<PAGE>
As filed with the Securities and Exchange Commission on May 30, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 16, 1996
RYKOFF-SEXTON, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-8105 95-2134693
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification Number)
incorporation)
1050 WARRENVILLE ROAD
LISLE, ILLINOIS 60532
(Address of principal executive offices) (Zip Code)
(708) 964-1414
(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 17, 1996, Rykoff-Sexton, Inc. ("Rykoff-Sexton") consummated its
previously announced agreement to acquire US Foodservice Inc. ("US Foodservice")
(the "Merger"), a privately held, broadline foodservice distribution company.
As part of the Merger, US Foodservice stockholders received 1.457 shares of
Rykoff-Sexton Common Stock, par value $.10 per share ("Rykoff-Sexton Common
Shares"), for each outstanding share of Class A Common Stock, par value $.01
per share, and Class B Common Stock, par value $.01 per share, of US
Foodservice (together the "US Foodservice Common Stock"), resulting in the
issuance of 12.9 million Rykoff-Sexton Common Shares. Options and warrants
to acquire approximately one million shares of US Foodservice Common Stock
were converted into options and warrants to acquire Rykoff-Sexton Common
Shares on the same basis (the "Assumed Options" and the "Assumed Warrants").
In addition, all outstanding shares of US Foodservice $15 Cumulative
Redeemable Exchangeable Preferred Stock ("US Foodservice Preferred Stock")
were purchased by Rykoff-Sexton in connection with the Merger for a total
aggregate consideration of approximately $26.6 million. US Foodservice will
now operate as a wholly-owned subsidiary of Rykoff-Sexton. Rykoff-Sexton's
current intention is to utilize the assets of US Foodservice in the conduct
of US Foodservice's foodservice distribution business.
The aggregate number of Rykoff-Sexton Common Shares to be paid by
Rykoff-Sexton for the outstanding US Foodservice Common Stock was determined in
arms-length negotiations, wherein Rykoff-Sexton and US Foodservice were each
represented by independent counsel. The cash amount paid to the holders of US
Foodservice Preferred Stock was determined pursuant to the terms of the
Redemption Agreement dated as of September 8, 1995, as amended, among US
Foodservice, ML IBK Positions, Inc. and Merchant Banking L.P. No. IV.
In connection with the Merger, Rykoff-Sexton entered into a new bank
credit facility with a sydicate of financial institutions, with Bank of
America National Trust and Savings Association ("BofA") acting as
administrative agent and The Chase Manhattan Bank, N.A. ("Chase") acting as
documentation agent, providing for loans and other extensions of credit up to
$485 million (the "New Credit Facility"). Rykoff-Sexton also entered into an
accounts receivable securitization facility with BofA and Chase (the
"Receivables Securitization"). The Receivables Securitization consists of a
$110 million program pursuant to which Rykoff-Sexton will sell certain of its
trade accounts receivable on an ongoing basis. The initial net proceeds of
the New Credit Facility and the Receivables Securitization were used to
refinance existing bank debt and certain other indebtedness of Rykoff-Sexton,
refinance substantially all of US Foodservice's outstanding debt, repurchase
US Foodservice Preferred Stock, provide initial financing for Rykoff-Sexton's
on-going working capital needs and pay related fees and expenses.
On May 17, 1996, Rykoff-Sexton issued a press release relating to the
Merger, a text of which is filed as Exhibit 99.1 to this Current Report on Form
8-K and incorporated herein by reference.
-2-
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
The audited consolidated balance sheets of US Foodservice and subsidiaries
as of December 31, 1994 and December 30, 1995 and the consolidated
statements of operations, mandatory redeemable preferred stock and
stockholders' equity (deficit) and cash flows of US Foodservice and
subsidiaries for the fiscal years ended January 1, 1994, December 31, 1994
and December 30, 1995 incorporated by reference herein, have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in
their reports with respect thereto and are incorporated by reference herein
in reliance upon the authority of said firm as experts in giving said
reports.
The unaudited interim financial statements for US Foodservice and
subsidiaries as of March 30, 1996 are as follows:
-3-
<PAGE>
US FOODSERVICE INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
ASSETS
<TABLE>
<CAPTION>
March 30, December 31,
1996 1995
----------- ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $25,661 $22,182
Receivables, net 153,368 151,147
Inventories 84,807 88,449
Prepaid expenses and other
current assets 6,799 6,445
Deferred income taxes 3,936 4,210
----------- -----------
Total current assets 274,571 272,433
----------- -----------
PROPERTY, PLANT AND EQUIPMENT, net 110,528 109,665
GOODWILL, net 212,711 213,907
DEFERRED COSTS, net 9,395 8,235
NONCOMPETE AGREEMENTS, net 382 435
OTHER ASSETS 6,341 5,860
----------- -----------
Total Assets $613,928 $610,535
----------- -----------
----------- -----------
</TABLE>
See accompanying notes to consolidated financial statements
-4-
<PAGE>
US FOODSERVICE INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Amounts in Thousands)
LIABILITIES & STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 30, December 31,
1996 1995
----------- -----------
<S> <C> <C>
CURRENT LIABILITIES
Bank overdraft $37,119 $37,820
Current maturities of long-term debt 15,172 15,094
Current maturities of capital lease obligations 367 372
Accounts payable 82,454 76,803
Accrued expenses and other current liabilities 29,051 27,443
Income taxes payable 2,385 2,381
----------- -----------
Total current liabilities 166,548 159,913
----------- -----------
LONG TERM DEBT:
Receivables securitization financing 90,000 90,000
Revolving credit loans 81,000 60,000
Term loans 103,893 107,604
Senior subordinated guaranteed notes 70,892 70,892
Other 1,639 1,705
----------- -----------
Total long-term debt 347,424 330,201
----------- -----------
CAPITAL LEASE OBLIGATIONS 13,045 13,133
DEFERRED INCOME TAXES 9,549 9,251
OTHER NONCURRENT LIABILITIES 13,633 14,050
----------- -----------
Total liabilities 550,199 526,548
----------- -----------
MANDATORY REDEEMABLE PREFERRED STOCK:
10% Cumulative redeemable preferred stock - 28,633
Series A cumulative redeemable exchangeable
preferred stock 24,563 24,563
----------- -----------
Total mandatory redeemable preferred stock 24,563 53,196
----------- -----------
STOCKHOLDERS' EQUITY
Class A common stock, $.01 par value, 50,000,000
authorized, 8,056,189, shares outstanding 81 81
Class B common stock, nonvoting, $.01 par value,
50,000,000 shares authorized, 821,206 shares
outstanding 8 8
Additional paid-in capital, net of deferred compensation 132,879 124,020
Notes receivable from sale of stock (735) (980)
Accumulated deficit (91,426) (90,697)
Treasury stock, at cost (37,152 shares of Class A
common stock) (541) (541)
Minimum pension liability adjustment (1,100) (1,100)
----------- -----------
Total stockholders' equity 39,166 30,791
----------- -----------
Total liabilities and stockholders' equity $613,928 $610,535
----------- -----------
----------- -----------
</TABLE>
See accompanying notes to consolidated financial statements
-5-
<PAGE>
US FOODSERVICE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
--------------------------
March 30, April 1,
1996 1995
----------- -----------
<S> <C> <C>
NET SALES $412,090 $391,270
COST OF GOODS SOLD 338,707 323,367
----------- -----------
Gross Profit 73,383 67,903
OPERATING EXPENSES (excluding depreciation and
amortization) 57,721 54,338
DEPRECIATION EXPENSE 2,711 2,296
AMORTIZATION EXPENSE 1,624 1,537
FORGIVENESS OF NOTES RECEIVABLE FROM
STOCK SALE 244 241
----------- -----------
Income from operations 11,083 9,491
INTEREST EXPENSE, net 9,277 7,868
OTHER EXPENSE, net 59 195
----------- -----------
Income before income taxes 1,747 1,428
INCOME TAX PROVISION 1,021 873
----------- -----------
NET INCOME 726 555
PREFERRED DIVIDENDS 1,455 1,939
----------- -----------
NET (LOSS) ATTRIBUTABLE TO COMMON
STOCKHOLDERS $(729) $(1,384)
----------- -----------
----------- -----------
</TABLE>
See accompanying notes to consolidated financial statements
-6-
<PAGE>
US FOODSERVICE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
--------------------------
March 30, April 1,
1996 1995
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $726 $555
Adjustments to reconcile net income to net cash
provided by (used in) operating activities
Depreciation and amortization 4,335 3,833
Amortization of deferred financing costs 714 601
Forgiveness of notes receivable from sale of stock 244 241
Deferred income taxes 572 (8,904)
Gain on disposal of property and equipment (59) -
Change in assets and liabilities, excluding effects
of acquisitions:
(Increase) in receivables, net (2,221) (4,573)
Decrease in inventories 3,712 795
(Increase) in prepaid expenses and other current assets (439) (568)
Increase (decrease) in other assets (418) 10,590
Increase (decrease) in accounts payable 4,950 (6,155)
Increase in accrued expenses and other current liabilities 1,612 2,210
Increase (decrease) in income taxes payable 4 (1,093)
Decrease in other noncurrent liabilities (405) (1,054)
----------- -----------
Net cash provided by (used in) operating activities 13,327 (3,522)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Purchases of property, plant and equipment (4,010) (3,188)
Payment for the net assets of businesses, net of cash acquired - (1,994)
Proceeds from sale of equipment 145 -
----------- -----------
Net cash used in investing activities (3,865) (5,182)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt 21,000 17,100
Payments on long-term debt (3,699) (7,564)
Payments of deferred financing costs (1,929) (117)
Payments on capital lease obligations (93) (90)
Purchase of treasury stock - (12)
Purchase of preferred stock (21,262) -
----------- -----------
Net cash provided by (used in) financing activities (5,983) 9,317
----------- -----------
Increase in cash and cash equivalents 3,479 613
CASH, BEGINNING OF PERIOD 22,182 10,730
----------- -----------
CASH, END OF PERIOD $25,661 $11,343
----------- -----------
----------- -----------
</TABLE>
See accompanying notes to consolidated financial statements
-7-
<PAGE>
US FOODSERVICE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. PRESENTATION
The accompanying consolidated financial statements as of March 30, 1996 and for
the thirteen weeks ended March 30, 1996 and April 1, 1995 are unaudited. In the
opinion of management, these consolidated financial statements include all
adjustments, consisting of only normal recurring adjustments, necessary for a
fair presentation in conformity with generally accepted accounting principles
for interim financial statements. These consolidated financial statements do
not include all of the information and footnotes required by generally accepted
accounting principles for a complete set of financial statements.
The results of operations for the thirteen weeks ended March 30, 1996 are not
necessarily indicative of the results to be expected for the full year.
2. SUBSEQUENT EVENT
On May 17, 1996, all of the outstanding shares of US Foodservice Common Stock
were exchanged for Rykoff-Sexton Common Shares. Holders of US Foodservice
Common Stock received 1.457 shares of Rykoff-Sexton Common Shares for each
share of US Foodservice Common Stock they held. In addition, Rykoff-Sexton
repaid all of the outstanding bank and subordinated debt of US Foodservice
and purchased all of the outstanding shares of US Foodservice Preferred Stock.
-8-
<PAGE>
(b) PRO FORMA FINANCIAL INFORMATION.
The required unaudited pro forma combined statements of operations for the
fifty-two weeks ended April 29, 1995 and the thirty-nine weeks ended
January 27, 1996 and the unaudited pro forma combined balance sheet as of
January 27, 1996 are incorporated by reference herein.
(c) EXHIBITS.
2.1 Agreement and Plan of Merger dated February 2, 1996 (the "Merger
Agreement") among Rykoff-Sexton, Inc., a Delaware corporation, US
Foodservice Inc., a Delaware corporation and USF Acquisition
Corporation, a Delaware corporation (incorporated by reference from
Rykoff-Sexton, Inc.'s Registration Statement on Form S-4, as filed
with the Commission on April 2, 1996, Registration No. 333-02175 (the
"Registration Statement on Form S-4"))
4.1 Credit Agreement dated as of May 17, 1996 among Rykoff-Sexton, Inc.,
Bank of America National Trust and Savings Association, as
Administrative Agent, The Chase Manhattan Bank, N.A., as Documentation
Agent, BA Securities, Inc., as Co-Arranger, Chase Securities, Inc., as
Co-Arranger and the Other Financial Institutions Party Hereto
23.1 Consent of Arthur Andersen LLP
99.1 Text of press release dated May 17, 1996
99.2 Audited consolidated balance sheets of US Foodservice and subsidiaries
as of December 31, 1994 and December 30, 1995 and the consolidated
statements of operations, mandatory redeemable preferred stock and
-9-
<PAGE>
stockholders' equity (deficit) and cash flows of US Foodservice and
subsidiaries for the fiscal years ended January 1, 1994, December 31,
1994 and December 30, 1995 (incorporated by reference from the
Registration Statement on Form S-4)
99.3 Unaudited pro forma combined statements of operations for the fifty-
two weeks ended April 29, 1995 and the thirty-nine weeks ended January
27, 1996 and unaudited pro forma combined balance sheet as of January
27, 1996 (incorporated by reference from the Registration Statement on
Form S-4)
Certain related transaction documents and exhibits (the "Exhibits") and the
schedules to the Merger Agreement (the "Schedules") are not being filed
herewith. Rykoff-Sexton undertakes to furnish a copy of any omitted
Exhibit or Schedule to the Commission upon request. Pursuant to Item
601(b)(2) of Regulation S-K, the following is a list of the omitted
Exhibits and Schedules.
EXHIBITS
--------
Exhibit A Affiliate Letter
Exhibit B Items to be Covered in Opinions of Counsel to US
Foodservice
Exhibit C Items to be Covered in Opinions of Counsel to
Rykoff-Sexton
Exhibit D Employment Agreements
Exhibit E-1 Tax Opinion of Morgan Lewis & Bockius LLP
Exhibit E-2 Tax Opinion of Jones, Day, Reavis & Pogue
Exhibit E-3 Tax Opinion of Shearman & Sterling
SCHEDULES
---------
US FOODSERVICE DISCLOSURE STATEMENT
-----------------------------------
Schedule 4.1(e) US Foodservice Inc. Shareholders Information
(Including Options)
Schedule 5.1 Organization of the Company
Schedule 5.2 Orders, Investigations, Etc.
Schedule 5.3 Agreement
Schedule 5.4 Capital Stock
Schedule 5.5 Other Interests
Schedule 5.6 Litigation
Schedule 5.7 Compliance With Other Instruments
Schedule 5.8(a) Employee Benefits Plans
Schedule 5.8(b) Benefit Plan Administration
Schedule 5.8(c) Underfunded Plans
Schedule 5.8(f) Forgiveness of Loans
Schedule 5.8(g) Actions Affecting Benefit Plans
Schedule 5.8(h) Post-Employment or Retirement Welfare Plans
Schedule 5.9 Labor/Union Agreements/Campaigns
-10-
<PAGE>
Schedule 5.10(b) Sales/Use Tax Filings
Schedule 5.11 Intellectual Property
Schedule 5.12 Properties
Schedule 5.13 Environmental Matters
Schedule 5.14 Registration Statement and Financial Statements
Schedule 5.15 Material Transactions Since September 30, 1995
Schedule 5.16 Contracts and Leases
Schedule 5.17 Affiliated Transactions
Schedule 5.18 Brokers and Finders
Schedule 5.19 S-4 Registration Statement and Proxy
Statement/Prospectus
Schedule 5.20 Tax Matters
Schedule 5.21 Stockholders Agreement
Schedule 5.22 Opinion of Financial Advisor
Schedule 7.1 Conduct of Business
Schedule 7.10 Part I: 10% Preferred Stock
Maximum Redemption Amounts
Part II: Exchangeable Preferred Stock
Maximum Redemption Amounts
RYKOFF-SEXTON DISCLOSURE STATEMENT
----------------------------------
Schedule 6.1 Organization, Etc. of RSI
Schedule 6.2 Subsidiaries
Schedule 6.3 Agreement
Schedule 6.4 Capital Stock
Schedule 6.5 Authorization for RSI Common Shares
Schedule 6.6 Other Interests
Schedule 6.7 Litigation
Schedule 6.8 Compliance with Other Instruments, Etc.
Schedule 6.9 Employee Benefit Plans
Schedule 6.10 Labor Matters
Schedule 6.11 Taxes
Schedule 6.12 Intellectual Property
Schedule 6.13 Properties
Schedule 6.14 Environmental Matters
Schedule 6.15 Reports and Other Financial Statements
Schedule 6.16 Absence of Certain Changes or Events
Schedule 6.17 Contracts and Leases
Schedule 6.18 Affiliated Transactions
Schedule 6.19 Ownership of Merger Sub; No Prior Activities;
Assets of Merger Sub
Schedule 6.20 Brokers and Finders
Schedule 6.21 S-4 Registration Statement and Proxy
Statement/Prospectus
Schedule 6.22 Tax Matters
Schedule 7.9 Conduct of Business of RSI
Schedule 7.17 RSI Change in Control Arrangements
-11-
<PAGE>
ITEM 8. CHANGE IN FISCAL YEAR.
On May 16, 1996, Rykoff-Sexton determined to change its fiscal year-end
from the Saturday closest to April 30, which was the fiscal year used in its
most recent filing with the Commission, to the Saturday closest to June 30.
The report covering the two-month transition period ending June 29, 1996
will be filed with the Commission on Form 10-Q.
-12-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Rykoff-Sexton has duly caused this Current Report on Form 8-K to be signed on
its behalf by the undersigned thereunto duly authorized.
RYKOFF-SEXTON, INC.
By /s/ Richard J. Martin
--------------------------------------------
Richard J. Martin
Senior Vice President and
Chief Financial Officer
Date: May 30, 1996
-13-
<PAGE>
EXHIBIT INDEX
EXHIBIT SEQUENTIAL
NUMBER DOCUMENT DESCRIPTION PAGE NUMBER
- - ------- -------------------- -----------
2.1 Agreement and Plan of Merger dated February 2, 1996
among Rykoff-Sexton, Inc., a Delaware corporation, US
Foodservice Inc., a Delaware corporation and USF
Acquisition Corporation, a Delaware corporation
(incorporated by reference from Rykoff-Sexton, Inc.'s
Registration Statement on Form S-4, as filed with the
Commission on April 2, 1996, Registration No. 333-02175
(the "Registration Statement on Form S-4")
4.1 Credit Agreement dated as of May 17, 1996 among
Rykoff-Sexton, Inc., Bank of America National Trust
and Savings Association, as Administrative Agent, The
Chase Manhattan Bank, N.A., as Documentation Agent,
BA Securities, Inc., as Co-Arranger, Chase Securities,
Inc., as Co-Arranger and the Other Financial Institutions
Party Hereto
23.1 Consent of Arthur Andersen LLP
99.1 Text of Press Release dated May 17, 1996
99.2 Audited consolidated balance sheets of US Foodservice
and subsidiaries as of December 31, 1994 and
December 30, 1995 and the consolidated statements of
operations, mandatory redeemable preferred stock and
stockholders' equity (deficit) and cash flows of US
Foodservice and subsidiaries for the fiscal years ended
January 1, 1994, December 31, 1994 and December 30, 1995
(incorporated by reference from the Registration Statement
on Form S-4)
-14-
<PAGE>
99.3 Unaudited pro forma combined statements of operations
for the fifty-two weeks ended April 29, 1995 and the
thirty-nine weeks ended January 27, 1996 and unaudited
pro forma combined balance sheet as of January 27, 1996
(incorporated by reference from the Registration Statement
on Form S-4)
-15-
<PAGE>
Exhibit 4.1
CREDIT AGREEMENT
DATED AS OF MAY 17, 1996
AMONG
RYKOFF-SEXTON, INC.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS ADMINISTRATIVE AGENT
THE CHASE MANHATTAN BANK, N.A.,
AS DOCUMENTATION AGENT
BA SECURITES, INC.,
AS CO-ARRANGER
CHASE SECURITIES, INC.,
AS CO-ARRANGER
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Other Interpretive Provisions . . . . . . . . . . . . . . . . . 33
(a) Defined Terms. . . . . . . . . . . . . . . . . . . . . . . 33
(b) The Agreement. . . . . . . . . . . . . . . . . . . . . . . 33
(c) Certain Common Terms . . . . . . . . . . . . . . . . . . . 34
(d) Performance; Time. . . . . . . . . . . . . . . . . . . . . 34
(e) Contracts. . . . . . . . . . . . . . . . . . . . . . . . . 34
(f) Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(g) Captions . . . . . . . . . . . . . . . . . . . . . . . . . 34
(h) Independence of Provisions . . . . . . . . . . . . . . . . 34
(i) Interpretation . . . . . . . . . . . . . . . . . . . . . . 34
1.03 Accounting Principles . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE II
THE CREDITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.01 Amounts and Terms of Commitments. . . . . . . . . . . . . . . . 35
(a) The Term Credit. . . . . . . . . . . . . . . . . . . . . . 35
(b) The Revolving Credit . . . . . . . . . . . . . . . . . . . 35
(c) Swing Line Loans . . . . . . . . . . . . . . . . . . . . . 36
2.02 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.03 Procedure for Borrowing . . . . . . . . . . . . . . . . . . . . 38
2.04 Conversion and Continuation Elections . . . . . . . . . . . . . 40
2.05 Voluntary Termination or Reduction of Commitments . . . . . . . 41
2.06 Optional Prepayments. . . . . . . . . . . . . . . . . . . . . . 41
2.07 Mandatory Prepayments of Loans; Mandatory
Commitment Reductions. . . . . . . . . . . . . . . . . . . . . 42
(a) Asset Dispositions; Events of Loss . . . . . . . . . . . . 42
(b) Excess Cash Flow . . . . . . . . . . . . . . . . . . . . . 43
(c) Equity Issuance. . . . . . . . . . . . . . . . . . . . . . 43
(d) Debt Issuance. . . . . . . . . . . . . . . . . . . . . . . 43
(e) Pension Plan Surplus . . . . . . . . . . . . . . . . . . . 43
(f) General. . . . . . . . . . . . . . . . . . . . . . . . . . 44
(g) Reduction of Commitment. . . . . . . . . . . . . . . . . . 44
2.08 Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
(a) The Term Credit. . . . . . . . . . . . . . . . . . . . . . 45
(b) The Revolving Credit . . . . . . . . . . . . . . . . . . . 45
2.09 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
2.10 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(a) Arrangement and Administrative Fees. . . . . . . . . . . . 47
(b) Commitment Fees. . . . . . . . . . . . . . . . . . . . . . 47
(c) Agency Fee . . . . . . . . . . . . . . . . . . . . . . . . 48
2.11 Computation of Fees and Interest. . . . . . . . . . . . . . . . 48
2.12 Payments by the Company . . . . . . . . . . . . . . . . . . . . 49
2.13 Payments by the Lenders to the Administrative Agent . . . . . . 50
2.14 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . 51
<PAGE>
2.15 Security and Guaranties . . . . . . . . . . . . . . . . . . . . 51
2.16 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
2.17 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . 55
2.18 Increased Costs and Reduction of Return . . . . . . . . . . . . 56
2.19 Funding Losses. . . . . . . . . . . . . . . . . . . . . . . . . 56
2.20 Inability to Determine Rates. . . . . . . . . . . . . . . . . . 57
2.21 Certificates of Lenders . . . . . . . . . . . . . . . . . . . . 57
2.22 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE III
THE LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . 57
3.01 The Letter of Credit Subfacility. . . . . . . . . . . . . . . . 57
3.02 Issuance, Amendment and Renewal of Letters of Credit. . . . . . 59
3.03 Existing Letters of Credit; Risk Participations,
Drawings and Reimbursements. . . . . . . . . . . . . . . . . . 61
3.04 Repayment of Participations . . . . . . . . . . . . . . . . . . 63
3.05 Role of the Issuing Bank. . . . . . . . . . . . . . . . . . . . 64
3.06 Obligations Absolute. . . . . . . . . . . . . . . . . . . . . . 65
3.07 Cash Collateral Pledge. . . . . . . . . . . . . . . . . . . . . 66
3.08 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . 66
3.09 Uniform Customs and Practice. . . . . . . . . . . . . . . . . . 67
ARTICLE IV
CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . . . 67
4.01 Conditions of Initial Loans . . . . . . . . . . . . . . . . . . 67
(a) Loan Documents . . . . . . . . . . . . . . . . . . . . . . 67
(b) Resolutions; Incumbency. . . . . . . . . . . . . . . . . . 67
(c) Articles of Incorporation; By-laws and Good
Standing. . . . . . . . . . . . . . . . . . . . . . . . . 68
(d) Collateral Documents . . . . . . . . . . . . . . . . . . . 68
(e) Legal Opinions . . . . . . . . . . . . . . . . . . . . . . 70
(f) Payment of Fees. . . . . . . . . . . . . . . . . . . . . . 70
(g) Certificate. . . . . . . . . . . . . . . . . . . . . . . . 70
(h) Financial Statements . . . . . . . . . . . . . . . . . . . 71
(i) Insurance Policies . . . . . . . . . . . . . . . . . . . . 71
(j) Environmental Review . . . . . . . . . . . . . . . . . . . 71
(k) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
(l) Consummation of Transaction, Etc.. . . . . . . . . . . . . 71
(m) Approvals. . . . . . . . . . . . . . . . . . . . . . . . . 72
(n) USF Receivables Facility . . . . . . . . . . . . . . . . . 72
(o) Subordinated Notes Outstanding . . . . . . . . . . . . . . 72
(p) Rykoff Receivables Subsidiary. . . . . . . . . . . . . . . 72
(q) Litigation . . . . . . . . . . . . . . . . . . . . . . . . 72
(r) Existing Indebtedness. . . . . . . . . . . . . . . . . . . 73
(s) Compliance with Laws . . . . . . . . . . . . . . . . . . . 73
(t) Termination of Existing Credit Agreements. . . . . . . . . 73
(u) Other Documents. . . . . . . . . . . . . . . . . . . . . . 73
4.02 Conditions to All Borrowings. . . . . . . . . . . . . . . . . . 74
(a) Notice of Borrowing. . . . . . . . . . . . . . . . . . . . 74
ii
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(b) Continued Accuracy of Representations and
Warranties. . . . . . . . . . . . . . . . . . . . . . . . 74
(c) No Default . . . . . . . . . . . . . . . . . . . . . . . . 74
(d) No Future Advance Notice . . . . . . . . . . . . . . . . . 74
ARTICLE V
REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . 75
5.01 Corporate Existence and Power . . . . . . . . . . . . . . . . . 75
5.02 Corporate Authorization; No Contravention . . . . . . . . . . . 75
5.03 Governmental Authorization. . . . . . . . . . . . . . . . . . . 75
5.04 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . 76
5.05 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . 76
5.06 No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . 76
5.07 ERISA Compliance. . . . . . . . . . . . . . . . . . . . . . . . 77
5.08 Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . 78
5.09 Title to Properties . . . . . . . . . . . . . . . . . . . . . . 78
5.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
5.11 Financial Condition . . . . . . . . . . . . . . . . . . . . . . 79
5.12 Environmental Matters . . . . . . . . . . . . . . . . . . . . . 80
5.13 Collateral Documents. . . . . . . . . . . . . . . . . . . . . . 81
5.14 Regulated Entities. . . . . . . . . . . . . . . . . . . . . . . 82
5.15 No Burdensome Restrictions. . . . . . . . . . . . . . . . . . . 82
5.16 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
5.17 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . 82
5.18 Copyrights, Patents, Trademarks and Licenses, etc.. . . . . . . 82
5.19 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . 83
5.20 Brokers; Transaction Fees . . . . . . . . . . . . . . . . . . . 83
5.21 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
5.22 Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . 83
5.23 Capitalization of the Company . . . . . . . . . . . . . . . . . 83
5.24 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . 84
ARTICLE VI
AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 84
6.01 Financial Statements. . . . . . . . . . . . . . . . . . . . . . 85
6.02 Certificates; Other Information . . . . . . . . . . . . . . . . 86
6.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
6.04 Preservation of Corporate Existence, Etc. . . . . . . . . . . . 88
6.05 Maintenance of Property . . . . . . . . . . . . . . . . . . . . 89
6.06 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
6.07 Payment of Obligations. . . . . . . . . . . . . . . . . . . . . 90
6.08 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . 90
6.09 Inspection of Property and Books and Records. . . . . . . . . . 90
6.10 Environmental Laws. . . . . . . . . . . . . . . . . . . . . . . 91
6.11 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 92
6.12 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
6.13 Interest Rate Protection. . . . . . . . . . . . . . . . . . . . 92
6.14 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . 92
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ARTICLE VII
NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . 95
7.01 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . 95
7.02 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . 97
7.03 Consolidations and Mergers. . . . . . . . . . . . . . . . . . . 98
7.04 Loans and Investments . . . . . . . . . . . . . . . . . . . . . 98
7.05 Limitation on Indebtedness. . . . . . . . . . . . . . . . . . . 99
7.06 Prepayments; Amendments . . . . . . . . . . . . . . . . . . . . 100
7.07 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 101
7.08 Contingent Obligations. . . . . . . . . . . . . . . . . . . . . 101
7.09 Joint Ventures. . . . . . . . . . . . . . . . . . . . . . . . . 101
7.10 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . 101
7.11 Lease Obligations . . . . . . . . . . . . . . . . . . . . . . . 102
7.12 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . 102
7.13 Capital Expenditures. . . . . . . . . . . . . . . . . . . . . . 103
7.14 Consolidated Net Worth. . . . . . . . . . . . . . . . . . . . . 104
7.15 Leverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . 104
7.16 Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . 106
7.17 Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . 106
7.18 Change in Business. . . . . . . . . . . . . . . . . . . . . . . 107
7.19 Change in Structure . . . . . . . . . . . . . . . . . . . . . . 107
7.20 Accounting Changes. . . . . . . . . . . . . . . . . . . . . . . 107
7.21 Transactions with Affiliates. . . . . . . . . . . . . . . . . . 107
7.22 Subordinated Note Indenture . . . . . . . . . . . . . . . . . . 108
ARTICLE VIII
EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . 108
8.01 Event of Default. . . . . . . . . . . . . . . . . . . . . . . . 108
(a) Non-Payment. . . . . . . . . . . . . . . . . . . . . . . . 108
(b) Representation or Warranty . . . . . . . . . . . . . . . . 108
(c) Specific Defaults. . . . . . . . . . . . . . . . . . . . . 108
(d) Other Defaults . . . . . . . . . . . . . . . . . . . . . . 108
(e) Cross Default. . . . . . . . . . . . . . . . . . . . . . . 109
(f) Insolvency; Voluntary Proceedings. . . . . . . . . . . . . 109
(g) Involuntary Proceedings. . . . . . . . . . . . . . . . . . 109
(h) ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . 109
(i) Monetary Judgments . . . . . . . . . . . . . . . . . . . . 110
(j) Non-Monetary Judgments . . . . . . . . . . . . . . . . . . 110
(k) Collateral . . . . . . . . . . . . . . . . . . . . . . . . 111
(l) Change of Control. . . . . . . . . . . . . . . . . . . . . 111
(m) Loss of Licenses . . . . . . . . . . . . . . . . . . . . . 111
(n) Rate Contracts . . . . . . . . . . . . . . . . . . . . . . 112
(o) Invalidity of Subordination Provisions . . . . . . . . . . 112
8.02 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
8.03 Rights Not Exclusive. . . . . . . . . . . . . . . . . . . . . . 113
ARTICLE IX
THE ADMINISTRATIVE AGENT. . . . . . . . . . . . . . . . . . . . . . . 113
9.01 Appointment and Authorization . . . . . . . . . . . . . . . . . 113
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9.02 Delegation of Duties. . . . . . . . . . . . . . . . . . . . . . 113
9.03 Liability of Agent-Related Persons. . . . . . . . . . . . . . . 114
9.04 Reliance by Administrative Agent. . . . . . . . . . . . . . . . 114
9.05 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . 115
9.06 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . 115
9.07 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 116
9.08 Agents in Individual Capacity . . . . . . . . . . . . . . . . . 117
9.09 Successor Administrative Agent. . . . . . . . . . . . . . . . . 117
9.10 Collateral Matters. . . . . . . . . . . . . . . . . . . . . . . 117
ARTICLE X
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
10.01 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . 118
10.02 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
10.03 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . 121
10.04 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . 121
10.05 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . 122
(a) General Indemnity. . . . . . . . . . . . . . . . . . . . . 122
(b) Environmental Indemnity. . . . . . . . . . . . . . . . . . 122
(c) Survival . . . . . . . . . . . . . . . . . . . . . . . . . 123
10.06 Marshalling; Payments Set Aside. . . . . . . . . . . . . . . . 123
10.07 Successors and Assigns . . . . . . . . . . . . . . . . . . . . 123
10.08 Assignments, Participations, etc.. . . . . . . . . . . . . . . 124
10.09 Set-off. . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
10.10 Notification of Addresses, Lending Offices, Etc. . . . . . . . 127
10.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 127
10.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 127
10.13 No Third Parties Benefited . . . . . . . . . . . . . . . . . . 128
10.14 Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
10.15 Governing Law and Jurisdiction . . . . . . . . . . . . . . . . 128
10.16 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . 128
10.17 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 129
10.18 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . 129
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SCHEDULES
Schedule I Term and Revolving Commitments
Schedule II Lending Offices
Schedule III Amortization of Term Loans
Schedule 1.01 Mortgages/Mortgaged Property
Schedule 2.07 Stock Options and Warrants
Schedule 3.03 Existing Letters of Credit
Schedule 5.05 Litigation
Schedule 5.07 ERISA
Schedule 5.11 Permitted Liabilities
Schedule 5.12 Environmental Matters
Schedule 5.19 Subsidiaries and Equity Investments
Schedule 7.01 Permitted Liens
Schedule 7.05 Permitted Indebtedness
Schedule 7.08 Contingent Obligations
Schedule 7.11 Leases
Schedule 7.13 Expansion CAPEX
Schedule 7.21 Transactions with Affiliates
EXHIBITS
Exhibit 2.03(a) Notice of Borrowing
Exhibit 2.04(b) Notice of Conversion/Continuation
Exhibit 2.02(a)(1) Tranche A Term Note
Exhibit 2.02(a)(2) Tranche B Term Note
Exhibit 2.02(a)(3) Tranche C Term Note
Exhibit 2.02(b) Revolving Note
Exhibit 2.02(c) Swing Line Note
Exhibit 5.13(a)(1) Company Security Agreement
Exhibit 5.13(a)(2) Subsidiaries Security Agreement
Exhibit 5.13(c)(1) Company Note and Stock Pledge Agreement
Exhibit 5.13(c)(2) Subsidiaries Note and Stock Pledge Agreement
Exhibit 6.14(f) Subsidiaries Guaranty
Exhibit 4.01(e)(1) Form of Company Counsel Opinion
Exhibit 4.01(e)(2) Form of Local Counsel Opinion
Exhibit 10.08 Assignment and Acceptance Agreement
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CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of May 17, 1996, among Rykoff-
Sexton, Inc., a Delaware corporation (the "COMPANY"), the several financial
institutions from time to time party to this Agreement, Bank of America National
Trust and Savings Association, as Administrative Agent for the Lenders, The
Chase Manhattan Bank, N.A., as Documentation Agent, and BA Securities, Inc. and
Chase Securities, Inc., as Co-Arrangers.
