) the date of the Offer (the "Offer Date") which
shall be no earlier than 45 days nor later than 60 days from
the date such notice is mailed; and
(3) the instructions a Holder must follow in order to
have its New Notes purchased in accordance with paragraph
(c) of this Section.
(c) Holders electing to have their New Notes purchased
will be required to give notice of such election (an "Election
Notice") to the Company at the address specified in the notice at
least five Business Days prior to the Offer Date. Holders will
be entitled to withdraw their election if the Company receives,
not later than three Business Days prior to the Offer Date, a
telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the New Notes as
to which his election is to be withdrawn and a statement that
such Holder is withdrawing his election to have such New Notes
purchased. If the aggregate principal amount of their New Notes
as to which Holders have given an Election Notice
exceeds the amount of Excess Proceeds, the Company shall purchase
the New Notes to be purchased out of the Excess Proceeds pro
rata. Holders whose New Notes are purchased only in part will be
issued New Notes equal in principal amount to the unpurchased
portion of the New Notes surrendered.
(d) In the event that the Company shall be unable to
purchase Notes from Holders in an Offer because of provisions of
the Bank Credit Agreement or in the event the Company shall be
unable to purchase Notes from Holders in an Offer because of
provisions of applicable law, the Company need not make an Offer.
The Company shall then be obligated to use the Excess Proceeds as
working capital or to invest the Excess Proceeds in replacement
properties and assets, in accordance with clause (i) or (ii) of
Subsection (a) of this Section.
(e) Whenever Net Cash Proceeds received by the
Company, and prior to the purchase of New Notes or an allocation
to the payment of Bank Credit Agreement Indebtedness, as set
forth in Subsection (a) of this Section 1013, exceeds $1,500,000,
such Net Cash Proceeds shall be set aside by the Company in a
separate account pending (i) deposit with the depositary for the
amount required to repay the New Notes tendered in an Offer,
(ii) delivery by the Company of the Offered Price to the Holders
of the Notes and the holders of the other New Notes tendered in
an Offer or (iii) allocation, as set forth in Subsection (a) of
this Section, of Net Cash Proceeds to the payment of Bank Credit
Agreement Indebtedness or to working capital or investment in
properties and assets. Such Net Cash Proceeds may be invested in
(A) any U.S. Government Obligations maturing not more than one
year after the date of issue, (B) any certificate of deposit,
maturing not more than 90 days after the Offer Date, issued by,
or time deposit of, a commercial banking institution that is a
member of the Federal Reserve System and that has combined
capital and surplus and undivided profits of not less than
$200,000,000, (C) commercial paper, maturing not more than 90
days after the date of the Offer, issued by a corporation (other
than an Affiliate or Subsidiary of the Company) organized and
existing under the laws of the United States of America that is
rated, at the time as of that any investment therein is made, "P-
2" (or higher) by Moody's Investors Service, Inc., or "A-2" (or
higher) by Standard and Poor's Corporation, and (D) adjustable
rate preferred stock that is readily marketable, provided that
the maturity date of any investment permitted by clauses (A), (B)
and (C) shall not be later than the Offer Date in the case of an
Offer.
Section 1014. Guarantees of Indebtedness.
The Company (x) will not permit an Affiliate of the
Company (a "guarantor") to guarantee or secure the payment of any
Indebtedness of the Company or any Subsidiary thereof and
(y) will not, and will not permit a Subsidiary of the Company
(each of the Company and its Subsidiaries, a "guarantor") to,
guarantee or secure the payment of any Indebtedness of any
Person, unless, in either case, the payment of the Notes is also
guaranteed by any such guarantor pursuant to a guarantee in form
and substance satisfactory to the Trustee (a "Guarantee");
provided, however, that any such Guarantee shall provide by its
terms that it shall be automatically and unconditionally released
and discharged upon either (i) the release or discharge of such
guarantee of, or security for (or both such guarantee and such
security, if applicable), the payment of such Indebtedness,
except a discharge by or as a result of payment under such guar-
antee or security or payment of such Indebtedness or (ii) any
sale, exchange or transfer, to any person not an Affiliate of the
Company, of the Company's stock in, or of all or substantially
all the assets of, such guarantor if such guarantor is a
Subsidiary of the Company which sale, exchange or transfer does
not result in a breach of Sections 1005, 1012, 1013, 1014, 1015,
1016 and 1017.
Section 1015. Limitation on Certain Liens.
(a) The Company will not, and will not permit any
Subsidiary of the Company to, permit to exist any security
interest or pledge any asset to secure the payment of any
Indebtedness which ranks junior to or is subordinate in right of
payment to the Notes.
(b) The Company will not, and will not permit any
Subsidiary of the Company to, permit to exist any security
interest or pledge any asset to secure the Senior Fixed Rate
Notes or any Indebtedness incurred to refinance the Senior Fixed
Rate Notes unless it shall make effective provision whereby the
Notes shall be directly secured equally and ratably with the
Indebtedness so secured (the "Secured Debt"), and in the same
proportion as the Secured Debt in an amount equal to the product
of (i) a ratio the numerator of which is the aggregate principal
amount of Secured Debt and the denominator of which is the
aggregate principal amount of Senior Fixed Rate Notes and the
Indebtedness incurred to refinance the Senior Fixed Rate Notes,
outstanding immediately after such security interest is granted
multiplied by (ii) the aggregate principal amount of Notes
outstanding at the time such security is granted.
Section 1016. Investments.
The Company will not, and will not permit any
Subsidiary of the Company to, directly or indirectly make or own
any Investment in any Person except:
(a) Investments in Investment Cash Equivalents;
(b) promissory notes of purchasers in sales by the
Company of properties or assets not exceeding an aggregate
principal balance of $5,000,000 outstanding at any one time;
(c) amounts due from landlords for remodelling work
done by the Company for account of a landlord, not exceeding an
aggregate principal balance of $4,000,000 outstanding at any one
time;
(d) other Investments not in excess of an aggregate
amount of $1,000,000 outstanding at any one time; and
(e) Investments in respect of Securities of another
Person received by the Company in connection with a plan of
reorganization or readjustment of such Person or its debts.
Section 1017. Conduct of Business.
The Company shall not engage in any business other than
(a) the business engaged in by the Company on the date hereof,
and (b) any business activities substantially similar or related
thereto.
Section 1018. Limitations on Subordinated Debt.
The Company shall not, and shall not permit any Sub-
sidiary of the Company to, (a) create, incur, assume or directly
or indirectly guarantee or in any other manner become directly or
indirectly liable for the payment of any Indebtedness that is
expressly subordinate in right of payment to any Indebtedness of
the Company or any Subsidiary thereof unless such subordinate
Indebtedness both constitutes Subordinated Debt and does not
require principal repayments or sinking fund payments to be made
prior to the Stated Maturity of the Notes, or (b) amend the
provisions of any instrument evidencing or agreement governing
Subordinated Debt to (i) require principal repayments or sinking
fund payments to be made prior to the Stated Maturity of the
Notes or (ii) alter the subordination provisions of such Subordi-
nated Debt.
ARTICLE ELEVEN
REDEMPTION OF NOTES
Section 1101. Right of Redemption.
The Notes may be redeemed, otherwise than upon a Change
in Control as defined in and required by Section 1109, at the
election of the Company, as a whole or from time to time in part,
at the Redemption Price specified in the form of Note set forth
in Article Two for redemptions, together with accrued interest to
the Redemption Date.
Section 1102. Applicability of Article.
Redemption of Notes at the election of the Company or
otherwise, as permitted or required by any provision of this
Indenture, shall be made in accordance with such provision and
this Article Eleven.
Section 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Notes
pursuant to Section 1101 shall be evidenced by a Board Resolution
of the Company. In case of any redemption at the election of the
Company, the Company shall, at least 45 days prior to the Redemp-
tion Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemp-
tion Date and of the principal amount of Notes to be redeemed.
Section 1104. Selection by Trustee of Notes to Be Redeemed.
If less than all the Notes are to be redeemed, the
particular Notes to be redeemed shall be selected not more than
60 days prior to the Redemption Date by the Trustee, from the
Outstanding Notes not previously called for redemption, by such
method as the Trustee shall deem fair and appropriate and which
may provide for the selection for redemption of portions (equal
to $1,000 or any integral multiple thereof) of the principal
amount of Notes of a denomination larger than $1,000.
The Trustee shall promptly notify the Company and the
Note Registrar (if other than the Trustee) in writing of the
Notes selected for redemption and, in the case of any Notes
selected for partial redemption, the principal amount thereof to
be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of
Notes shall relate, in the case of any Notes redeemed or to be
redeemed only in part, to the portion of the principal amount of
such Notes which has been or is to be redeemed.
Section 1105. Notice of Redemption.
Notice of Redemption shall be given by first class
mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the Redemption Date, to each Holder of Notes to be
redeemed, at its address appearing in the Note Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Notes are to
be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Notes
to be redeemed,
(4) that New Notes called for redemption must be
surrendered to the Paying Agent to collect the Redemption
Price plus accrued interest, if any,
(5) that, unless the Company defaults in making
the redemption payment, interest on New Notes called for
redemption ceases to accrue on and after the Redemption
Date, and the only remaining right of the Holders of such
New Notes is to receive payment of the Redemption Price plus
accrued interest, if any, upon surrender to the Paying Agent
of the Notes redeemed,
(6) if any New Note is being redeemed in part,
the portion of the principal amount of such New Note to be
redeemed and that, after the Redemption Date, and upon
surrender of such New Note, a New Note or New Notes in the
aggregate principal amount equal to the unredeemed portion
thereof will be issued,
(7) if fewer than all the New Notes are to be
redeemed, the identification of the particular New Notes (or
portion thereof) to be redeemed, as well as the aggregate
principal amount of New Notes to be redeemed and the
aggregate principal amount of New Notes to be outstanding
after such partial redemption,
(8) the place or places where such Notes are to
be surrendered for payment of the Redemption Price, and
(9) the CUSIP number, if any, of the Notes to be
redeemed.
Notice of redemption of Notes to be redeemed at the
election of the Company shall be given by the Company or, at the
Company's request, by the Trustee in the name and at the expense
of the Company.
Section 1106. Deposit of Redemption Price.
On or prior to 11:00 a.m. (New York time) on the
Business Day immediately preceding any Redemption Date, the
Company shall deposit with the Trustee or with a Paying Agent
(or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 1003) an amount of money
in same day funds sufficient to pay the Redemption Price of, and
accrued interest on, all the Notes or portions thereof which are
to be redeemed on that date.
Section 1107. Notes Payable on Redemption Date.
Notice of redemption having been given as aforesaid,
the Notes so to be redeemed shall, on the Redemption Date, become
due and payable at the Redemption Price therein specified, and
from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued interest) such Notes
shall cease to bear interest. Upon surrender of any such Note
for redemption in accordance with said notice, such Note shall be
paid for by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided, however, that
installments of interest whose Stated Maturity is on or prior to
the Redemption Date shall be payable to the Holders of such
Notes, or one or more Predecessor Notes, registered as such at
the close of business on the relevant Regular Record Dates or
Special Record Dates, as the case may be, according to their
terms and the provisions of Section 307.
If any Note called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and premium
(if any) shall, until paid, bear interest from the Redemption
Date at the rate borne by the Note.
Section 1108. Notes Redeemed in Part.
Any Note which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for
that purpose pursuant to Section 1002 (with, if the Company or
the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or its attorney
duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and make available for delivery to
the Holder of such Note without service charge, a new Note or
Notes of any authorized denomination as requested by such Holder,
in an aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Note so surrendered.
Section 1109. Offer to Purchase Upon a Change in Control.
(a) If at any time either (a) any person or any
persons acting together (excluding the Original Stockholders)
that constitute a "group" for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended, shall beneficially
own at least 50% of the total voting stock of the Company or
(b) any person or any persons acting together (excluding the
Original Stockholders) that constitutes a "group" for purposes of
Section 13(d) of the Securities Exchange Act of 1934, as amended,
shall succeed in having a sufficient number of its nominees
elected to the board of directors of the Company to constitute a
majority of the board of directors of the Company (each, a
"Change of Control"), then the Company shall make an offer to
repurchase any or all of the Outstanding Notes at a price,
payable in cash, equal to 100% of the principal amount thereof
plus accrued and unpaid interest, if any, to the Change of Con-
trol Purchase Date (the "Change of Control Purchase Price"), in
accordance with the procedures set forth in this Section 1109;
provided that such repurchase shall be conditioned upon receipt
by the Company of Notes representing at least 50% of the
aggregate principal amount of the Outstanding Notes.
(b) Within 30 days after a Change of Control, the
Company shall send by first-class mail postage prepaid, to each
Holder of the Outstanding Notes, at its address appearing in the
Note Register, a notice (a "Change of Control Purchase Notice")
stating:
(1) that a Change of Control has occurred and
that the Holder has the right to require the Company to
repurchase such Holder's Notes at the Change of Control
Purchase Price subject to the conditions contained herein;
(2) that unless Notes representing at least 50%
of the aggregate principal amount of the Outstanding Notes
are tendered, the Company shall not redeem any Notes
pursuant to this Section;
(3) the purchase date (the "Change of Control
Purchase Date") which shall be no earlier than 30 days nor
later than 50 days from the date such notice is mailed or
such later date as is necessary to comply with requirements
under the Exchange Act or any applicable securities laws or
regulations; and
(4) the instructions a Holder must follow in
order to have its Notes purchased in accordance with
paragraph (c) of this Section.
(c) Holders electing to have Notes purchased will be
required to give notice of such election to the Company at the
address specified in the Change of Control Purchase Notice at
least five Business Days prior to the Change of Control Purchase
Date. Holders will be entitled to withdraw their election if the
Company receives, not later than three Business Days prior to the
Change of Control Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Notes as to which its election is to be
withdrawn and a statement that such Holder is withdrawing its
election to have such Notes purchased.
INDENTURE SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed, and their respective corpo-
rate seals to be hereunto affixed and attested, all as of the day
and year first above written.
KASH N' KARRY FOOD STORES, INC.
By:
Attest: Name:
Title:
By
Name:
Title:
IBJ SCHRODER BANK & TRUST COMPANY
By:
Name:
Title:
By:
Name:
Title:
TERMS OF SUBORDINATED DEBT
Payment of the principal of and premium, if any, and
interest on and any other amounts payable with respect to any
Subordinated Debt or on account of the purchase or other
acquisition of such Subordinated Debt shall be (to the extent set
forth below) subordinate and subject in right of payment to the
prior payment in full, in cash or Cash Equivalents, of all
principal or, premium, if any, and interest on, and any other
amounts due on or in respect of all New Notes (including interest
on unpaid principal and interest at the rate provided in the
respective instruments creating the New Notes accruing on or
after the filing of any petition in bankruptcy or reorganization
relating to the Company whether or not a claim for post-filing
interest is allowed in such proceeding) (the "Senior Debt").
1. In the event of (a) any insolvency, bankruptcy or similar
case or proceeding relative to the Company or to its
creditors, as such, or to its assets, or (b) any
liquidation, dissolution or other winding up of the Company,
or (c) any assignment for the benefit of creditors or any
other action or proceeding involving the readjustment of all
or any of the indebtedness of the Company, the holders of
New Notes shall be entitled to receive payment in full, in
cash or Cash Equivalents, of all the Senior Debt before the
holders of such Subordinated Debt are entitled to receive
any direct or indirect payment or distribution (in cash,
property or securities or by set-off or otherwise) of any
assets of the Company of any kind or character on account of
principal of, premium, if any, or interest on or any other
amounts payable with respect to such Subordinated Debt
(other than securities of the Company or any other
corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least
to the extent provided in these subordination provisions
with respect to such Subordinated Debt, to the payment of
all amounts due on or in respect of New Notes at the time
outstanding and to any securities issued in respect thereof
under any such plan of reorganization or readjustment
(collectively, "Permitted Junior Securities").
2. Unless paragraph 1 is applicable, upon the occurrence of any
default in the payment of any principal of (or premium, if
any) or interest on any New Note when due (each a "Payment
Default"), no direct or indirect payment or distribution (in
cash, property or securities or by set-off or otherwise) of
any assets of the Company of any kind or character shall be
made by the Company on account of principal of, premium, if
any, or interest on or any other amounts payable with
respect to such Subordinated Debt or on account of the
purchase or other acquisition of such Subordinated Debt
unless and until such Payment Default shall have been cured
or waived in writing or shall have ceased to exist or all of
the New Notes shall have been discharged.
3. Unless either paragraph 1 or paragraph 2 is applicable, upon
the occurrence of any event the occurrence of which entitles
the Holders of the requisite aggregate principal amount of
the Outstanding Notes as set forth in Section 502 (the
"Requisite Holders") to accelerate the maturity of any New
Note (each a "Non-payment Event of Default"), no direct or
indirect payment or distribution (in cash, property or
securities or by set-off or otherwise) of any assets of the
Company of any kind or character shall be made by the
Company on account of any principal of, premium, if any, or
interest on or any other amounts payable with respect to
such Subordinated Debt or on account of the purchase or
other acquisition of such Subordinated Debt for a period
(the "Payment Blockage Period") commencing on the date
written notice of such default shall have been given to the
Company by the Requisite Holders unless and until (i) more
than 179 days shall have elapsed since receipt of such
written notice by the Company, (ii) such Non-payment Event
of Default shall have been cured or waived in writing or
shall have ceased to exist or all of the New Notes shall
have been discharged or (iii) such Payment Blockage Period
shall have been terminated by written notice to the Company
from the Requisite Holders; provided, that, subject to the
following sentence, the commencement of a Payment Blockage
Period hereunder shall not bar the commencement of another
Payment Blockage Period by the Requisite Holders due to
another Non-payment Event of Default. Notwithstanding
anything herein to the contrary, in no event will any one or
more consecutive Payment Blockage Periods extend beyond 179
days from a date on which any payment with respect to the
Subordinated Debt was due.
4. Any payment or distribution, whether in cash, securities or
other property (other than Permitted Junior Securities),
which would otherwise (but for these subordination
provisions) be payable or deliverable in respect of such
Subordinated Debt shall be paid or delivered directly to the
holders of New Notes in accordance with the priorities then
existing among such holders until all the Senior Debt shall
have been paid in full. If any payment or distribution of
any character or any security, whether in cash, securities
or other property (other than Permitted Junior Securities),
shall be received by any holder of such Subordinated Debt in
contravention of any of the terms hereof and before all the
Senior Debt shall have been paid in full, such payment or
distribution or security shall be received in trust for the
benefit of, and shall be paid over or delivered and
transferred to, the holders of the New Notes at the time
outstanding in accordance with the priorities then existing
among such holders for application to the payment of all
Senior Debt remaining unpaid, to the extent necessary to pay
all such Senior Debt in full.
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of
Trust Indenture Act Section Indenture Section
310(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . .608
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . .608
(a)(3). . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4). . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(5). . . . . . . . . . . . . . . . . . . . . . . . . .608
(b) . . . . . . . . . . . . . . . . . . . . . . . . 608, 609
(c) . . . . . . . . . . . . . . . . . . . . . Not Applicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . .612
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . .612
(c) . . . . . . . . . . . . . . . . . . . . . Not Applicable
312(a) . . . . . . . . . . . . . . . . . . . . . . .701, 702(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 702(c)
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(b)(1). . . . . . . . . . . . . . . . . . . . Not Applicable
(b)(2). . . . . . . . . . . . . . . . . . . . . . . . 703(b)
(c) . . . . . . . . . . . . . . . . . . . . . 703(a), 703(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 703(c)
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . .704
(b) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . .102
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . .102
(c)(3). . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . .102
(f) . . . . . . . . . . . . . . . . . . . . . Not Applicable
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . 601(a)
(b) . . . . . . . . . . . . . . . . . . . . . . .602, 703(a)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 601(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 601(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . .514
316(a)(last sentence). . . . . . . . . . . . . . . . . . . .101
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . .512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . .513
(a)(2). . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . .508
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . .512
317(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . .503
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . .504
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 1003
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . .107
Note: This reconciliation and tie shall not, for any purpose,
be deemed to be a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. Definitions. . . . . . . . . . . . . . . . 2
Section 102. Compliance Certificates and Opinions . . . 20
Section 103. Form of Documents Delivered to Trustee . . 21
Section 104. Acts of Holders. . . . . . . . . . . . . . 22
Section 105. Notices, Etc., to Trustee and the
Company. . . . . . . . . . . . . . . . . . 23
Section 106. Notice to Holders; Waiver. . . . . . . . . 24
Section 107. Conflict with Trust Indenture Act. . . . . 24
Section 108. Effect of Headings and Table of
Contents . . . . . . . . . . . . . . . . . 25
Section 109. Successors and Assigns . . . . . . . . . . 25
Section 110. Separability Clause. . . . . . . . . . . . 25
Section 111. Benefits of Indenture. . . . . . . . . . . 25
Section 112. Governing Law. . . . . . . . . . . . . . . 25
Section 113. Legal Holidays . . . . . . . . . . . . . . 25
Section 114. Incorporators, Stockholders, Officers
and Directors of the Company Exempt from
Individual Liability . . . . . . . . . . . 26
Section 115. Counterparts . . . . . . . . . . . . . . . 27
ARTICLE TWO
FORMS OF NOTES
Section 201. Forms Generally. . . . . . . . . . . . . . 27
Section 202. Form of Face of Note . . . . . . . . . . . 27
Section 203. Form of Reverse of Note. . . . . . . . . . 31
Section 204. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . 34
Section 205. Form of Assignment . . . . . . . . . . . . 34
Section 206. Form of Option of Holder to Elect
Redemption . . . . . . . . . . . . . . . . 35
ARTICLE THREE
THE NOTES
Section 301. Title and Terms. . . . . . . . . . . . . . 36
Section 302. Denominations. . . . . . . . . . . . . . . 37
Section 303. Execution, Authentication, Delivery and
Dating . . . . . . . . . . . . . . . . . . 38
Section 304. Temporary Notes. . . . . . . . . . . . . . 39
Section 305. Registration, Registration of Transfer
and Exchange . . . . . . . . . . . . . . . 40
Section 306. Mutilated, Destroyed, Lost and Stolen
Notes. . . . . . . . . . . . . . . . . . . 41
Section 307. Payment of Interest; Interest Rights
Preserved. . . . . . . . . . . . . . . . . 42
Section 308. Persons Deemed Owners. . . . . . . . . . . 43
Section 309. Cancellation . . . . . . . . . . . . . . . 44
Section 310. Computation of Interest. . . . . . . . . . 44
Section 311. CUSIP Numbers. . . . . . . . . . . . . . . 44
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction, Discharge of the Indenture
and Defeasance of the Notes. . . . . . . . 45
Section 402. Termination of Obligations upon
Cancellation of the Notes. . . . . . . . . 47
Section 403. Survival of Certain Obligations. . . . . . 47
Section 404. Acknowledgement of Discharge by Trustee. . 48
Section 405. Application of Trust Money . . . . . . . . 48
Section 406. Repayment to the Company . . . . . . . . . 48
Section 407. Reinstatement. . . . . . . . . . . . . . . 48
Section 408. Indemnity. . . . . . . . . . . . . . . . . 49
ARTICLE FIVE
REMEDIES
Section 501. Events of Default. . . . . . . . . . . . . 49
Section 502. Acceleration of Maturity Date;
Rescission and Annulment . . . . . . . . . 52
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . 53
Section 504. Trustee May File Proofs of Claim . . . . . 54
Section 505. Trustee May Enforce Claims Without
Possession of Notes. . . . . . . . . . . . 55
Section 506. Application of Money Collected . . . . . . 56
Section 507. Limitation on Suits. . . . . . . . . . . . 56
Section 508. Unconditional Right of Holders to
Receive Principal, Premium and Interest. . 57
Section 509. Restoration of Rights and Remedies . . . . 58
Section 510. Rights and Remedies Cumulative . . . . . . 58
Section 511. Delay or Omission Not Waiver . . . . . . . 58
Section 512. Control by Holders . . . . . . . . . . . . 58
Section 513. Waiver of Past Default.. . . . . . . . . . 59
Section 514. Undertaking for Costs. . . . . . . . . . . 59
Section 515. Waiver of Stay or Extension Laws . . . . . 60
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities. . . . 60
Section 602. Notice of Defaults . . . . . . . . . . . . 62
Section 603. Certain Rights of Trustee. . . . . . . . . 62
Section 604. Not Responsible for Recitals or Issuance
of Notes . . . . . . . . . . . . . . . . . 64
Section 605. May Hold Notes . . . . . . . . . . . . . . 64
Section 606. Money Held in Trust. . . . . . . . . . . . 64
Section 607. Compensation and Reimbursement . . . . . . 64
Section 608. Corporate Trustee Required; Eligibility. . 66
Section 609. Resignation and Removal; Appointment of
Successor. . . . . . . . . . . . . . . . . 66
Section 610. Acceptance of Appointment by Successor . . 68
Section 611. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . 68
Section 612. Preferential Collection of Claims
Against Company. . . . . . . . . . . . . . 69
Section 613. Appointment of Authenticating Agent. . . . 69
Section 614. Paying Agent . . . . . . . . . . . . . . . 70
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS
BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and
Addresses of Holders. . . . . . . . . . . 71
Section 702. Preservation of Information;
Communications to Holders. . . . . . . . . 71
Section 703. Reports by Trustee . . . . . . . . . . . . 73
Section 704. Reports by Company . . . . . . . . . . . . 75
Section 705. Certain Obligations of the Trustee . . . . 76
ARTICLE EIGHT
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
Section 801. The Company May Consolidate, etc., Only
on Certain Terms . . . . . . . . . . . . . 77
Section 802. Successor Substituted for the Company. . . 78
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent
of Holders . . . . . . . . . . . . . . . . 79
Section 902. Amendments, Supplemental Indentures and
Waivers with Consent of Holders. . . . . . 80
Section 903. Execution of Amendment or Supplemental
Indentures . . . . . . . . . . . . . . . . 81
Section 904. Effect of Amendment or
Supplemental Indentures. . . . . . . . . . 81
Section 905. Conformity with Trust Indenture Act. . . . 82
Section 906. Reference in Notes to Amendments or
Supplemental Indentures. . . . . . . . . . 82
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Inter-
est. . . . . . . . . . . . . . . . . . . . 82
Section 1002. Maintenance of Office or Agency. . . . . . 82
Section 1003. Money for Note Payments to Be Held in
Trust. . . . . . . . . . . . . . . . . . . 83
Section 1004. Statements of Officers of the Company as
to Default; Notice of Default. . . . . . . 85
Section 1005. Existence. . . . . . . . . . . . . . . . . 85
Section 1006. Maintenance of Properties; Insurance . . . 86
Section 1007. Payment of Taxes and Other Claims. . . . . 86
Section 1008. Further Instruments and Acts . . . . . . . 87
Section 1009. Limitation on Indebtedness . . . . . . . . 87
Section 1010. Limitation on Restricted Payments. . . . . 88
Section 1011. Limitation on Dividends and Other
Payment Restrictions Affecting
Subsidiaries . . . . . . . . . . . . . . . 89
Section 1012. Limitation on Transactions with Affili-
ates . . . . . . . . . . . . . . . . . . . 90
Section 1013. Disposition of Proceeds of Asset Sale. . . 90
Section 1014. Guarantees of Indebtedness . . . . . . . . 93
Section 1015. Limitation on Certain Liens. . . . . . . . 94
Section 1016. Investments. . . . . . . . . . . . . . . . 94
Section 1017. Conduct of Business. . . . . . . . . . . . 95
Section 1018. Limitations on Subordinated Debt . . . . . 95
ARTICLE ELEVEN
REDEMPTION OF NOTES
Section 1101. Right of Redemption. . . . . . . . . . . . 95
Section 1102. Applicability of Article . . . . . . . . . 96
Section 1103. Election to Redeem; Notice to Trustee. . . 96
Section 1104. Selection by Trustee of Notes to Be
Redeemed . . . . . . . . . . . . . . . . . 96
Section 1105. Notice of Redemption.. . . . . . . . . . . 97
Section 1106. Deposit of Redemption Price. . . . . . . . 98
Section 1107. Notes Payable on Redemption Date . . . . . 98
Section 1108. Notes Redeemed in Part . . . . . . . . . . 98
Section 1109. Offer to Purchase Upon a Change in
Control. . . . . . . . . . . . . . . . . . 99
EXHIBIT A
INDENTURE
KASH N' KARRY FOOD STORES, INC., Issuer
AND
IBJ SCHRODER BANK & TRUST COMPANY
Senior Floating Rate Notes due 2003
Dated as of December 29, 1994
KASH N' KARRY FOOD STORES, INC.
_____________________________
CREDIT AGREEMENT
Dated as of December 29, 1994
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Administrative Agent
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Co-Agent
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to
which it is attached but is inserted for convenience of reference
only.
Page
Section 1. Definitions and Accounting Matters. . . . . . 1
1.01 Certain Defined Terms . . . . . . . . . 1
1.02 Accounting Terms and
Determinations. . . . . . . . . . . . . 22
1.03 Classes of Loans. . . . . . . . . . . . 22
1.04 Interpretation. . . . . . . . . . . . . 22
Section 2. Commitments, Loans, Notes and
Prepayments . . . . . . . . . . . . . . . . . 23
2.01 Loans . . . . . . . . . . . . . . . . . 23
2.02 Borrowings of Loans . . . . . . . . . . 24
2.03 Letters of Credit . . . . . . . . . . . 25
2.04 Changes of Commitments. . . . . . . . . 33
2.05 Fees. . . . . . . . . . . . . . . . . . 33
2.06 Lending Offices . . . . . . . . . . . . 34
2.07 Several Obligations; Remedies
Independent . . . . . . . . . . . . . . 34
2.08 Notes and Loan Account. . . . . . . . . 34
2.09 Optional Prepayments. . . . . . . . . . 36
2.10 Mandatory Prepayments and
Reductions of Commitments . . . . . . . 36
2.11 Casualty Proceeds. . . . . . . . . . . . 39
Section 3. Payments of Principal and Interest. . . . . . 40
3.01 Repayment of Loans. . . . . . . . . . . 40
3.02 Interest. . . . . . . . . . . . . . . . 41
Section 4. Payments; Pro Rata Treatment;
Computations; Etc.. . . . . . . . . . . . . . 42
4.01 Payments. . . . . . . . . . . . . . . . 42
4.02 Pro Rata Treatment. . . . . . . . . . . 44
4.03 Computations. . . . . . . . . . . . . . 44
4.04 Minimum Amounts . . . . . . . . . . . . 45
4.05 Certain Notices . . . . . . . . . . . . 45
4.06 Non-Receipt of Funds by the
Administrative Agent. . . . . . . . . . 45
4.07 Sharing of Payments, Etc. . . . . . . . 46
Section 5. Yield Protection, Etc.. . . . . . . . . . . . 47
5.01 Additional Costs. . . . . . . . . . . . 47
5.02 Certain Protections in Respect
of Letters of Credit. . . . . . . . . . 48
5.03 Taxes . . . . . . . . . . . . . . . . . 49
Section 6. Conditions Precedent. . . . . . . . . . . . . 50
6.01 Initial Extension of Credit . . . . . . 50
6.02 Initial and Subsequent
Extensions of Credit. . . . . . . . . . 57
Section 7. Representations and Warranties. . . . . . . . 57
7.01 Corporate Existence . . . . . . . . . . 57
7.02 Financial Condition . . . . . . . . . . 58
7.03 Litigation. . . . . . . . . . . . . . . 58
7.04 No Breach . . . . . . . . . . . . . . . 58
7.05 Action. . . . . . . . . . . . . . . . . 59
7.06 Approvals . . . . . . . . . . . . . . . 59
7.07 Use of Credit . . . . . . . . . . . . . 59
7.08 ERISA . . . . . . . . . . . . . . . . . 59
7.09 Taxes . . . . . . . . . . . . . . . . . 59
7.10 Certain Regulations . . . . . . . . . . 60
7.11 Material Agreements and Liens . . . . . 60
7.12 Environmental Matters . . . . . . . . . 60
7.13 Capitalization. . . . . . . . . . . . . 62
7.14 Subsidiaries. . . . . . . . . . . . . . 63
7.15 Title to Assets . . . . . . . . . . . . 63
7.16 True and Complete Disclosure. . . . . . 63
Section 8. Covenants of the Company. . . . . . . . . . . 63
8.01 Financial Statements, Etc.. . . . . . . 64
8.02 Litigation. . . . . . . . . . . . . . . 68
8.03 Existence, Etc. . . . . . . . . . . . . 68
8.04 Insurance . . . . . . . . . . . . . . . 69
8.05 Prohibition of Fundamental
Changes . . . . . . . . . . . . . . . . 71
8.06 Limitation on Liens . . . . . . . . . . 72
8.07 Indebtedness. . . . . . . . . . . . . . 74
8.08 Investments . . . . . . . . . . . . . . 74
8.09 Dividend Payments . . . . . . . . . . . 75
8.10 Leverage Ratio. . . . . . . . . . . . . 75
8.11 Net Worth . . . . . . . . . . . . . . . 75
8.12 Working Capital . . . . . . . . . . . . 76
8.13 Fixed Charges Ratio . . . . . . . . . . 76
8.14 Capital Expenditures. . . . . . . . . . 77
8.15 Funded Debt to Operating Cash
Flow Ratio. . . . . . . . . . . . . . . 78
8.16 Lease Obligations.. . . . . . . . . . . 79
8.17 Lines of Business . . . . . . . . . . . 79
8.18 Transactions with Affiliates. . . . . . 79
8.19 Use of Proceeds . . . . . . . . . . . . 79
8.20 Modifications of Certain
Documents . . . . . . . . . . . . . . . 80
8.21 After Acquired Real Property. . . . . . 80
8.22 Inventory and Receivables . . . . . . . 80
8.23 Subsidiaries. . . . . . . . . . . . . . 81
8.24 Statutory Notice. . . . . . . . . . . . 81
8.25 Intangible Personal Property
Taxes . . . . . . . . . . . . . . . . . 81
Section 9. Events of Default . . . . . . . . . . . . . . 82
Section 10. The Administrative Agent . . . . . . . . . . 86
10.01 Appointment, Powers and
Immunities. . . . . . . . . . . . . . . 86
10.02 Reliance by Administrative
Agent . . . . . . . . . . . . . . . . . 87
10.03 Defaults . . . . . . . . . . . . . . . 87
10.04 Rights as a Lender . . . . . . . . . . 87
10.05 Indemnification. . . . . . . . . . . . 88
10.06 Nonreliance on Administrative
Agent, Co-Agent and Other
Lenders . . . . . . . . . . . . . . . . 88
10.07 Failure to Act . . . . . . . . . . . . 89
10.08 Resignation or Removal of
Administrative Agent. . . . . . . . . . 89
10.09 Agency Fees. . . . . . . . . . . . . . 90
10.10 Authorization of the Co-
Agent . . . . . . . . . . . . . . . . . 90
10.11 Collateral Sub-Agent . . . . . . . . . 90
Section 11. Miscellaneous. . . . . . . . . . . . . . . . 90
11.01 Waiver . . . . . . . . . . . . . . . . 90
11.02 Notices. . . . . . . . . . . . . . . . 90
11.03 Expenses, Etc. . . . . . . . . . . . . 91
11.04 Amendments, Etc. . . . . . . . . . . . 92
11.05 Successors and Assigns . . . . . . . . 94
11.06 Assignments and
Participations. . . . . . . . . . . . . 94
11.07 Survival . . . . . . . . . . . . . . . 96
11.08 Agreements Superseded. . . . . . . . . 97
11.09 Severability . . . . . . . . . . . . . 97
11.10 Captions . . . . . . . . . . . . . . . 97
11.11 Counterparts . . . . . . . . . . . . . 97
11.12 Treatment of Certain
Information . . . . . . . . . . . . . . 97
11.13 GOVERNING LAW; SUBMISSION TO
JURISDICTION. . . . . . . . . . . . . . 98
11.14 WAIVER OF JURY TRIAL . . . . . . . . . 98
ANNEX 1 - Addresses for Notices and Commitments of the
Lenders
SCHEDULE I - Material Agreements and Liens
SCHEDULE II - Hazardous Materials
SCHEDULE III - Existing Letters of Credit
SCHEDULE IV - Litigation
EXHIBIT A-1 - Form of Revolving Credit Note
EXHIBIT A-2 - Form of Tranche A Term Loan Note
EXHIBIT A-3 - Form of Tranche B Term Loan Note
EXHIBIT A-4 - Form of Tranche C Term Loan Note
EXHIBIT B - Form of Borrowing Base Certificate
EXHIBIT C - Form of Security Agreement
EXHIBIT D - Form of Mortgage
EXHIBIT E-1 - Form of Opinion of Counsel to the Company
EXHIBIT E-2 - Form of Opinion of Florida Counsel to the
Company
EXHIBIT F-1 - Form of Opinion of Special Counsel to the
Administrative Agent
EXHIBIT F-2 - Form of Opinion of Special Florida Counsel to
the Administrative Agent
EXHIBIT G- Form of Confidentiality Agreement
This CREDIT AGREEMENT (this "Agreement"), dated as of
December 29, 1994, is made among KASH N' KARRY FOOD STORES, INC.,
a Delaware corporation (the "Company"); each of the lenders that
is a signatory to this Agreement identified under the caption
"LENDERS" on the signature pages of this Agreement or which,
pursuant to Section 11.06(b), shall become a "Lender" under this
Agreement (individually, a "Lender" and, collectively, the
"Lenders"); and THE CIT GROUP/BUSINESS CREDIT, INC., as
administrative agent for the Lenders (in such capacity, together
with its successors in such capacity, the "Administrative Agent")
and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
co-agent for the Lenders (in such capacity, together with its
successors in such capacity, the "Co-Agent").
The Company has requested the Lenders to extend credit
to the Company in an aggregate principal amount not exceeding
$85,000,000 to finance the operations of the Company, to
refinance certain existing indebtedness of the Company and for
other purposes. To induce the Lenders to extend such credit, the
Company, the Lenders, the Administrative Agent and the Co-Agent
propose to enter into this Agreement pursuant to which the
Lenders agree to make loans to, and issue (or participate in)
letters of credit for the account of, the Company, and the
Company agrees to execute and deliver, mortgages, deeds of trust,
and security agreements providing for security interests and
liens to be granted by the Company on substantially all of its
Properties as collateral security for the obligations of the
Company to the Lenders, the Administrative Agent and the Co-Agent
under the Basic Documents.
Accordingly, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings:
"Administrative Agent" shall have the meaning assigned
to that term in the introductory paragraph to this Agreement.
"Affiliate" shall mean any Person that directly or
indirectly controls, or is under common control with, or is
controlled by, the Company. As used in this definition,
"control" (including, with its correlative meanings, "controlled
by" and "under common control with") shall mean the possession,
directly or indirectly, of power to direct or cause the direction
of the management or policies (whether through ownership of
securities or partnership or other ownership interests, by
contract or otherwise), provided that, in any event, any Person
that owns directly or indirectly securities having 10% or more of
the voting power for the election of directors or other governing
body of a corporation or 10% or more of the partnership or other
ownership interests of any other Person (other than as a limited
partner of such other Person) will be deemed to control such
corporation or other Person. Notwithstanding the foregoing, the
definition of "Affiliate" shall not encompass (a) any individual
solely by reason of his or her being a director, officer or
employee of the Company and (b) the Administrative Agent, the Co-
Agent or any Lender.
"Applicable Lending Office" shall mean, for each
Lender, the "Lending Office" of such Lender (or of an affiliate
of such Lender) designated on Annex 1 or such other office of
such Lender (or of an affiliate of such Lender) as such Lender
may from time to time specify to the Administrative Agent and the
Company as the lending office for its Loans.
"Applicable Margin" shall mean, with respect to each
Class of Loan at any time, the percentage per annum set forth in
Column A under the heading for that Class of Loan opposite the
period in which such time occurs:
Column A
Applicable Margin (% p.a.)
Revolving Credit Tranche B
Loans and Tranche A and Tranche C
Period Term Loan Term Loan
Effective Date through
and including the first
anniversary of the
Effective Date 1.00 2.50
Thereafter through and
including the second
anniversary of the
Effective Date 1.50 3.00
Thereafter 2.00 3.50
"Bank of America" shall mean Bank of America National
Trust and Savings Association.
"Bankruptcy Code" shall mean Title 11 of the United
States Code.
"Bankruptcy Court" shall mean the United States
Bankruptcy Court for the District of Delaware.
"Base Rate" shall mean, for any day, a rate per annum
equal to the higher of (a) the Federal Funds Rate for such day
plus 1/2 of 1% and (b) the Prime Rate for such day. Each
interest rate that this Agreement provides is to be based upon
the Base Rate shall change upon any change in the Base Rate,
effective as of the opening of business on the first day of the
month following the month in which such change in the Base Rate
occurs.
"Basic Documents" shall mean, collectively, this
Agreement, the Notes, the Letter of Credit Documents and the
Security Documents.
"Basle Accord" shall mean the proposals for risk-based
capital framework described by the Basic Committee on Banking
Regulations and Supervisory Practices in its paper entitled
"International Convergence of Capital Measurement and Capital
Standards" dated July 1988.
"Blocked Account" shall mean the account of the Company
subject to the Blocked Account Agreement.
"Blocked Account Agreement" shall mean the agreement,
in substantially the form attached as Annex 8 of the Security
Agreement, executed by the Company, Barnett Bank of Tampa and the
Administrative Agent.
"Borrowing Base" shall mean, as at any date, the sum of
(a) 85% of the aggregate amount of Eligible Receivables at that
date plus (b) 80% of the aggregate value of Eligible Inventory at
that date minus (c) the aggregate amount of Revolving Credit
Loans, Tranche A Term Loan and Letter of Credit Liabilities
outstanding at that date minus (d) an amount equal to 105% of the
aggregate amount of Other Pari Passu Obligations at that date
minus (e) the amount of all unpaid sales taxes due any state that
have been collected by the Company minus (f) reserves as may be
required by the Administrative Agent for intangible personal
property taxes that may be payable to the State of Florida as
contemplated in Section 8.25 minus (g) reserves as may be
required by the Administrative Agent for Liens or trusts created
in favor of fresh and frozen fruit and vegetable suppliers (and
similar Liens or trusts in favor of other suppliers) of the
Company and other statutory Liens plus (h) the aggregate amount
of cover for Letter of Credit Liabilities held by the
Administrative Agent in the Collateral Account as contemplated in
Section 2.10(h) plus (i) the aggregate amount on deposit in the
Special Collateral Account (after giving effect to any permitted
disbursements to the Company as contemplated in Section 4.01(f))
on such day. The "value" of Eligible Inventory shall be
determined at the lower of cost or market in accordance with
GAAP, with cost being determined on an average cost basis. In
order to assist the Administrative Agent in determining the
amount of reserves for Liens and trusts referred to in clause (g)
above, the Company, at the time of delivery of each Borrowing
Base Certificate pursuant to Section 8.01(f), shall notify the
Administrative Agent of the aggregate amount payable by the
Company to fresh and frozen fruit and vegetable suppliers as at
the date of each such Borrowing Base Certificate.
"Borrowing Base Certificate" shall mean a certificate
of the chief financial or accounting officer of the Company, in
substantially the form of Exhibit B and appropriately completed.
"Business Day" shall mean any day on which (a)
commercial banks are not authorized or required to close in New
York City, New York or Los Angeles, California, and (b) CITBC is
not closed for business.
"Capital Expenditures" shall mean, for any period,
expenditures (including the aggregate amount of Capital Lease
Obligations incurred during such period) made during such period
by the Company to acquire or to construct fixed assets, plant and
equipment (including renewals, improvements and replacements, but
excluding repairs in the ordinary course), computed in accordance
with GAAP.
"Capital Lease Obligations" shall mean, for any Person,
all obligations of such Person to pay rent or other amounts under
a lease of (or other agreement conveying the right to use)
Property to the extent such obligations are required to be
classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards
Board), and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount of such obligation,
determined in accordance with GAAP (including such Statement
No. 13).
"Cash Flow" shall mean, for any period, the sum, for
the Company (determined without duplication in accordance with
GAAP), of the following: (a) Operating Cash Flow minus (b) the
sum of (i) taxes paid in cash during such period plus
(ii) Capital Expenditures made in cash (and not financed with the
proceeds of borrowings) during such period.
"Casualty Event" shall mean, with respect to any
Property of any Person, any loss of or damage to, or any
condemnation or other taking of, such Property for which such
Person or any of its Subsidiaries receives insurance proceeds
(including proceeds of business interruption insurance), or
proceeds of a condemnation award or other compensation.
"Chapter 11 Case" shall mean that certain case pending
before the Bankruptcy Court under Chapter 11 of the Bankruptcy
Code identified as Case No. 94-1082 (HSB).
"CITBC" shall mean The CIT Group/Business Credit, Inc.,
a New York corporation.
"CITBC Share" shall mean, at any time of determination,
(a) a fraction (expressed as a percentage) the numerator of which
shall be the outstanding principal amount of Loans and Letter of
Credit Liabilities then held by CITBC for its own account and the
denominator of which shall be the outstanding principal amount of
Loans (excluding the Tranche C Term Loan) and Letter of Credit
Liabilities then held by or for the account of all of the Lenders
or (b) if no such Loans shall then be outstanding, the Revolving
Credit Commitment Percentage of CITBC at such time.
"Class" shall have the meaning assigned to that term in
Section 1.03.
"Co-Agent" shall have the meaning assigned to that term
in the introductory paragraph to this Agreement.
"Code" shall mean the Internal Revenue Code of 1986.
"Collateral Account" shall have the meaning assigned to
that term in Section 3.01 of the Security Agreement.
"Commitments" shall mean the Revolving Credit
Commitments and the Term Loan Commitments.
"Company" shall have the meaning assigned to that term
in the introductory paragraph of this Agreement.
"Confirmation Order" shall mean a final and
nonappealable order of the Bankruptcy Court entered on the docket
of the Clerk of the Bankruptcy Court confirming the Plan of
Reorganization pursuant to Section 1129 of the Bankruptcy Code.
"Debt Service" shall mean, for any period, the sum, for
the Company (determined without duplication in accordance with
GAAP), of the following: (a) all payments of principal of
Indebtedness scheduled to be made during such period (before
giving effect to the application of prepayments of Term Loans
made pursuant to Section 2.09 during such period) plus (b) all
Interest Expense for such period.
"Default" shall mean an Event of Default or an event
that with notice or lapse of time or both would become an Event
of Default.
"Disclosure Statement" shall mean that certain
Disclosure Statement dated September 2, 1994 filed in the Chapter
11 Case, as supplemented by a Supplement to Disclosure Statement
dated October 28, 1994 filed in the Chapter 11 Case (without
regard to any amendments, modifications or supplements made
without the consent of the Lenders after October 28, 1994).
"Disposition" shall mean any sale, assignment, transfer
or other disposition of any Property (whether now owned or
hereafter acquired) by the Company to any Person excluding any
sale, assignment, transfer or other disposition of any Property
sold or disposed of in the ordinary course of business and on
ordinary business terms.
"Dividend Payment" shall mean dividends (in cash,
Property or obligations) on, or other payments or distributions
on account of, or the setting apart of money for a sinking or
other analogous fund for, or the purchase, redemption, retirement
or other acquisition of, any shares of any class of stock of the
Company or of any warrants, options or other rights to acquire
the same (or to make any payments to any Person, such as "phantom
stock" payments, where the amount is calculated with reference to
the fair market or equity value of the Company), but excluding
dividends payable solely in shares of common stock of the
Company.
"Dollars" and "$" shall mean lawful money of the United
States of America.
"Effective Date" shall mean the date upon which the
initial extension of credit under this Agreement is made.
"Eligible Inventory" shall mean, as at any date, the
sum of the following (determined without duplication): all
Inventory (a) that is owned by (and in the possession or under
the control of) the Company as at such date, (b) that is located
in a jurisdiction in the United States of America, (c) as to
which (i) appropriate Uniform Commercial Code financing
statements have been filed naming the Company as "debtor" and the
Administrative Agent as "secured party" and (ii) the
Administrative Agent (for the benefit of the Lenders, the
Administrative Agent and the Co-Agent) has a first priority Lien,
(d) that is in good condition, (e) that meets all standards
imposed by any Governmental Person having regulatory authority
over such Inventory, its use or sale and (f) that is either
currently usable or currently saleable in the normal course of
the Company's business without any notice to, or consent of, any
Governmental Person; provided that: (x) in no event shall any of
the following be "Eligible Inventory": (i) Inventory that is
perishable or that has exceeded its shelf life or otherwise been
held by the Company as inventory for more than 300 days;
(ii) Inventory to be returned to the Company's suppliers;
(iii) Inventory in transit to or from third parties (other than
warehouses owned by third parties at which the Company stores a
portion of its Inventory from time to time, provided that the
Administrative Agent shall have received acknowledgements from
each such warehouse consenting to the security interest of the
Administrative Agent for the benefit of the Lenders, the
Administrative Agent and the Co-Agent and any related original
negotiable warehouseman's receipts duly endorsed by the Company
to the order of the Administrative Agent); (iv) supplies used in
the ordinary course of the Company's business; or (v) shrinkage;
and (y) the Administrative Agent may at any time exclude from
Eligible Inventory any type of Inventory that the Administrative
Agent (in its reasonable business judgment) determines to be
unmarketable or otherwise ineligible for any reason. In
addition, Eligible Inventory shall be reduced by the amount of
reserves required by the Administrative Agent (in its reasonable
judgment as set forth below) for (A) special order Inventory,
(B) market value declines (to the extent the Inventory's value is
below its cost), (C) bill and hold (deferred shipment or
consignment sales), (D) markdowns (to the extent the Inventory's
value is below its cost), (E) Inventory that is not located at
the Company's retail store locations or its warehouses (or
warehouses referred to in clause (iii) above) or in transit
between such stores or warehouses, (F) demonstration items (to
the extent the Inventory's value is below its cost) and (G)
Inventory held for rent. The amount of such reserves shall be
determined solely by the Administrative Agent in its reasonable
business judgment using standards, consistently applied by the
Administrative Agent. Such standards shall take into
consideration amounts representing, historically, the Company's
reserves, discounts, returns, claims, credits and allowances.
"Eligible Receivables" shall mean, as at any date, the
aggregate amount of all Receivables at such date payable to the
Company other than the following (determined without
duplication):
(a) any Receivable not payable in Dollars,
(b) any Receivable that, at the date of issuance of
the original invoice for the related Inventory, was payable more
than 60 days after shipment of such Inventory,
(c) any Receivable due from an Affiliate of the
Company,
(d) any Receivable due from an account debtor whose
principal place of business is located outside of the United
States of America,
(e) any Receivable due from an account debtor that the
Administrative Agent has notified the Company does not have a
satisfactory credit standing (as determined in the sole
discretion of the Administrative Agent),
(f) any Receivable that is more than 90 days past due,
(g) all Receivables of any account debtor if more than
25% of the aggregate amount of the Receivables due from such
account debtor shall at the time be more than 30 days past due,
(h) all Receivables due from any account debtor if the
Receivables due from such account debtor and its Affiliates at
the time exceed 15% of all Receivables then payable to the
Company,
(i) any Receivable as to which there is any unresolved
dispute with the respective account debtor (but only to the
extent of the amount so in dispute),
(j) any Receivable due from an account debtor to whom
the Company is or may become liable for goods sold or services
rendered by such account debtor to the Company (but only to the
extent of the amount of the liability to such account debtor),
(k) any Receivable representing an obligation for
goods sold on consignment, approval or a sale-or-return basis or
subject to any other repurchase or return arrangement,
(l) any Receivable as to which the Administrative
Agent determines that it has insufficient information to
determine eligibility, and
(m) any Receivable that the Administrative Agent may
otherwise determine (in its reasonable business judgment) from
time to time to be uncollectible or otherwise ineligible for any
reason.
"Environmental Claim" shall mean, with respect to any
Person, any written or oral notice, claim, demand or other
communication (collectively, a "claim") by any other Person
alleging or asserting such Person's liability for investigatory
costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines or
penalties arising out of, based on or resulting from (a) the
presence, or Release into the environment, of any Hazardous
Material at any location, whether or not owned by such Person, or
(b) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law. The term "Environmental
Claim" shall include any claim by any Governmental Person for
enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law,
and any claim by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief
resulting from the presence of Hazardous Materials or arising
from alleged injury or threat of injury to human or animal health
or safety or to the environment.
"Environmental Laws" shall mean any and all present and
future Governmental Rules relating to the regulation or
protection of human or animal health or safety or of the
environment or to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or toxic or
hazardous substances or wastes (including Hazardous Materials)
into the indoor or outdoor environment, including ambient air,
soil, surface water, ground water, wetlands, land or subsurface
strata, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals or toxic or
hazardous substances or wastes. The term "Environmental Law"
shall include the terms and conditions of any Governmental
Approval issued under any Environmental Law or with respect to
any Hazardous Material.
"Equity Issuance" shall mean (a) any issuance or sale
by the Company after the Effective Date of (i) any capital stock
(other than capital stock issued on customary terms to directors,
officers or employees of the Company), (ii) any warrants or
options exercisable in respect of capital stock (other than any
warrants or options issued on customary terms to directors,
officers or employees of the Company and any capital stock of the
Company issued upon the exercise of such warrants or options) or
(iii) any other security or instrument representing an equity
interest (or the right to obtain any equity interest) in the
issuing or selling Person or (b) the receipt by the Company after
the Effective Date of any capital contribution (whether or not
evidenced by any equity security issued by the recipient of such
contribution).
"Equity Rights" shall mean, with respect to any Person,
any outstanding subscriptions, options, warrants, commitments,
preemptive rights or agreements of any kind (including any
stockholders' or voting trust agreements) for the issuance, sale,
registration or voting of, or outstanding securities convertible
into, any additional shares of capital stock of any class, or
partnership or other ownership interests of any type in, such
Person.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974.
"ERISA Affiliate" shall mean any corporation or trade
or business that is a member of any group of organizations (i)
described in Section 414(b) or (c) of the Code of which the
Company is a member and (ii) solely for purposes of potential
liability under Section 302(c)(11) of ERISA and
Section 412(c)(11) of the Code and the lien created under
Section 302(f) of ERISA and Section 412(n) of the Code, described
in Section 414(m) or (o) of the Code of which the Company is a
member.
"Event of Default" shall have the meaning assigned to
that term in Section 9.
"Excess Cash Flow" shall mean, for any period, the
excess of (i) the sum of (A) Cash Flow for such period plus
(B) any decrease in the amount of the Company's investment in
forward buy Inventory over such period (determined by reference
to the first and last days of such period) minus (C) any increase
in the amount of the Company's investment in forward buy
Inventory over such period (determined by reference to the first
and last days of such period) over (ii) the sum of the aggregate
amount of (A) Debt Service for such period plus (B) payments made
by the Company during such period pursuant to leases of retail
store locations that are no longer being operated by the Company.
"Existing Interest Rate Protection Agreement" shall
mean that certain Interest Rate Protection Agreement dated
January 27, 1989 (as amended March 8, 1989, and November 3, 1994
and the Effective Date) between the Company and Bank of America.
"Existing Letters of Credit" shall mean the letters of
credit identified on Schedule III.
"Existing Senior Credit Agreement" shall mean the
Credit Agreement referred to in numbered paragraph 1 of Part A of
Schedule I.
"Federal Funds Rate" shall mean, for any day, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (a) if the day for
which such rate is to be determined is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such
transactions on the immediately preceding Business Day as so
published on the next succeeding Business Day and (b) if such
rate is not so published for any Business Day, the Federal Funds
Rate for such Business Day shall be the average rate charged to
Chemical Bank on such Business Day on such transactions as
determined by the Administrative Agent.
"Fixed Charges Ratio" shall mean, as at any date and
for any period, the ratio of (a) Cash Flow for such period to
(b) Debt Service for such period.
"Funded Debt" shall mean, at any time, the aggregate
unpaid principal amount of Indebtedness of the Company
(determined without duplication in accordance with GAAP)
outstanding at such time.
"Funded Debt to Operating Cash Flow Ratio" shall mean,
as at any date and for any period, the ratio of (a) Funded Debt
at such date to (b) Operating Cash Flow for such period.
"GAAP" shall mean accounting principles set forth as
generally accepted in currently effective opinions of the
Accounting Principles Board of the American Institute of
Certified Public Accountants and in statements of the Financial
Accounting Standards Board, together with interpretive rulings
and bulletins issued in connection therewith, as in effect from
time to time but applied on a consistent basis with those
principles used in the preparation of the financial statements
referred to in Section 7.02.
"GEI" shall mean Green Equity Investors, L.P., a
Delaware limited partnership.
"Governmental Approvals" shall mean any authorization,
consent, approval, license, lease, ruling, permit, waiver,
exemption, filing, registration or notice by or with any
Governmental Person.
"Governmental Person" shall mean any national (Federal
or foreign), state or local government, any political subdivision
or any governmental, quasi-governmental, judicial, public or
statutory instrumentality, authority, agency, body or entity,
including the PBGC, Federal Deposit Insurance Corporation, the
Comptroller of the Currency, the Board of Governors of the
Federal Reserve System, any central bank or any comparable
authority.
"Governmental Rules" shall mean any law, rule,
regulation, ordinance, order, code, judgment, decree, directive,
guideline, policy, or any similar form of decision of, or any
interpretation or administration of any of the foregoing by, any
Governmental Person.
"Guarantee" shall mean a guarantee, an endorsement, a
contingent agreement to purchase or to furnish funds for the
payment or maintenance of, or otherwise to be or to become
contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other
distributions upon the stock or equity interests of any Person,
or an agreement to purchase, sell or lease (as lessee or lessor)
Property, products, materials, supplies or services primarily for
the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to assure a creditor against loss,
including causing a bank or other financial institution to issue
a letter of credit or other similar instrument for the benefit of
another Person, but excluding endorsements for collection or
deposit in the ordinary course of business. The terms
"Guarantee" and "Guaranteed" used as verbs shall have correlative
meanings.
"Hazardous Material" shall mean, collectively, (a) any
petroleum or petroleum products, flammable explosives,
radioactive materials, asbestos in any form that is or could
reasonably be expected to become friable, urea formaldehyde foam
insulation, and transformers or other equipment that contain
dielectric fluid containing polychlorinated biphenyls (PCB's),
(b) any chemicals or other materials or substances which are now
or hereafter become defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," "contaminants,"
"infectious wastes," "pollutants" or words of similar import
under any Environmental Law and (c) any other chemical or other
material or substance, exposure to which or use of which is now
or hereafter prohibited, limited or regulated under any
Environmental Law.
"Indebtedness" shall mean, for any Person (without
duplication): (a) obligations created, issued or incurred by
such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or
otherwise, to repurchase such Property from such Person); (b)
obligations of such Person to pay the deferred purchase or
acquisition price of Property or services, other than trade
accounts payable (other than for borrowed money) arising, and
accrued expenses incurred, in the ordinary course of business so
long as such trade accounts payable are payable within 90 days of
the date the respective goods are delivered or the respective
services are rendered; (c) obligations of others secured by a
Lien on the Property of such Person, whether or not the
respective obligations so secured have been assumed by such
Person; (d) obligations of such Person in respect of letters of
credit or similar instruments issued or accepted by banks and
other financial institutions for the account of such Person; (e)
Capital Lease Obligations of such Person and obligations of such
Person in respect of Special Operating Leases; and (f)
obligations of others Guaranteed by such Person.
"Interest Expense" shall mean, for any period, the sum,
for the Company (determined without duplication in accordance
with GAAP), of the following: (a) all interest in respect of
Indebtedness accrued, added to principal or paid in kind during
such period (whether or not actually paid during such period),
net of interest income of the Company during such period, plus
(b) the net amounts payable (or minus the net amounts receivable)
under Interest Rate Protection Agreements accrued during such
period (whether or not actually paid or received during such
period).
"Interest Rate Protection Agreement" shall mean, for
any Person, an interest rate swap, cap or collar agreement or
similar arrangement between such Person and one or more financial
institutions, or (in connection with any such agreement or
arrangement which is a master agreement providing for separate
transactions to be entered into from time to time pursuant
thereto) any such separate transaction. For purposes of this
Agreement, the "credit exposure" at any time of any Person under
an Interest Rate Protection Agreement to which such Person is a
party shall be determined at such time in accordance with the
customary methods of calculating credit exposure under similar
arrangements by the counterparty to such arrangements (and, in
the case of the Existing Interest Rate Protection Agreement, as
determined monthly by Bank of America), taking into account
potential interest rate movements and the respective termination
provisions and notional principal amount and term of such
Interest Rate Protection Agreement.