WHEREAS, concurrently herewith pursuant to, and in accordance with, that
certain Agreement and Plan of Merger dated February 2, 1996 (the "Merger
Agreement") among the Company, USF Acquisition Corporation, a Delaware
corporation and wholly-owned subsidiary of the Company, and US Foodservice Inc.,
a Delaware corporation ("USF"), the Company is acquiring in a stock-for-stock
merger transaction (the "Transaction") all of the issued and outstanding shares
of common stock of USF;
WHEREAS, the Company has requested that the Lenders provide certain credit
facilities in order to provide funds to refinance certain indebtedness of the
Company and USF, repurchase certain outstanding preferred shares of USF, pay
certain fees and expenses associated with the Transaction, and provide financing
for on-going working capital needs, permitted acquisitions and capital
expenditures of the Company following the Transaction; and
WHEREAS, the Lenders have agreed to make available to the Company term loan
facilities, a revolving credit facility (including a letter of credit sub-
facility) and a swing line loan facility upon the terms and conditions set forth
in this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 DEFINED TERMS. In addition to the terms defined elsewhere in this
Agreement, the following terms have the following meanings:
"ACQUISITION" means any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of a Person, or of
any business or division of a Person, (b) the acquisition of in excess of
50% of the capital stock, partnership interests or equity of any Person
<PAGE>
or otherwise causing any Person to become a Subsidiary of the Company, or
(c) a merger or consolidation or any other combination with another Person
(other than a Person that is a Subsidiary of the Company), PROVIDED that
the Company or a Subsidiary of the Company is the surviving entity.
"ADEQUATE LIQUIDITY" means, at any date of determination, that (i) the
unutilized portion of the Aggregate Revolving Commitment equals or exceeds
an amount equal to (A) $40,000,000 MINUS (B) the aggregate amount of Cash
Equivalents held by the Company and its Subsidiaries as of such date, PLUS
(C) the excess of $200,000,000 over the average aggregate facility amount
of all Permitted Receivables Purchase Facilities during the 90 days
preceding the date of determination, (ii) all conditions set forth in
Section 4.02 would be satisfied (and are capable of satisfaction) if the
Company delivered a Notice of Borrowing on such date requesting
(additional) Revolving Loans in such amount, and (iii) after giving effect
to such Borrowing, no violation, conflict, Default or Event of Default
would have occurred, or would result, under this Agreement, the
Subordinated Note Indenture or any other agreement, covenant, restriction
or limitation to which the Company is a party or by which it is bound.
"ADJUSTED EBITDA" means, for any period, EBITDA of the Company and its
Subsidiaries on a consolidated basis including the EBITDA of any Person
acquired by the Company or any Subsidiary as if such acquisition had been
consummated as of the beginning of such period.
"ADJUSTED INTEREST COVERAGE RATIO" means the Interest Coverage Ratio
adjusted as follows: (i) Adjusted EBITDA (calculated before the deduction
of any loss attributable to the sale of Permitted Receivables) shall be
substituted for EBITDA (calculated before the deduction of any loss
attributable to the sale of Permitted Receivables) in the numerator, and
(ii) Consolidated Interest Expense shall be calculated to include any
Indebtedness incurred or assumed in connection with the proposed
transaction as if such Indebtedness had been outstanding for the entire
period in question at a rate of interest equal to the rate in effect at the
time such Indebtedness is incurred or assumed.
"ADMINISTRATIVE AGENT" means BofA in its capacity as administrative
agent for the Lenders hereunder, and any successor administrative agent.
"ADMINISTRATIVE AGENT'S PAYMENT OFFICE" means the address for payments
set forth on SCHEDULE II hereto in relation to the Administrative Agent or
such other address as the
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Administrative Agent may from time to time specify in accordance with
Section 10.02.
"AFFILIATE" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of
the other Person, whether through the ownership of voting securities, by
contract or otherwise. Without limitation, any director, executive officer
or beneficial owner of 5% or more of the equity of a Person shall for the
purposes of this Agreement, be deemed to control the other Person.
Notwithstanding the foregoing, no Lender shall be deemed an "Affiliate" of
the Company or of any Subsidiary of the Company.
"AGENT-RELATED PERSONS" means BofA (and any successor administrative
agent appointed under Section 9.09), Chase (and any successor documentation
agent), BA Securities, Inc. and Chase Securites, Inc., together with their
respective Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"AGENTS" means the Administrative Agent and the Documentation Agent.
"AGGREGATE COMMITMENT" means, at any time, the combined Commitments of
the Lenders.
"AGGREGATE REVOLVING COMMITMENT" means, at any time, the combined
Revolving Commitments of the Lenders, in the initial amount of One Hundred
Fifty million dollars ($150,000,000), as such amount may be reduced from
time to time pursuant to this Agreement.
"AGGREGATE TERM COMMITMENTS" mean the Aggregate Tranche A Term
Commitment, Aggregate Tranche B Term Commitment and Aggregate Tranche C
Term Commitment, collectively.
"AGGREGATE TRANCHE A TERM COMMITMENT" means the combined Tranche A
Term Commitments of the Lenders in the initial amount of One Hundred Fifty
million dollars ($150,000,000).
"AGGREGATE TRANCHE B TERM COMMITMENT" means the combined Tranche B
Term Commitments of the Lenders in the initial amount of One Hundred
Twenty-Five million dollars ($125,000,000).
3
<PAGE>
"AGGREGATE TRANCHE C TERM COMMITMENT" means the combined Tranche C
Term Commitments of the Lenders in the initial amount of Sixty million
dollars ($60,000,000).
"AGREEMENT" means this Credit Agreement, as amended or otherwise
modified from time to time in accordance with the terms hereof.
"APPLICABLE MARGIN" means
(i) with respect to Revolving Loans and Tranche A Term
Loans that are Base Rate Loans, 1-1/4%;
(ii) with respect to Tranche B Term Loans that are Base
Rate Loans, 1-3/4%;
(iii) with respect to Tranche C Term Loans that are Base
Rate Loans, 2%;
(iv) with respect to Revolving Loans and Tranche A Term
Loans that are LIBOR Loans, 2-1/2%;
(v) with respect to Tranche B Term Loans that are LIBOR
Loans, 3%; and
(vi) with respect to Tranche C Term Loans that are LIBOR
Loans, 3-1/4%;
PROVIDED that such Applicable Margins may be adjusted pursuant to, and in
accordance with subsection 2.09(b)
"ASSIGNEE" has the meaning specified in subsection 10.08(a).
"ASSIGNMENT AND ACCEPTANCE" has the meaning specified in subsection
10.08(a).
"ATTORNEY COSTS" means and includes all fees and disbursements of any
law firm or other external counsel, the allocated cost of internal legal
services and all disbursements of internal counsel.
"AVAILABLE EXCESS CASH FLOW" means as of any date of determination,
the amount of Excess Cash Flow for the immediately preceding fiscal year
less the amount of Excess Cash Flow required to be applied to the
prepayment of Loans pursuant to subsection 2.07(b).
"BANKRUPTCY CODE" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. Section 101, ET SEQ.).
4
<PAGE>
"BASE RATE" means, for any day, the higher of:
(a) the arithmetic mean (rounded upward to the nearest whole multiple
of 1/16 of 1%, if such mean is not such a multiple), as determined by the
Administrative Agent, of the rates of interest in effect for such day as
publicly announced from time to time by each of the Reference Lenders, as
its "reference rate." The reference rate is a rate set by each of the
Reference Lenders based upon various factors, including their respective
costs and desired return, general economic conditions and other factors,
and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate; and
(b) 0.50% per annum above the latest Federal Funds Rate.
Any change announced by either of the Reference Lenders in its
reference rate shall take effect at the opening of business on the day
specified in the public announcement of such change.
"BASE RATE LOAN" means a Loan that bears interest based on the Base
Rate.
"BOFA" means Bank of America National Trust and Savings Association, a
national banking association.
"BORROWING" means a borrowing hereunder consisting of Loans of a
particular type made to the Company on the same day by Lenders having a
Commitment to make such Loans (or a Swing Line Loan made to the Company by
the Swing Line Lender) pursuant to Article II.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other
day on which commercial Lenders in New York City, Chicago, Illinois or San
Francisco, California are authorized or required by law to close and, if
the applicable Business Day relates to any LIBOR Loan, means such a day on
which dealings are carried on in the London interbank market.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other
law, rule or regulation, whether or not having the force of law, in each
case, regarding capital adequacy of any Lender or of any corporation
controlling a Lender.
"CAPITAL EXPENDITURES" means, for any period and with respect to any
Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the construction, acquisition or leasing of fixed or
capital assets or additions to equipment (including replacements,
capitalized repairs and
5
<PAGE>
improvements during such period) which should be capitalized under GAAP on
a consolidated balance sheet of such Person and its Subsidiaries.
"CAPITAL LEASE" has the meaning specified in the definition of
"Capital Lease Obligations."
"CAPITAL LEASE OBLIGATIONS" means all monetary obligations of the
Company or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, is classified as a capital lease ("CAPITAL
LEASE").
"CASH COLLATERALIZE" means to pledge and deposit with or deliver to
the Administrative Agent, for the benefit of the Administrative Agent, the
Issuing Bank and the Lenders (including the Swing Line Lender), as
additional collateral for the L/C Obligations, cash or deposit account
balances pursuant to documentation in form and substance satisfactory to
the Administrative Agent and the Issuing Bank (which documents are hereby
consented to by the Lenders). Derivatives of such term shall have a
corresponding meaning.
"CASH EQUIVALENTS" means:
(a) securities issued or fully guaranteed or insured by the
United States Government or any agency thereof and backed by the full
faith and credit of the United States having maturities of not more
than one year from the date of acquisition;
(b) certificates of deposit, time deposits, Eurodollar time
deposits, repurchase agreements, reverse repurchase agreements, or
bankers' acceptances, having in each case a tenor of not more than one
year, issued by any bank, or by any U.S. commercial bank or any branch
or agency of a non-U.S. bank licensed to conduct business in the U.S.
having combined capital and surplus of not less than $500,000,000
whose short term securities are rated at least A-1 by Standard &
Poor's Corporation and P-1 by Moody's Investors Service, Inc.;
(c) commercial paper of an issuer rated at least A-1 by Standard
& Poor's Corporation or P-1 by Moody's Investors Service Inc.
"CERCLA" has the meaning specified in the definition of "Environmental
Laws."
"CHASE" means The Chase Manhattan Bank, N.A.
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"CLOSING DATE" means the date on which all conditions precedent set
forth in Section 4.01 are satisfied or waived by all Lenders.
"CO-ARRANGERS" means BA Securities, Inc. and Chase Securities, Inc.
"CODE" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder or any successor statute and related regulations.
"COLLATERAL" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by the Company and its Subsidiaries
in or upon which a Lien now or hereafter exists or purports to exist in
favor of the Lenders or the Issuing Bank, or the Administrative Agent for
the benefit of itself, the Lenders (including the Swing Line Lender) and
the Issuing Bank, whether under this Agreement or under any other documents
executed by any such persons and delivered to the Administrative Agent or
the Lenders.
"COLLATERAL DOCUMENTS" means, collectively, (i) the Company Security
Agreement, the Subsidiaries Security Agreements, the Mortgages, the
Subsidiaries Guaranty, the Pledge Agreements, and all other security
agreements, mortgages, deeds of trust, patent and trademark assignments,
lease assignments, guarantees and other similar agreements between the
Company or its Subsidiaries and the Lenders or the Issuing Bank (or the
Administrative Agent for the benefit of itself, the Lenders (including the
Swing Line Lender) and the Issuing Bank) now or hereafter delivered to the
Lenders or the Issuing Bank or the Administrative Agent pursuant to or in
connection with the transactions contemplated hereby, and all financing
statements (or comparable documents now or hereafter filed in accordance
with the UCC or comparable law) against the Company or any of its
Subsidiaries as debtor in favor of the Lenders or the Issuing Bank or the
Administrative Agent for the benefit of itself, the Lenders (including the
Swing Line Lender) and the Issuing Bank, as secured party, and (ii) any
amendments, supplements, modifications, renewals, replacements,
consolidations, substitutions and extensions of any of the foregoing.
"COMMITMENT" means, for each Lender, the sum of its Revolving
Commitment and its Term Commitment.
"COMMITMENT PERCENTAGE" means, as to any Lender, (i) with respect to
Revolving Loans, L/C Obligations or Swing Line Loans, such Lender's
Revolving Commitment divided by the Aggregate Revolving Commitment,
(ii) with respect to a Tranche A Term Loan, such Lender's Tranche A Term
Commitment divided by the Aggregate Tranche A Term Commitment, (iii) with
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respect to a Tranche B Term Loan, such Lender's Tranche B Term Commitment
divided by the Aggregate Tranche B Term Commitment, and (iv) with respect
to a Tranche C Term Loan, such Lender's Tranche C Term Commitment divided
by the Aggregate Tranche C Term Commitment.
"COMPANY" means Rykoff-Sexton, Inc., a Delaware corporation.
"COMPANY NOTE AND STOCK PLEDGE AGREEMENT" means that certain Pledge
Agreement substantially in the form of EXHIBIT 5.13(c)(1) hereto, dated as
of the date hereof by the Company in favor of the Administrative Agent for
the benefit of itself, the Lenders (including the Swing Line Lender) and
the Issuing Bank, as the same may be, from time to time, amended, modified
or supplemented.
"COMPANY SECURITY AGREEMENT" means that certain Security Agreement
substantially in the form of EXHIBIT 5.13(a)(1) hereto, dated as of the
date hereof between the Company and the Administrative Agent for the
benefit of itself, the Lenders (including the Swing Line Lender) and the
Issuing Bank, as the same may be, from time to time, amended, modified or
supplemented.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, gross interest
expense (including all commissions, discounts, fees and other charges in
connection with standby letters of credit and similar instruments) accrued
or paid by the Company and its Subsidiaries during such period, determined
on a consolidated basis in accordance with GAAP, excluding amortization of
deferred financing costs and amortization of Rate Contracts.
"CONSOLIDATED INTEREST INCOME" means, for any period, gross interest
income received by the Company and its Subsidiaries during such period,
determined on a consolidated basis in accordance with GAAP, excluding any
non-cash interest income attributable to Rate Contracts.
"CONSOLIDATED NET WORTH" means, at any date, the consolidated
stockholders equity of the Company and its Subsidiaries, as determined on a
consolidated basis in accordance with GAAP.
"CONTINGENT OBLIGATION" means, as to any Person, (a) any Guaranty
Obligation of that Person; and (b) any direct or indirect obligation or
liability, contingent or otherwise, of that Person, (i) in respect of any
Surety Instrument issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings or payments, (ii)
to purchase any materials, supplies or other Property
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<PAGE>
from, or to obtain the services of, another Person if the relevant contract
or other related document or obligation requires that payment for such
materials, supplies or other Property, or for such services, shall be made
regardless of whether delivery of such materials, supplies or other
Property is ever made or tendered, or such services are ever performed or
tendered, or (iii) in respect of any Rate Contract that is not entered into
in connection with a bona fide hedging operation that provides offsetting
benefits to such Person. The amount of any Contingent Obligation shall
(subject, in the case of Guaranty Obligations, to the last sentence of the
definition of "Guaranty Obligation") be deemed equal to the maximum
reasonably anticipated liability in respect thereof, and shall, with
respect to any Rate Contract under (b)(iii) of this definition, be marked
to market on a current basis.
"CONTRACTUAL OBLIGATIONS" means, as to any Person, any provision of
any security issued by such Person or of any agreement, undertaking,
contract, indenture, mortgage, deed of trust or other instrument, document
or agreement to which such Person is a party or by which it or any of its
property is bound.
"CONTROLLED GROUP" means the Company and all Persons (whether or not
incorporated) under common control or treated as a single employer with the
Company pursuant to Section 414(b), (c), (m) or (o) of the Code.
"CONVERSION DATE" means any date on which the Company converts a Base
Rate Loan to a LIBOR Loan or a LIBOR Loan to a Base Rate Loan.
"DEFAULT" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"DEFAULTING LENDER" means, at any time, any Lender that has defaulted
for a period of three Business Days after the date due and payable, and at
the time of determination continues to be in default, in its obligation to
make available its Commitment Percentage with respect to any Revolving Loan
(including a Refunded Swing Line Loan).
"DISPOSITION" means (i) the sale, lease, conveyance or other
disposition of Property, and (ii) the sale or transfer by the Company or
any Subsidiary of the Company of any equity securities of any Subsidiary of
the Company.
"DOCUMENTATION AGENT" means The Chase Manhattan Bank, N.A. in its
capacity as documentation agent hereunder, and any successor documentation
agent.
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"DOLLARS", "DOLLARS" and "$" each mean lawful money of the United
States.
"DOMESTIC LENDING OFFICE" means, with respect to each Lender, the
office of that Lender designated as such on SCHEDULE II hereto or such
other office of the Lender as it may from time to time specify to the
Company and the Administrative Agent.
"EBITDA" means, for any period, for the Company and its Subsidiaries
on a consolidated basis, determined in accordance with GAAP, (i) the sum of
(a) the net income (or net loss) for such period PLUS (b) all amounts
treated as expenses for depreciation and the amortization of intangibles of
any kind to the extent included in the determination of such net income (or
loss), PLUS (c) Consolidated Interest Expense, PLUS (d) all provisions for
United States federal, state, local and foreign income taxes to the extent
included in the determination of such net income (or loss), PLUS (e) any
other non-cash charges, MINUS (ii) Consolidated Interest Income; PROVIDED,
HOWEVER, that net income (or loss) shall be computed for these purposes
without giving effect to extraordinary losses or extraordinary gains and
any related tax effect.
"EFFECTIVE AMOUNT" means (i) with respect to any Revolving Loans on
any date, the aggregate outstanding principal amount thereof after giving
effect to any Borrowings and prepayments or repayments of Revolving Loans
occurring on such date; and (ii) with respect to any outstanding L/C
Obligations on any date, the amount of such L/C Obligations on such date
after giving effect to any Issuances of Letters of Credit occurring on such
date and any other changes in the aggregate amount of the L/C Obligations
as of such date, including as a result of any reimbursements of outstanding
unpaid drawings under any Letters of Credit or any reductions in the
maximum amount available for drawing under Letters of Credit taking effect
on such date.
"ELIGIBLE ASSIGNEE" means (i) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000; (ii) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having a combined capital
and surplus of at least $100,000,000, provided that such Lender is acting
through a branch or agency located in the United States; (iii) a Person
that is primarily engaged in the business of commercial banking and that is
(A) a Subsidiary of a Lender, (B) a Subsidiary of a Person of which a
Lender is a Subsidiary, or (C) a Person of which a Lender is a Subsidiary;
(iv) any Person included within the
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definition of a "qualified institutional buyer" in Regulation 144A under
the Securities Act of 1933, as amended (the "SECURITIES ACT"); and (v) any
other entity which is an "accredited investor" (as defined in Regulation D
under the Securities Act) with net worth of at least $100 million which
extends credit or buys loans as one of its businesses, including, but not
limited to, insurance companies, mutual funds and lease financing
companies.
"ENVIRONMENTAL CLAIMS" means all claims or disputes, however asserted
or threatened, by any Governmental Authority or other Person alleging
potential liability or responsibility for violation of any Environmental
Laws, or for Release, threatened Release or injury to the environment or
threat to public or worker health and safety, property damage, natural
resources damage, or otherwise alleging liability or responsibility for
damages (punitive or otherwise), cleanup, removal, remedial or response
costs, restitution, civil or criminal penalties, injunctive relief, or
other type of relief, resulting from or based upon the presence, placement,
migration or Release of any Hazardous Material at, in, to or from Property,
whether or not owned by the Company or for Hazardous Materials transported
from the Property by the Company or its agents (including, without
limitation, haulers and transporters) to an offsite location for disposal
or treatment.
"ENVIRONMENTAL LAWS" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances, codes, standards,
objectives, together with all administrative orders, directed duties,
requests, and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and the environment; including
without limitation, the following statutes as amended and as amended
hereafter, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA") 42 U.S.C. Section 9601 et seq.; the Clean
Air Act, 42 U.S.C. Section 7401 et seq.; the Federal Water Pollution
Control Act of 1972, 33 U.S.C. Section 1251 et seq.; the Solid Waste
Disposal Act, 42 U.S.C. Section 6901 et seq.; the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et seq.; the Emergency Planning and Community
Right-to-Know Act, 42 U.S.C. 311001 et seq.; and any similar state statute.
"ENVIRONMENTAL PERMITS" has the meaning specified in subsection
5.12(b).
"ENVIRONMENTAL LIABILITIES" has the meaning specified in subsection
10.05(b).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and regulations promulgated thereunder.
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"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with the Company within the meaning of
Section 414(b), 414(c) or 414(m) of the Code.
"ERISA EVENT" means (a) a Reportable Event with respect to a Qualified
Plan or a Multiemployer Plan subject to Title IV of ERISA; (b) a withdrawal
by the Company or any ERISA Affiliate from a Qualified Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA); (c) a complete or
partial withdrawal by the Company or any ERISA Affiliate from a
Multiemployer Plan; (d) the filing of a notice of intent to terminate, the
treatment of a plan amendment as a termination under Section 4041 or 4041A
of ERISA or the commencement of proceedings by the PBGC to terminate a
Qualified Plan or Multiemployer Plan subject to Title IV of ERISA; (e) a
failure by the Company or any member of the Controlled Group to make
required contributions to a Qualified Plan or Multiemployer Plan; (f) an
event or condition which would constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Qualified Plan or Multiemployer Plan; (g) the imposition of
any liability under Title IV of ERISA, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon the Company or any ERISA
Affiliate; (h) an application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code with respect to any
Plan; (i) a non-exempt prohibited transaction occurs with respect to any
Plan for which the Company or any Subsidiary of the Company may be directly
or indirectly liable; or (j) a violation of the applicable requirements of
Section 404 or 405 of ERISA or the exclusive benefit rule under Section
401(a) of the Code by any fiduciary or disqualified person with respect to
any Plan for which the Company or any member of the Controlled Group may be
directly or indirectly liable.
"ESTIMATED RESPONSE COST" means all costs associated with performing
work to investigate, remove, remediate and respond to contamination of
soil, groundwater, or other media including engineering, legal and other
professional fees and expenses, monitoring and sampling costs, capital
costs to construct the remedy, operation and maintenance costs and costs
owed to a Governmental Authority.
"EVENT OF DEFAULT" means any of the events or circumstances specified
in Section 8.01.
"EVENT OF LOSS" means, with respect to any Property, any of the
following: (a) any loss, destruction or damage of such Property; (b) any
pending institution of any proceedings for the condemnation or seizure of
such Property or for the
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exercise of any right of eminent domain; or (c) any actual condemnation,
seizure or taking, by exercise of the power of eminent domain or otherwise,
of such Property, or confiscation of such Property or the requisition of
the use of such Property.
"EXCESS CASH FLOW" means, for any period ending on the close of any
fiscal year, the excess, if any, of (a) EBITDA for such period LESS (b) the
sum of (i) Capital Expenditures of the Company for such period, but only to
the extent that such Capital Expenditures are funded by internal cash flow
and excluding those portions of any Capital Expenditures that are financed
directly or indirectly from an external source (whether by Capital Lease or
incurrence of any other type of Indebtedness, by equity issuance or
otherwise), PLUS (ii) scheduled, required principal payments of Term Loans,
other Indebtedness and any regularly scheduled payments with respect to
Capital Lease Obligations to the extent allocable to principal, in each
case, made during such period, PLUS (iii) voluntary prepayments of Term
Loans and mandatory prepayments (other than mandatory prepayments pursuant
to subsection 2.07(b)) of Loans made during such period, PLUS (iv) all
provisions for United States federal, state, local and foreign income taxes
to the extent included in the determination of net income (or loss) of the
Company and its Subsidiaries for such period, PLUS (v) Consolidated
Interest Expense of the Company and its Subsidiaries during such period.
"EXCHANGEABLE PREFERRED STOCK" means the issued and outstanding $15
Cumulative Redeemable Exchangeable Preferred Stock of USF.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and regulations promulgated thereunder.
"EXISTING CREDIT AGREEMENTS" means each of (i) the Credit Agreement
dated as of October 23, 1993 between the Company and BofA, as amended to
date, and (ii) the Credit Agreement dated as of September 23, 1993 among
USF, Chase, as agent, and Chemical Bank, N.A., as co-agent, and the other
financial institutions party thereto, as amended to date.
"EXISTING LETTERS OF CREDIT" means the Letters of Credit described on
Schedule 3.03.
"EXISTING USF LETTERS OF CREDIT" means those Existing Letters of
Credit identified on Schedule 3.03 as having been issued by Chase for the
benefit of USF and its Subsidiaries.
"EXPANSION CAPEX AMOUNT" means, for any period, the amount of Capital
Expenditures expended for such facility expansion projects as are described
on SCHEDULE 7.13 hereto,
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which Schedule may be revised from time to time as necessary (but in any
event at least annually from the date hereof through June 30, 1999) in a
certificate of a Responsible Officer setting forth such project
substitutions of similar scope and nature as have been specifically
authorized and approved by the Company's Board of Directors.
"FDIC" means the Federal Deposit Insurance Corporation, or any entity
succeeding to any of its principal functions.
"FEDERAL FUNDS RATE" means, for any period, the rate per annum set
forth in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Board of New York
(including any such successor, "H.15(519)") for such day opposite the
caption "Federal Funds (Effective)". If on any relevant day such rate is
not yet published in H.15(519), the rate for such day will be the rate set
forth in the daily statistical release designated as the Composite 3:30
p.m. Quotations for U.S. Government Securities, or any successor
publication, published by the Federal Reserve Bank of New York (including
any such successor, the "Composite 3:30 p.m. Quotations") for such day
under the caption "Federal Funds Effective Rate". If on any relevant day
the appropriate rate for such previous day is not yet published in either
H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day will
be the arithmetic mean as determined by the Administrative Agent of the
rates for the last transaction in overnight Federal funds arranged prior to
9:00 a.m. (New York time) on that day by each of three leading brokers of
Federal funds transactions in New York City selected by the Administrative
Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System, or any entity succeeding to any of its principal functions.
"FIXED CHARGE COVERAGE RATIO" means, at any date, for the immediately
preceding four consecutive full fiscal quarters for which the
Administrative Agent has received financial statements in compliance with
Section 6.01, the ratio determined by dividing (a) (i) EBITDA (calculated
before the deduction of any loss attributable to the sale of Permitted
Receivables) MINUS (ii) all cash dividends on capital stock paid by the
Company during such period, MINUS (iii) all provisions for United States
federal, state, local and foreign income taxes to the extent included in
the determination of net income (or loss) of the Company and its
Subsidiaries during such period, MINUS (iv) the excess of the aggregate
amount of all Capital Expenditures over the Expansion CAPEX Amount, by (b)
the sum of (i) Consolidated Interest Expense PLUS (ii) all scheduled,
required payments of principal of Indebtedness of the Company and its
Subsidiaries that were due
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<PAGE>
and payable during such period, PLUS (iii) the amount of any loss
attributable to the sale of Permitted Receivables; PROVIDED, HOWEVER, that
(x) for the fiscal quarter ended on or about September 30, 1996, the ratio
shall be determined solely by reference to the preceding fiscal quarter
ended such date, (y) for the fiscal quarter ended on or about December 31,
1996, the ratio shall be determined solely by reference to the preceding
two consecutive fiscal quarters ended such date, and (z) for the fiscal
quarter ended on or about March 31, 1997, the ratio shall be determined
solely by reference to the preceding three consecutive fiscal quarters
ended such date.
"FORM 1001" has the meaning specified in subsection 2.16(f).
"FORM 4224" has the meaning specified in subsection 2.16(f).
"FUNDED DEBT" means, as applied to any Person, all Indebtedness which
appears on such Person's consolidated balance sheet and which by its terms
or by the terms of any instrument or agreement relating thereto matures, or
which is otherwise payable or unpaid, more than one year from, or is
directly or indirectly renewable or extendable (without regard to any
"clean-up" or "clean-down" requirements) at the option of such Person to a
date more than one year (including an option of such Person under a
revolving or similar agreement obligating the lender or lenders to extend
credit over a period of more than one year) from the date of the creation
thereof.
"GAAP" means generally accepted accounting principles in the United
States set forth from time to time in the opinions and pronouncements of
the Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting profession), or in
such other statements by such other entity as may be in general use by
significant segments of the U.S. accounting profession; PROVIDED, that,
with respect to the calculation of the financial ratios and the terms used
in the covenants contained in this Agreement and the definitions related
thereto, "GAAP" means generally accepted accounting principles in effect in
the United States on the dates of the financial statements referred to in
subsection 5.11(c), it being understood that, upon any change in GAAP as at
such dates that in the reasonable opinion of the Majority Lenders affects
in any material respect the financial ratios and covenants contained in
this Agreement, the Company and the Administrative Agent, on behalf of the
Majority Lenders, will negotiate in good faith to adapt or conform any such
financial
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ratios and covenants and the definitions related thereto to any such
changes in GAAP to the extent necessary to maintain the original economic
terms of such financial ratios and covenants as in effect under this
Agreement on the date hereof, the Administrative Agent shall promptly
notify the Lenders in writing of the negotiated changes to such financial
ratios, covenants and definitions, and if, by the 30th day after the date
such notice is given (i) the Majority Lenders shall not have objected in
writing to such changes, such changes shall be deemed to be effective, and
this Agreement shall be deemed to be amended accordingly, as of such 30th
day, without further action on the part of any party hereto or (ii) the
Majority Lenders shall have objected to such changes, then, until this
Agreement shall be amended in accordance with the terms of Section 10.01 to
reflect such changes as may be necessary to maintain the original economic
terms of such financial ratios and covenants, the financial ratios and
covenants immediately in effect prior to such amendment shall remain in
effect.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary
or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"GUARANTY OBLIGATION" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary obligations")
of another Person (the "primary obligor"), including any obligation of that
Person, whether or not contingent, (a) to purchase, repurchase or
otherwise acquire such primary obligations or any property constituting
direct or indirect security therefor, or (b) to advance or provide funds
(i) for the payment or discharge of any such primary obligation, or (ii) to
maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet item,
level of income or financial condition of the primary obligor, or (c) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation, or (d)
otherwise to assure or hold harmless the holder of any such primary
obligation against loss in respect thereof; in each case (a), (b), (c) or
(d) including arrangements wherein the rights and remedies of the holder of
the primary obligation are limited to repossession or sale of certain
property of such Person. The amount of any Guaranty
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<PAGE>
Obligation shall be deemed equal to the stated or determinable amount of
the primary obligation in respect of which such Guaranty Obligation is made
or, if not stated or if indeterminable, the maximum reasonably anticipated
liability in respect thereof.
"HAZARDOUS MATERIALS" means all those substances which are regulated
by, or which may form the basis of liability under, any Environmental Law,
including, without limitation, all substances identified under any
Environmental Law as a pollutant, contaminant, hazardous waste, hazardous
constituent, special waste, hazardous substance, hazardous material, or
toxic substance, or petroleum or petroleum- derived substance or waste.
"HONOR DATE" has the meaning specified in subsection 3.03(c).
"INDEBTEDNESS" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than
trade payables entered into in the ordinary course of business pursuant to
ordinary terms) which, in accordance with GAAP, would be shown on the
liability side of the balance sheet of such Person; (c) all non-contingent
reimbursement or payment obligations with respect to Surety Instruments;
(d) all obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection with
the acquisition of property, assets or businesses; (e) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to
Property acquired by the Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited
to repossession or sale of such property); (f) all Capital Lease
Obligations; (g) all net obligations with respect to Rate Contracts; (h)
all Receivables Facility Attributed Indebtedness; (i) all indebtedness
referred to in clauses (a) through (h) above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien upon or in Property (including accounts and
contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness; and (j) all
Guaranty Obligations in respect of indebtedness or obligations of others of
the kinds referred to in clauses (a) through (h) above.
"INDEMNIFIED PERSON" has the meaning specified in subsection 10.05(a).
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"INDEMNIFIED LIABILITIES" has the meaning specified in subsection
10.05(a).
"INSOLVENCY PROCEEDING" means (a) any case, action or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshalling of assets for creditors, or
other, similar arrangement in respect of its creditors generally or any
substantial portion of its creditors; in each case (a) and (b) undertaken
under U.S. Federal (including the Bankruptcy Code), State or foreign law.
"INTEREST COVERAGE RATIO" means, at any date, for the immediately
preceding four consecutive full fiscal quarters for which the
Administrative Agent has received financial statements in compliance with
Section 6.01, the ratio determined by dividing (a) EBITDA (calculated
before the deduction of any loss attributable to the sale of Permitted
Receivables) by (b) the sum of (i) Consolidated Interest Expense PLUS (ii)
the amount of any loss attributable to the sale of Permitted Receivables;
PROVIDED, HOWEVER, that (x) for the fiscal quarter ended on or about
September 30, 1996, the ratio shall be determined solely by reference to
the preceding fiscal quarter ended such date, (y) for the fiscal quarter
ended on or about December 31, 1996, the ratio shall be determined solely
by reference to the preceding two consecutive fiscal quarters ended such
date, and (z) for the fiscal quarter ended on or about March 31, 1997, the
ratio shall be determined solely by reference to the preceding three
consecutive fiscal quarters ended such date.
"INTEREST PAYMENT DATE" means, with respect to any LIBOR Loan, the
last day of each Interest Period applicable to such Loan and, with respect
to Base Rate Loans, the last Business Day of each calendar quarter and each
date a Base Rate Loan is converted into a LIBOR Loan, PROVIDED, HOWEVER,
that if any Interest Period for a LIBOR Loan exceeds three months, the date
which falls three months after the beginning of such Interest Period and
after each Interest Payment Date thereafter shall also be an Interest
Payment Date.
"INTEREST PERIOD" means, with respect to any LIBOR Loan, the period
commencing on the Business Day the Loan is disbursed or continued or on the
Conversion Date on which the Loan is converted to a LIBOR Loan and ending
on the date one, two, three or six months thereafter, as selected by the
Company in its Notice of Borrowing or Notice of Conversion/Continuation;
PROVIDED that:
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(i) if any Interest Period pertaining to a LIBOR Loan
would otherwise end on a day which is not a Business Day, that
Interest Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such Interest
Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day;
(ii) any Interest Period pertaining to a LIBOR Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of the calendar month at the end of such Interest Period;
(iii) no Interest Period for any Term Loan shall extend
beyond the applicable Term Maturity Date and no Interest Period for
any Revolving Loan shall extend beyond the Revolving Termination Date;
and
(iv) no Interest Period applicable to a Term Loan or
portion thereof shall extend beyond any date upon which is due any
scheduled principal payment in respect of such Term Loan unless the
aggregate principal amount of Term Loans represented by Base Rate
Loans or by LIBOR Loans having Interest Periods that will expire on or
before such date is equal to or in excess of the amount of such
principal payment.
"ISSUANCE DATE" has the meaning specified in subsection 3.01(a).
"ISSUE" means, with respect to any Letter of Credit, to issue or to
extend the expiry of, or to renew or increase the amount of, such Letter of
Credit, including the incorporation of the Existing Letters of Credit into
this Agreement; and the terms "ISSUED," "ISSUING" and "ISSUANCE" have
corresponding meanings.
"ISSUING BANK" means, as applicable, (i) with respect to all Letters
of Credit other than those referred to in clause (ii) immediately below,
Bank of America Illinois or any of its Affiliates in its capacity as issuer
of one or more Letters of Credit hereunder, together with any replacement
letter of credit issuer appointed under subsection 9.01(b), and (ii) solely
with respect to the Existing USF Letters of Credit, Chase or any of its
Affiliates.
"JOINT VENTURE" means a single-purpose corporation, partnership, joint
venture or other similar legal arrangement (whether created pursuant to
contract or conducted through a
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separate legal entity) now or hereafter formed by the Company or any of its
Subsidiaries with another Person in order to conduct a common venture or
enterprise with such Person.
"L/C ADVANCE" means each Lender's participation in any L/C Borrowing
in accordance with its Commitment Percentage.
"L/C AMENDMENT APPLICATION" means an application form for amendment of
outstanding standby or commercial documentary letters of credit as shall at
any time be in use at the Issuing Bank, as the Issuing Bank shall request.
"L/C APPLICATION" means an application form for issuances of standby
or commercial documentary letters of credit as shall at any time be in use
at the Issuing Bank, as the Issuing Bank shall request.
"L/C BORROWING" means an extension of credit resulting from a drawing
under any Letter of Credit which shall not have been reimbursed on the date
when made nor converted into a Borrowing of Revolving Loans under
subsection 3.03(d).
"L/C COMMITMENT" means the commitment of the Issuing Bank to Issue,
and the commitment of the Lenders severally to participate in, Letters of
Credit (including the Existing Letters of Credit) from time to time Issued
or outstanding under Article III, in an aggregate amount not to exceed on
any date the amount of $45,000,000, as the same shall be reduced as a
result of a reduction in the L/C Commitment pursuant to Section 2.07(g); it
being understood that the L/C Commitment is a part of the Revolving
Commitments, rather than a separate, independent commitment.
"L/C OBLIGATIONS" means at any time the sum of (a) the aggregate
undrawn amount of all Letters of Credit then outstanding, plus (b) the
amount of all unreimbursed drawings under all Letters of Credit, including
all outstanding L/C Borrowings.
"L/C-RELATED DOCUMENTS" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document
relating to any Letter of Credit, including any of the Issuing Bank's
standard form documents for letter of credit issuances.
"LENDER" (individually) and "LENDERS" (collectively) mean each of the
several financial institutions from time to time party to this Agreement,
and shall include the Swing Line Lender.
"LENDING OFFICE" means, with respect to any Lender, the office or
offices of the Lender specified as its "Lending
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Office" or "Domestic Lending Office" or "LIBOR Lending Office", as the case
may be, on SCHEDULE II hereto, or such other office or offices of the
Lender as it may from time to time notify the Company and the
Administrative Agent.
"LETTER OF CREDIT" means any standby letter of credit or documentary
letter of credit Issued by the Issuing Bank pursuant to Article III, in
each case as amended, supplemented or modified from time to time.
"LEVERAGE RATIO" means, at any date, the ratio determined by dividing
(a)(i) the aggregate outstanding principal balance of all Funded Debt and
Receivables Facility Attributed Indebtedness of the Company and its
Subsidiaries on a consolidated basis, PLUS (ii) the Tone Brothers
Liability, to the extent unpaid or unsatisfied, MINUS (iii) the aggregate
amount of Cash Equivalents held by the Company and its Subsidiaries, by (b)
Adjusted EBITDA (calculated before the deduction of any loss attributable
to the sale of Permitted Receivables) for the immediately preceding four
consecutive full fiscal quarters for which the Administrative Agent has
received financial statements in compliance with Section 6.01; PROVIDED,
HOWEVER, that (x) for the fiscal quarter ended on or about September 30,
1996, the ratio shall be determined by reference to the product obtained by
multiplying (A) Adjusted EBITDA for the preceding fiscal quarter ended such
date, times (B) four, (y) for the fiscal quarter ended on or about December
31, 1996, the ratio shall be determined by reference to the product
obtained by multiplying (A) Adjusted EBITDA for the preceding two
consecutive fiscal quarters ended such date, times (B) two, and (z) for the
fiscal quarter ended on or about March 31, 1997, the ratio shall be
determined by reference to the product obtained by multiplying (A) Adjusted
EBITDA for the preceding three consecutive fiscal quarters ended such date,
times (B) 4/3 (four-thirds).
"LIBOR" means for any Interest Period, with respect to LIBOR Loans
comprising part of the same Borrowing, the rate of interest per annum
(rounded upward to the nearest whole multiple of 1/16 of 1%, if the
following calculation does not result in such a multiple) determined by the
Administrative Agent as follows:
LIBOR = LIBOR Reference Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"EURODOLLAR RESERVE PERCENTAGE" means for any day for any
Interest Period the maximum reserve
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percentage (expressed as a decimal, rounded upward to the nearest
whole multiple of 1/100th of 1%, if such percentage is not such a
multiple) in effect on such day (whether or not applicable to any
Lender) under regulations issued from time to time by the Federal
Reserve Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently referred
to as "Eurocurrency liabilities"); and
"LIBOR REFERENCE RATE" means the rate of interest per annum
determined by the Administrative Agent to be the arithmetic mean
(rounded upward to the nearest whole multiple of 1/16th of 1%, if
such mean is not such a multiple) of the rates of interest per
annum notified to the Administrative Agent by each Reference
Lender as the rate of interest at which Dollar deposits in the
approximate amount of the amount of the Loan to be made or
continued as, or converted into, a LIBOR Loan by such Reference
Lender and having a maturity comparable to such Interest Period
would be offered to prime banks in the London interbank market at
their request at or about 11:00 a.m. (London time) on the second
Business Day prior to the commencement of such Interest Period.
"LIBOR LENDING OFFICE" means with respect to each Lender, the office
of such Lender designated as such on SCHEDULE II hereto or such other
office of such Lender as such Lender may from time to time specify to the
Company and the Administrative Agent.
"LIBOR LOAN" means a Loan that bears interest based on LIBOR.
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge or deposit arrangement, encumbrance, lien (statutory or
other) or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including those created by,
arising under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease Obligation, any
financing lease having substantially the same economic effect as any of the
foregoing), and any contingent or other agreement to provide any of the
foregoing, but not including the interest of a lessor under an Operating
Lease.
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"LOAN" means an extension of credit by a Lender (including the Swing
Line Lender) to the Company pursuant to Article II, and may be a Base Rate
Loan or a LIBOR Loan.
"LOAN DOCUMENTS" means this Agreement, the L/C-Related Documents, the
Notes, the Collateral Documents, all documents delivered to the
Administrative Agent in connection therewith and all Rate Contracts between
the Company and any of the Lenders.
"LOAN INTEREST(S)" has the meaning specified in Section 2.14.
"MAJORITY LENDERS" means, at any time, Non-Defaulting Lenders then
holding at least 51% of the then aggregate unpaid principal amount of the
Loans and unused Revolving Commitments, or, if no such principal amount is
then outstanding, Lenders then having at least 51% of the Commitments.
"MARGIN REDUCTION DISCOUNT" has the meaning specified in Section 2.09.
"MARGIN REDUCTION PERIOD" means the period beginning on the date the
financial statements for the preceding quarter are delivered to the
Administrative Agent pursuant to subsection 6.01(a) or 6.01(c) and 6.02(b),
and ending on the earlier of (a) the date upon which such financial
statements for the succeeding fiscal quarter are delivered to the
Administrative Agent and (b) the date upon which such financial statements
are required to be so delivered pursuant to subsections 6.01(a) or 6.01(c)
and 6.02(b).
"MARGIN STOCK" means "margin stock" as such term is defined in
Regulation G, T, U or X of the Federal Reserve Board.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of the Company and its
Subsidiaries taken as a whole; or (b) a material adverse effect upon (i)
the legality, validity, binding effect or enforceability of any Loan
Document, or (ii) the perfection or priority of any material Lien granted
to the Lenders or the Issuing Bank or to the Administrative Agent for the
benefit of itself, the Lenders (including the Swing Line Lender) and the
Issuing Bank under any of the Collateral Documents.
"MAXIMUM CAPEX AMOUNT" has the meaning specified in Section 7.13.
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"MERGER AGREEMENT" has the meaning specified in the recitals to this
Agreement.
"MORTGAGE(S)" means, individually or collectively, those certain
mortgage(s) constituting part of the Collateral Documents which are listed
on SCHEDULE 1.01 hereto or which are subsequently executed and delivered
pursuant to subsection 6.14(c).
"MORTGAGED PROPERTY" means, collectively, all of the real Property of
the Company and of certain of its Subsidiaries defined as "Mortgaged
Property" in each of the respective Mortgages listed on SCHEDULE 1.01 and
any other real Property which becomes subject to a Mortgage pursuant to
subsection 6.14(b), (c) or (d).
"MULTIEMPLOYER PLAN" means a "multiemployer plan" (within the meaning
of Section 4001(a)(3) of ERISA) and to which any member of the Controlled
Group makes, is making, or is obligated to make contributions or, during
the preceding six calendar years, has made, or been obligated to make,
contributions.
"NET ISSUANCE PROCEEDS" means, in respect of any issuance of debt or
equity, cash proceeds received in connection therewith, after deducting
only the reasonable out-of-pocket costs and expenses actually paid or
incurred in connection therewith in favor of any Person not an Affiliate of
the Company, but in any event such costs and expenses shall not be deducted
to the extent that they exceed 10% of the gross proceeds of such issuance.
"NET PROCEEDS" means proceeds in cash, checks or other cash equivalent
financial instruments (including Cash Equivalents) as and when received by
the Person making a Disposition, net of: (a) the direct costs relating to
such Disposition excluding amounts payable to the Company or any Affiliate
of the Company, (b) sale, use or other transaction taxes paid or payable as
a result thereof, and (c) amounts required to be applied to repay
principal, interest and prepayment premiums and penalties on Indebtedness
incurred to acquire the asset which is the subject of such Disposition and
secured by a purchase money lien on such asset. "Net Proceeds" shall also
include proceeds paid on account of any Event of Loss; and, subject to the
provisions of Section 1.13 of the Mortgages, net of (i) all money actually
applied to repair or reconstruct the damaged property or property affected
by the condemnation or taking to the extent so applied (or committed to be
so applied, such commitment to be evidenced by documentation satisfactory
to the Administrative Agent) by the Company or the applicable Subsidiary
within twelve months of receipt thereof, (ii) all of the costs and
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expenses reasonably incurred in connection with the collection of such
proceeds, award or other payments, and (iii) any amounts retained by or
paid to parties having superior rights to such proceeds, awards or other
payments.
"NON-DEFAULTING LENDER" means each Lender other than a Defaulting
Lender.
"NON-U.S. LENDER" has the meaning specified in subsection 10.08(f).
"NOTE" means a Revolving Note, a Swing Line Note or a Term Note, and
"NOTES" collectively means the Revolving Notes, the Swing Line Note and the
Term Notes.
"NOTICE OF BORROWING" means a notice given by the Company to the
Administrative Agent pursuant to Section 2.03, in substantially the form of
EXHIBIT 2.03(A).
"NOTICE OF CONVERSION/CONTINUATION" means a notice given by the
Company to the Administrative Agent pursuant to Section 2.04, in
substantially the form of EXHIBIT 2.04(B).
"NOTICE OF LIEN" means any "notice of lien" or similar document
intended to be filed or recorded with any court, registry, recorder's
office, central filing office or other Governmental Authority for the
purpose of evidencing, creating, perfecting or preserving the priority of a
Lien securing obligations owing to a Governmental Authority.
"OBLIGATIONS" means all Loans, and other Indebtedness, advances,
debts, liabilities, obligations, covenants and duties owing by the Company
to any Lender (including the Swing Line Lender), the Issuing Bank, the
Administrative Agent, or any other Person required to be indemnified, that
arises under any Loan Document, whether or not for the payment of money,
whether arising by reason of an extension of credit, loan, guaranty,
indemnification or in any other manner, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired.
"OPERATING LEASE" means, as applied to any Person, any lease of
Property which is not a Capital Lease.
"ORDINARY COURSE OF BUSINESS" means, in respect of any transaction
involving the Company or any Subsidiary of the Company, the ordinary course
of such Person's business, as conducted by any such Person in accordance
with past practice (taking into account operational changes reasonably
necessary to integrate the business operations of USF into the Company
following the Transaction) and undertaken by such Person in
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good faith and not for purposes of evading any covenant or restriction in
any Loan Document.
"ORGANIZATION DOCUMENTS" means, for any corporation, the certificate
or articles of incorporation, the bylaws, any certificate of determination
or instrument relating to the rights of preferred shareholders of such
corporation, any shareholder rights agreement, and all applicable
resolutions of the board of directors (or any committee thereof) of such
corporation.
"OTHER TAXES" has the meaning specified in subsection 2.16(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any of its principal functions under ERISA.
"PARTICIPANT" has the meaning specified in subsection 10.08(d).
"PERMITTED HOLDERS" shall mean (i) members, as of the Closing Date, of
executive management of the Company and their respective Affiliates, and
(ii) the ML Entities (as defined in the Merger Agreement) and their
respective Affiliates.
"PERMITTED LIENS" has the meaning specified in Section 7.01.
"PERMITTED RECEIVABLES" shall mean, collectively, (i) all Receivables
(as defined in the Receivables Sale Agreement dated as of the date hereof
among the Company, John Sexton & Co., Rykoff-Sexton Funding Corporation and
the Company, as Servicer, as amended, supplemented, waived or otherwise
modified from time to time (the "RSFC RECEIVABLES SALE AGREEMENT")) and all
Excluded Receivables now existing and hereafter arising from time to time,
and all Receivables Property (as defined in the RSFC Receivables Sale
Agreement), and (ii) all Receivables (as defined in the Amended and
Restated Pooling and Servicing Agreement dated as of October 27, 1994 among
USFAR Inc., USF, as Master Servicer and Chemical Bank, as Trustee, as
amended, supplemented, waived or otherwise modified from time to time) now
existing and hereafter arising from time to time, all payment and
enforcement rights (but none of the obligations) with respect to
Receivables and all Related Property (as defined in the Amended and
Restated Receivables Purchase Agreement dated as of October 27, 1994 (the
"USFAR RECEIVABLES SALE AGREEMENT") among Biggers Brothers, Inc., White
Swan, Inc., Roanoke Restaurant Service, Inc., F.H. Bevevino & Company,
Inc., King's Foodservice, Inc., each of the other subsidiaries of USF from
time to time parties thereto, USF as Master Servicer
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<PAGE>
and USFAR Inc., as amended, supplemented or otherwise modified from time to
time) in respect of such Receivables.
"PERMITTED RECEIVABLES PURCHASE FACILITY" shall mean any agreement of
the Company or any of its Subsidiaries providing for sales, transfers or
conveyances of Permitted Receivables purporting to be sales that do not
provide, directly or indirectly, for recourse against the seller of such
Permitted Receivables (or against any of such seller's Affiliates) by way
of a guaranty or any other support arrangement, with respect to the amount
of such Permitted Receivables (based on the financial condition or
circumstances of the obligor thereunder), other than such limited recourse
as is reasonable given market standards for transactions of a similar type,
taking into account such factors as historical bad debt loss experience and
obligor concentration levels. The USF Receivables Facility shall be deemed
to be a Permitted Receivables Purchase Facility for purposes of this
Agreement.
"PERSON" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture or Governmental Authority.
"PLAN" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which the Company or any member of the Controlled Group sponsors or
maintains or to which the Company or any member of the Controlled Group
makes, is making or is obligated to make contributions, and includes any
Multiemployer Plan or Qualified Plan.
"PLEDGE AGREEMENTS" means the Company Note and Stock Pledge Agreement
and the Subsidiaries Note and Stock Pledge Agreement, collectively.
"PLEDGED COLLATERAL" has the meaning specified in the Pledge
Agreements.
"PRINCIPAL PAYMENT DATE" has the meaning specified in subsection
2.08(a).
"PROPERTY" means any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
"QUALIFIED PLAN" means a pension plan (as defined in Section 3(2) of
ERISA) intended to be tax-qualified under Section 401(a) of the Code and
which any member of the Controlled Group sponsors, maintains, or to which
it makes, is making or is obligated to make contributions, or in the case
of a multiple employer plan (as described in Section 4064(a) of ERISA) has
made contributions at any time during the
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immediately preceding period covering five (5) plan years, but excluding
any Multiemployer Plan.
"RATE CONTRACTS" means swap agreements (as such term is defined in
Section 101 of the Bankruptcy Code) and any other agreements or
arrangements designed to provide protection against fluctuations in
interest or currency exchange rates.
"RECEIVABLES FACILITY ATTRIBUTED INDEBTEDNESS" at any time shall mean
the aggregate amount theretofore paid to the Company and/or its
Subsidiaries in respect of the Permitted Receivables sold by them pursuant
to the Permitted Receivables Purchase Facility, in each case to the extent
the respective underlying Permitted Receivables have not yet been repaid or
deemed repaid by the respective account debtor or repurchased by the
Company (it being the intent of the parties that the amount of Receivables
Facility Attributed Indebtedness at any time outstanding approximate as
closely as possible the principal amount of Indebtedness which would be
outstanding at such time under the Permitted Receivables Purchase Facility
if the same were structured as a secured lending agreement rather than a
purchase agreement).
"RECEIVABLES SUBSIDIARY" means USFAR Inc., Rykoff-Sexton Funding
Corporation and any other special purpose bankruptcy remote, finance
Subsidiary which is a Wholly-Owned Subsidiary formed for the purpose of
financing Permitted Receivables pursuant to a Permitted Receivables
Purchase Facility.
"REFERENCE LENDERS" means BofA and Chase.
"REFUNDED SWING LINE LOAN" has the meaning specified in
SUBSECTION 2.01(C).
"REGISTER", "REGISTERED NOTE" and "REGISTERED NOTEHOLDER" have the
respective meanings specified in subsection 10.08(f).
"RELEASE" has the meaning specified in section 101(22) of CERCLA, 42
U.S.C. Section 9601(22).
"REPORTABLE EVENT" means, as to any Plan subject to Title IV of ERISA,
(a) any of the events set forth in Section 4043(c) of ERISA or the
regulations thereunder, other than any such event for which the 30-day
notice requirement under ERISA has been waived in regulations issued by the
PBGC, (b) a withdrawal from a Plan described in Section 4063 of ERISA, or
(c) a cessation of operations described in Section 4062(e) of ERISA.
"REQUIRED LENDERS" means any one or more of the following, as
applicable pursuant to subsection 10.01(b): (i) with respect to specified
matters affecting the Lenders
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holding Tranche A Term Loans, Lenders holding at least 51% of the then
aggregate unpaid principal amount of the Tranche A Term Loans, (ii) with
respect to specified matters affecting the Lenders holding Tranche B Term
Loans, Lenders holding at least 51% of the then aggregate unpaid
principal amount of the Tranche B Term Loans, and (iii) with respect to
specified matters affecting the Lenders holding Tranche C Term Loans,
Lenders holding at least 51% of the then aggregate unpaid principal
amount of the Tranche C Term Loans.
"REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of
a Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property
is subject.
"RESPONSIBLE OFFICER" means any executive officer of the Company, or
any other officer of the Company designated in writing by the chief
executive officer or chief financial officer of the Company to the
Administrative Agent as responsible for overseeing or reviewing compliance
with this Agreement or any other Loan Document.
"REVOLVING COMMITMENT", with respect to each Lender, has the meaning
specified in subsection 2.01(b).
"REVOLVING LOAN" has the meaning specified in subsection 2.01(b).
"REVOLVING NOTE" means a promissory note of the Company payable to the
order of a Lender in substantially the form of EXHIBIT 2.02(B), evidencing
the aggregate Indebtedness of the Company to such Lender resulting from
Revolving Loan(s) made by such Lender.
"REVOLVING TERMINATION DATE" means the earlier to occur of:
(a) October 31, 2001; and
(b) the date on which the Aggregate Revolving Commitment shall
terminate in accordance with the provisions of this Agreement.
"RIGHTS AGREEMENT" means the Amended and Restated Rights Agreement,
dated as of April, 1996, between the Company and Chemical Bank, N.A.
"S-4 REGISTRATION STATEMENT" means the Registration Statement on Form
S-4 filed by the Company with the SEC on April 2, 1996, as amended.
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"SEC" means the Securities and Exchange Commission, or any entity
succeeding to any of its principal functions.
"SOLVENT" means, as to any Person at any time, that (a) the fair value
of the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities)
as such value is established and liabilities evaluated for purposes of
Section 101(31) of the Bankruptcy Code and, in the alternative, for
purposes of the New York Uniform Fraudulent Transfer Act; (b) the present
fair saleable value of the Property of such Person is not less than the
amount that will be required to pay the probable liability of such Person
on its debts as they become absolute and matured; (c) such Person is able
to realize upon its Property and pay its debts and other liabilities
(including disputed, contingent and unliquidated liabilities) as they
mature in the normal course of business; (d) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay as such debts and liabilities mature; and (e)
such Person is not engaged in business or a transaction, and is not about
to engage in business or a transaction, for which such Person's property
would constitute unreasonably small capital.
"SUBORDINATED NOTE INDENTURE" means that certain Indenture dated as of
November 1, 1993 by and between the Company and Norwest Bank Minnesota,
N.A., as Trustee pursuant to which the Subordinated Notes were issued.
"SUBORDINATED NOTES" means the Company's 8 7/8% Senior Subordinated
Notes due 2003 in the aggregate principal amount of $130,000,000.
"SUBSIDIARY" of a Person means any corporation, association,
partnership, joint venture or other business entity of which more than 50%
of the voting stock or other equity interests (in the case of Persons other
than corporations), is owned or controlled directly or indirectly by the
Person, or one or more of the Subsidiaries of the Person, or a combination
thereof. Except where otherwise specifically noted, the Subsidiaries of
the Company shall be deemed to include USF.
"SUBSIDIARIES GUARANTY" means the Guaranty Agreement substantially in
the form of EXHIBIT 6.14(F) hereto, dated as of the date hereof, executed
by the Subsidiaries of the Company (other than the Receivables Subsidiary)
in favor of the Administrative Agent for the benefit of itself, the Lenders
(including the Swing Line Lender) and the Issuing Bank, and each supplement
thereto executed pursuant to subsection 6.14(f) by any Person that
hereafter becomes a
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Subsidiary of the Company, as the same may be, from time to time, further
amended, modified or supplemented.
"SUBSIDIARIES SECURITY AGREEMENT" means the Security Agreement
substantially in the form of EXHIBIT 5.13(A)(2) hereto, dated as of the
date hereof, executed by each of the Subsidiaries of the Company (other
than the Receivables Subsidiary) in favor of the Administrative Agent for
the benefit of itself, the Lenders (including the Swing Line Lender) and
the Issuing Bank, and each supplement thereto executed pursuant to
subsection 6.14(e) by any Person that hereafter becomes a Subsidiary of the
Company, as the same may be, from time to time, further amended, modified
or supplemented.
"SUBSIDIARIES NOTE AND STOCK PLEDGE AGREEMENT" means the Pledge
Agreement substantially in the form of EXHIBIT 5.13(C)(2) hereto, dated as
of the date hereof, executed by each of the Subsidiaries of the Company
(other than the Receivables Subsidiary) in favor of the Administrative
Agent for the benefit of itself, the Lenders (including the Swing Line
Lender) and the Issuing Bank, and each supplement thereto executed pursuant
to subsection 6.14(e) by any Person that hereafter becomes a Subsidiary of
the Company, as the same may be, from time to time, further amended,
modified or supplemented.
"SURETY INSTRUMENTS" means all letters of credit (including standby
and commercial), banker's acceptances, banker guaranties, shipside bonds,
surety bonds and similar instruments.
"SWING LINE FACILITY AMOUNT" means the aggregate principal amount of
Swing Line Loans that the Swing Line Lender may make pursuant to
subsection 2.01(c), which shall be up to Fifteen million dollars
($15,000,000), subject to the limitations set forth in subsection
2.01(c)(i).
"SWING LINE LENDER" means BofA or any of its Affiliates in its
capacity as such.
"SWING LINE LOANS" has the meaning specified in subsection 2.01(c).
"SWING LINE NOTE" means a promissory note of the Company payable to
the order of the Swing Line Lender in substantially the form of EXHIBIT
2.02(C), evidencing the aggregate Indebtedness of the Company to the Swing
Line Lender resulting from Swing Line Loans.
"TAXES" has the meaning specified in subsection 2.16(a).
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"TERM COMMITMENT", with respect to each Lender, means such Lender's
Tranche A Term Commitment, Tranche B Term Commitment and Tranche C Term
Commitment, collectively.
"TERM LOAN" has the meaning specified in subsection 2.01(a).
"TERM MATURITY DATE" means with respect to (a) a Tranche A Term Loan,
October 31, 2001, (b) a Tranche B Term Loan, October 31, 2002 and (c) a
Tranche C Term Loan, April 30, 2003.
"TERM NOTE" means each promissory note of the Company payable to the
order of a Lender, in substantially the form of EXHIBIT 2.02(A)(1), EXHIBIT
2.02(A)(2) or EXHIBIT 2.02(A)(3), as applicable, evidencing the respective
aggregate Indebtedness of the Company to the Lender resulting from the
Tranche A Term Loans, Tranche B Term Loans or Tranche C Term Loans, as
applicable, made by such Lender.
"THIRD PARTY FACILITY DEBT" has the meaning specified in subsection
7.05(e).
"TONE BROTHERS LIABILITY" means the amount of any final, non-
appealable judgment or award against the Company relating to the pending
arbitration proceeding of claims brought by Burns Philp Foods Inc. ("Burns
Philp") against the Company in connection with the Company's sale of Tone
Brothers, Inc. to Burns Philp.
"TRANCHE A TERM COMMITMENT", "TRANCHE B TERM COMMITMENT" AND "TRANCHE
C TERM COMMITMENT", with respect to each Lender, has the respective
meanings specified in subsection 2.01(a).
"TRANCHE A TERM LOAN," "TRANCHE B TERM LOAN" AND "TRANCHE C TERM LOAN"
have the respective meanings specified in subsection 2.01(a).
"TRANSACTION" has the meaning specified in the recitals to this
Agreement.
"TRANSFEREE" has the meaning specified in subsection 10.08(e).
"UCC" means the Uniform Commercial Code as in effect in the State of
New York.
"USF" has the meaning specified in the recitals to this Agreement.
"USF MASTER TRUST AGREEMENT" means that certain USFAR Master Trust
Amended and Restated Pooling and Servicing
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Agreement, dated October 27, 1994 among USFAR Inc., USF, the servicers
named therein and Chemical Bank, as trustee, as such Agreement has been
amended, supplemented and modified to date.
"USF RECEIVABLES FACILITY" means the $90 million accounts receivable
securitization program of USF existing on the date hereof pursuant to the
USF Master Trust Agreement, and such other agreements, documents and
certificates in connection therewith, in each case, as may be further
amended, supplemented or modified hereafter.
"UNFUNDED PENSION LIABILITIES" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of
that Plan's assets (exclusive of any contribution due), determined as of
the most recent valuation date for which a valuation is available in
accordance with the assumptions used by the Plan's actuaries for funding
the Plan on an ongoing basis pursuant to Section 412 of ERISA for the
applicable plan year.
"UNITED STATES" and "U.S." each means the United States of America.
"WHOLLY-OWNED SUBSIDIARY" means any corporation in which (other than
directors' qualifying shares required by law) 100% of the capital stock of
each class having ordinary voting power, and 100% of the capital stock of
every other class, in each case, at the time as of which any determination
is being made, is owned, beneficially and of record, by the Company, or by
one or more of the other Wholly-Owned Subsidiaries, or both.
"WITHDRAWAL LIABILITIES" means, as of any determination date, the
aggregate amount of the liabilities, if any, pursuant to Section 4201 of
ERISA if the Controlled Group made a complete withdrawal from all
Multiemployer Plans and any increase in contributions pursuant to Section
4243 of ERISA.
1.02 OTHER INTERPRETIVE PROVISIONS.
(a) DEFINED TERMS. Unless otherwise specified herein or therein, all
terms defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto. The meaning of
defined terms shall be equally applicable to the singular and plural forms of
the defined terms. Terms (including uncapitalized terms) not otherwise defined
herein and that are defined in the UCC shall have the meanings therein
described.
(b) THE AGREEMENT. The words "hereof", "herein", "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular
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provision of this Agreement; and subsection, section, schedule and exhibit
references are to this Agreement unless otherwise specified.
(c) CERTAIN COMMON TERMS.
(i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(d) PERFORMANCE; TIME. Whenever any performance obligation hereunder
(other than a payment obligation) shall be stated to be due or required to be
satisfied on a day other than a Business Day, such performance shall be made or
satisfied on the next succeeding Business Day. In the computation of periods of
time from a specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to but excluding",
and the word "through" means "to and including." If any provision of this
Agreement refers to any action taken or to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be interpreted to
encompass any and all means, direct or indirect, of taking, or not taking, such
action.
(e) CONTRACTS. Unless otherwise expressly provided herein,
references to agreements and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications thereto, but only to
the extent such amendments and other modifications are not prohibited by the
terms of any Loan Document.
(f) LAWS. References to any statute or regulation are to be
construed as including all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting the statute or regulation.
(g) CAPTIONS. The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(h) INDEPENDENCE OF PROVISIONS. The parties acknowledge that this
Agreement and other Loan Documents may use several different limitations, tests
or measurements to regulate the same or similar matters, and that such
limitations, tests and measurements are cumulative and must each be performed,
except as expressly stated to the contrary in this Agreement.
(i) INTERPRETATION. This Agreement is the result of negotiations
among, and has been reviewed by, counsel to the
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Administrative Agent, the Company and other parties, and is the product of all
parties hereto. Accordingly, this Agreement and the other Loan Documents shall
not be construed against any of the Lenders (including the Swing Line Lender) or
the Administrative Agent or the Issuing Bank merely because of the
Administrative Agent's or such Lender's or such Issuing Bank's involvement in
the preparation of such documents and agreements.
1.03 ACCOUNTING PRINCIPLES.
(a) Unless the context otherwise clearly requires, all accounting
terms not expressly defined herein shall be construed, and all financial
computations required under this Agreement shall be made, in accordance with
GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter" refer to
such fiscal periods of the Company.
ARTICLE II
THE CREDITS
2.01 AMOUNTS AND TERMS OF COMMITMENTS.
(a) THE TERM CREDIT. Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make Loans to the Company (each such Loan,
a "TERM LOAN," or, as applicable, a "TRANCHE A TERM LOAN," a "TRANCHE B TERM
LOAN" or a "TRANCHE C TERM LOAN") on the Closing Date in the amounts set forth
opposite such Lender's name in SCHEDULE I under the headings "Tranche A Term
Commitment," "Tranche B Term Commitment" and "Tranche C Term Commitment" (such
amounts, as the same may be reduced pursuant to Section 2.05 or Section 2.07 or
as a result of one or more assignments pursuant to Section 10.08, such Lender's
"TRANCHE A TERM COMMITMENT," "TRANCHE B TERM COMMITMENT" and "TRANCHE C TERM
COMMITMENT", respectively, and collectively, such Lender's Term Commitment).
Amounts borrowed as a Term Loan which are repaid or prepaid by the Company may
not be reborrowed.
(b) THE REVOLVING CREDIT. Each Lender severally agrees, on the terms
and conditions hereinafter set forth, to make Loans to the Company (each such
Loan, a "REVOLVING LOAN") from time to time on any Business Day during the
period from the Closing Date to the Revolving Termination Date, in an aggregate
amount not to exceed at any time outstanding (when added to such Lender's
Commitment Percentage of the then outstanding Swing Line Loans and L/C
Obligations) the amount set forth opposite such Lender's name in SCHEDULE I
under the heading "Revolving Commitment" (such amount as the same may be reduced
pursuant to Section 2.05 or subsection 2.07(f) or as a result of one or more
assignments pursuant to Section 10.08, such Lender's "REVOLVING COMMITMENT");
PROVIDED,
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HOWEVER, that, after giving effect to any Borrowing of Revolving Loans, the
aggregate principal amount of all outstanding Revolving Loans, Swing Line Loans
and L/C Obligations shall not exceed the Aggregate Revolving Commitment. Within
the limits of each Lender's Revolving Commitment, and subject to the other terms
and conditions hereof, the Company may borrow under this subsection 2.01(b),
prepay pursuant to Section 2.06 and reborrow pursuant to this subsection
2.01(b).
(c) SWING LINE LOANS.
(i) SWING LINE FACILITY. Subject to the terms and conditions
hereof, the Swing Line Lender may, in its sole discretion, make swing line
loans ("SWING LINE LOANS") to the Company on any Business Day from time to
time during the period from the Closing Date to the Revolving Termination
Date in an aggregate principal amount at any one time outstanding not to
exceed the Swing Line Facility Amount; PROVIDED, HOWEVER, that in no event
may the aggregate amount of the Borrowings of Swing Line Loans (A) when
added to the aggregate principal amount of all outstanding Revolving Loans
and L/C Obligations, exceed the Aggregate Revolving Commitment immediately
prior to such Borrowing, or (B) cause the outstanding Revolving Loans of
any Lender, when added to such Lender's Commitment Percentage of the then
outstanding Swing Line Loans and L/C Obligations, to exceed such Lender's
Revolving Commitment. Amounts borrowed by the Company under this
subsection 2.01(c)(i) may be repaid and, to but excluding the Revolving
Termination Date, reborrowed. The Swing Line Loans shall be made and
maintained as Base Rate Loans and, notwithstanding subsection 2.04, shall
not be entitled to be converted into a LIBOR Loan.
(ii) REFUNDING OF SWING LINE LOANS. The Swing Line Lender, at
any time in its sole and absolute discretion, may on behalf of the Company
(which hereby irrevocably directs the Swing Line Lender to so act on its
behalf) send a written notification to the Administrative Agent to request
each Lender with a Revolving Commitment (including the Swing Line Lender)
to make a Revolving Loan in an amount equal to such Lender's Commitment
Percentage of the principal amount of the Swing Line Loans (the "REFUNDED
SWING LINE LOANS") outstanding on the date such notice is given.
Regardless of whether the conditions precedent set forth in this Agreement
to the making of a Revolving Loan are then satisfied, each Lender with a
Revolving Commitment shall make the proceeds of its Revolving Loan
available to the Administrative Agent for the account of the Swing Line
Lender in funds immediately available on the Business Day next succeeding
the date such notice is given. The proceeds of such Revolving Loans shall
be immediately applied to repay the Refunded Swing Line Loans.
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(iii) LENDERS' OBLIGATIONS UNCONDITIONAL. Each Lender's
obligations to make Revolving Loans in accordance with
subsection 2.01(c)(ii) shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (A) any set-
off, counterclaim, recoupment, defense or other right which such Lender may
have against the Swing Line Lender, the Company or any other Person for any
reason whatsoever; (B) the occurrence or continuance of any Default or
Event of Default; (C) any adverse change in the condition (financial or
otherwise) of the Company or any other Person; (D) any breach of this
Agreement by the Company or any other Person; (E) any inability of the
Company to satisfy the conditions precedent to borrowing set forth in this
Agreement on the date upon which such Revolving Loan is to be made, or
(F) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing. If any Lender does not make available to
the Administrative Agent for the account of the Swing Line Lender the
amount required pursuant to subsection 2.01(c)(ii), the Swing Line Lender
shall be entitled to recover such amount on demand through the
Administrative Agent from such Lender, together with interest thereon for
each day from the date of non- payment until such amount is paid in full at
the Federal Funds Rate for the first two Business Days and at the Base Rate
thereafter. Notwithstanding the foregoing provisions of this
subsection 2.01(c)(iii), no Lender shall be required to make a Revolving
Loan to the Company for the purpose of refunding a Swing Line Loan pursuant
to subsection 2.01(c)(ii) if a Default or Event of Default has occurred and
is continuing and, prior to the making by the Swing Line Lender of such
Swing Line Loan, the Swing Line Lender has received written notice from the
Administrative Agent or the Company specifying that such Default or Event
of Default has occurred and is continuing, describing the nature thereof
and, in the case of notice from the Administrative Agent, also stating
that, as a result thereof, the Lenders shall cease to make such Refunded
Swing Line Loans; PROVIDED, HOWEVER, that the obligation of such Lender to
make such Refunded Swing Line Loans shall be reinstated upon the earlier to
occur of (y) the date upon which the Administrative Agent notifies the
Swing Line Lender that its prior notice has been withdrawn and (z) the date
upon which the Default or Event of Default specified in such notice no
longer is continuing.