"Inventory" shall have the meaning assigned to that
term in the Security Agreement.
"Investment" shall mean, for any Person: (a) the
acquisition (whether for cash, Property, services or securities
or otherwise) of capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities
(including Equity Rights) of any other Person or any agreement to
make any such acquisition (including any "short sale" or any sale
of any securities at a time when such securities are not owned by
the Person entering into such short sale); (b) the making of any
deposit with, or advance, loan or other extension of credit to,
any other Person (including the purchase of Property from another
Person subject to an understanding or agreement, contingent or
otherwise, to resell such Property to such Person, but excluding
(i) any such advance, loan or extension of credit having a term
not exceeding 90 days representing the purchase price of
inventory or supplies sold by such Person in the ordinary course
of business and (ii) advances to employees in the ordinary course
of business); (c) the entering into of any Guarantee of, or other
contingent obligation with respect to, Indebtedness or other
liability of any other Person and (without duplication) any
amount committed to be advanced, lent or extended to such Person;
or (d) the entering into of any Interest Rate Protection
Agreement.
"Issuing Bank" shall mean Chemical Bank or The Dai-Ichi
Kangyo Bank, Limited, as the case may be, as an issuer of Letters
of Credit under Section 2.03 and, to the extent set forth in
Section 2.03(n), each Lender which has issued an Existing Letter
of Credit.
"Lenders" shall have the meaning assigned to that term
in the introductory paragraph of this Agreement.
"Letter of Credit" shall have the meaning assigned to
such term in Section 2.03.
"Letter of Credit Documents" shall mean, with respect
to any Letter of Credit, collectively, any application for any
Letter of Credit and any other agreements, instruments,
guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing
for (a) the rights and obligations of the parties concerned or at
risk with respect to such Letter of Credit or (b) any collateral
security for any of such obligations.
"Letter of Credit Interest" shall mean, for each
Revolving Credit Lender, such Lender's participation interest in
(a) the Administrative Agent's liability with respect to Letters
of Credit and (b) Existing Letters of Credit and such Lender's
rights and interests in Reimbursement Obligations and fees,
interest and other amounts payable in connection with Letters of
Credit and Reimbursement Obligations.
"Letter of Credit Liability" shall mean, without
duplication, at any time and in respect of any Letter of Credit,
the sum of (a) the undrawn face amount of such Letter of Credit
plus (b) the aggregate unpaid principal amount of all
Reimbursement Obligations of the Company at such time due and
payable in respect of all drawings made under such Letter of
Credit. For purposes of this Agreement, a Revolving Credit
Lender shall be deemed to hold a Letter of Credit Liability in an
amount equal to its participation interest in the Administrative
Agent's liability with respect to the Letters of Credit and its
participation interest in Existing Letters of Credit under
Section 2.03.
"Leverage Ratio" shall mean, at any time, the ratio of
Total Liabilities to Net Worth of the Company at such time.
"Lien" shall mean, with respect to any Property, any
mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such Property or any agreement to give,
or notice of, any of the foregoing. For purposes of this
Agreement and the other Basic Documents, a Person shall be deemed
to own subject to a Lien any Property that it has acquired or
holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title
retention agreement (other than an operating lease) relating to
such Property.
"Loans" shall mean Revolving Credit Loans and Term
Loans.
"Majority Lenders" shall mean, subject to the last
paragraph of Section 11.04, Lenders having at least 61% (or 75%
if the CITBC Share is greater than 40%) of the aggregate amount
of the Commitments (excluding the Tranche C Term Loan Commitment)
or, if such Commitments shall have terminated, Lenders holding at
least 61% (or 75% if the CITBC Share is greater than 40%) of the
sum of (a) the aggregate unpaid principal amount of the Loans
(excluding the Tranche C Term Loan) plus (b) the aggregate amount
of all Letter of Credit Liabilities.
"Margin Stock" shall mean "margin stock" within the
meaning of Regulations U and X.
"Material Adverse Effect" shall mean a material adverse
effect on (a) the Property, business, operations, financial
condition, prospects, liabilities or capitalization of the
Company taken as a whole, (b) the ability of the Company to
consummate the transactions contemplated by the Plan of
Reorganization, (c) the ability of the Company to perform its
obligations under any of the Basic Documents, (d) the validity or
enforceability of any of the Basic Documents, (e) the rights,
remedies, powers and privileges of the Lenders, the Co-Agent and
the Administrative Agent under any of the Basic Documents or
(f) the timely payment of the Obligations.
"Monthly Dates" shall mean the last day of each
calendar month in each year, the first of which shall be the
first such day after the Effective Date.
"Mortgage" shall mean a Mortgage, Assignment of Rents
and Fixture Filing, in substantially the form of Exhibit D,
executed by the Company in favor of the Administrative Agent for
the benefit of the Administrative Agent, the Co-Agent and the
Lenders.
"Multiemployer Plan" shall mean a multiemployer plan
defined as such in Section 3(37) of ERISA to which contributions
have been made by the Company or any ERISA Affiliate and which is
covered by Title IV of ERISA.
"Net Available Proceeds" shall mean:
(a) in the case of any Disposition, the amount of Net
Cash Payments received in connection with such Disposition;
(b) in the case of any Casualty Event, the aggregate
amount of proceeds of insurance, condemnation awards and other
compensation received by the Company in respect of such Casualty
Event net of (A) reasonable expenses incurred by the Company in
connection with such Casualty Event and (B) contractually
required repayments of Indebtedness to the extent secured by a
Lien on such Property and any income and transfer taxes payable
or estimated to be payable by the Company in respect of such
Casualty Event (but, in the case of estimated taxes, only to the
extent that such taxes are in fact paid to the relevant
Governmental Person within three months of the date of such
Casualty Event or (solely with respect to Federal income taxes in
respect of any Casualty Event occurring within one year after the
Effective Date to the extent the Company is not required by law
to make quarterly estimated Federal tax payments prior to the end
of such one-year period) within one year after the Effective
Date) or other payments required by the terms of existing
arrangements with landlords or mortgagees;
(c) in the case of any Equity Issuance, the aggregate
amount of all cash received by the Company in respect of such
Equity Issuance net of reasonable expenses incurred by the
Company in connection with such Equity Issuance; and
(d) in the case of any incurrence of Indebtedness, the
aggregate amount of all cash received by the Company in respect
of such Indebtedness net of reasonable expenses incurred by the
Company in connection with such Indebtedness.
"Net Cash Payments" shall mean, with respect to any
Disposition, the aggregate amount of all cash payments, and the
fair market value of any noncash consideration, received by the
Company directly or indirectly in connection with such
Disposition; provided that (a) Net Cash Payments shall be net of
(i) the amount of any legal, title and recording tax expenses,
commissions and other fees and expenses paid by the Company in
connection with such Disposition and (ii) any Federal, state and
local income or other taxes estimated to be payable by the
Company as a result of such Disposition (but only to the extent
that such estimated taxes are in fact paid to the relevant
Governmental Person within three months of the date of such
Disposition or (solely with respect to Federal income taxes in
respect of any Disposition occurring within one year after the
Effective Date to the extent the Company is not required by law
to make quarterly estimated Federal tax payments prior to the end
of such one-year period) within one year after the Effective
Date), and (b) Net Cash Payments shall be net of (i) any
repayments by the Company of Indebtedness to the extent that
(A) such Indebtedness is secured by a Lien on the Property that
is the subject of such Disposition and (B) the transferee of (or
holder of a Lien on) such Property requires that such
Indebtedness be repaid as a condition to the Disposition of such
Property and (ii) other payments required by the terms of
existing arrangements with landlords or mortgagees.
"Net Worth" shall mean, as at any date for the Company,
the excess of (a) Total Assets at such date over (b) the sum of
(i) Total Liabilities at such date plus (ii) the aggregate amount
of preferred stock of the Company outstanding at such date (other
than preferred stock as to which the payment of dividends are
solely within the discretion of the Company).
"Notes" shall mean the Revolving Credit Notes and the
Term Notes.
"Obligations" shall mean the principal of any Loan,
Reimbursement Obligations, interest, fees and any other amount
payable by the Company to any Lender, the Administrative Agent or
the Co-Agent under any Basic Document (including, if the Company
becomes a debtor in a case under the Bankruptcy Code, all such
amounts which would accrue under the terms of any Basic Document
whether or not such amounts constitute allowed claims in such
bankruptcy).
"Old Subordinated Debentures" shall have the meaning
assigned to that term in the Disclosure Statement.
"Operating Cash Flow" shall mean, for any period, the
sum, for the Company (determined without duplication in
accordance with GAAP), of the following: (a) operating income
(calculated before Interest Expense, taxes, extraordinary and
unusual items and income or loss attributable to equity in
Affiliates) for such period plus (b) depreciation and
amortization (to the extent deducted in determining operating
income) for such period.
"Other Pari Passu Obligations" shall mean, as at any
date, the aggregate credit exposure of the Company at such date
under the Existing Interest Rate Protection Agreement.
"Patent and Trademark Assignments" shall mean the
assignments, in substantially the form attached as Annexes 6
and 7 of the Security Agreement, executed by the Company in favor
of the Administrative Agent for the benefit of the Administrative
Agent, the Co-Agent and the Lenders.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation.
"Permitted Investments" shall mean: (a) direct
obligations of the United States of America, or of any of its
agencies, or obligations guaranteed as to principal and interest
by the United States of America, or of any of its agencies, in
either case maturing not more than 90 days from the date of
acquisition of such obligation; (b) certificates of deposit
issued by any bank or trust company organized under the laws of
the United States of America or any state and having capital,
surplus and undivided profits of at least $500,000,000, maturing
not more than 90 days from the date of acquisition; and
(c) commercial paper rated A-1 or better or P-1 by Standard &
Poor's Corporation or Moody's Investors Services, Inc.,
respectively, maturing not more than 90 days from the date of
acquisition.
"Person" shall mean any individual, corporation,
company, voluntary association, partnership, joint venture,
trust, unincorporated organization or Governmental Person.
"Plan" shall mean an employee benefit or other plan
established or maintained by the Company or any ERISA Affiliate
and that is covered by Title IV of ERISA, other than a
Multiemployer Plan.
"Plan of Reorganization" shall mean that certain "First
Amended Plan of Reorganization of Kash n' Karry Food Stores,
Inc." dated December 12, 1994 (without regard to any amendments,
modifications or supplements made without the consent of the
Lenders after December 12, 1994).
"Post-Default Rate" shall mean (a) in respect of the
Loans, a rate per annum equal to 2.0% plus the Base Rate as in
effect from time to time plus the Applicable Margin for such
Loans as in effect from time to time and (b) in respect of all
other Obligations, a rate per annum equal to 2.0% plus the Base
Rate as in effect from time to time plus the Applicable Margin
for Revolving Credit Loans as in effect from time to time.
"Prime Rate" shall mean the rate of interest from time
to time announced by Chemical Bank, New York City, New York, as
its prime rate. Such announced rate is not necessarily the
lowest rate offered by Chemical Bank, and any extension of credit
by Chemical Bank may be at rates above, below or at such
announced rate.
"Principal Office" shall mean the principal office of
Chemical Bank, located on the Effective Date at 270 Park Avenue,
New York, New York 10017.
"Principal Payment Dates" shall mean (a) the first
Business Day following each Quarterly Date, commencing with the
first such day after the Effective Date, and (b) the Termination
Date.
"Property" shall mean any right or interest in or to
property of any kind whatsoever, whether real, personal or mixed
and whether tangible or intangible.
"Quarterly Dates" shall mean the Sunday closest to the
last day of January, April, July and October in each year, the
first of which shall be the first such day after the Effective
Date.
"Receivables" shall mean all "Accounts" (as such term
is defined in the Security Agreement) of the Company and rights
of the Company to the payment of money from or in respect of (a)
manufacturers on account of coupons issued by such manufacturers
and honored by the Company, (b) insurance companies and third
party health care providers in respect of reimbursements for
prescription drugs sold by the Company and (c) open accounts with
customers arising from the sale of Inventory.
"Regulations A, D, U and X" shall mean, respectively,
Regulations A, D, U and X of the Board of Governors of the
Federal Reserve System.
"Regulatory Change" shall mean, with respect to any
Lender (or its Applicable Lending Office), the occurrence after
the Effective Date of any of the following events: (a) the
adoption of any applicable Governmental Rule, (b) any change in
any applicable Governmental Rule or in the interpretation or
administration of any Governmental Rule by any Governmental
Person charged with its interpretation or administration or (c)
the adoption or making of any interpretation, directive,
guideline, policy or request applying to a class of banks
including such Lender of or under any Governmental Rule or in the
interpretation or administration of any Governmental Rule
(whether or not having the force of law and whether or not
failure to comply would be unlawful) by any Governmental Person
charged with its interpretation or administration.
"Reimbursement Obligations" shall mean, at any time,
the obligations of the Company then outstanding, or which may
thereafter arise in respect of all Letters of Credit then
outstanding, to reimburse amounts paid by (or debited from the
Administrative Agent's account by) an Issuing Bank or the
Administrative Agent in respect of any drawings under a Letter of
Credit.
"Release" shall mean any release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor
environment, including the movement of Hazardous Materials
through ambient air, soil, surface water, ground water, wetlands,
land or subsurface strata.
"Retained Cash" shall mean coin and currency for the
Company to conduct business in the ordinary course of its
operations and consistent with past business practices of the
Company.
"Revolving Credit Commitment" shall mean, for each
Revolving Credit Lender, the obligation of such Lender to make
Revolving Credit Loans in an aggregate amount at any one time
outstanding up to but not exceeding the amount set opposite the
name of such Lender on Annex 1 (as the same may be reduced from
time to time pursuant to Section 2.04). The original aggregate
principal amount of the Revolving Credit Commitments is
$50,000,000.
"Revolving Credit Commitment Percentage" shall mean,
with respect to any Revolving Credit Lender, the ratio of (a) the
amount of the Revolving Credit Commitment of such Lender to
(b) the aggregate amount of the Revolving Credit Commitments of
all of the Lenders.
"Revolving Credit Lenders" shall mean (a) on the
Effective Date, the Lenders having Revolving Credit Commitments
as specified on Annex 1 and (b) thereafter, the Lenders from time
to time holding Revolving Credit Loans and Revolving Credit
Commitments after giving effect to any assignments permitted by
Section 11.06.
"Revolving Credit Loans" shall mean the loans provided
for by Section 2.01(a).
"Revolving Credit Notes" shall mean the promissory
notes provided for by Section 2.08(a).
"Securities Purchase Agreement" shall mean the
Securities Purchase Agreement dated as of December 29, 1994
between the Company and GEI.
"Security Agreement" shall mean a Security Agreement,
in substantially the form of Exhibit C, executed by the Company
in favor of the Administrative Agent for the benefit of the
Administrative Agent, the Co-Agent and the Lenders.
"Security Documents" shall mean, collectively, the
Security Agreement, the Mortgage, the Patent and Trademark
Assignments, the Blocked Account Agreement, all Uniform
Commercial Code financing statements and all other filings or
recordings with any Governmental Person required by this
Agreement, the Security Agreement or the Mortgage to be filed or
recorded with respect to each of the security interests in
personal Property and fixtures created pursuant to the Security
Agreement and the Mortgage.
"Senior Notes" shall mean the Indebtedness of the
Company in respect of the Senior Floating Rate Notes of the
Company due February 1, 2003 and the 11.5% Senior Fixed Rate
Notes of the Company due February 1, 2003, in each case issued
pursuant to the Senior Note Documents.
"Senior Note Documents" shall mean the (a) the
Indenture dated as of December 29, 1994 between the Company and
Shawmut Bank Connecticut, N.A., as Trustee, relating to the 11.5%
Senior Fixed Rate Notes of the Company due 2003 and (b) the
Indenture dated as of December 29, 1994 between the Company and
IBJ Schroder Bank & Trust Company, as Trustee, relating to the
Senior Floating Rate Notes of the Company due 2003.
"Special Collateral Account" shall have the meaning
assigned to that term in Section 4.01(f).
"Special Operating Lease" shall mean, for any Person,
each arrangement, however described, under which such Person
accounts for its interest in the Property covered thereby under
GAAP as lessee of a lease which is not a capital lease and
accounts for its interest in such Property for Federal income tax
purposes as the owner. The amount of the obligations of such
Person under any Special Operating Lease at any time of
determination shall be the amount of such Person's liability in
respect of such Special Operating Lease that would be required to
be capitalized on the balance sheet of such Person at such time
if such lease were required to be classified and accounted for as
a capital lease on a balance sheet of such Person in accordance
with GAAP.
"Subsidiary" shall mean, for any Person, any
corporation, partnership or other entity of which at least a
majority of the securities or other ownership interests having by
their terms ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions
of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership
interests of any other class or classes of such corporation,
partnership or other entity shall have or might have voting power
by reason of the happening of any contingency) is at the time
directly or indirectly owned or controlled by such Person or one
or more Subsidiaries of such Person or by such Person and one or
more Subsidiaries of such Person.
"Termination Date" shall mean the third anniversary of
the Effective Date.
"Term Loan Commitment" shall mean, for each Term Loan
Lender, the Tranche A Term Loan Commitment, the Tranche B Term
Loan Commitment and the Tranche C Term Loan Commitment (if any)
of such Lender.
"Term Loan Lenders" shall mean (a) on the Effective
Date, the Lenders having Term Loan Commitments as specified on
Annex 1 and (b) thereafter, the Lenders from time to time holding
Term Loans after giving effect to any assignments permitted by
Section 11.06.
"Term Loan Notes" shall mean the promissory notes
provided for by Sections 2.08(b), 2.08(c) and 2.08(d).
"Term Loans" shall mean the Tranche A Term Loan, the
Tranche B Term Loan and the Tranche C Term Loan.
"Total Assets" shall mean, as at any date for the
Company (determined in accordance with GAAP), all assets which
should be classified as assets on a balance sheet of the Company
at such date.
"Total Liabilities" shall mean, as at any date, the
sum, for the Company (determined without duplication in
accordance with GAAP), of the following: (a) all Indebtedness of
the Company at such date and (b) all other liabilities which
should be classified as liabilities on a balance sheet of the
Company at such date, including all reserves and all deferred
taxes and other deferred items.
"Tranche A Term Loan" shall mean, individually or
collectively, the loans provided for by Section 2.01(b).
"Tranche B Term Loan" shall mean, individually or
collectively, the loans provided for by Section 2.01(c).
"Tranche C Term Loan" shall mean, individually or
collectively, the loans provided for by Section 2.01(d).
"Tranche A Term Loan Commitment" shall mean, for each
Term Loan Lender, the obligation of such Lender to make a single
Tranche A Term Loan in the amount set opposite the name of such
Lender on Annex 1 under the caption "Tranche A Term Loan
Commitment." The original aggregate principal amount of the
Tranche A Term Loan Commitments is $0.
"Tranche B Term Loan Commitment" shall mean, for each
Term Loan Lender, the obligation of such Lender to make a single
Tranche B Term Loan in the amount set opposite the name of such
Lender on Annex 1 under the caption "Tranche B Term Loan
Commitment." The original aggregate principal amount of the
Tranche B Term Loan Commitments is $34,048,871.42.
"Tranche C Term Loan Commitment" shall mean the
obligation of Bank of America to make a single Tranche C Term
Loan in the amount set opposite its name on Annex 1 under the
caption "Tranche C Term Loan Commitment." The original principal
amount of the Tranche C Term Loan Commitment is $951,128.58.
"Working Capital" shall mean, as at any date for the
Company, the excess of current assets of the Company at such date
over current liabilities of the company at such date. For
purposes of this Agreement, the terms "current assets" and
"current liabilities" shall have the respective meanings assigned
to them by GAAP, provided that in any event there shall be
excluded from current liabilities the current portion of all
Indebtedness under the Basic Documents to the extent exceeding
$7,000,000.
1.02 Accounting Terms and Determinations.
(a) Except as otherwise expressly provided in this
Agreement, all accounting terms used in this Agreement shall be
interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the
Administrative Agent, the Co-Agent or the Lenders under this
Agreement shall be prepared, in accordance with GAAP in effect
from time to time; provided that the covenants set forth in
Sections 8.07, 8.09, 8.10, 8.11, 8.12, 8.13, 8.14, 8.15, the
determination of Excess Cash Flow and related definitions,
certificates and accounting terms shall be determined, prepared
and interpreted, as the case may be, in accordance with GAAP in
effect on the date of the financial statements of the Company
referred to in Section 7.02.
(b) To enable the ready and consistent determination
of compliance with the covenants set forth in Section 8, the
Company will not change the last day of its fiscal year from the
Sunday closest to the last day of July of each year, or the last
days of the first three fiscal quarters in each of its fiscal
years from the Sunday closest to the last day of October, January
and April of each year, respectively.
1.03 Classes of Loans. Loans are distinguished by
"Class." The "Class" of a Loan (or of a Commitment to make a
Loan) refers to whether such Loan is a Revolving Credit Loan, a
Tranche A Term Loan, a Tranche B Term Loan or a Tranche C Term
Loan, each of which constitutes a Class.
1.04 Interpretation. In this Agreement, unless
otherwise indicated, the singular includes the plural and plural
the singular; words importing any gender include the other
gender; references to statutes or regulations are to be construed
as including all statutory or regulatory provisions
consolidating, amending or replacing the statute or regulation
referred to; references to "writing" include printing, typing,
lithography and other means of reproducing words in a tangible
visible form; the words "including," "includes" and "include"
shall be deemed to be followed by the words "without limitation";
references to articles, sections (or subdivisions of sections),
exhibits, annexes or schedules are to this Agreement; references
to agreements and other contractual instruments shall be deemed
to include all subsequent amendments, extensions and other
modifications to such instruments (without, however, limiting any
prohibition on any such amendments, extensions and other
modifications by the terms of this Agreement); and references to
Persons include their respective permitted successors and assigns
and, in the case of Governmental Persons, Persons succeeding to
their respective functions and capacities.
Section 2. Commitments, Loans, Notes and Prepayments.
2.01 Loans.
(a) Revolving Credit Loans. Each Revolving Credit
Lender severally agrees, on the terms and conditions of this
Agreement, to make loans to the Company in Dollars during the
period from and including the Effective Date to but not including
the Termination Date in an aggregate principal amount at any one
time outstanding up to but not exceeding the amount of the
Revolving Credit Commitment of such Lender as in effect from time
to time, provided that in no event shall the aggregate principal
amount of all Revolving Credit Loans outstanding, together with
the aggregate amount of all Letter of Credit Liabilities
outstanding, exceed the aggregate amount of the Revolving Credit
Commitments as in effect from time to time. Subject to the terms
and conditions of this Agreement, during such period the Company
may borrow, repay and reborrow the amount of the Revolving Credit
Commitments.
(b) Tranche A Term Loan. Each Term Loan Lender
severally agrees, on the terms and conditions of this Agreement,
to make a single term loan to the Company in Dollars on the
Effective Date in an aggregate amount up to but not exceeding the
amount of the Tranche A Term Loan Commitment of such Lender.
(c) Tranche B Term Loan. Each Term Loan Lender
severally agrees, on the terms and conditions of this Agreement,
to make a single term loan to the Company in Dollars on the
Effective Date in an aggregate amount up to but not exceeding the
amount of the Tranche B Term Loan Commitment of such Lender.
(d) Tranche C Term Loan. Bank of America agrees, on
the terms and conditions of this Agreement, to make a single term
loan to the Company in Dollars on the Effective Date in an
aggregate amount up to but not exceeding the Tranche C Term Loan
Commitment of Bank of America.
2.02 Borrowings of Loans.
(a) The Company shall give the Administrative Agent
notice of each borrowing of Loans as provided in Section 4.05.
(b) Subject to the terms and conditions of this
Agreement, not later than 10:00 a.m. Los Angeles time on the date
specified for each borrowing of Loans or, if the Administrative
Agent in its sole and absolute discretion requests funds from the
Revolving Credit Lenders to fund the borrowing, after receipt of
funds relating thereto from the Revolving Credit Lenders (but not
later than 1:00 p.m. Los Angeles time on such date), the
Administrative Agent shall make available to the Company the
amount of such borrowing by transferring the same, in immediately
available funds, to an account of the Company maintained with
Chemical Bank at the Principal Office as designated by the
Company.
(c) Unless and until otherwise directed in writing by
the Majority Lenders (or, if the CITBC Share is greater than 40%,
each Lender other than CITBC), the Administrative Agent in its
sole and absolute discretion may make Revolving Credit Loans
requested by the Company or assist in the issuance of Letters of
Credit pursuant to Section 2.03 (each, a "Discretionary
Extension"), in excess of the Borrowing Base or at a time when
one or more of the other conditions set forth in Section 6.02
have not been satisfied (including at a time when a Default has
occurred and is continuing); provided that, unless the Majority
Lenders (or, if the CITBC Share is greater than 40%, each Lender
other than CITBC) shall have otherwise consented in writing, the
Administrative Agent agrees with the Lenders that it will not
make on any date any Discretionary Extension if such
Discretionary Extension would result in the principal amount of
the Revolving Credit Loans and Letter of Credit Liabilities
outstanding on such date (after giving effect thereto) exceeding
the Borrowing Base by more than $5,000,000, nor will it make any
such Discretionary Extension during any period commencing upon
the occurrence of an Event of Default and ending on the date on
which such Event of Default shall no longer be continuing (each
such period, a "Default Period") if, in the case of any Event of
Default other than one caused by the failure to make mandatory
prepayments under Section 2.10(a), (i) such Discretionary
Extension would result in the principal amount of the Revolving
Credit Loans and Letter of Credit Liabilities outstanding on the
date such Discretionary Extension is made (after giving effect
thereto) exceeding by more than $5,000,000 the principal amount
of the Revolving Credit Loans and Letter of Credit Liabilities
outstanding at the end of the day immediately preceding the first
day of the Default Period or (ii) such Discretionary Extension
would occur more than thirty (30) days after commencement of such
Default Period and the Administrative Agent has actual knowledge
of such Event of Default. Any such discretionary Revolving
Credit Loans shall be due on demand, and the making of any such
discretionary Revolving Credit Loans and the Administrative
Agent's assistance in the issuance of any such Letters of Credit
at any time shall not be deemed to constitute a waiver of any
condition applicable to any future borrowing or other extension
of credit nor a waiver of any Default, and the Administrative
Agent, the Co-Agent and the Lenders reserve all of their rights
with respect thereto.
(d) The Administrative Agent shall from time to time,
but no less frequently than weekly, notify each Lender of the
date such Lender is to fund its Revolving Credit Loans and the
amount to be made available by it. At the discretion of the
Administrative Agent, the amount to be made available by a Lender
on any date may be netted against any amount owing to such Lender
and otherwise payable by the Administrative Agent on account of
payments received by it from the Company on such date. The
amount to be made available by each Lender on any date shall be
made available by it on such date to the Administrative Agent, at
account number 144054227 maintained by the Administrative Agent
with Chemical Bank at the Principal Office, in immediately
available funds (not later than 1:00 p.m. Los Angeles time on any
day in the case of fundings required pursuant to Section 2.02(b)
of which the Lenders have received notice not later than 10:00
a.m. Los Angeles time on such day). Except to the extent the
Administrative Agent shall have made Revolving Credit Loans or
other extensions of credit under this Agreement available to the
Company after the Majority Lenders (or, if the CITBC Share is
greater than 40%, each Lender other than CITBC) shall have
instructed the Administrative Agent in writing not to make such
Loans or other extensions of credit available because the
conditions set forth in Section 6.02 have not been satisfied or
because a Default then exists and is continuing or otherwise in
contravention of Section 2.02(c), the obligation of each
Revolving Credit Lender to fund its Revolving Credit Loans on the
date specified by the Administrative Agent (even if made
available by the Administrative Agent to the Company prior to
requiring the funding by such Lender) or to participate in such
Letters of Credit pursuant to Section 2.03 is absolute and
unconditional and shall not be affected by any circumstance
whatsoever, including (i) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against the
Administrative Agent, the Company or any other Person for any
reason whatsoever, (ii) the occurrence or continuation of a
Default or a Material Adverse Effect, whether the same shall
occur before or after the Administrative Agent shall have made
the Revolving Credit Loans available to the Company, (iii) the
financial condition or prospects of the Company, (iv) the failure
of any other Revolving Credit Lender to make its Revolving Credit
Loans available to the Administrative Agent, or (v) any other
circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.
2.03 Letters of Credit. On the terms and subject to
the conditions of this Agreement, the Revolving Credit
Commitments may be utilized, in addition to the Revolving Credit
Loans provided for by Section 2.01(a), by the Company requesting
the issuance by one of the Issuing Banks of letters of credit
(collectively, "Letters of Credit") for the account of the
Company, provided that in no event shall (i) the aggregate amount
of all Letter of Credit Liabilities, together with the aggregate
principal amount of the Revolving Credit Loans, exceed the
aggregate amount of the Revolving Credit Commitments as in effect
from time to time, (ii) the outstanding aggregate amount of all
Letter of Credit Liabilities exceed $25,000,000 or (iii) the
expiration date of any Letter of Credit extend beyond the earlier
of fifteen (15) days prior to the Termination Date (or such
earlier date on which the Revolving Credit Commitment shall
terminate) and the date one year following the issuance of such
Letter of Credit. The Administrative Agent shall assist in the
issuance of each Letter of Credit (whether by co-signing an
application therefor, guaranteeing the Company's obligations with
respect thereto or otherwise). The following additional
provisions shall apply to Letters of Credit:
(a) The Company shall give the Administrative Agent at
least five Business Days' irrevocable prior notice (effective
upon receipt) specifying the Business Day (which shall be no
later than 30 days preceding the Termination Date or such earlier
date on which the Revolving Credit Commitment shall terminate)
each Letter of Credit is to be issued and describing in
reasonable detail the proposed terms of such Letter of Credit
(including its beneficiary) and the nature of the transactions or
obligations proposed to be supported (including whether such
Letter of Credit is to be a commercial letter of credit or a
standby letter of credit); provided that, no Letter of Credit
shall be issued except for the purpose of supporting (i) workers'
compensation obligations of the Company, (ii) the purchase and
importation of Inventory of the Company (iii) other obligations
of the Company of the type supported by the Existing Letters of
Credit or (iv) other obligations of the Company approved in
writing by the Administrative Agent. Upon receipt of any such
notice for a Letter of Credit and satisfaction of the provisions
of the foregoing proviso, the Administrative Agent shall advise
one of the Issuing Banks of the contents thereof and assist the
Company in obtaining the issuance of such Letter of Credit. The
Administrative Agent shall periodically (but no less frequently
than weekly) notify the Lenders of the issuance of and payments
under Letters of Credit.
(b) On each day during the period commencing with the
issuance by an Issuing Bank of any Letter of Credit and until
such Letter of Credit shall have expired or been terminated or,
if drawn upon, until the resulting Reimbursement Obligations have
been reimbursed in full by the Company (whether by a borrowing
under this Agreement or otherwise), the Revolving Credit
Commitment of each Revolving Credit Lender shall be deemed to be
utilized for all purposes of this Agreement in an amount equal to
such Lender's Revolving Credit Commitment Percentage of the then
Letter of Credit Liabilities associated with such Letter of
Credit. Each Revolving Credit Lender agrees that, upon the
issuance in accordance with this Agreement of any Letter of
Credit it shall automatically acquire a participation in the
Administrative Agent's (or, in the case of any Existing Letter of
Credit issued by a Lender, such issuing Lender's) liability with
respect to such Letter of Credit in an amount equal to such
Lender's Revolving Credit Commitment Percentage of such
liability, and each Revolving Credit Lender thereby shall
absolutely, unconditionally and irrevocably assume, as primary
obligor and not as surety, and shall be unconditionally obligated
to the Administrative Agent (or, in the case of an Existing
Letter of Credit issued by a Lender, such issuing Lender) to pay
and discharge when due, its Revolving Credit Commitment
Percentage of the Administrative Agent's (or, in the case of any
Existing Letter of Credit issued by a Lender, such issuing
Lender's) liability with respect to such Letter of Credit.
(c) Upon receipt by the Administrative Agent from an
Issuing Bank of notice that such Issuing Bank has made a payment
or received any demand for payment under a Letter of Credit, or
upon receipt by the Administrative Agent from an Issuing Bank
that such Issuing Bank has debited the Administrative Agent's
account with such Issuing Bank in respect of the payment by it of
a drawing under a Letter of Credit issued by it, the
Administrative Agent shall promptly notify the Company of the
amount paid or to be paid by such Issuing Bank as a result of
such demand or payment, or the amount debited from the
Administrative Agent's account in respect of such payment, and
the date on which such payment or debit was or is to be made in
respect of such Letter of Credit. Notwithstanding the identity
of the account party of any Letter of Credit, the Company hereby
unconditionally agrees to pay and reimburse the Administrative
Agent for the account of such Issuing Bank for the amount of each
payment or demand for payment under such Letter of Credit, or for
the account of the Administrative Agent for the amount of each
such debit to the Administrative Agent's account in respect of
such Letter of Credit, at or prior to the date on which payment
was or is to be made by such Issuing Bank to the beneficiary
under such Letter of Credit or on which any such debit is made to
the Administrative Agent's account, as the case may be, without
presentment, demand, protest or other formalities of any kind.
(d) Forthwith upon its receipt of a notice referred to
in clause (c) of this Section 2.03, the Company shall advise the
Administrative Agent whether or not the Company intends to borrow
under Section 2.01 to finance its obligation to reimburse an
Issuing Bank for the amount of the related payment or demand for
payment, or to reimburse the Administrative Agent for the amount
debited from its account with an Issuing Bank in respect of any
drawing under a Letter of Credit, and, if it does, submit a
notice of such borrowing as provided in Section 4.05. In the
event that the Company fails to so advise the Administrative
Agent, or if the Company fails to reimburse an Issuing Bank for a
demand for payment under a Letter of Credit, or fails to
reimburse the Administrative Agent for the amount debited from
its account with an Issuing Bank in respect of a drawing under a
Letter of Credit, by the date of such payment or debit, as the
case may be, the Administrative Agent shall have the right (in
its sole discretion) to make a Revolving Credit Loan pursuant and
subject to Section 2.02(c) in order to effect any such
reimbursement or, if it shall not make such a Loan for any
reason, the Administrative Agent shall give each Revolving Credit
Lender prompt notice of the amount of the demand for payment or
the amount of the debit, as the case may be, specifying such
Lender's Revolving Credit Commitment Percentage of the amount of
the related demand for payment or debit, as the case may be.
(e) Each Revolving Credit Lender shall pay to the
Administrative Agent at the Principal Office in Dollars and in
immediately available funds, the amount of such Lender's
Revolving Credit Commitment Percentage of any payment under a
Letter of Credit or any debit of the Administrative Agent's
account with an Issuing Bank in respect of a drawing under a
Letter of Credit, as the case may be, upon notice by the
Administrative Agent to such Revolving Credit Lender requesting
such payment and specifying such amount as provided in clause (d)
of this Section 2.03. Each such Revolving Credit Lender's
obligation to make such payments to the Administrative Agent
under this clause (e) shall be absolute and unconditional and
shall not be affected by any circumstance whatsoever, including
(i) the failure of any other Revolving Credit Lender to make its
payment under this clause (e), the financial condition of the
Company (or any other account party), the existence of any
Default or (ii) the termination of the Commitments. Each such
payment to the Administrative Agent shall be made without any
offset, abatement, withholding or reduction whatsoever.
(f) Upon the making of each payment by a Revolving
Credit Lender to the Administrative Agent pursuant to
clause (e) above in respect of any Letter of Credit, such Lender
shall, automatically and without any further action on the part
of the Administrative Agent, the Issuing Bank with respect to
such Letter of Credit or such Lender, acquire (i) a participation
in an amount equal to such payment in the Reimbursement
Obligation in respect of such Letter of Credit and under any
applicable Letter of Credit Documents relating to such Letter of
Credit and (ii) a participation in a percentage equal to such
Lender's Revolving Credit Commitment Percentage in any interest
or other amounts payable under such Letter of Credit Documents
and the other Basic Documents in respect of such Reimbursement
Obligation (other than the commissions, charges, costs and
expenses payable to such Issuing Bank).
(g) The Company shall pay to the Administrative Agent
for its account in respect of each Letter of Credit a letter of
credit fee in an amount equal to 1-1/2% per annum of the daily
average undrawn face amount of such Letter of Credit for the
period from and including the date of issuance of such Letter of
Credit to and including the date such Letter of Credit is drawn
in full, expires or is terminated (such fee to be nonrefundable,
to be paid in arrears on each Monthly Date and on the Termination
Date and to be calculated, for any day, after giving effect to
any payments made under such Letter of Credit on such day). The
Administrative Agent shall pay to each Revolving Credit Lender,
from time to time at reasonable intervals (but in any event at
least monthly), but only to the extent actually received from the
Company, an amount equal to such Lender's Revolving Credit
Commitment Percentage of all such fees in respect of each Letter
of Credit (including any such fee in respect of any period of any
renewal or extension of such Letter of Credit). In addition, the
Company shall pay to the Administrative Agent for the account of
each Issuing Bank with respect to a Letter of Credit all
commissions, charges, costs and expenses in the amounts
customarily charged by such Issuing Bank from time to time in
like circumstances with respect to the issuance of such Letter of
Credit and drawings and other transactions relating thereto.
(h) The issuance of each Letter of Credit, and the
obligation of the Administrative Agent to provide the assistance
in its issuance herein described, shall be subject, in addition
to the conditions precedent set forth in Section 6, to the
conditions precedent that (i) such Letter of Credit shall be in
such form, contain such terms and support such transactions as
shall be satisfactory to the Issuing Bank with respect to such
Letter of Credit and the Administrative Agent consistent with
their respective then current practices and procedures with
respect to letters of credit of the same type and (ii) the
Company shall have executed and delivered such applications,
agreements and other instruments relating to such Letter of
Credit as such Issuing Bank shall have reasonably requested
consistent with its then current practices and procedures with
respect to letters of credit of the same type.
(i) To the extent that any Revolving Credit Lender
fails to pay any amount required to be paid pursuant to
clause (e) or (f) of this Section 2.03 when due, such Lender
shall pay interest to the Administrative Agent on such amount
from and including such due date to but excluding the date such
payment is made (i) during the period from and including such due
date to but excluding the date three Business Days thereafter, at
a rate per annum equal to the Federal Funds Rate (as in effect
from time to time) and (ii) thereafter, at a rate per annum equal
to the Federal Funds Rate (as in effect from time to time) plus
2%.
(j) The issuance of any modification or supplement to
any Letter of Credit shall be subject to the same conditions
applicable under this Section 2.03 to the issuance of new Letters
of Credit.
(k) The obligations of the Company under this
Section 2.03 shall be unconditional and absolute and shall not be
affected, modified or impaired, upon the happening at any time or
from time to time of any event, including any of the following,
whether or not with notice to or the consent of the Company:
(i) the compromise, settlement, release,
modification, amendment (whether material or otherwise) or
termination of any or all of the obligations, conditions,
covenants or agreements of any Person in respect of any of the
Basic Documents;
(ii) the occurrence, or the failure by the
Administrative Agent, the Co-Agent, any Lender or any other
Person to give notice to the Company of the occurrence, of any
Default or any default under any of the other Basic Documents;
(iii) the waiver of the payment, performance or
observance of any of the obligations, conditions, covenants or
agreements of any Person contained in any of the Basic Documents;
(iv) the extension of the time for performance
of any other obligations, covenants or agreements of any Person
under or arising out of any of the Basic Documents;
(v) the taking or the omission of any of the
actions referred to in any of the Basic Documents;
(vi) any failure, omission or delay on the part
of the Administrative Agent, the Co-Agent, any Lender, the
Company or the beneficiary of any Letter of Credit to enforce,
assert or exercise any right, remedy, power or privilege
conferred by this Agreement or any of the Basic Documents, or any
other act or acts on the part of the Administrative Agent, the
Co-Agent, any Lender, the Company or the beneficiary of any
Letter of Credit;
(vii) the voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially
all the assets of, the marshalling of assets and liabilities,
conservatorship, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement,
composition with creditors or readjustment of, or other similar
proceedings which affect, the Company or any other party to any
of the Basic Documents;
(viii) any lack of validity or enforceability of
this Agreement, any Letter of Credit or any other Basic Document,
or any allegation of invalidity or unenforceability or any
contest of such validity or enforceability;
(ix) the existence of any claim, set-off,
defense or other right which the Company may have at any time
against the Administrative Agent, the Co-Agent, any Lender or any
beneficiary or any transferee of any Letter of Credit (or any
persons or entities for whom the Lender or any such beneficiary
or transferee may be acting), or any other Person, whether in
connection with this Agreement or any of the other Basic
Documents or any of the transactions contemplated by any Basic
Document or any unrelated transaction;
(x) any statement in any certificate or any
other document presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any
such statement being untrue or inaccurate in any respect
whatsoever;
(xi) payment by an Issuing Bank under any Letter
of Credit against presentation of a demand or certificate which
does not comply with the terms of such Letter of Credit;
(xii) the release or discharge by operation of
law of the Company from the performance or observance or any
obligation, covenant or agreement contained in any of the Basic
Documents; or
any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing;
provided that nothing in this Section 2.03(k) shall preclude the
assertion by the Company of a separate claim against an Issuing
Bank for any damages which the Company proves were suffered
directly by or as a result of the gross negligence or willful
misconduct of such Issuing Bank in honoring or refusing to honor
any drawing under any Letter of Credit.
(l) Without affecting the Company's liability under
Section 11.03, the Company agrees to indemnify each of the
Issuing Banks, the Administrative Agent, the Co-Agent and the
Revolving Credit Lenders and their respective affiliates,
directors, officers, employees, attorneys and agents from, and
hold each of them harmless against, any and all losses,
liabilities, damages or expenses incurred by any of them in
connection with or by reason of any actual or threatened
investigation, litigation or other proceeding (including, in
respect of the Issuing Banks and the Administrative Agent, any
such investigations, litigation or other proceeding between the
Issuing Banks or the Administrative Agent and any Lender)
relating to (a) the execution and delivery of any Letter of
Credit; (b) the use of the proceeds of any drawing under any
Letter of Credit; or (c) the transfer or substitution of, or
payment or failure to pay under, any Letter of Credit, including
the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other
proceeding, but excluding damages, losses, liabilities or
expenses to the extent, but only to the extent, incurred by any
such Person by reason of the willful misconduct or gross
negligence of such Person in performing its respective
obligations under any Letter of Credit or this Agreement, as the
case may be. It shall not be a condition to any such
indemnification that the Issuing Banks, the Administrative Agent,
the Co-Agent or any Revolving Credit Lender shall be a party to
any such investigations, litigation or other proceeding. Nothing
in this Section 2.03 is intended to limit the Company's payment
obligations under this Agreement.
(m) The Company assumes all risks of the acts or
omissions of any beneficiary of any Letter of Credit with respect
to the use of the Letter of Credit. None of the Administrative
Agent, the Co-Agent, any Lender nor any of its affiliates,
officers, directors, employees, attorneys or agents shall be
liable or responsible for: (a) the use which may be made of the
Letter of Credit or for any acts or omissions of any beneficiary
of any Letter of Credit in connection with such Letter of Credit;
(b) the validity, sufficiency or genuineness of documents
presented to the Issuing Banks or the Administrative Agent, or of
any endorsement on such documents, even if such documents should
in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (c) payment by the Issuing Banks against
presentation of documents which vary in immaterial respects from
the terms of any Letter of Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under any Letter
of Credit.
(n) From and after the Effective Date, the Existing
Letters of Credit shall be deemed to be Letters of Credit issued
under this Agreement (including for purposes of determining
Letter of Credit Liabilities, Reimbursement Obligations and usage
of the Revolving Credit Commitment at any time and from time to
time) as of the Effective Date and the Lenders that issued such
Existing Letters of Credit shall be afforded all of the rights
and protections, and shall be subject to all of the obligations,
of an Issuing Bank under this Agreement solely with respect to
such Existing Letters of Credit (and such Lenders shall be deemed
to be the "Issuing Bank" under this Agreement with respect to
such Existing Letters of Credit). Each Revolving Credit Lender
shall participate in the Existing Letters of Credit on the same
terms and conditions on which it participates in the Letters of
Credit as set forth above in this Section 2.03.
(o) The Company agrees either (i) to provide cover for
all Letter of Credit Liabilities relating to any Existing Letter
of Credit that have not expired or been terminated on or prior to
the Termination Date by paying to the Administrative Agent, not
later than 15 days prior to the Termination Date, immediately
available funds in an amount equal to the then aggregate undrawn
face amount of each such Existing Letter of Credit, which funds
shall be held by the Administrative Agent in the Collateral
Account (as collateral security in the first instance for such
Letter of Credit Liabilities as set forth in the Security
Agreement) until such time as such Existing Letters of Credit
shall have been terminated and all of such Letter of Credit
Liabilities paid in full or (ii) to cause the termination and
surrender of any such Existing Letter of Credit not later than 15
days prior to the Termination Date.
2.04 Changes of Commitments.
(a) The aggregate amount of the Revolving Credit
Commitments shall be automatically reduced to zero on the
Termination Date.
(b) The Company shall have the right at any time or
from time to time (i) so long as no Revolving Credit Loans,
Tranche A Term Loan, Tranche B Term Loan or Letter of Credit
Liabilities are outstanding, to terminate the Revolving Credit
Commitments and (ii) to reduce the aggregate unused amount of the
Revolving Credit Commitments; provided that (x) the Company shall
give notice of each such termination or reduction as provided in
Section 4.05 and (y) each partial reduction shall be in an
aggregate amount at least equal to $1,000,000 or in any larger
multiple of $100,000.
(c) The Term Loan Commitments shall automatically
terminate at the close of business on the Effective Date.
(d) The Commitments of any Class once terminated or
reduced may not be reinstated.
2.05 Fees.
(a) The Company shall pay to the Administrative Agent
for the account of the Lenders a commitment fee on the daily
average unused amount of the aggregate Revolving Credit
Commitments of the Lenders for the period from and including the
Effective Date to but not including the earlier of the date such
Revolving Credit Commitments are terminated and the Termination
Date, at a rate per annum equal to 1/2 of 1%. Accrued commitment
fees shall be payable in arrears on each Monthly Date and on the
earlier of the date such Commitments are terminated and the
Termination Date, and shall be allocated to the Lenders as set
forth in Section 4.02.
(b) The Company shall pay to the Administrative Agent
for the account of the Lenders a facility fee on the aggregate
daily average outstanding amount of the Tranche B Term Loan for
the period from and including the Effective Date to but not
including the earlier of the date the Tranche B Term Loan is paid
in full and the Termination Date, at a rate per annum equal to
1/4 of 1%. Accrued facility fees under this Section 2.05(b)
shall be payable in arrears on each Quarterly Date and on the
earlier of the date the Tranche B Term Loan is paid in full and
the Termination Date, and shall be allocated to the Lenders as
set forth in Section 4.02.
(c) The Company shall pay to the Administrative Agent
for the account of Bank of America a facility fee on the daily
average outstanding amount of the Tranche C Term Loan for the
period from and including the Effective Date to but not including
the earlier of the date the Tranche C Term Loan is paid in full
and the Termination Date, at a rate per annum equal to 1/4 of 1%.
Such accrued facility fee under this Section 2.05(c) shall be
payable in arrears on each Quarterly Date and on the earlier of
the date the Tranche C Term Loan is paid in full and the
Termination Date.
(d) The Company shall pay to CITBC for its own account
a non-refundable structuring fee equal to $530,000, payable on
the Effective Date.
(e) The Company shall pay to Bank of America for the
account of the Lenders under the Existing Senior Credit Agreement
in accordance with their Pro Rata Shares (as defined in the
Existing Credit Agreement) a non-refundable structuring fee equal
to $525,000, payable on the Effective Date.
(f) The Company shall pay to the Administrative Agent
and the Co-Agent the agency fees provided for in Section 10.09.
2.06 Lending Offices. The Loans made by each Lender
shall be made and maintained at such Lender's Applicable Lending
Office.
2.07 Several Obligations; Remedies Independent. The
failure of any Lender to make any Loan to be made by it on the
date specified for such Loan shall not relieve any other Lender
of its obligation to make its Loan on such date, but neither any
Lender nor the Administrative Agent nor the Co-Agent shall be
responsible for the failure of any other Lender to make a Loan to
be made by such other Lender, and no Lender shall have any
obligation to the Administrative Agent, the Co-Agent or any other
Lender for the failure by such Lender to make any Loan required
to be made by such Lender. No Lender shall be entitled to take
any action to protect or enforce its rights arising out of any
Basic Document without the prior written consent of the Majority
Lenders or the Administrative Agent.
2.08 Notes and Loan Account.
(a) The Revolving Credit Loans made by each Lender
shall be evidenced by a single promissory note of the Company in
substantially the form of Exhibit A-1, dated the Effective Date,
payable to such Lender in a principal amount equal to the amount
of its Revolving Credit Commitment as originally in effect and
otherwise duly completed.
(b) The Tranche A Term Loan made by each Lender shall
be evidenced by a single promissory note of the Company in
substantially the form of Exhibit A-2, dated the Effective Date,
payable to such Lender in a principal amount equal to the amount
of its Tranche A Term Loan and otherwise duly completed.
(c) The Tranche B Term Loan made by each Lender shall
be evidenced by a single promissory note of the Company in
substantially the form of Exhibit A-3, dated the Effective Date,
payable to such Lender in a principal amount equal to the amount
of its Tranche B Term Loan and otherwise duly completed.
(d) The Tranche C Term Loan made by Bank of America
shall be evidenced by a single promissory note of the Company in
substantially the form of Exhibit A-4, dated the Effective Date,
payable to Bank of America in a principal amount equal to the
amount of its Tranche C Term Loan and otherwise duly completed.
(e) The date, amount, and interest rate of each Loan
of each Class made by each Lender to the Company, and each
payment made on account of the principal of each Loan, shall be
recorded by such Lender on its books and, prior to any transfer
of the Note evidencing the Loans of such Class held by it,
endorsed by such Lender on the schedule attached to such Note or
any continuation of such Note; provided that the failure of such
Lender to make any such recordation or endorsement shall not
affect the obligations of the Company to make a payment when due
of any amount owing under this Agreement or under such Note in
respect of the Loans to be evidenced by such Note.
(f) No Lender shall be entitled to have its Notes
subdivided, by exchange for promissory notes of lesser
denominations or otherwise, except in connection with a permitted
assignment of all or any portion of such Lender's relevant
Commitment, Loans and Notes pursuant to Section 11.06(b).
(g) The Administrative Agent will maintain a separate
account on its books in the Company's name in which the Company
will be charged with Loans made to it under this Agreement,
payments made by the Administrative Agent and the Lenders in
respect of Letters of Credit issued for the account of the
Company, and interest, fees, expenses and all other Obligations
payable by the Company under the Basic Documents; the Company
will be credited with all amounts received by the Administrative
Agent, for its own account and for the accounts of the Lenders,
from the Company or from others for the Company's account, such
amounts to be applied to the payment of the Obligations as set
forth in this Agreement and the other Basic Documents. The
Company and each Lender agrees that the Administrative Agent's
books and records showing the Obligations and the transactions
pursuant to this Agreement and the other Basic Documents shall be
admissible in any action or proceeding arising therefrom, and
shall constitute prima facie proof thereof, irrespective of
whether any Obligation is also evidenced by a promissory note or
other instrument. The Administrative Agent will provide to the
Company and each Lender a monthly statement of the Loans,
payments, issuances of and payments under Letters of Credit, and
other transactions pursuant to this Agreement. Such statement
shall be deemed correct, accurate, and binding on the Company,
absent manifest error, and as an account stated (except for
corrections of errors discovered by the Administrative Agent),
unless the Company notifies the Administrative Agent in writing
to the contrary within 30 days after such statement is delivered,
sent or mailed to the Company. In the event a timely written
notice of objections is given by the Company, only the items to
which exception is expressly made will be considered to be
disputed by the Company.
2.09 Optional Prepayments. Subject to Section 4.04,
the Company shall have the right to prepay Loans, at any time or
from time to time, provided that: (a) the Company shall give the
Administrative Agent notice of each such prepayment as provided
in Section 4.05 (and, upon the date specified in any such notice
of prepayment, the amount to be prepaid shall become due and
payable under this Agreement); (b) prepayments of the Tranche B
Term Loan shall be applied to the installments of the Tranche B
Term Loan in the direct order of their maturities; and (c) the
Tranche C Term Loan may not be prepaid in whole or in part until
all of the other Loans shall have been irrevocably repaid in
full, there shall have been irrevocably deposited in the
Collateral Account immediately available funds in an amount equal
to the aggregate undrawn face amount of all Letters of Credit
outstanding and the Commitments shall have been terminated.
2.10 Mandatory Prepayments and Reductions of
Commitments.
(a) Borrowing Base. Until the Termination Date, the
Company shall from time to time prepay the Revolving Credit Loans
(or provide cover for Letter of Credit Liabilities as specified
in clause (h) of this Section 2.10) and the Tranche A Term Loan
in such amounts as shall be necessary so that at all times the
aggregate outstanding amount of the Revolving Credit Loans and
the Tranche A Term Loan, together with the aggregate amount of
Letter of Credit Liabilities outstanding, shall not exceed the
Borrowing Base (calculated, solely for purposes of this Section
2.10(a), without deduction for any amount referred to in clause
(c) of the definition of "Borrowing Base"), such amount to be
applied: first, to the Revolving Credit Loans outstanding;
second, to the Tranche A Term Loan outstanding; and, third, as
cover for Letter of Credit Liabilities outstanding.
(b) Casualty Events. Immediately upon the receipt by
the Administrative Agent or the Company of the proceeds of
insurance, condemnation award or other compensation in respect of
any Casualty Event affecting any Property of the Company (or upon
such earlier date as the Company shall have determined not to
restore, repair or replace the Property affected by such Casualty
Event), (i) to the extent such proceeds (A) relate to Inventory,
(B) relate to collateral (other than Inventory) covered by the
Loan Documents and are less than $100,000 or (C) are proceeds of
business interruption insurance maintained by the Company, such
proceeds shall be applied to the prepayment of the Revolving
Credit Loans, then to the Tranche A Term Loan, then as cover for
outstanding Letter of Credit Liabilities, then to the Tranche B
Term Loan and then to the Tranche C Term Loan and (ii) in all
other circumstances, such proceeds shall (x) if an Event of
Default shall have occurred and be continuing at the time such
proceeds are required to be paid to or applied by the
Administrative Agent, be applied to the prepayment of the Loans
(or provide cover for Letter of Credit Liabilities as specified
in clause (h) of this Section 2.10), and the Commitments shall be
subject to automatic reduction (whether or not such prepayment is
actually made), in an aggregate amount, if any, equal to 100% of
the Net Available Proceeds of such Casualty Event not previously
applied to the restoration, repair or replacement of such
Property, such prepayment and reduction to be effected in each
case in the manner and to the extent specified in clause (g) of
this Section 2.10 and (y) if no Event of Default shall have
occurred and be continuing at the time such proceeds are required
to be paid to or applied by the Administrative Agent, such
proceeds shall be applied as provided in Section 2.11. Nothing
in this clause (b) shall be deemed to limit any obligation of the
Company pursuant to any of the Security Documents to remit to a
collateral or similar account (including the Collateral Account)
maintained by the Administrative Agent pursuant to any of the
Security Documents the proceeds of insurance, condemnation award
or other compensation received in respect of any Casualty Event.
(c) New Debt. Promptly upon receipt of the proceeds
of any Indebtedness permitted pursuant to Section 8.07 (other
than Indebtedness permitted pursuant to clauses (a), (b), (c) or
(d) of such Section), the Company shall prepay the Loans (or
provide cover for Letter of Credit Liabilities as specified in
clause (h) of this Section 2.10), and the Commitments shall be
subject to automatic reduction (whether or not such prepayment is
actually made), in an aggregate amount equal to 100% of the Net
Available Proceeds of such Indebtedness, such prepayment and
reduction to be effected in each case in the manner and to the
extent specified in clause (g) of this Section 2.10.
(d) Equity Issuance. Immediately upon receipt of the
proceeds of any Equity Issuance, the Company shall prepay the
Loans (or provide cover for Letter of Credit Liabilities as
specified in clause (h) of this Section 2.10), and the
Commitments shall be subject to automatic reduction (whether or
not such prepayment is actually made), in an aggregate amount
equal to 75% of the Net Available Proceeds of such Equity
Issuance, such prepayment and reduction to be effected in each
case in the manner and to the extent specified in clause (g) of
this Section 2.10.
(e) Excess Cash Flow. Not later than the date 90 days
after the end of each fiscal year of the Company ending after the
Effective Date, the Company shall prepay the Loans (or provide
cover for Letter of Credit Liabilities as specified in clause (h)
of this Section 2.10) in an aggregate amount equal to the excess
of (A) 75% of Excess Cash Flow for such fiscal year (or, in the
case of the fiscal year in which the Effective Date occurs, the
period (the "First Period") from the Effective Date to the end of
such fiscal year) over (B) the sum of (i) $2,000,000 (or
$1,200,000 for the First Period) and (ii) the aggregate amount of
prepayments of Term Loans made during such fiscal year or First
Period, as the case may be, pursuant to Section 2.09 and, after
the payment in full of the Term Loans, the aggregate amount of
voluntary reductions of Revolving Credit Commitments made during
such fiscal year or First Period, as the case may be, pursuant to
Section 2.04(b), such prepayment to be effected in each case in
the manner and to the extent specified in clause (g) of this
Section 2.10.
(f) Sale of Assets. Without limiting the obligation of
the Company to obtain the consent of the Majority Lenders
pursuant to Section 8.05 to any Disposition not otherwise
permitted under the Basic Documents, no later than five Business
Days prior to the occurrence of any such Disposition which (when
taken together with all prior Dispositions during the then
current fiscal year of the Company) would result in the receipt
by the Company of Net Available Proceeds of at least $50,000, the
Company will deliver to the Lenders a statement, certified by the
chief financial or accounting officer of the Company, in form and
detail reasonably satisfactory to the Administrative Agent, of
the amount of the Net Available Proceeds of such Disposition and,
to the extent such Net Available Proceeds (when taken together
with the Net Available Proceeds of all prior Dispositions during
the then current fiscal year of the Company as to which a
prepayment has not yet been made under this Section 2.10(f))
shall exceed $500,000, the Company shall prepay the Loans (or
provide cover for Letter of Credit Liabilities as specified in
clause (h) below), and the Commitments shall be subject to
automatic reduction (whether or not such prepayment is actually
made), in an aggregate amount equal to the excess of (i) 100% of
the Net Available Proceeds of such Disposition (together with
100% of the Net Available Proceeds of all prior Dispositions
during the then current fiscal year as to which a prepayment has
not yet been made under this Section 2.10(f)) over (ii) $500,000,
such prepayment and reduction to be effected in each case in the
manner and to the extent specified in clause (g) of this
Section 2.10; provided that, if the Company shall have notified
the Administrative Agent in writing prior to the date of such
Disposition that the Company intends to replace the assets
subject to such Disposition with similar assets for use in the
Company's operations within twelve (12) months after the date of
such Disposition, the required prepayment shall be applied first
to the Revolving Credit Loans outstanding, second to the Tranche
A Term Loan outstanding, and third as cover for Letter of Credit
Liabilities outstanding; provided further, however, that if the
assets subject to such Disposition are not so replaced within
such twelve-month period, the required prepayment shall thereupon
be applied and the Commitments shall be reduced as set forth in
clause (g) of this Section 2.10 (and the Company agrees to make
any prepayments necessary in connection with such application and
reduction).