2.02 NOTES.
(a) Each Term Loan made by each Lender shall be evidenced by a Term
Note payable to the order of that Lender in an amount equal to its Tranche A
Term Commitment, Tranche B Term Commitment or Tranche C Term Commitment, as
applicable.
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(b) The Revolving Loans made by each Lender shall be evidenced by a
Revolving Note payable to the order of that Lender in an amount equal to its
Revolving Commitment.
(c) The Swing Line Loans made by the Swing Line Lender shall be
evidenced by a Swing Line Note in the Swing Line Facility Amount.
(d) Each Lender (including the Swing Line Lender) shall endorse on
the schedules annexed to its Notes, or in its internal records, the date, amount
and maturity of each Loan made by it and the amount of each payment of principal
made by the Company with respect thereto. Each Lender (including the Swing Line
Lender) is irrevocably authorized by the Company to endorse its Notes and each
Lender's records shall be conclusive absent manifest error; PROVIDED, HOWEVER,
that the failure of a Lender to make, or an error in making, a notation thereon
or in its internal records with respect to any Loan shall not limit or otherwise
affect the obligations of the Company hereunder or under any such Note to such
Lender.
2.03 PROCEDURE FOR BORROWING.
(a) Each Borrowing of Term Loans and Revolving Loans shall be made
upon the Company's irrevocable written notice delivered to the Administrative
Agent in accordance with Section 10.02 in the form of a Notice of Borrowing
(which notice must be received by the Administrative Agent prior to 12:00 noon
(New York time) (i) three Business Days prior to the requested Borrowing date,
in the case of LIBOR Loans, and (ii) one Business Day prior to the requested
Borrowing date, in the case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which shall be in an
aggregate minimum principal amount of (x) One million dollars
($1,000,000) or any multiple of One Hundred thousand dollars
($100,000) in excess thereof for Base Rate Loans, (y) Five million
dollars ($5,000,000) or any multiple of Two Hundred Fifty thousand
dollars ($250,000) in excess thereof for LIBOR Loans and (z) Fifty
thousand dollars ($50,000) for Swing Line Loans;
(B) the requested Borrowing date, which shall be a Business
Day;
(C) whether the Borrowing is to be comprised of LIBOR Loans
or Base Rate Loans; and
(D) subject to subsection 2.03(e) hereof, the duration of
the Interest Period applicable to any LIBOR Loans included in such
notice. If the Notice of Borrowing shall fail to specify the duration
of the
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Interest Period for any Borrowing comprised of LIBOR Loans, such
Interest Period shall be one month;
PROVIDED, HOWEVER, that with respect to the Borrowing to be made on the Closing
Date, the Notice of Borrowing shall be delivered to the Administrative Agent not
later than 2:00 p.m. (New York time) one Business Day before the Closing Date
and such Borrowing will consist of Base Rate Loans only; and FURTHER PROVIDED,
if the primary syndication of this Agreement is not completed by the Closing
Date and if so requested by the Administrative Agent, all Borrowings comprised
of LIBOR Loans during the first 60 days following the Closing Date shall have
the same Interest Period, which shall be one month.
(b) Upon receipt of the Notice of Borrowing, the Administrative Agent
will promptly notify each Lender thereof and of the amount of such Lender's
Commitment Percentage (as applicable) of the Borrowing.
(c) Each Lender will make the amount of its Commitment Percentage (as
applicable) of the Borrowing available to the Administrative Agent for the
account of the Company at the Administrative Agent's Payment Office by 2:00 p.m.
(New York time) on the Borrowing date requested by the Company in funds
immediately available to the Administrative Agent. The proceeds of all such
Loans will then be made available to the Company by the Administrative Agent by
wire transfer in accordance with written instructions provided to the
Administrative Agent by the Company of like funds as received by the
Administrative Agent.
(d) Whenever the Company desires to incur Swing Line Loans hereunder,
it shall give the Swing Line Lender not later than 1:00 p.m. (New York time) on
the date that a Swing Line Loan is to be incurred, written notice or telephonic
notice promptly confirmed in writing of each Swing Line Loan to be incurred
hereunder. Each such notice shall be irrevocable and specify in each case (i)
the date of Borrowing (which shall be a Business Day) and (ii) the aggregate
principal amount of the Swing Line Loans to be incurred pursuant to such
Borrowing. Revolving Loans for the purpose of refunding Swing Line Loans shall
be made upon the notice specified in subsection 2.01(c)(ii) with the Company
irrevocably agreeing, by its incurrence of any Swing Line Loan, to the making of
the Revolving Loans as set forth in subsection 2.01(c)(ii).
(e) Unless the Majority Lenders shall otherwise agree, during the
existence of a Default or an Event of Default, the Company may not elect to have
a Loan be made as, or converted into or continued as, a LIBOR Loan.
(f) After giving effect to any Borrowing, there shall not be more
than three different Interest Periods in effect with
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respect to each of the Revolving Loans, the Tranche A Term Loans, the Tranche B
Term Loans and the Tranche C Term Loans.
2.04 CONVERSION AND CONTINUATION ELECTIONS.
(a) The Company may upon irrevocable written notice to the
Administrative Agent in accordance with subsection 2.04(b):
(i) elect to convert on any Business Day, any Base Rate Loans
(or any part thereof in an amount not less than $5,000,000, or that is in
an integral multiple of $250,000 in excess thereof) into LIBOR Loans; or
(ii) elect to convert on the last day of the applicable Interest
Period any LIBOR Loans having Interest Periods maturing on such day (or any
part thereof in an amount not less than $1,000,000, or that is in an
integral multiple of $100,000 in excess thereof) into Base Rate Loans; or
(iii) elect to renew on the last day of the applicable Interest
Period any LIBOR Loans having Interest Periods maturing on such day (or any
part thereof in an amount not less than $5,000,000, or that is in an
integral multiple of $250,000 in excess thereof);
PROVIDED, that if the aggregate amount of LIBOR Loans in respect of any
Borrowing shall have been reduced, by payment, prepayment, or conversion of part
thereof to be less than $5,000,000, such LIBOR Loans shall automatically convert
into Base Rate Loans, and on and after such date the right of the Company to
continue such Loans as, and convert such Loans into, LIBOR Loans shall
terminate.
(b) The Company shall deliver a Notice of Conversion/Continuation in
accordance with Section 10.02 to be received by the Administrative Agent not
later than 12:00 noon (New York time) at least (i) three Business Days in
advance of the Conversion Date or continuation date, if the Loans are to be
converted into or continued as LIBOR Loans; and (ii) on the Conversion Date, if
the Loans are to be converted into Base Rate Loans; specifying:
(A) the proposed Conversion Date or continuation date;
(B) the aggregate amount of Loans to be converted or
renewed;
(C) the nature of the proposed conversion or continuation;
and
(D) the duration of the requested Interest Period, if
applicable.
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(c) If upon the expiration of any Interest Period applicable to LIBOR
Loans, the Company has failed to select timely a new Interest Period to be
applicable to such LIBOR Loans or if any Default or Event of Default shall then
exist, the Company shall be deemed to have elected to convert such LIBOR Loans
into Base Rate Loans effective as of the expiration date of such current
Interest Period.
(d) Upon receipt of a Notice of Conversion/ Continuation, the
Administrative Agent will promptly notify each Lender thereof, or, if no timely
notice is provided by the Company, the Administrative Agent will promptly notify
each Lender of the details of any automatic conversion. All conversions and
continuations shall be made pro rata according to the respective outstanding
principal amounts of the Loans (with respect to which the notice was given) that
are held by each Lender.
(e) Unless the Majority Lenders shall otherwise agree, during the
existence of a Default or Event of Default, the Company may not elect to have a
Loan converted into or continued as a LIBOR Loan.
(f) Notwithstanding any other provision contained in this Agreement,
after giving effect to any conversion or continuation of any Loans, there shall
not be more than three different Interest Periods in effect with respect to each
of the Revolving Loans, the Tranche A Term Loans, the Tranche B Term Loans and
the Tranche C Term Loans.
2.05 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS. The Company may,
upon not less than three Business Day's prior notice to the Administrative
Agent, terminate the Aggregate Revolving Commitment or permanently reduce the
Aggregate Revolving Commitment by an aggregate minimum amount of $5,000,000 or
any multiple of $1,000,000 in excess thereof; PROVIDED that no such reduction or
termination shall be permitted if, after giving effect thereto and to any
prepayments of the Loans made on the effective date thereof, the then
outstanding principal amount of the Revolving Loans, Swing Line Loans and L/C
Obligations would exceed the Aggregate Revolving Commitment and, PROVIDED,
FURTHER, that, once reduced in accordance with this Section 2.05, the Aggregate
Revolving Commitment may not be increased. Any reduction of the Aggregate
Revolving Commitment shall be applied to each Lender's Revolving Commitment in
accordance with such Lender's applicable Commitment Percentage. All accrued
commitment fees to but not including the effective date of any termination of
Commitments shall be paid on the effective date of such termination.
2.06 OPTIONAL PREPAYMENTS. Subject to Section 2.19, the Company may, at
any time or from time to time, upon notice given not later than 12 noon (New
York time) at least three Business Days in advance (in the case of LIBOR Loans)
and at least one Business
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Day in advance (in the case of Base Rate Loans) to the Administrative Agent,
ratably prepay Loans in whole or in part, in amounts of (i) $5,000,000 or any
multiple of $250,000 in excess thereof for LIBOR Loans, or (ii) $1,000,000 or
any multiple of $100,000 in excess thereof for Base Rate Loans. Such notice of
prepayment shall specify the date and amount of such prepayment and whether such
prepayment is of Base Rate Loans or LIBOR Loans, or any combination thereof.
The Administrative Agent will promptly notify each Lender thereof and of such
Lender's applicable Commitment Percentage of such prepayment. If such notice is
given by the Company, the Company shall make such prepayment, and the payment
amount specified in such notice shall be due and payable on the date specified
therein, together with accrued interest to each such date on the amount prepaid
and any amounts required pursuant to Section 2.19. Partial prepayments of the
Term Loans shall be applied ratably among the Tranche A Term Loans, Tranche B
Term Loans and Tranche C Term Loans and shall be applied ratably over the
remaining installments of each such Loan.
2.07 MANDATORY PREPAYMENTS OF LOANS; MANDATORY COMMITMENT REDUCTIONS.
(a) ASSET DISPOSITIONS; EVENTS OF LOSS. If the Company or any of its
Subsidiaries shall at any time or from time to time make or agree to make a
Disposition or shall suffer an Event of Loss, then (i) the Company shall
promptly notify the Administrative Agent of such proposed Disposition or Event
of Loss (including the amount of the estimated Net Proceeds to be received by
the Company in respect thereof) and (ii) promptly upon receipt by the Company or
its Subsidiary of the Net Proceeds of such Disposition or on account of such
Event of Loss (and in any event not later than the third Business Day following
such receipt), the Company shall prepay Loans in accordance with subsection
2.07(f) in each case in an aggregate amount equal to the amount of such Net
Proceeds; NOTWITHSTANDING THE FOREGOING, Net Proceeds received from Dispositions
permitted pursuant to Section 7.02 shall be excepted from the foregoing
prepayment provisions PROVIDED that (x) Net Proceeds received from Dispositions
described in subsection 7.02(d) shall only be so excepted to the extent that
such Net Proceeds do not exceed $40,000,000, and (y) Net Proceeds received from
Dispositions described in subsection 7.02(e) shall only be so excepted to the
extent that such Net Proceeds are received from Dispositions made under Permited
Receivables Purchase Facilities with an aggregate facility amount for all such
Facilities as of any date that does not exceed $200,000,000, and PROVIDED
further that, to the extent that such aggregate facility amount exceeds
$200,000,000, if the Leverage Ratio calculated at such time is less than 3.0 to
1.0, then in lieu of prepaying Loans in accordance with subsection 2.07(f) in an
amount equal to 100% of such excess, the Company shall instead prepay Revolving
Loans in an amount equal to 50% of such excess and, in addition, the Revolving
Commitments shall correspondingly be reduced in the amount of such prepayment.
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(b) EXCESS CASH FLOW. As soon as the required financial information
is available to determine the amount, if any, of Excess Cash Flow generated by
the Company and its Subsidiaries during the then-preceding fiscal year, but not
later than the 120th day following the last day of such fiscal year commencing
with the fiscal year ending on or about June 30, 1997, the Company shall prepay
Loans in accordance with subsection 2.07(f) in an amount equal to seventy-five
percent (75%) of such Excess Cash Flow, if any, for the then-preceding fiscal
year of the Company; PROVIDED, HOWEVER, that if the Leverage Ratio as of the
last day of the then preceding fiscal year is less than 3.0 to 1.0, the Company
shall be required to make such prepayments in an amount equal to Fifty percent
(50%) of such Excess Cash Flow in accordance with this subsection 2.07(b).
(c) EQUITY ISSUANCE. If the Company shall issue new common,
preferred or other equity securities (other than the issuance of any stock
options or warrants, or the issuance of shares of common stock of the Company
pursuant to the existing warrants or any plan or program described on SCHEDULE
2.07 hereto, as any such plan or program may be amended from time to time, or
any similar or comparable plan or program that hereafter may be adopted by the
Board of Directors of the Company, or the issuance of any common stock upon the
exercise of any such stock options and/or warrants, so long as the aggregate
number of shares of such common stock issued pursuant to any of the foregoing
does not exceed 15 percent of the aggregate number of issued and outstanding
shares of common stock of the Company), or otherwise receives any capital
contribution in cash, the Company shall promptly notify the Administrative Agent
of the estimated Net Issuance Proceeds of such issuance or the amount of such
capital contribution to be received by the Company. Promptly upon such receipt
(and in any event not later than the third Business Day following such receipt),
the Company shall prepay the Loans in accordance with subsection 2.07(f) in an
aggregate amount equal to 50% of the amount of such Net Issuance Proceeds or
capital contribution received in cash.
(d) DEBT ISSUANCE. If the Company or any of its Subsidiaries shall
incur any Indebtedness (other than Indebtedness permitted pursuant to subsection
7.05(e)), the Company shall promptly notify the Administrative Agent of the Net
Issuance Proceeds to be received by the Company in respect of such incurrence.
Promptly upon receipt by the Company of such Net Issuance Proceeds (and in any
event not later than the third Business Day following such receipt), the Company
shall prepay the Loans in accordance with subsection 2.07(f) in an aggregate
amount equal to such Net Issuance Proceeds.
(e) PENSION PLAN SURPLUS. Promptly upon the return to Company or any
of its Subsidiaries for their respective accounts of any surplus cash assets of
any pension plan of the Company or any of its Subsidiaries, but not later than
the third Business Day
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following such return (and in the case of surplus non-cash assets, at a time to
be agreed upon by the Company and the Administrative Agent), an amount equal to
100% of such returned surplus assets, net of (i) transaction costs and expenses
incurred in obtaining such return (including incremental taxes payable as a
result thereof) and (ii) any amounts reinvested in any Qualified Plan or other
similar benefits plan, shall be applied to prepay the Loans in accordance with
subsection 2.07(f).
(f) GENERAL. Any prepayments pursuant to this Section 2.07 shall be
applied (i) first, subject to subsection 2.07(i) below, to the prepayment of the
outstanding amount of Term Loans, ratably among the Tranche A Term Loans,
Tranche B Term Loans and Tranche C Term Loans, and within each Tranche, ratably
over the remaining installments of each such Loan until all Term Loans have been
repaid in full, and then to the outstanding amount of any Swing Line Loans until
all Swing Line Loans have been repaid in full, and then to the outstanding
amount of any Revolving Loans, and then to prepay or Cash Collateralize the
outstanding amount of any L/C Obligations; and (ii) subject to the foregoing
priorities, first to any Base Rate Loans then outstanding and then to LIBOR
Loans with the shortest Interest Periods remaining; PROVIDED, HOWEVER, that if
the amount of Base Rate Loans then outstanding is not sufficient to satisfy the
entire prepayment requirement, the Company may, at its option, place any amounts
which it would otherwise be required to use to prepay LIBOR Loans on a day other
than the last day of the Interest Period therefor in an interest-bearing account
pledged to the Administrative Agent for the benefit of the Lenders until the end
of such Interest Period, at which time such pledged amounts will be applied to
prepay such LIBOR Loans; and PROVIDED, FURTHER, that any prepayment required as
a result of a Disposition of Permitted Receivables in accordance with subsection
2.07(a) shall be applied only to the repayment of outstanding Revolving Loans
and to a corresponding reduction in the Revolving Commitment. The Company shall
pay, together with each prepayment under this Section 2.07, accrued interest on
the amount prepaid and any amounts required pursuant to Section 2.19.
(g) REDUCTION OF COMMITMENT. Upon the making of any mandatory
prepayment under this Section 2.07, the applicable Commitments of each Lender
shall automatically be reduced by an amount equal to such Lender's ratable share
of the aggregate of principal repaid, effective as of the earlier of the date
that such prepayment is made or the date by which such prepayment is due and
payable hereunder. All accrued commitment fees to, but not including the
effective date of any termination of Commitments, shall be paid on the effective
date of such termination.
(h) MANDATORY PREPAYMENT NOTICE. The Company shall deliver to the
Administrative Agent (i) at the time of each prepayment required under
subsections 2.07(a) through (e) above, a certificate signed by a Responsible
Officer of the Company setting
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forth in reasonable detail the calculation of the amount of such prepayment, and
(ii) to the extent reasonably practicable, at least three Business Days prior to
the time of each such prepayment, a notice of such prepayment which shall
specify the prepayment date and the principal amount of the Loans (or portion
thereof) to be prepaid pursuant to subsection 2.07(f).
(i) ELECTION BY TRANCHE B AND TRANCHE C LENDERS. Notwithstanding any
other provisions of this Agreement, any Tranche B or Tranche C Lender may elect,
by giving written or telecopy notice to the Administrative Agent (or telephonic
notice promptly confirmed by written or telecopy notice) at least one Business
Day prior to any prepayment of Tranche B or Tranche C Term Loans required to be
made by the Company for the account of such Lender pursuant to subsections
2.07(a) through (e) above, to refuse to accept all or a portion of such
prepayment specified in such notice, in which case the Administrative Agent
shall instead apply 50% of such amount to prepay Tranche A Term Loans pursuant
to subsection 2.07(f) above and 50% of such amount may be retained by the
Company; PROVIDED that no Tranche B or Tranche C Lender shall be entitled to
make such election if at the time thereof no Tranche A Loans are outstanding.
(j) LETTERS OF CREDIT. If on any date the Effective Amount of L/C
Obligations exceeds the L/C Commitment, the Company shall Cash Collateralize on
such date the outstanding Letters of Credit in an amount equal to the excess of
the maximum amount then available to be drawn under the Letters of Credit over
the Aggregate L/C Commitment. Subject to Section 2.19, if on any date after
giving effect to any Cash Collateralization made on such date pursuant to the
preceding sentence, the Effective Amount of all Revolving Loans then outstanding
plus the Effective Amount of all L/C Obligations plus the amount of Swing Line
Loans then outstanding exceeds the Aggregate Revolving Commitment, the Company
shall immediately, and without notice or demand, prepay the outstanding
principal amount of the Revolving Loans and L/C Advances by an amount equal to
the applicable excess.
2.08 REPAYMENT.
(a) THE TERM CREDIT. The Company shall repay the Term Loans in
installments on each quarterly date (or on the next Business Day if such date is
not a Business Day) indicated on SCHEDULE III hereto (each a "PRINCIPAL PAYMENT
DATE") in the amount indicated opposite each such Principal Payment Date (net of
any optional or mandatory prepayments previously applied in accordance with
Section 2.06 or subsection 2.07(f)).
(b) THE REVOLVING CREDIT. The Company shall repay to the Lenders in
full on the Revolving Termination Date the aggregate principal amount of the
Revolving Loans outstanding on the Revolving Termination Date (including any
Swing Line Loans).
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2.09 INTEREST.
(a) Subject to subsection 2.09(d), each Loan shall bear interest on
the outstanding principal amount thereof from the date when made at a rate per
annum equal to LIBOR or the Base Rate, as the case may be, PLUS the Applicable
Margin as the same may be adjusted pursuant to the provisions of subsection
2.09(b).
(b) Commencing with delivery of the financial reports required by
subsections 6.01(c) and 6.02(b) for the fiscal quarter of the Company ended
September 30, 1996, and continuing thereafter, the Applicable Margin for
Revolving Loans and Tranche A Term Loans shall be adjusted by deducting
therefrom the applicable Margin Reduction Discount, if any. The applicable
"MARGIN REDUCTION DISCOUNT" shall be determined as of the end of each fiscal
quarter, shall be effective for the succeeding Margin Reduction Period, and
shall apply to all Loans outstanding (regardless of the date made) during such
succeeding Margin Reduction Period. The Margin Reduction Discount shall mean
the percentage, if any, specified below opposite the Leverage Ratio (which shall
be calculated as of the end of the immediately preceding fiscal quarter);
PROVIDED, HOWEVER, that as long as any Default or Event of Default exists, no
Margin Reduction Discount shall be effective or remain in effect (and the Loans
shall bear interest without any reduction of the Applicable Margin):
If the Leverage Margin Reduction Margin Reduction
Ratio is Equal to Discount for Discount for
or Less Than LIBOR Loans Base Rate Loans
- - ---------------- ---------------- -----------------
4.5 but Greater than or Equal to 4.01 1/4% 1/4%
4.0 but Greater than or Equal to 3.51 5/8 5/8
3.5 but Greater than or Equal to 3.01 1.0 1.0
3.0 but Greater than or Equal to 2.51 1-3/8 1-1/4
2.5 but Greater than or Equal to 2.0 1-1/2 1-1/4
2.0 1-5/8 1-1/4
If the Company shall not have delivered to the Administrative Agent the
financial reports required to be delivered pursuant to subsection 6.01(a) or (c)
and 6.02(b), as applicable, on the date due, then any Margin Reduction Discount
then in effect shall be eliminated entirely as of such due date, and no Margin
Reduction Discount shall thereafter become effective until the required
financial reports shall have been delivered.
(c) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of
Loans pursuant to Section 2.06 and 2.07 for the portion of the Loans so prepaid
and upon payment (including prepayment) in full thereof and, during the
existence of any Event
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of Default, interest shall be paid on demand of the Administrative Agent at the
request or with the consent of the Required Lenders.
(d) If any amount of principal of or interest on any Loan, or any
other amount payable hereunder or under any of the other Loan Documents is not
paid in full when due (whether at stated maturity, by acceleration, demand or
otherwise), the Company agrees to pay interest on such unpaid principal or other
amount, from the date such amount becomes due until the date such amount is paid
in full, and after as well as before any entry of judgment thereon to the extent
permitted by law, payable on demand, at a rate per annum equal to the applicable
interest rate (including the Applicable Margin) for such Loan plus two percent
(2%) and, in the case of Obligations not subject to an Applicable Margin, at a
rate per annum equal to the Base Rate plus two percent (2%); PROVIDED, HOWEVER,
that, on and after the expiration of any Interest Period applicable to any LIBOR
Loan outstanding on the date of occurrence of such Event of Default or
acceleration, the principal amount of such Loan shall, during the continuation
of such Event of Default or after acceleration, bear interest at a rate per
annum equal to the Base Rate plus the Applicable Margin plus two percent (2%).
(e) Anything herein to the contrary notwithstanding, the Obligations
of the Company hereunder shall be subject to the limitation that payments of
interest shall not be required, for any period for which interest is computed
hereunder, to the extent (but only to the extent) that contracting for or
receiving such payment by the respective Lender or Issuing Bank would be
contrary to the provisions of any law applicable to such Lender or Issuing Bank
limiting the highest rate of interest which may be lawfully contracted for,
charged or received by such Lender or Issuing Bank, and in such event the
Company shall pay such Lender or Issuing Bank interest at the highest rate
permitted by applicable law. Any such payments of interest that are not made as
a result of the limitation referred to in the preceding sentence shall be made
by the Company to such Lender or Issuing Bank on the earliest Interest Payment
Date or Dates on which the receipt thereof would be permissible under the laws
applicable to such Lender or Issuing Bank limiting rates of interest that it may
charge or collect. Such deferred interest shall not bear interest.
2.10 FEES.
(a) ARRANGEMENT AND ADMINISTRATIVE FEES. The Company shall pay to
BofA, as Administrative Agent, and BA Securities, Inc. and Chase Securities,
Inc., as co-arrangers, for the respective accounts of each, fees in such amounts
and at such times as are agreed upon between or among the parties.
(b) COMMITMENT FEES. The Company shall pay to the Administrative
Agent for the account of each Lender a commitment fee on the average daily
unused portion of such Lender's Revolving
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Commitment, computed on a quarterly basis in arrears on the last Business Day of
each calendar quarter (the "determination date") based upon the daily
utilization for that quarter as calculated by the Administrative Agent, at a
rate equal to the Commitment Fee Rate. The "COMMITMENT FEE RATE" shall be equal
to one-half of one percent per annum; PROVIDED that if the Leverage Ratio
calculated as of the end of the fiscal quarter immediately preceding the
commencement of any calendar quarter (or shorter period as provided in the
provision below) is
(i) less than 3.51 but greater than 2.50, the Commitment Fee Rate for
such calendar quarter (or shorter period) shall be three-eighths of one percent
per annum; and
(ii) 2.50 or less, the Commitment Fee Rate for such calendar quarter
(or shorter period) shall be one-quarter of one percent per annum.
The amount of any Swing Line Loans outstanding as of the date of determination
shall not be included in calculating the utilized portion of the Revolving
Commitment of any Lender. Such commitment fee shall accrue from the Closing
Date to the Revolving Termination Date and shall be due and payable quarterly in
arrears on the last Business Day of each calendar quarter commencing with the
calendar quarter ending on or about June 30, 1996, and continuing to the
Revolving Termination Date, with the final payment to be made on the Revolving
Termination Date; PROVIDED that, in connection with any termination of
Commitments pursuant to Section 2.05 or Section 2.07, the accrued commitment fee
calculated for the period ending on such date shall also be paid on the date of
such termination. The commitment fees provided in this subsection shall accrue
at all times after the Closing Date, including at any time during which one or
more conditions in Article IV are not met.
(c) AGENCY FEE. The Company shall pay to the Administrative Agent,
for the Administrative Agent's own account, an annual agency fee in the amount
and at the times agreed upon between the Company and the Administrative Agent.
2.11 COMPUTATION OF FEES AND INTEREST.
(a) All computations of interest payable in respect of Base Rate
Loans shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest under
this Agreement shall be made on the basis of a 360-day year and actual days
elapsed. Interest and fees shall accrue during each period during which interest
or such fees are computed from the first day thereof to the last day thereof.
(b) The Administrative Agent will, with reasonable promptness, notify
the Company and the Lenders of each
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determination of the Base Rate or of LIBOR; PROVIDED that any failure to do so
shall not relieve the Company of any liability hereunder or provide the basis
for any claim against the Administrative Agent. Any change in the interest rate
on a Loan resulting from a change in the Applicable Margin shall become
effective as of the opening of business on the day on which such change in the
Applicable Margin becomes effective. The Administrative Agent will with
reasonable promptness notify the Company and the Lenders of the effective date
and the amount of each such change, PROVIDED that any failure to do so shall not
relieve the Company of any liability hereunder or provide the basis for any
claim against the Administrative Agent.
(c) Each determination of an interest rate by the Administrative
Agent shall be conclusive and binding on the Company and the Lenders in the
absence of manifest error.
(d) If any Reference Lender's Commitment shall terminate (otherwise
than on termination of all the Commitments), or for any reason whatsoever a
Reference Lender shall cease to be a Lender hereunder, that Reference Lender
shall thereupon cease to be a Reference Lender, and the Base Rate and LIBOR
shall be determined on the basis of the rates as notified by the remaining
Reference Lender or Reference Lenders.
(e) Each Reference Lender shall use its best efforts to furnish
quotations of rates to the Administrative Agent as contemplated hereby. If any
of the Reference Lenders shall be unable or otherwise fails to supply such rates
to the Administrative Agent upon its request, the rate of interest shall be
determined on the basis of the quotations of the remaining Reference Lender or
Reference Lenders.
2.12 PAYMENTS BY THE COMPANY.
(a) All payments (including prepayments) to be made by the Company on
account of principal, interest, fees and other amounts required hereunder shall
be made without set-off, recoupment or counterclaim; shall, except as otherwise
expressly provided herein, be made to the Administrative Agent for the ratable
account of the Lenders at the Administrative Agent's Payment Office, and shall
be made in dollars and in immediately available funds, no later than 2:00 p.m.
(New York time) on the date specified herein. The Administrative Agent will
promptly distribute to each Lender its Commitment Percentage (or other
applicable share as expressly provided herein) of such principal, interest, fees
or other amounts, in like funds as received. Any payment which is received by
the Administrative Agent later than 2:00 p.m. (New York time) shall be deemed to
have been received on the immediately succeeding Business Day and any applicable
interest or fee shall continue to accrue.
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(b) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be; subject to the provisions
set forth in the definition of "Interest Period" herein.
(c) Unless the Administrative Agent shall have received notice from
the Company prior to the date on which any payment is due to the Lenders
hereunder that the Company will not make such payment in full as and when
required hereunder, the Administrative Agent may assume that the Company has
made such payment in full to the Administrative Agent on such date in
immediately available funds and the Administrative Agent may (but shall not be
so required), in reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent the Company shall not have made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent on
demand such amount distributed to such Lender, together with interest thereon
for each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Administrative Agent, at the Federal
Funds Rate as in effect for each such day.
2.13 PAYMENTS BY THE LENDERS TO THE ADMINISTRATIVE AGENT.
(a) Unless the Administrative Agent shall have received notice from a
Lender on the Closing Date or, with respect to each Borrowing after the Closing
Date, at least one Business Day prior to the date of any proposed Borrowing,
that such Lender will not make available to the Administrative Agent as and when
required hereunder for the account of the Company the amount of that Lender's
Commitment Percentage of the Borrowing, the Administrative Agent may assume that
each Lender has made such amount available to the Administrative Agent in
immediately available funds on the Borrowing date and the Administrative Agent
may (but shall not be so required), in reliance upon such assumption, make
available to the Company on such date a corresponding amount. If and to the
extent any Lender shall not have made its full amount available to the
Administrative Agent in immediately available funds and the Administrative Agent
in such circumstances has made available to the Company such amount, that Lender
shall on the next Business Day following the date of such Borrowing make such
amount available to the Administrative Agent, together with interest at the
Federal Funds Rate for and determined as of each day during such period. A
notice of the Administrative Agent submitted to any Lender with respect to
amounts owing under this subsection 2.13(a) shall be conclusive, absent manifest
error. If such amount is so made available, such payment to the Administrative
Agent shall constitute such Lender's Loan on the date of Borrowing for all
purposes of this Agreement. If such amount is not made available
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to the Administrative Agent on the next Business Day following the date of such
Borrowing, the Administrative Agent shall notify the Company of such failure to
fund and, upon demand by the Administrative Agent, the Company shall pay such
amount to the Administrative Agent for the Administrative Agent's account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the interest rate applicable at the time
to the Loans comprising such Borrowing.
(b) The failure of any Lender to make any Loan on any date of
borrowing shall not relieve any other Lender of any obligation hereunder to make
a Loan on the date of such borrowing, but no Lender shall be responsible for the
failure of any other Lender to make the Loan to be made by such other Lender on
the date of any borrowing.
2.14 SHARING OF PAYMENTS, ETC. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its Commitment Percentage of payments on
account of the Loans obtained by all the Lenders, such Lender shall forthwith
(a) notify the Administrative Agent of such fact, and (b) purchase from the
other Lenders such participations, assignments or other interests in the Loans
made by them ("LOAN INTEREST(S)") as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them; PROVIDED, HOWEVER,
that if all or any portion of such excess payment is thereafter recovered from
the purchasing Lender, such purchase shall to that extent be rescinded and each
other Lender shall repay to the purchasing Lender the purchase price paid
therefor, together with an amount equal to such paying Lender's Commitment
Percentage (according to the proportion of (i) the amount of such paying
Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Company
agrees that any Lender so purchasing a Loan Interest from another Lender
pursuant to this Section 2.14 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 10.09) with respect to such Loan Interest as fully as if such Lender
were the direct creditor of the Company in the amount of such Loan Interest. The
Administrative Agent will keep records (which shall be conclusive and binding in
the absence of manifest error) of Loan Interests purchased pursuant to this
Section 2.14 and will in each case notify the Lenders following any such
purchases or repayments.
2.15 SECURITY AND GUARANTIES.
(a) All Obligations of the Company under this Agreement, each of the
Notes and all other Loan Documents shall be secured in accordance with the
Collateral Documents.
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(b) All Obligations of the Company under this Agreement, each of the
Notes and all other Loan Documents shall be unconditionally guaranteed by the
Company's Subsidiaries (other than the Receivables Subsidiary) pursuant to the
Subsidiaries Guaranty.
2.16 TAXES.
(a) Subject to subsection 2.16(g), any and all payments by the
Company to each Lender or the Administrative Agent under this Agreement shall be
made free and clear of, and without deduction or withholding for, any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding, in the case of each Lender
and the Administrative Agent, such taxes (including income taxes or franchise
taxes) as are imposed on or measured by each Lender's or the Administrative
Agent's net income by the jurisdiction under the laws of which such Lender or
the Administrative Agent, as the case may be, is organized or maintains a
Lending Office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "TAXES").
(b) In addition, the Company shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Documents (hereinafter referred to as "OTHER TAXES").
(c) Subject to subsection 2.16(g), the Company shall indemnify and
hold harmless each Lender and the Administrative Agent for the full amount of
Taxes or Other Taxes (including any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.16) paid by the Lender or
the Administrative Agent and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Payment under this indemnification shall be made within 30 days from the date
the Lender or the Administrative Agent makes written demand therefor.
(d) If the Company shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Administrative Agent, then, subject to subsection 2.16(g):
(i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.16) such Lender or the
Administrative Agent, as the
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case may be, receives an amount equal to the sum it would have received had
no such deductions been made;
(ii) the Company shall make such deductions, and
(iii) the Company shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with
applicable law.
(e) Within 30 days after the date of any payment by the Company of
Taxes or Other Taxes, the Company shall furnish to the Administrative Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to the Administrative Agent.
(f) Each Lender which is a foreign person (i.e., a person other than
a United States person for United States Federal income tax purposes) agrees
that:
(i) it shall, no later than the Closing Date (or, in the case of
a Lender which becomes a party hereto pursuant to Section 10.08 after the
Closing Date, the date upon which the Lender becomes a party hereto)
deliver to the Company through the Administrative Agent two accurate and
complete signed originals (one of which shall be retained by the
Administrative Agent) of Internal Revenue Service Form 4224 or any
successor thereto ("FORM 4224"), or two accurate and complete signed
originals of Internal Revenue Service Form 1001 or any successor thereto
("FORM 1001"), as appropriate, in each case indicating that the Lender is
on the date of delivery thereof entitled to receive payments of principal,
interest and fees under this Agreement free from withholding of United
States Federal income tax;
(ii) if at any time the Lender makes any changes necessitating a
new Form 4224 or Form 1001, it shall with reasonable promptness deliver to
the Company through the Administrative Agent in replacement for, or in
addition to, the forms previously delivered by it hereunder, two accurate
and complete signed originals (one of which shall be retained by the
Administrative Agent) of Form 4224; or two accurate and complete signed
originals (one of which shall be retained by the Administrative Agent) of
Form 1001, as appropriate, in each case indicating that the Lender is on
the date of delivery thereof entitled to receive payments of principal,
interest and fees under this Agreement free from withholding of United
States Federal income tax;
(iii) it shall, before or promptly after the occurrence of any
event (including the passing of time but excluding any event mentioned in
(ii) above) requiring a change in or renewal of the most recent Form 4224
or Form 1001
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previously delivered by such Lender and deliver to the Company through the
Administrative Agent two accurate and complete original signed copies (one
of which shall be retained by the Administrative Agent) of Form 4224 or
Form 1001 in replacement for the forms previously delivered by the Lender;
and
(iv) it shall, promptly upon the Company's or the Administrative
Agent's reasonable request to that effect, deliver to the Company or the
Administrative Agent (as the case may be) such other forms or similar
documentation as may be required from time to time by any applicable law,
treaty, rule or regulation in order to establish such Lender's tax status
for withholding purposes.
(g) The Company will not be required to pay any additional amounts in
respect of United States Federal income tax pursuant to subsection 2.16(d) to
any Lender for the account of any Lending Office of such Lender:
(i) if the obligation to pay such additional amounts would not
have arisen but for a failure by such Lender to comply with its obligations
under subsection 2.16(f) in respect of such Lending Office;
(ii) if such Lender shall have delivered to the Company a Form
4224 in respect of such Lending Office pursuant to subsection 2.16(f), and
such Lender shall not at any time be entitled to exemption from deduction
or withholding of United States Federal income tax in respect of payments
by the Company hereunder for the account of such Lending Office for any
reason other than a change in United States law or regulations or in the
official interpretation of such law or regulations by any governmental
authority charged with the interpretation or administration thereof
(whether or not having the force of law) after the date of delivery of such
Form 4224; or
(iii) if the Lender shall have delivered to the Company a Form
1001 in respect of such Lending Office pursuant to subsection 2.16(f), and
such Lender shall not at any time be entitled to exemption from deduction
or withholding of United States Federal income tax in respect of payments
by the Company hereunder for the account of such Lending Office for any
reason other than a change in United States law or regulations or any
applicable tax treaty or regulations or in the official interpretation of
any such law, treaty or regulations by any governmental authority charged
with the interpretation or administration thereof (whether or not having
the force of law) after the date of delivery of such Form 1001.
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(h) If, at any time, the Company requests any Lender to deliver any
forms or other documentation pursuant to subsection 2.16(f)(iv), then the
Company shall, on demand of such Lender through the Administrative Agent,
reimburse such Lender for any costs and expenses (including Attorney Costs)
reasonably incurred by such Lender in the preparation or delivery of such forms
or other documentation.
(i) If the Company is required to pay additional amounts to any
Lender or the Administrative Agent pursuant to subsection 2.16(d), then such
Lender shall use its reasonable best efforts (consistent with legal and
regulatory restrictions) to change the jurisdiction of its Lending Office so as
to eliminate any such additional payment by the Company which may thereafter
accrue if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.
2.17 ILLEGALITY.
(a) If any Lender shall determine that the introduction of any
Requirement of Law, or any change in any Requirement of Law or in the
interpretation or administration thereof, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Lender or its Lending Office to make LIBOR Loans, then, on notice
thereof by the Lender to the Company through the Administrative Agent, the
obligation of that Lender to make LIBOR Loans shall be suspended until the
Lender shall have notified the Administrative Agent and the Company that the
circumstances giving rise to such determination no longer exists.
(b) If a Lender shall determine that it is unlawful to maintain any
LIBOR Loan, all LIBOR Loans of that Lender then outstanding shall be converted
into Base Rate Loans either on the last day of the Interest Period thereof if
the Lender may lawfully continue to maintain such LIBOR Loans to such day, or
immediately, if the Lender may not lawfully continue to maintain such LIBOR
Loans, and the Company shall prepay accrued interest thereon to the date of
conversion, together with any amounts required to be paid in connection
therewith pursuant to Section 2.19.
(c) If the obligation of any Lender to make or maintain LIBOR Loans
has been terminated, the Company may elect, by giving notice to the Lender
through the Administrative Agent that all Loans which would otherwise be made by
the Lender as LIBOR Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Administrative Agent pursuant to
this Section 2.17, the affected Lender shall designate a different Lending
Office with respect to its LIBOR Loans if such designation will avoid the need
for giving such notice or making
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such demand and will not, in the judgment of the Lender, be illegal or otherwise
disadvantageous to the Lender.
2.18 INCREASED COSTS AND REDUCTION OF RETURN.
(a) If any Lender shall determine that, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of law),
there shall be any increase in the cost to such Lender of agreeing to make or
making, funding or maintaining any LIBOR Loans, then the Company shall be liable
for, and shall from time to time, upon demand therefor by such Lender (with a
copy of such demand to the Administrative Agent), pay to the Administrative
Agent for the account of such Lender, additional amounts as are sufficient to
compensate such Lender for such increased costs.
(b) If any Lender shall have determined that (i) the introduction of
any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, or (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, affects or would
affect the amount of capital required or expected to be maintained by the Lender
or any corporation controlling the Lender and (taking into consideration such
Lender's or such corporation's policies with respect to capital adequacy and
such Lender's anticipated return on capital) determines that the amount of such
capital is increased as a consequence of its Commitment, loans, credits or
obligations under this Agreement, then, upon demand of such Lender (with a copy
to the Administrative Agent), the Company shall upon demand pay to the Lender,
from time to time as specified by the Lender, additional amounts sufficient to
compensate the Lender for such increase.
2.19 FUNDING LOSSES. The Company agrees to reimburse each Lender and to
hold each Lender harmless from any loss or expense which the Lender may sustain
or incur as a consequence of:
(a) the failure of the Company to make any payment or mandatory
prepayment of principal of any LIBOR Loan (including payments made after any
acceleration thereof);
(b) the failure of the Company to borrow, continue or convert a Loan
after the Company has given (or is deemed to have given) a Notice of Borrowing
or a Notice of Conversion/ Continuation;
(c) the failure of the Company to make any prepayment after the
Company has given a notice in accordance with Section 2.06;
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(d) the prepayment (including pursuant to Section 2.07) of a LIBOR
Loan on a day which is not the last day of the Interest Period with respect
thereto; or
(e) the conversion pursuant to Section 2.04 or 2.17 of any LIBOR Loan
to a Base Rate Loan on a day that is not the last day of the respective Interest
Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Loans hereunder or from fees
payable to terminate the deposits from which such funds were obtained.
2.20 INABILITY TO DETERMINE RATES. If the Administrative Agent shall have
determined that for any reason adequate and reasonable means do not exist for
ascertaining the LIBOR Reference Rate for any requested Interest Period with
respect to a proposed LIBOR Loan or that the LIBOR Reference Rate applicable
pursuant to subsection 2.09(a) for any requested Interest Period with respect to
a proposed LIBOR Loan does not adequately and fairly reflect the cost to the
Lenders of funding such Loan, the Administrative Agent will forthwith give
notice of such determination to the Company and each Lender. Thereafter, the
obligation of the Lenders to make or maintain LIBOR Loans, as the case may be,
hereunder shall be suspended until the Administrative Agent revokes such notice
in writing. Upon receipt of such notice, the Company may revoke any Notice of
Borrowing or Notice of Conversion/Continuation then submitted by it. If the
Company does not revoke such notice, the Lenders shall make, convert or continue
the Loans, as proposed by the Company, in the amount specified in the applicable
notice submitted by the Company, but such Loans shall be made, converted or
continued as Base Rate Loans instead of LIBOR Loans.
2.21 CERTIFICATES OF LENDERS. Any Lender claiming reimbursement or
compensation pursuant to this Article II shall deliver to the Company (with a
copy to the Administrative Agent) a certificate setting forth in reasonable
detail the amount payable to the Lender hereunder and such certificate shall be
conclusive and binding on the Company in the absence of manifest error.
2.22 SURVIVAL. The agreements and obligations of the Company in Sections
2.16 through 2.22 shall survive the payment of all other Obligations.
ARTICLE III
THE LETTERS OF CREDIT
3.01 THE LETTER OF CREDIT SUBFACILITY. (a) On the terms and conditions
set forth herein (i) the Issuing Bank agrees, (A) from time to time on any
Business Day during the period from the Closing
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Date to the Revolving Termination Date to Issue Letters of Credit for the
account of the Company, and to amend or renew Letters of Credit previously
Issued by it, in accordance with subsections 3.02(c) and 3.02(d), and (B) to
honor drafts under the Letters of Credit; and (ii) the Lenders with a Revolving
Commitment severally agree to participate in Letters of Credit Issued for the
account of the Company; PROVIDED, that the Issuing Bank shall not be obligated
to Issue, and no Lender shall be obligated to participate in, any Letter of
Credit if as of the date of Issuance of such Letter of Credit (the "ISSUANCE
DATE") (1) the Effective Amount of all L/C Obligations plus the Effective Amount
of all Revolving Loans plus the outstanding amount of Swing Line Loans exceeds
the Aggregate Revolving Commitments, (2) the participation of any Lender in the
Effective Amount of all L/C Obligations plus the Effective Amount of the
Revolving Loans of such Lender exceeds such Lender's Revolving Commitment, or
(3) the Effective Amount of L/C Obligations exceeds the L/C Commitment. Within
the foregoing limits, and subject to the other terms and conditions hereof, the
Company's ability to obtain Letters of Credit shall be fully revolving, and,
accordingly, the Company may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit which have expired or which have been drawn
upon and reimbursed.
(b) The Issuing Bank is under no obligation to Issue any Letter of
Credit if:
(i) any order, judgment or decree of any Governmental Authority
or arbitrator shall by its terms purport to enjoin or restrain the Issuing
Bank from Issuing such Letter of Credit, or any Requirement of Law
applicable to the Issuing Bank or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction
over the Issuing Bank shall prohibit, or request that the Issuing Bank
refrain from, the Issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the Issuing Bank with respect to
such Letter of Credit any restriction, reserve or capital requirement (for
which the Issuing Bank is not otherwise compensated hereunder) not in
effect on the Closing Date, or shall impose upon the Issuing Bank any
unreimbursed loss, cost or expense which was not applicable on the Closing
Date and which the Issuing Bank in good faith deems material to it;
(ii) the Issuing Bank has received written notice from the
Administrative Agent or the Company, on or prior to the Business Day prior
to the requested date of Issuance of such Letter of Credit, that one or
more of the applicable conditions contained in Article IV is not then
satisfied;
(iii) the expiry date of any requested Letter of Credit is (A)
more than 360 days after the date of Issuance, unless the Majority Lenders
have approved such expiry date in
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writing, or (B) after the Revolving Termination Date, unless all of the
Lenders have approved such expiry date in writing;
(iv) any requested Letter of Credit does not provide for drafts,
or is not otherwise in form and substance reasonably acceptable to the
Issuing Bank, or the Issuance of a Letter of Credit shall violate any
applicable policies of the Issuing Bank; or
(v) such Letter of Credit is to be denominated in a currency
other than Dollars.
3.02 ISSUANCE, AMENDMENT AND RENEWAL OF LETTERS OF CREDIT. (a) Each
Letter of Credit shall be Issued upon the irrevocable written request of the
Company received by the Issuing Bank (with a copy sent by the Company to the
Administrative Agent) at least two days (or such shorter time as the Issuing
Bank may agree in a particular instance in its sole discretion) prior to the
proposed date of issuance. Each such request for issuance of a Letter of Credit
shall be by facsimile, confirmed immediately in an original writing, in the form
of an L/C Application, and shall specify in form and detail satisfactory to the
Issuing Bank: (i) the proposed date of Issuance of the Letter of Credit (which
shall be a Business Day); (ii) the face amount of the Letter of Credit; (iii)
the expiry date of the Letter of Credit; (iv) the name and address of the
beneficiary thereof; (v) the documents to be presented by the beneficiary of the
Letter of Credit in case of any drawing thereunder; (vi) the full text of any
certificate to be presented by the beneficiary in case of any drawing
thereunder; and (vii) such other matters as the Issuing Bank may reasonably
require.
(b) At least one Business Day prior to the Issuance of any Letter of
Credit, the Issuing Bank will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has received a copy of
the L/C Application or L/C Amendment Application from the Company and, if not,
the Issuing Bank will provide the Administrative Agent with a copy thereof (if
application was made by hard copy) or a listing of Letters of Credit to be
issued (if application was made electronically). Unless the Issuing Bank has
received notice on or before the Business Day immediately preceding the date the
Issuing Bank is to issue a requested Letter of Credit from the Administrative
Agent (A) directing the Issuing Bank not to Issue such Letter of Credit because
such Issuance is not then permitted under subsection 3.01(a) as a result of the
limitations set forth in clauses (1) through (3) thereof or subsection
3.01(b)(ii); or (B) that one or more conditions specified in Article IV are not
then satisfied; then, subject to the terms and conditions hereof, the Issuing
Bank shall, on the requested date, issue a Letter of Credit for the account of
the Company in accordance with the Issuing Bank's usual and customary business
practices.
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(c) From time to time while a Letter of Credit is outstanding and
prior to the Revolving Termination Date, the Issuing Bank will, upon the written
request of the Company received by the Issuing Bank (with a copy sent by the
Company to the Administrative Agent) at least three days (or such shorter time
as the Issuing Bank may agree in a particular instance in its sole discretion)
prior to the proposed date of amendment, amend any Letter of Credit issued by
it. Each such request for amendment of a Letter of Credit shall be made by
facsimile, confirmed immediately in an original writing, made in the form of an
L/C Amendment Application and shall specify in form and detail satisfactory to
the Issuing Bank: (i) the Letter of Credit to be amended; (ii) the proposed
date of amendment of the Letter of Credit (which shall be a Business Day); (iii)
the nature of the proposed amendment; and (iv) such other matters as the Issuing
Bank may reasonably require. The Issuing Bank shall be under no obligation to
amend any Letter of Credit if: (A) the Issuing Bank would have no obligation at
such time to issue such Letter of Credit in its amended form under the terms of
this Agreement; or (B) the beneficiary of any such Letter of Credit does not
accept the proposed amendment to the Letter of Credit. The Administrative Agent
will promptly notify the Lenders of the receipt by it of any L/C Application or
L/C Amendment Application.
(d) The Issuing Bank and the Lenders (including the Swing Line
Lender) agree that, while a Letter of Credit is outstanding and prior to the
Revolving Termination Date, at the option of the Company and upon the written
request of the Company received by the Issuing Bank (with a copy sent by the
Company to the Administrative Agent) at least three days (or such shorter time
as the Issuing Bank may agree in a particular instance in its sole discretion)
prior to the proposed date of notification of renewal, the Issuing Bank shall be
entitled to authorize the automatic renewal of any Letter of Credit (other than
an Existing USF Letter of Credit) issued by it. Each such request for renewal
of a Letter of Credit shall be made by facsimile, confirmed immediately in an
original writing, in the form of an L/C Amendment Application, and shall specify
in form and detail satisfactory to the Issuing Bank: (i) the Letter of Credit to
be renewed; (ii) the proposed date of notification of renewal of the Letter of
Credit (which shall be a Business Day); (iii) the revised expiry date of the
Letter of Credit; and (iv) such other matters as the Issuing Bank may require.
The Issuing Bank shall be under no obligation so to renew any Letter of Credit
if: (A) the Issuing Bank would have no obligation at such time to issue or amend
such Letter of Credit in its renewed form under the terms of this Agreement; or
(B) the beneficiary of any such Letter of Credit does not accept the proposed
renewal of the Letter of Credit. If any outstanding Letter of Credit shall
provide that it shall be automatically renewed unless the beneficiary thereof
receives notice from the Issuing Bank that such Letter of Credit shall not be
renewed, and if at the time of renewal the Issuing Bank would be entitled to
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authorize the automatic renewal of such Letter of Credit in accordance with this
subsection 3.02(d) upon the request of the Company but the Issuing Bank shall
not have received any L/C Amendment Application from the Company with respect to
such renewal or other written direction by the Company with respect thereto, the
Issuing Bank shall nonetheless be permitted to allow such Letter of Credit to
renew, and the Company and the Lenders hereby authorize such renewal, and,
accordingly, the Issuing Bank shall be deemed to have received an L/C Amendment
Application from the Company requesting such renewal.
(e) The Issuing Bank may, at its election (or as required by the
Administrative Agent at the direction of the Majority Lenders), deliver any
notices of termination or other communications to any Letter of Credit
beneficiary or transferee, and take any other action as necessary or
appropriate, at any time and from time to time, in order to cause the expiry
date of such Letter of Credit to be a date not later than the Revolving
Termination Date.
(f) This Agreement shall control in the event of any conflict with
any L/C-Related Document (other than any Letter of Credit).
(g) The Issuing Bank will also deliver to the Administrative Agent,
concurrently or promptly following its delivery of a Letter of Credit, or
amendment to or renewal of a Letter of Credit, to an advising bank or a
beneficiary, a true and complete copy of each such Letter of Credit or amendment
to or renewal of a Letter of Credit.
3.03 EXISTING LETTERS OF CREDIT; RISK PARTICIPATIONS, DRAWINGS AND
REIMBURSEMENTS. (a) On and after the Closing Date, the Existing Letters of
Credit shall be deemed for all purposes, including for purposes of the fees to
be collected pursuant to subsections 3.08(a) and 3.08(c), and reimbursement of
costs and expenses to the extent provided herein, Letters of Credit outstanding
under this Agreement and entitled to the benefits of this Agreement and the
other Loan Documents, and shall be governed by the applications and agreements
pertaining thereto and by this Agreement. Each Lender with a Revolving
Commitment shall be deemed to, and hereby irrevocably and unconditionally agrees
to, purchase from the Issuing Bank on the Closing Date a participation in each
such Existing Letter of Credit Issued by such Issuing Bank and each drawing
thereunder in an amount equal to the product of (i) such Lender's applicable
Commitment Percentage times (ii) the maximum amount available to be drawn under
such Letter of Credit and the amount of such drawing, respectively. For
purposes of subsection 2.01(b) and subsection 2.10(b), the Existing Letters of
Credit shall be deemed to utilize pro rata the Revolving Commitment of each
Lender.
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(b) Immediately upon the Issuance of each Letter of Credit in
addition to those described in subsection 3.03(a), each Lender with a Revolving
Commitment shall be deemed to, and hereby irrevocably and unconditionally agrees
to, purchase from the Issuing Bank a participation in such Letter of Credit and
each drawing thereunder in an amount equal to the product of (i) the applicable
Commitment Percentage of such Lender, times (ii) the maximum amount available to
be drawn under such Letter of Credit and the amount of such drawing,
respectively. For purposes of subsection 2.01(b) and 2.10(b), each Issuance of
a Letter of Credit shall be deemed to utilize the Revolving Commitment of each
Lender by an amount equal to the amount of such participation.
(c) In the event of any request for a drawing under a Letter of
Credit by the beneficiary or transferee thereof, the Issuing Bank will promptly
notify the Company. The Company shall reimburse the Issuing Bank prior to 1:00
p.m. (New York City time), on each date that any amount is paid by the Issuing
Bank under any Letter of Credit (each such date, an "HONOR DATE"), in an amount
equal to the amount so paid by the Issuing Bank. In the event the Company fails
to reimburse the Issuing Bank for the full amount of any drawing under any
Letter of Credit by 1:00 p.m. (New York City time) on the Honor Date, the
Issuing Bank will promptly notify the Administrative Agent and the
Administrative Agent will promptly notify each Lender thereof, and the Company
shall be deemed to have requested that Base Rate Loans be made by the Lenders to
be disbursed on the Honor Date under such Letter of Credit, subject to the
amount of the unutilized portion of the Aggregate Revolving Commitment and
subject to the conditions set forth in Section 4.02. Any notice given by the
Issuing Bank or the Administrative Agent pursuant to this subsection 3.03(c) may
be oral if immediately confirmed in writing (including by facsimile); provided
that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.
(d) Each Lender with a Revolving Commitment shall upon any notice
pursuant to subsection 3.03(c) make available to the Administrative Agent for
the account of the Issuing Bank an amount in Dollars and in immediately
available funds equal to its Commitment Percentage of the amount of the drawing,
whereupon the participating Lenders shall (subject to subsection 3.03(e)) each
be deemed to have made a Revolving Loan consisting of a Base Rate Loan to the
Company in that amount. If any Lender so notified fails to make available to
the Administrative Agent for the account of the Issuing Bank the amount of such
Lender's Commitment Percentage of the amount of the drawing by no later than
4:00 p.m. (New York City time) on the Honor Date, then interest shall accrue on
such Lender's obligation to make such payment, from the Honor Date to the date
such Lender makes such payment, at a rate per annum equal to the Federal Funds
Rate in effect from time to time during such period. The Administrative Agent
will promptly give notice of the occurrence of the Honor Date, but failure of
the Administrative
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Agent to give any such notice on the Honor Date or in sufficient time to enable
any Lender to effect such payment on such date shall not relieve such Lender
from its obligations under this Section 3.03.
(e) With respect to any unreimbursed drawing that is not converted
into Revolving Loans consisting of Base Rate Loans to the Company in whole or in
part, because of the Company's failure to satisfy the conditions set forth in
Section 4.02 or for any other reason, the Company shall be deemed to have
incurred from the Issuing Bank an L/C Borrowing in the amount of such drawing,
which L/C Borrowing shall be due and payable on demand (together with interest)
and shall bear interest at a rate per annum equal to the Base Rate plus the
Applicable Margin plus 2% per annum, and each Lender's payment to the Issuing
Bank pursuant to subsection 3.03(d) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance from
such Lender in satisfaction of its participation obligation under this Section
3.03.
(f) Each Lender's obligation in accordance with this Agreement to
make the Revolving Loans or L/C Advances, as contemplated by this Section 3.03,
as a result of a drawing under a Letter of Credit, shall be absolute and
unconditional and without recourse to the Issuing Bank and shall not be affected
by any circumstance, including (i) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against the Issuing Bank, the
Company or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default, an Event of Default or a Material Adverse Effect; or
(iii) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing; PROVIDED, HOWEVER, that each Lender's
obligation to make Revolving Loans under this Section 3.03 is subject to the
conditions set forth in Section 4.02.
3.04 REPAYMENT OF PARTICIPATIONS. (a) Upon (and only upon) receipt by the
Administrative Agent for the account of the Issuing Bank of immediately
available funds from the Company (i) in reimbursement of any payment made by the
Issuing Bank under the Letter of Credit with respect to which any Lender has
paid the Administrative Agent for the account of the Issuing Bank for such
Lender's participation in the Letter of Credit pursuant to Section 3.03 or (ii)
in payment of interest thereon, the Administrative Agent will pay to each such
Lender, in the same funds as those received by the Administrative Agent for the
account of the Issuing Bank, the amount of such Lender's Commitment Percentage
of such funds, and the Issuing Bank shall receive the amount of the Commitment
Percentage of such funds of any Lender that did not so pay the Agent for the
account of the Issuing Bank.
(b) If the Administrative Agent or the Issuing Bank is required at
any time to return to the Company, or to a trustee,
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receiver, liquidator, custodian, or any official in any Insolvency Proceeding,
any portion of the payments made by the Company to the Administrative Agent for
the account of the Issuing Bank pursuant to subsection 3.04(a) in reimbursement
of a payment made under the Letter of Credit or interest or fee thereon, each
such Lender shall, on demand of the Administrative Agent, forthwith return to
the Administrative Agent or the Issuing Bank the amount of its Commitment
Percentage of any amounts so returned by the Administrative Agent or the Issuing
Bank plus interest thereon from the date such demand is made to the date such
amounts are returned by such Lender to the Administrative Agent or the Issuing
Bank, at a rate per annum equal to the Federal Funds Rate in effect from time to
time.
3.05 ROLE OF THE ISSUING BANK. (a) Each Lender and the Company agree
that, in paying any drawing under a Letter of Credit, the Issuing Bank shall not
have any responsibility to obtain any document (other than any sight draft and
certificates expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document.
(b) No Agent-Related Person nor any of the respective correspondents,
participants or assignees of the Issuing Bank shall be liable to any Lender for:
(i) any action taken or omitted in connection herewith at the request or with
the approval of the Lenders (including the Majority or Required Lenders, as
applicable); (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any L/C-Related Document.
(c) The Company hereby assumes all risks of the acts or omissions of
any beneficiary or transferee with respect to its use of any Letter of Credit;
PROVIDED, HOWEVER, that this assumption is not intended to, and shall not,
preclude the Company's pursuing such rights and remedies as it may have against
the beneficiary or transferee at law or under any other agreement. No Agent-
Related Person, nor any of the correspondents, participants or assignees of the
Issuing Bank, shall be liable or responsible for any of the matters described in
clauses (i) through (vii) of Section 3.06; PROVIDED, HOWEVER, anything in such
clauses to the contrary notwithstanding, that the Company may have a claim
against the Issuing Bank, and the Issuing Bank may be liable to the Company, to
the extent, but only to the extent, of any direct, as opposed to consequential
or exemplary, damages suffered by the Company which the Company proves were
caused by the Issuing Bank's willful misconduct or gross negligence or the
Issuing Bank's willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing: (i) the Issuing
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Bank may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) the Issuing Bank shall not be responsible
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.
6. OBLIGATIONS ABSOLUTE. The obligations of the Company under this
Agreement and any L/C-Related Document to reimburse the Issuing Bank for a
drawing under a Letter of Credit, and to repay any L/C Borrowing and any drawing
under a Letter of Credit converted into Revolving Loans, shall be unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement and each such other L/C-Related Document under all circumstances,
including the following:
(i) any lack of validity or enforceability of this Agreement or
any L/C-Related Document;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the obligations of the Company in respect
of any Letter of Credit or any other amendment or waiver of or any consent
to departure from all or any of the L/C-Related Documents;
(iii) the existence of any claim, set-off, defense or other right
that the Company may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by the L/C-Related Documents or any unrelated
transaction;
(iv) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any
Letter of Credit;
(v) any payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of any Letter of Credit; or any payment made by the
Issuing Bank under any Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to
any beneficiary or any
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transferee of any Letter of Credit, including any arising in connection
with any Insolvency Proceeding;
(vi) any exchange, release or non-perfection of any collateral,
or any release or amendment or waiver of or consent to departure from any
other guarantee, for all or any of the obligations of the Company in
respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Company or a guarantor.
3.07 CASH COLLATERAL PLEDGE. Upon (i) the request of the Administrative
Agent, (A) if the Issuing Bank has honored any full or partial drawing request
on any Letter of Credit and such drawing has resulted in an L/C Borrowing
hereunder, or (B) if, as of the Revolving Termination Date, any Letters of
Credit may for any reason remain outstanding and partially or wholly undrawn, or
(ii) the occurrence of the circumstances described in subsection 2.07(j)
requiring the Company to Cash Collateralize Letters of Credit, then, the Company
shall immediately Cash Collateralize the L/C Obligations in an amount equal to
such L/C Obligations.
3.08 LETTER OF CREDIT FEES. (a) The Company shall pay to the
Administrative Agent for the account of each of the Lenders with a Revolving
Commitment a letter of credit fee with respect to the Letters of Credit equal to
(i) the Applicable Margin with respect to Revolving Loans that are LIBOR Loans
times (ii) the average daily maximum amount available to be drawn of the
outstanding Letters of Credit, computed on a quarterly basis in arrears on the
last Business Day of each calendar quarter based upon Letters of Credit
outstanding for that quarter as calculated by the Administrative Agent. Such
letter of credit fees shall be due and payable quarterly in arrears on the last
Business Day of each calendar quarter during which Letters of Credit are
outstanding, commencing on the first such quarterly date to occur after the
Closing Date, through the Revolving Termination Date (or such later date upon
which the outstanding Letters of Credit shall expire), with the final payment to
be made on the Revolving Termination Date (or such later expiration date).
(b) The Company shall pay to the Issuing Bank a letter of credit
fronting fee for each Letter of Credit Issued by the Issuing Bank equal to 1/4
of 1% of the face amount (or increased face amount, as the case may be) of such
Letter of Credit, PROVIDED that, with respect to Existing Letters of Credit, the
Company shall pay to the Issuing Bank such fee as shall have been previously
agreed upon by the Company and the Issuing Bank. Such Letter of Credit fronting
fee shall be due and payable on each date of issuance or extension of a Letter
of Credit, and the Company hereby
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authorizes the Issuing Bank to automatically debit an account maintained by the
Issuing Bank for such purpose.
(c) The Company shall pay to the Issuing Bank from time to time on
demand the normal issuance, presentation, amendment and other processing fees,
and other standard costs and charges, of the Issuing Bank relating to letters of
credit as from time to time in effect.
3.09 UNIFORM CUSTOMS AND PRACTICE. The Uniform Customs and Practice for
Documentary Credits as published by the International Chamber of Commerce most
recently at the time of issuance of any Letter of Credit shall (unless otherwise
expressly provided in the Letters of Credit) apply to the Letters of Credit.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 CONDITIONS OF INITIAL LOANS. The obligation of each Lender to make
its initial Loan hereunder, or of the Issuing Bank to Issue any Letter of
Credit, is subject to the condition that the Agents shall have received on or
before the Closing Date all of the following, in form and substance satisfactory
to the Agents, and (except for the instruments or documents representing Pledged
Collateral) in sufficient copies for the Agents and each Lender:
(a) LOAN DOCUMENTS. This Agreement executed by the Company, the
Administrative Agent, the Documentation Agent, the Issuing Bank, the Co-
Arrangers, and each of the Lenders (including the Swing Line Lender); the Notes
executed by the Company; and each other Loan Document executed by the parties
thereto;
(b) RESOLUTIONS; INCUMBENCY.
(i) Copies of the resolutions of the board of directors of the
Company approving and authorizing the execution, delivery and performance
by the Company of this Agreement and the other Loan Documents to be
delivered hereunder, and authorizing the borrowing of the Loans, certified
as of the Closing Date by the Secretary or an Assistant Secretary of the
Company;
(ii) Certified copies of the resolutions of the board of
directors of each Subsidiary of the Company approving the Loan Documents to
be delivered by it hereunder; and
(iii) A certificate of the Secretary or Assistant Secretary of the
Company, and of each Subsidiary of the Company, certifying the names and
true signatures of the
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officers of the Company authorized to execute, deliver and perform, as
applicable, this Agreement, and all other Loan Documents to be delivered
hereunder;
(c) ARTICLES OF INCORPORATION; BY-LAWS AND GOOD STANDING. Each of
the following documents:
(i) the certificate of incorporation of each of the Company and
its Subsidiaries as in effect on the Closing Date, certified by the
Secretary of State of its jurisdiction of incorporation as of a recent date
and by the Secretary or Assistant Secretary of the Company or Subsidiary,
as applicable, as of the Closing Date; and the bylaws of the Company and
each of its Subsidiaries as in effect on the Closing Date, certified by the
Secretary or Assistant Secretary of the Company or Subsidiary, as
applicable, as of the Closing Date; and
(ii) a good standing certificate for the Company and each of its
Subsidiaries from the Secretary of State of its jurisdiction of
incorporation and each state where the Company or such Subsidiary is
qualified to do business as a foreign corporation as of a date within five
days of the Closing Date; and
(iii) A Certificate of Merger of USF with and into USF Acquisition
Corp., certified by the Secretary of State of the State of Delaware;
(d) COLLATERAL DOCUMENTS. The Collateral Documents, executed by the
Company and the Subsidiaries, in appropriate form for recording, where
necessary, together with:
(i) acknowledgment copies of all UCC-l financing statements
filed, registered or recorded to perfect the security interests of the
Administrative Agent for the benefit of the Lenders, or other evidence
satisfactory to the Agents that there has been filed, registered or
recorded all financing statements and other filings, registrations and
recordings necessary and advisable to perfect the Liens of the
Administrative Agent for the benefit of the Lenders in accordance with
applicable law;
(ii) written advice relating to such Lien and judgment searches
as the Agents shall have requested of the Company, and such termination
statements or other documents as may be necessary to confirm that the
Collateral is subject to no other Liens in favor of any Persons (other than
Permitted Liens);
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(iii) all certificates and instruments representing the Pledged
Collateral and stock transfer powers executed in blank;
(iv) evidence that all other actions necessary or, in the opinion
of the Agents and their counsel, desirable to perfect and protect the first
priority security interest created by the Collateral Documents (subject to
Permitted Liens and security interests permitted under the Loan Documents),
and to enhance the Administrative Agent's ability to preserve and protect
its interest in and access to the Collateral, have been taken;
(v) funds sufficient to pay any filing or recording tax or fee
in connection with any and all UCC-1 financing statements and the
Mortgages;
(vi) with respect to the Mortgaged Property, an A.L.T.A. Form B
(or other form acceptable to the Agents) mortgagee policy of title
insurance or a binder issued by a title insurance company reasonably
satisfactory to the Agents insuring (or undertaking to insure, in the case
of a binder) that the Mortgage creates and constitutes a valid first Lien
against that portion of the Mortgaged Property that constitutes real
Property under applicable state law in favor of the Administrative Agent,
subject only to exceptions acceptable to the Agents, with such endorsements
and affirmative insurance as the Agents may reasonably request;
(vii) evidence that the Administrative Agent has been named as
mortgagee and loss payee under all policies of property insurance, and as
additional insured under all policies of general liability insurance,
required by the Mortgage;
(viii) flood insurance and earthquake insurance (where required by
federal law) on terms satisfactory to the Agents;
(ix) current ALTA surveys and surveyor's certification as to
Mortgaged Property specified by the Agents, each in form and substance
satisfactory to the Agents;
(x) proof of payment of all title insurance premiums,
documentary stamp or intangible taxes, recording fees and mortgage taxes
payable in connection with the recording of any Mortgage or the issuance of
the title insurance policies (whether due on the Closing Date or in the
future) including sums due in connection with any future advances; and
(xi) such consents, estoppels, subordination agreements and other
documents and instruments executed by
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landlords, tenants and other Persons party to material contracts relating
to any Collateral as to which the Administrative Agent shall be granted a
Lien for the benefit of itself, the Lenders (including the Swing Line
Lender) and the Issuing Bank, as requested by the Agents;
(e) LEGAL OPINIONS.