(g) Application. Prepayments and reductions of
Commitments described in this Section 2.10 (other than in
clause (a) above and other than as set forth in clauses (b) and
(f) above) shall be effected as follows:
(i) first, the amount of the prepayment specified
in such clauses shall be applied to the Tranche B Term Loan in
the inverse order of the maturities of the installments of the
Tranche B Term Loan then outstanding;
(ii) second, any excess over the amount referred
to in the foregoing clause (i) shall be applied pro rata in
accordance with the respective amounts outstanding to: (A) the
Revolving Credit Loans, Letter of Credit Liabilities and the
Tranche A Term Loan then outstanding (with the amount of the
prepayment applied to this clause (A) to be applied to such Loans
and Letter of Credit Liabilities as the Company may direct in
writing to the Administrative Agent and, in the absence of such
direction, first to the Revolving Credit Loans outstanding,
second to the Tranche A Term Loan outstanding and third to
provide cover for Letter of Credit Liabilities as specified in
clause (h) of this Section 2.10); and (B) the Tranche C Term Loan
then outstanding; and
(iii) third, the Revolving Credit Commitments
shall (other than in connection with prepayments of the Revolving
Credit Loans pursuant to clause (e) above) be automatically
reduced by an amount equal to the amount of the prepayment
required to be applied to the Revolving Credit Loans and Letter
of Credit Liabilities as set forth in clause (ii)(A) above (and
to the extent that, after giving effect to such reduction, the
aggregate principal amount of Revolving Credit Loans, together
with the aggregate amount of all Letter of Credit Liabilities,
would exceed the Revolving Credit Commitments, the Company shall,
first, prepay Revolving Credit Loans and, second, provide cover
for Letter of Credit Liabilities as specified in clause (h) of
this Section 2.10, in an aggregate amount equal to such excess).
(h) Cover for Letter of Credit Liabilities. In the
event that the Company shall be required pursuant to this
Section 2.10 to provide cover for Letter of Credit Liabilities,
the Company shall effect the same by paying to the Administrative
Agent immediately available funds in an amount equal to the
required amount, which funds shall be retained by the
Administrative Agent in the Collateral Account (as collateral
security in the first instance for the Letter of Credit
Liabilities as set forth in the Security Agreement) until such
time as the Letters of Credit shall have been terminated and all
of the Letter of Credit Liabilities paid in full.
2.11 Casualty Proceeds. (a) So long as no Event of
Default shall have occurred and be continuing and the proceeds
received by (or required to be delivered to) the Administrative
Agent in respect of a Casualty Event (other than proceeds of
business interruption insurance which shall be applied as set
forth in Section 2.10(b)) affecting any Property of the Company
(other than in respect of Inventory) shall exceed $100,000, the
Company may elect (by delivering written notice to the
Administrative Agent) to use such proceeds to replace, repair or
restore such Property to substantially the equivalent condition
prior to such Casualty Event. If the Company does not elect to
use or is not entitled to use such proceeds as set forth above,
then such proceeds shall be applied as provided in Section
2.10(b).
(b) If the Company properly elects to use proceeds of
a Casualty Event for the repair, replacement or restoration of
Property as provided in subsection (a) above and so long as no
Event of Default shall then exist and be continuing, (i) such
proceeds shall be applied to the reduction of the Revolving
Credit Loans, (ii) the Administrative Agent shall set up a
reserve against availability under the Revolving Credit
Commitment equal to such proceeds and (iii) subject to all of the
terms and conditions set forth herein, including those set forth
in this Section 2.11, the Company may request Revolving Credit
Loans for the purpose of such repair, replacement or restoration.
The reserve against availability shall be reduced dollar-for-
dollar as Revolving Credit Loans are made therefor and, as a
condition to the making of such Revolving Credit Loans, the
Administrative Agent may require the delivery to it of executed
purchase orders, delivery receipts or other evidence of such
repair, replacement or restoration. Prior to the commencement of
any such repair, replacement or restoration, the Company shall
provide the Administrative Agent with a plan and total budget
therefor which, in the case of real property repair or
restoration, shall (unless otherwise agreed by the Administrative
Agent) be certified by an experienced independent third party
acceptable to the Administrative Agent (the cost of which shall
be paid by the Company). If there are insufficient proceeds in
respect of such Casualty Event to cover the cost of such repair,
replacement or restoration, the Company shall be responsible for
the amount of any such insufficiency (which can be, subject to
the terms and conditions hereof, from proceeds from the Revolving
Credit Loans).
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans.
(a) The Company hereby promises to pay to the
Administrative Agent for the account of each Lender the entire
outstanding principal amount of such Lender's Revolving Credit
Loans, and each Revolving Credit Loan shall mature, on the
Termination Date.
(b) The Company hereby promises to pay to the
Administrative Agent for the account of each Lender the entire
outstanding principal amount of such Lender's Tranche A Term
Loan, and such Lender's Tranche A Term Loan shall mature, on the
Termination Date.
(c) The Company hereby promises to pay to the
Administrative Agent for the account of each Lender the principal
of such Lender's Tranche B Term Loan in 12 consecutive quarterly
installments payable on the Principal Payment Dates (other than
the Termination Date) and on the Termination Date as follows:
Principal Payment Date Amount of Installment ($)
Each Principal Payment
Date (other than the
Termination Date) $ 1,750,000.00
Termination Date $13,048,871.42
(d) The Company hereby promises to pay to the
Administrative Agent for the account of Bank of America the
entire outstanding principal amount of its Tranche C Term Loan,
and such Tranche C Term Loan shall mature, on the Termination
Date.
3.02 Interest. The Company hereby promises to pay to
the Administrative Agent for the account of the Lenders interest
on the unpaid principal amount of Loans made by the Lenders for
the period from and including the date of such Loans to but
excluding the date such Loans shall be paid in full, at a rate
per annum equal to the Base Rate (as in effect from time to time)
plus the Applicable Margin. Notwithstanding the foregoing, the
Company hereby promises to pay to the Administrative Agent for
the account of the Lenders interest at the applicable
Post-Default Rate on (a) any Obligations (including the principal
of any Loan) held by the Lenders which shall not be paid in full
when due (whether at stated maturity, by acceleration, by
mandatory prepayment or otherwise) for the period from and
including the due date of any such Obligation to but excluding
the date such Obligations are paid in full and (b) all of the
Obligations outstanding upon the occurrence and during the
continuance of an Event of Default. Accrued interest on each
Loan shall be payable (i) monthly on the Monthly Dates, and (ii)
upon the payment or prepayment of such Loan (but only on the
principal amount so paid or prepaid), except that interest
payable at the Post-Default Rate shall be payable from time to
time on demand and otherwise on the Monthly Dates. Promptly
after the determination of any interest rate provided for in this
Agreement or any change in any such interest rate, the
Administrative Agent shall give notice of the same to the Lenders
to which such interest is payable and to the Company. Accrued
interest shall be allocated to the Lenders as set forth in
Section 4.02.
Section 4. Payments; Pro Rata Treatment; Computations;
Etc.
4.01 Payments.
(a) Except to the extent otherwise provided in this
Agreement, all payments of any Obligations, except to the extent
otherwise provided in any other Basic Document, shall be made in
Dollars, in immediately available funds, without deduction,
set-off or counterclaim, to the Administrative Agent at account
number 144054227 maintained by the Administrative Agent with
Chemical Bank at the Principal Office (or such other account as
the Administrative Agent shall have designated in writing to the
Company), not later than 10:00 a.m. Los Angeles time on the date
on which such payment shall become due (each such payment made
after such time on such due date to be deemed to have been made
on the next succeeding Business Day).
(b) Except to the extent otherwise provided in clause
(f) below, all moneys that the Administrative Agent receives from
or on behalf of the Company (including moneys received by the
Administrative Agent pursuant to the Blocked Account Agreement)
shall be deemed to be payments by the Company under this
Agreement. The Company shall, at the time of making each payment
under this Agreement of any Obligation for the account of any
Lender, specify to the Administrative Agent (which shall so
notify each intended recipient) to which Obligation such payment
is to be applied (and in the event that the Company fails to so
specify, or if an Event of Default has occurred and is
continuing, the Administrative Agent shall (subject to Section
2.02(d)) distribute such payment to the Lenders for application:
(a) first, to the Revolving Credit Loans outstanding; second, to
the Tranche A Term Loan outstanding; and third, as cover for
Letter of Credit Liabilities; and (b) otherwise in such manner as
it or the Majority Lenders, subject in each case to Section 4.02,
may determine to be appropriate).
(c) Each payment received by the Administrative Agent
under this Agreement of any Obligation for the account of any
Lender shall (subject to Section 2.02(d)) be paid by the
Administrative Agent promptly to such Lender, in immediately
available funds, for the account of such Lender's Applicable
Lending Office for the Loan or other Obligation in respect of
which such payment is made.
(d) If the due date of any payment of any Obligation
would otherwise fall on a day that is not a Business Day, such
date shall be extended to the next succeeding Business Day, and
interest shall be payable for any principal so extended for the
period of such extension.
(e) The Company hereby authorizes the Administrative
Agent to charge the Company's loan account referred to in
Section 2.08(g) with the amount of all Obligations due hereunder
as such payment becomes due. In furtherance of the foregoing,
the Administrative Agent shall have the right (but not the
obligation) to cause Revolving Credit Loans to be made at any
time (subject only to availability of the Revolving Credit
Commitments) to pay any such Obligations when due.
(f) Moneys in the Blocked Account shall be
transferred to the Administrative Agent to the account specified
in paragraph 3 of the Blocked Account Agreement (the "Collection
Account") in accordance with the terms of such Blocked Account
Agreement. On each Business Day on which no Event of Default of
which the Administrative Agent has actual knowledge shall have
occurred and be continuing, moneys on deposit in the Collection
Account shall be withdrawn by the Administrative Agent and (i)
deposited to the Special Collateral Account referred to below in
an amount which, when taken together with all other amounts on
deposit therein after giving effect to any requested
disbursements from such account on such day, does not exceed the
lesser of $5,000,000 and the amount specified by the Company for
the Special Collateral Account as of the end of such day, and
(ii) to the extent that the amount available for deposit from the
Collection Account to the Special Collateral Account on any day
would cause the balance therein (after giving effect to any
requested disbursements from such account on such day) to exceed
such lesser amount, such excess shall be withdrawn by the
Administrative Agent and deposited into the account referred to
in clause (a) of this Section 4.01 and then applied to the
Obligations as set forth in clause (b) of this Section 4.01. If
an Event of Default of which the Administrative Agent has actual
knowledge shall have occurred and be continuing on any day, no
moneys shall be deposited to the Special Collateral Account on
such day and any and all moneys received from the Blocked Account
on such day, together with any and all moneys then on deposit in
the Special Collateral Account, shall be withdrawn by the
Administrative Agent and deposited into the account referred to
in clause (a) of this Section 4.01 and then applied to the
Obligations as set forth in clause (b) of this Section 4.01. The
Administrative Agent shall establish an account (the "Special
Collateral Account") by and in the name of the Administrative
Agent with Chemical Bank at the Principal Office (or such other
account as the Administrative Agent shall designate from time to
time) for the sole purpose of holding certain cash proceeds of
Collateral and earnings thereon in which a security interest has
been created under the Security Documents, which Special
Collateral Account shall be under the sole and absolute dominion
and control of the Administrative Agent for the benefit of the
Lenders, the Administrative Agent and the Co-Agent and shall be
subject to no Liens other than the Lien of the Security
Documents. Amounts on deposit in the Special Collateral Account
on any day that are not subject to withdrawal and deposit into
the account referred to in clause (a) of this Section 4.01 for
application to the Obligations as set forth above shall be made
available by the Administrative Agent to the Company upon its
request therefor for the same purposes that, and on the same
terms and subject to the same conditions on which, Revolving
Credit Loans may be borrowed by the Company under this Agreement
(including the giving and timing of notices requesting
disbursements and satisfaction of the conditions precedent
specified in Section 6.02), it being understood and agreed by the
Company that amounts on deposit in the Special Collateral Account
shall be disbursed only to the extent that the Company would, at
the time of any such disbursement, be permitted to make a
borrowing of Revolving Credit Loans in the amount of such
disbursement. The Special Collateral Account shall be an
interest bearing deposit account and amounts on deposit therein
shall bear interest at market rates set from time to time by
Chemical Bank (or such other financial institution at which the
Special Collateral Account shall be held) for like accounts;
except as set forth in this sentence, amounts on deposit in the
Special Collateral Account shall not be invested.
4.02 Pro Rata Treatment. Except to the extent
otherwise provided in this Agreement: (a) the making of Loans of
a particular Class shall be made pro rata among the relevant
Lenders according to the amounts of their respective Commitments
of such Class (subject to the right of the Administrative Agent
to require the Revolving Credit Lenders to fund their interest in
Revolving Credit Loans at a date later than the borrowing date of
such Loans as provided in Section 2.02(d)); and (b) each payment
on account of any Obligations to or for the account of one or
more of the Lenders in respect of any Obligations due on a
particular day (or, if such day is not a Business Day, the next
succeeding Business Day) shall be entitled to priority over
payments in respect of Obligations not then due and shall be
allocated among the Lenders entitled to such payments (after
appropriate adjustment by the Administrative Agent for Revolving
Credit Loans funded by or repaid to the Lenders on a date later
than the date such Loans were made available to or repaid by the
Company) pro rata in accordance with the respective amounts due
and payable to such Lenders on such day (or Business Day) and
shall be distributed accordingly. For the purpose of allocating
interest and fees among the Lenders under this Agreement, such
interest and fees shall be deemed to accrue to each Lender on
each day based upon Loans that have actually been funded by such
Lender and are outstanding of such day. Nothing in this Section
4.02 shall be deemed to prevent, except in the case of shortfall,
the differential indemnity and other amounts owing to or for the
account of a particular Lender or Lenders pursuant to any
provisions of any Basic Document which, by their terms, require
differential payments.
4.03 Computations. Interest payable in respect of the
Loans and all fees provided for in this Agreement shall be
computed on the basis of a year of 360 days and the actual number
of days elapsed (including the first day but excluding the last
day) occurring in the period for which payable.
4.04 Minimum Amounts. Subject to the other terms and
conditions of this Agreement, borrowings and prepayments are not
required to be made in any minimum Dollar amounts.
4.05 Certain Notices. Notices by the Company to the
Administrative Agent of terminations or reductions of the
Commitments, of borrowings and optional prepayments of Loans and
of Classes of Loans shall be irrevocable and shall be effective
only if received by the Administrative Agent not later than
9:30 a.m. Los Angeles time on the same Business Day or the number
of Business Days prior to the date of the relevant termination,
reduction, borrowing or prepayment as specified below:
Number of
Business
Notice Days Prior
Termination or reduction
of Commitments 3
Borrowing of Loans and same day
optional prepayments of
Revolving Credit Loans
Optional Prepayment of Loans 3
(other than Revolving Credit Loans)
Each such notice of termination or reduction shall specify the
amount and the Class of the Commitments to be terminated or
reduced. Each such notice of borrowing or optional prepayment
shall specify the Class of Loans to be borrowed or prepaid and
the amount (subject to Section 4.04) of each Loan to be borrowed
or prepaid and the date of borrowing or optional prepayment
(which shall be a Business Day). The Administrative Agent shall
promptly notify the Lenders of the contents of any such notices
received by it except that, at the Administrative Agent's option,
notice of the borrowings and optional prepayments of Revolving
Credit Loans may be summarized periodically (but no less
frequently than weekly).
4.06 Non-Receipt of Funds by the Administrative Agent.
Unless the Administrative Agent shall have been notified by a
Lender or the Company (the "Payor") prior to the date on which
the Payor is to make payment to the Administrative Agent of (in
the case of a Lender) the proceeds of a Loan to be made by such
Lender, or a participation in a Letter of Credit drawing to be
acquired by such Lender, under this Agreement or (in the case of
the Company) a payment to the Administrative Agent for the
account of one or more of the Lenders (the "Required Payment"),
which notice shall be effective upon receipt, that the Payor does
not intend to make the Required Payment to the Administrative
Agent, the Administrative Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount of such payment
available to the intended recipient on such date; and, if the
Payor has not in fact made the Required Payment to the
Administrative Agent, the recipient or recipients of such payment
shall, on demand, repay to the Administrative Agent the amount so
made available together with interest on such amount in respect
of each day during the period commencing on the date (the
"Advance Date") such amount was so made available by the
Administrative Agent until the date the Administrative Agent
recovers such amount at a rate per annum equal to (x) if the
recipient is the Company, the rate applicable to Revolving Loans
on such day and (y) if the recipient is a Lender, the Federal
Funds Rate for such day and, if such recipient or recipients
shall fail within two Business Days to make such payment, the
Administrative Agent shall be entitled to recover such amount, on
demand, from the Payor, together with interest on such amount for
each day during the period commencing on the Advance Date until
the date the Administrative Agent recovers such amount at a rate
per annum equal to (i) if the Payor is the Company, the Post-
Default Rate and (ii) if the Payor is a Lender, the Federal Funds
Rate for such day plus 2%.
4.07 Sharing of Payments, Etc.
(a) The Company agrees that, in addition to (and
without limitation of) any right of set-off, banker's lien or
counterclaim a Lender may otherwise have, each Lender shall be
entitled, at its option but only with the prior consent of the
Administrative Agent, to offset balances held by it for the
account of the Company at any of its offices, in Dollars or in
any other currency, against any Obligations of the Company to
such Lender that are not paid when due (regardless of whether
such balances are then due to the Company). Any Lender so
entitled shall promptly notify the Company and the Administrative
Agent of any offset effected by it, provided that such Lender's
failure to give such notice shall not affect the validity of such
offset.
(b) If any Lender shall obtain from the Company
payment of any Obligation through the exercise of any right of
set-off, banker's lien or counterclaim or similar right or
otherwise (other than from the Administrative Agent as provided
in this Agreement), and, as a result of such payment, such Lender
shall have received a greater amount of the Obligations than the
amount allocable to such Lender under Section 4.02, it shall
promptly purchase from such other Lenders participations in (or,
if and to the extent specified by such Lender, direct interests
in) such Obligations owing to such other Lenders in such amounts,
and make such other adjustments from time to time as shall be
equitable, to the end that all the Lenders shall share the
benefit of such excess payment (net of any expenses that may be
incurred by such Lender in obtaining or preserving such excess
payment) pro rata in accordance with the unpaid Obligations owing
to each of the Lenders, provided that if at the time of such
payment the outstanding principal amount of the Loans of any
Class shall not be held by the Lenders pro rata in accordance
with their respective Commitments of such Class in effect at the
time such Loans were made (by reason of a failure of a Lender to
make a Loan under this Agreement in the circumstances described
in the last paragraph of Section 11.04), then such purchases of
participations or direct interests shall be made in such manner
as will result, as nearly as is practicable, in the outstanding
principal amount of the Loans being held by the Lenders pro rata
according to the amounts of such Commitments. To such end all
the Lenders shall make appropriate adjustments among themselves
(by the resale of participations sold or otherwise) if such
payment is rescinded or must otherwise be restored.
(c) The Company agrees that any Lender so purchasing
such a participation (or direct interest) may exercise all rights
of set-off, banker's lien, counterclaim or similar rights with
respect to such participation as fully as if such Lender were a
direct holder of Loans or other amounts (as the case may be)
owing to such Lender in the amount of such participation.
(d) Nothing contained in this Section 4.07 shall
require any Lender to exercise any such right or shall affect the
right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness
or obligation of the Company. If, under any applicable
bankruptcy, insolvency or other similar law, any Lender receives
a secured claim in lieu of a set-off to which this Section 4.07
applies, such Lender shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this
Section 4.07 to share in the benefits of any recovery on such
secured claim.
Section 5. Yield Protection, Etc.
5.01 Additional Costs.
(a) The Company shall pay directly to each Lender from
time to time on demand such amounts as such Lender may determine
to be necessary to compensate such Lender (or, without
duplication, the bank holding company of which such Lender is a
subsidiary) for any costs that it determines are attributable to
the maintenance by such Lender (or any Applicable Lending Office
or such bank holding company), pursuant to any Governmental Rule
(i) following any Regulatory Change or (ii) implementing any
risk-based capital guideline or other requirement (whether or not
having the force of law and whether or not the failure to comply
would be unlawful) issued by any government or governmental or
supervisory authority implementing at the national level the
Basle Accord (including the Final Risk-Based Capital Guidelines
of the Board of Governors of the Federal Reserve System
(12 C.F.R. Part 208, Appendix A; 12 C.F.R. Part 225, Appendix A)
and the Final Risk-Based Capital Guidelines of the Office of the
Comptroller of the Currency (12 C.F.R. Part 3, Appendix A)), of
capital in respect of its Commitments or Loans (such compensation
to include an amount equal to any reduction of the rate of return
on assets or equity of such Lender (or any Applicable Lending
Office or such bank holding company) to a level below that which
such Lender (or any Applicable Lending Office or such bank
holding company) could have achieved but for such Governmental
Rule.
(b) Each Lender shall notify the Company of any event
occurring after the date of this Agreement entitling such Lender
to compensation under paragraph (a) of this Section 5.01 as
promptly as practicable, but in any event within 180 days, after
such Lender obtains actual knowledge of such event; provided that
if any Lender fails to give such notice within 180 days after it
obtains actual knowledge of such event, such Lender shall, with
respect to compensation payable pursuant to this Section 5.01 in
respect of any costs resulting from such event, only be entitled
to payment under this Section 5.01 for costs incurred from and
after the date 180 days prior to the date that such Lender does
give such notice. Each Lender will furnish to the Company a
certificate setting forth the basis and amount of each request by
such Lender for compensation under paragraph (a) of this
Section 5.01. Determinations and allocations by any Lender for
purposes of this Section 5.01 of the effect of capital maintained
pursuant to paragraph (a) of this Section 5.01, on its costs or
rate of return of maintaining Loans or its obligation to make
Loans, or on amounts receivable by it in respect of Loans, and of
the amounts required to compensate such Lender under this
Section 5.01, shall be conclusive absent manifest error, provided
that such determinations and allocations are made on a reasonable
basis.
5.02 Certain Protections in Respect of Letters of
Credit.
(a) Without limiting the obligations of the Company
under Section 5.01 (but without duplication), if, as a result of
any Regulatory Change or any risk-based capital guideline or
other Governmental Rule implementing at the national level the
Basle Accord, there shall be imposed, modified or deemed
applicable any tax, reserve, special deposit, capital adequacy or
similar requirement against or with respect to or measured by
reference to Letters of Credit issued or to be issued under this
Agreement and the result shall be to increase the cost to the
Administrative Agent or any Lender or Lenders of issuing (or
purchasing participations in) or maintaining its or their
obligation to issue (or purchase participations in or, in the
case of the Administrative Agent, becoming a guarantor of) any
Letter of Credit or reduce any amount receivable by the
Administrative Agent or any Lender in respect of any Letter of
Credit (which increases in cost, or reductions in amount
receivable, shall be the result of Administrative Agent's or such
Lender's or Lenders' reasonable allocation of the aggregate of
such increases or reductions resulting from such event), then,
upon demand by the Administrative Agent or such Lender or Lenders
(through the Administrative Agent), the Company shall pay
immediately to the Administrative Agent for the account of the
Administrative Agent or such Lender or Lenders, from time to time
as specified by the Administrative Agent or such Lender or
Lenders (through the Administrative Agent), such additional
amounts as shall be sufficient to compensate the Administrative
Agent or such Lender or Lenders (through the Administrative
Agent) for such increased costs or reductions in amount. A
statement as to such increased costs or reductions in amount
incurred by the Administrative Agent or any such Lender or
Lenders, submitted by such Lender or Lenders to the Company,
shall be conclusive in the absence of manifest error as to such
amount.
(b) Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful or, by reason of
any Regulatory Change, impossible for the Administrative Agent to
guarantee or any Lender to issue (or to participate in) any
Letter of Credit, then the Administrative Agent or such Lender
shall promptly notify the Company of such event (with a copy to
the Administrative Agent) and the Administrative Agent's
obligation to assist in the issuance by way of guarantee or the
Lenders' obligation to issue (or participate in) any Letter of
Credit shall be suspended until such time as each Lender may
again issue (or participate in) Letters of Credit.
5.03 Taxes.
(a) The Company agrees to pay to each Lender such
additional amounts as are necessary in order that the net payment
of any Obligation due to such Lender after deduction for or
withholding in respect of any Tax imposed with respect to such
payment (or for payment of such Tax by such Lender), will not be
less than the amount of the Obligation then due and payable,
provided that the foregoing obligation to pay such additional
amounts shall not apply:
(i) to any payment to a Lender that is not a U.S.
Person unless such Lender is, on the Effective Date (or on the
date it becomes a Lender as provided in Section 11.06(b)) and on
the date of any change in the Applicable Lending Office of such
Lender, either entitled to submit a Form 1001 (relating to such
Lender and entitling it to a complete exemption from withholding
on all interest to be received by it under this Agreement and the
Notes in respect of the Loans) or Form 4224 (relating to all
interest to be received by such Lender under this Agreement in
respect of the Loans) (and in that regard each such non-U.S.
Person shall on such date deliver to the Administrative Agent and
the Company duplicate such Forms 1001 or 4224, as appropriate),
or
(ii) to any Tax imposed solely by reason of the
failure by such non-U.S. Person to comply with applicable
certification, information, documentation or other reporting
requirements concerning the nationality, residence, identity or
connections with the United States of America of such
non-U.S. Person if such compliance is required by statute or
regulation of the United States of America as a precondition to
relief or exemption from such Tax.
For the purposes of this Section 5.03(a), (w) "Form 1001" shall
mean Form 1001 (Ownership, Exemption, or Reduced Rate
Certificate) of the Department of the Treasury of the United
States of America, (x) "Form 4224" shall mean Form 4224
(Exemption from Withholding of Tax on Income Effectively
Connected with the Conduct of a Trade or Business in the United
States) of the Department of the Treasury of the United States of
America (or in relation to either such Form such successor and
related forms as may from time to time be adopted by the relevant
taxing authorities of the United States of America to document a
claim of the kind to which such Form relates), (y) "U.S. Person"
shall mean a citizen, national or resident of the United States
of America, a corporation, partnership or other entity created or
organized in or under any laws of the United States of America,
or any estate or trust that is subject to Federal income taxation
regardless of the source of its income and (z) "Taxes" shall mean
any present or future tax (including any recurring or
nonrecurring intangible personal property taxes that may be
payable to the State of Florida), assessment or other charge or
levy imposed by or on behalf of any Governmental Person (other
than taxes imposed on or measured by the overall net income of
any Lender or of its Applicable Lending Office by the
jurisdiction in which such Lender has its principal office or any
Applicable Lending Office).
(b) Within 30 days after paying any amount to the
Administrative Agent or any Lender from which it is required by
law to make any deduction or withholding, and within 30 days
after it is required by law to remit such deduction or
withholding to any relevant taxing or other authority, the
Company shall deliver to the Administrative Agent for delivery to
such non-U.S. Person evidence satisfactory to such Person of such
deduction, withholding or payment (as the case may be).
Section 6. Conditions Precedent.
6.01 Initial Extension of Credit. The obligation of
each Lender to make its initial extension of credit under this
Agreement (whether by making a Loan or issuing a Letter of
Credit) is subject to (i) the condition precedent that such
extension of credit shall be made on or before December 31, 1994
and (ii) the receipt by the Administrative Agent (in sufficient
copies for each Lender) of the following documents, each of which
shall be satisfactory to the Administrative Agent and the Co-
Agent (and to the extent specified below, to each Lender) in form
and substance:
(a) Corporate Documents. The following documents,
each certified as indicated below:
(i) a copy of the Company's charter, as amended
and in effect, certified as of a recent date, subsequent to the
date of the Confirmation Order, by the Secretary of State of its
jurisdiction of incorporation, and such evidence from such
Governmental Persons as to the good standing of and information
regarding such charter filed by the Company as the Administrative
Agent may reasonably request;
(ii) a certificate of the Secretary or an
Assistant Secretary of the Company, dated the Effective Date and
certifying (A) that attached to such certificate is a true and
complete copy of the by-laws of the Company as amended and in
effect at all times from the date on which the resolutions
referred to in clause (B) were adopted to and including the date
of such certificate, (B) that attached to such certificate is a
true and complete copy of resolutions duly adopted by the board
of directors of the Company authorizing the execution, delivery
and performance of such of the Basic Documents to which the
Company is or is intended to be a party and the extensions of
credit under this Agreement, and that such resolutions have not
been modified, rescinded or amended and are in full force and
effect, (C) that the charter of the Company has not been amended
since the date of the certification furnished pursuant to
clause (i) above, and (D) as to the incumbency and specimen
signature of each officer of the Company executing such of the
Basic Documents to which the Company is or is intended to be a
party and each other document to be delivered by the Company from
time to time in connection with any Basic Document (and the
Administrative Agent, the Co-Agent and each Lender may
conclusively rely on such certificate until the Administrative
Agent receives notice in writing from the Company ); and
(iii) a certificate of another officer of the
Company as to the incumbency and specimen signature of the
Secretary or Assistant Secretary, as the case may be, of the
Company.
(b) Officer's Certificate. A certificate of a senior
officer of the Company, dated the Effective Date, to the effect
set forth in the first sentence of Section 6.02.
(c) Borrowing Base Certificate. A Borrowing Base
Certificate as of a date not more than 5 days prior to the
Effective Date.
(d) Opinions of Counsel to the Company. An opinion,
dated the Effective Date, of (i) Kramer, Levin, Naftalis, Nessen,
Kamin & Frankel, counsel to the Company, in substantially the
form of Exhibit E-1 and (ii) Barnett, Bolt, Kirkwood & Long,
special Florida counsel to the Company, in substantially the form
of Exhibit E-2; and, in each case, covering such other matters as
the Administrative Agent, the Co-Agent or any Lender may
reasonably request (and the Company hereby instructs such counsel
to deliver such opinions to the Lenders, the Administrative Agent
and the Co-Agent).
(e) Opinion of Special Counsel to the Administrative
Agent. An opinion, dated the Effective Date, of (i) Orrick,
Herrington & Sutcliffe, special counsel to the Administrative
Agent, in substantially the form of Exhibit F-1 and (ii) Coll
Davidson Carter Smith Salter & Barkett, P.A., special Florida
counsel to the Administrative Agent, in substantially the form of
Exhibit F-2.
(f) Notes. The Notes, duly completed and executed.
(g) Security Agreements. The Security Agreement, the
Blocked Account Agreement and the Patent and Trademark
Assignments duly executed and delivered by the Company, the
Administrative Agent (in the case of the Security Agreement and
the Blocked Account Agreement) and Barnett Bank of Tampa (in the
case of the Blocked Account Agreement). In addition, the Company
shall have (i) taken such other action (including filing
appropriately completed and duly executed copies of Uniform
Commercial Code financing statements together with payment of all
fees in connection therewith) as any such Security Document shall
specify or as the Administrative Agent shall have requested in
order to create, perfect and establish the priority (subject only
to Liens permitted by Section 8.06) of the Liens granted by the
Security Agreement (and the Company shall have delivered to the
Administrative Agent Uniform Commercial Code searches certified
by the appropriate filing officer evidencing the first priority
Liens of the Administrative Agent in the Property in which the
Administrative Agent has been granted a security interest under
the Security Agreement), (ii) to the extent the Company has
rights in patents and trademarks, filed the Patent and Trademark
Assignments with any appropriate Governmental Person and paid all
fees in connection therewith and (iii) delivered to the
Administrative Agent (A) estoppel certificates from each landlord
of any premises on which the Company conducts its business and
that is held under ground lease by the Company and
(B) acknowledgements from each public warehouse in which
Inventory is stored consenting to the security interest of the
Administrative Agent for the benefit of itself and the Lenders in
such Inventory and any related original negotiable warehouseman's
receipts duly endorsed by the Company to the order of the
Administrative Agent.
(h) Mortgage and Title Insurance. The Mortgage, duly
executed and delivered (and, where appropriate, acknowledged) by
the Company, together with:
(A) evidence that the Mortgage has been duly
recorded in the appropriate recorder's office in, respectively,
each county in Florida in which the Company owns or leases real
property, which Mortgage shall cover the Company's interest in
each such property (excluding real properties that may not be
encumbered without the express consent of prior mortgagees or
landlords, except to the extent such consent has been obtained as
of the Effective Date);
(B) one or more ALTA extended coverage mortgagee
policies of title insurance issued by one or more title companies
satisfactory to each Lender (the "Title Companies"), insuring the
validity and priority of the Liens created under the Mortgage in
respect of all real properties owned by the Company in fee simple
absolute or held by the Company under ground leases covered by
the Mortgage for and in amounts satisfactory to each Lender,
subject only to such exceptions as are satisfactory to each
Lender and containing such endorsements and direct access
reinsurance agreements as each Lender may request and, to the
extent necessary under applicable law, evidence of the due filing
in the appropriate county land offices of Uniform Commercial Code
financing statements covering fixtures;
(C) certified copies of permanent and
unconditional certificates of occupancy (or, in the case of
leased premises, occupational licenses) permitting the fully
functioning operation and occupancy of each premises covered by
the Mortgage and of such other permits necessary for the use and
operation of each such premises issued by the respective
Governmental Persons having jurisdiction over each such premises;
and
(D) consents from holders of Liens on the
Properties covered by the Mortgage that are permitted pursuant to
Section 8.06(b) acknowledging and consenting to the Liens of the
Administrative Agent for the benefit of itself and the Lenders in
respect of such Properties.
In addition, the Company shall have paid to the Title Companies
all expenses and premiums of the Title Companies in connection
with the issuance of such policies and in addition shall have
paid to the Title Companies an amount equal to the recording and
stamp taxes payable in connection with recording the Mortgage in
the appropriate county land offices.
(i) Financial Statements. Copies of the financial
statements of the Company referred to in Section 7.02.
(j) Insurance. Certificates of insurance evidencing
the existence of all insurance required to be maintained by the
Company pursuant to Section 8.04 and the designation of the
Administrative Agent as the loss payee under such policies to the
extent required by Section 8.04 in respect of all insurance
covering tangible Property, such certificates to be in such form
as the Administrative Agent shall require. In addition, the
Company shall have delivered (i) a certificate of the chief
financial or accounting officer of the Company setting forth the
insurance obtained by it in accordance with the requirements of
Section 8.04 and stating that such insurance is in full force and
effect and that all premiums then due and payable with respect to
such insurance have been paid and (ii) a written report, dated
reasonably near the Effective Date, of Alexander & Alexander, or
any other firm of independent insurance brokers of nationally
recognized standing, as to such insurance in form and substance
satisfactory to the Administrative Agent and the Lenders.
(k) Environmental Survey. An environmental survey and
assessment prepared by Clayton Environmental Consultants, as
engaged by the Administrative Agent and satisfactory to each
Lender, which survey and assessment shall be in form and
substance satisfactory to each Lender.
(l) Additional Secured Obligations. The Agreement
Regarding Additional Secured Obligations, in substantially the
form attached as Annex 9 to the Security Agreement, duly executed
and delivered by the Administrative Agent and Bank of America.
(m) Appraisals. A written appraisal of one or more
independent, impartial and qualified appraisers, engaged by the
Administrative Agent and satisfactory to each Lender, setting
forth, on a date reasonably near the Effective Date, (i) the
market value of the Properties covered by the Mortgage and
containing appropriate supporting market data, which appraisal
shall reflect a market value (after payment of all Indebtedness,
other than the Obligations, secured by Liens on such Properties)
of not less than $27,000,000, and otherwise be in form and
substance satisfactory to each Lender, and (ii) the orderly
liquidation value of the Company's equipment and containing
appropriate supporting market data, which appraisal shall reflect
the orderly liquidation value (after payment of all Indebtedness,
other than the Obligations, secured by Liens on such equipment)
of not less than $20,000,000, and otherwise be in form and
substance satisfactory to each Lender.
(n) Senior Notes. Evidence that the Senior Note
Documents shall have been duly authorized, executed and
delivered, and that the Senior Notes shall have been duly issued
at par in exchange for the Old Senior Floating Rate Notes and the
Old Senior Fixed Rate Notes (as such terms are defined in the
Disclosure Statement), which Senior Note Documents and Senior
Notes contain economic terms as set forth in the Disclosure
Statement as of the Effective Date and other terms in form and
substance satisfactory to each Lender, and the Administrative
Agent shall have received copies of each of the Senior Note
Documents certified by a senior financial officer of the Company.
In addition, the Administrative Agent shall have received a
certificate of a senior financial officer of the Company to the
effect that the obligations of the Company in respect of the Old
Senior Floating Rate Notes, the Old Senior Fixed Rate Notes, and
the Old Subordinated Debentures have been satisfied in full and
all of such notes and debentures have been cancelled.
(o) Securities Purchase Agreement. A copy of the
Securities Purchase Agreement, certified by the chief financial
officer or secretary of the Company, pursuant to which GEI shall
purchase certain of the common stock of the Company for a net
cash consideration (prior to the payment of any transaction
expenses) of not less than $10,000,000. In addition, the
Administrative Agent shall have received a certificate of a
senior financial or accounting officer of the Company to the
effect that the Company shall have received net cash proceeds
(prior to the payment of any transaction expenses) from the
issuance and sale of the common stock pursuant to the Securities
Purchase Agreement in an aggregate amount at least equal to
$10,000,000.
(p) Repayment of Existing Indebtedness. Evidence that
the principal of and interest on the Indebtedness, and all other
amounts owing (including any contingent or other amounts payable
in respect of letters of credit) indicated on Schedule I which is
to be repaid upon the making of the initial extension of credit
under this Agreement shall have been (or shall be simultaneously)
repaid in full and that any Liens securing any such Indebtedness
(including Liens securing the Company's obligations in respect of
the Existing Letters of Credit) shall have been released (or
arrangements for such release satisfactory to the Majority
Lenders shall have been made), provided that the Existing Letters
of Credit shall become Letters of Credit under this Agreement, as
provided in Section 2.03(n); in addition, the Administrative
Agent shall have received from any Person holding any Lien
securing any such Indebtedness, such Uniform Commercial Code
termination statements, reconveyances and other instruments, in
each case in proper form for recording, as the Administrative
Agent shall have requested to release and terminate of record the
Liens securing such Indebtedness (or arrangements for such
release and termination satisfactory to the Majority Lenders
shall have been made).
(q) Plan of Reorganization. A copy of (i) the Plan of
Reorganization as confirmed pursuant to the Confirmation Order,
(ii) the Disclosure Statement, (iii) the Confirmation Order and a
judgment pursuant to Federal Rule of Bankruptcy Procedure 9021
with respect thereto and (iv) such other papers or pleadings
filed with the Bankruptcy Court as the Administrative Agent or
any Lender may request, all as certified by the Clerk of the
Bankruptcy Court.
(r) Financial Officer's Certificate. A certificate of
the chief financial or accounting officer of the Company, dated
the Effective Date, to the effect that (i) after giving effect to
all extensions of credit under this Agreement on the Effective
Date, the aggregate unused amount of the Revolving Credit
Commitments (as well as availability under the Borrowing Base) is
equal to or greater than an amount equal to the sum of (A)
$5,000,000 plus (B) the aggregate amount of all trade payables
and Indebtedness of the Company that is then past due (determined
taking into account any relevant course of conduct between the
Company and its trade creditors to the extent invoice terms
differ from such course of conduct, but only to the extent any
such trade creditors have not taken any action, or notified the
Company that they intend to take any action, to enforce such
invoice terms) and (ii) the aggregate amount of professional
financial advisory fees incurred by or on behalf of the Company
in connection with the transactions contemplated by the Plan do
not exceed $2,250,000 on account of financial advisory services
rendered to the Company or $1,000,000 on account of financial
advisory services rendered to the bondholders' committee (plus,
in each such case, the amount of legal and other reimbursable
expenses incurred in respect of such financial advisory
services).
(s) Financial Projections. A cash forecast for the
12-month period commencing on January 2, 1995, which forecast
shall be satisfactory to the Lenders, certified as a true and
correct copy as of the Effective Date by the chief financial or
accounting officer of the Company.
(t) Payment and Disbursement Instructions. Payment
and disbursement instructions with respect to the funding of
Loans on the Effective Date and disbursement of the proceeds of
such Loans, in form and substance satisfactory to the
Administrative Agent and the Co-Agent.
(u) Cash Management. A copy of the Company's cash
management procedures and policies (which procedures and policies
shall be in form and substance satisfactory to the Lenders),
certified as a true and correct copy as of the Effective Date by
the chief financial officer of the Company, and evidence that
a cash management system incorporating such procedures and
policies shall have been established by the Company with Barnett
Bank of Tampa.
(v) Plan of Reorganization Conditions. Evidence of
the satisfaction or waiver of the conditions set forth in Article
IX of the Plan of Reorganization.
(w) Credit Card Receipts. Evidence that the Company
shall have taken all action required to be taken by it as of the
Effective Date in respect of credit card receipts as provided in
Section 8.22(f) and copies of all agreements with credit card
companies and merchant banks in respect thereof.
(x) Existing Letters of Credit. Copies of the
Existing Letters of Credit.
(y) Other Documents. Such other documents as the
Administrative Agent or any Lender or special counsel to the
Administrative Agent may reasonably request.
The obligation of any Lender to make its initial extension of
credit under this Agreement is also subject to the payment or
delivery by the Company of such fees and other consideration as
the Company shall have agreed to pay or deliver to any Lender or
an affiliate of such Lender, the Administrative Agent or the
Co-Agent as of the Effective Date in connection with this
Agreement.
6.02 Initial and Subsequent Extensions of Credit. The
obligation of any Lender to make any Loan (including such
Lender's initial Loan) or otherwise extend any credit to the
Company upon the occasion of each borrowing or other extension of
credit under this Agreement is subject to the further conditions
precedent that, both immediately prior to the making of such Loan
or other extension of credit and also after giving effect to, and
to the intended use of, such Loan or other extension: (a) no
Default shall have occurred and be continuing; (b) the
representations and warranties made by the Company in Section 7,
and by the Company in each of the other Basic Documents to which
it is a party, shall be true and complete on and as of the date
of the making of such Loan or other extension of credit with the
same force and effect as if made on and as of such date (or, if
any such representation or warranty is expressly stated to have
been made as of a specific date, as of such specific date); and
(c) the aggregate principal amount of the Revolving Credit Loans
(plus, with respect to borrowings on the Effective Date, the
aggregate principal amount of the Tranche A Term Loan) borrowed
on such occasion together with the aggregate face amount of all
Letters of Credit issued on such occasion shall not (subject to
the right of the Administrative Agent to make Discretionary
Extensions pursuant to Section 2.02(c)) exceed the availability
under the Borrowing Base as reflected in the most recent
Borrowing Base Certificate delivered pursuant to Section 8.01(f).
Each notice of borrowing or request for the issuance of a Letter
of Credit by the Company shall constitute a certification by the
Company to the effect set forth in the preceding sentence (both
as of the date of such notice or request and, unless the Company
otherwise notifies the Administrative Agent prior to the date of
such borrowing or issuance, as of the date of such borrowing or
issuance.
Section 7. Representations and Warranties. The
Company represents and warrants to the Lenders that:
7.01 Corporate Existence. The Company: (a) is a
corporation, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization;
(b) has all requisite corporate or other power, and has all
material Governmental Approvals necessary, to own its assets and
to carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business and is in good
standing in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where
failure so to qualify could have a Material Adverse Effect.
7.02 Financial Condition. The Company has previously
furnished to each of the Lenders balance sheets of the Company as
at July 31, 1994 and the related statements of income, retained
earnings and cash flow of the Company for the fiscal year ended
on that date, with the opinion (in the case of those balance
sheets and statements) of KPMG Peat Marwick, and the unaudited
balance sheets of the Company as at October 30, 1994, and the
related statements of income and cash flow of the Company for the
13-week period ended on such date. All such financial statements
fairly present the financial condition of the Company as at those
dates and the results of its operations for the fiscal year and
13-week period ended on those dates (subject, in the case of such
financial statements as at October 30, 1994, to normal year-end
audit adjustments), all in accordance with GAAP and practices
applied on a consistent basis (except that, with respect to the
unaudited financial statements as at October 30, 1994, the notes
thereto have not been presented in accordance with GAAP). The
Company does not have on the Effective Date any material
contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from
any unfavorable commitments, except as referred to or reflected
or provided for in the most recent balance sheet referred to
above (or in the notes thereto). Since July 31, 1994, there has
been no material adverse change in the financial condition,
operations, business or prospects taken as a whole of the Company
from that set forth in the financial statements as at July 31,
1994 for the period ending on that date.
7.03 Litigation. Except as disclosed to the Lenders
in Schedule IV there are no legal or arbitral proceedings, or any
proceedings by or before any Governmental Person now pending or
(to the knowledge of the Company) threatened against the Company
which, if adversely determined, could have a Material Adverse
Effect.
7.04 No Breach. None of the execution and delivery of
the Basic Documents, the consummation of the transactions
contemplated in the Basic Documents or compliance with the terms
and provisions of the Basic Documents will conflict with or
result in a breach of, or require any consent under, the charter
or by-laws of the Company, or any applicable Governmental Rule or
any agreement or instrument to which the Company is a party or by
which it or its Property is bound or to which it is subject, or
constitute a default under, or result in the acceleration or
mandatory prepayment of, any indebtedness evidenced by or
termination of any such agreement or instrument, or (except for
the Liens created pursuant to the Security Documents) result in
the creation or imposition of any Lien upon any Property of the
Company pursuant to the terms of any such agreement or
instrument.
7.05 Action. The Company has all necessary corporate
power and authority to execute, deliver and perform its
obligations under each of the Basic Documents to which it is a
party; the execution, delivery and performance by the Company of
each of the Basic Documents to which it is a party have been duly
authorized by all necessary corporate action on its part
(including any required shareholder approvals); and this
Agreement has been duly and validly executed and delivered by the
Company and constitutes, and each of the Notes and the other
Basic Documents to which it is a party when executed and
delivered by the Company will constitute, its legal, valid and
binding obligation, enforceable against the Company in accordance
with its terms, (a) except as limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general
applicability affecting the enforcement of creditors' rights and
(b) except as such enforceability may be limited by the
application of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law).
7.06 Approvals. No Governmental Approvals are
necessary for the execution, delivery or performance by the
Company of the Basic Documents to which it is a party or for the
legality, validity or enforceability of any Basic Document,
except for filings and recordings in respect of the Liens created
pursuant to the Security Documents.
7.07 Use of Credit. The Company is not engaged
principally, or as one of its important activities, in the
business of extending credit for the purpose, whether immediate,
incidental or ultimate, of buying or carrying Margin Stock, and
no part of the proceeds of any extension of credit under this
Agreement will be used to buy or carry any Margin Stock.
7.08 ERISA. Each Plan, and, to the knowledge of the
Company, each Multiemployer Plan, is in compliance with, and has
been administered in compliance with, the applicable provisions
of ERISA, the Code and any other Governmental Rule except to the
extent non-compliance could not reasonably be expected to have a
Material Adverse Effect, and no event or condition has occurred
and is continuing as to which the Company would be under an
obligation to furnish a report to the Lenders under
Section 8.01(e).
7.09 Taxes. The Company has filed all Federal income
tax returns and all other material tax returns that are required
to be filed and has paid all taxes due pursuant to such returns
or pursuant to any assessment received by the Company and all
other related penalties and charges, except for any such tax
(excluding any Federal tax the nonpayment of which could result
in the imposition of a Lien on any Property of the Company) the
payment of which is being contested in good faith and by proper
proceedings and against which adequate reserves are being
maintained in accordance with GAAP. As of the Effective Date, no
such taxes are being contested by the Company. The charges,
accruals and reserves on the books of the Company in respect of
taxes and other governmental charges are, in the opinion of the
Company, adequate. The Company has not given or been requested
to give a waiver of the statute of limitations relating to the
payment of Federal or other taxes.
7.10 Certain Regulations. The Company is not (a) an
"investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of
1940; (b) a "holding company," or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935; or
(c) subject to any other Governmental Rule restricting its
ability to incur debt or to grant Liens.
7.11 Material Agreements and Liens.
(a) Part A of Schedule I is a complete and correct
list, as of the Effective Date of each credit agreement, loan
agreement, indenture, purchase agreement, guarantee, letter of
credit or other arrangement providing for or otherwise relating
to any Indebtedness or any extension of credit (or commitment for
any extension of credit) to, or guarantee by, the Company the
aggregate principal or face amount of which equals or exceeds (or
may equal or exceed) $50,000, and the aggregate principal or face
amount outstanding or that may become outstanding under each such
arrangement is correctly described in Part A of Schedule I.
(b) Part B of Schedule I is a complete and correct
list, as of the Effective Date, of each Lien securing
Indebtedness of any Person the aggregate principal or face amount
of which equals or exceeds (or may equal or exceed) $50,000 and
covering any Property of the Company, and the aggregate
Indebtedness secured (or which may be secured) by each such Lien
and the Property covered by each such Lien is correctly described
in Part B of Schedule I. Except for (i) Liens granted by the
Security Agreement, (ii) in the case of Inventory, Liens arising
by operation of law and (iii) in the case of Property of the
Company other than Inventory and Receivables, Liens permitted
pursuant to Section 8.06, there are no Liens on Inventory,
Receivables or other Property of the Company. Except for Liens
permitted pursuant to Section 8.06, the Liens of the Security
Documents constitute first priority Liens on all or substantially
all of the Properties of the Company.
7.12 Environmental Matters. The Company has obtained
all Governmental Approvals required under all Environmental Laws
to carry on its business as now being or as proposed to be
conducted, except to the extent failure to have any such
Governmental Approvals would not have a Material Adverse Effect.
Each of such Governmental Approvals is in full force and effect
and the Company is in compliance with the terms and conditions of
such Governmental Approvals, and is also in compliance with all
other provisions of any applicable Environmental Law or any
Governmental Rule issued, entered, promulgated or approved under
any Environmental Law, except to the extent failure to comply
with such provisions would not have a Material Adverse Effect.
In addition, except as set forth in Schedule II:
(a) No notice, notification, demand, request for
information, citation, summons or order has been issued and is
pending, no complaint has been filed and is pending, no material
penalty has been assessed and no investigation or review is
pending or threatened by any Governmental Person with respect to
any alleged failure by the Company to have any Governmental
Approval required under any Environmental Law in connection with
the conduct of the business of the Company or with respect to any
generation, treatment, storage, recycling, transportation or
Release of any Hazardous Materials generated by the Company.
(b) The Company does not own, operate or lease a
treatment, storage or disposal facility requiring a permit under
the Resource Conservation and Recovery Act of 1976 or under any
comparable state or local statute; and
(i) no polychlorinated biphenyls (PCB's) are or
have been present at any site, facility or vessel now or
previously owned, operated or leased by the Company that could
reasonably be expected to have a Material Adverse Effect;
(ii) no friable asbestos or materials containing
friable asbestos are or have been present at any site or facility
now or previously owned, operated or leased by the Company that
could reasonably be expected to have a Material Adverse Effect;
(iii) there are no underground storage tanks or
surface impoundments for Hazardous Materials, active or
abandoned, at any site or facility now or previously owned,
operated or leased by the Company;
(iv) no Hazardous Materials have been Released at,
on or under any site or facility now or previously owned,
operated or leased by the Company in a quantity established as
reportable by statute, ordinance, rule, regulation or order; and
(v) no Hazardous Materials have been otherwise
Released at, on or under any site or facility now or previously
owned, operated or leased by the Company that could reasonably be
expected to have a Material Adverse Effect.
(c) The Company has not transported or arranged for
the transportation of any Hazardous Material to any location that
is listed on the National Priorities List ("NPL") under the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ("CERCLA"), listed for possible inclusion on the NPL
by the Environmental Protection Agency in the Comprehensive
Environmental Response and Liability Information System, as
provided for by 40 C.F.R. 300.5 ("CERCLIS"), or on any similar
state or local list or that is the subject of Federal, state or
local enforcement actions or other investigations that may lead
to Environmental Claims against the Company.
(d) No Hazardous Material generated by the Company has
been recycled, treated, stored, disposed of or Released by the
Company at any location other than those listed in Schedule II.
(e) No oral or written notification of a Release of a
Hazardous Material has been filed by or on behalf of the Company
and no site or facility now or previously owned, operated or
leased by the Company is listed or proposed for listing on the
NPL, CERCLIS or any similar state list of sites requiring
investigation or clean-up.
(f) No Liens have arisen under or pursuant to any
Environmental Laws on any site or facility owned, operated or
leased by the Company, and no action has been taken or is in
process by any Governmental Person that could subject any such
site or facility to such Liens and the Company would not be
required to place any notice or restriction relating to the
presence of Hazardous Materials at any site or facility owned by
it or in any instrument of transfer affecting such site or
facility.
(g) There have been no environmental investigations,
studies, audits, tests, reviews or other analyses conducted by or
that are in the possession of the Company in relation to any site
or facility now or previously owned, operated or leased by the
Company which have not been made available to the Lenders.
7.13 Capitalization. The authorized capital stock of
the Company consists, on the Effective Date, of an aggregate of
6,500,000 shares consisting of (i) 5,500,000 shares of common
stock, par value $0.01 per share, of which, after giving effect
to the transactions contemplated on the Effective Date, 3,100,000
shares will be duly and validly issued and outstanding, each of
which shares is fully paid and nonassessable and (ii) 1,000,000
shares of preferred stock, par value $0.01 per share which may be
issued in such series and with such preferences, conversion and
other rights, voting powers, restrictions, limitations as to
dividends, qualifications and other provisions as may be fixed
from time to time by the Board of Directors of the Company (but
only to the extent permitted by this Agreement and the other
Basic Documents), of which no shares will be issued and
outstanding as of the Effective Date. As of the Effective Date,
fifteen percent (15%) of the issued and outstanding shares of
capital stock of the Company will be held beneficially or of
record by GEI and 85% of such common stock will be held
beneficially or of record by the holders of the Old Subordinated
Debentures. As of the Effective Date there are no outstanding
Equity Rights with respect to the Company and there are no
outstanding obligations of the Company to repurchase, redeem, or
otherwise acquire any shares of capital stock of the Company nor
are there any outstanding obligations of the Company to make
payments to any Person, such as "phantom stock" payments, where
the amount of the payment is calculated with reference to the
fair market value or equity value of the Company.
7.14 Subsidiaries. The Company has no Subsidiaries.
7.15 Title to Assets. The Company owns and has good
and marketable title (subject only to Liens permitted by Section
8.06) to the Properties shown to be owned by it in the most
recent financial statements referred to in Section 7.02 (other
than Properties disposed of in the ordinary course of business or
otherwise permitted to be disposed of pursuant to Section 8.05).
The Company owns and has good and marketable title to, and enjoys
peaceful and undisturbed possession of, all Properties (subject
only to Liens permitted by Section 8.06) that are necessary for
the operation and conduct of its businesses.
7.16 True and Complete Disclosure. The information,
reports, financial statements, exhibits and schedules furnished
in writing by or on behalf of the Company to the Administrative
Agent, the Co-Agent or any Lender in connection with the
negotiation, preparation or delivery of the Basic Documents or
included in or delivered pursuant to any Basic Document, when
taken as a whole (together with the Disclosure Statement), do not
contain any untrue statement of material fact or omit to state
any material fact necessary to make the statements in the Basic
Documents and the Disclosure Statement, in light of the
circumstances under which they were made, not misleading. All
written information furnished after the Effective Date by the
Company to the Administrative Agent, the Co-Agent or the Lenders
in connection with the Basic Documents and the transactions
contemplated by the Basic Documents will be true, complete and
accurate in all material respects, or (in the case of
projections) based on reasonable estimates, on the date as of
which such information is stated or certified. There is no fact
known to the Company that could have a Material Adverse Effect
that has not been disclosed in the Basic Documents or in a
report, financial statement, exhibit, schedule, disclosure letter
or other writing furnished to the Lenders for use in connection
with the transactions contemplated by the Basic Documents.
Section 8. Covenants of the Company. The Company
covenants and agrees with the Lenders, the Administrative Agent
and the Co-Agent that, so long as any Commitment, Loan or Letter
of Credit Liability is outstanding and until payment in full of
all Obligations:
8.01 Financial Statements, Etc. The Company shall
deliver to the Administrative Agent (with sufficient copies for
the Co-Agent and each of the Lenders) for delivery to the
Lenders:
(a) as soon as available and in any event within 45
days after the end of each of the first three quarterly fiscal
periods of each fiscal year of the Company, statements of income
and cash flow of the Company for such period and for the period
from the beginning of the respective fiscal year to the end of
such period, and the related balance sheets of the Company as at
the end of such period, setting forth in each case in comparative
form the corresponding figures for the corresponding period in
the preceding fiscal year, accompanied by a certificate of a
senior financial officer of the Company, which certificate shall
state such financial statements fairly present the financial
condition and results of operations of the Company in accordance
with GAAP, consistently applied (except (i) for the application
of fresh start accounting, SOP No. 90-7 and (ii) that the notes
to such financial statements shall not be required to be
presented in accordance with GAAP), as at the end of, and for,
such period (subject to normal year-end audit adjustments);
(b) as soon as available and in any event within 90
days after the end of each fiscal year of the Company, statements
of income, retained earnings and cash flow of the Company for
such fiscal year and the related balance sheets of the Company as
at the end of such fiscal year, setting forth in each case in
comparative form the corresponding figures for the preceding
fiscal year, and accompanied (i) by an unqualified opinion of
independent certified public accountants of recognized national
standing, which opinion shall state that such financial
statements fairly present the financial condition and results of
operations of the Company as at the end of, and for, such fiscal
year in accordance with GAAP, consistently applied (except for
application of fresh start accounting, SOP No. 90-7), and a
certificate of such accountants stating that, in making the
examination necessary for their opinion, they obtained no
knowledge, except as specifically stated, of any Default, and
(ii) by a certificate of a senior financial officer of the
Company, which certificate shall state that such financial
statements fairly present the financial condition and results of
operations of the Company in accordance with GAAP, consistently
applied (except for application of fresh start accounting,
SOP No. 90-7), as at the end of, and for, such fiscal year;
(c) promptly upon their becoming available, copies of
all registration statements and regular periodic reports, if any,
which the Company shall have filed with the Securities and
Exchange Commission or any national securities exchange;
(d) promptly upon their being mailed or provided to
the shareholders of the Company generally, copies of all
financial statements, reports and proxy statements so mailed or
provided;
(e) as soon as possible, and in any event within ten
days after the Company knows or has reason to believe that any of
the events or conditions specified below with respect to any Plan
or Multiemployer Plan has occurred or exists, a statement signed
by a senior financial officer of the Company setting forth
details respecting such event or condition and the action, if
any, that the Company or its ERISA Affiliate proposes to take
with respect to such event or condition (and a copy of any report
or notice required to be filed with or given to PBGC by the
Company or an ERISA Affiliate with respect to such event or
condition):
(i) any reportable event, as defined in
Section 4043(b) of ERISA and the regulations issued under that
Section, with respect to a Plan, as to which PBGC has not by
regulation waived the requirement of Section 4043(a) of ERISA
that it be notified within 30 days of the occurrence of such
event (provided that a failure to meet the minimum funding
standard of Section 412 of the Code or Section 302 of ERISA,
including the failure to make on or before its due date a
required installment under Section 412(m) of the Code or
Section 302(e) of ERISA, shall be a reportable event regardless
of the issuance of any waivers in accordance with Section 412(d)
of the Code); and any request for a waiver under Section 412(d)
of the Code for any Plan;
(ii) the distribution under Section 4041(a) of
ERISA of a notice of intent to terminate any Plan or any action
taken by the Company or an ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan, or the receipt by the
Company or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by PBGC with respect to such
Multiemployer Plan;
(iv) the complete or partial withdrawal from a
Multiemployer Plan by the Company or any ERISA Affiliate that
results in liability under Section 4201 or 4204 of ERISA
(including the obligation to satisfy secondary liability as a
result of a purchaser default) or the receipt by the Company or
any ERISA Affiliate of notice from a Multiemployer Plan that it
is in reorganization or insolvency pursuant to Section 4241
or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a
fiduciary of any Multiemployer Plan against the Company or any
ERISA Affiliate to enforce Section 515 of ERISA, which proceeding
is not dismissed within 30 days; and
(vi) the adoption of an amendment to any Plan
that, pursuant to Section 401(a)(29) of the Code or Section 307
of ERISA, would result in the loss of tax-exempt status of the
trust of which such Plan is a part if the Company or an ERISA
Affiliate fails to timely provide security to the Plan in
accordance with the provisions of those Sections;
(f) as soon as available and in any event by Tuesday
of each week, (i) a Borrowing Base Certificate for the weekly
accounting period ending on Sunday of the second preceding week
(9 days before), (ii) a statement of earnings of the Company for
the week ended Wednesday of the immediately preceding week (6
days before), which statement shall include a summary of accounts
payable of the Company, and (iii) a sales report of the Company
for the week ended Wednesday of the immediately preceding week,
in each case in form and substance satisfactory to the
Administrative Agent;
(g) periodically at the request of the Administrative
Agent, the Co-Agent or the Majority Lenders (but not more often
than once during each fiscal quarter of the Company so long as no
Default has occurred and is continuing), a report of an
independent collateral auditor (which may be, or be affiliated
with, the Administrative Agent or one of the Lenders) with
respect to the Receivables and Inventory components included in
the Borrowing Base as at the end of any weekly, monthly or
quarterly accounting period selected by the Administrative Agent,
the Co-Agent or the Majority Lenders, which report shall indicate
that, based upon a review by such auditors of the Receivables
(including verification with respect to the amount, aging,
identity and credit of the respective account debtors and the
billing practices of the Company) and Inventory (including
verification as to the value, location and respective types), the
information set forth in the Borrowing Base Certificate delivered
by the Company as at the end of such accounting period is
accurate and complete in all material respects and (if so
requested by the Administrative Agent, the Co-Agent or the
Majority Lenders) in addition, as soon as available and in any
event within 90 days after the end of each fiscal year of the
Company, a like report of KPMG Peat Marwick or other independent
public accountants with respect to the Receivables and Inventory
components included in the Borrowing Base as at the end of such
fiscal year;
(h) as soon as available and in any event within 30
days after the end of each month, an aging report, in form and
substance satisfactory to the Administrative Agent and the Co-
Agent, as to the Receivables of the Company showing all customer
balances during such month;
(i) promptly upon request of any Lender, copies of any
documents relating to the verification of Receivables and
Inventory by the independent certified public accountants
referred to in clause (g) above;
(j) (i) not later than 10 days after the end of each
fiscal year of the Company, a copy of the final budget of the
Company for the next succeeding fiscal year (broken down by
quarter), in form and substance satisfactory to the Majority
Lenders, and (ii) not later than 10 days after the end of each
fiscal year of the Company, a quarterly business plan of the
Company covering the next succeeding fiscal year, in form and
substance satisfactory to the Majority Lenders (and, if requested
by the Majority Lenders prior to the end of any such fiscal year,
an annual business plan for the succeeding 3 fiscal years);
(k) within 30 days after the end of each annual
anniversary of the Effective Date, reports of the independent
appraisers updating each of the appraisals delivered pursuant to
Section 6.01(m), which reports shall reflect the then market
value of Properties covered by the Mortgage and the then orderly
liquidation value of the Company's equipment and contain such
other information relating to such Properties and such equipment
as shall be requested by the Administrative Agent or the Co-
Agent;
(l) promptly after an officer of the Company knows or
has reason to believe that any Default has occurred, a notice of
such Default describing the same in reasonable detail and,
together with such notice or as soon thereafter as possible, a
description of the action that the Company has taken or proposes
to take with respect to such Default;
(m) not later than 60 days after the Effective Date, a
management succession plan setting forth the Company's plans for
the retention and employment of key operation and financial
executives of the Company;
(n) promptly after the amendment of the charter of the
Company or the amendment of the Senior Notes or the Senior Note
Documents, copies of such amendments; and
(o) from time to time such other information regarding
the financial condition, operations, business or prospects of the
Company (including any Plan or Multiemployer Plan and any reports
or other information required to be filed under ERISA) as any
Lender, the Administrative Agent or the Co-Agent may reasonably
request.