(i) The signed opinions of (A) Jones, Day, Reavis & Pogue, (B)
Maslon Edelman Borman & Brand and (C) Ann B. Cianflone, Esq., counsel to
the Company, USF and the other Subsidiaries of the Company, and (D) the
Company's Director of Litigation, each dated the Closing Date and addressed
to the Agents, the Issuing Bank and the Lenders (including the Swing Line
Lender), substantially in the composite form of EXHIBIT 4.01(e)(1) hereto;
and
(ii) The signed opinions of local counsel to the Company and the
Subsidiaries of the Company in all jurisdictions in which any of the
Mortgaged Property is located, dated the Closing Date, in substantially the
form of EXHIBIT 4.01(e)(2) hereto and as to such other matters as the
Agents may reasonably request that are appropriate to local law and
requirements;
(f) PAYMENT OF FEES. The Company shall have paid all accrued and
unpaid fees, costs and expenses to the extent then due and payable on the
Closing Date (including but not limited to the fees and costs referred to in
Section 2.10), together with Attorney Costs to be reimbursed by the Company
pursuant to Section 10.04 to the extent invoiced prior to the Closing Date, and
such additional Attorney Costs as shall constitute the Agents' reasonable
estimate of Attorney Costs incurred or to be incurred by them or their
Affiliates through the closing proceedings; PROVIDED that such estimate shall
not thereafter preclude final settling of accounts between the Company and each
of the Agents and their respective Affiliates; including any such costs, fees
and expenses arising under or referenced in Sections 2.10, 2.16 and 10.04;
(g) CERTIFICATE. A certificate signed by a Responsible Officer,
dated as of the Closing Date, stating that:
(i) the representations and warranties contained in Article V
are true and correct on and as of such date, as though made on and as of
such date;
(ii) no Default or Event of Default exists or would result from
the initial Borrowing or the Issuance of any Letter of Credit by the
Issuing Bank;
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(iii) the Company (individually, and on a consolidated basis) and
each of its Subsidiaries is Solvent on the Closing Date and will continue
to be Solvent after giving effect to the transactions contemplated hereby;
(iv) there has not occurred since February 2, 1996, any event or
circumstance that has resulted or could reasonably be expected to result in
a Material Adverse Effect;
(v) all conditions to be fulfilled on or prior to the Closing
Date in this Section 4.01 have been satisfied; and
(vi) the Transaction has been consummated without the waiver of
any conditions precedent required to be performed on or prior to the
consummation thereof which are for the benefit of the Company (except as
specified);
(h) FINANCIAL STATEMENTS. A certified copy of financial statements
of the Company and its Subsidiaries referred to in Section 5.11;
(i) INSURANCE POLICIES. Standard lenders' payable endorsements with
respect to the insurance policies or other instruments or documents evidencing
insurance coverage on the properties of the Company in accordance with Section
6.06;
(j) ENVIRONMENTAL REVIEW. An environmental site assessment report or
updates of prior assessments with respect to any real property as to which the
Administrative Agent is granted a Lien for the benefit of itself, the Lenders
and the Issuing Bank (except for real Property located at 9 East Main Street,
West Yarmouth, Massachusetts and two vacant lots in Indianapolis, Indiana),
dated as of a recent date prior to the Closing Date, prepared by a qualified
firm or firms, acceptable to the Agents, (i) stating, among other things, that
such real property is free from Hazardous Materials or specifying any Estimated
Response Cost for each parcel of real property that is acceptable to the
Lenders, and further stating that operations conducted thereon are in compliance
with all Environmental Laws; and (ii) letters executed by the firm or firms
performing such assessments in form and substance reasonably acceptable to the
Agents authorizing the Agents, the Lenders and the Issuing Bank to rely on such
assessments. Evidence of compliance with applicable state environmental
transfer statutes including, without limitation, the Illinois Responsible
Property Transfer Act and the New Jersey Industrial Site Recovery Act.
(k) TONE BROTHERS LIABILITY. The Agents shall have received an
update in form and content satisfactory to them regarding the Tone Brothers
Liability;
(l) CONSUMMATION OF TRANSACTION, ETC. The Transaction shall have
been consummated without the waiver, except as disclosed on the certificate of a
Responsible Officer referred to in
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subsection 4.01(g), of any conditions precedent thereto required to be performed
on or prior to the consummation of the Transaction which are for the benefit of
the Company, and the Agents shall have received such evidence of the
consummation of the Transaction as the Agents may reasonably request;
(m) APPROVALS. All necessary governmental (domestic and foreign) and
third party approvals in connection with the Transaction shall have been
obtained and remain in effect, and all applicable waiting periods shall have
expired without any action being taken by any competent authority which
restrains, prevents or imposes materially adverse conditions upon the
consummation of all or any part of the Transaction. Additionally, there shall
not exist any judgment, stop order, injunction or other restraint issued or
filed or a hearing seeking injunctive relief or other restraint pending or
notified prohibiting or imposing materially adverse conditions upon all or any
part of the Transaction;
(n) USF RECEIVABLES FACILITY. (i) The USF Receivables Facility shall
be outstanding and there shall not have occurred (and the consummation of the
transactions contemplated hereby, including the Transaction, shall not cause)
any event of default or event, which, with notice or lapse of time, or both,
would constitute an event of default under the USF Receivables Facility, and
(ii) BofA, a Person designated by BofA, or a Person acceptable to the Agents
shall have purchased from the holders thereof all of the issued and outstanding
Investor Certificates (as defined in the USF Master Trust Agreement) issued
pursuant to the USF Receivables Facility;
(o) SUBORDINATED NOTES OUTSTANDING. (i) The Subordinated Notes shall
be outstanding and there shall not have occurred (and consummation of the
transactions contemplated hereby, including the Transaction, shall not cause)
any event of default or event, which, with notice or lapse of time, or both,
would constitute an event of default under the Subordinated Note Indenture and
(ii) except for execution of a supplemental indenture pursuant to which the
subordinated guarantees of the Company's Subsidiaries referred to in subsection
7.08(d) were delivered, the Subordinated Note Indenture shall not have been
amended, modified, nor any provision thereof waived;
(p) RYKOFF RECEIVABLES SUBSIDIARY. The Company shall have (i) formed
Rykoff-Sexton Funding Corporation, which shall have an implied credit rating of
at least "BBB", and (ii) received at least $110,000,000 in cash proceeds from
Rykoff-Sexton Funding Corporation;
(q) LITIGATION. Other than, and to the extent disclosed on SCHEDULE
5.05 hereto, no litigation by any entity (private or governmental) shall be
pending or threatened (i) with respect to the Transaction, this Agreement, any
other Loan Document or any
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documentation executed in connection herewith or the transactions contemplated
hereby or (ii) which the Agents shall determine could reasonably be expected to
have a Material Adverse Effect after giving effect to the Transaction;
(r) EXISTING INDEBTEDNESS. On the Closing Date and after giving
effect to the Transaction and the other transactions contemplated hereby, the
Company shall not have any Indebtedness outstanding except for the Loans,
reimbursement obligations under Letters of Credit, and other Indebtedness
permitted hereby, and the terms and conditions of such Indebtedness shall be
satisfactory to the Agents;
(s) COMPLIANCE WITH LAWS. The Agents shall be satisfied that the
Company and its Subsidiaries are in compliance with Regulations G, T, U and X of
the Board of Governors of the Federal Reserve System, and in all material
respects with all other Requirements of Law, as of the Closing Date and after
giving effect to the transactions contemplated hereby;
(t) TERMINATION OF EXISTING CREDIT AGREEMENTS.
(i) On or prior to the Closing Date, the total commitments under
each of the Existing Credit Agreements shall have been terminated, all
loans thereunder shall have been repaid in full, together with interest
thereon, all letters of credit, if any, issued thereunder shall have been
terminated (other than the Existing Letters of Credit) and all other
amounts owing pursuant to the Existing Credit Agreements shall have been
repaid in full and the Existing Credit Agreements shall have been
terminated on terms and conditions satisfactory to the Agents and be of no
further force or effect (other than any indemnity or other provision which
expressly survives the termination thereof). On the Closing Date, the
Agents shall have received evidence in form, scope and substance
satisfactory to the Agents that the matters set forth in this subsection
4.01(t) have been satisfied on such date; and
(ii) The creditors under the Existing Credit Agreements shall
have terminated and released all security interests and Liens on the assets
owned by the Company and its Subsidiaries. The Agents shall have received
such releases of security interest in and Liens on the assets owned by the
Company and its Subsidiaries or agreements to release the foregoing and/or
proper termination statements (form UCC-3 or the appropriate equivalent) as
may have been requested by the Agents, which releases shall be in form and
substance satisfactory to the Agents; and
(u) OTHER DOCUMENTS. Such other approvals, opinions, documents,
materials, certificates or other evidence of compliance
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with the conditions set forth in this Section 4.01, as the Agents or their
counsel may request.
4.02 CONDITIONS TO ALL BORROWINGS. The obligation of each Lender to make
any Loan to be made by it hereunder (including its initial Loan) or to continue
or convert any Loan pursuant to Section 2.04, or of the Issuing Bank to Issue
any Letter of Credit, is subject to the satisfaction of the following conditions
precedent on the relevant Borrowing date, continuation or conversion date, or
Issuance Date:
(a) NOTICE OF BORROWING OR CONTINUATION/CONVERSION. The
Administrative Agent shall have received (with, in the case of the initial Loan
only, a copy for each Lender) a Notice of Borrowing or a Notice of
Continuation/Conversion or the Issuing Bank shall have received an L/C
Application, as applicable;
(b) CONTINUED ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made by the Company contained in Article V shall
be true and correct in all material respects on and as of such Borrowing date,
continuation or conversion date, or Issuance Date with the same effect as if
made on and as of such Borrowing date, continuation or conversion date, or
Issuance Date (except to the extent such representations and warranties
expressly refer to an earlier date, in which case they shall be true and correct
as of such earlier date);
(c) NO DEFAULT. No Default or Event of Default shall exist or shall
result from such Borrowing or continuation or conversion or Issuance; and
(d) NO FUTURE ADVANCE NOTICE. Neither the Administrative Agent nor
any Lender nor the Issuing Bank shall have received from the Company any notice
that any Collateral Document will no longer secure on a first priority basis
(subject to liens and security interests permitted under the Loan Documents)
future advances or future Loans or future Issuances to be made or extended under
this Agreement.
Each Notice of Borrowing and Notice of Continuation/Conversion submitted by the
Company hereunder shall constitute a representation and warranty by the Company
hereunder, as of the date of each such notice or application and as of the date
of each Borrowing, continuation or conversion, or Issuance, as applicable, that
the conditions in Section 4.02 are satisfied.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Administrative Agent, the
Documentation Agent, the Issuing Bank, the Swing Line Lender and each other
Lender that:
5.01 CORPORATE EXISTENCE AND POWER. The Company and each of its
Subsidiaries:
(a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority to own its assets, carry on its
business, and execute, deliver and perform its obligations under, the Loan
Documents;
(c) is duly qualified as a foreign corporation, and licensed and in
good standing, under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
or license, except where failure to be so qualified or licensed will not have a
Material Adverse Effect; and
(d) has all necessary material governmental licenses, authorizations,
consents and approvals to own its assets and carry on its business, and in all
material respects is in compliance with applicable material Requirements of Law.
5.02 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution, delivery
and performance by the Company and its Subsidiaries of this Agreement, and any
other Loan Document to which such Person is party, have been duly authorized by
all necessary corporate action, and do not and will not:
(a) contravene the terms of any of that Person's Organization
Documents;
(b) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any Contractual Obligation
to which such Person is a party or any order, injunction, writ or decree of any
Governmental Authority to which such Person or its Property is subject; or
(c) violate any Requirement of Law.
5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except for recordings and
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filings in connection with the Liens granted to the Administrative Agent under
the Collateral Documents) is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Company or
any of its Subsidiaries of this Agreement or any other Loan Document or the
transactions contemplated hereby or thereby (except as referred to in the Merger
Agreement in connection with the Transaction).
5.04 BINDING EFFECT. This Agreement and each other Loan Document to which
the Company or any of its Subsidiaries is a party constitute the legal, valid
and binding obligations of the Company and each such Subsidiary to the extent it
is a party thereto, enforceable against such Person in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
5.05 LITIGATION. Except as specifically disclosed in SCHEDULE 5.05, there
are no actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of the Company, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Company, or its
Subsidiaries or any of their respective Properties which:
(a) purport to affect or pertain to the Merger Agreement, this
Agreement or any other Loan Document, the Transaction or any of the transactions
contemplated hereby or thereby; or
(b) would reasonably be expected to have a Material Adverse Effect.
No injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement or any other
Loan Document, or directing that the transactions provided for herein or therein
not be consummated as herein or therein provided.
5.06 NO DEFAULT. No Default or Event of Default exists or would result
from the incurring of any Obligations by the Company or the grant or perfection
of the Administrative Agent's Liens on the Collateral. Neither the Company nor
any of its Subsidiaries is in default under or with respect to any Contractual
Obligation in any respect which, individually or together with all such
defaults, could reasonably be expected to have a Material Adverse Effect or that
would, if such default had occurred after the Closing Date, create an Event of
Default under subsection 8.01(e).
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5.07 ERISA COMPLIANCE.
(a) SCHEDULE 5.07 hereto lists all Plans and separately identifies
Plans intended to be Qualified Plans and Multiemployer Plans.
(b)Except as disclosed in SCHEDULE 5.07 hereto, each Plan sponsored or
maintained by the Company or an ERISA Affiliate is in compliance in all material
respects with the applicable provisions of ERISA, the Code and other Federal or
state law, including all requirements under the Code or ERISA for filing reports
(which are true and correct in all material respects as of the date filed), and
benefits have been paid in all material respects in accordance with the
provisions of the Plan.
(c) Each Qualified Plan sponsored or maintained by the Company or an
ERISA Affiliate has been determined by the Internal Revenue Service to qualify
under Section 401 of the Code, and the trusts created thereunder have been
determined to be exempt from tax under the provisions of Section 501 of the
Code, or an application for determination of qualified status has been or will
be made to the Internal Revenue Service prior to the end of the remedial
amendment period under Section 401(b) of the Code, and to the best knowledge of
the Company nothing has occurred which would cause the loss of such
qualification or tax-exempt status.
(d) Except as specifically disclosed in SCHEDULE 5.07, no Plan
subject to Title IV of ERISA that is sponsored or maintained by the Company or
an ERISA Affiliate has any Unfunded Pension Liability.
(e) Except as specifically disclosed in SCHEDULE 5.07, no member of
the Controlled Group has ever represented, promised or contracted (whether in
oral or written form) to any current or former employee (either individually or
to employees as a group) that such current or former employee(s) would be
provided, at any cost to any member of the Controlled Group, with life insurance
or employee welfare plan benefits (within the meaning of section 3(1) of ERISA)
following retirement or termination of employment. Except as specifically
disclosed on SCHEDULE 5.07, to the extent that any member of the Controlled
Group has made any such representation, promise or contract, such member has
expressly reserved the right to amend or terminate such life insurance or
employee welfare plan benefits with respect to claims not yet incurred.
(f) All members of the Controlled Group have complied in all material
respects with the notice and continuation coverage requirements of Section 4980B
of the Code.
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(g) Except as specifically disclosed in SCHEDULE 5.07, no ERISA Event
has occurred or is reasonably expected by the Company or any ERISA Affiliate to
occur with respect to any Plan.
(h) Except as specifically disclosed on SCHEDULE 5.07, there are no
pending or, to the best knowledge of the Company, threatened claims, actions or
lawsuits, other than routine claims for benefits in the usual and ordinary
course, asserted or instituted against (i) any Plan maintained or sponsored by
the Company or its assets, (ii) any member of the Controlled Group with respect
to any Qualified Plan, or (iii) any fiduciary with respect to any Plan for which
the Company may be directly or indirectly liable, through indemnification
obligations or otherwise.
(i) Except as specifically disclosed in SCHEDULE 5.07, neither the
Company nor any ERISA Affiliate has incurred nor reasonably expects to incur (i)
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan or (ii) any liability under
Title IV of ERISA (other than premiums due and not delinquent under Section 4007
of ERISA) with respect to a Plan.
(j) Except as specifically disclosed in SCHEDULE 5.07, neither the
Company nor any ERISA Affiliate has transferred any Unfunded Pension Liability
to a Person other than the Company or an ERISA Affiliate or otherwise engaged in
a transaction that could be subject to Section 4069 or 4212(c) of ERISA.
(k) To the best knowledge of the Company, no member of the Controlled
Group has engaged, directly or indirectly, in a non-exempt prohibited
transaction (as defined in Section 4975 of the Code or Section 406 of ERISA) in
connection with any Plan which could reasonably be expected to have a Material
Adverse Effect.
5.08 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the Loans
(including the Swing Line Loans) are intended to be and shall be used solely for
the purposes set forth in and permitted by Section 6.11, and are intended to be
and shall be used in compliance with Section 7.07. Neither the Company nor any
of its Subsidiaries is generally engaged in the business of purchasing or
selling Margin Stock or extending credit for the purpose of purchasing or
carrying Margin Stock.
5.09 TITLE TO PROPERTIES. The Company and each of its Subsidiaries have
good and valid fee simple title to, or valid leasehold interests in, all real
Property used in the ordinary conduct of their respective businesses, except for
such defects in title as could not, individually or in the aggregate, have a
Material Adverse Effect. As of the Closing Date, the Property of the Company
and its Subsidiaries is subject to no Liens, other than Permitted Liens.
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5.10 TAXES. The Company and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their Properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP and no Notice of Lien has been filed or recorded. There is
no proposed tax assessment against the Company or any of its Subsidiaries which
would, if the assessment were made, have a Material Adverse Effect.
5.11 FINANCIAL CONDITION.
(a) The audited consolidated balance sheets of each of (1) the
Company and its Subsidiaries (other than USF) as of April 29, 1995 and (2) USF
and its Subsidiaries as of December 31, 1995, and, in each case, the related
consolidated statements of operations, shareholders' equity and cash flows,
together with the notes thereto, for the three most recently completed fiscal
years ended on such dates, respectively:
(i) were prepared in accordance with GAAP (as in effect from
time to time) consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein;
(ii) fairly present the consolidated financial condition of the
Company and its Subsidiaries (other than USF and its Subsidiaries), and USF
and its Subsidiaries, as of the respective dates thereof, and the
respective consolidated results of operations and changes in cash flow for
the periods covered thereby; and
(iii) except as specifically disclosed in SCHEDULE 5.11, show all
material Indebtedness and other liabilities, direct or contingent, of the
Company and its consolidated Subsidiaries (other than USF and its
Subsidiaries), and USF and its consolidated Subsidiaries, as the case may
be, as of the date thereof, including liabilities for taxes, material
commitments and Contingent Obligations.
(b) No event has occurred (i) since April 29, 1995 with respect to
the Company and its Subsidiaries (other than USF and its Subsidiaries) or (ii)
since December 31, 1995 with respect to USF and its Subsidiaries, which would
constitute a Material Adverse Effect.
(c) The unaudited consolidated balance sheet of each of (1) the
Company and its Subsidiaries as of January 27, 1996 contained in the Company's
quarterly report on SEC Form 10-Q dated March 12, 1996 and (2) USF and its
Subsidiaries as of March 30,
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1996 and, in each case, the related consolidated statements of operations,
shareholders' equity and cash flows for the fiscal quarter and elapsed portion
of the fiscal year then ended:
(i) fairly present, in conformity with GAAP applied on a basis
consistent with the financial statements referred to in subsection 5.11(a),
the consolidated financial condition of the Company and its Subsidiaries
(other than USF and its Subsidiaries), and USF and its Subsidiaries, as of
the respective dates thereof, and the respective consolidated results of
operations and changes in cash flow for the periods covered thereby; and
(ii) except as specifically disclosed in SCHEDULE 5.11, show all
material Indebtedness and other liabilities, direct or contingent, of the
Company and its consolidated Subsidiaries, and USF and its consolidated
Subsidiaries, as of the date thereof, including liabilities for taxes,
material commitments and Contingent Obligations.
5.12 ENVIRONMENTAL MATTERS.
(a) Except as specifically disclosed in SCHEDULE 5.12, the on-going
operations of the Company and each of its Subsidiaries comply in all material
respects with all Environmental Laws.
(b) Except as specifically disclosed in SCHEDULE 5.12, the Company
and each of its Subsidiaries have obtained all material licenses, permits,
authorizations, certificates, approvals and registrations required under any
Environmental Laws ("ENVIRONMENTAL PERMITS") and necessary for their respective
ordinary course operations, all such Environmental Permits are in good standing,
and the Company and each of its Subsidiaries are in compliance with all material
terms and conditions of such Environmental Permits.
(c) Except as specifically disclosed in SCHEDULE 5.12, none of the
Company, any of its Subsidiaries or any of their respective present Property or
operations, is subject to any outstanding written order from or agreement with
any Governmental Authority, nor subject to any judicial or administrative
proceeding, investigation, action, litigation, or suit respecting any
Environmental Claim.
(d) Except as specifically disclosed in SCHEDULE 5.12, there are no
violations of Environmental Laws and no Hazardous Materials or other conditions
or circumstances existing with respect to any Property, or arising from
operations prior to the Closing Date, of the Company or any of its Subsidiaries
or related to the Company's or any Subsidiary's offsite disposal of Hazardous
Materials which, in each case, would reasonably be expected to give rise to
Environmental Claims. In addition, except as disclosed on SCHEDULE 5.12,
neither the Company nor any of its Subsidiaries owns
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or operates any underground storage tanks, polychlorinated biphenals, or
asbestos containing materials that are not in material compliance with
applicable Environmental Laws.
The items disclosed in Schedule 5.12 will not have a Material Adverse Effect on
the Company or its Subsidiaries.
5.13. COLLATERAL DOCUMENTS.
(a) The provisions of each of the Collateral Documents are effective
to create in favor of the Administrative Agent for the benefit of itself, the
Lenders (including the Swing Line Lender) and the Issuing Bank, a legal, valid
and enforceable first priority security interest (subject to Permitted Liens and
security interests permitted under the Loan Documents) in all right, title and
interest of the Company and its Subsidiaries in the Collateral described
therein; and financing statements have been filed in the offices in all of the
jurisdictions listed in the schedule to the Company Security Agreement and the
Subsidiary Security Agreements and each such Security Agreement has been filed
in the U.S. Patent and Trademark Office and the U.S. Copyright Office.
(b) Each Mortgage when delivered will be effective to grant to the
Administrative Agent for the benefit of itself, the Lenders (including the Swing
Line Lender) and the Issuing Bank, a legal, valid and enforceable deed of trust
or mortgage lien, as applicable, on all the right, title and interest of the
mortgagor under such Mortgage in the portion of the Mortgaged Property described
therein that constitutes real Property. When each such Mortgage is duly
recorded in the appropriate office and the mortgage recording fees and taxes in
respect thereof are paid and compliance is otherwise had with the formal
requirements of state law applicable to the recording of real estate mortgages
generally, each such Mortgage, subject to the encumbrances and exceptions to
title set forth therein and except as noted in the title policies delivered to
the Administrative Agent pursuant to Section 4.01, is effective to create a
legal, valid, enforceable and perfected first priority lien against the real
Property interests therein described; and when financing statements have been
filed in the appropriate office, such Mortgage also creates a legal, valid,
enforceable and perfected first lien on, and security interest in, all right,
title and interest of the Company or such Subsidiary under such Mortgage in all
personal property and fixtures which is covered by such Mortgage, subject to no
other Liens, except the Prior Liens permitted under such Mortgage.
(c) The provisions of the Pledge Agreements are effective to create,
in favor of the Administrative Agent for the benefit of itself, the Lenders
(including the Swing Line Lender) and the Issuing Bank, a legal, valid and
enforceable security interest in all of the collateral described therein; and
the Pledged Collateral (as defined in the Pledge Agreements) was
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delivered to the Administrative Agent or its nominee in accordance with the
terms thereof. The Lien of the Pledge Agreements constitutes a perfected, first
priority security interest in all right, title and interest of the Company or
such Subsidiary, as the case may be, in the Collateral described therein, prior
and superior to all other Liens and interests.
(d) All representations and warranties of the Company and any of its
Subsidiaries party thereto contained in the Collateral Documents are true and
correct.
5.14. REGULATED ENTITIES. None of the Company, any Person controlling the
Company, or any Subsidiary of the Company, is (a) an "Investment Company" within
the meaning of the Investment Company Act of 1940; or (b) subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other Federal
or state statute or regulation limiting its ability to incur Indebtedness.
5.15 NO BURDENSOME RESTRICTIONS. Neither the Company nor any of its
Subsidiaries is a party to or bound by any Contractual Obligation, or subject to
any charter or corporate restriction, or any Requirement of Law, which could
reasonably be expected to have a Material Adverse Effect.
5.16 SOLVENCY. The Company (individually, and on a consolidated basis)
and each of its Subsidiaries is Solvent on the date hereof and will be Solvent
after giving effect to the transactions contemplated by the Loan Documents.
5.17 LABOR RELATIONS. There are no strikes, lockouts or other significant
labor disputes against the Company or any of its Subsidiaries, or, to the best
of the Company's knowledge, threatened against or affecting the Company or any
of its Subsidiaries, and no significant unfair labor practice complaint is
pending against the Company or any of its Subsidiaries or, to the best knowledge
of the Company, threatened against any of them before any Governmental
Authority.
5.18 COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC. The Company or
its Subsidiaries own or are licensed or otherwise have the right to use all of
the patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective businesses, without, to the best knowledge of
the Company, conflict with the rights of any other Person. To the best
knowledge of the Company, no slogan or other advertising device, product,
process, method, substance, part or other material now employed, or now
contemplated to be employed, by the Company or any of its Subsidiaries infringes
upon any rights held by any other Person; except as specifically disclosed in
SCHEDULE 5.05, no claim
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or litigation regarding any of the foregoing is pending or threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the knowledge of the Company,
proposed, which, in either case, could reasonably be expected to have a Material
Adverse Effect.
5.19 SUBSIDIARIES. As of the Closing Date, the Company has no
Subsidiaries other than those specifically disclosed in part (a) of SCHEDULE
5.19 hereto and has no equity investments in any other corporation or entity
other than those specifically disclosed in part (b) of SCHEDULE 5.19.
5.20 BROKERS; TRANSACTION FEES. Except as referred to in Section 2.10,
neither the Company nor any of its Subsidiaries has any obligation to any Person
in respect of any finder's, broker's or investment banker's fee in connection
with the credit facilities extended hereby.
5.21 INSURANCE. The Properties of the Company and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Company, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar Properties in localities where the Company or such Subsidiary operates.
5.22 SENIOR INDEBTEDNESS. The Obligations of the Company under this
Agreement and the other Loan Documents constitute "Senior Indebtedness" as
defined in the Subordinated Note Indenture.
5.23 CAPITALIZATION OF THE COMPANY. On the Closing Date, the
capitalization of the Company will be as described under the heading
"Capitalization" in the S-4 Registration Statement. All issued and outstanding
shares of capital stock of the Company have been duly authorized, validly issued
and are fully paid and non-assessable. Except as described in the Merger
Agreement (including the RSI Disclosure Statement thereto) or the S-4
Registration Statement (including the documents incorporated therein by
reference) and the exhibits thereto, no authorized but unissued or treasury
shares of capital stock of the Company are subject to any option, warrant, right
to call or commitment of any kind or character. A complete and correct copy of
each of the certificate of incorporation and by-laws of the Company in effect on
the date of this Agreement has been delivered to the Agents. Except as
described in the Merger Agreement (including the RSI Disclosure Statement
thereto) or the S-4 Registration Statement (including the documents incorporated
therein by reference) and the exhibits thereto, or as expressly contemplated by
the Transaction, the Company does not have any outstanding stock or securities
convertible into or exchangeable for any shares of its capital
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stock, or any rights issued to any Person (either preemptive or other) to
subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, any of its capital
stock or any stock or securities convertible into or exchangeable for any of its
capital stock. Except as described in the Merger Agreement (including the RSI
Disclosure Statement thereto) or the S-4 Registration Statement (including the
documents incorporated therein by reference) and the exhibits thereto, neither
the Company nor any of its Subsidiaries is subject to any obligation (contingent
or otherwise) to repurchase or otherwise acquire or retire any shares of its
capital stock, except as contemplated by the Transaction or agreements the
performance of which would not violate this Agreement.
5.24 FULL DISCLOSURE. None of the representations or warranties made by
the Company or any of its Subsidiaries in this Agreement or the other Loan
Documents as of the date such representations and warranties are made or deemed
made, and none of the statements contained in each exhibit, report or
certificate furnished by or on behalf of the Company or any of its Subsidiaries,
or USF or any of its Subsidiaries, in connection with this Agreement or the
other Loan Documents (including, but not limited to, (i) the Bank Information
Memorandum dated March 1996, as supplemented or amended (but subject to the
qualifications and limitations contained in the Company's Letter of
Representations dated March 25, 1996 accompanying such Information Memorandum),
(ii) the S-4 Registration Statement (including the documents incorporated
therein by reference) and the exhibits thereto, (iii) the Merger Agreement
(including the RSI Disclosure Statement thereto), and (iv) USF's "S-1
Registration Statement" (as defined in the Merger Agreement, but subject to the
qualifications and exceptions set forth in Section 5.14 of the Merger
Agreement), contains any untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they are or
were made, not misleading as of the time when made or delivered.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as any Lender shall have any
Commitment hereunder, or any Loan (including any Swing Line Loan) or other
Obligation (including any L/C Obligation) shall remain unpaid or unsatisfied,
unless the Majority Lenders waive compliance in writing:
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6.01 FINANCIAL STATEMENTS. The Company shall deliver to the
Administrative Agent and each Lender, in form and detail satisfactory to the
Administrative Agent and the Majority Lenders:
(a) as soon as available, but not later than 95 days after the end of
each fiscal year, a copy of the audited consolidated balance sheets of the
Company as at the end of such year and the related consolidated statements of
operations, shareholders' equity and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year
(except, in the case of the audited financial statements for the 1997 fiscal
year, such financial statements will include a footnote describing revenues and
operating income for the preceding fiscal year (which shall reflect any
significant acquisitions occurring during such year)), and accompanied by the
opinion of Arthur Andersen & Co. LLP or another nationally-recognized
independent public accounting firm, which report shall state that such
consolidated financial statements present fairly the financial position and
results of operations and changes in cash flow for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years. Such
opinion shall not be qualified or limited because of a restricted or limited
examination by such accountant of any material portion of the Company's or any
Subsidiary's records and shall be delivered to the Administrative Agent and the
Lenders pursuant to a reliance agreement between the Administrative Agent and
the Lenders, and such accounting firm, in form and substance reasonably
satisfactory to the Administrative Agent;
(b) as soon as available, but not later than 95 days after the end of
each fiscal year, a copy of an unaudited balance sheet and statement of
operations for each material operating Subsidiary of the Company, all in
reasonable detail and certified by an appropriate Responsible Officer as correct
and fairly presenting the financial position and results of operations of each
such Subsidiary;
(c) as soon as available, but not later than 50 days after the end of
each fiscal quarter, a copy of the unaudited consolidated balance sheets of the
Company and its consolidated Subsidiaries as of the end of such quarter and the
related consolidated statements of operations, shareholders' equity and cash
flows for such fiscal quarter and for the elapsed portion of the fiscal year
then ended, certified by an appropriate Responsible Officer as being complete
and correct and fairly presenting the financial position and the results of
operations of the Company and its consolidated Subsidiaries, setting forth in
each case in comparative form (i) the figures as of and for the corresponding
dates and periods in the previous fiscal year (accompanied in the case of the
fiscal 1997 quarterly financial statements by a footnote describing revenues and
operating income for the prior periods (which shall reflect any significant
acquisitions occurring
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during such prior periods)) and (ii) the figures as of and for such fiscal
quarter as set forth in the budgeted forecast referred to in subsection 6.01(d);
(d) as soon as available, but in no event later than 60 days after
the end of each fiscal year, a budgeted forecast of the Company and its
consolidated Subsidiaries for the forthcoming fiscal year, prepared in the same
form and with the same line items, as the financial statements described in
subsection 6.01(c), which shall include a forecasted consolidated balance sheet
and related forecasted consolidated statement of income and cash flows for each
fiscal quarter in the forthcoming fiscal year.
6.02 CERTIFICATES; OTHER INFORMATION. The Company shall deliver to the
Administrative Agent and each Lender, in form and detail satisfactory to the
Administrative Agent:
(a) concurrently with the delivery of the financial statements
referred to in subsection 6.01(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in making
the examination necessary therefor no knowledge was obtained of any Default or
Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 6.01(a), (b) and (c), a certificate of a Responsible
Officer (i) stating that, to the best of such officer's knowledge, the Company,
during such period, has observed and performed all of its covenants and other
agreements, and satisfied every condition contained in this Agreement and the
other Loan Documents to be observed, performed or satisfied by it, and that such
officer has obtained no knowledge of any Default or Event of Default except as
specified (by applicable subsection reference) in such certificate; (ii) setting
forth in detail the calculations supporting such statement in respect of
Sections 7.14, 7.15, 7.16 and 7.17 and, commencing with the fiscal year ended on
or about June 30, 1997, the calculation of Excess Cash Flow for such year; and
(iii) comparing, for the most recent fiscal quarter, the actual results of such
quarter with the budgeted forecast figures for such quarter previously furnished
to the Lenders, together with a narrative discussion and analysis of the actual
versus budgeted forecast results;
(c) promptly after the same are sent, copies of all financial
statements and reports which the Company sends to its shareholders; and promptly
after the same are filed, copies of all financial statements, proxy statements
and regular, periodical or special reports which the Company may make to, or
file with, the Securities and Exchange Commission or any successor or similar
Governmental Authority; and
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(d) promptly, such additional business, financial, corporate affairs
and other information as the Administrative Agent, at the request of any Lender,
may from time to time reasonably request.
6.03 NOTICES. The Company shall notify the Administrative Agent and each
Lender promptly after the occurrence of any of the following events or
circumstances (and in no event later than five Business Days after the
occurrence of any of the events or circumstances set forth in subsections
6.03(a), (b), (c) and (g));
(a) of the occurrence of any Default or Event of Default;
(b) of (i) any breach or non-performance of, or any default under,
any Contractual Obligation of the Company or any of its Subsidiaries which could
result in a Material Adverse Effect; and (ii) any dispute, litigation,
investigation, proceeding or suspension which may exist at any time between the
Company or any of its Subsidiaries and any Governmental Authority;
(c) of the commencement of any litigation or proceeding affecting the
Company or any Subsidiary (i) in which the amount of damages claimed against the
Company or any of its Subsidiaries is $5,000,000 (or its equivalent in another
currency or currencies) or more, (ii) in which injunctive or similar relief is
sought and which, if adversely determined, would reasonably be expected to have
a Material Adverse Effect, or (iii) in which the relief sought is an injunction
or other stay of the performance of this Agreement or any Loan Document, and in
each case such further information and/or periodic status reports as the
Administrative Agent, at the request of any Lender, may reasonably request;
(d) upon, but in no event later than 15 Business Days after, becoming
aware of (i) any and all enforcement, cleanup, response or other governmental
regulatory or third party actions asserted, filed, completed or threatened
against the Company or any of its Subsidiaries or any of their respective
Properties pursuant to any applicable Environmental Laws, (ii) all other
Environmental Claims that could reasonably result in liability in excess of
$500,000, and (iii) any environmental or similar condition on the Collateral or
on any real property adjoining the Collateral that could reasonably be
anticipated to cause such Collateral or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability or use of such
Collateral under any Environmental Laws or which could reasonably be expected to
result in a Material Adverse Effect;
(e) of any other litigation or proceeding affecting the Company or
any of its Subsidiaries which the Company would be required to report to the SEC
pursuant to the Exchange Act, within five days after reporting the same to the
SEC;
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(f) of any of the following events affecting the Company or any
member of its Controlled Group (but in no event more than 10 days after such
event), together with a copy of any notice with respect to such event that may
be required to be filed with a Governmental Authority and any notice delivered
by a Governmental Authority to the Company or any member or its Controlled Group
with respect to such event:
(i) an ERISA Event;
(ii) the adoption of any new Plan that is subject to Title IV of
ERISA or section 412 of the Code by any member of the Controlled Group;
(iii) the adoption of any amendment to a Plan that is subject to
Title IV of ERISA or section 412 of the Code, if such amendment results in
a material increase in benefits or Unfunded Pension Liabilities; or
(iv) the commencement of contributions by any member of the
Controlled Group to any Plan that is subject to Title IV of ERISA or
section 412 of the Code;
(g) any Material Adverse Effect subsequent to the date of the most
recent audited financial statements of the Company delivered to the Lenders
pursuant to subsection 6.01(a) or 4.01(h);
(h) of any significant change in accounting policies or financial
reporting practices by the Company or any of its Subsidiaries; and
(i) of any labor controversy resulting in or threatening to result in
any strike, work stoppage, boycott, shutdown or other labor disruption against
or involving the Company or any of its Subsidiaries that could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a written
statement by a Responsible Officer of the Company setting forth details of the
occurrence referred to therein, and stating what action the Company proposes to
take with respect thereto and at what time. Each notice under subsection
6.03(a) shall describe with particularity any and all clauses or provisions of
this Agreement or other Loan Document that have been breached or violated.
6.04 PRESERVATION OF CORPORATE EXISTENCE, ETC. The Company shall, and
shall cause each of its Subsidiaries to:
(a) preserve and maintain in full force and effect its corporate
existence and good standing under the laws of its state
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or jurisdiction of incorporation, except in connection with transactions
permitted by Section 7.03;
(b) preserve and maintain in full force and effect all rights,
privileges, qualifications, permits, licenses and franchises necessary or
desirable in the normal conduct of its business, except in connection with
transactions permitted by Section 7.03 and Dispositions permitted by Section
7.02;
(c) use its reasonable efforts, in the Ordinary Course of Business,
to preserve its business organization and preserve the goodwill and business of
the customers, suppliers and others having material business relations with it;
PROVIDED, HOWEVER, that nothing in this subsection 6.04(c) shall restrict the
Company's ability to integrate its business operations with those of USF and its
Subsidiaries in accordance with reasonable business practice; and
(d) preserve or renew all of its registered trademarks, trade names
and service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.
6.05 MAINTENANCE OF PROPERTY. The Company shall maintain, and shall cause
each of its Subsidiaries to maintain, and preserve all its Property which is
used or useful in its business in good working order and condition, ordinary
wear and tear excepted and make all necessary repairs thereto and renewals and
replacements thereof except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect, except as permitted by Section 7.02.
6.06 INSURANCE. In addition to insurance requirements set forth in the
Collateral Documents, the Company shall maintain, and shall cause each of its
Subsidiaries to maintain, with financially sound and reputable independent
insurers (or through self-insurance programs), insurance with respect to its
Properties and business against loss or damage of the kinds customarily insured
against by Persons engaged in the same or similar business, of such types and in
such amounts as are customarily carried under similar circumstances by such
other Persons; including workers' compensation insurance, general liability and
property and casualty insurance. All such insurance (except for workers'
compensation insurance) shall name the Administrative Agent as loss
payee/mortgagee and as additional insured (in the case of general liability),
for the benefit of itself, the Lenders (including the Swing Line Lender) and the
Issuing Bank, as their interests may appear. Upon request of the Administrative
Agent or any Lender, the Company shall furnish the Administrative Agent, with
sufficient copies for each Lender, at reasonable intervals (but not more than
once per policy year), a certificate of a Responsible Officer of the Company
(and, if requested by the Administrative Agent, any insurance broker of the
Company) setting forth the nature and
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extent of all insurance maintained by the Company and its Subsidiaries in
accordance with this Section 6.06 or any Collateral Documents (and which, in the
case of a certificate of a broker, were placed through such broker).
6.07 PAYMENT OF OBLIGATIONS. The Company shall, and shall cause its
Subsidiaries to, pay and discharge as the same shall become due and payable, all
their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings and adequate reserves in accordance
with GAAP or in accordance with the terms of the Mortgage are being maintained
by the Company or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a Lien
upon its Property, unless the same are being contested in good faith by
appropriate proceedings and adequate reserves in accordance with GAAP or the
terms of the Mortgage are being maintained by the Company or such Subsidiary;
and
(c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
6.08 COMPLIANCE WITH LAWS. The Company shall comply, and shall cause each
of its Subsidiaries to comply, in all material respects with all Requirements of
Law of any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
6.09 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Company shall
maintain and shall cause each of its Subsidiaries to maintain proper books of
record and account, in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Company and such Subsidiaries.
The Company shall permit, and shall cause each of its Subsidiaries to permit,
representatives and independent contractors of the Administrative Agent or any
Lender to visit and inspect any of their respective Properties, to examine their
respective corporate, financial and operating records, and make copies thereof
or abstracts therefrom, and to discuss their respective affairs, finances and
accounts with their respective directors, officers, and independent public
accountants, all at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance written notice to
the Company; PROVIDED, that when an Event of Default exists, the Administrative
Agent or any Lender may do any of the foregoing at the expense of
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the Company at any time during normal business hours and without advance written
notice.
6.10 ENVIRONMENTAL LAWS.
(a) The Company shall, and shall cause each of its Subsidiaries to,
(i) conduct its operations and keep and maintain its Property in compliance with
all applicable Environmental Laws; and (ii) promptly take any and all
appropriate and necessary response actions with regard to the presence, storage,
use, disposal, transportation, Release or threatened Release of any Hazardous
Materials, on, under, from or about any Property. In the event the Company or
any Subsidiary undertakes any response action with respect to any Hazardous
Materials on, under, from or about any Property, the Company or such Subsidiary
shall conduct and complete such response action in compliance with all
applicable Environmental Laws and in accordance with the applicable policies,
directives and guidance of federal, state and local governmental authorities,
except when a liability of the Company or any of its Subsidiaries for such
presence, storage, use, disposal, transportation, Release or threatened Release
of any Hazardous Materials is being contested in good faith by the Company or
such Subsidiary and appropriate reserves therefor have been established on the
Company's books. If the Administrative Agent or any Lender at any time has a
reasonable basis to believe that there may be a material violation of any
Environmental Laws by the Company or any of its Subsidiaries, or any material
liability arising thereunder, or related to a Release or threatened Release of
Hazardous Materials on any Property or on real property adjacent to such
Property, then the Company and its Subsidiaries agree, upon written request of
the Administrative Agent or any Lender, to provide the Administrative Agent and
any Lender with such reports, certificates, engineering studies or other written
material or data, including, without limitation, subsurface sampling of soil and
groundwater, as the Administrative Agent or any Lender may require, and to grant
access to the Administrative Agent and its consultants to conduct such sampling,
investigations and other appropriate actions if the Company has failed to comply
with its obligations under this subsection 6.10(a).
(b) Upon the written request of the Administrative Agent, the Company
shall submit and cause each of its Subsidiaries to submit, within 15 Business
Days of receipt of the written request, to the Administrative Agent with
sufficient copies for each Lender, at the Company's sole cost and expense, at
reasonable intervals, a report providing an update of the status of any
environmental, health or safety compliance, hazard or liability issue identified
in any notice or report required pursuant to subsection 6.03(d) that could, as
to any individual Mortgaged Property, reasonably be expected to result in
liability in excess of $500,000.
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6.11 USE OF PROCEEDS. The Company shall use the proceeds of the Loans
(including Swing Line Loans) solely to (a) refinance the outstanding
Indebtedness of the Company and its Subsidiaries (including USF) under the
Existing Credit Agreements, (b) repurchase the Exchangeable Preferred Stock and
prepay the Company's outstanding promissory note to H&O Foods, Inc. in the
amount of $18,850,000, (c) pay certain expenses associated with the
Transaction, and (d) finance on-going working capital needs, permitted
acquisitions and capital expenditures, not in contravention of any provision
hereof or of the Loan Documents or applicable law.
6.12 SOLVENCY. The Company (individually and on a consolidated basis)
shall at all times be Solvent.
6.13 INTEREST RATE PROTECTION. Within 90 days of the Closing Date, the
Company shall enter into, or have existing, Rate Contracts providing protection
against fluctuations in interest rates with one or more financial institutions,
each having a combined capital and surplus of at least $100,000,000 and a long-
term credit rating of "A" or better from Standard & Poor's Rating Group (or a
comparable rating from another nationally recognized statistical rating
organization), with respect to at least 50% of the sum of (i) the Company's
outstanding Term Loans, (ii) $200,000,000 attributable to Receivables Facility
Attributed Indebtedness, and (iii) $50,000,000 attributable to Revolving Loans,
which agreements shall provide for not less than three year's coverage from the
Closing Date and shall stipulate a weighted average cost of funds not in excess
of nine and one-half percent (9 1/2%) and shall contain such other terms as are
customary and reasonably satisfactory to the Agents.
6.14 FURTHER ASSURANCES.
(a) DISCLOSURE. The Company shall ensure that all written
information, exhibits and reports furnished to the Administrative Agent or the
Lenders do not and will not contain any untrue statement of a material fact and
do not and will not omit to state any material fact or any fact necessary to
make the statements contained therein not misleading, in light of the
circumstances in which made, and will promptly disclose to the Administrative
Agent and the Lenders and correct any defect or error that may be discovered
therein or in any Loan Document or in the execution, acknowledgment or
recordation thereof.
(b) PROTECTION OF EXISTING INTERESTS. Promptly upon request by the
Administrative Agent or the Majority Lenders, the Company shall (and shall cause
any of its Subsidiaries to) do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register, any and all such further
acts, deeds, conveyances, security agreements, mortgages, assignments, estoppel
certificates, financing statements and continuations thereof,
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termination statements, notices of assignment, transfers, certificates,
assurances and other instruments the Administrative Agent or such Lenders, as
the case may be, may reasonably require from time to time in order (i) to carry
out more effectively the purposes of this Agreement or any other Loan Document,
(ii) to subject to the Liens created by any of the Collateral Documents any of
the Properties, rights or interests covered by any of the Collateral Documents,
(iii) to perfect and maintain the validity, effectiveness and priority of any of
the Collateral Documents and the Liens intended to be created thereby, and (iv)
to better assure, convey, grant, assign, transfer, preserve, protect and confirm
to the Administrative Agent and Lenders the rights granted or now or hereafter
intended to be granted to the Lenders under any Loan Document or under any other
document executed in connection therewith.
(c) SECURITY INTEREST IN ADDITIONAL COLLATERAL. Promptly, and in any
event within 30 days after the acquisition or construction by the Company or any
of its Subsidiaries of Property of the type that would have constituted
Collateral on the date hereof, in each case in which the Administrative Agent
does not have a perfected security interest under the Collateral Documents
(other than (w) Property of the type covered by the Company Stock and Note
Pledge Agreement or the Subsidiaries Note and Stock Pledge Agreement, which is
provided for in subsection 6.14(d), (x) Property subject to Liens permitted
under subsections 7.01(a) and 7.01(i) under agreements which prohibit the
creation of additional Liens on such Property, (y) all Property in which the
Receivables Subsidiary has an interest, or (z) any other Property with a fair
market value of less than $500,000 individually, PROVIDED that all such other
Property collectively have a fair market value of less than $2,500,000), or
within 30 days after request by the Administrative Agent with respect to any
other Property deemed material by the Administrative Agent or the Majority
Lenders (the "ADDITIONAL COLLATERAL"), the Company will, and will cause each of
its Subsidiaries to, take all necessary action, including (i) the amendment or
supplementing of the Company Security Agreement or the Subsidiaries Security
Agreement, as appropriate and in accordance with the terms thereof, to subject
such additional Collateral to the terms thereof, (ii) the filing of appropriate
financing statements under the provisions of the UCC, applicable foreign,
domestic or local laws, rules or regulations in each of the offices where such
filing is necessary or appropriate, and (iii) with respect to real Property, the
providing of any environmental report pursuant to Section 6.10, the execution
of a Mortgage, the obtaining of title insurance policies, title surveys and
real estate appraisals satisfying the Requirements of Law, to grant the
Administrative Agent a perfected Lien (subject only to Permitted Liens) in such
Collateral pursuant to, and to the full extent required by, the Collateral
Documents and this Agreement.
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(d) ADDITIONAL PLEDGE. The Company shall, pursuant to and in
accordance with the Company Note and Stock Pledge Agreement, and shall cause
each Subsidiary to, pursuant to and in accordance with the Subsidiaries Note and
Stock Pledge Agreement, pledge and deliver to the Administrative Agent for the
benefit of itself, the Lenders (including the Swing Line Lender) and the Issuing
Bank, all shares of stock, promissory notes and other Property that would have
constituted Collateral under the Pledge Agreements on the date hereof that are
acquired by the Company or any Subsidiary after the date hereof.
(e) GRANT OF SECURITY BY NEW SUBSIDIARIES. The Company will cause
each Subsidiary of the Company established or created after the Closing Date
(other than a special purpose, bankruptcy- remote Subsidiary) to grant to the
Administrative Agent a first priority Lien (subject to Permitted Liens) on all
property (tangible and intangible) of such Subsidiary by executing and
delivering an appropriate supplement to the Subsidiaries Security Agreement and
an appropriate supplement to the Subsidiaries Note and Stock Pledge Agreement,
or on other terms satisfactory in form and substance to the Administrative Agent
and the Majority Lenders. The Company shall cause each such Subsidiary, at its
own expense, to execute, acknowledge and deliver, or cause the execution,
acknowledgment and delivery of, and thereafter register, file or record in any
appropriate governmental office, any documents or instruments reasonably deemed
by the Administrative Agent to be necessary or desirable for the creation and
perfection of the foregoing Liens. The Company will cause each of its
Subsidiaries to take all actions requested by the Administrative Agent
(including, without limitation, the filing of UCC-1s) in connection with the
granting of such security interests.
(f) ADDITIONAL GUARANTOR. The Company will cause each Subsidiary of
the Company established or created after the Closing Date (other than a special
purpose, bankrupty-remote Subsidiary) to execute an appropriate supplement to
the Subsidiaries Guaranty pursuant to which such Subsidiary shall guarantee the
Obligations of the Company.
(g) CASH COLLATERALIZATION. The Company shall, pursuant to and in
order to effect its obligations under subsection 2.07(j) and Section 3.07,
execute such additional documentation in form and substance satisfactory to the
Administrative Agent, pursuant to which, among other things, the Company shall
grant to the Administrative Agent, for the benefit of the Administrative Agent,
the Issuing Bank and the Lenders (including the Swing Line Lender), a first
perfected security interest in all cash and deposit balances delivered by the
Company in accordance with subsection 2.07(j) and Section 3.07.
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ARTICLE VII
NEGATIVE COVENANTS
The Company hereby covenants and agrees that, so long as any Lender shall
have any Commitment hereunder, or any Loan (including any Swing Line Loan) or
other Obligation (including any L/C Obligation) shall remain unpaid or
unsatisfied, unless the Majority Lenders waive compliance in writing:
7.01 LIMITATION ON LIENS. The Company shall not, and shall not suffer or
permit any of its Subsidiaries to, directly or indirectly, make, create, incur,
assume or suffer to exist any Lien upon or with respect to any part of its
Property, whether now owned or hereafter acquired, other than the following
("PERMITTED LIENS"):
(a) any Lien existing on the Property of the Company or its
Subsidiaries on the Closing Date and set forth in SCHEDULE 7.01 securing
Indebtedness outstanding on such date (and any renewals or extensions thereof,
PROVIDED that such Liens as so extended or renewed shall secure only those
obligations which they secure on the date hereof (or any permitted replacements
or refinancing of such obligations in no greater amounts than in effect on the
Closing Date) and shall not extend to other Property of the Company or any
Subsidiary);
(b) "Permitted Exceptions" as defined in the Mortgages and any Lien
created under any Loan Document or under any Permitted Receivables Purchase
Facility;
(c) Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or to the extent
that non-payment thereof is permitted by Section 6.07, provided that no Notice
of Lien has been filed or recorded under the Code;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the Ordinary Course of Business
securing obligations that are not delinquent or that remain payable without
penalty or which are being contested in good faith and by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture or
sale of the Property subject thereto; PROVIDED that (A) any proceedings
commenced for the enforcement of such Liens have been stayed or suspended within
30 days of the commencement thereof, and (B) full provision for the payment of
the obligations secured by such Liens has been made on the books of the Company
to the extent required by GAAP or by the Mortgage;
(e) Liens (other than any Lien imposed by ERISA) consisting of
pledges or deposits required in the Ordinary Course
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of Business in connection with workers' compensation, unemployment insurance and
other social security legislation, PROVIDED that all such liens in the aggregate
at any time outstanding for the Company and its Subsidiaries do not exceed
$250,000 (to the extent any such Lien encumbers any of the Collateral) and
PROVIDED FURTHER, that (A) any proceedings commenced for the enforcement of such
Liens have been stayed or suspended within 30 days of the commencement thereof,
and (B) full provision for the payment of the obligations secured by such Liens
has been made on the books of the Company to the extent required by GAAP;
(f) Liens on the Property of the Company or any of its Subsidiaries
securing (i) the non-delinquent performance of bids, trade contracts (other than
for borrowed money or the payment of the deferred purchase price of Property),
leases, statutory obligations, (ii) contingent obligations on surety and appeal
bonds, and (iii) other non-delinquent obligations of a like nature; in each
case, incurred in the Ordinary Course of Business, PROVIDED that all such liens
in the aggregate at any time outstanding for the Company and its Subsidiaries do
not exceed $100,000 (to the extent any such Lien encumbers any of the
Collateral) and PROVIDED FURTHER, that full provision for the payment of such
obligations has been made on the books of the Company to the extent required by
GAAP;
(g) Liens consisting of judgment or judicial attachment liens,
PROVIDED that the enforcement of such Liens is effectively stayed and all such
Liens in the aggregate at any time outstanding for the Company and its
Subsidiaries do not exceed $1,000,000;
(h) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the Ordinary Course of Business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the Property subject thereto or interfere
with the ordinary conduct of the businesses of the Company and its Subsidiaries;
(i) Liens on assets of corporations which become Subsidiaries after
the date of this Agreement, PROVIDED, HOWEVER, that such Liens existed at the
time the respective corporations became Subsidiaries and were not created in
anticipation thereof and PROVIDED FURTHER, that such Liens do not secure
Indebtedness in the aggregate in excess of $1,000,000;
(j) Purchase money security interests on any Property acquired or
held by the Company or its Subsidiaries in the Ordinary Course of Business,
other than the Collateral, securing Indebtedness incurred or assumed for the
purpose of financing all or any part of the cost of acquiring such Property;
PROVIDED that (i) any such Lien attaches to such Property concurrently with or
within 20 days after the acquisition thereof, (ii) such Lien attaches solely to
the Property so acquired in such transaction,
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(iii) the principal amount of the debt secured thereby does not exceed 100% of
the cost of such Property, and (iv) the principal amount of the Indebtedness
secured by any and all such purchase money security interests shall not at any
time exceed $1,000,000;
(k) Liens securing (i) Capital Lease Obligations on assets subject to
such Capital Leases, provided that such Capital Leases are permitted under
subsection 7.11(d); and (ii) Indebtedness permitted pursuant to subsection
7.05(e); and
(l) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; PROVIDED that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated by
the Federal Reserve Board, and (ii) such deposit account is not intended by the
Company or any of its Subsidiaries to provide collateral to the depository
institution.
7.02 DISPOSITION OF ASSETS. The Company shall not (except to a Wholly-
Owned Subsidiary), and shall not suffer or permit any of its Subsidiaries to
(except to the Company or a Wholly-Owned Subsidiary), directly or indirectly,
sell, assign, lease, convey, transfer or otherwise dispose of (whether in one or
a series of transactions) any Property or enter into any agreement to do any of
the foregoing, except:
(a) Dispositions of inventory, or used, worn-out or surplus
equipment, all in the Ordinary Course of Business;
(b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to the
purchase price of such replacement equipment;
(c) Dispositions of inventory or equipment by the Company or any of
its Subsidiaries to the Company or any of its Subsidiaries pursuant to
reasonable business requirements;
(d) Disposition of (i) the Terminal Street, Los Angeles, California
facility, and (ii) other facilities and related Property not exceeding
$35,000,000 in aggregate market value; and
(e) sales, contributions or transfers by the Company and its
Subsidiaries and by the Receivables Subsidiary of Permitted Receivables pursuant
to a Permitted Receivables Purchase Facility;
PROVIDED at least seventy percent (70%) of the aggregate sales price from any
Disposition permitted under subsections 7.02(a)
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through (d), and 100% of the sales price from any Disposition permitted under
subsection 7.02(e), shall be paid in cash.
7.03 CONSOLIDATIONS AND MERGERS. The Company shall not, and shall not
suffer or permit any of its Subsidiaries to, merge, consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except:
(a) any Subsidiary of the Company (other than a Receivables
Subsidiary) may merge with the Company, PROVIDED that the Company shall be the
continuing or surviving corporation, or with any one or more Subsidiaries of the
Company, provided that if any transaction shall be between a Subsidiary and a
Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be the continuing or
surviving corporation; and
(b) the Company or any Subsidiary of the Company may sell all or
substantially all of its assets (upon voluntary liquidation or otherwise) to (i)
the Company (in the case of a Subsidiary) or (ii) a Wholly-Owned Subsidiary
other than a Receivables Subsidiary (in the case of the Company or a
Subsidiary).
7.04 LOANS AND INVESTMENTS. The Company shall not purchase or acquire, or
suffer or permit any of its Subsidiaries to purchase or acquire, or make any
commitment therefor, any capital stock, equity interest, or any obligations or
other securities of, or any interest in, any Person, or make or commit to make
any Acquisitions, or make or commit to make any advance, loan, extension of
credit or capital contribution to or any other investment in, any Person
including any Affiliate of the Company, except for:
(a) investments in Cash Equivalents;
(b) extensions of credit in the nature of accounts receivable or
notes receivable arising from the sale or lease of goods or services in the
Ordinary Course of Business;
(c) extensions of credit by the Company to any of its Wholly-Owned
Subsidiaries or by any of its Wholly-Owned Subsidiaries to another of its
Wholly-Owned Subsidiaries; PROVIDED, HOWEVER, that extensions of credit to a
Receivables Subsidiary shall be limited to the subordinated purchase notes
provided for in the RSFC Receivables Sale Agreement and the USFAR Receivables
Sale Agreement as in effect on the date hereof.
(d) additional purchases of or investments in the stock of
Subsidiaries (other than a Receivables Subsidiary) or the capital stock, assets,
obligations or other securities of or
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interest in other Persons (and which for purposes of the dollar limitations set
forth below shall include the amount of any Indebtedness assumed in connection
with any such purchase or investment) not exceeding (i) with respect to any one
purchase or investment, $20,000,000 or (ii) as to all such purchases and
investments in the aggregate, $40,000,000 plus the amount of Available Excess
Cash Flow for the prior fiscal year (to the extent not previously applied
pursuant to Section 7.09, subsection 7.12(a) or subsection 7.13(a)), SUBJECT,
HOWEVER, in each case to the satisfaction of the following conditions precedent
(each such condition as determined or calculated in a certificate of a
Responsible Officer after giving effect to the proposed transaction): (A) the
Company shall have Adequate Liquidity, (B) the Company shall demonstrate
compliance, as of the effective date of the proposed transaction, with the
Leverage Ratio and the Adjusted Interest Coverage Ratio, and there shall be no
Default or Event of Default, and (C) the Company shall demonstrate compliance
with subsections 7.14, 7.15, 7.16 and 7.17 on a pro forma basis for the four
consecutive full fiscal quarters commencing immediately following the effective
date of the proposed transaction; PROVIDED, HOWEVER, that the foregoing dollar
limitation on purchases and investments in any single transaction set forth in
subclause (i) above shall no longer be in effect commencing two years after the
Closing Date PROVIDED that, and only so long as, the principal amount of
Revolving Loans outstanding hereunder, after giving effect to any such
acquisition, shall not exceed $50,000,000;
(e) loans to USF management employees in an amount not to exceed
$5,000,000; or
(f) additional investments and loans in an aggregate amount not to
exceed $5,000,000 so long as the Company shall have complied with Section 6.14
in regard to all Property (including loans) acquired by the Company or its
Subsidiaries in connection therewith;
PROVIDED, HOWEVER, that in no event shall the Company or any of its Subsidiaries
make any Acquisition without effective written consent or approval to such
Acquisition of the board of directors or equivalent governing body of the
acquiree.
7.05 LIMITATION ON INDEBTEDNESS. The Company shall not, and shall not
suffer or permit any of its Subsidiaries to, create, incur, assume, suffer to
exist, or otherwise become or remain directly or indirectly liable with respect
to, any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations permitted
pursuant to Section 7.08;
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(c) Indebtedness existing on the Closing Date and set forth in
SCHEDULE 7.05;
(d) Receivables Facility Attributed Indebtedness;
(e) Indebtedness in an aggregate principal amount not exceeding
$65,000,000 incurred to finance or refinance (by way of sale-leaseback,
industrial development or revenue bond or purchase money mortgage (any such
financing referred to herein as "THIRD PARTY FACILITY DEBT")) the Company's
distribution facility located in La Mirada, California (the "LA MIRADA
FACILITY"), the contemplated distribution facility to be constructed by Biggers
Brothers, Inc. (the "BIGGERS FACILITY") and other distribution or manufacturing
facilities, whether constructed before or after the Closing Date; PROVIDED,
HOWEVER, that (i) the principal amount of any such refinancing Indebtedness (as
determined as of the date of the incurrence of such refinancing Indebtedness in
accordance with GAAP) does not exceed the principal amount of the Indebtedness
refinanced thereby on such date, (ii) the weighted average life to maturity of
such Indebtedness is not decreased, and (iii) the covenants, defaults and
similar provisions applicable to such refinancing Indebtedness or obligations
are no more restrictive with respect to the Company and its Subsidiaries in any
material respect than the provisions contained in the agreements governing the
Indebtedness being refinanced and do not conflict with the provisions of this
Agreement; and
(f) (i) Indebtedness secured by Liens permitted by subsections
7.01(i), (j) and (k), and (ii) Indebtedness assumed in connection with purchases
or investments permitted pursuant to subsection 7.04(d).
7.06 PREPAYMENTS; AMENDMENTS. (a) The Company shall not make any
voluntary prepayments or redemptions or repurchases of, or defease any,
Indebtedness except for (i) prepayments permitted by subsections 6.11(a) and
(b), (ii) the Notes, (iii) prepayments required pursuant to the instrument
evidencing any Indebtedness permitted by Section 7.05; and
(b) the Company shall not, and shall not permit any Subsidiary of the
Company to, amend, modify or grant any waiver with respect to any indenture,
note or any other instrument evidencing Indebtedness of the Company or pursuant
to which such Indebtedness was issued; PROVIDED, HOWEVER, that the Company may,
and may permit any Subsidiary to, amend, modify, or grant any waiver with
respect to any indenture, note or other instrument evidencing Indebtedness of
the Company or such Subsidiary if any such amendment, modification or waiver
could not reasonably be expected to have an adverse effect on the interests of
the Administrative Agent or the Lenders.
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7.07 USE OF PROCEEDS. The Company shall not and shall not suffer or
permit any of its Subsidiaries to use any portion of the Loan proceeds, directly
or indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Company or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
7.08 CONTINGENT OBLIGATIONS. The Company shall not, and shall not suffer
or permit any of its Subsidiaries to, create, incur, assume or suffer to exist
any Contingent Obligations except:
(a) endorsements for collection or deposit in the Ordinary Course of
Business;
(b) Rate Contracts entered into in the Ordinary Course of Business or
pursuant to Section 6.13;
(c) Contingent Obligations of the Company and its Subsidiaries
existing as of the Closing Date and listed in SCHEDULE 7.08;
(d) unsecured guarantees of the Company's Subsidiaries pursuant to
Section 4.15 of the Subordinated Note Indenture which are subordinated in right
of payment to the Subsidiaries Guaranty on the terms and conditions provided by
such Indenture; and
(e) unsecured guarantees by the Company of lease obligations of its
Subsidiaries incurred in the Ordinary Course of Business.
7.09 JOINT VENTURES. The Company shall not, and shall not suffer or
permit any of its Subsidiaries to, enter into Joint Ventures, except for total
investments in Joint Ventures which shall not exceed an aggregate amount of
$2,500,000 at any time PLUS the amount of any Available Excess Cash Flow for the
prior fiscal year (to the extent not previously applied pursuant to subsection
7.04(d), 7.12(a) or 7.13(a)).
7.10 COMPLIANCE WITH ERISA. The Company shall not, and shall not suffer
or permit any of its Subsidiaries to, (i) terminate any Plan subject to Title IV
of ERISA so as to result in any material liability to the Company or any ERISA
Affiliate, (ii) permit to exist any ERISA Event or any other event or condition
with respect to a Plan, which presents the risk of a material liability to any
member of the Controlled Group, (iii) make a complete or partial withdrawal
(within the meaning of ERISA Section 4201) from any Multiemployer Plan so as to
result in any material liability to the Company or any ERISA Affiliate,
(iv) enter into any new Plan or modify any existing Plan so as to increase its
obligations
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thereunder which could result in any material liability to any member of the
Controlled Group, or (v) permit the excess (if any) of (x) the present value of
all liabilities (determined by using the actuarial assumptions utilized by the
PGBC upon termination of a single employer plan) under any Plan sponsored or
maintained by the Company or any of its Subsidiaries that is subject to Title IV
of ERISA OVER (y) the fair market value of Plan assets allocable to such benefit
liabilities, to exceed an aggregate amount of $10,000,000 for all such Plans of
the Company and its Subsidiaries, all determined as of the most recent valuation
date for each such Plan for which a valuation is available.
7.11 LEASE OBLIGATIONS. The Company shall not, and shall not suffer or
permit any of its Subsidiaries to, create or suffer to exist any obligations for
the payment of rent for any Property under lease or agreement to lease, except
for:
(a) leases of the Company and its Subsidiaries in existence on the
Closing Date (SCHEDULE 7.11 hereto sets forth all such leases incurred outside
the Ordinary Course of Business);
(b) Operating Leases entered into by the Company or any of its
Subsidiaries after the Closing Date;
(c) sale/leaseback transactions entered into by the Company or any of
its Subsidiaries after the Closing Date, PROVIDED, that:
(i) immediately prior to giving effect to such lease, the
Property subject to such lease was sold by the Company or any such
Subsidiary to the lessor pursuant to a transaction permitted under
subsection 7.02(d) or 7.05(e);
(ii) the Net Proceeds of such sale are applied simultaneously to
reduce the Loans to the extent required by subsection 2.07(a); and
(iii) no Default or Event of Default exists or would occur as a
result of such sale and subsequent lease; and
(d) Capital Leases other than those permitted under subsections (a)
and (c) of this Section 7.11, entered into by the Company or any of its
Subsidiaries after the Closing Date; PROVIDED that the aggregate annual rental
payments for all such Capital Leases shall not exceed $2,000,000 in any fiscal
year.
7.12 RESTRICTED PAYMENTS. The Company shall not, and shall not suffer or
permit any of its Subsidiaries to, declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any shares of any class of its capital stock, or purchase, redeem or
otherwise acquire for value any shares of its capital stock or any warrants,
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rights or options to acquire such shares, now or hereafter outstanding; except:
(a) the Company may (i) so long as no Default or Event of Default
exists, declare and make annual dividend payments on its capital stock not in
excess of the sum of (x) $3,000,000 PLUS (y) the amount of any Available Excess
Cash Flow (to the extent not previously applied pursuant to subsection 7.04(d),
Section 7.09 or subsection 7.13(a)), and (ii) make distributions payable solely
in its common stock; and
(b) any Subsidiary may make payments or distributions to the Company
or to any Wholly-Owned Subsidiary other than a Receivables Subsidiary (except as
required by the RSFC Receivables Sale Agreement or the USFAR Receivables Sale
Agreement).
7.13 CAPITAL EXPENDITURES. (a) Subject to subsections 7.13(b) and (c)
below, the Company and its consolidated Subsidiaries shall not make or commit to
make Capital Expenditures through the end of any fiscal year (or longer period)
set forth below in excess of the amount set forth below (herein the "MAXIMUM
CAPEX AMOUNT") with respect to such fiscal year (or longer period) PLUS, to the
extent the Company and its consolidated Subsidiaries make Capital Expenditures
in any fiscal year in an amount equal to the Maximum CAPEX Amount for such year,
an additional amount equal to the sum of (i) the excess, if any, of the Maximum
CAPEX Amount for the prior fiscal year (or longer period) LESS the amount of
Capital Expenditures actually made during such prior fiscal year, and (ii) the
amount of any Available Excess Cash Flow for the prior fiscal year (to the
extent not previously applied pursuant to subsection 7.04(d), Section 7.09 or
subsection 7.12(a)):
Fiscal Year Maximum
----------- CAPEX Amount
------------
5/1/96 through 6/30/97 $92,500,000
7/1/97 through 6/30/98 71,000,000
7/1/98 through 6/30/99 53,000,000
7/1/99 through 6/30/00 34,000,000
7/1/00 through 6/30/01 37,000,000
7/1/01 through 6/30/02 40,000,000
7/1/02 through 6/30/03 43,000,000
(b) The Maximum CAPEX Amount for each of the fiscal years ended on or
about June 30, 1998 and June 30, 1999 shall be reduced by an amount equal to
one-half of the amount by which $35,000,000 exceeds the amount of proceeds
received by the Company and its Subsidiaries from any Third Party Facility Debt
obtained by the Company or any of its Subsidiaries on or prior to June 30, 1997.
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(c) Upon final determination of the Tone Brothers Liability, the
Maximum CAPEX Amount for the fiscal year in which such determination occurs
shall be reduced in the amount of such Liability; if such calculation would
exceed the Maximum CAPEX Amount already expended for such fiscal year, any
excess shall be applied to reduce the Maximum CAPEX Amount for the next
succeeding fiscal year.
7.14 CONSOLIDATED NET WORTH. The Company shall not permit its
Consolidated Net Worth at any time during any fiscal quarter to be less than (i)
the applicable minimum base amount set forth below opposite each such period
PLUS (ii) the cumulative amount of aggregate net cash proceeds received by the
Company from the issuance of common or preferred stock after the Closing Date
MINUS (iii) the sum of (x) the one-time restructuring and reorganization charge
associated with the Transaction, including the non-cash impairment of long-term
assets resulting from the application of SFAS 121, (y) the Tone Brothers
Liability and (z) accounting adjustments made in accordance with GAAP relating
to the price of the Company's common stock in connection with the Transaction,
in each case of (x), (y) and (z) after taking into account the effect of taxes
and any adjustments to prior reserve provisions:
During each Fiscal Quarter
Ending in Each of the
Following Periods Minimum Base Amount
-------------------------- -------------------
from the date hereof through
June 29, 1997 $425,000,000
from June 30, 1997 through
June 29, 1998 $430,000,000
from June 30, 1998 through
June 29, 1999 $450,000,000
from June 30, 1999 through
June 29, 2000 $475,000,000
from June 30, 2000 through
June 29, 2001 $510,000,000
from June 30, 2001 through
June 29, 2002 $550,000,000
from June 30, 2002 through
June 29, 2003 $600,000,000
7.15 LEVERAGE RATIO. The Company shall not permit its Leverage Ratio for
any fiscal quarter (determined as of the last
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day of such fiscal quarter) ending in any period set forth below to be greater
than the respective ratios set forth below opposite each such period:
For Each Fiscal Quarter
Ending in Each of the
Following Periods Maximum Leverage Ratio
-------------------------- ----------------------
from the date hereof through
September 30, 1996 6.50 to 1.00
October 1, 1996 through
December 31, 1996 6.40 to 1.00
from January 1, 1997 through
March 31, 1997 6.25 to 1.00
from April 1, 1997 through
September 30, 1997 5.75 to 1.00
from October 1, 1997 through
December 31, 1997 5.50 to 1.00
from January 1, 1998 through
March 31, 1998 5.25 to 1.00
from April 1, 1998 through
June 30, 1998 4.80 to 1.00
from July 1, 1998 through
September 30, 1998 4.75 to 1.00
from October 1, 1998 through
December 31, 1998 4.50 to 1.00
from January 1, 1999 through
March 31, 1999 4.25 to 1.00
from April 1, 1999 through
September 30, 1999 4.00 to 1.00
from October 1, 1999 through
December 31, 1999 3.80 to 1.00
from January 1, 2000 through
March 31, 2000 3.60 to 1.00
from April 1, 2000 through
September 30, 2000 3.50 to 1.00
from October 1, 2000 through
March 31, 2001 3.25 to 1.00
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from April 1, 2001 through
March 31, 2003 3.00 to 1.00
7.16 FIXED CHARGE COVERAGE RATIO. The Company shall not permit its Fixed
Charge Coverage Ratio for any fiscal quarter (determined as of the last day of
such fiscal quarter) ending in any period set forth below to be less than the
respective ratios set forth below opposite each such period:
For Each Fiscal Quarter
Ending in Each of the Minimum Fixed Charge
Following Periods Coverage Ratio
------------------------- --------------------
from the date hereof through
June 30, 1997 1.2 to 1.0
from July 1, 1997 through
June 30, 2000 1.1 to 1.0
from July 1, 2000 through
March 31, 2003 1.0 to 1.0
7.17 INTEREST COVERAGE RATIO. The Company shall not permit its Interest
Coverage Ratio for any fiscal quarter (determined as of the last day of such
fiscal quarter) ending in any period set forth below to be less than the
respective ratios set forth below opposite each such period:
For Each Fiscal Quarter
Ending in Each of the Minimum Interest
Following Periods Coverage Ratio
-------------------------- ------------------
from the date hereof through
December 31, 1996 1.75 to 1.00
from January 1, 1997 through
March 31, 1997 1.80 to 1.00
from April 1, 1997 through
September 30, 1997 2.00 to 1.00
from October 1, 1997 through
December 31, 1997 2.10 to 1.00
from January 1, 1998 through
March 31, 1998 2.25 to 1.00
from April 1, 1998 through
June 30, 1998 2.40 to 1.00
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from July 1, 1998 through
March 31, 1999 2.50 to 1.00
from April 1, 1999 through
June 30, 1999 2.60 to 1.00
from July 1, 1999 through
December 31, 1999 2.75 to 1.00
from January 1, 2000 through
September 30, 2000 3.00 to 1.00
from October 1, 2000 through
March 31, 2001 3.25 to 1.00
from April 1, 2001 through
March 31, 2003 3.50 to 1.00
7.18 CHANGE IN BUSINESS. The Company shall not, and shall not permit any
of its Subsidiaries (including any Receivables Subsidiary) to, engage in any
material line of business substantially different from those lines of business
carried on by it on the date hereof.