The Company will furnish to the Administrative Agent (with
sufficient copies for the Co-Agent and each Lender) for delivery
to the Lenders, at the time it furnishes each set of financial
statements pursuant to paragraph (a) or (b) above, a certificate
of a senior financial officer of the Company (i) to the effect
that no Default has occurred and is continuing (or, if any
Default has occurred and is continuing, describing the same in
reasonable detail and describing the action that the Company has
taken or proposes to take with respect to such Default) and
(ii) setting forth in reasonable detail the computations
necessary to determine Excess Cash Flow and whether the Company
is in compliance with Sections 8.07, 8.09, 8.10, 8.11, 8.12,
8.13, 8.14, 8.15 and 8.16 as of the end of the respective
quarterly fiscal period or fiscal year (together with, to the
extent such financial statements have been prepared on a basis
different than the financial statements delivered pursuant to
Section 7.02 as a result of changes in GAAP, an explanation of
such changes in order that such determinations may be verified).
8.02 Litigation. The Company will promptly give to
each Lender notice of all legal, arbitral or investigatory
proceedings, and of all proceedings by or before any Governmental
Person, and any material development in respect of any such
proceedings, affecting the Company, except proceedings which, if
adversely determined, could not have a Material Adverse Effect.
Without limiting the generality of the foregoing, the Company
will give to each Lender notice of the assertion of any
Environmental Claim by any Person against, or with respect to the
activities of, the Company and notice of any alleged violation of
or non-compliance with any Environmental Laws or any Governmental
Approvals under Environmental Laws other than any Environmental
Claim or alleged violation which, if adversely determined, could
not have a Material Adverse Effect.
8.03 Existence, Etc. The Company will:
(a) preserve and maintain its legal existence and all
of its material rights, privileges, licenses and franchises
(provided that nothing in this Section 8.03 shall prohibit any
transaction expressly permitted under Section 8.05);
(b) comply with the requirements of all applicable
Governmental Rules, if failure to comply with such requirements
could have a Material Adverse Effect;
(c) pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its income or
profits or on any of its Properties prior to the date on which
penalties attach except for any such tax, assessment, charge or
levy the payment of which is being contested in good faith and by
proper proceedings and against which adequate reserves are being
maintained;
(d) maintain all of its Properties used or useful in
its business in good working order and condition, ordinary wear
and tear excepted;
(e) keep adequate records and books of account, in
which complete entries will be made in accordance with GAAP
consistently applied; and
(f) permit representatives of any Lender, the
Administrative Agent or the Co-Agent, during normal business
hours and upon at least one Business Days' prior notice to the
Company so long as no Default has occurred and is continuing, to
examine, copy and make extracts from its books and records, to
inspect any of its Properties, and to discuss its business and
affairs with its officers, all to the extent reasonably requested
by such Lender, the Administrative Agent or the Co-Agent (as the
case may be); and, without limitation of the foregoing, the
Company will pay the expenses of the Administrative Agent, Co-
Agent and one representative of each Lender to attend periodic
meetings of the Administrative Agent, the Co-Agent, the Lenders
and the Company, provided that, so long as no Default has
occurred and is continuing, the Company shall not be required to
pay such expenses for more than one such meeting per calendar
quarter.
8.04 Insurance. The Company will keep insured by
financially sound and reputable insurers all Property of a
character usually insured by corporations engaged in the same or
similar business similarly situated against loss or damage of the
kinds and in the amounts customarily insured against by such
corporations and carry such other insurance as is usually carried
by such corporations or as otherwise may be requested by the
Administrative Agent or the Majority Lenders, provided that in
any event, except as provided in the certificates received and
approved by the Lenders pursuant to Section 6.01(j), the Company
will maintain:
(1) Casualty Insurance -- insurance against loss
or damage covering all of the tangible real and personal Property
and improvements of the Company by reason of any Peril (as
defined below) in such amounts and subject to such deductibles as
shall be satisfactory to the Administrative Agent or the Majority
Lenders and sufficient to avoid the named insured from becoming a
co-insurer of any loss under such policy but in any event in an
amount (i) in the case of fixed assets and equipment (including
vehicles), at least equal to 100% of the actual replacement cost
of such assets (including foundation, footings and excavation
costs), subject to deductibles and (ii) in the case of Inventory,
not less than the fair market value of such Inventory, subject to
deductibles.
(2) Automobile Liability Insurance for Bodily
Injury and Property Damage -- insurance against liability for
bodily injury and property damage in respect of all vehicles
(whether owned, hired or rented by the Company) at any time
located at, or used in connection with, its Properties or
operations in such amounts as are then customary for vehicles
used in connection with similar Properties and businesses, but in
any event to the extent required by applicable law.
(3) Comprehensive General Liability Insurance --
insurance against claims for bodily injury, death or Property
damage occurring on, in or about the Properties (and adjoining
streets, sidewalks and waterways) of the Company, in such amounts
as are then customary for Property similar in use in the
jurisdictions where such Properties are located.
(4) Workers' Compensation Insurance -- workers'
compensation insurance (including Employers' Liability Insurance)
to the extent required by applicable law.
(5) Product Liability Insurance -- insurance
against claims for bodily injury, death or Property damage
resulting from the use of products sold by the Company in such
amounts as are then customarily maintained by responsible persons
engaged in businesses similar to that of the Company.
(6) Business Interruption Insurance -- insurance
against loss of operating income (up to an aggregate amount equal
to $70,000,000) by reason of any Peril.
(7) Other Insurance -- such other insurance, in
each case as generally carried by owners of similar Properties in
the jurisdictions where such Properties are located, in such
amounts and against such risks as are then customary for Property
similar in use.
Such insurance shall be written by financially responsible
companies selected by the Company and having an A. M. Best rating
of "B+" or better (or "A-" or better in the case of any change in
the Company's insurers after the Effective Date) and being in a
financial size category of XI or larger, or by other companies
acceptable to the Majority Lenders, and (other than workers'
compensation) shall name the Administrative Agent as additional
insured, or loss payee, as its interests may appear. Each policy
referred to in this Section 8.04 shall provide that it will not
be canceled or reduced, or allowed to lapse without renewal,
except after not less than 30 days' notice to the Administrative
Agent and shall also provide that the interests of the
Administrative Agent and the Lenders shall not be invalidated by
any act or negligence of the Company or any Person having an
interest in any Property covered by the Mortgage nor by occupancy
or use of any such Property for purposes more hazardous than
permitted by such policy nor by any foreclosure or other
proceedings relating to such Property. The Company will advise
the Administrative Agent promptly of any policy cancellation,
reduction or amendment.
On the Effective Date, the Company will deliver to the
Administrative Agent certificates of insurance satisfactory to
the Administrative Agent evidencing the existence of all
insurance required to be maintained by the Company under this
Section 8.04 (or as otherwise approved by Administrative Agent
and the Lenders pursuant to Section 6.01(j)) setting forth the
respective coverages, limits of liability, carrier, policy number
and period of coverage and showing that such insurance will
remain in effect through October 31, 1995, subject only to the
payment of premiums as they become due (or December 15 in the
case of insurance required by subsection (1) above). Thereafter,
on each September 30 (or November 15 in the case of insurance
required by subsection (1) above) in each year (commencing with
1995), the Company will deliver to the Administrative Agent
certificates of insurance evidencing that all insurance required
to be maintained by the Company under this Section 8.04 will be
in effect through the October 31 (or December 15 in the case of
insurance required by subsection (1) above) of the calendar year
following the calendar year of the current September 30, subject
only to the payment of premiums as they become due. In addition,
the Company will not modify any of the provisions of any policy
with respect to casualty insurance without delivering the
original copy of the endorsement reflecting such modification to
the Administrative Agent accompanied by a written report of
Alexander & Alexander, or any other firm of independent insurance
brokers of nationally recognized standing, stating that, in their
opinion, such policy (as so modified) adequately protects the
interests of the Lenders and the Administrative Agent, is in
compliance with the provisions of this Section 8.04, and is
comparable in all respects with insurance carried by responsible
owners and operators of Properties similar to those covered by
the Mortgage. The Company will not obtain or carry separate
insurance concurrent in form or contributing in the event of loss
with that required by this Section 8.04 unless such insurance
names the Administrative Agent as additional insured or loss
payee as provided in this Section 8.04. The Company will
immediately notify the Administrative Agent whenever any such
separate insurance is obtained and shall deliver to the
Administrative Agent the certificates evidencing the same.
Without limiting the obligations of the Company under
the foregoing provisions of this Section 8.04, in the event the
Company shall fail to maintain in full force and effect insurance
as required by the foregoing provisions of this Section 8.04,
then the Administrative Agent may, but shall have no obligation
to, procure insurance covering the interests of the Lenders and
the Administrative Agent in such amounts and against such risks
as the Administrative Agent (or the Majority Lenders) shall deem
appropriate, and the Company shall reimburse the Administrative
Agent in respect of any premiums paid by the Administrative Agent
in respect of such insurance.
For purposes of this Section 8.04, the term "Peril"
shall mean, collectively, fire, lightning, flood (but, unless
otherwise required by the Administrative Agent or the Majority
Lenders, only to the maximum amount available under federal
programs), windstorm, hail, earthquake, explosion, riot and civil
commotion, vandalism and malicious mischief, damage from
aircraft, vehicles and smoke and all other perils covered by the
"all-risk" endorsement then in use in the jurisdictions where the
Properties of the Company are located.
8.05 Prohibition of Fundamental Changes. The Company
will not enter into any transaction of merger or consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer
any liquidation or dissolution). The Company will not issue any
shares of preferred stock or make any Equity Issuance as to which
the Company is or may become obligated to repurchase, redeem or
otherwise acquire such shares or Equity Rights at the election of
the holder or otherwise on any date prior to February 1, 2003.
The Company will not acquire any business or Property from, or
capital stock of, or be a party to any acquisition of, any Person
except for purchases of inventory and other Property to be sold
or used in the ordinary course of business, Investments permitted
under Section 8.08 and Capital Expenditures permitted under
Section 8.14. The Company will not convey, sell, lease, transfer
or otherwise dispose of, in one transaction or a series of
transactions, any part of its business or Property, whether now
owned or hereafter acquired (including receivables and leasehold
interests, but excluding (i) obsolete or worn-out Property, tools
or equipment no longer used or useful in its business so long as
the amount so sold in any single fiscal year by the Company shall
not have a fair market value in excess of $250,000; (ii) any
inventory sold or disposed of in the ordinary course of business
and on ordinary business terms; (iii) assets with a fair value of
not more than $500,000 relating to the Company's management
information system operations in connection with the outsourcing
of such operations to a third party (provided that (A) the
Company shall have (1) notified the Administrative Agent in
writing of the terms of such Disposition not later than 30 days
prior to the date on which such Disposition is proposed to be
made and (2) provided copies of all agreements relating to such
Disposition to the Administrative Agent, (B) the arrangements
relating to such Disposition shall in all respects be
satisfactory to the Administrative Agent and (C) such Disposition
shall be subject to such conditions as the Administrative Agent
may reasonably request (including the execution and delivery of
consents to assignment in form and substance satisfactory to the
Administrative Agent)); and (iv) other Property of the Company so
long as the amount so sold in any single fiscal year shall not
have a fair market value in excess of $250,000).
8.06 Limitation on Liens. The Company will not
create, incur, assume or suffer to exist any Lien upon any of its
Property, whether now owned or hereafter acquired, except:
(a) Liens created pursuant to the Security Documents;
(b) Liens in existence on the Effective Date and
listed in Part B of Schedule I or Liens securing Indebtedness
referred to in Section 8.07(c) (excluding, however, (i) following
the making of the initial Loans, Liens securing Indebtedness to
be repaid with the proceeds of such Loans, as indicated on
Schedule I and (ii) Liens on Inventory and Receivables of the
Company other than those arising by operation of law);
(c) Liens (other than Federal tax Liens and Liens
imposed under ERISA) imposed by any Governmental Person for
taxes, assessments or charges not yet due or which are being
contested in good faith and by proper proceedings if adequate
reserves with respect to such Liens are being maintained in
accordance with GAAP, but only to the extent such Governmental
Person shall not have filed a notice of Lien in the public
records;
(d) carriers', mechanics', warehousemen's, artisans',
service, suppliers', depositaries', or other like Liens arising
in the ordinary course of business which are not overdue for a
period of more than 30 days;
(e) pledges or deposits in respect of workers'
compensation, unemployment insurance and other social security
legislation;
(f) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
the Company's business;
(g) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of the
Company's business and encumbrances consisting of zoning
restrictions, easements, licenses, restrictions on the use of
Property or minor imperfections in title which, in the aggregate,
are not material in amount, and which do not in any case
materially detract from the value of the Property subject to such
Lien or interfere with the ordinary conduct of the business of
the Company;
(h) Liens upon real or tangible personal Property
(excluding Liens on Inventory and Receivables) acquired after the
Effective Date (by purchase, construction or otherwise) by the
Company, each of which Liens either (A) existed on such Property
before the time of its acquisition and was not created in
anticipation of such event, or (B) was created solely for the
purpose of securing Indebtedness representing, or incurred to
finance, refinance or refund, the cost (including the cost of
construction) of such Property; provided that no such Lien shall
extend to or cover any Property of the Company other than the
Property so acquired and improvements on such Property; and
provided, further, that the principal amount of Indebtedness
secured by any such Lien shall at no time exceed 80% of the fair
market value (as determined in good faith by a senior financial
officer of the Company) of such Property (or 100% in the case of
equipment) at the time it was acquired (by purchase, construction
or otherwise); and
(i) any extension, renewal or replacement of the
foregoing, provided, however, that the Liens permitted under this
clause (i) shall not be spread to cover any additional
Indebtedness or Property (other than a substitution of like
Property).
8.07 Indebtedness. The Company will not create, incur
or suffer to exist any Indebtedness except:
(a) Indebtedness under the Basic Documents;
(b) Indebtedness outstanding on the Effective Date and
listed in Part A of Schedule I (excluding, however, (i)
Indebtedness referred to in subsection (d) below and (ii)
following the making of the initial Loans, the Indebtedness to be
repaid with the proceeds of such Loans, as indicated on
Schedule I);
(c) additional Indebtedness outstanding on the
Effective Date and not listed in Part A of Schedule I pursuant to
Section 7.11(a) provided that the aggregate amount thereof shall
not exceed $150,000;
(d) Indebtedness of the Company under the Indentures
listed in numbered paragraphs 6 and 7 in Part A of Schedule I
either (i) as of the Effective Date or (ii) after the Effective
Date as payments in kind permitted pursuant to the terms of the
Senior Note Documents as in effect on the Effective Date (for
clarification purposes only, fees and expenses under, and
indemnities payable pursuant to Sections 408 and 607(3) of, the
Senior Note Documents as in effect on the Effective Date are not
Indebtedness under this Agreement);
(e) Indebtedness consisting of Capital Lease
Obligations of the Company relating to Capital Expenditures
permitted by Section 8.14; and
(f) additional Indebtedness of the Company up to but
not exceeding $10,000,000 at any one time outstanding.
8.08 Investments. The Company will not make or permit
to remain outstanding any Investments except:
(a) operating deposit accounts with banks;
(b) Permitted Investments;
(c) the Existing Interest Rate Protection Agreement
(but only to the extent of any transactions entered into as of
the Effective Date);
(d) other Interest Rate Protection Agreements so long
as (i) the aggregate notional principal amount under all such
Interest Rate Protection Agreements calculated at the time any
such Interest Rate Protection Agreement is entered into does not
exceed the aggregate amount of floating rate Indebtedness of the
Company and the aggregate amount of unfunded commitments to lend
floating rate Indebtedness to the Company, and (ii) the
obligations of the Company under such Interest Rate Protection
Agreements are not secured by any Property of the Company;
(e) repurchase obligations of the Company permitted
pursuant to Section 8.09; and
(f) additional Investments up to but not exceeding
$50,000 in the aggregate.
8.09 Dividend Payments. The Company will not declare
or make any Dividend Payment at any time (other than Dividend
Payments in respect of the Company's obligations to repurchase
capital stock or Equity Rights of the Company of retired,
terminated or deceased directors, officers or employees of the
Company, provided that (a) the aggregate amount of such payments
in any fiscal year of the Company shall not exceed the sum of
(i) $500,000 plus (ii) for each fiscal year of the Company
beginning after the Effective Date, an amount equal to the excess
(if any) of $500,000 over the amount of such payments made by the
Company in its immediately preceding fiscal year and (b) no such
Dividend Payments may be made after the occurrence and during the
continuance of any Default).
8.10 Leverage Ratio. The Company will not permit the
Leverage Ratio (determined as of each Quarterly Date) to exceed
the following respective amounts at any time during the following
respective periods:
Period Ratio
From the Effective Date
through October 29, 1995 8.0 to 1
From October 30, 1995
through February 2, 1997 7.0 to 1
From February 3, 1997
and at all times thereafter 6.0 to 1
8.11 Net Worth. The Company will not permit its Net
Worth (determined as of each Quarterly Date) to be less than the
following respective amounts at any time during the following
respective periods:
Period Amount
From the Effective Date
through October 29, 1995 $40,000,000
From October 30, 1995
through February 2, 1997 $42,500,000
From February 3, 1997
and at all times thereafter $50,000,000
8.12 Working Capital. The Company will not permit
Working Capital (determined as of each Quarterly Date) to be less
than the following respective amounts at any time during the
following respective periods:
Period Amount
From the Effective Date
through January 29, 1995 $14,500,000
From January 30, 1995
through April 30, 1995 $11,500,000
From May 1, 1995
through July 30, 1995 $ 9,750,000
From July 31, 1995
through April 28, 1996 $19,250,000
From April 29, 1996
through July 28, 1996 $12,500,000
From July 29, 1996
through February 2, 1997 $20,750,000
From February 3, 1997
through May 4, 1997 $20,250,000
From May 5, 1997
through August 3, 1997 $13,750,000
From August 4, 1997
through November 2, 1997 $21,750,000
From November 3, 1997
and thereafter $20,500,000
8.13 Fixed Charges Ratio. The Company will not permit
the Fixed Charges Ratio (determined as of each Quarterly Date
occurring at the end of each period specified below) to be less
than the following respective amounts at any time during the
following respective periods:
Period Ratio
From January 30, 1995 through
April 30, 1995 0.850 to 1
From January 30, 1995 through
July 30, 1995 0.850 to 1
From January 30, 1995 through
October 29, 1995 0.800 to 1
From January 30, 1995 through
January 28, 1996 0.750 to 1
From May 1, 1995 through
April 28, 1996 0.700 to 1
From July 31, 1995 through
July 28, 1996 0.700 to 1
From October 30, 1995 through
November 3, 1996 0.700 to 1
From January 29, 1996 through
February 2, 1997 0.725 to 1
From April 29, 1996 through
May 4, 1997 0.750 to 1
From July 29, 1996 through
August 3, 1997 0.775 to 1
From November 4, 1996 through
November 2, 1997 0.775 to 1
8.14 Capital Expenditures. The Company will not
permit the aggregate amount of Capital Expenditures by the
Company to exceed the following respective amounts for the
following respective periods (provided that the following
limitations shall not apply to (a) Capital Expenditures made for
the purpose of restoring, repairing or replacing assets subject
to a Casualty Event to the extent permitted by this Agreement and
provided such expenditures are made within twelve (12) months of
the occurrence of such Casualty Event or (b) Capital Expenditures
made for the purpose of replacing assets subject to a Disposition
to the extent not exceeding an aggregate amount equal to $500,000
in any fiscal year of the Company):
Period Amount
For the seven fiscal month
period from the Effective Date
through July 30, 1995 $6,000,000
For each period of two fiscal
quarters of the Company from
and after July 31, 1995 $15,000,000
For each fiscal year of the
Company from and after
July 31, 1995 $22,000,000
8.15 Funded Debt to Operating Cash Flow Ratio. The
Company will not permit the Funded Debt to Operating Cash Flow
Ratio (determined as of each Quarterly Date occurring at the end
of each period specified below) to be more than the following
respective amounts at any time during the following respective
periods:
Period Ratio
From January 30, 1995
through April 30, 1995 20.00 to 1
From January 30, 1995
through July 30, 1995 12.00 to 1
From January 30, 1995
through October 29, 1995 8.00 to 1
From January 30, 1995
through January 28, 1996 5.75 to 1
From May 1, 1995
through April 28, 1996 5.25 to 1
From July 31, 1995
through July 28, 1996 5.00 to 1
From October 30, 1995
through November 3, 1996 4.75 to 1
From January 29, 1996
through February 2, 1997 4.75 to 1
From April 29, 1996
through May 4, 1997 4.50 to 1
From July 29, 1996
through August 3, 1997 4.25 to 1
From November 4, 1996
through November 2, 1997 4.25 to 1
8.16 Lease Obligations. The aggregate obligations of
the Company for the payment of rent for any Property under
operating leases or agreements to lease shall not exceed
$25,000,000 during any fiscal year of the Company.
8.17 Lines of Business. The Company shall not engage
to any substantial extent in any line or lines of business
activity other than the business of distributing merchandise to
and operating retail food and liquor stores in the State of
Florida which offer for sale groceries, meats, fresh produce,
dairy products, delicatessen and bakery products, health and
beauty aids, pharmacies, wine, beer, liquor and selected general
merchandise.
8.18 Transactions with Affiliates. Except as
expressly permitted by this Agreement, the Company will not,
directly or indirectly: (a) make any Investment in an Affiliate;
(b) transfer, sell, lease, assign or otherwise dispose of any
Property to an Affiliate; (c) merge into or consolidate with or
purchase or acquire Property from an Affiliate; or (d) enter into
any other transaction directly or indirectly with or for the
benefit of an Affiliate (including guarantees and assumptions of
obligations of an Affiliate); provided that (x) any Affiliate who
is an individual may serve as a director, officer or employee of
the Company and receive reasonable compensation for his or her
services in such capacity and (y) the Company may enter into
transactions (other than extensions of credit by the Company to
an Affiliate) (i) in the ordinary course of business if the
monetary or business consideration arising from such activity
would be substantially as advantageous to the Company as the
monetary or business consideration which would obtain in a
comparable transaction with a Person not an Affiliate and (ii) in
which an Affiliate participates as a holder of stock of the
Company which is also held by Persons not Affiliates of the
Company on terms no more favorable than terms on which such other
Persons may participate.
8.19 Use of Proceeds. The Company will use the
proceeds of the (a) Revolving Credit Loans and the Tranche A Term
Loan for general corporate purposes (provided that the proceeds
of such Loans shall not be used to make any payments in respect
of the Senior Notes if (i) the Company shall have the option
under the Senior Notes to make payments in kind and the average,
for the 60 days immediately preceding the date on which such
payment is proposed to be made, of the excess of (A) the
Borrowing Base (calculated, solely for purposes of this Section
8.19, without deduction for any amount referred to in clause (c)
of the definition of "Borrowing Base") over (B) the aggregate
principal amount of Revolving Credit Loans and Tranche A Term
Loan outstanding, together with the aggregate amount of Letter
of Credit Liabilities outstanding, shall be less than
$15,000,000, or (ii) either before or after giving effect to such
payment, a Default shall have occurred and be continuing), (b)
the Tranche B Term Loan solely to repay in full the Indebtedness
of the Company identified in numbered paragraph 1 of Part A of
Schedule I and (c) the Tranche C Term Loan solely to repay a
portion of the Additional Term Loan made by Bank of America under
the Existing Senior Credit Agreement (in each case in compliance
with all applicable Governmental Rules); provided that none of
the Administrative Agent nor the Co-Agent nor any Lender shall
have any responsibility as to the use of any of such proceeds.
8.20 Modifications of Certain Documents. The Company
will not amend its charter in a manner which could be adverse to
the Lenders or the Administrative Agent nor consent to any
modification, supplement or waiver of any of the provisions of
the Senior Notes or the Senior Note Documents the effect of which
would change the terms thereof in any manner which could be
adverse to the Company, the Lenders, the Administrative Agent or
the Co-Agent, in either case without the prior consent of the
Administrative Agent (with the approval of the Majority Lenders).
8.21 After Acquired Real Property. If the Company
acquires or leases any real property after the Effective Date (or
if, at any time after the Effective Date, the Company shall not
be prohibited from encumbering any real property interest of the
Company which was not encumbered by the Mortgage as of the
Effective Date), the Company shall (a) promptly notify the
Administrative Agent in writing of such acquisition or ability to
encumber, as the case may be, and (b) promptly execute a mortgage
(substantially in the form of the Mortgage) or an amendment to
the Mortgage (as the Administrative Agent or the Co-Agent may
reasonably require) covering such property in favor of the
Administrative Agent for the benefit of the Administrative Agent,
the Co-Agent and the Lenders, together with such surveys, title
insurance policies and endorsements, certificates of occupancy
and such other agreements, estoppels and consents (including
agreements with lessors) as the Administrative Agent or the Co-
Agent may reasonably require. The Company shall use its
reasonable best efforts to obtain, within 60 days after the
Effective Date, the consent (which shall be reasonably
satisfactory to the Majority Lenders) of Sun Life Insurance
Company of America on the Company's warehouse facility in
Hillsborough County, Florida (commonly known as 6422 Harney Road,
Tampa, Florida), and shall promptly cause such facility to be
encumbered by the Mortgage (and covered by title insurance) as
set forth above in this Section 8.21.
8.22 Inventory and Receivables. The Company agrees
that:
(a) all sales of Inventory shall be bona fide sales in
the ordinary course of the Company's business;
(b) all invoices representing Receivables shall be in
the name of the Company;
(c) all credit memoranda shall be issued promptly;
(d) it will, consistent with its existing business
practices, promptly enforce, collect and receive all amounts
owing in respect of the Receivables;
(e) except for Retained Cash in an amount not to
exceed $6,000,000 at any time, all cash and checks received by
the Company in respect of the sale of Inventory or services
rendered by the Company shall be deposited promptly to the
Blocked Account;
(f) all amounts owing to the Company in respect of
credit card sales shall be paid directly by the relevant credit
card companies (or, if applicable, the bank or banks at which the
Company has merchant agreements with respect to such credit
cards) directly to the Blocked Account (and the Company shall, on
or before the Effective Date, direct the credit card companies or
such banks to make such payments directly to the Blocked
Account); and
(g) it will otherwise comply in all material respects
with its cash management procedures and policies in effect as of
the Effective Date (as the same may be amended from time to time
with the consent of the Majority Lenders).
8.23 Subsidiaries. The Company will not directly or
indirectly organize or acquire any Subsidiary.
8.24 Statutory Notice. The Company will not file or
record any instrument of record pursuant to Section 697.04(1)(b)
of the Florida Statutes that would limit the maximum amount that
may be secured by any of the Security Documents.
8.25 Intangible Personal Property Taxes. Within 30
days after the Effective Date, the Company will file an
application (which application shall be reasonably acceptable to
the Administrative Agent) for a ruling from the Department of
Revenue of the State of Florida to the effect that the Company is
not liable to the State of Florida for the payment of
nonrecurring intangible personal property taxes pursuant to
Chapter 199 of the Florida Statutes in connection with the
transactions contemplated by the Basic Documents. Within 180
days after the Effective Date, the Company will either (a) obtain
and deliver to the Administrative Agent the formal ruling
referred to in the immediately preceding sentence (which ruling
shall be in all respects satisfactory to the Majority Lenders) or
(b) if such ruling has not been so obtained and delivered to the
Administrative Agent within such period or if the Department of
Revenue has issued a ruling at any time within such period to the
effect that the Company is required to pay such taxes, the
Company will (subject to its right to contest such taxes pursuant
to Section 8.03(c) and to pursue all rights to seek review of any
such unfavorable ruling) as promptly as possible thereafter pay
such taxes to the extent required to be paid by it (or, in the
case of an unfavorable ruling, to the extent required by such
ruling) to the State of Florida. In addition, after the
occurrence and during the continuance of an Event of Default, the
Company agrees that it will (unless the Department of Revenue has
issued a ruling as set forth above to the effect that no such
nonrecurring intangible personal property taxes are due), upon
the written request of the Majority Lenders, promptly pay all
such nonrecurring intangible personal property taxes (whether or
not being contested) and, if not so paid, the Majority Lenders
shall have the right (but not the obligation) to cause Revolving
Credit Loans to be made for the purpose of paying such taxes.
Section 9. Events of Default. If one or more of the
following events ("Events of Default") shall occur and be
continuing:
(a) The Company shall: (i) default in the payment of
any principal of any Loan or any Reimbursement Obligation when
due (whether at stated maturity or at mandatory or optional
prepayment); or (ii) default in the payment of any interest on
any Loan or any other Obligation when due and such default shall
have continued unremedied for 2 or more days; or
(b) The Company shall default (after the passage of
any applicable grace period, without giving effect to any
extensions thereof after default) in the payment when due of any
principal of or interest on any of its other Indebtedness the
aggregate outstanding principal amount of which exceeds $250,000,
or in the payment when due of any amount under any Interest Rate
Protection Agreement for an amount exceeding $250,000; or any
event specified in any note, agreement, indenture or other
document evidencing or relating to any such Indebtedness or any
event specified in any Interest Rate Protection Agreement shall
occur if the effect of such event is to cause, or (with or
without the giving of any notice or the lapse of time or both) to
permit the holder or holders of such Indebtedness (or a trustee
or agent on behalf of such holder or holders) to cause (other
than, in the case of a Capitalized Lease Obligation, as a result
of a default occurring on the Effective Date in respect of such
Capitalized Lease Obligation caused solely by the creation of the
Liens intended to be created by the Security Documents on the
Property to which such Capitalized Lease Obligation relates),
such Indebtedness to become due, or to be prepaid in full or to
be purchased by the Company or one of its Affiliates (whether by
redemption, purchase, repurchase, offer to purchase or
repurchase, exercise of a put or call option or otherwise), prior
to its stated maturity or to have the interest rate on such
Indebtedness reset to a level so that securities evidencing such
Indebtedness trade at a level specified in relation to its par
value or, in the case of an Interest Rate Protection Agreement,
to permit the payments owing under such Interest Rate Protection
Agreement to be liquidated; or the holder of any Lien on any
Property of the Company having a fair market value in excess of
$250,000 shall have commenced foreclosure of such Lien; or
(c) Any representation, warranty or certification made
or deemed made by the Company in any Basic Document or any
certificate furnished to any Lender, the Administrative Agent or
the Co-Agent pursuant to the provisions of any Basic Document
shall prove to have been false or misleading as of the time made
or furnished or deemed made or furnished in any material respect;
or
(d) The Company shall default in the performance of
any of its obligations under any of Section 8.01(l), 8.05, 8.06,
8.07, 8.08, 8.09, 8.10, 8.11, 8.12, 8.13, 8.14, 8.15, 8.16, 8.18,
8.24 or 8.25, or Section 5 of the Security Agreement or any
provisions of the Mortgage; or the Company shall default in the
performance of any of its obligations under Section 8.01(f) and
such default shall continue unremedied for a period of 1 Business
Day after notice of such default shall have been given to the
Company by the Administrative Agent or any Lender (through the
Administrative Agent); or the Company shall default in the
performance of any of its other obligations in this Agreement or
any other Basic Document and such default shall continue
unremedied for a period of 30 days after notice of such default
shall have been given to the Company by the Administrative Agent
or any Lender (through the Administrative Agent); or
(e) The Company shall admit in writing its inability
to, or be generally unable to, pay its debts as such debts become
due; or
(f) The Company shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver,
custodian, trustee, examiner or liquidator of itself or of all or
a substantial part of its Property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a
voluntary case under the Bankruptcy Code, (iv) file a petition
seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of
debts, (v) fail to controvert in a timely and appropriate manner,
or acquiesce in writing to, any petition filed against it in an
involuntary case under the Bankruptcy Code or (vi) take any
corporate action for the purpose of effecting any of the
foregoing; or
(g) A proceeding or case shall be commenced, without
the application or consent of the Company in any court of
competent jurisdiction, seeking (i) its reorganization,
liquidation, dissolution, arrangement or winding-up, or the
composition or readjustment of its debts, (ii) the appointment of
a receiver, custodian, trustee, examiner, liquidator or the like
of the Company or of all or any substantial part of its Property,
or (iii) similar relief in respect of the Company under any law
relating to bankruptcy, insolvency, reorganization, winding-up,
or composition or adjustment of debts, and such proceeding or
case shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of 60 or more days;
or an order for relief against the Company shall be entered in an
involuntary case under the Bankruptcy Code; or
(h) A final judgment or judgments (including any
arbitration award) for the payment of money in excess of $100,000
in the aggregate (exclusive of judgment amounts fully covered by
insurance where the insurer has admitted in writing liability in
respect of such judgment) or in excess of $250,000 in the
aggregate (regardless of insurance coverage) shall be rendered by
a one or more Governmental Persons (or, in the case of an
arbitration award, one or more arbitrators) having jurisdiction
against the Company and the same shall not be discharged (or
provision shall not be made for such discharge), or a stay of
execution of the relevant judgment shall not be procured, within
60 days from the date of entry of such judgment and the Company
shall not, within that sixty-day period, or such longer period
during which execution of the same shall have been stayed, appeal
from and cause the execution of such judgment to be stayed during
such appeal; or
(i) An event or condition specified in Section 8.01(e)
shall occur or exist with respect to any Plan or Multiemployer
Plan and, as a result of such event or condition, together with
all other such events or conditions, the Company or any ERISA
Affiliate shall incur or shall be reasonably likely to incur a
liability to a Plan, a Multiemployer Plan or PBGC (or any
combination of the foregoing) which would constitute a Material
Adverse Effect; or
(j) A reasonable basis shall exist for the assertion
against the Company of (or there shall have been asserted against
the Company) claims or liabilities, whether accrued, absolute or
contingent, based on or arising from the generation, storage,
transport, handling or Release of Hazardous Materials by the
Company or Affiliates, or any predecessor in interest of the
Company or Affiliates, or relating to any site, facility or
vessel owned, operated or leased by the Company or Affiliates,
which claims or liabilities (insofar as they are payable by the
Company but after deducting any portion which is reasonably
expected to be paid by other creditworthy Persons jointly and
severally liable for such portion), in the judgment of the
Majority Lenders are reasonably likely to be determined adversely
to the Company, and the amount of such claims or liabilities is,
singly or in the aggregate, reasonably likely to have a Material
Adverse Effect; or
(k) Any person or group (within the meaning of
Rule 13d-5 of the Securities and Exchange Commission as in effect
on the date of this Agreement), other than GEI (or one or more of
its affiliates) or members of the bondholders committee in the
Chapter 11 Case (or a group which includes any one or more of the
foregoing), shall acquire beneficially more than 35% (by number
of votes) of the voting stock of the Company; or any Person or
group (other than GEI (or its affiliates) or any member of the
bondholders committee in the Chapter 11 case (or a group which
includes any one or more of the foregoing)) shall succeed in
having a sufficient number of its nominees elected to the Board
of Directors of the Company to constitute a majority of the Board
of Directors of the Company; or
(l) Except for expiration in accordance with its
terms, any of the Security Documents shall be terminated or shall
cease to be in full force and effect, or any Lien intended to be
created by the Security Documents shall at any time be
invalidated, subordinated or otherwise cease to be in full force
and effect, for whatever reason; or
(m) The Company shall make any payment or prepayment
(whether in cash or other Property) of the principal of or
interest on, or any other amount owing in respect of the
principal of or interest on, the Senior Notes (including any
redemption, retirement, purchase or defeasance of, or sinking
fund or similar payment with respect to, the Senior Notes),
except for regularly scheduled payments of interest in respect of
such Senior Notes required pursuant to the Senior Notes and
Senior Note Documents;
THEREUPON: (1) in the case of an Event of Default other than one
referred to in clause (f) or (g) of this Section 9, (A) the
Administrative Agent may and, upon the request of the Majority
Lenders, shall, by notice to the Company, terminate the
Commitments and they shall thereupon terminate and (B) the
Administrative Agent may and, upon the request of the Majority
Lenders, shall, by notice to the Company, declare the principal
amount then outstanding of, and the accrued interest on, the
Loans, the Reimbursement Obligations and all other Obligations to
be forthwith due and payable, whereupon such amounts shall be
immediately due and payable without presentment, demand, protest
or other formalities of any kind, all of which are hereby
expressly waived by the Company; and (2) in the case of the
occurrence of an Event of Default referred to in clause (f)
or (g) of this Section 9, the Commitments shall automatically be
terminated and the principal amount then outstanding of, and the
accrued interest on, the Loans, the Reimbursement Obligations and
all other Obligations shall automatically become immediately due
and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived
by the Company. The Majority Lenders shall have the right (in
their sole and absolute discretion) to rescind any declaration of
termination or acceleration made by the Administrative Agent
under this Section 9. Nothing in this Section 9 shall affect the
rights of the Administrative Agent to make Discretionary
Extensions in accordance with Section 2.02(c) (or the obligations
of the Company and the Lenders with respect thereto) prior to any
termination of the Commitments or acceleration of the Obligations
as set forth above.
In addition, upon the occurrence and during the
continuance of any Event of Default (if the Administrative Agent
has declared the principal amount then outstanding of, and
accrued interest on, the Revolving Credit Loans and all other
Obligations to be due and payable), the Company agrees that it
shall, if requested by the Administrative Agent or the Majority
Lenders through the Administrative Agent (and, in the case of any
Event of Default referred to in clause (f) or (g) of this
Section 9, forthwith, without any demand or the taking of any
other action by the Administrative Agent or such Lenders) provide
cover for the Letter of Credit Liabilities by paying to the
Administrative Agent immediately available funds in an amount
equal to the then aggregate undrawn face amount of all Letters of
Credit, which funds shall be held by the Administrative Agent in
the Collateral Account as collateral security in the first
instance for the Letter of Credit Liabilities and be subject to
withdrawal only as provided in the Security Documents with
respect to the Collateral Account.
Section 10. The Administrative Agent.
10.01 Appointment, Powers and Immunities. Each Lender
hereby irrevocably appoints and authorizes the Administrative
Agent to act as its agent under this Agreement and the other
Basic Documents with such powers as are specifically delegated to
the Administrative Agent by the terms of the Basic Documents,
together with such other powers as are reasonably incidental to
such powers. The Administrative Agent (which term as used in
this sentence and in Section 11.05 and the first sentence of
Section 11.06 shall include reference to its affiliates and its
own and its affiliates' officers, directors, employees and
agents): (a) shall have no duties or responsibilities except
those expressly set forth in the Basic Documents, and shall not
by reason of any Basic Document be a trustee or fiduciary for any
Lender; (b) shall not be responsible to the Lenders for any
recitals, statements, representations or warranties contained in
any Basic Document, or in any certificate or other document
referred to or provided for in, or received by any of them under,
this Agreement or any other Basic Document, or for the value,
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, any Note or any other Basic
Document or any other document referred to or provided for in any
Basic Document or for any failure by the Company or any other
Person to perform any of its obligations under any Basic
Document; (c) shall not be required to initiate or conduct any
litigation or collection proceedings under any Basic Document;
(d) shall not be responsible for any action taken or omitted to
be taken by it under any Basic Document or under any other
document or instrument referred to or provided for in any Basic
Document or in connection with any Basic Document, except for its
own gross negligence or willful misconduct. The Administrative
Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents
or attorneys-in-fact selected by it in good faith. The
Administrative Agent may deem and treat the payee of any Note as
the holder of such Note for all purposes of the Basic Documents
unless and until a notice of the assignment or transfer of such
Note shall have been filed with the Administrative Agent,
together with the consent of the Company to such assignment or
transfer (to the extent provided in Section 11.06(b)).
10.02 Reliance by Administrative Agent. The
Administrative Agent shall be entitled to rely upon any
certification, notice or other communication (including any made
by telephone, telecopy, telex, telegram or cable) believed by it
to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other
experts selected by the Administrative Agent. As to any matters
not expressly provided for by any Basic Document, the
Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under any Basic Document in
accordance with instructions given by the Majority Lenders or, if
provided in this Agreement, in accordance with the instructions
given by all of the Lenders as is required in such circumstance,
and such instructions of such Lenders and any action taken or
failure to act pursuant to such instructions shall be binding on
all of the Lenders.
10.03 Defaults. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of a Default
(other than the nonpayment of principal of or interest on Loans
or Reimbursement Obligations or of commitment fees) unless the
Administrative Agent has received notice from a Lender or the
Company specifying such Default and stating that such notice is a
"Notice of Default". In the event that the Administrative Agent
receives such a notice of the occurrence of a Default, the
Administrative Agent shall give prompt notice of such receipt to
the Lenders (and shall give each Lender prompt notice of each
such nonpayment). The Administrative Agent shall (subject to
Section 11.07) take such action with respect to such Default as
shall be directed by the Majority Lenders, provided that, unless
and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such
action, with respect to such Default as it shall deem advisable
in the best interest of the Lenders (including the making of
discretionary Revolving Credit Loans pursuant to Section 2.02)
except to the extent that this Agreement expressly requires that
such action be taken, or not be taken, only with the consent or
upon the authorization of the Majority Lenders, or all of the
Lenders.
10.04 Rights as a Lender. With respect to its
Commitments and the Loans made by it, CITBC (and any successor
acting as Administrative Agent) in its capacity as a Lender under
the Basic Documents shall have the same rights, privileges and
powers under the Basic Documents as any other Lender and may
exercise the same as though it were not acting as the
Administrative Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the
Administrative Agent in its individual capacity. CITBC (and any
successor acting as Administrative Agent) and its affiliates may
(without having to account for the same to any Lender) accept
deposits from, lend money to, make investments in and generally
engage in any kind of banking, trust or other business with the
Company (and any of its Affiliates) as if it were not acting as
the Administrative Agent, and CITBC and its affiliates may accept
fees and other consideration from the Company for services in
connection with this Agreement or otherwise without having to
account for the same to the Lenders.
10.05 Indemnification. The Lenders agree to indemnify
each of the Administrative Agent and the Co-Agent (in their
respective capacities as administrative agent and co-agent for
the Lenders under the Basic Documents) and their respective
affiliates, directors, officers, employees, attorneys and agents
(to the extent not reimbursed under Section 11.03, but without
limiting the obligations of the Company under Section 11.03)
ratably in accordance with their respective Commitments or, if
the Commitments shall have terminated, in accordance with the
principal outstanding amount of the Loans held by the Lenders,
for any and all losses, liabilities, damages or expenses (a)
incurred by any of them in connection with or by reason of any
actual or threatened investigation, litigation or other
proceedings (including any such investigation, litigation or
other proceedings between the Administrative Agent, the Co-Agent
and any Lender) relating to the extensions of credit under, and
the transactions contemplated by, the Basic Documents or any
actual or proposed use by the Company of the proceeds of any such
extensions of credit (or arising under any Environmental Law as
provided in the last sentence of Section 11.03), including the
reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other
proceedings and (b) payable or reimbursable to the Administrative
Agent or the Co-Agent pursuant to clause (a), (b) or (c) of
Section 11.03 but not paid or reimbursed by or on behalf of the
Company when due (but excluding in any such case any such losses,
liabilities, damages or expenses to the extent, but only to the
extent, incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified).
10.06 Nonreliance on Administrative Agent, Co-Agent
and Other Lenders. Each Lender agrees that it has, independently
and without reliance on the Administrative Agent, the Co-Agent or
any other Lender, and based on such documents and information as
it has deemed appropriate, made its own credit analysis of the
Company and decision to enter into this Agreement and that it
will, independently and without reliance upon the Administrative
Agent, the Co-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 analysis and decisions in taking
or not taking action under this Agreement. Neither the
Administrative Agent nor the Co-Agent shall be required to keep
itself informed as to the performance or observance by the
Company of any Basic Document or any other document referred to
or provided for in any Basic Document or to inspect the
Properties or books of the Company. Except for notices, reports
and other documents and information expressly required to be
furnished to the Lenders by the Administrative Agent under this
Agreement, neither the Administrative Agent nor the Co-Agent
shall have any duty or responsibility to provide any Lender with
any credit or other information concerning the affairs, financial
condition or business of the Company (or any of its Affiliates)
that may come into the possession of the Administrative Agent,
the Co-Agent or any of their respective affiliates.
10.07 Failure to Act. Except for action expressly
required of the Administrative Agent under the Basic Documents,
the Administrative Agent shall in all cases be fully justified in
failing or refusing to act under any Basic Document unless it
shall receive further assurances to its satisfaction from the
Lenders of their indemnification obligations under Section 11.05
against any and all liability and expense that may be incurred by
it by reason of taking or continuing to take any such action.
10.08 Resignation or Removal of Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent
may resign at any time by notice to the Lenders and the Company,
and the Administrative Agent may be removed at any time with or
without cause by the Majority Lenders. Upon any such resignation
or removal, the Majority Lenders shall have the right to appoint
a successor Administrative Agent. If no successor Administrative
Agent shall have been so appointed by the Majority Lenders and
shall have accepted such appointment within 30 days after the
retiring Administrative Agent's giving of notice of resignation
or the Majority Lenders' removal of the retiring Administrative
Agent, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, that shall
be a financial institution which has an office in New York City,
New York or Los Angeles, California. Upon the acceptance of any
appointment as Administrative Agent by a successor Administrative
Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers,
privileges, duties and obligations of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations, under the Basic Documents.
After any retiring Administrative Agent's resignation or removal
as Administrative Agent, the provisions of this Section 10 shall
continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the
Administrative Agent.
10.09 Agency Fees. So long as the Commitments are in
effect and until payment in full of the principal of and interest
on the Loans and all other Obligations, the Company will pay to
(a) the Administrative Agent agency fees of (i) $600,000 on the
Effective Date and (ii) $100,000 on each anniversary of the
Effective Date (excluding the Termination Date) and (b) the Co-
Agent a co-agency fee of $25,000 per annum, payable annually in
advance commencing on the Effective Date and on each anniversary
of the Effective Date (excluding the Termination Date). Such
fees, once paid, shall be non-refundable.
10.10 Authorization of the Co-Agent. Each of the
Lenders hereby irrevocably appoints and authorizes Bank of
America to act as the Co-Agent under this Agreement. Except as
expressly set forth in this Agreement and as otherwise may be
agreed by the Administrative Agent and the Majority Lenders, Bank
of America shall have no duties as Co-Agent under this Agreement.
10.11 Collateral Sub-Agent. Each Lender by its
execution and delivery of this Agreement agrees, as contemplated
by Section 3.03 of the Security Agreement, that, in the event it
shall hold any Permitted Investments referred to in that Section
3.03, such Permitted Investments shall be held in the name and
under the control of such Lender, and such Lender shall hold such
Permitted Investments as a collateral sub-agent for the
Administrative Agent under the Security Agreement. In addition,
a Lender in possession of any property subject to the Lien of the
Security Documents shall hold the same as a collateral sub-agent
for the Administrative Agent for the benefit of the Lenders, the
Administrative Agent and the Co-Agent as provided for in the
Security Documents. Any such property held or recovered at any
time by any Lender or any realization on account of any such
property shall inure to the ratable benefit of the Lenders, the
Administrative Agent and the Co-Agent as provided in the Security
Agreement. The Company by its execution and delivery of this
Agreement hereby consents to the foregoing.
Section 11. Miscellaneous.
11.01 Waiver. No failure on the part of the
Administrative Agent or any Lender to exercise and no delay in
exercising, and no course of dealing with respect to, any right,
remedy, power or privilege under this Agreement or any Note shall
operate as a waiver of such right, remedy, power or privilege,
nor shall any single or partial exercise of any right, power or
privilege under this Agreement or any Note preclude any other or
further exercise of any such right, remedy, power or privilege or
the exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges provided in this
Agreement and the Notes are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
11.02 Notices. All notices, requests and other
communications provided for in this Agreement and under the Basic
Documents making reference to this Section 11.02 (including any
modifications of, or waivers or consents under, this Agreement)
shall be given or made in writing, delivered to the intended
recipient at the "Address for Notices" specified below its name
on Annex 1 or, as to any party, at such other address as shall be
designated by such party in a notice to each other party. Except
as otherwise provided in any Basic Document, all such
communications shall be deemed to have been duly given when
transmitted by telex or telecopier or personally delivered or, in
the case of a mailed notice, upon receipt, in each case given or
addressed as set forth above (provided that, if the day on which
any such communication shall be deemed to have been duly given as
set forth above is not a Business Day, such communication shall
be deemed to have been duly given on the next succeeding Business
Day).
11.03 Expenses, Etc. The Company agrees to pay or
reimburse each of the Lenders, the Administrative Agent and the
Co-Agent, as the case may be, for paying: (a) all reasonable
out-of-pocket costs and expenses of the Administrative Agent and
the Co-Agent (including, upon delivery of statements therefor,
the reasonable fees and expenses of Orrick, Herrington &
Sutcliffe, special counsel to the Administrative Agent, and of
Sidley & Austin, special counsel to the Co-Agent), in connection
with (i) the negotiation, preparation, execution, delivery and
administration of the Basic Documents and the extension of credit
under this Agreement and (ii) any modification, supplement or
waiver of any of the terms of any Basic Document; (b) all
reasonable costs and expenses of the Lenders, the Administrative
Agent and the Co-Agent (including, upon delivery of statements
therefor, reasonable counsels' fees and expenses) in connection
with (i) any Default and any enforcement or collection
proceedings (including any bankruptcy, reorganization, workout or
other similar proceeding) resulting from such Default or in
connection with the negotiation of any restructuring or
"work-out" (whether or not consummated) of the obligations of the
Company under the Basic Documents and (ii) the enforcement of
this Section 11.03; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges (including intangible
personal property taxes) levied by any governmental or revenue
authority in respect of any Basic Document or any other document
referred to in any Basic Document and all costs, expenses, taxes,
assessments and other charges (including intangible personal
property taxes) incurred in connection with any filing,
registration, recording or perfection of any security interest
contemplated by any Basic Document or any other document referred
to in any Basic Document (including recurring and nonrecurring
intangible personal property taxes payable under Chapters 199 and
201 of the Florida Statutes).
The Company hereby agrees (i) to indemnify the
Administrative Agent, the Co-Agent and each Lender and their
respective affiliates, directors, officers, employees, attorneys,
agents, accountants and consultants from, and hold each of them
harmless against, any and all losses, liabilities, damages or
expenses incurred by any of them in connection with or by reason
of any actual or threatened investigation, litigation or other
proceedings (including, in respect of the Administrative Agent,
any such investigation, litigation or other proceedings between
the Administrative Agent and any Lender or the Co-Agent) relating
to the extensions of credit under, and the transactions
contemplated by, the Basic Documents or any actual or proposed
use by the Company of the proceeds of any such extensions of
credit, including, upon delivery of statements therefor, the
reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other
proceedings (but excluding any such losses, liabilities, damages
or expenses to the extent, but only to the extent, incurred by
reason of the gross negligence or willful misconduct of the
Person to be indemnified) and (ii) not to assert any claim
against the Administrative Agent, the Co-Agent any Lender or any
of their respective affiliates, directors, officers, employees,
attorneys and agents, on any theory of liability, for special,
indirect, consequential or punitive damages arising out of or
otherwise relating to any of the transactions contemplated in any
Basic Document. It shall not be a condition to any such
indemnification that the Administrative Agent, the Co-Agent or
any Lender be a party to any such investigation, litigation or
other proceeding. Without limiting the generality of the
foregoing, the Company will indemnify the Administrative Agent,
the Co-Agent and each Lender and their respective affiliates,
directors, officers, employees, attorneys and agents from, and
hold each of them harmless against, any losses, liabilities,
damages or expenses described in the preceding provisions (but
excluding, as provided in the preceding provisions, any loss,
liability, damage or expense incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified)
arising under any Environmental Law as a result of the past,
present or future operations of the Company (or any predecessor
in interest to the Company), or the past, present or future
condition of any site, facility or vessel owned, operated or
leased by the Company (or any such predecessor in interest), or
any Release or threatened Release of any Hazardous Materials from
any such site or facility, including any such Release or
threatened Release which shall occur during any period when the
Administrative Agent, the Co-Agent or any Lender shall be in
possession of any such site, facility or vessel following the
exercise by the Administrative Agent, the Co-Agent or any Lender
of any of its rights and remedies under any Basic Document.
11.04 Amendments, Etc. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement and
the other Basic Documents may be modified or supplemented only by
an instrument in writing signed by the Company, the
Administrative Agent and the Majority Lenders, or by the Company
and the Administrative Agent acting with the written consent of
the Majority Lenders, and any provision of this Agreement and the
other Basic Documents may be waived by the Majority Lenders or by
the Administrative Agent acting with the written consent of the
Majority Lenders; provided that: (a) no modification, supplement
or waiver shall, unless by an instrument signed by all of the
Lenders that will be adversely affected thereby or by the
Administrative Agent acting with the written consent of such
Lenders: (i) increase, or extend the term of, any of the
Commitments, or extend the time or waive any requirement for the
reduction or termination of any of the Commitments, (ii) extend
the date fixed for the payment of any principal, interest or fees
under this Agreement or the Notes, (iii) reduce the amount of any
such payment of principal, (iv) reduce the rate at which interest
or any fee is payable under this Agreement or alter the basis for
calculating any other Obligation (provided that the Majority
Lenders shall have the right to waive compliance with the
requirement in Section 3.02 that the Obligations shall bear
interest at the Post-Default Rate upon the occurrence and during
the continuance of an Event of Default, other than under the
circumstances in which an Event of Default specified in Section
9(a) shall have occurred and is continuing), (v) alter the terms
of this Section 11.04, (vi) modify the definition of the term
"Majority Lenders," or modify in any other manner the number or
percentage of the Lenders required to make any determinations or
to waive any rights under, or to modify any provision of, this
Agreement, (vii) modify the definition of the term "Borrowing
Base" or (viii) release any collateral or otherwise terminate any
Lien under any Basic Document providing for collateral security
or agree to additional obligations (other than the Obligations)
being secured by such collateral security (except that no such
consent shall be required, and the Administrative Agent is hereby
authorized, to release any Lien covering Property (A) which is
the subject of a permitted Disposition under this Agreement, (B)
leased by the Company to the extent (1) the creation of such Lien
violates the terms of any applicable lease in effect as of the
Effective Date and (2) the lessor under such lease has notified
the Company that it intends to terminate such lease unless such
Lien is released, or (C) which is the subject of a Disposition as
to which (1) Net Available Proceeds in respect of such
Disposition of such Property in an amount equal to the greater of
the fair market value of such Property at the Effective Date and
the date of such Disposition shall have been received by the
Company and applied to the prepayment of the Loans as set forth
in Section 2.10(f) and (2) the Majority Lenders shall have given
their prior written consent (and, upon the written request of the
Company, the Administrative Agent shall execute such
reconveyances and other instruments as shall be reasonably
necessary to evidence any such release); and (b) any
modification, supplement or waiver of Section 10 (or any increase
in the duties of the Administrative Agent or the Co-Agent) shall
require the consent of the Administrative Agent and (if affected
thereby) the Co-Agent. Any modification, supplement or waiver
shall be for such period and subject to such conditions as shall
be specified in the instrument effecting the same and shall be
binding upon the Administrative Agent, the Co-Agent, the Lenders
and the Company, and any such waiver shall be effective only in
the specific instance and for the purpose for which given. A
copy of each such amendment shall be delivered to the Co-Agent.
Notwithstanding any other provision of this Agreement,
if:
(a) any Lender shall fail to fulfill its obligations
to make a Loan as set forth in this Agreement, or
(b) any Revolving Credit Lender shall fail to pay to
the Administrative Agent the amount of such Lender's Revolving
Credit Commitment Percentage of any payment under a Letter of
Credit pursuant to Section 2.03,
then, for so long as such failure shall continue, such Lender
shall (unless the Majority Lenders, determined as if such Lender
were not a "Lender" under the Basic Documents, shall otherwise
consent in writing) be deemed for all purposes relating to
amendments, modifications, waivers or consents under any of the
Basic Documents (including under this Section 11.04) to have no
Loans, Letter of Credit Liabilities or Commitments.
11.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of its parties and their
respective successors and permitted assigns.
11.06 Assignments and Participations.
(a) The Company may not assign any of its rights or
obligations under this Agreement or under the Notes without the
prior consent of all of the Lenders, the Administrative Agent and
the Co-Agent. Any attempted or purported assignment in
contravention of the preceding sentence shall be null and void.
(b) Each Lender may assign all or any part of its
Loans, its Notes, its Commitments (except that Bank of America
may not assign the Tranche C Term Loan, related Note and
Tranche C Term Loan Commitment other than in connection with an
assignment of all of Bank of America's rights and obligations as
a Lender hereunder) and its Letter of Credit Interest (but only
with the consent of the Administrative Agent and, in the case of
an outstanding Commitment, the Company (provided that the
Company's consent shall not be required at any time during which
a Default shall have occurred and be continuing), which consents
shall not be unreasonably withheld or delayed), together with, in
any such case, its related rights, remedies, powers and
privileges under the Basic Documents; provided that (i) no such
consent by the Company or the Administrative Agent shall be
required in the case of any assignment to another Lender or (in
the case of consent by the Company) to an affiliate of a Lender;
(ii) any such partial assignment shall be in an amount at least
equal to $5,000,000 and the assigning Lender (other than CITBC)
shall have a retained interest at least equal to $5,000,000 after
giving effect to such partial assignment; (iii) CITBC shall not
make any assignment unless, after giving effect to such
assignment, it shall have a retained interest at least equal to
twenty percent (20%) of the outstanding Obligations (or, if no
such Obligations are outstanding, of the Commitments) at such
time; (iv) each such assignment by a Lender of its Loans, Notes,
Commitments and Letter of Credit Interest shall be made in such
manner so that the same portion of its Loans, Notes, Commitments
and Letter of Credit Interest is assigned to the respective
assignee; and (v) the assigning Lender or the respective assignee
shall have paid to the Administrative Agent an assignment fee of
$5,000. Upon execution and delivery by the assignee to the
Company and the Administrative Agent of an instrument in writing
(a copy of which shall be delivered to the Co-Agent) pursuant to
which such assignee agrees to become a "Lender" under this
Agreement (if not already a Lender) having the Commitment or
Commitments, Loans, and Letter of Credit Interest specified in
such instrument, and upon the consent of the Company and the
Administrative Agent, to the extent required above, the assignee
shall have, to the extent of such assignment (unless otherwise
provided in such assignment with the consent of the Company and
the Administrative Agent), the obligations, rights and benefits
of a Lender under the Basic Documents holding the Commitment or
Commitments, Loans and Letter of Credit Interest assigned to it
(in addition to the Commitment or Commitments, Loans and Letter
of Credit Interest, if any, theretofore held by such assignee)
and the assigning Lender shall, to the extent of such assignment,
be released from the Commitment or Commitments so assigned.
(c) A Lender may sell or agree to sell to one or more
other Persons a participation in all or any part of its Loans,
its Notes, its Commitments, its Letter of Credit Interest and its
related rights, remedies, powers and privileges under the Basic
Documents, in which event each purchaser of a participation (a
"Participant") shall be entitled to the rights and benefits of
the provisions of Section 8.01(o) with respect to such
participation as if (and the Company shall be directly obligated
to such Participant under such provisions as if) such Participant
were a "Lender" for purposes of Section 8.01(o), but, except as
otherwise provided in Section 4.07(c), shall not have any other
rights, remedies, powers or privileges under any Basic Document
(the Participant's rights against such Lender in respect of such
participation to be those set forth in the agreements executed by
such Lender in favor of the Participant). All amounts payable by
the Company to any Lender under Section 5 in respect of such
Lender's Loans, Notes, Letter of Credit Interest, and Commitments
shall be determined as if such Lender had not sold or agreed to
sell any participations in such Loans, Letter of Credit Interest
and Commitments, and as if such Lender were funding each of such
Loans, Notes, Letter of Credit Interest and Commitments in the
same way that it is funding the portion of such Loans, Notes,
Letter of Credit Interest and Commitments in which no
participations have been sold. In no event shall a Lender that
sells a participation agree with the Participant to take or to
refrain from taking any action under any Basic Document except
that such Lender may agree with the Participant that it will not,
without the consent of the Participant, agree to (i) increase or
extend the term, or extend the time or waive any requirement for
the reduction or termination, of such Lender's related
Commitment, (ii) extend the date fixed for the payment of
principal of or interest on the related Loan or Loans,
Reimbursement Obligations or any portion of any fee under this
Agreement payable to the Participant, (iii) reduce the amount of
any such payment of principal, (iv) reduce the rate at which
interest or any fee under this Agreement in which such Lender has
sold an interest is payable to the Participant, to a level below
the rate at which the Participant is entitled to receive such
interest or fee under its agreements with such Lender, (v) alter
the rights or obligations of the Company to prepay the related
Loans or (vi) consent to any modification, supplement or waiver
of any Basic Document to the extent that the same, under
Section 11.04, requires the consent of each Lender.
(d) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 11.06,
any Lender may assign and pledge all or any portion of its Loans
and its Notes to any Federal Reserve Bank as collateral security
pursuant to Regulation A and any Operating Circular issued by
such Federal Reserve Bank. No such assignment shall release the
assigning Lender from its obligations under the Basic Documents.
(e) A Lender may furnish any information concerning
the Company in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of
Section 11.12.
(f) Notwithstanding anything in this Section 11.06 to
the contrary, no Lender may assign or participate any interest in
any Obligation or Commitment (or any related rights, remedies,
powers or privileges) to the Company or any of its Affiliates
without the prior written consent of each Lender.
11.07 Survival. The obligations of the Company under
Sections 2.03(l), 2.03(o), 5.01, 5.02, 5.03 and 11.03 and the
obligations of the Lenders under Section 10.05 shall survive the
repayment of the Obligations and the termination of the
Commitments. In addition, each representation and warranty made,
or deemed to be made by a notice of any extension of credit
(whether by means of a Loan or a Letter of Credit), in or
pursuant to any Basic Document to which the Company is a party
shall survive the making or deemed making of such representation
and warranty, and no Lender shall be deemed to have waived, by
reason of making any extension of credit (whether by means of a
Loan or a Letter of Credit), any Default which may arise by
reason of such representation or warranty proving to have been
false or misleading, notwithstanding that such Lender, the
Administrative Agent or the Co-Agent may have had notice or
knowledge or reason to believe that such representation or
warranty was false or misleading at the time such extension of
credit was made.
11.08 Agreements Superseded. This Agreement
supersedes all prior agreements and understandings (including the
Disclosure Statement and any and all commitment letters and term
sheets), written or oral, among the parties with respect to the
subject matter of this Agreement.
11.09 Severability. Any provision of this Agreement
or the Notes that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or the
Notes, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
11.10 Captions. The table of contents and captions
and section headings appearing in this Agreement are included
solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.
11.11 Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties to
this Agreement may execute this Agreement by signing any such
counterpart.
11.12 Treatment of Certain Information;
Confidentiality. Each of the Lenders, the Administrative Agent
and the Co-Agent agrees (on behalf of itself and each of its
affiliates, directors, officers, employees and representatives)
to use reasonable precautions to keep confidential, in accordance
with customary procedures for handling confidential information
of this nature and in accordance with safe and sound banking
practices, any nonpublic information supplied to it by the
Company pursuant to this Agreement which is identified by the
Company as being confidential at the time the same is delivered
to the Lenders, the Administrative Agent or the Co-Agent,
provided that nothing in this Agreement shall limit the
disclosure of any such information (i) to the extent required by
Governmental Rule, (ii) to counsel for any of the Lenders, the
Administrative Agent or the Co-Agent, (iii) to bank examiners,
auditors or accountants, (iv) to the Administrative Agent, the
Co-Agent or any other Lender or their affiliates, directors,
officers, employees, accountants, consultants and
representatives, (v) in connection with any litigation to which
any one or more of the Lenders, the Administrative Agent or the
Co-Agent is a party, (vi) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first
executes and delivers to the respective Lender a Confidentiality
Agreement substantially in the form of Exhibit G.
11.13 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS
AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. THE COMPANY
HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND
OF ANY NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK FOR THE
PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
11.14 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE
ADMINISTRATIVE AGENT, THE CO-AGENT AND THE LENDERS HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed and delivered as of the day and
year first above written.
KASH N' KARRY FOOD STORES, INC.
By: /s/ R.P. Springer
Title:
LENDERS
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ Judd S. Fischer
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ H.G. Wheelock
Title: V.P.
WELLS FARGO BANK, N.A.
By: /s/ Jeffrey P. Rose
Title: Vice President
BARNETT BANK OF TAMPA, BY BARNETT
BANKS, INC., as Attorney-in-Fact
for Barnett Bank of Tampa
By: /s/ Julie M. Smith
Title: Julie M. Smith, Workout Officer
NATIONSBANK OF FLORIDA, N.A.
By: /s/ Samuel P. McNeil
Title: V.P.
ADMINISTRATIVE AGENT
THE CIT GROUP/BUSINESS CREDIT,
INC., as Administrative Agent
By: /s/ Judd S. Fischer
Title: Vice President
CO-AGENT
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Co-Agent
By: /s/ Laura Knight
Title: Laura Knight Vice President
Annex 1
Addresses for Notices and Commitments of the Lenders
THE COMPANY
KASH N' KARRY FOOD STORES, INC.
6422 Harney Road
Tampa, Florida 33610
Attention: Executive Vice President, Administration
Telephone No.: (813) 621-0200
Telecopier No.: (813) 626-9550
THE LENDERS
(Lending Offices and Addresses for Notices)
THE CIT GROUP/BUSINESS CREDIT, INC.
300 South Grand Avenue
Third Floor
Los Angeles, California 90071
Attention: Regional Credit Manager
Telephone No.: (213) 613-2575
Telecopier No.: (213) 613-2588<PAGE>
Revolving Credit Commitment
$29,744,599.28
Tranche A
Term Loan Commitment
0
Tranche B
Term Loan Commitment
$20,255,400.72
Tranche C
Term Loan Commitment
0
<PAGE>
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
1850 Gateway Blvd.
Concord, California 94520
Attention: Pat Simmons
Global Payments
Service Account
Administration
Telephone No.: (510) 675-7760
Telecopier No.: (510) 675-7531<PAGE>
Revolving Credit Commitment
$7,150,048.14
Tranche A
Term Loan Commitment
0
Tranche B
Term Loan Commitment
$4,869,021.40
Tranche C
Term Loan Commitment
$951,128.58<PAGE>
WELLS FARGO BANK, N.A.
Suite #940
333 South Grand Avenue
Los Angeles, California 90071-1504
Attention: Lorna Dauglash
Telephone No.: (213) 253-3547
Telecopier No.: (213) 627-2442<PAGE>
Revolving Credit Commitment
$6,905,250.24
Tranche A
Term Loan Commitment
0
Tranche B
Term Loan Commitment
$4,702,319.56
Tranche C
Term Loan Commitment
0
<PAGE>
BARNETT BANK OF TAMPA
Commercial Loan Accounting
900 Southside Blvd., Building 600
Jacksonville, Florida 32256
Attention: Stacy Flye
Telephone No.: (904) 464-5050
Telecopier No.: (904) 464-5552<PAGE>
Revolving Credit Commitment
$4,570,321.58
Tranche A
Term Loan Commitment
0
Tranche B
Term Loan Commitment
$3,112,285.83
Tranche C
Term Loan Commitment
0
<PAGE>
NATIONSBANK OF FLORIDA, N.A.
T18-7
1 NationsBank Plaza
Charlotte, North Carolina 28255
Attention: Patricia Turner
Telephone No.: (704) 386-9875
Telecopier No.: (704) 386-8694<PAGE>
Revolving Credit Commitment
$1,629,780.76
Tranche A
Term Loan Commitment
0
Tranche B
Term Loan Commitment
$1,109,843.91
Tranche C
Term Loan Commitment
0
THE ADMINISTRATIVE AGENT
THE CIT GROUP/BUSINESS CREDIT, INC.
300 South Grand Avenue
Third Floor
Los Angeles, California 90071
Attention: Regional Credit Manager
Telephone No.: (213) 613-2575
Telecopier No.: (213) 613-2588
THE CO-AGENT
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
Agency Management Services
Department 5596
1455 Market St., 12th Fl.
San Francisco, California 94103
Attention: Laura J. Knight
Telephone No.: (415) 622-4935
Telecopier No.: (415) 622-4894
SCHEDULE I
Material Agreements and Liens
PART A
1. Credit Agreement, dated as of October 12, 1988, and
amended and restated as of September 14, 1989, as
amended, among the Company, the Senior Lenders
referred to therein and Bank of America National
Trust and Savings Association* (Note: This
Agreement is secured by substantially all of the
Company's assets and is incorporated in Part B
hereof.)
2. Loan and Security Agreement, dated as of November 9,
1994, among the Company, the Lenders referred to
therein, Wells Fargo Bank, N.A., as Co-Agent, and
Bank America Business Credit, Inc., as Agent**
3. Indenture dated as of January 29, 1992 between the
Company and Ameritrust Texas N.A., as Trustee,
relating to Senior Notes due 1999*
4. Indenture dated as of September 14, 1989 between the
Company and NCNB National Bank of Florida, as
Trustee (NationsBank of Florida, National
Association, successor Trustee), relating to
Senior Floating Rate Notes due 1996*
5. Indenture dated as of February 8, 1989 between the
Company and First Florida Bank N.A., as Trustee
(the Bank of New York, successor Trustee),
relating to 14% Subordinated Debentures due 2001*
6. Indenture dated as of December 28, 1994 between the
Company and Shawmut Bank Connecticut, N.A., as
Trustee, relating to 11.5% Senior Floating Rate
Notes due 2003
7. Indenture dated as of December 28, 1994 between the
Company and IBJ Schroder Bank & Trust Company, as
Trustee, relating to Senior Floating Rate Notes
due 2003
8. See Schedule I, Part B.
___________________________
*To be terminated upon the Effective Date.
**Note: This is debtor in possession financing secured by
substantially all of the Company's assets and is incorporated in
Part B hereof.
PART B Schedule I
Kash n' Karry Food Stores, Inc.
Debts over $50,000 subject to liens
Ending October 30, 1995
Obligation
Property DescriptionLocation Balance Holder
Store Fixtures & Equipment#207 Charlotte Harbor$ 247,882GE Capital
Store Fixtures & Equipment#209 Bonita Springs$ 386,383GE Capital
Store Fixtures & Equipment#214 Sarasota $ 979,815GE Capital
Store Fixtures & Equipment#703 Temple Terrace$ 215,839GE Capital
Store Fixtures & Equipment#711 Orange City$ 239,539GE Capital
Store Fixtures & Equipment#716 Spring Hill$ 609,131GE Capital
Store Fixtures & Equipment#854 Palmetto $ 443,869GE Capital
Building Capital Lease#128 Zephryhills $ 73,222Grand Central
Building Capital Lease#129 Lakeland $ 82,918Grand Central
Building Capital Lease#130 Ocala $ 80,258Grand Central
Building Capital Lease#134 Holiday $ 69,251Grand Central
Building Capital Lease#140 Seminole $ 94,450Grand Central
Building Capital Lease#144 Tampa $ 115,257Grand Central
Building Capital Lease#203 St. Petersburg$ 594,963Grand Central
Building Capital Lease#826 Plant City $ 137,027Grand Central
Building Capital Lease#827 Tampa $ 167,527Grand Central
Building Capital Lease#842 Winter Haven $ 85,681Grand Central
Building Capital Lease#848 Ruskin $ 176,206Grand Central
Building Capital Lease#851 Inverness $ 160,357Grand Central
Building Capital Lease#852 St. Petersburg$ 140,075Grand Central
4683 Front End Equip.23 locations $ 305,997IBMCC
Store Fixtures & Equipment#715 Bradenton$ 445,490MDFC
Store Fixtures & Equipment#717 New Port Richey$ 471,545MDFC
Building Capital Lease#216 Sarasota $ 631,049Palm Plaza Assoc.
Building Capital Lease#892 Tampa $ 953,608Prime Plus Realty
Store Fixtures & Equipment#215 Sarasota $ 1,008,728Sanwa GEL
Store Fixtures & Equipment#723 Plant City$ 813,839Sanwa GEL
EAS Camera System #401 & #403 $ 87,782Sensormatic
Store Fixture & Equipment#719 Sarasota $ 363,704US Leasing
IBM Front End FinancingVarious $ 780,969IBMCC
Building & Equipment#651 Ocala $ 1,883,700Goodings
Save n' Pack Building#401 Tampa $ 2,017,536Supervalu, Inc.
Save n' Pack Equipment#401 & #403 $ 1,399,744Supervalu, Inc.
NCR Scanner Scales Various $ 522,659AT&T (NCC Leasing)
EAS Systems Various $ 558,218Sensormatic
Tractor Trailer LeaseWarehouse $ 78,378GE Capital
Store Fixtures & Equipment#718 Tampa $ 376,111CIT Equip Financing
Store Fixtures & Equipment#712 Tampa $ 343,438CIT Equip Financing
Sakurai Color Press Admin $ 265,370CIT Equip Financing
Unix Hardware/SoftwareAdmin $ 688,219Sanwa GEL
Trucks & Trailers Warehouse $ 455,283Sanwa GEL
Store Fixtures & Equipment#722, #725 & #728$ 671,809Heller Financial
Building Lease 6401 Harney Road $ 415,054Ferris Funk
Meat Scales Unix HardwareAdmin/Various Stores$ 395,973Sun Financial
Mortgage Store #722 $ 3,500,000H P Financial (T.G. Lee)
Mortgage #726 Beverly Hills $ 387,500Kellner Construction
Mortgage #702 Crystal River $ 1,902,346Aegon USA Mortgage
Mortgage #709 Port Charlotte $ 2,033,041Aegon USA Mortgage
Mortgage #717 New Port Richey$ 1,524,781Aegon USA Mortgage
Mortgage #878 Tampa $ 1,706,302Aegon USA Mortgage
Mortgage #886 Spring Hill $ 2,033,041Aegon USA Mortgage
Mortgage #887 Tampa $ 1,561,085Aegon USA Mortgage
Mortgage #891 Seebring $ 1,977,375Aegon USA Mortgage
Mortgage #896 Belleview $ 1,996,737Aegon USA Mortgage
Mortgage Warehouse 6422 Harney Road$15,292,389Sunlife Mortgage
Mortgage #875 Palm Harbor $ 1,470,971CALPERS (Pers ABKB)
Mortgage #876 Gainesville $ 740,453CALPERS (Pers ABKB)
Mortgage #878 Seffner $ 724,287CALPERS (Pers ABKB)
Mortgage #880 Sarasota $ 807,173CALPERS (Pers ABKB)
Store Fixtures & Equipment#720 GainesvilleOperating LeaseDana Commercial Credit
Hazardous Materials
[Section 7.12]
GASOLINE SERVICE STATIONS
At the time of the Lucky acquisition, Kash n' Karry acquired
12 sites containing operating gasoline service stations ("sublet
locations") operated by third parties under sublease agreements
and sites which contained closed gasoline service stations
("former locations"). As part of the acquisition agreement, as
amended by that certain Agreement Respecting Service Stations and
Former Service Stations dated November 14, 1989 (the
"Agreement"), Lucky was obligated to perform tests for the
presence of underground tank hazardous materials at the former
locations and to use its best efforts to perform tests at the
sublet locations. In the event the tests revealed the presence
of hazardous materials, Lucky agreed to take all actions
reasonably necessary to eliminate such hazardous materials from
the former locations and to use its best efforts to cause such
action to be taken with respect to the sublet locations. All
costs and expenses incurred by Lucky were to be borne solely by
Lucky.
Subsequent to the acquisition date, subleases with Devco
Petroleum on 8 of the 12 sublet locations were terminated ("Devco
sites"). Consequently, the Devco sites were treated as former
locations and all underground tanks and other service station
improvements were removed and disposed of by Lucky on the 8
former locations and the 8 Devco sites.
Of the 20 sites, 3 sites have been approved by the Florida
DER for no further action and Kash n' Karry has released Lucky
from any further obligations.
The 4 sublet locations have been certified as eligible for
the state Early Detection Incentive ("EDI") program and the
sublessee is waiting for state clean-up.
The remaining 13 sites are the responsibility of Lucky.
They have chosen to do site rehabilitation on certain sites and
wait for state clean-up under the EDI program on others. If they
choose to perform the work themselves, they can apply to the
state for reimbursement. If the state does not commence clean-up
within 8 years of the Agreement or has not completed the clean-up
within 11 years of the Agreement, Lucky must complete the work.
The attached summarizes the work at each site as of June 15,
1992. [The following table was intentionally omitted for
purposes of this electronic filing. The Company will provide a
paper copy upon request.]
STORE #722
The site is approximately four acres in area and supports the
Kash n' Karry retail food store, 722, which is approximately
47,000 square feet in area. The remainder of the site is
dominantly covered by asphalt and concrete parking area.
On July 31, 1992, during demolition of a former fabric store
building located on the subject property, an underground concrete
tank and rusted drum in the tank were encountered and crushed by
a backhoe. An unidentified blue liquid residue present in the
drum subsequently spilled onto portions of the concrete tank
walls and soil in the vicinity of the former tank location. The
area around the tank location was then over-excavated and the
excavated soil, concrete debris and drum were stockpiled on site
and covered with plastic, pending soil debris waste
characterization and removal.
In August and September 1992, Law, authorized by Kash n' Karry,
conducted a preliminary assessment of ground-water and soil
quality in the area where the tank was previously located. A
Preliminary Contamination Assessment Report (PCAR) which
summarized the assessment activities and results was submitted to
the Florida Department of Environmental Protection (FDEP) by Kash
n' Karry in October 1992 (Law, 1992). According to the report,
soil and ground water assessed did not appear to have been
adversely impacted by the constituents of interest (volatile and
semi-volatile organic compounds and eight RCRA metals).
In September 1992, soil samples were collected from the soil pile
for analyses for disposal method determination. Analytical
results on samples indicated that concentrations of seven metals
were detected in the samples above method detection limits:
arsenic, barium, cadmium, chromium, lead, selenium and silver.
The concentration of only one of the metals, lead, exceeded the
maximum concentration standard established for a waste. The soil
debris was subsequently removed and transported to the Chemical
Waste Management, Inc. facility in Emelle, Alabama for disposal
and the clean concrete debris was sent to a Woodruff & Sons, Inc.
facility for disposal.
Based on their review of the PCAR, the FDEP requested by letter
(October and December 1993) that assessment of ground water and
soil quality be conducted in the area of the former soil pile
location. In March 1994, the FDEP approved a supplemental
preliminary contamination assessment plan. In April 1994, Law,
on behalf of Kash n' Karry, implemented the plan which included
collection and analysis of soil and ground-water samples for the
constituents of interest: volatile organic compounds and semi-
volatile organic compounds, excluding pesticides and PCBs, and
eight RCRA metals.
Data obtained as part of the supplemental preliminary
contamination assessment indicated the following:
1. Ground-water flow direction in the southwestern portion
of the site is toward the northeast;
2. Concentrations of five metals, arsenic, barium,
chromium, lead and mercury, detected in soil samples
were below the toxicity characteristic leachate
standards established in Chapter 40 of the Code of
Federal Regulation Part 261.24, Table 1, for these
metals in a waste and there were no toxicity standards
established for the constituents acetone and di-n-
butylphthalate which were also detected in these
samples;
3. Concentrations of total chromium and barium detected in
ground-water samples did not exceed the maximum
contaminant levels established in Florida
Administrative Code 17-550.310 for these metals in
drinking water.
These data indicate that there does not appear to be a concern
with regard to soil and ground-water quality related to the
volatile and semi-volatile compounds and the metals for which
these matrices were analyzed. No further assessment of soil and
ground water in the areas of interest is recommended.
Chemical Waste Management, Inc.
Emelle Facility
PO Box 55
Emelle, Alabama 35459-0055
205/652-9721
FEDERAL EPA ID NUMBER: ALD000622464
MANIFEST DOCUMENT NUMBER: 33553
KASH N' KARRY FOOD STORES
P O BOX 11675
TAMPA, FL 33680
CERTIFICATE OF DISPOSAL
Chemical Waste Management, Inc. has received waste material from
KASH N' KARRY FOOD STORES, described on Alabama Hazardous Waste
Manifest number CWMA 684030. Chemical Waste Management, Inc.,
hereby certifies waste material received on the 4th day of
December, 1992 was disposed of in compliance with State and
Federal Regulations.
____________________________________________________
Carol Weldon, Recordkeeping & Reporting Supervisor
Date 11/08/93
PROFILE QUANT. DESCRIPTION
- - - - - - - - - - - - - -
K01169 1 Dump
UNDERGROUND STORAGE TANKS
Location: Warehouse and Distribution Center
6422 Harney Road, Tampa
4 12,000 gallon fiber glass-coated diesel tanks
1 2,000 gallon steel waste oil tank
1 550 gallon fiber glass-coated diesel tank
SCHEDULE III
Existing Letters of Credit
KASH N' KARRY FOOD STORES, INC.
LETTER OF CREDIT BALANCES: BANK OF AMERICA AND
(TO THE EXTENT NOTED BELOW) BARNETT BANK
DATE OF
LC# BENEFICIARY EXPIRY AMOUNT
133426 AEGON USA REALTY 12-01-95 $320,000.00
133418 CIT EQUIPMENT GROUP FINANCING 12-14-95 $260,254.04
139019 CIT EQUIPMENT GROUP FINANCING 10-15-95 $125,000.00
133414 G.E. (CHRYSLER) CAPITAL CORPORATION 11-23-98 $691,104.00
133409 G.E. (CHRYSLER) CAPITAL CORPORATION 09-24-95 $453,900.00
133422 DANA COMMERCIAL CREDIT CORPORATION 06-24-95 $487,600.00
133424 FIDELITY & DEPOSIT COMPANY OF MD 10-13-95 $722,183.00
133395 FLORIDA POWER CORPORATION 03-22-95 $880,400.00
133399 FLORIDA POWER & LIGHT (ALL) 11-09-95 $430,320.00
133397 GAINESVILLE REGIONAL UTILITIES 11-01-95 $86,600.00
133428 HOME INSURANCE COMPANY 10-31-95 $10,633,000.00
133389 KISSIMMEE UTILITY 11-01-95 $30,200.00
133391 LAKELAND ELECTRIC 11-01-95 $40,000.00
133434 NCC LEASING, INC. 12-31-94 $356,073.08
133420 PEOPLES GAS COMPANY 01-08-95 $19,050.00
133432 SUN LIFE INSURANCE CO. OF AMERICA 11-30-99 $450,000.00
133407 TAMPA ELECTRIC COMPANY 11-01-95 $1,006,645.00
133393 WITHLACOOCHEE RIVER ELECTRIC 11-09-95 $160,000.00
4554 GE CAPITAL (LC ISSUED BY BARNETT) 02-03-95 $361,588.00
______________
$17,513,908.12
SCHEDULE IV
Litigation
[See Section 7.03]
SCHEDULE 8.13
LITIGATION
The Borrower's former chief executive officer has notified
the Borrower that he believes he has certain monetary
entitlements in connection with his severance from the Borrower.
Through counsel, this former officer has indicated that he has
contractual claims alleged to aggregate less than $2,000,000.
Through counsel, the Borrower has notified this former officer's
counsel that the Borrower disagrees with the entitlements
asserted.<PAGE>
EXHIBIT A-1
[Form of Revolving Credit Note]
PROMISSORY NOTE
$[_______________] December __, 1994
FOR VALUE RECEIVED, KASH N' KARRY FOOD STORES, INC., a
Delaware corporation (the "Company"), hereby promises to pay to
[__________________] (the "Lender"), for the account of its
Applicable Lending Office provided for by the Credit Agreement
referred to below, at the principal office of Chemical Bank, 270
Park Avenue, New York, New York 10017, the principal sum of
[_______________] Dollars (or such lesser amount as shall equal
the aggregate unpaid principal amount of the Revolving Credit
Loans made by the Lender to the Company under the Credit
Agreement), in lawful money of the United States of America and
in immediately available funds, on the dates and in the principal
amounts provided in the Credit Agreement, and to pay interest on
the unpaid principal amount of each such Revolving Credit Loan,
at such office, in like money and funds, for the period
commencing on the date of such Revolving Credit Loan until such
Revolving Credit Loan shall be paid in full, at the rates per
annum and on the dates provided in the Credit Agreement.
The date and amount of each Revolving Credit Loan made
by the Lender to the Company, and each payment made on account of
the principal of such Loan, shall be recorded by the Lender on
its books and, prior to any transfer of this Note, endorsed by
the Lender on the schedule attached to this Note or any
continuation of such schedule, provided that the failure of the
Lender to make any such recordation or endorsement shall not
affect the obligations of the Company to make a payment when due
of any amount owing under the Credit Agreement or under this Note
in respect of the Revolving Credit Loans made by the Lender.
This Note is one of the Revolving Credit Notes referred
to in the Credit Agreement dated as of December 29, 1994 (as
modified and supplemented and in effect from time to time, the
"Credit Agreement") among the Company, the Lenders (including the
Lender), The CIT Group/Business Credit, Inc., as Administrative
Agent, and Bank of America National Trust and Savings
Association, as Co-Agent, and evidences Revolving Credit Loans
made by the Lender under the Credit Agreement. Capitalized terms
used but not defined in this Note have the respective meanings
assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of
the maturity of this Note upon the occurrence of certain events
and for prepayments of Loans upon the terms and conditions
specified in the Credit Agreement. This Note is secured by and
entitled to the benefits of the Security Documents.
Except as permitted by Section 11.06(b) of the Credit
Agreement, this Note may not be assigned by the Lender to any
other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK.
KASH N' KARRY FOOD STORES, INC.
By: _______________________
Title:
SCHEDULE OF REVOLVING CREDIT LOANS
This Note evidences Revolving Credit Loans made under
the Credit Agreement to the Company, on the dates and in the
principal amounts set forth below, subject to the payments and
prepayments of principal set forth below:
Principal Amount
Date Amount Paid Unpaid
of of or Principal Notation
Loan Loan Prepaid Amount Made by
EXHIBIT A-2
[Form of Tranche A Term Loan Note]
PROMISSORY NOTE
$[_______________] December ____, 1994
FOR VALUE RECEIVED, KASH N' KARRY FOOD STORES, INC., a
Delaware corporation (the "Company"), hereby promises to pay to
[__________________] (the "Lender"), for the account of its
Applicable Lending Office provided for by the Credit Agreement
referred to below, at the principal office of Chemical Bank, 270
Park Avenue, New York, New York 10017, the principal sum of
[_______________] Dollars (or such lesser amount as shall equal
the aggregate unpaid principal amount of the Tranche A Term Loan
made by the Lender to the Company under the Credit Agreement), in
lawful money of the United States of America and in immediately
available funds, on the dates and in the principal amounts
provided in the Credit Agreement, and to pay interest on the
unpaid principal amount of the Tranche A Term Loan, at such
office, in like money and funds, for the period commencing on the
date of the Tranche A Term Loan until the Tranche A Term Loan
shall be paid in full, at the rates per annum and on the dates
provided in the Credit Agreement.
The date and amount of the Tranche A Term Loan made by
the Lender to the Company, and each payment made on account of
the principal of such Loan, shall be recorded by the Lender on
its books and, prior to any transfer of this Note, endorsed by
the Lender on the schedule attached to this Note or any
continuation of such schedule, provided that the failure of the
Lender to make any such recordation or endorsement shall not
affect the obligations of the Company to make a payment when due
of any amount owing under the Credit Agreement or under this Note
in respect of the Tranche A Term Loan made by the Lender.
This Note is one of the Term Loan Notes referred to in
the Credit Agreement dated as of December 29, 1994 (as modified
and supplemented and in effect from time to time, the "Credit
Agreement") among the Company, the Lenders (including the
Lender), The CIT Group/Business Credit, Inc., as Administrative
Agent, and Bank of America National Trust and Savings
Association, as Co-Agent, and evidences the Tranche A Term Loan
made by the Lender under the Credit Agreement. Capitalized terms
used but not defined in this Note have the respective meanings
assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of
the maturity of this Note upon the occurrence of certain events
and for prepayments of the Tranche A Term Loan upon the terms and
conditions specified in the Credit Agreement. This Note is
secured by and entitled to the benefits of the Security
Documents.
Except as permitted by Section 11.06(b) of the Credit
Agreement, this Note may not be assigned by the Lender to any
other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK.
KASH N' KARRY FOOD STORES, INC.
By: _______________________
Title:
SCHEDULE OF TRANCHE A TERM LOAN
This Note evidences the Tranche A Term Loan made under
the Credit Agreement to the Company, on the dates and in the
principal amounts set forth below, subject to the payments and
prepayments of principal set forth below:
Principal Amount
Date Amount Paid Unpaid
of of or Principal Notation
Loan Loan Prepaid Amount Made by
EXHIBIT A-3
[Form of Tranche B Term Loan Note]
PROMISSORY NOTE
$[_______________] December ____, 1994
FOR VALUE RECEIVED, KASH N' KARRY FOOD STORES, INC., a
Delaware corporation (the "Company"), hereby promises to pay to
[__________________] (the "Lender"), for the account of its
Applicable Lending Office provided for by the Credit Agreement
referred to below, at the principal office of Chemical Bank, 270
Park Avenue, New York, New York 10017, the principal sum of
[_______________] Dollars (or such lesser amount as shall equal
the aggregate unpaid principal amount of the Tranche B Term Loan
made by the Lender to the Company under the Credit Agreement), in
lawful money of the United States of America and in immediately
available funds, on the dates and in the principal amounts
provided in the Credit Agreement, and to pay interest on the
unpaid principal amount of the Tranche B Term Loan, at such
office, in like money and funds, for the period commencing on the
date of the Tranche B Term Loan until the Tranche B Term Loan
shall be paid in full, at the rates per annum and on the dates
provided in the Credit Agreement.
The date and amount of the Tranche B Term Loan made by
the Lender to the Company, and each payment made on account of
the principal of such Loan, shall be recorded by the Lender on
its books and, prior to any transfer of this Note, endorsed by
the Lender on the schedule attached to this Note or any
continuation of such schedule, provided that the failure of the
Lender to make any such recordation or endorsement shall not
affect the obligations of the Company to make a payment when due
of any amount owing under the Credit Agreement or under this Note
in respect of the Tranche B Term Loan made by the Lender.
This Note is one of the Term Loan Notes referred to in
the Credit Agreement dated as of December 29, 1994 (as modified
and supplemented and in effect from time to time, the "Credit
Agreement") among the Company, the Lenders (including the
Lender), The CIT Group/Business Credit, Inc., as Administrative
Agent, and Bank of America National Trust and Savings
Association, as Co-Agent, and evidences the Tranche B Term Loan
made by the Lender under the Credit Agreement. Capitalized terms
used but not defined in this Note have the respective meanings
assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of
the maturity of this Note upon the occurrence of certain events
and for prepayments of the Tranche B Term Loan upon the terms and
conditions specified in the Credit Agreement. This Note is
secured by and entitled to the benefits of the Security
Documents.
Except as permitted by Section 11.06(b) of the Credit
Agreement, this Note may not be assigned by the Lender to any
other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK.
KASH N' KARRY FOOD STORES, INC.
By: _______________________
Title:
SCHEDULE OF TRANCHE B TERM LOAN
This Note evidences the Tranche B Term Loan made under
the Credit Agreement to the Company, on the dates and in the
principal amounts set forth below, subject to the payments and
prepayments of principal set forth below:
Principal Amount
Date Amount Paid Unpaid
of of or Principal Notation
Loan Loan Prepaid Amount Made by
EXHIBIT A-4
[Form of Tranche C Term Loan Note]
PROMISSORY NOTE
$[_______________] December ____, 1994
FOR VALUE RECEIVED, KASH N' KARRY FOOD STORES, INC., a
Delaware corporation (the "Company"), hereby promises to pay to
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION (the
"Lender"), for the account of its Applicable Lending Office
provided for by the Credit Agreement referred to below, at the
principal office of Chemical Bank, 270 Park Avenue, New York, New
York 10017, the principal sum of [_______________] Dollars (or
such lesser amount as shall equal the aggregate unpaid principal
amount of the Tranche C Term Loan made by the Lender to the
Company under the Credit Agreement), in lawful money of the
United States of America and in immediately available funds, on
the dates and in the principal amounts provided in the Credit
Agreement, and to pay interest on the unpaid principal amount of
the Tranche C Term Loan, at such office, in like money and funds,
for the period commencing on the date of the Tranche C Term Loan
until the Tranche C Term Loan shall be paid in full, at the rates
per annum and on the dates provided in the Credit Agreement.
The date and amount of the Tranche C Term Loan made by
the Lender to the Company, and each payment made on account of
the principal of such Loan, shall be recorded by the Lender on
its books and, prior to any transfer of this Note, endorsed by
the Lender on the schedule attached to this Note or any
continuation of such schedule, provided that the failure of the
Lender to make any such recordation or endorsement shall not
affect the obligations of the Company to make a payment when due
of any amount owing under the Credit Agreement or under this Note
in respect of the Tranche C Term Loan made by the Lender.
This Note is one of the Term Loan Notes referred to in
the Credit Agreement dated as of December 29, 1994 (as modified
and supplemented and in effect from time to time, the "Credit
Agreement") among the Company, the Lenders (including the
Lender), The CIT Group/Business Credit, Inc., as Administrative
Agent, and Bank of America National Trust and Savings
Association, as Co-Agent, and evidences the Tranche C Term Loan
made by the Lender under the Credit Agreement. Capitalized terms
used but not defined in this Note have the respective meanings
assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of
the maturity of this Note upon the occurrence of certain events
and for prepayments of the Tranche C Term Loan upon the terms and
conditions specified in the Credit Agreement. This Note is
secured by and entitled to the benefits of the Security
Documents.
Except as permitted by Section 11.06(b) of the Credit
Agreement, this Note may not be assigned by the Lender to any
other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK.
KASH N' KARRY FOOD STORES, INC.
By: _______________________
Title:
SCHEDULE OF TRANCHE C TERM LOAN
This Note evidences the Tranche C Term Loan made under
the Credit Agreement to the Company, on the dates and in the
principal amounts set forth below, subject to the payments and
prepayments of principal set forth below:
Principal Amount
Date Amount Paid Unpaid
of of or Principal Notation
Loan Loan Prepaid Amount Made by
EXHIBIT B
[Form of Borrowing Base Certificate]
BORROWING BASE CERTIFICATE
Weekly accounting period ended [__________ _____, ____]
Reference is made to the Credit Agreement dated as of
December 29, 1994 (as modified and supplemented and in effect
from time to time, the "Credit Agreement"), among Kash n' Karry
Food Stores, Inc. (the "Company"), the Lenders, The CIT
Group/Business Credit, Inc., as Administrative Agent, and Bank of
America National Trust and Savings Association, as Co-Agent.
Capitalized terms used in this Certificate have the respective
meanings assigned to them in the Credit Agreement.
Pursuant to Section 8.01(f) of the Credit Agreement,
the undersigned, the Chief [Financial/Accounting] Officer of the
Company, hereby certifies that, to the best of [his][her]
knowledge, attached as Annex 1 is a true and accurate calculation
of the Borrowing Base as at the end of the weekly accounting
period ended [__________ _____, ____] determined in accordance
with the requirements of the Credit Agreement.
All Inventory covered by this Certificate has been
produced in compliance with all applicable laws, including (to
the extent applicable) the minimum wage and overtime requirements
of the Fair Labor Standards Act of 1938.
IN WITNESS WHEREOF, the undersigned has caused this
certificate to be duly executed as of the [__________] day of
[____________, ____].
[____________________________]
Title: Chief [Financial/
Accounting] Officer
Annex 1
KASH N' KARRY FOOD STORES, INC.
Borrowing Base Certificate
(000's omitted)
************************************************************
Receivables (determined net of credits)
-- beginning balance period ended
[_________ _____, _____] ______
Plus: total sales for period ______
Less: total cash receipts for period ______
total other adjustments
for period (+/-) (details
attached) including rebates,
offsets and commissions ______
Receivables (determined net of credits)
-- ending balance period ended
[__________ ____, _____] ______
Less: ineligible Receivables at period end
(determined without duplication):
Receivables not payable in Dollars
or convertible currency ______
Receivables over 60 days original terms ______
Receivables due from Affiliates ______
Export Receivables ______
Receivables from creditors with
unsatisfactory credit standing (as
determined by the Administrative Agent) ______
Receivables over 90 days past due ______
Receivables with excess of 25% of
balances past 30 days past due ______
Receivables exceeding concentration of
15% of aggregate Receivables ______
Receivables subject to dispute ______
Contras ______
Receivables arising out of sale or
return transactions ______
Receivables otherwise determined by
Administrative Agent to be ineligible ______
Total ineligible Receivables ______
Total Eligible Receivables ______
************************************************************
Inventory at average cost
covered by appropriate filings
with first lien priority:
Beginning period Inventory balance
[____________ ____, ____] ______
Ending period Inventory balance
[____________ ____, ____] ______
Less: ineligible Inventory at period end
(determined without duplication)
Perishable Inventory ______
Inventory exceeding shelf life ______
Inventory held more than 300 days ______
Inventory to be returned to suppliers ______
Inventory in transit to or from third ______
parties
Supplies ______
Shrinkage ______
Total ineligible Inventory ______
Less: Required Reserves ______
Total Eligible Inventory ______
************************************************************
Borrowing Base:
85% of Eligible Receivables ______
Plus: 80% of Eligible Inventory ______
Subtotal ______
Less 105% of Other Pari Passu Obligations (______)
Less Reserves for Intangible Personal Property
Taxes that may become payable as contemplated
in Section 8.25 of Credit Agreement (______)
Less Reserves for Liens or trusts created in
favor of suppliers and other statutory Liens (______)
Plus Cover for Letter of Credit Liabilities (______)
Plus Amount on Deposit in Special Collateral Account (______)
Borrowing Base (before deduction of outstandings): ______
************************************************************
Less:
Revolving Credit and Tranche A Term
Loan Balance Period beginning
[____________ ____, _____] ______
advances for period ______
reductions for period ______
other adjustments (+/-) ______
Revolving Credit and Tranche A Term
Loan Balance Period ending
[___________, ____, _____] ______
Letter of Credit Liabilities ______
Total outstandings ______
************************************************************
Borrowing Base
Availability (overadvance) ______
************************************************************
EXHIBIT C
FORM OF SECURITY AGREEMENT
SECURITY AGREEMENT
Dated as of December 28, 1994
between
KASH N' KARRY FOOD STORES, INC.
and
THE CIT GROUP/BUSINESS CREDIT, INC.,
as the Administrative Agent
TABLE OF CONTENTS
Page
Section 1. Definitions and Interpretation . . . . . . . . . . 1
1.01 Certain Defined Terms . . . . . . . . . . . . . . . 1
1.02 Interpretation. . . . . . . . . . . . . . . . . . . 4
Section 2. Collateral . . . . . . . . . . . . . . . . . . . . 5
2.01 Grant . . . . . . . . . . . . . . . . . . . . . . . 5
2.02 Intellectual Property . . . . . . . . . . . . . . . 6
2.03 Perfection. . . . . . . . . . . . . . . . . . . . . 6
2.04 Preservation and Protection of Security
Interests. . . . . . . . . . . . . . . . . . . . . . 7
2.05 Attorney-in-Fact. . . . . . . . . . . . . . . . . . 8
2.06 Use of Intellectual Property. . . . . . . . . . . . 9
2.07 Instruments . . . . . . . . . . . . . . . . . . . . 10
2.08 Use or Sale of Collateral . . . . . . . . . . . . . 10
2.09 Rights and Obligations. . . . . . . . . . . . . . . 10
2.10 Release of Motor Vehicles . . . . . . . . . . . . . 11
2.11 Termination . . . . . . . . . . . . . . . . . . . . 11
Section 3. Cash Proceeds of Collateral. . . . . . . . . . . . 12
3.01 Collateral Account. . . . . . . . . . . . . . . . . 12
3.02 Certain Proceeds. . . . . . . . . . . . . . . . . . 12
3.03 Investment of Balance in Collateral Account . . . . 13
3.04 Cover for Letter of Credit Liabilities. . . . . . . 13
Section 4. Representations and Warranties . . . . . . . . . . 13
4.01 Title . . . . . . . . . . . . . . . . . . . . . . . 14
4.02 Intellectual Property . . . . . . . . . . . . . . . 14
Section 5. Covenants. . . . . . . . . . . . . . . . . . . . . 15
5.01 Books and Records . . . . . . . . . . . . . . . . . 15
5.02 Removals, Etc.. . . . . . . . . . . . . . . . . . . 15
5.03 Sales and Other Liens . . . . . . . . . . . . . . . 15
5.04 Intellectual Property . . . . . . . . . . . . . . . 16
5.05 Further Assurances. . . . . . . . . . . . . . . . . 17
Section 6. Remedies . . . . . . . . . . . . . . . . . . . . . 17
6.01 Events of Default, Etc. . . . . . . . . . . . . . . 17
6.02 Deficiency. . . . . . . . . . . . . . . . . . . . . 18
6.03 Manner of Disposition . . . . . . . . . . . . . . . 18
6.04 Application of Proceeds . . . . . . . . . . . . . . 19
Section 7. Miscellaneous. . . . . . . . . . . . . . . . . . . 20
7.01 The Administrative Agent. . . . . . . . . . . . . . 20
7.02 Waiver. . . . . . . . . . . . . . . . . . . . . . . 20
7.03 Notices . . . . . . . . . . . . . . . . . . . . . . 20
7.04 Expenses, Etc.. . . . . . . . . . . . . . . . . . . 21
7.05 Amendments, Etc.. . . . . . . . . . . . . . . . . . 21
7.06 Successors and Assigns. . . . . . . . . . . . . . . 22
7.07 Survival. . . . . . . . . . . . . . . . . . . . . . 22
7.08 Agreements Superseded . . . . . . . . . . . . . . . 22
7.09 Severability. . . . . . . . . . . . . . . . . . . . 22
7.10 Captions. . . . . . . . . . . . . . . . . . . . . . 22
7.11 Counterparts. . . . . . . . . . . . . . . . . . . . 22
7.12 GOVERNING LAW; SUBMISSION TO JURISDICTION . . . . . 22
7.13 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . 23
ANNEX 1 LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS AND
APPLICATIONS FOR COPYRIGHT REGISTRATIONS
ANNEX 2 LIST OF PATENTS AND PATENT APPLICATIONS
ANNEX 3 LIST OF TRADE NAMES, TRADEMARKS, SERVICES MARKS,
TRADEMARK AND SERVICE MARK REGISTRATIONS AND
APPLICATIONS FOR TRADEMARK AND SERVICE MARK
REGISTRATIONS
ANNEX 4 LIST OF CONTRACTS, LICENSES AND OTHER AGREEMENTS
ANNEX 5 LIST OF LOCATIONS
ANNEX 6 ASSIGNMENT FOR SECURITY (PATENTS)
ANNEX 7 ASSIGNMENT FOR SECURITY (TRADEMARKS)
ANNEX 8 FORM OF BLOCKED ACCOUNT AGREEMENT
ANNEX 9 AGREEMENT REGARDING ADDITIONAL SECURED OBLIGATIONS
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "Agreement") dated as of
December 28, 1994 is made between KASH N' KARRY FOOD STORES, INC.
(the "Company") and THE CIT GROUP/BUSINESS CREDIT, INC., as the
administrative agent (in such capacity, the "Administrative
Agent") for the holders, from time to time, of the Secured
Obligations (as defined below).
The Credit Agreement dated as of December 29, 1994 (the
"Credit Agreement") among KASH N' KARRY FOOD STORES, INC., the
lenders identified in the Credit Agreement (the "Lenders"), the
Administrative Agent and Bank of America National Trust and
Savings Association, as Co-Agent, provides, subject to its terms
and conditions, for certain extensions of credit to the Company.
It is a condition to the obligations of the Administrative Agent
and the Lenders under the Credit Agreement that the Company shall
have executed and delivered, and granted the Liens provided for
in, this Agreement.
To induce the Administrative Agent and the Lenders to
enter into, and to extend credit under, the Credit Agreement and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company has
agreed to pledge and grant a security interest in the Collateral
as security for the Secured Obligations. Accordingly, the
Company agrees with the Administrative Agent as follows:
Section 1. Definitions and Interpretation.
1.01 Certain Defined Terms. Unless otherwise defined,
all capitalized terms used in this Agreement that are defined in
the Credit Agreement (including those terms incorporated by
reference) shall have the respective meanings assigned to them in
the Credit Agreement. In addition, the following terms shall
have the following meanings under this Agreement:
"Account" shall have the meaning assigned to that term
in Section 9-106 of the Uniform Commercial Code as in effect on
the date of this Agreement, without regard to any subsequent
amendments .
"Chattel Paper" shall have the meaning assigned to that
term in Section 9-105 of the Uniform Commercial Code, as in
effect on the date of this Agreement, without regard to any
subsequent amendments.
"Collateral" shall have the meaning assigned to that
term in Section 2.01.
"Collateral Account" shall have the meaning assigned to
that term in Section 3.01.
"Copyright Collateral" shall mean all Copyrights,
whether now owned or hereafter acquired by the Company, including
each Copyright identified in Annex 1.
"Copyrights" shall mean, collectively, (a) all
copyrights, copyright registrations and applications for
copyright registrations, (b) all renewals and extensions of all
copyrights, copyright registrations and applications for
copyright registration and (c) all rights, now existing or
hereafter coming into existence, (i) to all income, royalties,
damages and other payments (including in respect of all past,
present or future infringements) now or hereafter due or payable
under or with respect to any of the foregoing, (ii) to sue for
all past, present and future infringements with respect to any of
the foregoing and (iii) otherwise accruing under or pertaining to
any of the foregoing throughout the world.
"Deposit Account" shall have the meaning assigned to
that term in Section 9-105 of the Uniform Commercial Code as in
effect on the date of this Agreement, without regard to any
subsequent amendments.
"Document" shall have the meaning assigned to that term
in Section 9-105 of the Uniform Commercial Code as in effect on
the date of this Agreement, without regard to any subsequent
amendments.
"Equipment" shall have the meaning assigned to that
term in Section 9-109 of the Uniform Commercial Code as in effect
on the date of this Agreement, without regard to any subsequent
amendments.
"General Intangibles" shall have the meaning assigned
to that term in Section 9-106 of the Uniform Commercial Code as
in effect on the date of this Agreement, without regard to any
subsequent amendments.
"Instrument" shall have the meaning assigned to that
term in Section 9-105 of the Uniform Commercial Code as in effect
on the date of this Agreement, without regard to any subsequent
amendments.
"Intellectual Property" shall mean all Copyright
Collateral, all Patent Collateral and all Trademark Collateral,
together with (a) all inventions, processes, production methods,
proprietary information, know-how and trade secrets; (b) all
licenses or user or other agreements granted to the Company with
respect to any of the foregoing, in each case whether now or
hereafter owned or used, including the licenses or other
agreements with respect to the Copyright Collateral, the Patent
Collateral or the Trademark Collateral listed in Annex 4; (c) all
information, customer lists, identification of suppliers, data,
plans, blueprints, specifications, designs, drawings, recorded
knowledge, surveys, engineering reports, test reports, manuals,
materials standards, processing standards, performance standards,
catalogs, computer and automatic machinery software and programs;
(d) all accounting information and all media in which or on which
any information or knowledge or data or records may be recorded
or stored and all computer programs used for the compilation or
printout of such information, knowledge, records or data; (e) all
Governmental Approvals now held or hereafter obtained by the
Company in respect of any of the foregoing; and (f) all causes of
action, claims and warranties now owned or hereafter acquired by
the Company in respect of any of the foregoing. It is understood
that Intellectual Property shall include all of the foregoing
owned or acquired by the Company on a worldwide basis.
"Inventory" shall have the meaning assigned to that
term in Section 9-109 of the Uniform Commercial Code as in effect
on the date of this Agreement, without regard to any subsequent
amendments.
"Motor Vehicles" shall mean motor vehicles, tractors,
trailers and other like property, whether or not the title to any
such property is governed by a certificate of title or ownership.
"Patent Collateral" shall mean all Patents, whether now
owned or hereafter acquired by the Company, including each Patent
identified in Annex 2.
"Patents" shall mean, collectively, (a) all patents and
patent applications, (b) all reissues, divisions, continuations,
renewals, extensions and continuations-in-part of all patents or
patent applications and (c) all rights, now existing or hereafter
coming into existence, (i) to all income, royalties, damages, and
other payments (including in respect of all past, present and
future infringements) now or hereafter due or payable under or
with respect to any of the foregoing, (ii) to sue for all past,
present and future infringements with respect to any of the
foregoing and (iii) otherwise accruing under or pertaining to any
of the foregoing throughout the world, including all inventions
and improvements described or discussed in all such patents and
patent applications.
"Proceeds" shall have the meaning assigned to that term
in Section 9-306 of the Uniform Commercial.
"Secured Obligations" shall mean (a) any and all
Obligations, (b) any and all other obligations of the Company for
the performance of its agreements, covenants and undertakings
under or in respect of the Basic Documents, and (c) if Bank of
America National Trust and Savings Association and the
Administrative Agent enter into an agreement in the form of
Annex 9, the obligations of the Company to the Swap Counterparty
under the Existing Interest Rate Protection Agreement.
"Swap Counterparty" shall mean Bank of America in its
capacity as a party to the Existing Interest Rate Protection
Agreement.
"Trademark Collateral" shall mean all Trademarks,
whether now owned or hereafter acquired by the Company, including
each Trademark identified in Annex 3. Notwithstanding the
foregoing, the Trademark Collateral shall not include any
Trademark which would be rendered invalid, abandoned, void or
unenforceable by reason of its being included as part of the
Trademark Collateral.
"Trademarks" shall mean, collectively, (a) all trade
names, trademarks and service marks, logos, trademark and service
mark registrations and applications for trademark and service
mark registrations, (b) all renewals and extensions of any of the
foregoing and (c) all rights, now existing or hereafter coming
into existence, (i) to all income, royalties, damages and other
payments (including in respect of all past, present and future
infringements) now or hereafter due or payable under or with
respect to any of the foregoing, (ii) to sue for all past,
present and future infringements with respect to any of the
foregoing and (iii) otherwise accruing under or pertaining to any
of the foregoing throughout the world, together, in each case,
with the product lines and goodwill of the business connected
with the use of, or otherwise symbolized by, each such trade
name, trademark and service mark.
"Uniform Commercial Code" shall mean the Uniform
Commercial Code as in effect in the State of New York.
Section 1.02 Interpretation. In this Agreement,
unless otherwise indicated: the singular includes the plural and
plural the singular; words importing either gender include the
other gender; references to statutes or regulations are to be
construed as including all statutory or regulatory provisions
consolidating, amending or replacing the statute or regulation
referred to; references to "writing" include printing, typing,
lithography and other means of reproducing words in a tangible
visible form; the words "including," "includes" and "include"
shall be deemed to be followed by the words "without limitation";
references to articles, sections (or subdivisions of sections),
exhibits, annexes or schedules are to this Agreement; references
to agreements and other contractual instruments shall be deemed
to include all subsequent amendments, extensions and other
modifications to such instruments (without, however, limiting any
prohibition on any such amendments, extensions and other
modifications by the terms of any Basic Document); and references
to Persons include their respective permitted successors and
assigns and, in the case of Governmental Persons, Persons
succeeding to their respective functions and capacities.
Section 2. Collateral.
2.01 Grant. As collateral security for the prompt
payment in full when due (whether at stated maturity, by
acceleration or otherwise) and performance of the Secured
Obligations, the Company hereby pledges and grants to the
Administrative Agent, for the benefit of the Administrative
Agent, the Lenders, and, if an agreement in the form of Annex 9
is fully executed, the Swap Counterparty, a security interest in
all of the Company's right, title and interest in and to the
following property, whether now owned or hereafter acquired by
the Company and whether now existing or hereafter coming into
existence (collectively, the "Collateral"):
(a) all Accounts and General Intangibles, including
all rights to the payment of money, whether or not earned by
performance, including all moneys due and to become due to the
Company in repayment of any loans or advances, in payment for
goods (including Inventory and Equipment) sold or leased or for
services rendered, in payment of tax refunds and in payment of
any guarantee of any of the foregoing;
(b) all Documents, Instruments, and Chattel Paper and,
without limiting the generality of the foregoing, letters of
credit, including any such writing evidencing, representing,
arising from or existing in respect of, relating to, covering,
evidencing, securing or supporting the payment of, any of the
Accounts, General Intangibles, Inventory or Equipment;
all Inventory, including all goods of the Company
that are held by the Company for sale, lease or furnishing under
a contract of service that are so leased or furnished, and
including all spare parts and related supplies, all goods
obtained by the Company in exchange for any such goods, all
products made or processed from any such goods and all
substances, if any, commingled with or added to any such goods;
(d) all Equipment, including all goods (including
Motor Vehicles) of the Company that are used or bought for use
primarily in its business, including all spare parts and related
supplies, all goods obtained by the Company in exchange for any
such goods, all substances, if any, commingled with or added to
such goods and all upgrades and other improvements to such goods;
(e) all Deposit Accounts and the balances thereof from
time to time, including the Collateral Account, the Special
Collateral Account and the balance thereof from time to time;
(f) without limiting the generality of the foregoing,
all Intellectual Property;
(g) without limiting the generality of the foregoing,
all contracts and other agreements relating to the sale or other
disposition of all or any part of the Collateral and all rights,
warranties, claims and benefits against any Person arising out
of, relating to or in connection with all or any part of the
Collateral, including any such rights, warranties, claims or
benefits against any Person storing or transporting any Inventory
or Equipment or issuing any Documents or other writings;
(h) without limiting the generality of the foregoing,
to the extent related to all or any part of the other Collateral,
all books, correspondence, credit files, records, invoices,
tapes, cards, computer runs and other papers and documents in the
possession or under the control of the Company or any computer
bureau or service company from time to time acting for the
Company;
(i) without limiting the generality of the foregoing,
all liquor licenses;
(j) without limiting the generality of the foregoing,
all property that is or may become fixtures under applicable law;
(k) all other tangible and intangible property of the
Company; and
(l) all Proceeds and products in whatever form of all
or any part of the other Collateral including all insurance
payments in respect of the Collateral and all condemnation awards
and all other compensation for any Casualty Event with respect to
all or any part of the other Collateral, together with all rights
to recover and proceed with respect to the same, and all
accessions to, substitutions for and replacements of all or any
part of the Collateral.
2.02 Intellectual Property. For the purpose of
enabling the Administrative Agent to exercise its rights,
remedies, powers and privileges under Section 6 at such time or
times as the Administrative Agent shall be lawfully entitled to
exercise such rights, remedies, powers and privileges, and for no
other purpose, the Company hereby grants to the Administrative
Agent, to the extent assignable, an irrevocable, nonexclusive
license (exercisable without payment of royalty or other
compensation to the Company) to use, assign, license or
sublicense any of the Intellectual Property, together with
reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer programs used for
the compilation or printout of such items.
2.03 Perfection. Concurrently with the execution and
delivery of this Agreement, the Company shall (i) execute such
financing statements and other documents as the Administrative
Agent may request with respect to the Liens granted hereby,
(ii) deliver and pledge to the Administrative Agent any and all
Instruments, endorsed or accompanied by such instruments of
assignment and transfer in such form and substance as the
Administrative Agent may request, (iii) cause the Administrative
Agent (to the extent requested by the Administrative Agent) to be
listed as the lienholder on all certificates of title or
ownership relating to Motor Vehicles owned by the Company and
deliver to the Administrative Agent originals of all such
certificates of title or ownership for the Motor Vehicles
together with the odometer statements for each respective Motor
Vehicle, (iv) deliver to the Administrative Agent and file with
each relevant Governmental Person, each of the assignments in the
form of Annex 6 (in the case of any Patent Collateral) and Annex
7 (in the case of any Trademark Collateral), (v) give appropriate
notice to the relevant depository institution or financial
intermediary with respect to all Deposit Accounts or
uncertificated Securities, and (vi) take all such other actions
as the Administrative Agent may request to perfect or establish
the priority of the Liens granted by this Agreement.
2.04 Preservation and Protection of Security
Interests. The Company shall:
(a) upon the acquisition after the Effective Date, by
the Company of any Instrument (so long as no Default shall have
occurred and be continuing, excluding any checks received by the
Company for the payment of goods or services in the ordinary
course of business), promptly deliver and pledge to the
Administrative Agent all such Instruments, endorsed or
accompanied by such instruments of assignment and transfer in
such form and substance as the Administrative Agent may request;
(b) upon the acquisition after the Effective Date by
the Company of any Motor Vehicle, promptly deliver to the
Administrative Agent originals of the certificates of title or
ownership for such Motor Vehicles with the Administrative Agent
listed as lienholder, together with the manufacturer's statement
of origin and odometer statements; provided, however, if the
Motor Vehicle to be acquired is subject to a purchase money
security interest permitted by the Credit Agreement, the
Administrative Agent shall be listed as a junior lienholder to
the Person holding such purchase money security interest;
(c) without limiting the obligations of the Company
under Section 2.04(b), upon the acquisition after the Effective
Date by the Company of any Equipment covered by a certificate of
title or ownership, promptly cause the Administrative Agent to be
listed as the lienholder on such certificate of title and within
120 days of the acquisition of such Equipment deliver evidence of
the same to the Administrative Agent;
(d) upon the Company's acquiring, or otherwise
becoming entitled to the benefits of, any Copyright (or
copyrightable material), Patent (or patentable invention),
Trademark (or associated goodwill) or other Intellectual Property
or upon or prior to the Company's filing, either directly or
through any agent, licensee or other designee, of any application
with any Governmental Person for any Copyright, Patent,
Trademark, or other Intellectual Property, in each case after the
Effective Date, execute and deliver such contracts, agreements
and other instruments (including assignments in the form of
Annexes 6 and 7, as applicable) as the Administrative Agent may
request to evidence, validate, perfect and establish the priority
(subject only to Liens permitted under the Credit Agreement) of
the Liens granted by this Agreement in such and any related
Intellectual Property and, if requested by the Administrative
Agent, amend Annex 1, 2 or 3 (as the case may be) to reflect the
inclusion of any such Intellectual Property as part of the
Collateral (it being understood that the failure to amend any
such Annex shall not affect the Liens granted by this Agreement
on any such Intellectual Property); and
(e) give, execute, deliver, file or record any and all
financing statements, notices, contracts, agreements or other
instruments, obtain any and all Governmental Approvals and take
any and all steps that may be necessary or as the Administrative
Agent may request to create, perfect, establish the priority of,
or to preserve the validity, perfection or priority of, the Liens
granted by this Agreement or to enable the Administrative Agent
to exercise and enforce its rights, remedies, powers and
privileges under this Agreement with respect to such Liens,
provided that notices to account debtors in respect of any
Accounts or Instruments shall be subject to the provisions of
Section 3.02(b).
2.05 Attorney-in-Fact.
(a) Subject to the rights of the Company under
Sections 2.06, 2.07, 2.08 and 2.09, the Administrative Agent is
hereby appointed the attorney-in-fact of the Company for the
purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which the
Administrative Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, to preserve the
validity, perfection or priority of the Liens granted by this
Agreement, including the execution and filing of financing
statements, continuation statements and the like, and to exercise
its rights, remedies, powers and privileges under this Agreement.
This appointment as attorney-in-fact is irrevocable and coupled
with an interest. Without limiting the generality of the
foregoing, the Administrative Agent shall be entitled under this
Agreement upon the occurrence and during the continuance of any
Event of Default or, in respect of Section 3.02(b), any Default,
(i) to ask, demand, collect, sue for, recover, receive and give
receipt and discharge for amounts due and to become due under and
in respect of all or any part of the Collateral; (ii) to receive,
endorse and collect any Instruments or other drafts, instruments,
documents and chattel paper in connection with clause (i) above
(including any draft or check representing the proceeds of
insurance or the return of unearned premiums); (iii) to file any
claims or take any action or proceeding that the Administrative
Agent may deem necessary or advisable for the collection of all
or any part of the Collateral, including the collection of any
compensation due and to become due under any contract or
agreement with respect to all or any part of the Collateral; and
(iv) to execute, in connection with any sale or disposition of
the Collateral under Section 6, any endorsements, assignments,
bills of sale or other instruments of conveyance or transfer with
respect to all or any part of the Collateral.
(b) Without limiting the rights and powers of the
Administrative Agent under Section 2.05(a), the Company hereby
appoints the Administrative Agent as its attorney-in-fact,
effective the Effective Date and terminating upon the termination
of this Agreement and upon satisfaction in full of the Secured
Obligations, for the purpose of (i) executing on behalf of the
Company title or ownership applications for filing with
appropriate state agencies to enable Motor Vehicles now owned or
hereafter acquired by the Company to be retitled and the
Administrative Agent to be listed as lienholder as to such Motor
Vehicles, (ii) filing such applications with such state agencies
and (iii) executing such other documents and instruments on
behalf of, and taking such other action in the name of, the
Company as the Administrative Agent may deem necessary or
advisable to accomplish the purposes of this Agreement (including
the purpose of creating in favor of the Administrative Agent a
perfected lien on the Motor Vehicles and exercising the rights
and remedies of the Administrative Agent under Section 6). This
appointment as attorney-in-fact is irrevocable and coupled with
an interest.
(c) Without limiting the rights and powers of the
Administrative Agent under Section 2.05(a), the Company hereby
appoints the Administrative Agent as its attorney-in-fact,
effective the Effective Date and terminating upon the termination
of this Agreement and upon satisfaction in full of the Secured
Obligations, for the purpose of executing and filing all such
contracts, agreements and other documents as are contemplated by
Section 2.04(d). This appointment as attorney-in-fact is
irrevocable and coupled with an interest.
2.06 Use of Intellectual Property. Subject to such
action not otherwise constituting a Default and so long as no
Event of Default shall have occurred and be continuing, the
Company will be permitted to exploit, use, enjoy, protect,
license, sublicense, assign, sell, dispose of or take other
actions with respect to the Intellectual Property in the ordinary
course of the business of the Company. In furtherance of the
foregoing, so long as no Event of Default shall have occurred and
be continuing, the Administrative Agent shall from time to time,
upon the request of the Company, execute and deliver any
instruments, certificates or other documents, in the form so
requested, which the Company shall have certified are appropriate
(in its judgment) to allow it to take any action permitted above
(including relinquishment of the license provided pursuant to
Section 2.02 as to any specific Intellectual Property). The
exercise of rights, remedies, powers and privileges under
Section 6 by the Administrative Agent shall not terminate the
rights of the holders of any licenses or sublicenses theretofore
granted by the Company in accordance with the first sentence of
this Section 2.06.
2.07 Instruments. So long as no Default shall have
occurred and be continuing, the Company may retain for collection
in the ordinary course of business any checks received by the
Company for the payment of goods and services in the ordinary
course of business, and the Administrative Agent shall, promptly
upon the request, and at the expense, of the Company, make
appropriate arrangements for making any other Instruments pledged
by the Company available to the Company for purposes of
presentation, collection or renewal. Any such arrangement shall
be effected, to the extent deemed appropriate by the
Administrative Agent, against trust receipt or like document.
2.08 Use or Sale of Collateral. So long as no Event
of Default shall have occurred and be continuing, the Company
shall, in addition to its rights under Sections 2.06 and 2.07 in
respect of the Collateral contemplated in those sections, be
entitled to use and possess the other Collateral and to exercise
its rights, title and interest in all contracts, agreements,
licenses and Governmental Approvals, subject to the rights,
remedies, powers and privileges of the Administrative Agent under
Sections 3 and 6 and to such use, possession or exercise not
otherwise constituting a Default. With respect to any of the
Collateral that the Company has the right to sell under
Section 8.05 of the Credit Agreement, such sale shall be deemed
to be an authorized disposition of such Collateral for purposes
of Section 9-306(2) of the Uniform Commercial Code and the
security interest granted by this Agreement in such Collateral
shall be deemed released so long as the cash Proceeds of such
sale are applied in accordance with the Credit Agreement and the
other Basic Documents.
2.09 Rights and Obligations.
(a) The Company shall remain liable to perform its
duties and obligations under the contracts and agreements
included in the Collateral in accordance with their respective
terms to the same extent as if this Agreement had not been
executed and delivered. The exercise by the Administrative Agent
or any Lender of any right, remedy, power or privilege in respect
of this Agreement shall not release the Company from any of its
duties and obligations under such contracts and agreements.
Neither the Administrative Agent nor any Lender shall have any
duty, obligation or liability under such contracts and agreements
or in respect to any Governmental Approval included in the
Collateral by reason of this Agreement or any other Basic
Document, nor shall the Administrative Agent or any Lender be
obligated to perform any of the duties or obligations of the
Company under any such contract or agreement or any such
Governmental Approval or to take any action to collect or enforce
any claim (for payment) under any such contract or agreement or
Governmental Approval.
(b) No Lien granted by this Agreement in the Company's
right, title and interest in any contract, agreement or
Governmental Approval shall be deemed to be a consent by the
Administrative Agent or any Lender to any such contract,
agreement or Governmental Approval.
(c) No reference in this Agreement to Proceeds or to
the sale or other disposition of Collateral shall authorize the
Company to sell or otherwise dispose of any Collateral except to
the extent otherwise expressly permitted by the terms of any
Basic Document.
(d) Neither the Administrative Agent nor any Lender
shall be required to take steps necessary to preserve any rights
against prior parties to any part of the Collateral.
2.10 Release of Motor Vehicles. So long as no Default
shall have occurred and be continuing, upon the request of, and
as the expense of, the Company, the Administrative Agent shall
execute and deliver to the Company such instruments as the
Company shall reasonably request to remove the notation of the
Administrative Agent as lienholder on any certificate of title
for any Motor Vehicle; provided that any such instruments shall
be delivered, and the release shall be effective, only upon
receipt by the Administrative Agent of a certificate from the
Company stating that the Motor Vehicle the Lien on which is to be
released is to be sold or has suffered a casualty loss (with
title passing to the appropriate casualty insurance company in
settlement of the claim for such loss).
2.11 Termination. When all Secured Obligations shall
have been fully paid or otherwise fully performed and the
Commitments and all Letter of Credit Liabilities shall have
expired or been terminated, this Agreement shall terminate, and
the Administrative Agent shall forthwith cause to be assigned,
transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever, any remaining
Collateral and money received in respect of the Collateral, to or
on the order of the Company and to be released, canceled and
granted back all licenses and rights referred to in Section 2.02.
The Administrative Agent shall also execute and deliver to the
Company upon such termination such Uniform Commercial Code
termination statements, certificates for terminating the Liens on
the Motor Vehicles and such other documentation as shall be
reasonably requested by the Company to effect the termination and
release of the Liens granted by this Agreement on the Collateral.
Section 3. Cash Proceeds of Collateral.
3.01 Collateral Account. The Administrative Agent
shall establish with Chemical Bank at the Principal Office a cash
collateral account (the "Collateral Account") in the name and
under the control of the Administrative Agent into which there
shall be deposited from time to time (i) the cash Proceeds of any
of the Collateral required to be deposited in the Collateral
Account pursuant to the Credit Agreement, (ii) prior to their
disbursement, cash Proceeds required to be disbursed by the
Administrative Agent pursuant to Section 6.04, and (iii) any
additional amounts which the Company wishes (subject to Section
4.01(b) of the Credit Agreement) to pledge as additional
collateral security under this Agreement or which, as provided in
the Credit Agreement, are required to be pledged as additional
collateral security under this Agreement. The balance from time
to time in the Collateral Account shall constitute part of the
Collateral and shall not constitute payment of the Secured
Obligations until applied as provided in this Agreement. Except
as expressly provided in the next sentence, the Administrative
Agent shall remit the collected balance outstanding to the credit
of the Collateral Account to or upon the order of the Company as
the Company shall from time to time instruct. However, if any
Event of Default shall have occurred and be continuing, the
Administrative Agent may (and, if instructed by the Lenders as
specified in Section 9 of the Credit Agreement, shall) in its (or
their) discretion apply or cause to be applied (subject to
collection) the balance from time to time outstanding to the
credit of the Collateral Account to the payment of the Secured
Obligations in the manner specified in Section 6. The balance
from time to time in the Collateral Account shall be subject to
withdrawal only as provided in this Agreement.
3.02 Certain Proceeds.
(a) If any Event of Default shall have occurred and be
continuing, Company shall, upon request of the Administrative
Agent, instruct all account debtors and other Persons obligated
in respect of all Accounts and General Intangibles to make all
payments in respect of the Accounts and General Intangibles
directly to Barnett Bank of Tampa (by instructing that such
payments shall be made to such bank for deposit into the Blocked
Account) under and pursuant to a blocked account agreement, in
substantially the form of Annex 8, or to such other Persons or
under other arrangements in form and substance satisfactory to
the Administrative Agent.
(b) If any Event of Default shall have occurred and be
continuing, the Company shall, upon request of the Administrative
Agent, promptly notify (and the Company hereby authorizes the
Administrative Agent so to notify) each account debtor in respect
of any Instruments that such Collateral has been assigned to the
Administrative Agent under this Agreement and that any payments
due or to become due in respect of such Collateral are to be made
directly to the Administrative Agent. All such payments made to
the Administrative Agent shall be immediately deposited in the
Collateral Account.
(c) The Company agrees that if the Proceeds of any
Collateral required to be deposited in the Collateral Account
shall be received by the Company, the Company shall as promptly
as possible deposit such Proceeds into the Collateral Account or,
if the Proceeds are of a type that cannot be so deposited,
deliver such Proceeds to the Administrative Agent in kind. Until
so deposited or delivered, all such Proceeds shall be held in
trust by the Company for the Administrative Agent and shall not
be commingled with any other funds or property of the Company.
3.03 Investment of Balance in Collateral Account.
Amounts on deposit in the Collateral Account shall be invested
from time to time in such Permitted Investments as the Company
(or, if any Default shall have occurred and be continuing, the
Administrative Agent) shall determine. All such Permitted
Investments shall be held in the name and be under the control of
the Administrative Agent, provided that, if requested by the
Company, such Permitted Investments may be held in the name and
under the control of one or more of the Lenders (and in that
connection each Lender, pursuant to Section 10.11 of the Credit
Agreement, has agreed that such Permitted Investments shall be
held by such Lender as a collateral subagent for the
Administrative Agent under this Agreement). At any time after
the occurrence and during the continuance of an Event of Default,
the Administrative Agent may (and, if instructed by the Lenders
as specified in Section 9 of the Credit Agreement, shall) in its
(or their) discretion at any time and from time to time elect to
liquidate, or direct any such Lender acting as a collateral
subagent to liquidate, any such Permitted Investments and to
apply or cause to be applied the proceeds of such action to the
payment of the Secured Obligations in the manner specified in
Section 6.
3.04 Cover for Letter of Credit Liabilities. Amounts
deposited into the Collateral Account as cover for Letter of
Credit Liabilities pursuant to Sections 2.10(h) or 9 of the
Credit Agreement shall be held by the Administrative Agent in a
separate sub-account (designated "Letter of Credit Liabilities
Sub-Account") of the Collateral Account, and all amounts held in
such sub-account shall constitute collateral security first for
the Letter of Credit Liabilities outstanding from time to time
and second as collateral security for the other Secured
Obligations.
Section 4. Representations and Warranties. As of the
Effective Date and as of the date of each extension of credit by
the Lenders, the Company represents and warrants to the Lenders
and the Administrative Agent as follows:
4.01 Title. The Company is the sole beneficial owner
of the Collateral in which it purports to grant a Lien pursuant
to this Agreement, and such Collateral is free and clear of all
Liens, except for Liens permitted under Section 8.06 of the
Credit Agreement. The Liens granted by this Agreement in favor
of the Administrative Agent for the benefit of the Administrative
Agent and the Lenders have attached and constitute a perfected
security interest in all of such Collateral (other than
Intellectual Property registered or otherwise located outside of
the United States of America) prior to all other Liens (except
such permitted Liens). Notwithstanding the foregoing, nothing
contained in this Section 4.01 shall derogate the grant of a
security interest under Section 2.01 with respect to any property
not owned by the Company but with respect to which the Company
has sufficient rights to confer a security interest.
4.02 Intellectual Property.
(a) Annexes 1, 2 and 3 set forth completely and
correctly all Copyrights, Patents and Trademarks owned by the
Company on the Effective Date; except pursuant to licenses and
other user agreements entered into by the Company in the ordinary
course of business and listed in Annex 4, the Company owns and
possesses the right to use, and has done nothing to authorize or
enable any other Person to use, any Copyright, Patent or
Trademark listed in Annex 1, 2 or 3; all registrations listed in
Annexes 1, 2 and 3 are valid and in full force and effect; and,
except as may be set forth in Annex 4, the Company owns and
possesses the right to use all Copyrights, Patents and Trademarks
listed in Annexes 1, 2 and 3.
(b) Annex 4 sets forth completely and correctly all
licenses and other user agreements included in the Intellectual
Property on the Effective Date.
(c) To the Company's knowledge, (i) except as set
forth in Annex 4, there is no violation by others of any right of
the Company with respect to any Copyright, Patent or Trademark
listed in Annex 1, 2 or 3 and (ii) the Company is not infringing
in any respect upon any Copyright, Patent or Trademark of any
other Person; and no proceedings have been instituted, are
pending against the Company or, to the Company's knowledge, have
been threatened against, and no claim has been received by, the
Company, alleging any such violation, except as may be set forth
in Annex 4.
(d) The Company does not own any Trademarks registered
in the United States of America to which the last sentence of the
definition of Trademark Collateral applies.
Section 5. Covenants.
5.01 Books and Records. The Company shall:
(a) keep full and accurate books and records relating
to the Collateral and stamp or otherwise mark such books and
records in such manner as the Administrative Agent may reasonably
require in order to reflect the Liens granted by this Agreement;
(b) furnish to the Administrative Agent on the last
business day of the months of March, June, September and December
(or at such other times as the Administrative Agent may
designate) statements and schedules further identifying and
describing the Copyright Collateral, the Patent Collateral and
the Trademark Collateral and such other reports in connection
with the Copyright Collateral, the Patent Collateral and the
Trademark Collateral, as the Administrative Agent may reasonably
request, all in reasonable detail;
(c) prior to filing, either directly or through an
agent, licensee or other designee, any application for any
Copyright, Patent or Trademark, furnish to the Administrative
Agent prompt notice of such proposed filing; and
(d) permit representatives of the Administrative
Agent, upon reasonable notice, at any time during normal business
hours, to inspect and make abstracts from its books and records
pertaining to the Collateral, permit representatives of the
Administrative Agent to be present at the Company's place of
business to receive copies of all communications and remittances
relating to the Collateral and forward copies of any notices or
communications received by the Company with respect to the
Collateral, all in such manner as the Administrative Agent may
reasonably request.
5.02 Removals, Etc. Without at least 30 days' prior
written notice to the Administrative Agent, the Company shall not
(i) maintain any of its books and records with respect to the
Collateral at any office or maintain its principal place of
business at any place, or permit any Inventory or Equipment to be
located anywhere, other than at the address initially indicated
for notices to it under Section 7 or at one of the locations
identified in Annex 5 or in transit from one of such locations to
another or (ii) change its corporate name, or the name under
which it does business, from the name shown on the signature
pages to this Agreement.
5.03 Sales and Other Liens. Except as otherwise
permitted under Section 8 of the Credit Agreement, without the
prior written consent of the Administrative Agent (granted with
the authorization of the Lenders as specified in Section 11.04 of
the Credit Agreement), the Company shall not dispose of any
Collateral, create, incur, assume or suffer to exist any Lien
upon any Collateral or file or suffer to be on file or authorize
to be filed, in any jurisdiction, any financing statement or like
instrument with respect to all or any part of the Collateral in
which the Administrative Agent is not named as the sole secured
party for the benefit of the Lenders and, if an agreement in the
form of Annex 9 has been fully executed, the Swap Counterparty.
5.04 Intellectual Property.
(a) The Company (either itself or through licensees)
will, for each Trademark, (i) to the extent consistent with past
practice and good business judgment, continue to use such
Trademark on each and every trademark class of goods in order to
maintain such Trademark in full force and effect free from any
claim of abandonment for nonuse, (ii) maintain as in the past the
quality of products and services offered under such Trademark,
(iii) employ such Trademark with the appropriate notice of
registration and (iv) not (and not permit any licensee or
sublicensee to) do any act or knowingly omit to do any act
whereby any Trademark material to the conduct of its business may
become invalidated.
(b) The Company (either itself or through licensees)
will not do any act or knowingly omit to do any act whereby any
Patent material to the conduct of its business may become
abandoned or dedicated.
(c) The Company shall notify the Administrative Agent
immediately if it knows or has reason to know that any
Intellectual Property material to the conduct of its business may
become abandoned or dedicated, or of any adverse determination or
development (including the institution of, or any such
determination or development in, any proceeding before any
Governmental Person) regarding the Company's ownership of any
Intellectual Property material to its business, its right to
copyright, patent or register the same (as the case may be), or
its right to keep, use and maintain the same.
(d) The Company will take all necessary steps that are
consistent with good business practices in any proceeding before
any appropriate Governmental Person to maintain and pursue each
application relating to any Intellectual Property (and to obtain
the relevant registrations) and to maintain each registration
material to the conduct of its business, including payment of
maintenance fees, filing of applications for renewal, affidavits
of use, affidavits of incontestability and opposition,
interference and cancellation proceedings.
(e) In the event that any Intellectual Property
material to the conduct of its business is infringed,
misappropriated or diluted by a third party, the Company shall
notify the Administrative Agent within (10) days after it learns
of such event and shall, if consistent with good business
practice, promptly sue for infringement, misappropriation or
dilution, seek temporary restraints and preliminary injunctive
relief to the extent practicable, seek to recover any and all
damages for such infringement, misappropriation or dilution and
take such other actions as are appropriate under the
circumstances to protect such Collateral.
(f) The Company shall, through counsel acceptable to
the Administrative Agent, prosecute diligently any application
for any Intellectual Property pending as of the date of this
Agreement or thereafter made until the termination of this
Agreement, make application on uncopyrighted but copyrightable
material, unpatented but patentable inventions and unregistered
but registerable Trademarks and preserve and maintain all rights
in applications for any Intellectual Property; provided, however,
that the Company shall have no obligation to make any such
application if making such application would be unnecessary or
imprudent in the good faith business judgment of the Company.
Any expenses incurred in connection with such an application
shall be borne by the Company. The Company shall not abandon any
right to file an application for any Intellectual Property or any
pending such application in the United States without the consent
of the Administrative Agent, which consent shall not be
unreasonably withheld.
(g) The Administrative Agent shall have the right but
shall in no way be obligated to bring suit in its own name to
enforce the Copyrights, Patents and Trademarks and any license
under such Intellectual Property, in which event the Company
shall, at the request of the Administrative Agent, do any and all
lawful acts and execute and deliver any and all proper documents
required by the Administrative Agent in aid of such enforcement
action.
5.05 Further Assurances. The Company agrees that,
from time to time upon the request of the Administrative Agent,
the Company will execute and deliver such further writings and do
such other acts and things as the Administrative Agent may
reasonably request in order fully to effect the purposes of this
Agreement.
Section 6. Remedies.
6.01 Events of Default, Etc. If any Event of Default
shall have occurred and be continuing:
(a) The Administrative Agent in its discretion may
require the Company to, and the Company shall, assemble the
Collateral owned by it at such place or places, reasonably
convenient to both the Administrative Agent and the Company,
designated in the Administrative Agent's request.
(b) The Administrative Agent in its discretion may
make any reasonable compromise or settlement it deems desirable
with respect to any of the Collateral and may extend the time of
payment, arrange for payment in installments, or otherwise modify
the terms of, all or any part of the Collateral.
(c) The Administrative Agent in its discretion may, in
its name or in the name of the Company or otherwise, demand, sue
for, collect or receive any money or property at any time payable
or receivable on account of or in exchange for all or any part of
the Collateral, but shall be under no obligation to do so.
(d) In the event of any sale, license or other
disposition of any of the Trademark Collateral, the goodwill
connected with and symbolized by the Trademark Collateral subject
to such disposition shall be included, and the Company shall
supply to the Administrative Agent or its designee, for inclusion
in such sale, assignment or other disposition, all Intellectual
Property relating to such Trademark Collateral.
(e) In addition to any rights conferred by this
Agreement, the Administrative Agent shall have, and in its
discretion may exercise, all of the rights, remedies, powers and
privileges with respect to the Collateral of a secured party
under the Uniform Commercial Code (whether or not a version of
the Official Text of the Uniform Commercial Code is in effect in
the jurisdiction where such rights, remedies, powers and
privileges are asserted) and such additional rights, remedies,
powers and privileges to which a secured party is entitled under
the laws in effect in any jurisdiction where any rights,
remedies, powers and privileges in respect of this Agreement or
the Collateral may be asserted, including the right, to the
maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the
Collateral as if the Administrative Agent were the sole and
absolute owner of the Collateral (and the Company agrees to take
all such action as may be appropriate to give effect to such
right).
The Proceeds of, and other realization upon, the Collateral by
virtue of the exercise of remedies under this Section 6.01 and of
the exercise of the license granted to the Administrative Agent
in Section 2.02 shall be applied in accordance with Section 6.04.
6.02 Deficiency. If the Proceeds of, or other
realization upon, the Collateral by virtue of the exercise of
remedies under Section 6.01 and of the exercise of the license
granted by the Administrative Agent in Section 2.02 are
insufficient to cover the costs and expenses of such exercise and
the payment in full of the other Secured Obligations, the Company
shall remain liable for any deficiency.
6.03 Manner of Disposition.
(a) The Administrative Agent and the Lenders shall
incur no liability as a result of the sale, lease or other
disposition of all or any part of the Collateral conducted in any
commercially reasonable manner. The Company hereby waives any
claims against the Administrative Agent or any Lender arising by
reason of the fact that the price at which the Collateral may
have been sold, leased, or otherwise disposed of was less than
the price which might have been obtained by some other manner of
sale, lease or other disposition or was less than the aggregate
amount of the Secured Obligations, even if, in connection with a
private sale or other non-public disposition, the Administrative
Agent accepts the first offer received and does not offer the
Collateral to more than one offeree.
(b) With respect to any Collateral that may from time
to time be pledged to secure the Secured Obligations the
disposition of which is subject to certain prohibitions contained
in the Securities Act of 1933 and applicable state securities
laws, the Company recognizes that the Administrative Agent may be
compelled, with respect to any sale of all or any part of such
Collateral, to limit purchasers to those who will agree, among
other things, to acquire the Collateral for their own account,
for investment and not with a view to distribution or resale.
The Company acknowledges that any such private sales may be at
prices and on terms less favorable to the Administrative Agent
than those obtainable through a public sale without such
restrictions, and, notwithstanding such circumstances, agree that
any such private sale shall be deemed to have been made in a
commercially reasonable manner and that the Administrative Agent
shall have no obligation to engage in public sales and no
obligation to delay the sale of any Collateral for the period of
time necessary to permit the respective issuer of such Collateral
to register it for public sale.
6.04 Application of Proceeds. Except as otherwise
expressly provided in this Agreement and except as provided below
in this Section 6.04, the proceeds of, or other realization upon,
all or any part of the Collateral by virtue of the exercise of
remedies under Section 6.01 or of the exercise of the license
granted in Section 2.02, and any other cash at the time held by
the Administrative Agent under Section 3 or this Section 6, shall
be applied by the Administrative Agent:
First, to the reasonable expenses of retaking, holding,
preparing for sale or lease, selling, or leasing or other
disposition of the Collateral, including reasonable out-of-pocket
costs and expenses of the Administrative Agent, and the
reasonable fees and expenses of its agents, as well as reasonable
attorneys' fees and legal expenses incurred by the Administrative
Agent in that connection;
Next, to satisfaction of the Secured Obligations
equally and ratably in accordance with their respective amounts
then due and owing or as the Lenders may otherwise agree;
Next, to any Persons entitled to such amounts pursuant
to Section 9-504(1)(c) of the Uniform Commercial Code; and
Finally, to the Company, or its respective successors
or assigns, or as a court of competent jurisdiction may direct,
of any surplus then remaining.
Notwithstanding the foregoing, the proceeds of any cash or other
amounts held in the Letter of Credit Liabilities Sub-Account of
the Collateral Account pursuant to Section 3.04 shall be applied
first to the Letter of Credit Liabilities outstanding from time
to time and second to the other Secured Obligations in the manner
provided above in this Section 6.04.
Section 7. Miscellaneous.
7.01 The Administrative Agent. As provided in
Section 10.01 of the Credit Agreement, each of the Lenders and,
if it executes an agreement in the form of Annex 9, the Swap
Counterparty has appointed The CIT Group/Business Credit, Inc. as
its Administrative Agent for purposes of this Agreement. In such
capacity, The CIT Group/Business Credit, Inc. shall be entitled
to all of the rights and benefits accorded the Administrative
Agent by Section 10 of the Credit Agreement. Following the
payment in full of all Secured Obligations and the termination or
expiration of the Commitments of the Lenders and Letter of Credit
Liabilities, the provisions of Section 11.03 of the Credit
Agreement shall be deemed to continue in full force and effect
for the benefit of the Administrative Agent under this Agreement.
7.02 Waiver. No failure on the part of the
Administrative Agent or any Lender to exercise and no delay in
exercising, and no course of dealing with respect to, any right,
remedy, power or privilege under this Agreement shall operate as
a waiver of such right, remedy, power or privilege, nor shall any
single or partial exercise of any right, remedy, power or
privilege under this Agreement preclude any other or further
exercise of any such right, remedy, power or privilege or the
exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges provided in this
Agreement are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
7.03 Notices. All notices and communications to be
given under this Agreement shall be given or made in writing to
the intended recipient at the address specified below or, as to
any party, at such other address as shall be designated by such
party in a notice to each other party. Except as otherwise
provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telex or
telecopier, or personally delivered or, in the case of a mailed
notice, upon receipt, in each case, given or addressed as
provided in this Section 7.03:
To the Company:
Kash n' Karry Food Stores, Inc.
6422 Harney Road
Tampa, Florida 33610
Attention: Executive Vice President,
Administration
Telecopier No.: (813) 626-9550
To the Administrative Agent:
The CIT Group/Business Credit, Inc.
300 South Grand Avenue
Third Floor
Los Angeles, California 90071
Attention: Regional Credit Manager
Telecopier No.: (213) 613-2588
Notwithstanding the foregoing, if a notice is
transmitted by telex, telecopier or personal delivery or, in the
case of a mailed notice, is received on a day that is not a
Business Day, then such notice shall be deemed to have been duly
given on the first Business Day after such transmission or, in
the case of a mailed notice, receipt.
7.04 Expenses, Etc. The Company agrees to pay or to
reimburse the Administrative Agent and the Lenders for all costs
and expenses (including reasonable attorney's fees and expenses)
that may be incurred by the Administrative Agent or the Lenders
in any effort to enforce any of the provisions of Section 6 or
any of the obligations of the Company in respect of the
Collateral or in connection with (a) the preservation of the Lien
of, or the rights of, the Administrative Agent and the Lenders
under this Agreement, (b) any actual or attempted sale, lease,
disposition, exchange, collection, compromise, settlement or
other realization in respect of, or care of, the Collateral, or
(c) all such costs and expenses and any other costs and expenses,
including reasonable attorney's fees and expenses incurred in any
bankruptcy, reorganization, workout or other similar proceeding,
including costs, expenses and reasonable attorneys' fees and
expenses relating to any proceeding concerning relief from stay,
cash collateral, appointment of a trustee, disclosure statement
approval, or plan confirmation.
7.05 Amendments, Etc. Any provision of this Agreement
may be modified, supplemented or waived only by an instrument in
writing duly executed by the Company and the Administrative Agent
(with the consent of the Lenders as specified in Section 11.04 of
the Credit Agreement). Any such modification, supplement or
waiver shall be for such period and subject to such conditions as
shall be specified in the instrument effecting the same and shall
be binding upon the Administrative Agent and each Lender, each
holder of any of the Secured Obligations and the Company, and any
such waiver shall be effective only in the specific instance and
for the purposes for which given.
7.06 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Company, the
Administrative Agent, the Lenders and each holder of any of the
Secured Obligations and their respective successors and permitted
assigns. The Company shall not assign or transfer its rights
under this Agreement without the prior written consent of the
Administrative Agent (with the further consent of the Lenders as
specified in Section 10.10 of the Credit Agreement).
7.07 Survival. All representations and warranties
made in this Agreement or in any certificate or other document
delivered pursuant to or in connection with this Agreement shall
survive the execution and delivery of this Agreement or such
certificate or other document (as the case may be) or any deemed
repetition of any such representation or warranty.
7.08 Agreements Superseded. This Agreement supersedes
all prior agreements and understandings (including the Disclosure
Statement and any and all commitment letters and term sheets),
written or oral, between or among the parties with respect to the
subject matter of this Agreement.
7.09 Severability. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions of this Agreement, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
7.10 Captions. The table of contents and captions and
section headings appearing in this Agreement are included solely
for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
7.11 Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties to
this Agreement may execute this Agreement by signing any such
counterpart.
7.12 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK. THE COMPANY HEREBY SUBMITS TO
THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY STATE COURT
SITTING IN THE BOROUGH OF MANHATTAN, COUNTY OF NEW YORK, NEW YORK
FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
7.13 WAIVER OF JURY TRIAL. THE COMPANY, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVE, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed and delivered as of the day and
year first above written.
KASH N' KARRY FOOD STORES, INC.
By:________________________________
Title:
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Administrative Agent
By:________________________________
Title:
ANNEX 1
LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS AND
APPLICATIONS FOR COPYRIGHT REGISTRATIONS
KASH N' KARRY FOOD STORES, INC.
Title Date Filed Registration No. Effective Date
-None-
ANNEX 2
LIST OF PATENTS AND PATENT APPLICATIONS
KASH N' KARRY FOOD STORES, INC.
File Patent Country Registration No. Date
-None-
ANNEX 3
LIST OF TRADE NAMES, TRADEMARKS, SERVICES MARKS,
TRADEMARK AND SERVICE MARK REGISTRATIONS AND
APPLICATIONS FOR TRADEMARK AND SERVICE MARK REGISTRATIONS
U.S. Trademarks
KASH N' KARRY FOOD STORES, INC.
I. Federal Registrations
No. Reg. No. Serial No.Reg. Date Mark
1. 1,830,625 74-352,02101/25/93 Pro's Choice
2. 1,804,488 74-281,86511/16/93 Nature Friendly and design
3. 1,534,618 73-721,53404/11/89 Round Up
4. 1,533,699 73-639,90204/04/89 Florida Choice
5. 1,500,764 73-672,96608/16/88 EZ Checkout and design
6. 1,351,939 73-515,16307/30/85 Five Star Meats and design
7. 1,297,925 73-447,90009/25/84 Hi-Class
8. 1,279,112 73-407,48705/22/84 Harvest Day block letters
9. 1,214,443 73-321,44510/26/82 Key Buy
10. 1,169,786 73-157,48509/22/81 Lady Lee
11. 1,000,911 73-004,69201/07/75 Medi-Guard and design
12. 965,934 72-428,45608/14/73 Medi-Guard and design
13. 875,507 72-298,94508/26/69 Medi-Guard and design
14. 839,887 72-255,52212/05/67 Medi-Guard and design
II. Federal Registrations - pending status
No. Reg. No. Serial No.Reg. Date Mark
15. 74-457,11511/12/93 Fresh American Royal Ban anddesign
16. 74-281,86406/05/92 Nature Friendly (Published for Opp
Request for Extension File Opposition)
ANNEX 3
LIST OF TRADE NAMES, TRADEMARKS, SERVICES MARKS,
TRADEMARK AND SERVICE MARK REGISTRATIONS AND
APPLICATIONS FOR TRADEMARK AND SERVICE MARK REGISTRATIONS
U.S. Trademarks
KASH N' KARRY FOOD STORES, INC.
III. Florida Registrations
No. Reg. No. Reg. Date Mark
17. T9400000010001/20/94Florida Preferred and design
18. T16172 07/22/92 Kash $aver
19. T15518 02/10/92 Kash $aver
20. T15161 10/29/91 Kash $aver
21. T14932 08/28/91 $ave and Pack and design
22. T14214 03/08/91 Pro's Choice and design
23. T14071 01/28/91 $mart Buy and design
24. T13496 09/19/90 Nature Friendly and design
25. T13370 08/27/90 Kash n' Karry Food Stores and design
26. T13369 08/27/90 So Much More to Pay Less for!
27. T13368 08/27/91 Kash n' Karry and design
28. T12501 02/21/90 The Pharmacy With TLC
(Touch Link Computers)
29. T09931 11/29/88 Kash n' Karry Hollywood at Home
30. T02593 12/31/84 Five Star Meats and design
31. T08543 10/20/83 Kash N Karry (for carts)
32. 925816 12/31/81 Kash n' Karry Discount Centers
33. 925815 12/31/81 Kash n' Karry Discount Supermarkets
34. 923973 02/19/81 We Make Savings Simple
35. 922717 07/24/80 Tell a Friend
36. 922401 05/19/80 Kash n' Karry K
37. 922400 05/19/80 Kash n' Karry k
38. 922399 05/19/80 K Kash n' Karry
39. 922398 05/19/80 K Kash n' Karry
ANNEX 3
LIST OF TRADE NAMES, TRADEMARKS, SERVICES MARKS,
TRADEMARK AND SERVICE MARK REGISTRATIONS AND
APPLICATIONS FOR TRADEMARK AND SERVICE MARK REGISTRATIONS
U.S. Trademarks
KASH N' KARRY FOOD STORES, INC.
IV. Registered Fictitious Names
No. Reg. No. File Date Name
40. G92323900024 11/18/92 Save 'n Pack
V. Unregistered Trade Marks
The Bakery
The Corner Deli
Farm Fresh Produce
Fresh n' Easy Salads
Kash n' Karry
Kash n' Karry Food Centers
K Kash n' Karry Food Centers and design
Silken Care
Smart Lane
So Much More to Pay Less For
Captain's Choice and design
Smart Buy
Foreign Trademarks
KASH N' KARRY FOOD STORES, INC.
Application (A) Registration or
Mark Registration (R) Country Filing Date (F)
-None-
ANNEX 4
LIST OF CONTRACTS, LICENSES AND OTHER AGREEMENTS
KASH N' KARRY FOOD STORES, INC.
-None-
ANNEX 5
LIST OF LOCATIONS
KASH N' KARRY FOOD STORES, INC.
NOTES OPEN-1 STORE# ADDRESS CITY COUNTY
2 LIQUOR 584 2002 SW 34th St. (Liquor)GainesvilleAlachua
1 1 720 N.W. 13th Street & 23rd Blvd.GainesvilleAlachua
3 1 876 4120 NW 16th Blvd. GainesvilleAlachua
2 1 884 2002 SW 36th St. GainesvilleAlachua
2 1 207 4200 S. Tamiami TrailPt. CharlotteCharlotte
1 1 709 Forrest Nelson Blvd & U.S. 41Pt. CharlotteCharlotte
1 1 702 1651 SE Hwy. 19 Crystal RiverCitrus
4 LAND 726 Beverly Hills Beverly HillsCitrus
2 1 851 W. Main Street & MontgomeryInvernessCitrus
2 1 871 4500 S. Suncoast Blvd (US 19)HomosassaCitrus
2 1 880 1133 U.S. Hwy. 17 S.Wauchula Hardee
2 1 716 Spring Hill Dr. & Mariner Bd.Spring HillHernando
2 1 868 Hwy 41 & S.R. 577 BrooksvilleHernando
1 1 886 2384 Commercial Way Spring HillHernando
1 1 891 3250 U.S. 27 S. Sebring Highlands
2 ASSIGNED 106 305 W. Hillsborough Ave.Tampa Hillsborough
2 1 113 Kennedy & Westshore Blvd.TampaHillsborough
2 CLOSED 144 7325 W. Hillsborough Ave.TampaHillsborough
1 1 146 Florida & Ida Tampa Hillsborough
3 1 401 2525 N. Dale Mabry Tampa Hillsborough
2 1 403 11612-B N. Nebraska Tampa Hillsborough
2 LIQUOR 587 Fowler & 30th St. (Liquor)TampaHillsborough
2 LIQUOR 592 West Village Dr. (Liquor)TampaHillsborough
2 1 617 Northdale & Dale MabryTampa Hillsborough
2 1 619 Florida & Fletcher Tampa Hillsborough
2 1 621 Hillsborough & ArmeniaTampa Hillsborough
2 1 623 Gandy Blvd. & ManhattanTampa Hillsborough
2 1 703 David Blvd. &TempleTerr.HwyTempleTerraceHillsborough
2 1 718 Waters Avenue & Hanley Rd.TampaHillsborough
3 1 722 2100 W. Swann Tampa Hillsborough
2 1 723 205 W. Alexander St.Plant CityHillsborough
1 LAND 734 Dale Mabry & LambrightTampa Hillsborough
1 LAND 736 Martin Luther King and NebraskaTampaHillsborough
2 1 743 Busch Blvd & 56th Temple TerraceHillsborough
2 1 824 50th St. & 10th Ave Tampa Hillsborough
2 1 826 507 Wheeler St. Plant CityHillsborough
2 1 827 Florida Ave. & WatersTampa Hillsborough
2 1 848 1023 N. Tamiami TrailRuskin Hillsborough
2 1 855 U.S. 301 & Hannaway Dr.RiverviewHillsborough
2 1 858 Armenia & Tampa Bay Tampa Hillsborough
2 ASSIGNED 866 Dale Mabry & EhrlichTampa Hillsborough
2 1 869 Lithia Rd & Lumsden Dr.BrandonHillsborough
2 1 870 Hillsborough & MemorialTampa Hillsborough
ANNEX 5
LIST OF LOCATIONS
KASH N' KARRY FOOD STORES, INC.
NOTES OPEN-1 STOREADDRESS CITY COUNTY
#
3 1 877 Parsons Ave. & BuffaloSeffner Hillsborough
1 1 878 Gunn Hwy. & Casey Rd.Tampa Hillsborough
1 1 887 Fowler & 30th St. Tampa Hillsborough
2 1 892 West Village Dr. & EhrlichTampaHillsborough
2 SUBLEASE 206 1801 N. Tamiami TrailFt. MyersLee
2 1 209 8951 Bonita Bch. Rd.Bonita SpringsLee
2 CLOSED 217 6257 McGregor Blvd. Ft. Myers Lee
2 1 309 College Pkwy. & WinderFt. MyersLee
2 1 311 McGregor Blvd. Ft. Myers Lee
2 1 313 Bayshore Rd. & Post N. Ft. MyersLee
2 1 315 1530 Del Prado Blvd.Cape CoralLee
2 1 629 U.S. 41 & Hancock Pkwy.Cape CoralLee
2 1 882 4820 Leonard St. Cape CoralLee
1 LAND 882 Cape Coral Cape CoralLee
2 1 211 Manatee Ave. & 58th St.BradentonManatee
2 1 627 Cortez & 22nd St. Bradenton Manatee
2 1 715 5201 33rd Street Bradenton Manatee
2 1 854 7th Street & 5th Ave.Palmetto Manatee
2 1 867 U.S. 41 & 58th Ave. Bradenton Manatee
2 CLOSED 130 2957 NW Pine Avenue Ocala Marion
2 1 301 SR 200 & NW 27th Ave.Ocala Marion
2 CLOSED 601 NE 38th Ave. & Hwy 40Ocala Marion
2 1 651 2720 E. Silver Springs Blvd.OcalaMarion
1 1 725 U.S. 441 & C.R. 326 Ocala Marion
2 1 894 833 U.S. 41 N. Dunnellon Marion
1 1 896 11310 S.E. U.S. 301 Belleview Marion
2 CLOSED 898 3233 S.E. Maricamp Rd.Ocala Marion
2 1 701 3183 W. Vine Street Kissimmee Osceola
2 CLOSED 128 U.S. 301 & 1st St. ZephyrhillsPasco
2 CLOSED 134 2607 U.S. 19 Holiday Pasco
2 CLOSED 141 U.S. 92 Bypass Dade City Pasco
2 1 204 U.S. 19 N. & Moog Rd.New Port RicheyPasco
2 SUBLEASE 205 U.S. 19 & Embassy Blvd.Port RicheyPasco
2 1 603 Fivey & Hwy. 52 Hudson Pasco
2 1 605 Seven Springs & Hwy. 54Seven SpringsPasco
2 1 704 C.R. 584 & 586 Land O'LakesPasco
1 1 717 Congress & MassachusettsNew Port RicheyPasco
2 1 728 U.S. 301 North ZephyrhillsPasco
2 1 874 S.R. 585 & Trouble CreekNew Port RicheyPasco
2 1 885 Little Rd. & EmbassyNew Port RicheyPasco
2 1 897 U.S. 301 S. & Morningside Dr.Dade CityPasco
2 1 133 Blind Pass Rd. & 76thSt. Pete BeachPinellas
ANNEX 5
LIST OF LOCATIONS
KASH N' KARRY FOOD STORES, INC.
NOTES OPEN-1 STORE ADDRESS CITY COUNTY
2 CLOSED 140 10884 74th Ave. N. Seminole Pinellas
2 CLOSED 201 Gandy Blvd. & 9th St. N.St. PetersburgPinellas
2 SUBLEASE 202 Park Blvd. & Starkey Rd.Largo Pinellas
2 SUBLEASE 203 34th St. & 30th Ave. St. PetersburgPinellas
2 ASSIGNED 405 3533 U.S. Hwy 19 Palm HarborPinellas
2 SUBLEASE 607 2465 U.S. 19 ClearwaterPinellas
2 1 609 Ulmerton & Ridge Rd.Largo Pinellas
2 1 611 66th St. & 46th Ave. N.Kenneth CityPinellas
2 1 613 34th St. & 22nd Ave. N.St. PetersburgPinellas
2 1 615 Gulfport & Pasadena Gulfport Pinellas
2 1 705 3110 S.R. 584 West Oldsmar Pinellas
2 1 707 C. R. 1 & 584 Palm HarborPinellas
2 1 710 Indian Rocks & WalsinghamLargoPinellas
1 1 765 3327 9th Street NorthSt. PetersburgPinellas
2 1 831 9th Ave. & 60th St. N.St. PetersburgPinellas
2 1 849 U.S. 19 N. & Drew ClearwaterPinellas
2 1 852 4th St. & 74th Ave. N.St. PetersburgPinellas
2 CLOSED 853 34th St. & 39th Ave. S.St. PetersburgPinellas
2 1 857 9th St. & 62nd Ave. S.St. PetersburgPinellas
2 1 864 Main Street & King ArthurDunedinPinellas
2 1 873 McMullen Booth & C.R. 102ClearwaterPinellas
3 1 875 U.S. 19 & Alderman Rd.Palm HarborPinellas
1 1 879 Ulmerton & 66th St. Largo Pinellas
2 1 881 Keene & East Bay Largo Pinellas
2 1 883 Highland & Sunset PointClearwaterPinellas
2 CLOSED 888 1068 Ulmerton Rd. Largo Pinellas
2 1 129 Bartow Rd. & New JerseyLakelandPolk
1 1 733 Havendale Blvd AuburndalePolk
2 1 842 3rd St. & Ave. O. S.W.Winter HavenPolk
2 1 889 S.R. 60 & S.R. 17A Lake WalesPolk
2 1 893 Florida & Highland Lakeland Polk
2 1 895 1176 U.S. 27 N. Haines CityPolk
2 1 899 Hwy. 98 & Daughtery Rd.LakelandPolk
2 1 139 U.S. 41 & Albee Farm Rd.VeniceSarasota
2 SUBLEASE 212 8199 S. Tamiami TrailSarasota Sarasota
2 1 214 Fruitville & Beneva Rd.SarasotaSarasota
2 1 215 Tamiami Trail & Prospect St.SarasotaSarasota
2 1 216 Bee Ridge & McintoshSarasota Sarasota
2 CLOSED 305 Hwy. 41 & Alligator Dr.Venice Sarasota
2 CLOSED 319 15 Beneva Rd. Sarasota Sarasota
2 1 712 1254 Jacaranda Blvd.Venice Sarasota
2 1 719 University & Lockwood RidgeSarasotaSarasota
3 1 880 Cattlemen & Bee Ridge Rd.SarasotaSarasota
2 1 711 858 Saxon Orange CityVolusia
NOTES:
1 Fee Properties
2 Leased Properties
3 Ground Leased/Improvements Owned
4 Balloon Payment due 1/14/95
ANNEX 6
ASSIGNMENT FOR SECURITY
(PATENTS)
WHEREAS, Kash n' Karry Food Stores, Inc., a Delaware
corporation (herein referred to as "Assignor"), owns the letters
patent, and/or applications for letters patent, of the United
States, more particularly described on Schedule 1 annexed hereto as
part hereof (the "Patents");
WHEREAS, Assignor has executed and delivered to The CIT
Group/Business Credit, Inc., a New York corporation, as
administrative agent (herein referred to as "Assignee") for the
ratable benefit of Assignee and the lenders (the "Lenders") under
the Credit Agreement dated as of December 29, 1994 (as amended,
supplemented, restated or otherwise modified from time to time, the
"Credit Agreement"), a Security Agreement of even date herewith
(the "Agreement", terms defined therein and not otherwise defined
herein being used herein as therein defined) in favor of Assignee;
and
WHEREAS, pursuant to the Agreement, Assignor has assigned
to Assignee, and granted to Assignee a security interest in, and
mortgage on, all right, title and interest of Assignor in and to
the Patents, together with any reissue, continuation, continuation-
in-part or extension thereof, and all proceeds thereof, including,
without limitation, any and all causes of action which may exist by
reason of infringement thereof for the full term of the Patents
(the "Intellectual Property Collateral"), to secure the prompt
payment, performance and observance of the Secured Obligations;
NOW, THEREFORE, for good and valuable consideration,
receipt of which is hereby acknowledged, Assignor does hereby
further assign unto Assignee and grant to Assignee a security
interest in, and mortgage on, the Intellectual Property Collateral
to secure the prompt payment, performance and observance of the
Secured Obligations.
Assignor does hereby further acknowledge and affirm that
the rights and remedies of Assignee with respect to the assignment
of, security interest in and mortgage on the Intellectual Property
Collateral made and granted hereby are more fully set forth in the
Agreement, the terms and provisions of which are hereby
incorporated herein by reference as if fully set forth herein.
Assignee's address is 300 South Grand Avenue, 3rd Floor,
Los Angeles, California 90071.
IN WITNESS WHEREOF, Assignor has caused this Assignment
to be duly executed by its officer thereunto duly authorized as of
the th day of December, 1994.
KASH N' KARRY FOOD STORES, INC.
By: _______________________________
Name: _________________________
Title: ________________________
SCHEDULE 1 TO ASSIGNMENT FOR SECURITY
PATENTS
Title Date Issued Patent No.
-None-
ANNEX 7
ASSIGNMENT FOR SECURITY
(TRADEMARKS)
WHEREAS, Kash n' Karry Food Stores, Inc., a Delaware
corporation (herein referred to as "Assignor"), has adopted, used
and is using the trademarks listed on the annexed Schedule 1, which
trademarks are registered in the United States Patent and Trademark
Office (the "Trademarks");
WHEREAS, Assignor has executed and delivered to The CIT
Group/Business Credit, Inc., a New York corporation, as agent
(herein referred to as "Assignee") for the ratable benefit of
Assignee and the lenders (the "Lenders") under the Credit Agreement
dated as of December 29, 1994 (as amended, supplemented, restated
or otherwise modified from time to time, the "Credit Agreement"),
a Security Agreement of even date herewith (the "Agreement", terms
defined therein and not otherwise defined herein being used herein
as therein defined) in favor of Assignee; and
WHEREAS, pursuant to the Agreement, Assignor has assigned
to Assignee and granted to Assignee a security interest in, and
mortgage on, all right, title and interest of Assignor in and to
the Trademarks, together with the goodwill of the business
symbolized by the Trademarks and the applications and registrations
thereof, and all proceeds thereof, including, without limitation,
any and all causes of action which may exist by reason of
infringement thereof (the "Intellectual Property Collateral"), to
secure the payment, performance and observance of the Secured
Obligations;
NOW, THEREFORE, for good and valuable consideration,
receipt of which is hereby acknowledged, Assignor does hereby
further assign unto Assignee and grant to Assignee a security
interest in, and mortgage on, the Intellectual Property Collateral
to secure the prompt payment, performance and observance of the
Secured Obligations.
Assignor does hereby further acknowledge and affirm that
the rights and remedies of Assignee with respect to the assignment
of, security interest in and mortgage on the Intellectual Property
Collateral made and granted hereby are more fully set forth in the
Agreement, the terms and provisions of which are hereby
incorporated herein by reference as if fully set forth herein.
Assignee's address is 300 South Grand Avenue, 3rd Floor,
Los Angeles, California 90071.
IN WITNESS WHEREOF, Assignor has caused this Assignment
to be duly executed by its officer thereunto duly authorized as of
the day of December, 1994.
KASH N' KARRY FOOD STORES, INC.
By: _______________________________
Name: _________________________
Title: ________________________
SCHEDULE 1 TO ASSIGNMENT FOR SECURITY
TRADEMARKS
I. Federal Registrations
Reg. No. Serial No.Reg. Date Mark
1,830,625 74-352,02101/25/93 Pro's Choice
1,804,488 74-281,86511/16/93 Nature Friendly and design
1,534,618 73-721,53404/11/89 Round Up
1,533,699 73-639,90204/04/89 Florida Choice
1,500,764 73-672,96608/16/88 EZ Checkout and design
1,351,939 73-515,16307/30/85 Five Star Meats and design
1,297,925 73-447,90009/25/84 Hi-Class
1,279,112 73-407,48705/22/84 Harvest Day block letters
1,214,443 73-321,44510/26/82 Key Buy
1,169,786 73-157,48509/22/81 Lady Lee
1,000,911 73-004,69201/07/75 Medi-Guard and design
965,934 72-428,45608/14/73 Medi-Guard and design
875,507 72-298,94508/26/69 Medi-Guard and design
839,887 72-255,52212/05/67 Medi-Guard and design
II. Federal Registrations - pending status
Reg. No. Serial No.Reg. Date Mark
74-457,11511/12/93 Fresh American Royal Ban and
design
74-281,86406/05/92 Nature Friendly (Published for
Opp Request for Extension File
Opposition)
ANNEX 8
FORM OF BLOCKED ACCOUNT AGREEMENT<PAGE>
BLOCKED ACCOUNT AGREEMENT
Dated as of December 28, 1994
among
KASH N' KARRY FOOD STORES, INC.,
BARNETT BANK OF TAMPA,
and
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Administrative Agent
BLOCKED ACCOUNT AGREEMENT
This BLOCKED ACCOUNT AGREEMENT (this "Agreement") dated as
of December 28, 1994 is made among KASH N' KARRY FOOD STORES,
INC. (the "Company"), BARNETT BANK OF TAMPA (the "Bank"), and THE
CIT GROUP/BUSINESS CREDIT, INC., as the administrative agent (in
such capacity, the "Administrative Agent") for the Lenders
referred to below.
The Credit Agreement dated as of December 29, 1994 (the
"Credit Agreement") among KASH N' KARRY FOOD STORES, INC., the
lenders identified in the Credit Agreement (the "Lenders"), the
Administrative Agent and Bank of America National Trust and
Savings Association, as Co-Agent (the "Co-Agent"), provides,
subject to its terms and conditions, for certain extensions of
credit to the Company. It is a condition to the obligations of
the Administrative Agent, the Co-Agent and the Lenders under the
Credit Agreement that the Company shall have executed and
delivered this Agreement.
Accordingly, the parties hereto agree as follows:
1. The parties acknowledge that the Company and the
Administrative Agent for the benefit of the Lenders have entered
into a Security Agreement dated as of the date hereof (the
"Security Agreement") under which the Administrative Agent for
the benefit of the Lenders and the Administrative Agent has been
granted a security interest in, among other things, all of the
Company's right, title and interest in Account Number 1407708881
of the Company with the Bank (the "Blocked Account") and all
monies on deposit in the Blocked Account from time to time.
2. The Company and the Bank agree that (a) the Company
shall not be entitled to withdraw monies from the Blocked Account
and (b) all monies from time to time on deposit in the Blocked
Account shall be paid on each day on which the Bank is open for
business to the Administrative Agent as set forth in Section 3
below, subject to court resolution of any third party claims
and/or legal rights of the Company in the event of the filing of
a petition in bankruptcy, whether voluntary or involuntary. The
Company agrees not to permit the Blocked Account to become
subject to any other pledge, assignment, lien, charge or
encumbrance of any kind, nature or description. The Bank agrees
that the maintaining by the Bank of the Blocked Account and the
Bank's holding any checks, drafts, notes, acceptances, cash and
other evidences of indebtedness ("Remittances") included therein
shall be solely on behalf of the Administrative Agent for the
benefit of the Lenders and the Administrative Agent.
3. The Bank shall transfer the sum of the previous day's
collected balance in the Blocked Account by Federal Funds Wire as
follows:
Chemical Bank
270 Park Avenue
New York, New York 10017
ABA No: 021000128
for the account of The CIT Group/Business Credit, Inc.,
as Administrative Agent
Account No. 323094929
Refer to: Kash n' Karry Food Stores, Inc.
4. The Bank may charge the Company's Operating Account
Number 1407288441 with the Bank (the "Operating Account") for all
service charges, returned items and any other charges to which it
may be entitled for maintaining the Blocked Account. In the
event there are insufficient funds in the Operating Account for
such purpose, the Bank may then charge the Blocked Account for
such service charges and returned items.
5. The Bank will provide a copy of the Company's monthly
bank statements relating to the Blocked Account and the Operating
Account at the time such statements are provided to the Company
(and, upon the written request of the Administrative Agent,
statements relating to other accounts of the Company with the
Bank) to the Administrative Agent addressed as follows:
The CIT Group/Business Credit, Inc.
300 South Grand Avenue
Third Floor
Los Angeles, California 90071
Attention: Regional Credit Manager
6. As collateral security for the payment of all of the
Secured Obligations (as defined in the Security Agreement),
howsoever evidenced or acquired, whether now existing or
hereafter arising, whether direct or indirect, absolute or
contingent, the Company confirms that it has assigned, pledged
and transferred, and does hereby assign, pledge and transfer, to
the Administrative Agent for the benefit of the holders of the
Secured Obligations all of the Company's rights, title and
interest in and to the Blocked Account, including all sums now or
hereafter deposited in or payable to or withdrawable from said
Blocked Account and any interest accrued or payable thereon and
in and to the Remittances. The Administrative Agent shall have
the full and irrevocable right, power and authority, to demand,
collect, withdraw, receipt for or sue for all amounts due or to
become due and payable pursuant to the Blocked Account and the
Remittances and at the Administrative Agent's discretion take any
other action, including the transfer of the Blocked Account to
the Administrative Agent's own name, which the Administrative
Agent deems necessary or appropriate to preserve or protect the
Administrative Agent's security interests in the Blocked Account
and the Remittances.
7. The Bank shall be fully protected in acting on any
order or direction by the Administrative Agent respecting the
Blocked Account and disposition of Remittances without making any
inquiry whatsoever as to the Administrative Agent's right or
authority to give such order or direction or as to the
application or any payment made pursuant thereto.
8. Except as set forth in Section 4 above, the Bank agrees
that it shall not effect any right of offset (statutory or
otherwise) that it may otherwise have, or make any deduction or
claim, against the Blocked Account or the Remittances unless and
until the Administrative Agent shall have notified the Bank in
writing that all of the Secured Obligations have been paid in
full, and all such rights of offset and deduction are hereby
waived by the Bank until such time.
9. Nothing herein constitutes a waiver of, and the Bank
reserves all of, its present and future rights with respect to
checks and other items deposited to the Blocked Account and
returned for insufficient funds or for any other reason.
10. The Bank will not close the Blocked Account without
giving the Administrative Agent and the Company at least ten (10)
days' prior written notice thereof.
11. No amendments or modifications made to this Agreement
shall be effective without the written consent of the Bank, the
Company and the Administrative Agent.
12. The Company will indemnify the Bank and hold the Bank
harmless from and against all losses, liability, damages, costs
and expenses, including reasonable attorneys' fees at trial and
on appeal, arising from or in connection with the Bank's
liability to collect any endorsed Remittances. The Company
further agrees that the Bank shall not be liable for any action
or inaction taken by the Bank or the Bank's employees in
accordance with the provisions of this Agreement, nor for the
loss of any instruments, documents or other property of any
nature whatsoever received by the Bank in connection with this
Agreement, other than cash and Remittances lost through the gross
negligence or willful misconduct of the Bank or its employees.
13. Except as expressly provided in this Agreement, the
Bank makes no representations or warranties arising by law or
otherwise, including but not limited to, implied warranties of
merchantability or fitness of a particular purpose, relating to
the performance of any lockbox process system. The Bank makes no
warranty concerning the accuracy of any report or other form
furnished to the Company or on the Company's behalf.
14. Except for damages resulting from, related to or caused
by the Bank's gross negligence, willful misconduct or fraud, the
Bank shall not be liable for any loss, destruction, mutilation,
damage or theft of any documents or items and the Bank shall not
be liable to the Company for failure to follow any of the
operating procedures or failure to perform any service within the
time period stated, if failure to perform is due to the
occurrence of any of the following events: any act or failure to
act by the Company; mechanical failures of the Bank's equipment
or power failures; strikes or lockout; fire or other casualty;
riot or civil commotion, wind storms, earthquakes; floods or
other acts of God; delay in transportation; government
regulations or interferences; or any other event beyond the
control of the Bank.
15. This Agreement shall be governed by, and construed in
accordance with, the law of the State of New York.
16. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed and delivered as of the day and year first
above written.
KASH N' KARRY FOOD STORES, INC.
By:________________________________
Title:
BARNETT BANK OF TAMPA, BY BARNETT
BANKS, INC., as Attorney-in Fact
for Barnett Bank of Tampa
By:________________________________
Title:
THE CIT GROUP/BUSINESS CREDIT,
INC., as Administrative Agent
By:________________________________
Title:
ANNEX 9
AGREEMENT REGARDING ADDITIONAL SECURED OBLIGATIONS
This Agreement Regarding Additional Secured Obligations
(this "Agreement"), dated as of December 29, 1994, is made by and
between (A) The CIT Group/Business Credit, Inc. ("CITBC"), in its
capacities (i) as the Administrative Agent under that certain
Credit Agreement, dated as of December 29, 1994 (the "Credit
Agreement"), among Kash n' Karry Food Stores, Inc. (the
"Company"), CITBC, Bank of America National Trust and Savings
Association ("B of A"), and various lenders (the "Lenders") named
therein , (ii) as the Administrative Agent under that certain
Security Agreement, dated as of December 28, 1994 (the "Security
Agreement"), between the Company and CITBC and (iii) as the
Administrative Agent under that certain Mortgage, Assignment of
Rents and Fixture Filing, dated as of December 29, 1994 (the
"Mortgage"), executed by the Company for the benefit of CITBC as
Administrative Agent (in such capacities, the "Administrative
Agent"), and (B) B of A, in its capacity as a party to that
certain Interest Rate Swap Agreement, dated as of January 27,
1989 (as amended as of March 8, 1989, November 3, 1994 and
December 29, 1994) between B of A and the Company (the "Swap
Agreement") (in such capacity, the "Swap Counterparty").
Capitalized terms not specifically defined herein shall have the
meaning ascribed to them in the Credit Agreement.
Recitals
Whereas, the Company has granted a security interest in all
of its personal property pursuant to the Security Agreement to
secure the Company's obligations under the Credit Agreement and
the Basic Documents, and
Whereas, the Company has granted a lien on certain real
property pursuant to the Mortgage to secure the Company's
obligations under the Basic Documents, and
Whereas, the Company has agreed in the Security Agreement
and in the Mortgage that its obligations to the Swap Counterparty
under the Swap Agreement (the "Swap Obligations") will be secured
under the Security Agreement and the Mortgage if the Swap
Counterparty enters into this Agreement with the Administrative
Agent, and
Whereas, the Swap Counterparty desires to enter into this
Agreement in order to satisfy the condition to the granting of
security with respect to the Swap Obligations, and
Whereas, the Administrative Agent is willing to enter into
this Agreement,
Agreement
Now, therefore, the Administrative Agent and the Swap
Counterparty agree:
1. Secured Obligations. The obligations of the Company to
the Administrative Agent, to B of A as co-agent and to the
Lenders under the Basic Documents (collectively, the "Basic
Obligations") are secured pursuant to the Security Agreement and
the Mortgage. Upon execution of this Agreement by the Swap
Counterparty and the Administrative Agent, the Swap Obligations
will also be secured pursuant to the Security Agreement and the
Mortgage.
2. Sharing. The Basic Obligations and the Swap
Obligations shall be secured equally and ratably in accordance
with the amounts then due and owing with respect to each as of
each date on which any application of the proceeds of collateral
is made; provided, however, that, solely for the purpose of such
application, the amount due and owing with respect to the Swap
Obligations shall be deemed to be zero unless and until any
transaction under the Swap Agreement is terminated; and provided,
further, that the rights of the Swap Counterparty are expressly
made subject to all the provisions of the Security Agreement,
including Sections 3.04 and 6.01.
3. Appointment of Administrative Agent. The Swap
Counterparty hereby irrevocably appoints and authorizes the
Administrative Agent to act as secured party and, in such
capacity, as agent for the Swap Counterparty under and in
connection with the Security Agreement and the Mortgage;
provided, however, that the Administrative Agent shall have no
greater duty to B of A in its capacity as the Swap Counterparty
than it has to B of A in its capacity as co-agent or as one of
the Lenders under the Basic Documents.
4. No Rights or Remedies. Notwithstanding any other
provision of this Agreement, the Swap Counterparty shall have no
right to (i) effect any modification, amendment, waiver or
extension of, to or under the Basic Documents (and no such
modification, amendment, waiver or extension shall affect the
enforceability of this Agreement or constitute a modification,
amendment, waiver or extension of, to or under this Agreement),
(ii) take any action with respect to the collateral encumbered
pursuant to the Security Agreement or the Mortgage (other than
the right to apply proceeds of such collateral when and if
distributed by the Administrative Agent), (iii) direct or
participate in any decision concerning action or the refraining
from action by the Administrative Agent with respect to such
collateral or with respect to any of the Basic Obligations,
(iv) take any action in any legal proceeding (including any
bankruptcy case concerning the Company) that interferes with or
impairs the rights or remedies of the Administrative Agent,
B of A as co-agent or the Lenders under the Basic Documents, or
(v) share in any payments or recoveries on account of the Basic
Obligations (except pursuant to Section 6.04 of the Security
Agreement or as a result of an enforcement of the Mortgage);
provided, however, that nothing herein shall prohibit the Swap
Counterparty from terminating the Swap Agreement or exercising
its rights and remedies under the Swap Agreement; and provided,
however, that nothing herein shall impair the rights of B of A as
co-agent or as one of the Lenders under the Basic Documents.
5. Indemnification. The Swap Counterparty shall indemnify
and hold harmless the Administrative Agent and the Lenders and
their respective affiliates, officers, directors, employees,
attorneys, accountants, consultants and agents (collectively, the
"Indemnified Parties") from any and all losses, liabilities,
damages or expenses that any of the Indemnified Parties may
suffer or incur (i) as a consequence of the Swap Counterparty's
sharing in the collateral under the Security Agreement and the
Mortgage and that the Indemnified Parties would not have suffered
or incurred had the Swap Counterparty not been permitted to share
in the collateral under the Security Agreement and the Mortgage
or (ii) as a consequence of any action the Swap Counterparty may
take to enforce its rights or remedies under the Swap Agreement
(collectively, the "Indemnified Claims"). The Indemnified Claims
shall include expenses of any actual or threatened investigation,
litigation or other proceedings, including reasonable fees and
expenses of attorneys, accountants or other consultants employed
in connection with any such investigation, litigation or
proceeding. Nothing herein shall affect the obligations of
B of A as a party to the Basic Documents.
6. Miscellaneous.
6.01 Interpretation. In this Agreement, unless otherwise
indicated, the singular includes the plural and plural the
singular; references to statutes or regulations are to be
construed as including all statutory or regulatory provisions
consolidating, amending or replacing the statute or regulation
referred to; references to "writing" include printing, typing,
lithography and other means of reproducing words in a tangible
visible form; the words "including," "includes" and "include"
shall be deemed to be followed by the words "without limitation";
references to sections (or subdivisions of sections) are to this
Agreement; references and agreements and other contractual
instruments shall be deemed to include all subsequent amendments,
extensions and other modifications to such instruments (without,
however, limiting any prohibition on any such amendments,
extensions and other modifications by the terms of this
Agreement); and references to Persons include their respective
permitted successors and assigns and, in the case of Governmental
Persons, Persons succeeding to their respective functions and
capacities.
6.02 Waiver. No failure on the part of the Administrative
Agent or the Swap Counterparty to exercise and no delay in
exercising, and no course of dealing with respect to, any right,
remedy, power or privilege under this Agreement shall operate as
a waiver of such right, remedy, power or privilege, nor shall any
single or partial exercise of any right, remedy, power or
privilege under this Agreement preclude any other or further
exercise of any such right, remedy, power or privilege or the
exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges provided in this
Agreement are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
6.03 Notices. All notices and communications to be given
under this Agreement shall be given or made in writing to the
intended recipient at the address specified below or, as to any
party, at such other address as shall be designated by such party
in a notice to each other party. Except as otherwise provided in
this Agreement, all such communications shall be deemed to have
been duly given when transmitted by telex or telecopier, or
personally delivered or, in the case of a mailed notice, upon
receipt, in each case, given or addressed as provided in this
Section 6.03:
To the Administrative Agent:
The CIT Group/Business Credit, Inc.
300 South Grand Avenue
Third Floor
Los Angeles, California 90071
Attention: Regional Credit Manager
To the Swap Counterparty:
Bank of America National Trust
and Savings Association
Unit #3078
335 Madison Avenue
New York, New York 10017
Notwithstanding the foregoing, if a notice is
transmitted by telex, telecopier or personal delivery or, in the
case of a mailed notice, is received on a day that is not a
Business Day, then such notice shall be deemed to have been duly
given on the first Business Day after such transmission or, in
the case of a mailed notice, receipt.
6.04 Amendments, Etc. Any provision of this Agreement may
be modified, supplemented or waived only by an instrument in
writing duly executed by the Swap Counterparty and the
Administrative Agent. Any such modification, supplement or
waiver shall be for such period and subject to such conditions as
shall be specified in the instrument effecting the same, and any
such waiver shall be effective only in the specific instance and
for the purposes for which given.
6.05 Successors and Assigns; No Third Party Beneficiaries.
This Agreement shall be binding upon and inure to the benefit of
the Swap Counterparty, the Administrative Agent and their
respective successors and permitted assigns. This Agreement is
not intended and shall not inure to the benefit of any other
Persons.
6.06 Agreements Superseded. This Agreement supersedes all
prior agreements and understandings, written or oral, between or
among the parties with respect to the subject matter of this
Agreement.
6.07 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of
this Agreement, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.
6.08 Captions. The table of contents and captions and
section headings appearing in this Agreement are included solely
for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
6.09 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties to
this Agreement may execute this Agreement by signing any such
counterpart.
6.10 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the law of the State of New
York.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed and delivered as of the day and
year first above written.
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Administrative Agent
By:________________________________
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Swap Counterparty
By:________________________________
Title:
Acknowledged:
KASH N' KARRY FOOD STORES, INC.
By:_____________________________
Title:
Date:__________________________
EXHIBIT D
[Form of Mortgage]
<PAGE>
This document was prepared by
and after recording should be
returned to:
Sherry A. Stanley
Coll Davidson Carter Smith
Salter & Barkett, P.A.
201 South Biscayne Blvd.
Suite 3200
Miami, Florida 33131
THIS MORTGAGE IS MADE PURSUANT TO A
PLAN OF REORGANIZATION CONFIRMED BY
THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE. AS A
RESULT, PURSUANT TO 11 U.S.C. 1146(c),
NO DOCUMENTARY STAMP TAXES, INTANGIBLE
TAXES OR SIMILAR TAXES ARE DUE AND
OWING ON THIS INSTRUMENT.
MORTGAGE,
ASSIGNMENT OF RENTS AND FIXTURE FILING
THIS MORTGAGE (this "Mortgage") dated as of the day
of , 1994, made by KASH N' KARRY FOOD STORES, INC., a
Delaware corporation (the "Mortgagor"), having its chief
executive office at 6422 Harney Road, Tampa, Florida 33610 in
favor of THE CIT GROUP/BUSINESS CREDIT, INC., with an office at
300 South Grand Avenue, Third Floor, Los Angeles, California
90071, in its capacity as Administrative Agent for itself and
each of the other "Lenders" as such term is defined in the Credit
Agreement, as hereinafter defined, and in its capacity as
Administrative Agent for Bank of America National Trust and
Savings Association under that certain Swap Security Agreement,
as hereinafter defined (the "Mortgagee").
W I T N E S S E T H:
WHEREAS, the Mortgagor and the Lenders have entered, or
will enter, into a certain Credit Agreement of even date herewith
(together with any amendments thereof, the "Credit Agreement"),
pursuant to which the Mortgagor has executed or will execute
(a) those certain Term Loan Notes (together with any amendments,
substitutions or replacements thereof, the "Term Notes"), in the
aggregate principal amount not to exceed Thirty Five Million
Dollars ($35,000,000), each of which is or shall be payable to
the order of a Lender in the amount of such Lender's Term Loans
(as defined in the Credit Agreement), and (b) those certain
Revolving Credit Notes (together with any amendments,
substitutions or replacements thereof, the "Revolving Credit
Notes") in the aggregate principal amount not to exceed Fifty
Million Dollars ($50,000,000), each of which is or shall be
payable to the order of a Lender in the amount of such Lender's
respective Revolving Credit Loans (as defined in the Credit
Agreement); and
WHEREAS, the Term Notes and Revolving Credit Notes shall
bear interest at the rates specified in the Credit Agreement and
the principal and interest under the Term Notes and Revolving
Credit Notes shall be due and payable as provided in the Credit
Agreement; and
WHEREAS, the Revolving Credit Notes evidence revolving
credit loans under which the Mortgagor is entitled to borrow,
repay and reborrow principal sums from time to time in accordance
with the terms of the Credit Agreement; and
WHEREAS, Security Pacific National Bank, as predecessor
to Bank of America National Trust and Savings Association
("B of A"), and the Mortgagor have executed that certain Interest
Rate Swap Agreement dated January 27, 1989, as amended by
amendments dated March 8, 1989 and November 3, 1994 (as so
amended, and as the same may be amended from time to time
hereafter with the prior written consent of Mortgagee, the "Swap
Agreement"), creating certain obligations and liabilities of the
Mortgagor to B of A (B of A, in its capacity as a party to the
Swap Agreement, is hereinafter called the "Swap Counterparty");
and
WHEREAS, pursuant to that certain Agreement Regarding
Additional Secured Obligations of even date herewith between
Mortgagee and B of A, as acknowledged by Mortgagor (together with
any amendments thereof, the "Swap Security Agreement"), The CIT
Group/Business Credit, Inc. was appointed as administrative agent
for the Swap Counterparty in connection with this Mortgage; and
WHEREAS, as a condition to the Lenders' extension of
certain financial accommodations to the Mortgagor (including,
without limitation, the extensions of credit evidenced by the
Term Notes and the Revolving Credit Notes under and pursuant to
the Credit Agreement), the Lenders have required that the
Mortgagor execute and deliver this Mortgage and grant to the
Mortgagee (for the ratable benefit of the Lenders and the Swap
Counterparty) the liens and security interests referred to herein
to secure (i) payment of the principal amount evidenced by the
Term Notes together with interest thereon, (ii) payment of the
principal amount evidenced by the Revolving Credit Notes,
including readvances of principal thereunder, together with
interest on such Revolving Credit Notes, (iii) all of the
Obligations (as defined in the Credit Agreement) of the
Mortgagor, (iv) the obligations of the Mortgagor to the Swap
Counterparty under the Swap Agreement; (v) all other amounts and
payment and performance obligations under the Credit Agreement,
the documents executed in connection therewith, and this Mortgage
(including without limitation, all Claims payable under Section 4
hereof), and (vi) all additional sums advanced to Mortgagor
pursuant to Section 21 of this Mortgage and all payment and
performance obligations of the Mortgagor under any additional
documents executed in connection with such advances (the
aforesaid obligations of the Mortgagor to the Mortgagee, the
Lenders and the Swap Counterparty identified in clauses (i)
through (vi) above are hereinafter collectively referred to
collectively as the "Obligations").
NOW, THEREFORE, in consideration of the premises
contained herein and to secure payment of the Obligations and in
consideration of One Dollar ($1.00) in hand paid, receipt whereof
is hereby acknowledged, the Mortgagor does hereby grant, remise,
release, alien, convey, mortgage and warrant to the Mortgagee,
its successors and assigns, and hereby grants a security interest
to Mortgagee and its successors and assigns in and to the fee
simple interest of the Mortgagor in the real estate and the
leasehold interests of the Mortgagor in real estate as more
particularly set forth on Exhibit "A" attached hereto and by this
reference made a part hereof (each lease more particularly
described on Exhibit "B" attached hereto and made a part hereof
is severally referred to herein as a "Lease" and collectively as
the "Leases") together with any interest which the Mortgagor may
hereafter acquire in and to any property formerly subject to a
Lease and together with any interest which the Mortgagor may
hereafter acquire in any property ("Additional Property")
intended under the Credit Agreement to be secured by this
Mortgage with respect to which the Mortgagor agrees to execute
and deliver to Mortgagee a modification of this Mortgage adding
such Additional Property as additional Mortgaged Property
hereunder (the real estate described in Exhibit "A" under the
heading "Real Property Owned by the Mortgagor in Fee Simple" or
hereafter acquired by the Mortgagor in fee simple is herein
referred to as the "Land" and all of the foregoing property,
including the Land, Leases and Additional Property is herein
called the "Premises");
TOGETHER WITH all right, title and interest, if any,
including any after-acquired right, title and interest, and
including any right of use or occupancy, which the Mortgagor may
now have or hereafter acquire in and to (a) all easements, rights
of way, gores of land or any lands occupied by streets, ways,
alleys, passages, sewer rights, water courses, water rights and
powers, and public places adjoining said Premises, and any other
interests in property constituting appurtenances to the Premises,
or which hereafter shall in any way belong, relate or be
appurtenant thereto and, (b) all hereditaments, gas, oil,
minerals, and easements, of every nature whatsoever, located in
or on the Premises and all other rights and privileges thereunto
belonging or appertaining and all extensions, additions,
improvements, betterments, renewals, substitutions and
replacements to, or of any of the rights and interests described
in subparagraphs (a) and (b) above (The rights and interests
described in this paragraph are hereinafter called the "Property
Rights");
TOGETHER WITH all of the Mortgagor's right, title and
interest in and to (a) all buildings and improvements now or
hereafter located on the real estate described in Exhibit "A";
(b) all fixtures and appurtenances of every nature whatsoever now
or hereafter located in, on or attached to, and used or intended
to be used in connection with, or with the operation of, the
Premises, including but not limited to all apparatus, machinery
and equipment of the Mortgagor, and all extensions, additions,
improvements, betterments, renewals, substitutions, and
replacements to or of any of the foregoing (the "Fixtures"); and
(c) all personal property, goods and equipment of every nature
whatsoever now or hereafter located in or on the Premises,
including but not limited to (i) all screens, window shades,
blinds, wainscoting, storm doors and windows, floor coverings and
awnings of the Mortgagor; (ii) all apparatus, machinery,
equipment, appliances and goods of the Mortgagor not included as
Fixtures; (iii) all items of furniture, furnishings and personal
property of the Mortgagor; and (iv) all extensions, additions,
improvements, betterments, renewals, substitutions, and
replacements to or of any of the foregoing (the "Personal
Property"). It is mutually agreed, intended and declared, that
the Premises and all of the Property Rights and Fixtures owned by
the Mortgagor (referred to collectively herein as the "Real
Property") shall, so far as permitted by law, be deemed to form a
part and parcel of the Land and for the purpose of this Mortgage
to be real estate and covered by this Mortgage. It is also
agreed that if any of the property herein mortgaged is of a
nature so that a security interest therein can be perfected under
the Florida Uniform Commercial Code, this instrument shall
constitute a security agreement, fixture filing and financing
statement, and the Mortgagor agrees to execute, deliver and file
or refile any financing statement, continuation statement, or
other instruments the Mortgagee may reasonably require from time
to time to perfect or renew such security interest under the
Florida Uniform Commercial Code. To the extent permitted by law,
(i) all of the fixtures are or are to become fixtures on the
Premises and (ii) this instrument is to be filed of record in the
real estate records of the counties set forth in Exhibit "A"
hereto, and shall constitute a "fixture-filing" within the
meaning of Sections 679.313 and 679.402 of the Florida Uniform
Commercial Code. The remedies for any violation of the
covenants, terms and conditions of the agreements herein
contained shall be as prescribed herein or by general law, or, as
to that part of the security in which a security interest may be
perfected under the Florida Uniform Commercial Code, by the
specific statutory consequences now or hereafter enacted and
specified in the Florida Uniform Commercial Code, all at the
Mortgagee's sole election;
TOGETHER WITH all the estate, right, title and interest
of the Mortgagor, in and to (a) all judgments, insurance
proceeds, awards of damages and settlements resulting from
condemnation proceedings or the taking of the Real Property, or
any part thereof, under the power of eminent domain or for any
damage (whether caused by such taking or otherwise) to the Real
Property, or any part thereof, or to any rights appurtenant
thereto, and all proceeds of any sales or other dispositions of
the Real Property or any part thereof, and (except as otherwise
provided herein or in the Credit Agreement) the Mortgagee is
hereby authorized to collect and receive said awards and proceeds
and to give proper receipts and acquittances therefor, and to
apply the same as provided in the Credit Agreement; (b) any and
all deposits of cash, securities, credits or other property which
may be held at any time by any lessor to secure the performance
of the covenants, conditions and agreements contained in any
Lease; and (c) all contract rights, general intangibles, actions
and rights in action, relating to or arising in connection with
the Mortgaged Property (as hereinafter defined) including,
without limitation, all rights to insurance proceeds and unearned
premiums arising from or relating to damage to the Real Property
and any rights of the Mortgagor to agree to or acquiesce in any
rejection or termination of any Lease; and (d) all proceeds,
products, replacements, additions, substitutions, renewals and
accessions of and to the Real Property. (The rights and
interests described in this paragraph shall hereinafter be called
the "Intangibles.");
TOGETHER WITH any and all other, further or additional
title, estates, interests, privileges, liberties, tenements,
hereditaments and appurtenances whatsoever, in any way now or
hereafter belonging, relating or appertaining to the Premises,
Property Rights, Fixtures, Personal Property, and Intangibles,
whether now owned or hereafter acquired by the Mortgagor, and any
proceeds and products of the property, interests and rights
encumbered by this Mortgage.
As additional security for the Obligations secured
hereby, the Mortgagor does hereby assign and transfer to the
Mortgagee from and after the date hereof (including any period of
redemption), primarily and on a parity with said real estate, and
not secondarily, all the rents, issues and profits of the Real
Property and all rents, issues, profits, revenues, royalties,
bonuses, rights and benefits due, payable or accruing (including
all deposits of money as advance rent, for security or as earnest
money or as down-payment for the purchase of all or any part of
the Real Property) (the "Rents") under any and all present and
future leases and subleases, contracts or all or any portion of
the Real Property and, except to the extent such a transfer or
assignment is not permitted by the terms thereof, does hereby
transfer and assign to the Mortgagee all such leases and
subleases and agreements (including all of the Mortgagor's rights
under any contracts for the sale of any portion of the Mortgaged
Property and all revenues and royalties under any oil, gas and
mineral leases relating to the Real Property) (collectively
called the "Tenant Leases"). The Mortgagee hereby grants to the
Mortgagor the right to collect and use the Rents as they become
due and payable under the Tenant Leases but not more than two (2)
months in advance thereof until an Event of Default (as defined
in the Credit Agreement) has occurred, or a Mortgage Default (as
hereinafter defined) has occurred, provided, that the existence
of such right shall not operate to subordinate this assignment to
any subsequent assignment, in whole or in part, by the Mortgagor,
and any such subsequent assignment shall be subject to the rights
of the Mortgagee under this Mortgage. The Mortgagor further
agrees to execute and deliver such assignments of Tenant Leases
or assignments of land sale contracts as the Mortgagee may from
time to time request. A "Mortgage Default" shall mean any
failure by the Mortgagor to duly and punctually perform any
agreement, covenant or obligation arising under this Mortgage
which failure shall continue unremedied for twenty (20) days
after the Mortgagor is given notice thereof. Any Event of
Default under the Credit Agreement and any Mortgage Default shall
constitute a "Default" under this Mortgage. In the event of the
occurrence of a Default (1) the Mortgagor agrees, upon demand, to
deliver to the Mortgagee all of the Tenant Leases with such
additional assignments thereof as the Mortgagee may request and
agrees that the Mortgagee may assume the management of the
Mortgaged Property, and collect the Rents, applying the same upon
the Obligations in the manner provided in the Security Agreement
(as defined in the Credit Agreement) and (2) the Mortgagor hereby
authorizes and directs all tenants, purchasers or other persons
occupying or otherwise acquiring any interest in any part of the
Mortgaged Property to pay the Rents due under the Tenant Leases
to the Mortgagee upon request of the Mortgagee. The Mortgagor
hereby appoints the Mortgagee as its true and lawful attorney-in-
fact to manage said property and collect the Rents, with full
power to bring suit for collection of the Rents and possession of
the Real Property, giving and granting unto said Mortgagee and
unto its agent or attorney full power and authority to do and
perform all and every act and thing whatsoever requisite and
necessary to be done in the protection of the security hereby
conveyed; provided, however, that (i) this power of attorney and
assignment of Rents shall not be construed as an obligation upon
the Mortgagee to make or cause to be made any repairs that may be
needful or necessary and (ii) the Mortgagee agrees that until the
occurrence of such Default, the Mortgagee shall permit the
Mortgagor to perform the aforementioned management
responsibilities. Upon the Mortgagee's receipt of the Rents, the
Mortgagee shall first pay any rent obligations of the Mortgagor
under any Lease senior to the Tenant Lease which has generated
the Rents and, at the Mortgagee's option, it may pay:
(1) reasonable charges for collection hereunder, costs of
necessary repairs and other costs requisite and necessary during
the continuance of this power of attorney and assignment of
Rents, (2) general and special taxes, and insurance premiums, and
(3) the balance of the Rents to be applied to the Obligations
hereunder pursuant to the provisions of the Credit Agreement.
This power of attorney and assignment of Rents is coupled with an
interest and shall be irrevocable until this Mortgage shall have
been satisfied and released of record and the releasing of this
Mortgage shall act as a revocation of this power of attorney and
assignment of Rents. The Mortgagee shall have and hereby
expressly reserves the right and privilege (but assumes no
obligation) to demand, collect, sue for, receive and recover the
Rents, or any part thereof, now existing or hereafter made and
apply the same in accordance with the provisions of the Credit
Agreement.
All of the property described above including, but not
limited to, the Premises, the Property Rights, the Fixtures, the
Real Property, the Personal Property, the Intangibles, the Rents,
the Leases and the Tenant Leases are herein referred to
collectively as the "Mortgaged Property."
Nothing herein contained shall be construed as
constituting the Mortgagee a mortgagee-in-possession in the
absence of the taking of actual possession of the Mortgaged
Property by the Mortgagee. Nothing contained in this Mortgage
shall be construed as imposing on the Mortgagee any of the
obligations of the lessor under any Tenant Leases of the
Mortgaged Property, or as lessee under any Lease in the absence
of an explicit assumption thereof by the Mortgagee. In the
exercise of the powers herein granted the Mortgagee, no liability
shall be asserted or enforced against the Mortgagee, all such
liability being expressly waived and released by the Mortgagor.
TO HAVE AND TO HOLD the Mortgaged Property, properties,
rights and privileges hereby conveyed, mortgaged and assigned, or
intended so to be, unto the Mortgagee, its beneficiaries,
successors and assigns, forever for the uses and purposes herein
set forth. The Mortgagor hereby releases and waives all rights
under and by virtue of the Homestead Exemption Laws, if any, of
the State of Florida (the "State").
The following provisions shall also constitute an
integral part of this Mortgage:
1. Payment of Taxes on the Mortgage. Without limiting
any of the provisions of the Credit Agreement, the Mortgagor
agrees that if the United States of America or any department,
agency or bureau thereof or the State or any of its counties or
subdivisions having jurisdiction shall at any time require or
impose documentary stamp taxes or intangible personal property
taxes (whether recurring or nonrecurring) to be paid with respect
to this Mortgage or the credit, indebtedness or Obligations
secured hereby or shall levy, assess, or charge any other tax,
assessment or imposition upon this Mortgage or the credit,
indebtedness or Obligations secured hereby or upon the interest
of one or more of the Lenders or the Swap Counterparty (or any
assignee thereof) or the Mortgagee in the Mortgaged Property or
any part thereof or upon one or more of the Lenders or the Swap
Counterparty (or any assignee thereof) or the Mortgagee by reason
of or as holder of any of the foregoing (other than Florida
Corporate Franchise Taxes imposed solely on the income of any of
the Lenders or the Swap Counterparty, or any assignee thereof)
then, the Mortgagor shall pay such documentary stamp taxes,
intangible personal property taxes or other taxes in the required
amount or, in the event one or more Lenders or the Swap
Counterparty (or any assignee thereof) has previously paid such
taxes, reimburse such Lenders or the Swap Counterparty (and each
assignee thereof) for such taxes, assessments or impositions
previously so paid by such Lenders or the Swap Counterparty (or
any assignee thereof) (together with interest thereon as provided
in the Credit Agreement). Unless the Credit Agreement permits
the Mortgagor to contest, by appropriate proceedings, the amount,
validity, enforceability or application of any tax and Mortgagor
is diligently and in good faith prosecuting such contest and is
otherwise in full compliance with the terms of the Credit
Agreement, failure to pay all such documentary stamp taxes,
intangible personal property taxes or other taxes, assessments
and impositions when and as they become due and payable, shall at
the option of the Mortgagee constitute a Default hereunder (after
giving effect to any applicable grace period provided for
herein). The Mortgagor agrees to exhibit to the Mortgagee, at
least annually and at any time upon request, official receipts
showing payment of all taxes, assessments and charges which the
Mortgagor is required or elects to pay hereunder. The Mortgagor
agrees to indemnify the Mortgagee against liability on account of
such documentary stamp taxes, intangible personal property taxes,
or other taxes, assessments or impositions (other than Florida
Corporate Franchise Taxes imposed solely on the income of any
Lender, or any assignee thereof) and all penalties and interest
that may be due in connection therewith, whether such liability
arises before or after repayment of the Obligations and
regardless of whether this Mortgage shall have been released or
satisfied, the Mortgagor agreeing that such indemnity shall
survive such release or satisfaction.
Leases Affecting the Premises. The Mortgagor agrees
faithfully to perform all of its obligations under the Leases,
and under all present and future Tenant Leases or other
agreements relative to the occupancy of the Premises and at any
time assigned to the Mortgagee as additional security, and except
as expressly permitted pursuant to the terms of the Credit
Agreement, to refrain from any action or inaction which would
result in the termination of the Leases, any such Tenant Leases
(except with respect to any Tenant Leases, as may be necessary or
appropriate in the ordinary course of business) or any such other
agreements or in the diminution of the value of the Leases, the
Tenant Leases or such other agreements or of the Rents due
thereunder. The Mortgagor shall cause all future lessees or
sublessees under any Tenant Leases of the Premises or any part
thereof, made after the date of recording of this Mortgage to
agree that, at the Mortgagee's option and without any further
documentation, each such lessee or sublessee shall attorn to the
Mortgagee, as lessor or sublessor if for any reason the Mortgagee
becomes lessor or sublessor thereunder and, upon demand, shall
pay Rent to the Mortgagee and the Mortgagee shall not be
responsible under the Tenant Leases for matters arising prior to
the Mortgagee becoming lessor or sublessor thereunder.
3. Use of the Mortgaged Property. The Mortgagor agrees
that it shall not permit the public to use the Mortgaged Property
in any manner that is reasonably likely to impair the Mortgagor's
title to such Mortgaged Property or any portion thereof, or
reasonably likely to make possible any claim or claims of
easement by prescription or of implied dedication to public use.
4. Indemnification. The Mortgagor shall not use or
permit the use of any part of the Mortgaged Property for an
illegal purpose, including, without limitation, the violation of
any environmental laws, statutes, codes, regulations or
practices. Without limiting any indemnification the Mortgagor
has granted in the Credit Agreement, the Mortgagor agrees to
indemnify and hold harmless the Mortgagee from and against any
and all losses, suits, actions, obligations, fines, damages,
judgment, penalties, claims, charges, costs and expenses
(including reasonable, documented attorneys' and paralegals'
fees, court costs and disbursements) (collectively "Claims")
which may be imposed on, incurred or paid by or asserted against
the Mortgaged Property by reason or on account of, or in
connection with (i) the construction, reconstruction or
alteration of the Mortgaged Property, (ii) any negligence or
misconduct of the Mortgagor, any lessee or sublessee of the
Mortgaged Property, or any of their respective agents,
contractors, subcontractors, servants, employees, licensees or
invitees, (iii) any accident, injury, death or damage to any
person or property occurring in, on or about the Mortgaged
Property or any street, drive, sidewalk, curb or passageway
adjacent thereto, or (iv) any other transaction arising out of or
in any way connected with the Mortgaged Property. All amounts
indemnified against by the Mortgagor under this Section 4 shall
become additional Obligations secured hereby when paid or
incurred by the Mortgagee and if paid by the Mortgagee, shall be
payable on demand and shall bear interest from the date of
payment until paid by the Mortgagor to the Mortgagee at a rate
per annum equal to the Post-Default Rate under the Credit
Agreement.
5. Insurance. The Mortgagor shall, at its sole expense,
obtain for, deliver to, assign and maintain for the benefit of
the Mortgagee, until the Obligations are paid in full, insurance
policies as specified in the Credit Agreement. In the event of a
casualty loss, the net insurance proceeds from such insurance
policies shall be paid and applied as specified in Sections
2.10(b) and 2.11 of the Credit Agreement and Section 6.04 of the
Security Agreement.
6. Condemnation Awards. The Mortgagor hereby assigns to
the Mortgagee, as additional security, all awards of damage
resulting from condemnation proceedings or the taking of or
injury to the Mortgaged Property for public use, and the
Mortgagor agrees that the proceeds of all such awards shall be
paid and applied as specified in Sections 2.10(b) and 2.11 of the
Credit Agreement and Section 6.04 of the Security Agreement.
7. Mortgagee as Agent; Enforcement, Etc. In the event
of a Default, the Mortgagee as holder of this Mortgage and the
lien thereof as agent for, and for the benefit of, the Lenders
and the Swap Counterparty as holders of the Obligations, may as
sole party plaintiff, exercise all rights and remedies of the
Mortgagee hereunder and of the Lenders and Swap Counterparty
under the aggregate indebtedness outstanding under the Term
Notes, Revolving Credit Notes and other Obligations, may
foreclose this Mortgage as agent for the Lenders and the Swap
Counterparty for the aggregate amount of the Obligations then due
and payable, may bid as agent for the Lenders and the Swap
Counterparty at foreclosure sale of this Mortgage, and may apply
as credit on such bid so much of such Obligations as is necessary
to satisfy such bid. All modifications, amendments, releases,
satisfactions and other documents pertaining to this Mortgage may
be executed solely by Mortgagee as agent for the Lenders and the
Swap Counterparty, and the Lenders and the Swap Counterparty need
not join in the execution of any such documents.
8. Remedies of Mortgagee. Subject to the provisions of
the Credit Agreement, upon the occurrence of a Default and in
addition to any rights and remedies provided for in the Credit
Agreement or otherwise available at law or in equity, and to the
extent permitted by applicable law, the following provisions
shall apply:
(a) Mortgagee's Power of Enforcement. It shall be
lawful for the Mortgagee to (i) immediately sell the Mortgaged
Property either in whole or in separate parcels, as prescribed by
the State law, under power of sale, which power is hereby granted
to the Mortgagee to the full extent permitted by the State law,
and thereupon, to make and execute to any purchaser or purchasers
thereof deeds of conveyance pursuant to applicable law or
(ii) immediately foreclose this Mortgage by judicial action.
Upon or at any time after the filing of a suit to foreclose this
Mortgage, the court in which such suit is filed shall have full
power to enter an order placing the Mortgagee in possession of
the Mortgaged Property with the same power granted to a receiver
pursuant to this subparagraph and with all other rights and
privileges of a mortgagee-in-possession under applicable law.
In addition to all of the other rights and remedies of
the Mortgagee hereunder and not to the exclusion thereof, the
Mortgagee may, from time to time, at its option, institute
partial foreclosure proceedings of this Mortgage for the purpose
of collecting due but unpaid installments of the Obligations.
Such proceedings shall not affect the existence, lien, operation
and effect of this Mortgage and any judgment of foreclosure and
sale shall so provide and any purchaser at such foreclosure sale
shall acquire title to the property foreclosed upon subject to
the lien of this Mortgage.
(b) Appointment of a Receiver. Upon the occurrence of a
Default, the Mortgagee shall be entitled, at once or at any time
thereafter, either before or after sale, without notice and
without requiring bond, and without regard to the solvency or
insolvency of any person liable for payment of the Obligations
secured hereby, and without regard to the then value of the
Mortgaged Property or the occupancy thereof as a homestead, to
the appointment of a receiver (the provisions for the appointment
of a receiver and assignment of Rents being an express condition
upon which the Term Loans and Revolving Credit Loans hereby
secured are made) for the benefit of the Mortgagee, with power to
collect the Rents, whether then due or thereafter to become due.
The Mortgagor hereby specifically waives the right to object to
the appointment of a receiver and hereby expressly agrees that
such appointment shall be made as an admitted equity and as a
matter of absolute right to Mortgagee. The receiver, out of the
Rents when collected, may pay costs incurred in the management
and operation of the Mortgaged Property, prior and subordinate
liens, if any, and taxes, assessments, water and other utilities
and insurance, then due or thereafter accruing, and may make and
pay for any necessary repairs to the Mortgaged Property, and may
pay all or any part of the Obligations or other sums secured
hereby or any deficiency decree entered in such foreclosure
proceedings.
(c) Mortgagee's Right to Enter and Take Possession,
Operate and Apply Rents. The Mortgagee shall, at its option,
have the right, acting through its agents or attorneys, either
with or without process of law, to enter upon and take possession
of the Mortgaged Property, expel and remove any persons, goods,
or chattels occupying or upon the same, to collect or receive all
the Rents, and to manage and control the same, and to lease the
same or any part thereof, from time to time, and, after deducting
all reasonable, documented attorneys' fees and expenses, and all
reasonable expenses incurred in the protection, care,
maintenance, management and operation of the Mortgaged Property,
distribute and apply the remaining net income to payment of the
Obligations in the order and manner set forth in Section 6.04 of
the Security Agreement or upon any deficiency decree entered in
any foreclosure proceedings.
(d) Mortgagee's Right to Rents under Florida Statute
697.07. The Mortgagee may apply for a court order requiring the
Mortgagor to deposit all Rents in the court registry pursuant to
Florida Statute 697.07, as amended. The Mortgagor hereby
consents to entry of such order upon the sworn ex parte motion of
the Mortgagee that a Default has occurred.
(e) Enforcement of the Mortgage. The Mortgaged Property
encumbered by this Mortgage is situated in sixteen (16) counties
in the State of Florida and the Mortgagor agrees that the
Mortgagee may institute proceedings for the enforcement of this
Mortgage in any one or more of such counties as selected by the
Mortgagee in its sole discretion. All of the counterparts of
this Mortgage shall together constitute one Mortgage. Mortgagor
agrees that each parcel of property secures all of the
Obligations and there shall be no (and Mortgagor waives any right
to a) proration of the lien of this Mortgage with respect to any
portion or all of the Obligations. Mortgagor agrees that it may
foreclose this Mortgage (i) in any one county in accordance with
Section 702.04, Florida Statutes, (ii) simultaneously in all
counties, or (iii) in successive actions against all or any part
of the property encumbered hereby in one or more counties as
Mortgagee may deem advisable in its sole and absolute discretion.
Any portion of the Obligations which is not used by Mortgagee as
a successful bid in any foreclosure sale shall remain outstanding
and continue to be secured this Mortgage and shall be available
for use by Mortgagee in any subsequent foreclosure sale. When
any judgment of foreclosure is entered in connection with this
Mortgage, Mortgagor agrees that (i) such judgment of foreclosure
shall have no effect on the outstanding and unpaid Obligations or
the promissory notes and other documents evidencing such
Obligations, (ii) the lien of this Mortgage on all other property
encumbered hereby will continue to secure the Obligations as
provided herein notwithstanding such judgment, (iii) the
promissory notes and other documents evidencing the Obligations
filed as evidence in such foreclosure may be withdrawn by
Mortgagee immediately following the entry of the judgment of
foreclosure for use by Mortgagee as evidence of the unpaid
Obligations in the foreclosure of this Mortgage on any other
property, (iv) such judgment will not affect, impair or merge the
lien of the Mortgage with respect to any other property
encumbered by this Mortgage, which shall continue in full force
and effect, and (v) such judgment will not affect, impair or
merge the lien of the Mortgage with respect to the property
actually foreclosed against if the foreclosure proceedings relate
to only a portion of the Obligations, and Mortgagor hereby
consents that its agreements in this paragraph may be
incorporated in any final judgment of foreclosure in any county.
(f) Mixed Collateral Remedies. In case of a sale under
this Mortgage, the Mortgaged Property, real, personal and mixed,
may be sold in one parcel or piecemeal in such order as Mortgagee
may elect in its sole and absolute discretion and with the
Mortgagee having all of the rights and powers of a secured party
as provided in Chapter 679 of the Florida Uniform Commercial
Code.
(g) Discontinuance of Proceedings and Restoration of
Status of the Parties. In case the Mortgagee shall have
proceeded to enforce any right or remedy under this Mortgage by
receiver, entry or otherwise, and such proceedings shall have
been discontinued or abandoned for any reason or shall have been
determined adversely to the Mortgagee, then and in every such
case the Mortgagor and Mortgagee shall be restored to their
former positions and rights hereunder, and all rights, powers and
remedies of the Mortgagee shall continue as if no such proceeding
had been taken. The foregoing, however, shall not in any way
affect the obligation of the parties hereto to fully comply with
all orders or judgments entered in connection with any such
proceedings.
9. Application of the Rents or Proceeds from Foreclosure
or Sale. In any foreclosure of this Mortgage by judicial action
or any sale of the Mortgaged Property by advertisement, in
addition to any of the terms and provisions of the Credit
Agreement and the Security Agreement, the Mortgagor agrees that
there shall be allowed (and included in the decree for sale in
the event of a foreclosure by judicial action) to be paid out of
the Rents or the proceeds of such foreclosure proceeding and/or
sale:
(a) Obligations. All of the Obligations and other sums
secured hereby which then remain unpaid; and
(b) Other Advances. All other items advanced or paid by
the Mortgagee pursuant to this Mortgage; and
(c) Costs, Fees and Other Expenses. All court costs,
reasonable, documented attorneys' and paralegals' fees and
expenses, appraiser's fees, advertising costs, notice expenses,
expenditures for documentary and expert evidence, stenographer's
charges, publication costs, and costs (which may be estimated as
to items to be expended after entry of the decree) of procuring
all abstracts of title, title searches and examinations, title
guarantees, title insurance policies, Torrens certificates and
similar data with respect to title which the Mortgagee in the
reasonable exercise of its judgment may deem necessary. The
Mortgagor agrees to pay all such expenses and such expenses shall
become additional Obligations secured hereby when paid or
incurred by the Mortgagee in connection with any proceedings,
including but not limited to probate and bankruptcy proceedings,
to which the Mortgagee shall be a party, either as plaintiff,
claimant or defendant, by reason of this Mortgage or any
indebtedness hereby secured or in connection with the
preparations for the commencement of any suit for the
foreclosure, whether or not actually commenced, or sale by
advertisement. The proceeds of any sale (whether through a
foreclosure proceeding or the Mortgagee's exercise of the power
of sale) shall be distributed and applied to payment of the
Obligations in the order and manner set forth in Section 6.04 of
the Security Agreement.
10. Cumulative Remedies; Delay or Omission Not a Waiver.
Each remedy or right of the Mortgagee shall not be exclusive of
but shall be in addition to every other remedy or right now or
hereafter existing at law or in equity. No delay in the exercise
or omission to exercise any remedy or right accruing on the
occurrence or existence of any Default shall impair any such
remedy or right or be construed to be a waiver of any such
Default or acquiescence therein, nor shall it affect any
subsequent Default of the same or different nature. Every such
remedy or right may be exercised concurrently or independently
and when and as often as may be deemed expedient by the
Mortgagee.
11. Mortgagee's Remedies against Multiple Parcels. If
more than one property, lot or parcel is covered by this
Mortgage, and if this Mortgage is foreclosed upon, or judgment is
entered upon any Obligations secured hereby, or if the Mortgagee
exercises its power of sale, execution may be made upon or the
Mortgagee may exercise its power of sale against any one or more
of the properties, lots or parcels and not upon the others, or
upon all of such properties or parcels, either together or
separately, and at different times or at the same time, and
execution sales or sales by advertisement may likewise be
conducted separately or concurrently, in each case at the
Mortgagee's election. The Mortgagor, for itself and all who may
claim through or under the Mortgagor, irrevocably waives any and
all right to have the property, interests and estates comprising
the Mortgaged Property marshalled upon any foreclosure of the
lien hereof or upon the exercise of any other remedies (whether
under the Uniform Commercial Code or otherwise).
12. No Merger. In the event of a foreclosure of this
Mortgage or any other mortgage or deed of trust securing the
Obligations, the Obligations then due the Mortgagee shall not be
merged into any decree of foreclosure entered by the court, and
the Mortgagee may concurrently or subsequently seek to foreclose
one or more mortgages or deeds of trust which also secure said
Obligations.
13. Notices. Except as otherwise provided herein, any
notices, demands, consents, requests, approvals, undertakings or
other instruments required or permitted to be given in connection
with this Mortgage (and all copies of such notices or other
instruments as set forth below) shall be in writing, and shall be
deemed to have been properly given if hand-delivered or if mailed
(effective three (3) Business Days (as defined in the Credit
Agreement) following deposit thereof at any main or branch United
States Post Office) by United States registered or certified
mail, postage prepaid, return receipt requested, or if sent by a
nationally recognized overnight delivery service, postage
prepaid, (effective one (1) Business Day following deposit with
such delivery service) addressed to the party so notified as
follows:
if to the Mortgagor:
Kash n' Karry Food Stores, Inc.
6422 Harney Road
Tampa, Florida 33610
Attn: Executive Vice President,
Administration
Telecopy: (813) 626-9550
with copies to:
Barnett, Bolt, Kirkwood & Long
601 Bayshore Boulevard
Tampa, Florida 33606
Attn: Robert S. Bolt, Esq.
Telecopy: (813) 251-6711
and
Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
919 Third Avenue
New York, New York 10022
Attn: Michael S. Nelson, Esq.
Telecopy: (212) 688-2119
if to the Mortgagee:
The CIT Group/Business Credit, Inc.
300 South Grand Avenue
Third Floor
Los Angeles, California 90071
Attn: Regional Credit Manager
Telecopy: (213) 613-2588
with a copy to:
Orrick Herrington & Sutcliffe
777 South Figueroa Street
Suite 3200
Los Angeles, California 90017
Attn: Bradley S. White, Esq.
Telecopy: (213) 612-2499
The Mortgagor or the Mortgagee shall, from time to time, have the
right to specify as the proper addressee and/or address for the
purposes of this Mortgage any other party or address in the
United States upon giving five (5) days' prior written notice
thereof.
14. Extension of Payments; Release of Collateral. The
Mortgagor agrees that, without affecting the liability of any
person for payment of the Obligations secured hereby or affecting
the lien of this Mortgage upon the Mortgaged Property or any part
thereof (other than persons or property explicitly released as a
result of the exercise by the Mortgagee of its rights and
privileges hereunder), the Mortgagee may at any time and from
time to time, on request of the Mortgagor, without notice to any
person liable for payment of any Obligations secured hereby, but
otherwise subject to the provisions of the Credit Agreement,
extend the time, or agree to alter or amend the terms of payment
of such Obligations. The Mortgagor further agrees that any part
of the security herein described may be released with or without
consideration without affecting the remainder of the Obligations
or the remainder of the security.
15. Governing Law. The Mortgagor agrees that this
Mortgage is to be construed, governed and enforced in accordance
with the laws of the State of New York except that the laws of
the State of Florida shall govern the creation, perfection,
enforceability and priority of the liens and security interests
created by this Mortgage and the enforcement of the rights and
remedies (including the remedy of foreclosure) under this
Mortgage. Wherever possible, each provision of this Mortgage
shall be interpreted in such manner as to be effective and valid
under applicable law, but if any of the covenants, agreements,
terms or provisions contained in this Mortgage shall be invalid,
illegal or unenforceable in any respect, the validity of the
remaining covenants, agreements, terms or provisions contained
herein shall not be in any way affected, prejudiced or disturbed
thereby. In the event that the application of any of the
covenants, agreements, terms or provisions of this Mortgage is
held to be invalid, illegal or unenforceable, those covenants,
agreements, terms and provisions shall not be in any way
affected, prejudiced or disturbed when otherwise applied.
16. Satisfaction of Mortgage. Upon full payment of all
the Obligations at the time and in the manner provided in the
Credit Agreement and the other Basic Documents (as defined in the
Credit Agreement), the termination of all obligations of the
Lenders to make any additional loans to Mortgagor, the
satisfaction of all obligations of Mortgagor under the Swap
Agreement, and the repayment in full of all other amounts secured
hereby and termination of all further obligations of the
Mortgagee, the Lenders and the Swap Counterparty to make any
further advances or financial obligations to Mortgagor in
connection with the Obligations, this conveyance or lien shall be
null and void and, upon demand therefor following such payment, a
satisfaction of mortgage or reconveyance of the Mortgaged
Property shall promptly be provided by the Mortgagee to the
Mortgagor.
17. Successors and Assigns Included in Parties. This
Mortgage shall be binding upon the Mortgagor and upon the
successors, assigns and vendees of the Mortgagor and shall inure
to the benefit of the Mortgagee's successors and assigns; all
references herein to the Mortgagor and to the Mortgagee shall be
deemed to include their successors and assigns. The Mortgagor's
successors and assigns shall include, without limitation, a
receiver, trustee or debtor in possession of or for the
Mortgagor. Wherever used, the singular number shall include the
plural, the plural shall include the singular, and the use of any
gender shall be applicable to all genders.
18. Waiver of Appraisement, Valuation, Stay, Extension
and Redemption Laws. The Mortgagor agrees, to the full extent
permitted by law, that at all times following the occurrence of a
Default, neither the Mortgagor nor anyone claiming through or
under it shall or will set up, claim or seek to take advantage of
any appraisement, valuation, stay, or extension laws now or
hereafter in force, in order to prevent or hinder the enforcement
or foreclosure of this Mortgage or the absolute sale of the
Mortgaged Property or the final and absolute putting into
possession thereof, immediately after such sale, of the purchaser
thereat, and the Mortgagor, for itself and all who may at any
time claim through or under it, hereby waives, to the full extent
that it may lawfully so do, the benefit of all such laws, and any
and all right to have the assets comprising the Mortgaged
Property marshalled upon any foreclosure of the lien hereof and
agrees that the Mortgagee or any court having jurisdiction to
foreclose such lien may sell the Mortgaged Property in part or as
an entirety. To the full extent permitted by law, the Mortgagor
hereby waives any and all statutory or other rights of redemption
from sale under any order or decree of foreclosure of this
Mortgage, on its own behalf and on behalf of each and every
person, acquiring any interest in or title to the Mortgaged
Property subsequent to the date hereof.
19. Interpretation with Other Documents. Notwithstanding
anything in this Mortgage to the contrary, in the event of a
conflict or inconsistency between the Mortgage and the Credit
Agreement, the provisions of the Credit Agreement shall govern.
20. Revolving Credit Obligations. The Revolving Credit
Notes are executed in connection with the Revolving Credit Loans
in the aggregate amount of $50,000,000 to be made by the Lenders
pursuant to, and subject to the terms and conditions of, the
Credit Agreement. This Mortgage secures, among the other
Obligations, the revolving credit facility established pursuant
to the Credit Agreement and the amount of the principal
indebtedness outstanding under the Revolving Credit Notes will
increase and decrease from time to time as a result of advances
and repayments made pursuant to the Credit Agreement, but the
principal amount of the Revolving Credit Notes will not exceed
$50,000,000. This Mortgage shall secure all principal sums from
time to time advanced under the Revolving Credit Notes, whether
made on the date of this Mortgage or hereafter.
21. Additional Provisions Regarding Future Advances.
This Mortgage is given to secure not only existing indebtedness,
but also such future advances as may hereafter be made by any
Lender or the Mortgagee, whether such advances are obligatory or
are to be made at the option of any Lender or the Mortgagee, or
otherwise, within twenty years from the date hereof, to the same
extent as if such future advances were made on the date of the
execution of this Mortgage. The total amount of indebtedness
that may be so secured may decrease or increase from time to
time, but the total unpaid balance so secured at one time shall
not exceed $150,000,000, plus interest thereon, and any
disbursements made for the payment of taxes, levies, and
insurance on the Mortgaged Property, interest on such
disbursements, and any costs, fees, expenses and indemnities
payable hereunder. The provisions of this paragraph apply
regardless of whether any such advances are characterized as
obligatory or optional; but nothing contained in this paragraph
by itself obligates the Mortgagee or any Lender to make any
additional loans or advances hereunder.
22. Future Advances Limitations. If the Mortgagor files
or causes or consents to be filed of record in any county in
which any of the Mortgaged Property is situated, an instrument
limiting the maximum amount which may be secured by this Mortgage
under Section 697.04(1)(b) Florida Statutes, such filing shall
immediately constitute a Default (without any notice from
Mortgagee or the passage of any cure period).
23. Changes. Neither this Mortgage nor any term hereof
may be changed, waived, discharged or terminated orally, or by
any action or inaction, but only by an instrument in writing
signed by the party against which enforcement of the change,
waiver, discharge or termination is sought. To the extent
permitted by law, any agreement hereafter made by the Mortgagor
and the Mortgagee relating to this Mortgage shall be superior to
the rights of the holder of any intervening lien or encumbrance.
24. Acquisition of Fee Interest. If the Mortgagor
acquires the fee simple interest in any real property subject to
a Lease, the lien of this Mortgage shall automatically encumber
such fee simple interest as part of the Mortgaged Property.
25. Further Leasehold Provisions. The Mortgagor hereby
agrees as follows:
(a) The Mortgagor shall promptly pay all rent,
additional rent, taxes and all other sums and charges when due
and payable under the terms of the Leases, shall fully and
promptly perform and observe all of the agreements, terms,
covenants and conditions required to be performed and observed by
the Mortgagor under the Leases within the grace period provided
therein for the Mortgagor's performance (in contrast to any
additional grace periods provided in the Leases for curative
action by the Mortgagee), and shall do all things necessary to
preserve and keep unimpaired the Mortgagor's rights under the
Leases and to prevent any default thereunder or any modification,
termination, surrender, cancellation, forfeiture or impairment
thereof except as otherwise expressly provided in the Credit
Agreement.
(b) If any Lease is lawfully terminated before the
natural expiration of its term for any reason whatsoever and if
the Mortgagee or its designee shall acquire from any Lessor a new
lease of the Mortgaged Property or any portion thereof (whether
pursuant to any provision of any Lease or otherwise), then the
Mortgagor shall have no right, title or interest whatsoever in or
to such new lease or the leasehold estate created thereby.
(c) The Mortgagor shall promptly notify the Mortgagee in
writing of any request for arbitration or appraisal proceedings
made by any party to any Lease, as well as provide notice to the
Mortgagee of the institution of such arbitration or appraisal
proceedings and the progress thereof and any determination made
by the arbitrators thereunder. The Mortgagee shall have the
right to participate in any such arbitration or appraisal
proceedings in association with the Mortgagor or on the
Mortgagee's own behalf as an interested party.
(d) In the event of non-payment or non-performance by
the Mortgagor under any Lease or any Tenant Lease, the Mortgagee
shall, upon prior notice to the Mortgagor, have the right, but
not the duty, to perform the obligations of the Mortgagor under
the Leases or any Tenant Lease for the purpose of protecting or
preserving the lien of this Mortgage and any sums so expended by
the Mortgagee shall be an Obligation secured by the lien of this
Mortgage and shall bear interest at a rate per annum equal to the
Post-Default Rate under the Credit Agreement from the date of
payment by the Mortgagee until repaid, all of which shall be due
and payable on demand by the Mortgagee.
(e) Except as otherwise provided in the Credit
Agreement, Mortgagor will enforce the obligations of the lessor
under each Lease to the end that Mortgagor may enjoy all of the
rights granted to it under the Lease, and will promptly notify
Mortgagee in writing of any default by the lessor or by Mortgagor
in the performance or observance of any of the terms, covenants
and conditions on the part of the lessor or Mortgagor, as the
case may be, to be performed or observed under any Lease and
Mortgagor will promptly advise Mortgagee in writing of the
occurrences of any default under any Lease and of the giving of
any notice of default by the lessor to Mortgagor. If any notice
of default has been given to Mortgagor by any lessor, such notice
shall constitute full authority and protection to Mortgagee for
any action taken or omitted to be taken by Mortgagee in good
faith in reliance thereon.
(f) If any action or proceeding shall be instituted to
terminate any Lease or to evict Mortgagor or to recover
possession of any premises demised by any Lease or for any other
purpose affecting any Lease or this Mortgage, Mortgagor will,
immediately upon service thereof on or to Mortgagor, deliver to
Mortgagee a true copy of each petition, summons, complaint,
notice of motion, order to show cause and of all other pleadings,
and papers, however designated, served in any such action or
proceeding.
(g) Notwithstanding any future acquisition by Mortgagor
of fee title to any of the property demised by any Lease, the
leasehold estate created by the Lease shall not merge with the
fee title and such estates shall always remain separate and
distinct unless otherwise agreed to in writing by Mortgagee. If
Mortgagor acquires the fee title or any other estate, title or
interest in any property demised by any Lease, this Mortgage
shall attach to and cover and be a lien upon the fee title or
such other estate so acquired, and such fee title or other estate
shall, without further assignment, mortgage or conveyance, become
and be subject to the lien of and covered by this Mortgage.
(h) The generality of the provisions of this section or
any other provision contained in this Mortgage relating to any
Lease shall not be limited by other more particular provisions of
this Mortgage or any other document executed by Mortgagor setting
forth obligations of the Mortgagor which are also required of the
Mortgagor as the lessee under any Lease.
26. Warranty of Title. The Mortgagor hereby represents,
warrants and covenants to and with the Mortgagee that the
Mortgagor has full power and lawful authority to sell, convey,
transfer and mortgage the Mortgaged Property pursuant to this
Mortgage; that the Mortgaged Property is free and discharged from
all liens and encumbrances of any person or entity other than the
liens in existence on the date hereof and disclosed in Part B of
Schedule I of the Credit Agreement; and that the Mortgagor hereby
fully warrants unto the Mortgagee the title to the Mortgaged
Property subject to the permitted liens identified above and will
defend the same against the lawful claims and demands of all
persons whomsoever.
27. Counterparts for Convenience of Recording. This
Mortgage is being executed in sixteen (16) counterparts for the
purpose of facilitating simultaneous recording in the counties in
which the property encumbered hereby is located and such
Mortgages shall together constitute one Mortgage.
28. Fixture Filing. Pursuant to the Florida Uniform
Commercial Code the following information is set forth as a
financing statement to be filed as a fixture filing:
A. Debtor: Kash n' Karry Food Stores, Inc.
a Delaware corporation
Address of Debtor:
6422 Harney Road
Tampa, Florida 33610
B. Secured Party: The CIT Group/Business Credit,
Inc., as Administrative Agent for
the Lenders under the Credit
Agreement and as Administrative
Agent for the Swap Counterparty
under the Swap Security Agreement
Address of Secured Party:
The CIT Group/Business Credit, Inc
300 South Grand Avenue
Third Floor
Los Angeles, California 90071
C. This financing statement covers the property
described in the definition of "Mortgaged Property"
as provided on pages 3 - 7 above.
D. The collateral covered by this financing statement
includes goods and property which are or are to be
come fixtures on the real property described in
Exhibit "A".
E. This financing statement is to be filed for record in
the real estate records in the counties listed in
Exhibit "A" hereto.
F. For any parcel of real estate described in
Exhibit "A" hereto in which the Mortgagor does not
have an interest of record, the name of a record
owner is shown on Exhibit "A".
G. Proceeds of the collateral are also covered by this
financing statement.
29. Further Assurances; After-Acquired Property. At any
time, and from time to time, upon request by the Mortgagee, the
Mortgagor will make, execute and deliver or cause to be made,
executed and delivered, to the Mortgagee and, where appropriate,
cause to be recorded and/or filed, and from time to time
thereafter to be recorded and/or refiled, at such time and in
such offices and places as shall be deemed desirable by the
Mortgagee, any and all such other and further mortgages, security
agreements, financing statements, continuation statements,
instruments of further assurance, certificates and other
documents as may, in the opinion of the Mortgagee, be necessary
or desirable in order to effectuate, complete or perfect, or to
continue and preserve (i) the obligation of the Mortgagor under
the Term Notes, the Revolving Credit Notes and under this
Mortgage and (ii) the security interest created by this Mortgage
as a first and prior lien upon or security interest in and to all
of the Mortgaged Property, subject only to Liens (as defined in
the Credit Agreement) permitted under Section 8.06 of the Credit
Agreement. Upon any failure by the Mortgagor so to do, the
Mortgagee may make, execute, record, file, re-record and/or
refile any and all such mortgages, deeds to secure debt, security
agreements, financing statements, continuation statements,
instruments, certificates and other documents for and in the name
of the Mortgagor, and the Mortgagor hereby irrevocably appoints
the Mortgagee its agent and attorney-in-fact so to do. The lien
hereof will automatically attach, without further act, to all
after-acquired property attached to and/or used in connection
with or in the operation of the Mortgaged Property or any part
thereof.
30. Subrogation. The Mortgagee shall be subrogated to
the claims and liens of all parties whose claims or liens are
discharged or paid with the proceeds of the indebtedness secured
hereby.
31. Headings. The headings of the sections, paragraphs
and subdivisions of this Mortgage are for the convenience of
reference only, are not to be considered a part hereof, and shall
not limit or otherwise affect any of the terms hereof.
32. Time is of the Essence. It is specifically agreed
that time is of the essence of the performance by Mortgagor of
the obligations of the Mortgagor under this Mortgage.
33. Waiver of Jury Trial. THE MORTGAGEE AND THE
MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS MORTGAGE AND ANY AGREEMENT CONTEMPLATED TO
BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR THE EXECUTION OF THE CREDIT AGREEMENT BY THE LENDERS AND THE
MORTGAGEE, THE MAKING THE TERM LOANS AND REVOLVING CREDIT LOANS
TO THE MORTGAGOR, AND THE ACCEPTANCE OF THIS MORTGAGE BY
MORTGAGEE.
IN WITNESS WHEREOF, this instrument is executed as of the
day and year first above written by Richard D. Coleman, as Vice
President on behalf of the Mortgagor (and he hereby represents
that he possesses full power and authority to execute and deliver
this instrument).
THE MORTGAGOR HEREBY DECLARES AND ACKNOWLEDGES THAT THE
MORTGAGOR HAS RECEIVED, WITHOUT CHARGE, A TRUE COPY OF THIS
MORTGAGE.
Signed, sealed and delivered MORTGAGOR:
in the presence of:
KASH N' KARRY FOOD STORES, INC.
_____________________________ By:____________________________
First Witness Name: Richard D. Coleman
Title: Vice President
_____________________________
Printed Name of First Witness
Address:
Kash n' Karry Food Stores, Inc.
6422 Harney Road
_____________________________ Tampa, FL 33610
Second Witness
_____________________________
Printed Name of Second Witness
STATE OF FLORIDA )
)SS
COUNTY OF HILLSBOROUGH )
The foregoing instrument was acknowledged before me this
_____ day of December, 1994 by Richard D. Coleman, as Vice
President of KASH N' KARRY FOOD STORES, INC., a Delaware
corporation, on behalf of the corporation. He is
_____ personally known to me, or
_____ produced _____________________ as identification,
and did not take an oath.
Given under my hand and official seal this _____ day of
December, 1994.
__________________________________
Notary Public
Printed Name of Notary:
__________________________________
My Commission expires:
77090
EXHIBIT E-1
[Form of Opinion of Counsel to the Company]
December 29, 1994
To the Lenders party to the
Credit Agreement referred to
below and The CIT Group/Business Credit, Inc.
as the Administrative Agent
Ladies and Gentlemen:
We have acted as counsel to Kash n' Karry Food Stores,
Inc. (the "Company") in connection with the financing
transactions contemplated by the Credit Agreement dated as of
December 29, 1994 (the "Credit Agreement") among the Company, the
lenders identified in the Credit Agreement (the "Lenders") and
The CIT Group/Business Credit, Inc., in its capacity as the
Administrative Agent, and Bank of America National Trust and
Savings Association, in its capacity as Co-Agent. All
capitalized terms defined in the Credit Agreement are used with
the same meanings, unless otherwise defined, in this opinion
letter.
In rendering the opinions expressed below, we have
examined (a) (i) the Credit Agreement and the Notes, (ii) the
Security Agreement (the "Security Agreement") and (iii) the
Mortgage and the Blocked Account Agreement (together with the
Security Agreement, the "Security Documents" and, together with
the Credit Agreement, the Security Agreement and the Notes, the
"Loan Documents"), and (b) such corporate records of the Company
and such other documents as we have deemed necessary as a basis
for the opinions expressed below. In our examination, we have
assumed the genuineness of all signatures, the authenticity of
documents submitted to us as originals and the conformity with
authentic original documents of all documents submitted to us as
copies. When relevant facts were not independently established,
we have relied upon statements of governmental officials and upon
representations made in or pursuant to the Loan Documents and
certificates of appropriate representatives of the Company.
In rendering the opinions expressed below, we have
assumed (except, as to the Company) that all of the documents
referred to in this opinion have been duly authorized by, have
been executed and delivered by, and constitute legal, valid,
binding and enforceable obligations of, all of the parties to
such documents, that all signatories to such documents have been
duly authorized and that all such parties are duly organized and
validly existing and have the power and authority (corporate or
other) to execute, deliver and perform such documents.
Based upon and subject to the foregoing and subject
also to the comments and qualifications set forth below, and
having considered such questions of law as we have deemed
necessary as a basis for the opinions expressed below, we are of
the opinion that:
(i) The Company is a corporation duly
incorporated, validly existing and in good standing under the
laws of the State of Delaware and has the corporate power to
execute and deliver, and to borrow and perform its obligations
under, the Loan Documents.
(ii) The execution, delivery and performance by
the Company of the Loan Documents, and borrowing by the Company
under the Loan Documents, have been duly authorized by all
necessary corporate action on the part of the Company.
(iii) The Loan Documents have been duly executed
and delivered by the Company.
(iv) The Loan Documents (other than the Mortgage,
as to which we are not opining in this paragraph (iv)) constitute
the legal, valid and binding obligations of the Company,
enforceable against it in accordance with their respective terms,
in each case except as may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other
similar laws and court decisions relating to or affecting the
rights of creditors generally and except as the enforceability of
such Loan Documents is subject to the application of general
principles of equity (regardless of whether considered in a
proceeding in equity or at law), including without limitation (i)
the possible unavailability of specific performance, injunctive
relief or any other equitable remedy and (ii) concepts of
materiality, reasonableness, good faith and fair dealing.
(v) No authorization, consent or other approval
of, or registration, declaration or other filing with, any
governmental authority of the United States of America or the
State of New York is required on the part of the Company for the
execution and delivery by it of, for the borrowing by the Company
under, or for the performance by the Company of its agreements
under, the Loan Documents.
(vi) The execution and delivery by the Company of,
the borrowing by the Company under, and the performance by the
Company of its obligations under, the Loan Documents do not (a)
violate any law, rule or regulation of the United States of
America or the State of New York applicable to the Company; (b)
violate any provision of the Certificate of Incorporation or
bylaws of the Company; or (c) result in a breach of, constitute a
default under, require consent under, (except pursuant to the
Loan Documents) result in or require the creation of any Lien on
any Property of the Company or result in the acceleration or
required prepayment of any indebtedness pursuant to the terms of,
any agreement, instrument or order (including any arbitral award)
to which the Company or any of its assets is subject and of which
we have knowledge. For purposes of clause (c) above, we have
reviewed those agreements, instruments and orders that have been
identified to us, after due inquiry, by the Company as its
material agreements, instruments and orders.
(vii) To the extent that a security interest may be
created in such property under Article 9 of the Uniform
Commercial Code of New York (the "Code"), the Security Agreement
is effective to create in favor of the Administrative Agent for
the benefit of the Holders, from time to time, of the Secured
Obligations (as defined in the Security Agreement) a valid
security interest under the Code in the rights of the Company in
the personal property purported to be subject to the Lien of such
Security Agreement (the "Collateral") as collateral security for
the Secured Obligations specified in such Security Agreement
except that the security interest in any Collateral in which the
Company acquires rights after the commencement of a case against
it under the Bankruptcy Code will be limited by Section 552 of
the Bankruptcy Code.
(viii) The Confirmation Order has been entered by
the Clerk of the Bankruptcy Court; the effectiveness of the
Confirmation Order is not stayed by reason of the operation of
the Federal Rules of Bankruptcy Procedure, any local bankruptcy
rule or order of any Governmental Person or otherwise; and the
Confirmation Order has become final and is non-appealable. We
are not aware of any grounds for revocation of the Confirmation
Order.
(ix) The Company is not required to pay documentary
stamp taxes pursuant to section 201.08 of the Florida Statutes
(1993) in respect of the making or delivery of the Loan Documents
or the borrowing thereunder on the Effective Date by virtue of
section 1146(c) of the Bankruptcy Code and the paragraph 26 of
the Confirmation Order. While we are aware of no binding
precedent directly on point, it is also our opinion that the
Company is not required to pay intangible taxes pursuant to
section 199.133 of the Florida Statutes (1993) in respect of the
making or delivery of the Loan Documents or the borrowing
thereunder on the Effective Date by virtue of section 1146(c) of
the Bankruptcy Code and the paragraph 26 of the Confirmation
Order.
We advise you that, except for the matters set forth on
Schedule IV to the Credit Agreement, to our current actual
knowledge, there are no pending or threatened actions, suits,
proceedings or investigations against the Company in any court or
by or before any arbitrator or governmental authority, which, if
adversely determined, could have a Material Adverse Affect. For
purposes of the preceding sentence, the phrase "to our current
actual knowledge" is intended to indicate that, during the course
of our representation of the Company, no information that would
give us current actual knowledge of the inaccuracy of the
statements made in such sentence has come to the attention of
those attorneys in this firm who have rendered legal services on
behalf of the Company and that we have discussed with appropriate
representatives of the Company the contents of and relied, as
stated above, upon representations of the Company made in the
Loan Documents with respect to pending or threatened actions,
suits, proceedings and investigations.
The foregoing opinions are also subject to the
following comments and qualifications:
(a) Certain remedial or procedural provisions
contained in the Security Documents may be limited or rendered
unenforceable by applicable law, but such limitations do not, in
our opinion, make the remedies and procedures that are available
to the Administrative Agent and the Lenders inadequate for the
practical realization of the principal benefits purported to be
provided to them by the Security Documents.
(b) The enforceability of certain provisions of the
Loan Documents may be limited under certain circumstances to the
extent that such provisions impose late payment charges or an
increase in interest rates upon delinquency in payment or the
occurrence of a default.
(c) The enforceability of provisions in the Loan
Documents to the effect that terms may not be waived or modified
except in writing may be limited under certain circumstances.
(d) The enforceability of certain provisions of the
Loan Documents obligating the Borrower to indemnify the Lenders,
the Administrative Agent, the Co-Agent and/or others in
connection with such indemnified Person's own wrongful or
negligent acts or omissions may be limited by public policy or
otherwise.
(e) We express no opinion as to the ownership of or
title to any of the Collateral or (except as set forth in
paragraph (vii) above) as to the creation, perfection of any
Liens (including the Liens of the Loan Documents).
The foregoing opinions are limited to matters involving
the Federal laws of the United States and the laws of the State
of New York and the General Corporation Law of the State of
Delaware, and we do not express any opinion as to the laws of any
other jurisdiction.
This opinion letter is provided to you by us as counsel
to the Company pursuant to Section 6.01(d) of the Credit
Agreement and may not be relied upon by any other person (other
than your permitted assignees) or for any purpose other than in
connection with the transactions contemplated by the Loan
Documents without our prior written consent in each instance.
Very truly yours,
EXHIBIT E-2
[Form of Opinion of Florida Counsel to the Company]
December 29, 1994
To the Lenders party to the
Credit Agreement referred to
below and The CIT Group/Business Credit, Inc.
as the Administrative Agent
Ladies and Gentlemen:
We have acted as special Florida counsel to Kash n' Karry
Food Stores, Inc., a Delaware corporation (the "Company"), in
connection with the financing transactions contemplated by the
Credit Agreement dated as of December 29, 1994 (the "Credit
Agreement") among the Company, the lenders identified in the
Credit Agreement (the "Lenders") and The CIT Group/Business
Credit, Inc., in its capacity as the Administrative Agent (the
"Administrative Agent"), and Bank of America National Trust and
Savings Association, in its capacity as Co-Agent. All
capitalized terms defined in the Credit Agreement are used with
the same meanings, unless otherwise defined, in this opinion
letter.
This opinion has been prepared and is to be construed in
accordance with the Report on Standards For Florida Opinions
dated April 8, 1991 issued by the Business Law Section of The
Florida Bar (the "Report"), as published in 46 The Business
Lawyer 1407 (August 1991). The Report is incorporated by
reference into this opinion.
In rendering the opinions expressed below, we have relied,
with your approval, as to factual matters (but not legal
conclusions) that affect our opinions, solely on our examination
of the following documents and, except as to the opinions in
numbered paragraphs (i), (ii), (iv), (v), (viii), as to which our
opinions are based on our knowledge, have made no independent
verification of the facts asserted to be true and correct in
those documents, including the factual representations and
warranties contained in the Agreement: (a) (i) the Credit
Agreement and the Notes, (ii) the Security Agreement (the
"Security Agreement"), (iii) the Blocked Account Agreement and
(iv) each counterpart of the Mortgage (collectively, the
"Mortgage," and together with the Security Agreement and the
Blocked Account Agreement, the "Security Documents" and, together
with the Credit Agreement, the Security Agreement, the Blocked
Account Agreement and the Notes, the "Loan Documents"), (b) the
financing statement on Form UCC-1 naming the Company as debtor
and the Administrative Agent (as Agent) as secured party, bearing
File No. 940000252635, as filed with the Secretary of State of
the State of Florida on December 19, 1994, and the financing
statement on Form UCC-1 naming Save 'n Pack as debtor and the
Administrative Agent (as Agent) as secured party, to be filed
with the Secretary of State of the State of Florida (the "State
Financing Statements"), (c) the financing statements on Form UCC-
1 naming the Company as debtor and the Administrative Agent (as
Agent) as secured party, to be filed with the Clerk of Circuit
Court in each county in Florida in which goods of the Company
which are or are to become fixtures are located (the "Fixture
Financing Statements," and together with the State Financing
Statements, the "Financing Statements"), (d) the notice of liquor
license lien on Form 739L naming the Company as debtor and the
Administrative Agent (as Agent) as secured party to be recorded
with the Division of Alcoholic Beverages and Tobacco of the State
of Florida pursuant to Section 561.65(4) of the Florida Statutes,
and the notices of lien naming the Company as debtor and the
Administrative Agent (as Agent) as lienholder to be filed with
the Division of Motor Vehicles of the State of Florida
(collectively, the "Notices of Lien"), (e) a Certificate of the
Company's Authority to Transact Business in Florida issued by the
Florida Department of State on December 12, 1994, and (f) the
opinion letter dated as of December 29, 1994, delivered to you by
Kramer, Levin, Nessen, Kamin & Frankel pursuant to Section
6.01(d) of the Credit Agreement (the "Kramer Levin Opinion"). In
our examination, we have assumed the genuineness of all
signatures, the authenticity of documents submitted to us as
originals and the conformity with authentic original documents of
all documents submitted to us as copies.
In rendering the opinions expressed below, in addition to
the assumptions contained in the Report, we have assumed (except,
to the extent set forth below, as to the Company) that (a) the
Confirmation Order has been entered by the Clerk of the
Bankruptcy Court; the effectiveness of the Bankruptcy Order is
not stayed by reason of the operation of the Federal Rules of
Bankruptcy Procedure, any local bankruptcy rule or order of any
Governmental Person or otherwise; the Confirmation Order has
become final and is non-appealable; and no grounds exist for
revocation of the Confirmation Order; and (b) all of the
documents referred to in this opinion have been duly authorized
by, have been or (in the case of the Notes) will be executed and
delivered by, and (other than with respect to the Mortgage, to
the extent governed by Florida law) constitute legal, valid,
binding and enforceable obligations of, all of the parties to
such documents, that (except with respect to the Company) all
signatories to such documents have been duly authorized and that
all such parties are duly organized and validly existing and have
the power and authority (corporate or other) to execute, deliver
and perform such documents. With your permission, we have also
relied upon the Kramer Levin Opinion to the effect that the
execution and delivery of the Mortgage and the Notes and the
recordation of the Mortgage are exempt from Florida documentary
stamp and nonrecurring intangible taxes pursuant to Section
1146(c) of the U.S. Bankruptcy Code and paragraph 26 of the
Confirmation Order.
Based upon and subject to the foregoing and subject also to
the comments and qualifications set forth below, and having
considered such questions of law as we have deemed necessary as a
basis for the opinions expressed below, we are of the opinion
that:
(i) The Company has been duly authorized to transact
business as a foreign corporation under the laws of, and its
status is active in, the State of Florida.
(ii) Subject to the limitations contained in the next
paragraph and in numbered paragraph (iii) hereof, the Mortgage
constitutes the legal, valid and binding obligation of the
Company, enforceable against it under the law of Florida.
Our opinion concerning the validity, binding effect and
enforceability of the Mortgage means that (a) the Mortgage
constitutes an effective contract under applicable law, (b) the
Mortgage is not invalid in its entirety because of a specific
statutory prohibition or public policy and is not subject in its
entirety to a contractual defense, and (c) subject to the last
sentence of this paragraph, remedies generally available to
mortgage lenders in the State of Florida are available to the
Administrative Agent under the Mortgage if the Company is in
material default under the Mortgage. This opinion does not mean
that (a) any particular remedy is available upon a material
default, or (b) every provision of the Mortgage will be upheld or
enforced in any or each circumstance by a court. Furthermore,
the validity, binding effect and enforceability of the Mortgage
may be limited or otherwise affected by (a) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or
other similar statutes, rules, regulations or other laws
affecting the enforcement of creditors' rights and remedies
generally and (b) the unavailability of, or limitation on the
availability of, a particular right or remedy (whether in a
proceeding in equity or at law) because of an equitable principle
or a requirement as to commercial reasonableness, conscionability
or good faith.
(iii) If the execution, delivery and recordation of the
Mortgage and the execution and delivery of the Notes are not
exempt from all Florida nonrecurring intangible taxes pursuant to
Section 1146(c) of the U.S. Bankruptcy Code, then, until the
payment of all nonrecurring intangible taxes due upon execution
and delivery of the Mortgage, the Administrative Agent will be
unable to avail itself of remedies under the Mortgage in a
Florida court. Section 199.282(5) of the Florida Statutes (1993)
provides:
No mortgage, deed of trust, or other lien
upon real property situated in this state
shall be enforceable in any Florida court,
nor shall any written evidence of such
mortgage, deed of trust, or other lien be
recorded in any public record of the state,
until the nonrecurring intangible tax imposed
by this chapter, including any taxes due on
future advances, has been paid and the clerk
of circuit court collecting the tax has noted
its payment on the instrument or given other
receipt for it. However, failure to pay the
correct amount of tax or failure of the clerk
to note payment of the tax on the instrument
shall not affect the constructive notice
given by recording of the instrument.
Although Section 199.282(5) provides that a mortgage shall not be
"enforceable" until the nonrecurring intangible taxes are paid,
no Florida court has held that nonpayment of such taxes delays
the attachment of a mortgage lien or otherwise affects the
validity of the mortgage as between the mortgagor and the
mortgagee. While the matter is not free from doubt, it is our
opinion that, if the matter were properly presented to a court
having jurisdiction, and assuming interpretation of the relevant
law on a basis consistent with existing authority, the court
should hold that nonpayment of nonrecurring intangible taxes has
no effect on a recorded mortgage except as stated in the first
sentence of this paragraph.
In this regard, we note (but offer no opinion with
respect to the same) that pursuant to Section 6.01(h)(B) of the
Credit Agreement, the Administrative Agent (as Agent) is
obtaining a Loan Policy of Title Insurance to be issued by
Commonwealth Land Title Insurance Company ("Commonwealth")
insuring, among other things, the creation, validity,
enforceability and priority of the Lien created by the Mortgage
on the property more completely described on Commonwealth
Commitment Nos. 864-054411 through 864-054432, 864-230164 and
864-320165, and such Loan Policy of Title Insurance is issued on
the ALTA Loan Policy form dated 1970 (Rev. 10/1/70 and 10/17/84),
which form of policy does not contain exclusion number seven of
the ALTA Loan Policy form dated (10-17-92) set forth on Composite
Exhibit "A" attached hereto.
(iv) No authorization, consent or other approval of, or
registration, declaration or other filing with, any governmental
authority of the State of Florida is required on the part of the
Company for the execution and delivery by it of, for borrowing by
the Company under, or for the performance by the Company of its
agreements under, the Loan Documents, which, if not obtained,
could have a materially adverse impact on the transaction
contemplated by the Loan Documents, except, with respect to the
performance of the Company's agreements under the Loan Documents
to perfect the Liens granted in the Security Documents, for steps
required to be taken to perfect the Liens granted to the
Administrative Agent (as Agent) under the Security Documents.
(v) The execution and delivery by the Company of, the
borrowing by the Company under, and the performance by the
Company of its obligations under, the Loan Documents do not and
will not violate any law, rule or regulation of the State of
Florida, or any of its county, municipal and political
subdivisions, applicable to the Company and in effect as of the
date hereof.
(vi) Assuming that, notwithstanding the New York choice
of law set forth in the Security Agreement, Florida law governs
the creation of the Lien thereunder, to the extent that a
security interest may be created in such property under Article 9
of the Uniform Commercial Code of Florida (the "Code"), the
Security Agreement is effective to create in favor of the
Administrative Agent for the benefit of the Lenders and the
Administrative Agent a valid security interest under the Code in
the rights of the Company in the personal property purported to
be subject to the Lien of such Security Agreement (the
"Collateral") as collateral security for the Secured Obligations
specified in such Security Agreement except that the security
interest in any Collateral in which the Company acquires rights
after the commencement of a case against it under the Bankruptcy
Code will be limited by Section 552 of the Bankruptcy Code.
(vii) The Mortgage is in proper form for the creation of
the mortgage lien contemplated thereby in favor of the
Administrative Agent for the benefit of the Lenders and the
Administrative Agent in the right, title and interest of the
Company in the real property purported to be subject to the Lien
of such Mortgage (the "Mortgage Collateral") as collateral
security for the Obligations specified in such Mortgage except
that the lien in any Mortgage Collateral in which the Company
acquires rights after the commencement of a case against it under
the Bankruptcy Code will be limited by Section 552 of the
Bankruptcy Code.
(viii) The execution, delivery and recordation by the
Company of the Mortgage will not constitute a breach of or a
default under any Lease (as defined in the Mortgage), except as
to the Leases (more completely described on Exhibit B of the
Mortgage) relating to the store sites set forth on Part A of
Schedule I attached hereto. The Leases (more completely
described on Exhibit B of the Mortgage) demising the store sites
(identified on Part B of Schedule I hereto) prohibit assignments
by the Company without the prior consent of a third party.
Section 697.02 of the Florida Statutes provides: "A mortgage
shall be held to be a specific lien on the property therein
described and not a conveyance of the legal title or the right of
possession." Applying that statute, several Florida district
courts of appeal have held that the assignment of a mortgage upon
a leasehold interest in real property is not an assignment of an
interest in the leasehold. While the matter is not free from
doubt, it is our opinion that, if the matter were properly
presented to a court having jurisdiction, and assuming
interpretation of the relevant law on a basis consistent with
existing authority, the court should hold that the execution,
delivery and recordation by the Company of the Mortgage will not
constitute a breach of or a default under any Lease identified on
Part B of Schedule I, subject to the following proviso.
Provided, however, the analysis applied in the foregoing cases
does not necessarily extend to the enforcement by the mortgagee
of its rights under the leasehold mortgage, such as by
foreclosure, and to our knowledge no Florida court has addressed
that issue. Accordingly, we render no opinion as to whether the
enforcement by the Administrative Agent of its rights under the
Mortgage would constitute a breach of or default under the Leases
identified on Part B of Schedule I.
(ix) The Trademarks (as defined in the Security
Agreement) constitute general intangibles within the meaning of
Section 679.106 of the Code. Except as set forth in Section
679.302 of the Code, general intangibles of the Company may be
perfected by filing a financing statement with the Secretary of
State of Florida. The security interest granted by the Security
Agreement will have been perfected with respect to that portion
of the Collateral as to which a security interest can be
perfected under the Code by the filing of the State Financing
Statements with the Florida Secretary of State in accordance with
the Code, except that we call your attention to the fact that the
Lien on certain of the Collateral may not be perfected by filing
a financing statement under the Code. The Lien granted by the
Mortgage and the security interest granted by the Security
Agreement will have been perfected with respect to that portion
of the Mortgage Collateral and the Collateral consisting of goods
that are or are to become fixtures on the Premises (as defined in
the Mortgage) when the Mortgage and the Fixture Financing
Statements have been duly recorded with the Clerk of Circuit
Court in the various counties in which the Premises are located
in accordance with the Code.
(x) The Mortgage and the Fixture Financing Statements
are in proper form for recording with the Clerk of the Circuit
Court of the various counties in Florida in which the Mortgage
Collateral is located, and such recordation is the only recording
or filing necessary in Florida to give to third parties
constructive notice of the Lien of the Administrative Agent for
the benefit of the Lenders and the Administrative Agent on any
real property interest of the Company included in the Mortgage
Collateral.
(xi) A court in Florida would give effect to the New
York choice of law set forth in each of the Loan Documents stated
to be governed by New York law, so long as a normal and
reasonable relationship exists between New York and the
transaction represented by the Loan Documents. In this regard,
we understand and assume that the Administrative Agent is a New
York corporation, that it maintains its principal place of
business in New York, that the Notes were executed in Ohio and
delivered in New York, that the Loan Documents (other than the
Notes and certain Security Documents) will be executed and
delivered in New York, and that the disbursements and payments to
be made under the Loan Documents will take place in New York.
Given these understandings and assumptions, we are of the opinion
that a Florida court would honor the parties' choice of New York
law as the law applicable to such of the Loan Documents stated to
be governed by New York law, subject to the qualification that we
are unable to opine that a Florida court would apply the laws of
New York respecting (a) remedies available in Florida upon a
breach by the Company of any Loan Document; (b) the procedural
rules governing or affecting any action in Florida to enforce any
Loan Document; or (c) any law that is determined to be against an
overriding public policy of the State of Florida.
To the extent that the Loan Documents are governed by
and enforceable under the laws of the State of New York, we have
assumed, for purposes of this opinion letter, that the laws of
the State of New York governing the matters addressed by such
opinions do not differ from the laws of the State of Florida.
(xii) Neither the Administrative Agent nor any of the
Lenders will, solely by reason of the making by any Lender of any
Loan or solely by reason of, or as a condition to, the obtaining
by the Administrative Agent (on behalf of the Lenders) of the
Liens of the Security Documents or the enforcement by the
Administrative Agent or any Lender of its rights, remedies,
powers and privileges under the Loan Documents, be required to
qualify to do business in the State of Florida or to make any
registration, declaration or filing (other than the State
Financing Statements stated to be filed, and the Notices of Lien,
Fixture Financing Statements and Mortgages stated to be recorded,
in the State of Florida) with any Governmental Person of the
State of Florida.
We advise you that, to our knowledge after limited
investigation, there are no pending or threatened actions, suits,
proceedings or investigations against the Company in any court or
by or before any arbitrator or governmental authority in Florida,
which will or might reasonably be expected to have a material
adverse effect upon the business or financial condition of the
Company, upon the ability of the Company to repay the Loans, or
upon the benefits provided to the Administrative Agent or the
Lenders under the Security Documents, except for the matters set
forth on Schedule IV of the Credit Agreement.
The foregoing opinions are also subject to the following
comments and qualifications:
(a) We express no opinion as to the ownership of or
title to any of the Collateral or the Mortgage Collateral, as to
the priority of any Liens (including the Liens of the Loan
Documents, or (except as set forth in paragraphs (vi), (vii),
(ix) and (x) above) as to the creation or perfection of any Liens
(including the Liens of the Loan Documents). Further, we advise
you that we have, for the purposes of this opinion, assumed that:
(i) the chief executive office of the Company is located in
Florida; and (ii) the Collateral does not include property of the
types described in Sections 679.104 and 679.401(1)(a) or (except
as to goods which are or are to become fixtures) 679.401(1)(b) of
the Code.
(b) In connection with our opinions in paragraphs (vi)
and (ix) above, we wish to call your attention to the provisions
of (1) Sections 679.306 through 679.310, and Section 679.312 of
the Code as to limitations on the effect of perfection and
(2) Sections 679.103, 679.402 and 679.403 of the Code as to
actions (including the filing of continuation statements) that
may be necessary in the future to continue perfection as a result
of the lapse of time or a change in circumstances.
The foregoing opinions are limited to matters involving the
laws of the State of Florida and we do not express any opinion as
to the laws of any other jurisdiction. Without limitation of the
foregoing, we do not express any opinion as to any Federal or
Florida securities laws, tax laws, bank regulatory laws,
environmental laws, land use and zoning laws, or as to any
matters of law or fact not expressly opined upon herein.
This opinion letter is provided to you by us as counsel to
the Company pursuant to Section 6.01(d) of the Credit Agreement
and is rendered solely in connection with the transactions
contemplated by the Loan Documents. This opinion may be relied
upon by you (and your successors and assigns) only in connection
with such transactions, and may not be relied upon by any other
person or for any purpose without our prior written consent in
each instance.
Very truly yours,
RWR/LWH
SCHEDULE I
PART A
Store Nos. 879, 881, 882, 884 and 651
PART B
Store Nos. 139, 201, 584, 701, 704, 705, 707, 710, 711,
715, 716, 719, 849, 857, 864, 867, 868, 869, 870, 871,
873, 874, 883, 892, 898, 904 (Returns Center: 1432
Tampa East Blvd., Tampa)
EXHIBIT F-1
[Form of Opinion of Counsel to the Administrative Agent]
December 29, 1994
The CIT Group/Business Credit, Inc.
300 South Grand Avenue
Los Angeles, California 90017
Re: Credit Agreement dated as of December 29, 1994, among
Kash n' Karry Food Stores, Inc., The CIT Group/Business
Credit, Inc., as Administrative Agent, Bank of America
National Trust and Savings Association, as Co-Agent,
and the financial institutions party thereto
Ladies and Gentlemen:
Description of Representation
We have acted as special counsel for you, as Administrative
Agent (the "Administrative Agent"), in connection with the
preparation, execution and delivery of, and the initial Loans
made under, that certain Credit Agreement (the "Credit
Agreement") dated as of December 29, 1994 among Kash n' Karry
Food Stores, Inc., the Administrative Agent, Bank of America
National Trust and Savings Association, as Co-Agent, and the
financial institutions party thereto (the "Lenders"). This
opinion is being furnished to you pursuant to Section 6.01(e) of
the Credit Agreement. Capitalized terms used herein are used
with the meanings given to them in the Credit Agreement.
Material Examined
In this regard, we have examined executed originals or
copies of the following, each of which, unless otherwise
indicated, is dated the date (or as of the date) hereof:
(a) Credit Agreement.
(b) Notes being delivered on the date hereof (the "Notes").
(c) The Security Agreement (the "Security Agreement")
between Kash n' Karry Food Stores, Inc. and the
Administrative Agent, as agent for the holders, from
time to time, of Secured Obligations (as defined in the
Security Agreement). The Credit Agreement, the Notes
and the Security Agreement are collectively referred to
herein as the "Loan Documents."
(d) Opinion of Kramer, Levin, Nessen, Kamin & Frankel, New
York counsel for the Company.
(e) Opinion of Barnett, Bolt, Kirkwood & Long, Florida
counsel for the Company.
(f) Other certificates and documents of the Company,
governmental authorities or other parties delivered
pursuant to the Credit Agreement on the Effective Date
in satisfaction of the conditions specified in Section
6.01 and Section 6.02 of the Credit Agreement.
Opinions
Based upon such examination, and having regard for legal
considerations we deem relevant, we are of the following opinion:
(1) The Loan Documents, when duly executed and delivered by
the respective parties thereto, constitute legal, valid and
binding obligations of the Company enforceable against the
Company in accordance with their respective terms.
(2) To the extent that a security interest may be created
in such property under Article 9 of the Uniform Commercial Code
of New York (the "Code"), the Security Agreement is effective to
create in favor of the Administrative Agent for the benefit of
the holders, from time to time, of Secured Obligations (as
defined in the Security Agreement) a valid security interest
under the Code in the rights of the Company in the personal
property purported to be subject to the Lien of such Security
Agreement (the "Collateral") as collateral security for the
Secured Obligations specified in such Security Agreement except
that the security interest in any Collateral in which the Company
acquires rights after the commencement of a case against it under
the Bankruptcy Code will be limited by Section 552 of the
Bankruptcy Code.
Certain Assumptions
With your permission we have assumed the following: (a) the
authenticity of original documents and the genuineness of all
signatures on the documents we have reviewed; (b) the conformity
to the originals of all documents submitted to us as copies; (c)
the truth, accuracy, and completeness of the information,
representations, and warranties contained in the records,
documents, instruments, and certificates we have reviewed; (d)
the due power and authority of all parties to the Loan Documents;
(e) the due authorization, execution and delivery of the Loan
Documents by all parties thereto and, except with respect to the
Company, the legal, valid and binding nature of the obligations
of all such parties, and the enforceability against them in
accordance with their respective terms; (f) the due organization
and valid existence of all parties to the Loan Documents; and (g)
the absence of any evidence extrinsic to the provisions of the
written agreements between the parties that the parties intended
a meaning contrary to those expressed by those provisions.
We have assumed that the Confirmation Order has been entered
by the Clerk of the Bankruptcy Court; the effectiveness of the
Bankruptcy Order is not stayed by reason of the operation of the
Federal Rules of Bankruptcy Procedure, any local bankruptcy rule
or order of any Governmental Person or otherwise; the
Confirmation Order has become final and is non-appealable; and no
grounds exist for revocation of the Confirmation Order.
We also assume that failure to pay any documentary stamp or
intangible tax, if due, under Florida Law will not affect the
enforceability of, or any right or remedy any Person has under,
the Loan Documents.
Certain Limitations and Qualifications
We express no opinion as to: (i) matters of law in
jurisdictions other than the State of New York and the United
States; (ii) regulatory matters relating to each Lender and Co-
Agent including, but not limited to, lending limits and affiliate
transactions; and (iii) the enforceability of choice of law
provisions in the Loan Documents.
Our opinions set forth above are qualified as to:
(a) limitations imposed by bankruptcy, insolvency,
reorganization, arrangement, fraudulent conveyance, moratorium,
or other laws relating to or affective the rights of creditors
generally;
(b) rights to indemnification and contribution which may be
limited by applicable law and equitable principles;
(c) the unenforceability under certain circumstances of
provisions imposing penalties, forfeiture, late payment charges,
or an increase in interest rate upon delinquency in payment or
the occurrence of any event of default;
(d) general principals of equity, including without
limitation, concepts of materiality, reasonableness, good faith
and fair dealing, and the possible unavailability of specific
performance or injunctive relief, regardless of whether such
enforceability is considered in a proceeding in equity or at law;
(e) certain remedial or procedural provisions contained in
the Loan Documents may be limited or rendered unenforceable by
applicable law, but such limitations do not, in our opinion, make
the remedies and procedures that are available to the
Administrative Agent and the Lenders inadequate for the practical
realization of the principal benefits purported to be provided to
them by the Loan Documents;
(f) the enforceability of provisions of the Loan Documents
to the effect that terms may not be waived or modified except in
writing may be limited under certain circumstances; and
(g) we express no opinion as to the ownership of or title
to any of the Collateral or (except as set forth in paragraph (2)
above) as to the creation or perfection of any Liens (including
the Liens of the Loan Documents).
Use of Opinion
This opinion is solely for your benefit and may not be
relied upon or used by any other person without our prior written
approval. We disclaim any obligation to update this opinion
letter for events occurring or coming to our attention after the
date hereof.
Very truly yours,
Orrick, Herrington & Sutcliffe
EXHIBIT F-2
[Form of Opinion of Special Florida Counsel
to the Administrative Agent]
December 29, 1994
To the Lenders party to the
Credit Agreement referred to
below and The CIT Group/Business Credit, Inc.
as the Administrative Agent
Ladies and Gentlemen:
We have acted as special Florida counsel to The CIT Group/
Business Credit, Inc., in its capacity as the Administrative
Agent (the "Administrative Agent") in connection with financing
transactions contemplated by the Credit Agreement dated as of
December 29, 1994 (the "Credit Agreement") among the Kash n'
Karry Stores, Inc., a Delaware corporation (the "Company"), the
lenders identified in the Credit Agreement (the "Lenders"), the
Administrative Agent, and Bank of America National Trust and
Savings Association, in its capacity as Co-Agent. All
capitalized terms defined in the Credit Agreement are used with
the same meanings in this opinion letter unless otherwise
expressly defined herein.
This opinion has been prepared and is to be construed in
accordance with the Report on Standards For Florida Opinions
dated April 8, 1991 issued by the Business Law Section of the
Florida Bar (the "Report"), as published in 46 The Business
Lawyer 1407 (August 1991). The Report is incorporated by
reference into this opinion.
In rendering the opinions expressed below, we have relied,
with your approval, as to factual matters (but not legal
conclusions) that affect our opinions, solely on our examination
of the following documents and have made no independent
verification of the facts asserted to be true and correct in
those documents, including the factual representations and
warranties contained therein: (a) (i) the Credit Agreement and
the Notes, (ii) the Security Agreement (the "Security
Agreement"), (iii) the notice of liquor license lien to be filed
with the Division of Alcoholic Beverages and Tobacco of the State
of Florida pursuant to Section 561.65 of the Florida Statutes and
the notices of lien to be filed with the Division of Motor
Vehicles of the State of Florida (collectively, the "Notices of
Lien") and (iv) each counterpart of the Mortgage (collectively,
the "Mortgage," and, together with the Security Agreement, the
"Security Documents" and, together with the Credit Agreement, the
Security Agreement and the Notes, the "Loan Documents"), (b) (i)
the financing statement on Form UCC-1 naming the Company as
debtor and the Administrative Agent (as Agent) as secured party,
bearing File No. 940000252635, as filed with the Secretary of
State of the State of Florida (the "State Financing Statement"),
and (ii) the financing statement on Form UCC-1 naming the Company
as debtor and the Administrative Agent (as Agent) as secured
party to be filed with the Clerk of the Circuit Court of various
counties in Florida (the "Fixture Financing Statement", and
together with the State Financing Statement, the "Financing
Statements"), and (c) a Certificate of the Company's Authority to
Transact Business in Florida issued by the Florida Department of
State on December 12, 1994. In our examination, we have assumed
the genuineness of all signatures, the authenticity of documents
submitted to us as originals and the conformity with authentic
original documents of all documents submitted to us as copies.
In rendering the opinions expressed below, in addition to
the assumptions contained in the Report, we have assumed (a) the
Confirmation Order has been entered by the Clerk of the
Bankruptcy Court; the effectiveness of the Confirmation Order is
not stayed by reason of the operation of the Federal Rules of
Bankruptcy Procedure, any local bankruptcy rule or order of any
Governmental Person or otherwise; the Confirmation Order has
become final and is non-appealable; and no grounds exist for
revocation of the Confirmation Order; (b) the execution and
delivery of the Notes and Mortgages, the recording of the
Mortgages, and the borrowing and reborrowing of sums under the
Loan Documents are exempt from all Florida documentary stamp
taxes under Section 1146(c) of the U.S. Bankruptcy Code or,
alternatively, any such taxes that may be payable have been paid;
and (c) all of the documents referred to in this opinion have
been duly authorized by, have been duly executed and delivered,
and (other than with respect to the Mortgage, to the extent
governed by Florida law) constitute legal, valid, binding and
enforceable obligations of, all of the parties to such documents,
and that all signatories to such documents have been duly
authorized and have the power and authority (corporate or other)
to execute, deliver and perform such documents.
Based upon and subject to the foregoing and subject also to
the comments and qualifications set forth below, and having
considered such questions of law as we have deemed necessary as a
basis for the opinions expressed below, we are of the opinion
that:
(i) Neither the Administrative Agent nor any of the
Lenders will, solely by reason of the making by any Lender of any
Loan or solely by reason of, or a condition to, the obtaining by
the Administrative Agent (on behalf of the Lenders) of the Liens
of the Security Documents or the enforcement by the
Administrative Agent or any Lender of its rights, remedies,
powers and privileges under the Loan Documents, be required to
qualify to do business in the State of Florida or to make any
registration, declaration or filing (other than the filings of
the Financing Statements, Mortgages, and the Notices of Liens)
with any Governmental Person of the State of Florida (provided,
however, that certain rights, remedies, powers and privileges
under the Loan Documents are available only judicially and
therefore the filing of a lawsuit may be required in connection
with the enforcement thereof).
(ii) Subject to the limitations contained in the next
paragraph, the Mortgage constitutes the legal, valid and binding
obligation of the Company, enforceable against it under the law
of Florida.
Our opinion concerning the validity, binding effect and
enforceability of the Mortgage means that (a) the Mortgage
constitutes an effective contract under applicable law, (b) the
Mortgage is not invalid in its entirety because of a specific
statutory prohibition or public policy and is not subject in its
entirety to a contractual defense, and (c) subject to the last
sentence of this paragraph, remedies generally available to
mortgage lenders in the State of Florida are available to the
Administrative Agent under the Mortgage if the Company is in
material default under the Mortgage. This opinion does not mean
that (a) any particular remedy is available upon a material
default, or (b) every provision of the Mortgage will be upheld or
enforced in any or each circumstance by a court. Furthermore,
the validity, binding effect and enforceability of the Mortgage
may be limited or otherwise affected by (a) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or
other similar statutes, rules, regulations or other laws
affecting the enforcement of creditors' rights and remedies
generally and (b) the unavailability of, or limitation on the
availability of, a particular right or remedy (whether in a
proceeding in equity or at law) because of an equitable principle
or a requirement as to commercial reasonableness, conscionability
or good faith.
(iii) The Mortgage is in proper form for recording in
the public records of the various counties in which the real
property described therein is located and such recordation is the
only recording or filing necessary in Florida to give to third
parties constructive notice of the Lien of the Mortgage.
(iv) The State Financing Statement is in proper form
for filing with the Secretary of State of the State of Florida,
and the Fixture Financing Statement is in proper form for filing
with the Clerk of the Circuit Court of the various counties in
which the real property described therein is located.
(v) To the extent that a security interest in the
collateral described in the Security Agreement may be properly
perfected by filing a financing statement under Chapter 679,
Florida Statutes, the proper place to file the financing
statement is (a) with respect to goods which are or are to become
fixtures, with the Clerk of the Circuit Court of the county in
which the relevant real estate is located, and (b) with respect
to the other collateral, with the office of the Florida
Department of State.
The foregoing opinions are also subject to the following
comments and qualifications:
(a) We express no opinion as to the ownership of or
title to any of the property purported to be encumbered by the
Security Documents, as to the priority of any Liens (including
the Liens of the Loan Documents), or (except as expressly set
forth in paragraph (v) above) as to the creation or perfection of
any Liens (including the Liens of the Loan Documents). Further,
we advise you that we have, for the purposes of this opinion,
assumed that: (i) the chief executive office of the Company is
located in Florida, and (ii) the personal property purported to
be subject to the Lien of the Security Agreement does not include
property of the types described in Sections 679.104,
679.401(1)(a), or 679.401(1)(b) other than goods which are or are
to become fixtures.
(b) The foregoing opinions are limited to matters
involving the laws of the State of Florida and we do not express
any opinion as to the laws of any other jurisdiction. Without
limitation of the foregoing, we do not express any opinion as to
any Federal or Florida securities laws, tax laws, bank regulatory
laws, environmental laws, land use and zoning laws, or as to any
matters of law or fact not expressly opined upon herein.
This opinion letter is provided to you by us as special
counsel to the Administrative Agent pursuant to Section 6.01(e)
of the Credit Agreement and is rendered solely in connection with
the transactions contemplated by the Loan Documents. This
opinion may be relied upon by you (and your successors and
assigns) only in connection with such transaction, and may not be
relied upon by any other person or for any purpose without our
prior written consent in each instance.
Very truly yours,
COLL DAVIDSON CARTER SMITH
SALTER & BARKETT, P.A.
By_________________________
By_________________________
EXHIBIT G
[Form of Confidentiality Agreement]
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: Credit Agreement dated as of December 29, 1994 (the "Credit
Agreement") among Kash n' Karry Food Stores, Inc., the
Lenders identified in the Credit Agreement, the CIT
Group/Business Credit, Inc., as Administrative Agent, and
Bank of America National Trust and Savings Association, as
Co-Agent.
Ladies and Gentlemen:
As a Lender party to the Credit Agreement, we have agreed
with the Company pursuant to Section 11.12 of the Credit
Agreement to use reasonable precautions to keep confidential,
except as otherwise provided in the Credit Agreement, all
nonpublic information identified by the Company as being
confidential at the time the same is delivered to us pursuant to
the Credit Agreement.
As provided in that Section 11.12, we are permitted to
provide you, (i) as a prospective [holder of a participation in
the Loans (as defined in the Credit Agreement)] [assigned
Lender], with certain of such nonpublic information subject to
the execution and delivery by you, prior to receiving such
nonpublic information, of a Confidentiality Agreement in this
form. Such information will not be made available to you until
your execution and return to us of this Confidentiality
Agreement.
Accordingly, in consideration of the foregoing, you agree
(on behalf of yourself and each of your affiliates, directors,
officers, employees and representatives) that (A) such
information will not be used by you except in connection with the
proposed [participation] [assignment] mentioned above and (B) you
shall use reasonable precautions, in accordance with your
customary procedures for handling confidential information and in
accordance with safe and sound banking practices, to keep such
information confidential, provided that nothing in this
Confidentiality Agreement shall limit the disclosure of any such
information (i) to the extent required by Governmental Rule, (ii)
to your counsel or to counsel for any of the Lenders, the
Administrative Agent or the Co-Agent, (iii) to bank examiners,
auditors or accountants, (iv) to the Administrative Agent, the
Co-Agent or any other lender or their affiliates, directors,
officers, employees, accountants, consultants and
representatives, (v) in connection with any litigation to which
you or any one or more of the Lenders, the Administrative Agent
or the Co-Agent is a party, (vi) to a subsidiary or affiliate of
yours or (vii) to any assignee or participant (or prospective
assignee or participant) so long as such assignee or participant
(or prospective assignee or participant) first executes and
delivers to you a Confidentiality Agreement substantially in this
form and (y) that in no event shall you be obligated to return
any materials furnished to you pursuant to this Confidentiality
Agreement.
Please indicate your agreement to the foregoing by signing
as provided below the enclosed copy of this Confidentiality
Agreement and returning the same to us.
Very truly yours,
[NAME OF LENDER]
By: [_________________________]
The foregoing is agreed to
as of the date of this letter.
[NAME OF PROSPECTIVE
PARTICIPANT OR ASSIGNEE]
MASTER THIRD AMENDMENT TO THE
DEFERRED COMPENSATION AGREEMENTS
This Master Third Amendment to the Deferred Compensation
Agreements is entered into this 2nd day of September, 1994, by Kash
n' Karry Food Stores, Inc.
BACKGROUND
In December of 1989, Kash n' Karry Food Stores, Inc., a
Delaware corporation (the "Company"), entered into those certain
Deferred Compensation Agreements with certain of its key employees
(collectively referred to as "Key Employees" and singularly
referred to as "Key Employee"), as subsequently amended by that
certain Master First Amendment dated as of November 11, 1991, and
that certain Master Second Amendment dated as of December 30, 1993
(as so amended, collectively referred to as the "Agreements" and
singularly referred to as "Agreement"). Under subparagraph 7.2 of
each Agreement the Company reserved the right to amend the Plan
with or without consent of the Employee. The Company, in order to
reward the past and future loyalty and valuable efforts of its Key
Employees, and pursuant to such reserved amendment power, hereby
further amends the Agreements as set forth below.
TERMS
1. Subparagraph 1.6 is hereby amended by adding the
following sentence immediately after clause (e) thereof:
Notwithstanding any contrary provision herein, no
Change in Control shall occur by reason of, or as a
result of, the consummation of the capital restructuring
plan as described in the Company's recent reports on Form
8-K dated May 12, 1994, and July 27, 1994, filed with the
U.S. Securities and Exchange Commission, on the terms
described therein or on such other terms and conditions
as the Company may approve, including, without
limitation, the consummation of an exchange offer between
the Company and the holders of 14% Subordinated
Debentures due February 1, 2001, pursuant to which such
holders would receive common stock of the Company in
exchange for outstanding debentures, the exercise of
voting rights by the holders of common stock issued
pursuant to such exchange offer as a result of which the
persons who constitute the Incumbent Board as of the date
hereof cease to constitute at least two-thirds of the
Board of Directors, the filing by the Company of a
voluntary petition under Chapter 11 of the U.S.
Bankruptcy Code, or the approval by the Company's
shareholders or Board of Directors of any such
transaction.
2. The last sentence of paragraph 16 is hereby revised and
shall read in its entirety as follows:
<PAGE>
The Company shall pay the ninety percent amount (90%) of
the Key Employee's Benefit, less all deductions required
by law, to the Key Employee not later than sixty (60)
days after the Withdrawal Election Date by either hand
delivery to the Key Employee at the Company's office or
delivery in accordance with paragraph 15.5 of the
Agreement.
3. Unless otherwise provided under this Amendment, the
capitalized terms used herein shall have the meanings ascribed to
them under the Agreement.
4. Except as hereinabove amended, the Company does hereby
republish and affirm all provisions of the Agreements.
IN WITNESS WHEREOF, the Company has executed this Master
Third Amendment on this 2nd day of September, 1994.
ATTEST: KASH N' KARRY FOOD STORES, INC.
/s/ Richard D. Coleman By: /s/ Raymond P. Springer
Secretary Name: Raymond P. Springer
Its: Executive Vice President
MANAGEMENT SERVICES AGREEMENT
This MANAGEMENT SERVICES AGREEMENT (this "Agreement"), dated
as of December 29, 1994, is made by and between KASH N' KARRY
FOOD STORES, INC., a Delaware corporation (the "Company"), and
LEONARD GREEN & PARTNERS, L.P. ("LGP").
WHEREAS, the Company desires to obtain from LGP, and LGP
desires to provide, certain management, consulting, financial
planning and financial advisory services on an ongoing basis.
NOW THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto hereby
agree as follows:
1. Retention. Subject to the terms and conditions hereof, the
Company hereby retains LGP, and LGP hereby agrees to be
retained by the Company, to provide management, consulting,
financial planning and financial advisory services to the
Company on an ongoing basis in connection with the operation
of the Company during the term of this Agreement and in
connection with major financial transactions that may be
undertaken from time to time during the term of this Agree-
ment (collectively, the "Services").
2. Compensation. In consideration of the Services, the Company
shall pay LGP an annual fee of $200,000, payable in equal
monthly installments, in advance, on the first day of each
month commencing on the first such day following the effec-
tive date hereof; provided, however, that the amount of such
fee shall be prospectively reduced by an amount equal to two
percent (2%) of the greater of (x) the cost to LGP and its
affiliates of, or (y) the proceeds received by LGP and its
affiliates with respect to, all or any part of their $10
million equity investment in the Company which is trans-
ferred during the term of this Agreement to the Company or
to any third party which is not an affiliate of LGP or a
partner of Green Equity Investors, L.P.
In the event the Company shall specifically request that LGP
provide investment banking services to the Company in con-
nection with a major financial transaction undertaken by the
Company during the term of this Agreement, and LGP shall
agree to do so, the Company shall pay LGP for such services
reasonable and customary fees for services of like kind,
taking into consideration all relevant factors, including
but not limited to the complexity of the subject transac-
tion, the time devoted to providing such services and the
value of LGP's investment banking expertise and relations
within the business and financial community. The amount of
such fees shall be approved by a majority of the disinter-
ested members of the Company's Board of Directors.
The Company and LGP hereby terminate any prior written or
oral understandings or agreements with respect to the provi-
sion by LGP of management, consulting, financial planning or
financial advisory services to the Company, and LGP hereby
waives any fees and/or expenses that may have accrued or be
payable to LGP by or on behalf of the Company in connection
with or pursuant to any such prior understandings or agree-
ments.
3. Term. This Agreement shall become effective (the "effective
date") on the effective date of the Company's plan of reor-
ganization described in the Company's Disclosure Statement
dated September 2, 1994, and shall terminate on the earlier
to occur of (i) the second anniversary of the effective date
of this Agreement and (ii) the date on which the annual fee
to which LGP is entitled hereunder is reduced to zero pursu-
ant to the provisions of Section 2 hereof. Notwithstanding
any other provision hereof, the Company's obligation, pursu-
ant to Section 2 hereof and the provisions of Section 5
hereof, to pay amounts due with respect to periods prior to
the termination hereof shall survive any termination of this
Agreement.
4. Decisions; Authority of Management Advisor.
4.1 Company Decisions. The Company reserves the right to
make all decisions with regard to any matter upon which
LGP has rendered its advice and consultation, and there
shall be no liability to LGP for any such advice ac-
cepted by the Company pursuant to the provisions of
this Agreement.
4.2 Independent Contractor. LGP shall act solely as an
independent contractor and shall have complete charge
of its personnel engaged in the performance of the
Services. As an independent contractor, LGP shall have
the authority only to act as an advisor to the Company
and shall have no authority to enter into any agreement
or to make any representations, commitment or warranty
binding upon the Company or to obtain or incur any
right, obligation or liability on behalf of the Compa-
ny.
5. Indemnification.
5.1 Indemnification. The Company shall (i) indemnify LGP
and GEI, their respective affiliates, and the partners,
directors, officers, employees, agents and controlling
persons of LGP and GEI and their respective affiliates
(collectively, the "Indemnified Parties"), to the
fullest extent permitted by law, from and against any
and all losses, claims, damages and liabilities, joint
or several, to which any Indemnified Party may become
subject, caused by, related to or arising out of the
Services or the engagement of LGP pursuant to, and the
performance by LGP of the Services contemplated by,
this Agreement, and (ii) promptly reimburse each Indem-
nified Party for all costs and expenses (including
reasonable attorneys' fees and expenses), as incurred,
in connection with the investigation of, preparation
for or defense of any pending or threatened claim or
any action or proceeding arising therefrom, whether or
not such Indemnified Party is a party and whether or
not such claim, action or proceeding is initiated or
brought by or on behalf of the Company and whether or
not resulting in any liability; provided, however, that
the Company shall not be liable under the foregoing
indemnification to the extent that such loss, claim,
damage, liability, cost or expense is found in a final
non-appealable judgment by a court to have resulted
from such Indemnified Party's bad faith or gross negli-
gence or from a material violation of this Agreement or
from actions of such Indemnified Party outside the
scope of and unauthorized by this Agreement; and pro-
vided, further, that no Indemnified Party shall be
reimbursed for costs and expenses unless the Company
shall have received an undertaking by or on behalf of
such Indemnified Party to repay such amounts if it
shall be determined ultimately that such Indemnified
Party is not entitled to be indemnified hereunder.
5.2 The Company agrees that no Indemnified Party shall have
any liability (whether direct or indirect, in contract,
tort or otherwise) to the Company related to or arising
out of the engagement of LGP pursuant to, or the per-
formance by LGP of the Services contemplated by, this
Agreement, except to the extent that such loss, claim,
damage, liability, cost or expense is found in a final
non-appealable judgment by a court to have resulted
from LGP's bad faith or gross negligence or from a
material violation of this Agreement or from actions of
such Indemnified Party outside the scope of an unautho-
rized by this Agreement.
5.3 The Company, upon receipt of notice from any Indemni-
fied Party as to any such pending or threatened claim
or any action or proceeding arising therefrom and at
the Company's request, shall be permitted by such
Indemnified Party to assume (at the Company's expense)
the defense of such claim or any action or proceeding
arising therefrom (including, but not limited to, the
negotiation with the relevant third party of any set-
tlement of such claim and the scope of any nonmonetary
relief or action that may be required in response to
such claim), provided that (i) the counsel for the
Company who shall conduct the defense of such claim or
litigation shall be reasonably satisfactory to such
Indemnified Party and (ii) such Indemnified Party may
participate in (but not control) such defense at such
Indemnified Party's expense. Except with the prior
written consent of such Indemnified Party, such consent
not to be unreasonably withheld, the Company, in the
defense of any such claim or litigation, shall not
consent to entry of any judgment or order, interim or
otherwise, or enter into any settlement that provides
for injunctive or other nonmonetary relief affecting
such Indemnified Party. In each case, such Indemnified
Party will cooperate with the Company, so long as the
Company is conducting the defense of such claim, in the
preparation for and the prosecution of the defense of
such claim, including making available evidence within
the control of such Indemnified Party and persons
needed as witnesses who are employed by such Indemni-
fied Party, as the case may be, in each case as reason-
ably needed for such defense and at cost, which cost,
to the extent reasonably incurred, shall be paid by the
Company.
6. Miscellaneous.
6.1 Assignment. Neither of the parties hereto shall assign
this Agreement or the rights and obligations hereunder,
in whole or in part, without the prior written consent
of the other party. Subject to the foregoing, this
Agreement will be binding upon and inure solely for the
benefit of the parties hereto and their respective
successors and assigns, and no other person shall
acquire or have any right hereunder or by virtue here-
of.
6.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of
California as applied to contracts made and performed
within the State of California without regard to prin-
ciples of conflict of laws.
6.3 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions
covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be
affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ
an alternative means to achieve the same or substan-
tially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the
parties that they would have executed the remaining
terms, provisions, covenants and restrictions without
including any of such which may hereafter be declared
invalid, illegal, void or unenforceable.
6.4 Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the
subject matter of this Agreement and memorializes and
supersedes all written or oral representations, warran-
ties, commitments and other understandings prior to the
date of this Agreement relating to the subject matter
of this Agreement.
6.5 Further Assurances. The parties agree to take such
further action and to deliver or cause to be delivered
such additional agreements or instruments as either of
them may reasonably request for the purpose of carrying
out this Agreement and the agreements and transactions
contemplated hereby.
6.6 Attorneys' Fees. In any action or proceeding brought
to enforce any provision of this Agreement, or where
any provision hereof is validly asserted as a defense,
the prevailing party, as determined by the court, shall
be entitled to recover reasonable attorneys' fees in
addition to any other available remedy.
6.7 Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or
otherwise affect the meaning hereof.
6.8 Amendment and Waiver. This Agreement may be amended,
modified or supplemented provided that the same are in
writing and signed by each of the parties hereto.
Waivers or consents to departures from the provisions
hereof may be given provided that the same are in
writing and signed by the party charged with giving the
same. No waiver by either party of any provisions of
this Agreement shall operate as a subsequent waiver of
the same or any other provision of this Agreement.
6.9 Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed
shall be deemed to be an original and all of which
taken together shall constitute one and the same agree-
ment.
IN WITNESS WHEREOF, the parties have executed this Manage-
ment Services Agreement on the date first appearing above.
KASH N' KARRY FOOD STORES, INC.
By: /s/ R. S. Springer
Name: R. S. Springer
Title: Executive Vice President,
Administration
LEONARD GREEN & PARTNERS, L.P.
By: /s/ Jennfier Holden Dunbar
Name: Jennifer Holden Dunbar
Title: President, Willow III, Inc.
A General Partner of
Leonard Green & Partners.