7.19 CHANGE IN STRUCTURE. Except as expressly permitted under Section
7.03, the Company shall not and shall not permit any of its Subsidiaries to,
make any changes in its equity capital structure (including in the terms of its
outstanding stock), or amend its certificate of incorporation or by-laws in any
material respect; PROVIDED, HOWEVER, that the Company may amend its by-laws, and
may permit any Subsidiary to make a change in its equity capital structure or
amend its certificate of incorporation or by- laws, in any material respect to
the extent necessary to the reorganization of the Company's business following
the Transaction if any such change or amendment could not reasonably be expected
to have an adverse effect on the interests of the Administrative Agent or the
Lenders.
7.20 ACCOUNTING CHANGES. The Company shall not, and shall not suffer or
permit any of its Subsidiaries to, make any significant change in accounting
treatment or reporting practices, except as required by GAAP, or change the
fiscal year of the Company or of any of its consolidated Subsidiaries (except
for the change to a June 30 fiscal year by the Company in 1996).
7.21 TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall not
suffer or permit any of its Subsidiaries to, enter into any transaction with any
Affiliate of the Company or of any such Subsidiary, except (a) as expressly
permitted by this Agreement, (b) in the Ordinary Course of Business and pursuant
to the reasonable requirements of the business of the Company or such
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Subsidiary; in each case (a) and (b), upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate of the Company or such
Subsidiary, or (c) the transactions specifically described on SCHEDULE 7.21
hereto.
7.22 SUBORDINATED NOTE INDENTURE. Notwithstanding anything herein to the
contrary, the $30 million "basket" provided by clause (xiii) of the definition
of "Permitted Indebtedness" in the Subordinated Note Indenture shall not be
utilized by the Company or any of its Subsidiaries for the incurrence of any
Indebtedness other than Revolving Loans; PROVIDED, HOWEVER, that the foregoing
restriction shall no longer apply upon the later to occur of (i) the date that
is three years after the Closing Date and (ii) the first date upon which the
Leverage Ratio is 4.0 to 1.0 or less.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 EVENT OF DEFAULT. Any of the following shall constitute an "EVENT OF
DEFAULT":
(a) NON-PAYMENT. The Company fails to pay, (i) when and as required
to be paid herein, any amount of principal of any Loan (including any Swing Line
Loan) or L/C Borrowing, or (ii) within three days after the same shall become
due, any interest, fee or any other amount payable hereunder or pursuant to any
other Loan Document; or
(b) REPRESENTATION OR WARRANTY. Any representation or warranty by
the Company or any of its Subsidiaries made or deemed made herein, in any Loan
Document, or which is contained in any certificate, document or financial or
other statement by the Company, any of its Subsidiaries, or their respective
Responsible Officers, furnished at any time under this Agreement, or in or under
any Loan Document, shall prove to have been incorrect in any material respect on
or as of the date made or deemed made; or
(c) SPECIFIC DEFAULTS. The Company fails to perform or observe any
term, covenant or agreement contained in Article VII or Section 6.03 or Section
6.13; or
(d) OTHER DEFAULTS. The Company fails to perform or observe any
other term or covenant contained in this Agreement or any Loan Document, and
such default shall continue unremedied for a period of 30 days after the earlier
of (i) the date upon which a Responsible Officer of the Company becomes aware,
or would reasonably be expected to have become aware, of such failure or (ii)
the date upon which written notice thereof is given to the Company by the
Administrative Agent or any Lender; or
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(e) CROSS-DEFAULT. The Company or any of its Subsidiaries (i) fails
to make any payment in respect of any Indebtedness or Contingent Obligation
having an aggregate principal amount (including undrawn committed or available
amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than $5,000,000 when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise); or
(ii) fails to perform or observe any other condition or covenant, or any other
event shall occur or condition exist, under any agreement or instrument relating
to any such Indebtedness or Contingent Obligation, if the effect of such
failure, event or condition is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, such Indebtedness to be declared to be due and payable
prior to its stated maturity, or such Contingent Obligation to become payable or
cash collateral in respect thereof to be demanded; or
(f) INSOLVENCY; VOLUNTARY PROCEEDINGS. The Company or any of its
Subsidiaries (i) generally fails to pay, or admits in writing its inability to
pay, its debts as they become due, subject to applicable grace periods, if any,
whether at stated maturity or otherwise, (ii) commences any Insolvency
Proceeding with respect to itself, or (iii) takes any action to effectuate or
authorize any of the foregoing; or the Company (either on an individual or
consolidated basis) ceases or fails to be Solvent; or
(g) INVOLUNTARY PROCEEDINGS. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Company or any Subsidiary of the
Company, or any writ, judgment, warrant of attachment, execution or similar
process, is issued or levied against a substantial part of the Company's or any
of its Subsidiaries' Properties, and any such proceeding or petition shall not
be dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded within 60 days
after commencement, filing or levy; (ii) the Company or any of its Subsidiaries
admits the material allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under non-U.S. law) is
ordered in any Insolvency Proceeding; or (iii) the Company or any of its
Subsidiaries acquiesces in the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or Administrative Agent
therefor), or other similar Person for itself or a substantial portion of its
Property or business; or
(h) ERISA. (i) A member of the Controlled Group shall fail to pay
when due, after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under a Multiemployer Plan if
the unpaid and remaining installments aggregate $1,000,000 or more; (ii) the
Company or an
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ERISA Affiliate shall fail to satisfy its contribution requirements under
Section 412(c)(11) of the Code, whether or not it has sought a waiver under
Section 412(d) of the Code, if the amount involved is more than $1,000,000;
(iii) in the case of an ERISA Event involving the withdrawal from a Plan of a
"substantial employer" (as defined in Section 4001(a)(2) or Section 4062(e) of
ERISA), the withdrawing employer's proportionate share of that Plan's Unfunded
Pension Liabilities is more than $5,000,000; (iv) in the case of an ERISA Event
involving the complete or partial withdrawal of a member of the Controlled Group
from a Multiemployer Plan, the withdrawing employer has incurred a withdrawal
liability in an aggregate amount exceeding $5,000,000; (v) in the case of an
ERISA Event not described in clause (iii) or (iv), the Unfunded Pension
Liabilities of the relevant Plan or Plans could result in liability to the
Company and its Subsidiaries that would exceed $5,000,000; (vi) a Plan that is
intended to be qualified under Section 401(a) of the Code shall lose its
qualification, and the loss can reasonably be expected to impose on the Company
and its Subsidiaries liability (for additional taxes, to Plan participants, or
otherwise) in the aggregate amount of $5,000,000 or more; (vii) the commencement
or increase of contributions to, or the adoption of or the amendment of a Plan
by, a member of the Controlled Group shall result in a net increase in Unfunded
Pension Liabilities to the Controlled Group in excess of $5,000,000; (viii) the
Company or any of its Subsidiaries engages in or otherwise becomes liable for a
non-exempt prohibited transaction, and the initial tax or additional tax under
section 4975 of the Code relating thereto might reasonably be expected to exceed
$5,000,000; (ix) a violation of section 404 or 405 of ERISA or the exclusive
benefit rule under section 401(a) of the Code occurs, if such violation might
reasonably be expected to expose the Company and its Subsidiaries to monetary
liability in excess of $5,000,000; (x) any member of the Controlled Group is
assessed a tax under section 4980B of the Code in excess of $5,000,000; or (xi)
the occurrence of any combination of events listed in clauses (iii) through (x)
that involves a potential liability, net increase in aggregate Unfunded Pension
Liabilities, or any combination thereof, in excess of $5,000,000; or
(i) MONETARY JUDGMENTS. One or more judgments, non-interlocutory
orders, decrees or arbitration awards (other than an award or judgment
constituting the Tone Brothers Liability) shall be entered against the Company
or any of its Subsidiaries involving in the aggregate a liability (not fully
covered by independent third-party insurance) as to any single or related series
of transactions, incidents or conditions, of $7,500,000 or more, and the same
shall remain unsatisfied, unvacated and unstayed pending appeal for a period of
30 days after the entry thereof; or
(j) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order or
decree shall be rendered against the Company or any of its Subsidiaries which
has a Material Adverse Effect, and there shall
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be any period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(k) COLLATERAL.
(i) any Collateral Document shall for any reason cease to be
valid and binding on or enforceable in any material respect against the
Company or any Subsidiary of the Company party thereto, or the Company or
any Subsidiary of the Company shall so state in writing or bring an action
to limit its obligations or liabilities thereunder; or
(ii) any Collateral Document shall for any reason (other than
pursuant to the terms thereof) cease to create a valid security interest in
the Collateral purported to be covered thereby or such security interest
shall for any reason cease to be a perfected and first priority security
interest subject only to Permitted Liens; or
(l) CHANGE OF CONTROL. At any time:
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than one or more Permitted Holders, is or becomes
the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of more than 30% of the voting stock of the
Company; or
(ii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board of
Directors or whose nomination for election by the stockholders of the
Company was approved by two-thirds of the directors of the Company then
still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the Board of Directors of
the Company then in office; or
(m) LOSS OF LICENSES. (i) Any Governmental Authority shall revoke or
fail to renew any material license, permit or franchise of the Company or any of
its Subsidiaries, or (ii) the Company or any of its Subsidiaries shall for any
reason lose any material license, permit or franchise, or (iii) the Company or
any of its Subsidiaries shall suffer the imposition of any restraining order,
escrow, suspension or impoundment of funds in connection with any proceeding
(judicial or administrative) with respect to
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any material license, permit or franchise, and the consequence of any of such
events described in (i), (ii) or (iii) above shall be a Material Adverse Effect;
or
(n) RATE CONTRACTS. The Company shall breach or default under any
Rate Contract entered into pursuant to Section 6.13 to which any Lender is a
party, if the effect of such breach or default is to allow the Lender to proceed
against, or otherwise realize from, the Company or any Collateral to satisfy any
claim of the Lender against the Company in respect of such Rate Contract; or
(o) INVALIDITY OF SUBORDINATION PROVISIONS. The subordination
provisions of the Subordinated Note Indenture or any agreement or instrument
governing any subordinated Indebtedness shall for any reason be revoked or
invalidated, or otherwise cease to be in full force and effect, the holders of
the Subordinated Notes or any other Person shall contest in any manner the
validity or enforceability thereof or deny that they have any further liability
or obligation thereunder, or the Indebtedness hereunder shall for any reason be
subordinated or shall not have the priority contemplated by this Agreement or
such subordination provisions.
8.02 REMEDIES. If any Event of Default occurs, the Administrative Agent
shall, at the request of, or may, with the consent of, the Majority Lenders,
(a) declare the Commitment of each Lender (including the Swing Line
Lender) to make Loans, and of the Issuing Bank to Issue Letters of Credit, to be
terminated, whereupon such Commitments shall forthwith be terminated;
(b) declare the unpaid principal amount of all outstanding Loans
(including Swing Line Loans) and all outstanding L/C Borrowings, together with
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document, to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Company; and
(c) exercise on behalf of itself, the Lenders (including the Swing
Line Lender) and the Issuing Bank all rights and remedies available to it and
the Lenders under the Loan Documents or applicable law;
PROVIDED, HOWEVER, that upon the occurrence of any event specified in paragraph
(f) or (g) of Section 8.01 above (in the case of clause (i) of paragraph (g)
upon the expiration of the 60-day period mentioned therein), the obligation of
each Lender to make Loans shall automatically terminate and the unpaid principal
amount of all outstanding Loans and all interest and other amounts as aforesaid
shall automatically become due and payable without further act of the
Administrative Agent or any Lender.
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8.03 RIGHTS NOT EXCLUSIVE. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
ARTICLE IX
THE ADMINISTRATIVE AGENT
9.01 APPOINTMENT AND AUTHORIZATION. (a) Each Lender hereby irrevocably
appoints, designates and authorizes the Administrative Agent to take such action
on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document, the Administrative Agent, the Agents and the Co-Arrangers
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent, the Agents or the Co-Arrangers.
(b) The Issuing Bank shall act on behalf of the Lenders with respect
to any Letters of Credit Issued by it and the documents associated therewith
until such time and except for so long as the Administrative Agent may agree at
the request of the Majority Lenders to act for such Issuing Bank with respect
thereto; PROVIDED, HOWEVER, that the Issuing Bank shall have all of the benefits
and immunities (i) provided to the Administrative Agent in this Article IX with
respect to any acts taken or omissions suffered by the Issuing Bank in
connection with Letters of Credit Issued by it or proposed to be Issued by it
and the application and agreements for letters of credit pertaining to the
Letters of Credit as fully as if the term "Agent", as used in this Article IX,
included the Issuing Bank with respect to such acts or omissions, and (ii) as
additionally provided in this Agreement with respect to the Issuing Bank.
9.02 DELEGATION OF DUTIES. The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent
shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
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9.03 LIABILITY OF AGENT-RELATED PERSONS. None of the Agent-Related
Persons shall (i) be liable for any action taken or omitted to be taken by any
of them under or in connection with this Agreement or any other Loan Document
(except for its own gross negligence or willful misconduct), or (ii) be
responsible in any manner to any of the Lenders for any recital, statement,
representation or warranty made by the Company or any Subsidiary or Affiliate of
the Company, or any officer thereof, contained in this Agreement or in any other
Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent or any
of them under or in connection with, this Agreement or any other Loan Document,
or for the value of any Collateral or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or
for any failure of the Company or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Agent-Related Person shall
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the Properties,
books or records of the Company or any of the Company's Subsidiaries or
Affiliates.
9.04 RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent, the Agents and the Co-Arrangers
shall be entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to the Company), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent,
the Agents and the Co-Arrangers shall be fully justified in failing or refusing
to take any action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Majority Lenders as it
deems appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent, the Agents and the Co-Arrangers shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the Majority
Lenders and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Lenders.
(b) Each Lender that has executed this Agreement shall be deemed
to have consented to, approved or accepted or be satisfied with each document or
other matter sent by the
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Administrative Agent, the Agents or the Co-Arrangers prior to or concurrent with
the execution of this Agreement to such Lender for consent, approval, acceptance
or satisfaction.
9.05 NOTICE OF DEFAULT. The Administrative Agent, the Agents and the Co-
Arrangers shall not be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default, except with respect to defaults in the payment
of principal, interest and fees required to be paid to the Administrative Agent
for the account of the Lenders, unless the Administrative Agent shall have
received written notice from a Lender or the Company referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be requested by the Majority Lenders
in accordance with Article VIII; PROVIDED, HOWEVER, that unless and until the
Administrative Agent shall have received any such request, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable or in the best interest of the Lenders.
9.06 CREDIT DECISION. Each Lender expressly acknowledges that none of
the Agent-Related Persons has made any representation or warranty to it and that
no act by the Administrative Agent, any Agent or any Co-Arranger hereinafter
taken, including any review of the affairs of the Company and its Subsidiaries
shall be deemed to constitute any representation or warranty by the
Administrative Agent, any Agent or any Co-Arranger to any Lender. Each Lender
represents to the Administrative Agent that it has, independently and without
reliance upon the Administrative Agent, any Agent or any Co-Arranger and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Company and
its Subsidiaries, and all applicable regulatory laws relating to the
transactions contemplated thereby, and made its own decision to enter into this
Agreement and extend credit to the Company hereunder. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent, any Agent or any Co-Arranger, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the
Administrative Agent, the Administrative Agent, the Agents and the Co-Arrangers
shall not
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have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of the Company which may come into the
possession of any of the Agent-Related Persons.
9.07 INDEMNIFICATION. Whether or not the transactions contemplated
hereby shall be consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), ratably
(according to Commitments) from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind whatsoever which may at any time
(including at any time following the repayment of the Loans and the termination
or resignation of the related Administrative Agent) be imposed on, incurred by
or asserted against any such Person any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by any such Person under or in connection with any of the foregoing; PROVIDED,
HOWEVER, that no Lender shall be liable for the payment to the Agent-Related
Persons of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from such Person's gross negligence or willful misconduct. Without limitation
of the foregoing, each Lender shall reimburse the Administrative Agent, the
Agents and the Co-Arrangers upon demand for their ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Administrative
Agent, the Agents or the Co-Arrangers in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any other
Loan Document, or any document contemplated by or referred to herein to the
extent that the Administrative Agent, the Agents or the Co-Arrangers are not
reimbursed for such expenses by or on behalf of the Company. Without limiting
the generality of the foregoing, if the Internal Revenue Service or any other
Governmental Authority of the United States or other jurisdiction asserts a
claim that the Administrative Agent did not properly withhold tax from amounts
paid to or for the account of any Lender (because the appropriate form was not
delivered, was not properly executed, or because such Lender failed to notify
the Administrative Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Lender shall indemnify the Administrative Agent fully for all
amounts paid, directly or indirectly, by the Administrative Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Administrative Agent under this
Section, together with all costs
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and expenses (including Attorney Costs). The obligation of the Lenders in this
Section shall survive the payment of all Obligations hereunder.
9.08 AGENTS IN INDIVIDUAL CAPACITY. BofA and Chase and their respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
lending, trust, financial advisory or other business with the Company and its
Subsidiaries and Affiliates as though BofA and Chase were not one of the Agents
hereunder and without notice to or consent of the Lenders. With respect to its
Loans, BofA and Chase shall have the same rights and powers under this Agreement
as any other Lender and may exercise the same as though it were not one of the
Agents, and the terms "Lender" and "Lenders" shall include BofA and Chase in
their individual capacities.
9.09 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may, and
at the request of the Majority Lenders shall, resign as Administrative Agent
upon 30 days' notice to the Lenders. If the Administrative Agent shall resign
as Administrative Agent under this Agreement, the Majority Lenders shall appoint
from among the Lenders a successor Administrative Agent for the Lenders. If no
successor Administrative Agent is appointed prior to the effective date of the
resignation of the Administrative Agent, the Administrative Agent may appoint,
after consulting with the Lenders and the Company, a successor Administrative
Agent from among the Lenders. Upon the acceptance of its appointment as
successor Administrative Agent hereunder, such successor Administrative Agent
shall succeed to all the rights, powers and duties of the retiring
Administrative Agent and the term "Administrative Agent" shall mean such
successor Administrative Agent and the retiring Administrative Agent's
appointment, powers and duties as Administrative Agent shall be terminated.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article IX and Sections 10.04 and
10.05 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement. If no successor
Administrative Agent has accepted appointment as Administrative Agent by the
date which is 30 days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
the Administrative Agent hereunder until such time, if any, as the Majority
Lenders appoint a successor Administrative Agent as provided for above.
9.10 COLLATERAL MATTERS.
(a) The Administrative Agent is authorized on behalf of all the
Lenders, without the necessity of any notice to or further consent from the
Lenders, from time to time to take any action with
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respect to any Collateral or the Collateral Documents which may be necessary to
perfect and maintain perfected the security interest in and Liens upon the
Collateral granted pursuant to the Collateral Documents.
(b) The Lenders irrevocably authorize the Administrative Agent, at
its option and in its discretion, to release any Lien granted to or held by the
Administrative Agent upon any Collateral (i) upon termination of the Commitments
and payment in full of all Loans and all other Obligations payable under this
Agreement and under any other Loan Document; (ii) constituting Property sold or
to be sold or disposed of as part of or in connection with any Disposition
permitted hereunder pursuant to Section 7.02 or subsection 7.05(e); (iii)
constituting Property in which the Company or any Subsidiary of the Company
owned no interest at the time the Lien was granted or at any time thereafter;
(iv) constituting Property leased to the Company or any Subsidiary of the
Company under a lease which has expired or been terminated in a transaction
permitted under this Agreement or is about to expire and which has not been, and
is not intended by the Company or such Subsidiary to be, renewed or extended;
(v) consisting of an instrument evidencing Indebtedness or other debt
instrument, if the indebtedness evidenced thereby has been paid in full; or (vi)
if approved, authorized or ratified in writing by the Majority Lenders or all
the Lenders, as the case may be, as provided in subsection 10.01(a)(vi). Upon
request by the Administrative Agent at any time, the Lenders will confirm in
writing the Administrative Agent's authority to release particular types or
items of Collateral pursuant to this subsection 9.10(b).
(c) Each Lender agrees with and in favor of each other Lender
(which agreement shall not be for the benefit of the Company or any of its
Subsidiaries) that the Company's obligation to such Lender under this Agreement
and the other Loan Documents is not and shall not be secured by any real
property collateral now or hereafter acquired by such Lender other than the real
property described in the Mortgages.
ARTICLE X
MISCELLANEOUS
10.01 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Company therefrom, shall be effective unless the same shall be
in writing and signed by the Majority Lenders, the Company and acknowledged by
the Administrative Agent, and then such consent or waiver shall be effective
only in the specific instance and for the specific purpose for which given;
PROVIDED, HOWEVER, that
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(a) no such waiver, amendment or consent shall, unless in writing
and signed by all of the Lenders, the Company and acknowledged by the
Administrative Agent, do any of the following:
(i) increase or extend the Commitment of any Lender (or
reinstate any Commitment terminated pursuant to subsection 8.02(a) which
was terminated after or simultaneously with the exercise of the remedy in
subsection 8.02(b)) or subject any Lender to any additional obligations
without the prior written consent of such Lender (it being understood that
waivers or modifications of conditions precedent, covenants, Defaults or
Events of Default or of a mandatory reduction in the Aggregate Commitment
shall not constitute an increase of the Commitment of any Lender);
(ii) extend any date fixed for any scheduled payment of
principal, interest, fees or other amounts due to the Lenders (or any of
them) hereunder or under any Loan Document without the prior written
consent of each Lender affected thereby (it being understood that, subject
to the provisions of subsection 10.01(b) below, any waiver of the
application of any non-scheduled prepayment of, or the method of
application of any non-scheduled prepayment to the amortization of, the
Loans shall not constitute any such extension);
(iii) reduce the principal of, or the rate of interest
specified herein on any Loan (other than a waiver of the applicability of
any post-default increase in interest rates), or of any fees or other
amounts payable hereunder or under any Loan Document;
(iv) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which shall be required for
the Lenders or any of them to take any action hereunder;
(v) amend the definition of Majority Lenders or Required
Lenders, this Section 10.01 or Section 2.14 or any provision providing for
consent or other action by all the Lenders; or
(vi) discharge any Guarantor or release all or substantially
all of the Collateral (except as expressly provided in the Loan Documents)
under all the Collateral Documents; and
(b) no such waiver, amendment or consent shall, unless in writing
and signed by the Required Lenders specified below (in addition to the Majority
Lenders, the Company and the Administrative Agent):
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(i) change the allocation between Tranche A Term Loans,
Tranche B Term Loans and Tranche C Term Loans of any prepayment pursuant to
Section 2.06 or 2.07 without the prior written consent of the Required
Lenders of each Tranche affected thereby; or
(ii) amend subsection 2.07(i) without the prior written
consent of the Required Lenders of each Tranche affected thereby; and
(c) (i) without the consent of the Administrative Agent, amend,
modify or waive any provision of Article IX as it applies to the Administrative
Agent or any other provision of this Agreement or any other Loan Document as it
relates to the rights or obligations of the Administrative Agent, (ii) without
the consent of the Issuing Bank, amend, modify or waive any provision of Article
III or alter the Issuing Bank's rights or obligations with respect to Letters of
Credit, and (iii) without the consent of the Swing Line Lender, amend, modify or
waive any provisions relating to the rights or obligations of the Swing Line
Lender or with respect to Swing Line Loans.
10.02 NOTICES.
(a) All notices, requests and other communications provided for
hereunder shall be in writing (including, unless the context expressly otherwise
provides, by facsimile transmission, provided that any matter transmitted by the
Company by facsimile (i) shall be immediately confirmed by a telephone call to
the recipient at the number specified on SCHEDULE II hereto, and (ii) shall be
followed promptly by a hard copy original thereof) and mailed, faxed or
delivered, to the address or facsimile number specified for notices on Schedule
II hereto; or, as directed to the Company or the Administrative Agent, to such
other address as shall be designated by such party in a written notice to the
other parties, and as directed to each other party, at such other address as
shall be designated by such party in a written notice to the Company and the
Administrative Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next day) delivery, or when transmitted by facsimile machine,
respectively, or if mailed, upon the third Business Day after the date deposited
into the U.S. mail, or if delivered, upon delivery; except that notices pursuant
to Article II or IX shall not be effective until actually received by the
Administrative Agent.
(c) The Company acknowledges and agrees that any agreement of the
Administrative Agent and the Lenders at Article II herein to receive certain
notices by telephone and facsimile is
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solely for the convenience and at the request of the Company. The
Administrative Agent and the Lenders shall be entitled to rely on the authority
of any Person purporting to be a Person authorized by the Company to give such
notice and the Administrative Agent and the Lenders shall not have any liability
to the Company or other Person on account of any action taken or not taken in
good faith by the Administrative Agent or the Lenders in reliance upon such
telephonic or facsimile notice. The obligation of the Company to repay the
Loans shall not be affected in any way or to any extent by any failure by the
Administrative Agent and the Lenders to receive written confirmation of any
telephonic or facsimile notice or the receipt by the Administrative Agent and
the Lenders of a confirmation which is at variance with the terms understood by
the Administrative Agent and the Lenders to be contained in the telephonic or
facsimile notice.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no delay
in exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.
10.04 COSTS AND EXPENSES. The Company shall, whether or not the
transactions contemplated hereby shall be consummated:
(a) pay or reimburse BofA (including in its capacity as
Administrative Agent), Chase (including in its capacity as Documentation Agent)
and the respective Affiliates of each, including BA Securities, Inc. and Chase
Securities, Inc. (collectively, the "Bank Affiliates") (subject to subsection
4.01(f) within five Business Days after demand) for all costs and expenses
incurred by the Bank Affiliates in connection with the development, preparation,
delivery, syndication, administration and execution of, and any amendment,
supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any Loan Document and any other documents prepared
in connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including the reasonable Attorney Costs
incurred by each of the Bank Affiliates with respect thereto, PROVIDED the Bank
Affiliates shall be entitled to reimbursement of Attorney Costs of only one
outside law firm acting on behalf of the Bank Affiliates, collectively, to the
extent incurred in connection with the preparation, negotiation or execution of
this Agreement and the other Loan Documents for the period prior to and
including the Closing Date.
(b) pay or reimburse each Lender and each Bank Affiliate within
five Business Days after demand (subject to subsection 4.01(f)) for all costs
and expenses incurred by them in connection with the enforcement, attempted
enforcement, or preservation of any
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rights or remedies during the existence of an Event of Default (including in
connection with any "workout" or restructuring regarding the Loans, and
including in any Insolvency Proceeding or appellate proceeding) under this
Agreement, any other Loan Document, and any such other documents, including
Attorney Costs, incurred by any Bank Affiliate and any Lender; and
(c) pay or reimburse the Bank Affiliates within five Business Days
after demand (subject to subsection 4.01(f)) for all appraisal (including the
allocated cost of internal appraisal services), audit, environmental inspection
and review (including the allocated cost of such internal services), search and
filing costs, fees and expenses, incurred or sustained by the Bank Affiliates in
connection with the matters referred to under subsections (a) and (b) of this
Section.
10.05 INDEMNITY. Whether or not the transactions contemplated hereby
shall be consummated:
(a) GENERAL INDEMNITY. The Company shall pay, indemnify, defend
and hold the Administrative Agent, the Documentation Agent, each Lender, each
Issuing Bank, the Co- Arrangers and each of their respective Affiliates,
officers, directors, employees, counsel, agents and attorneys-in-fact (each, an
"INDEMNIFIED PERSON") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses or disbursements, of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement and any other Loan Documents (including Attorney Costs,
subject, with respect to execution and delivery, to subsection 10.04(a)), or the
transactions contemplated hereby and thereby, and with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to this Agreement or the Loans or the use of the
proceeds thereof, whether or not any Indemnified Person is a party thereto (all
the foregoing, collectively, the "INDEMNIFIED LIABILITIES"); PROVIDED, that the
Company shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities arising from the gross negligence or willful
misconduct of such Indemnified Person.
(b) ENVIRONMENTAL INDEMNITY. The Company hereby agrees to
indemnify, defend and hold harmless each Indemnified Person, from and against
any and all liabilities, obligations, claims, demands, assessments, losses,
damages, penalties, actions, judgments, suits, costs, charges, expenses or
disbursements, including Attorney Costs and environmental consultants' fees and
disbursements (all the foregoing, collectively, the "ENVIRONMENTAL
LIABILITIES"), resulting from, arising out of, or relating to (i) the breach by
the Company or its Subsidiaries of any of its representations, warranties and
covenants contained in this
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Agreement, including, without limitation, the matters disclosed in Schedule
5.12, and (ii) all Environmental Liabilities arising under Environmental Laws
and Environmental Permits, including, without limitation, CERCLA, resulting
from, arising out of or relating to any conditions or activities at, on, in,
under, to or from the Property of the Company or any of its Subsidiaries prior
to and after the Closing Date, including without limitation the off-site
disposal of Hazardous Materials. No action taken by legal counsel chosen by the
Administrative Agent or any Lender with regard to any matter related to this
Environmental Indemnity shall vitiate or in any way impair the Company's
obligation and duty hereunder to indemnify and hold harmless the Administrative
Agent and each Lender.
(c) SURVIVAL. The obligations in this Section 10.05 shall survive
payment of all other Obligations. All amounts owing under this Section 10.05
shall be paid within 30 days after delivery to the Company (with a copy to the
Administrative Agent) of a certificate setting forth in reasonable detail the
amount owed, which shall be conclusive and binding on the Company in the absence
of manifest error.
10.06 MARSHALLING; PAYMENTS SET ASIDE. Neither the Administrative Agent
nor the Lenders shall be under any obligation to marshall any assets in favor of
the Company or any other Person or against or in payment of any or all of the
Obligations. To the extent that the Company makes a payment or payments to the
Administrative Agent or the Lenders, or the Administrative Agent or the Lenders
enforce their Liens or exercise their rights of set-off, and such payment or
payments or the proceeds of such enforcement or set-off or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the
Administrative Agent in its discretion) to be repaid to a trustee, receiver or
any other party in connection with any Insolvency Proceeding, or otherwise, then
(a) to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or set-off had not
occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its ratable share of the total amount so recovered from or
repaid by the Administrative Agent.
10.07 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Administrative Agent and each Lender.
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10.08 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) Any Lender may, with the written consent of the Company (at
all times other than during the existence of an Event of Default), the
Administrative Agent, and if a Revolving Commitment is being assigned, then the
Swing Line Lender and the Issuing Bank, which consents shall not be unreasonably
withheld or delayed, at any time assign and delegate to one or more Eligible
Assignees (provided that no written consent of the Company, the Administrative
Agent, the Swing Line Lender or the Issuing Bank shall be required in connection
with any assignment and delegation by a Lender to (i) an Eligible Assignee that
is an Affiliate of such Lender or (ii) a person who was a Lender immediately
prior to such assignment) (each an "ASSIGNEE") all or a portion of its Revolving
Loan Commitment (and a ratable share of its outstanding Revolving Loans and
participations in L/C Obligations) and/or any of its outstanding Term Loans and
the other rights and obligations of such Lender hereunder, in a minimum amount
of $5,000,000 (or the then remaining amount of Commitments or Loans, if less);
PROVIDED, HOWEVER, that the Company, the Administrative Agent, the Swing Line
Lender and the Issuing Bank may continue to deal solely and directly with such
Lender in connection with the interest so assigned to an Assignee until (A)
written notice of such assignment, together with payment instructions, addresses
and related information with respect to the Assignee, shall have been given to
the Company and the Administrative Agent by such Lender and the Assignee;
(B) such Lender and its Assignee shall have delivered to the Company and the
Administrative Agent an Assignment and Acceptance Agreement in the form of
EXHIBIT 10.08 hereto ("ASSIGNMENT AND ACCEPTANCE") together with any Note or
Notes subject to such assignment and (C) the assignor Lender or Assignee has
paid to the Administrative Agent a processing fee in the amount of $3,000.
(b) From and after the date that the Administrative Agent notifies
the assignor Lender that it has received (and provided its consent with respect
to) an executed Assignment and Acceptance and payment of the above-referenced
processing fee, (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assignor Lender shall, to the
extent that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice by the
Administrative Agent that it has received an executed Assignment and Acceptance
and payment of the processing fee (and provided that it consents to such
assignment pursuant to subsection
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10.08(a)), the Company shall execute and deliver to the Administrative Agent,
new Notes (if required) evidencing such Assignee's assigned Loans and Commitment
and, if the assignor Lender has retained a portion of its Loans and its
Commitment, replacement Notes in the principal amount of the Revolving Loans
and/or Term Loans retained by the assignor Lender (such Notes to be in exchange
for, but not in payment of, the Notes held by such Lender). Immediately upon
each Assignee's making its processing fee payment under the Assignment and
Acceptance, this Agreement shall be deemed to be amended to the extent, but only
to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Lender
PRO TANTO.
(d) Any Lender may at any time sell to one or more commercial
banks or other Persons not Affiliates of the Company (a "PARTICIPANT")
participating interests in any Loans, the Commitment of that Lender and the
other interests of that Lender (the "originating Lender") hereunder and under
the other Loan Documents; PROVIDED, HOWEVER, that (i) the originating Lender's
obligations under this Agreement shall remain unchanged, (ii) the originating
Lender shall remain solely responsible for the performance of such obligations,
(iii) the Company, the Administrative Agent, the Swing Line Lender and the
Issuing Bank shall continue to deal solely and directly with the originating
Lender in connection with the originating Lender's rights and obligations under
this Agreement and the other Loan Documents, and (iv) no Lender shall transfer
or grant any participating interest under which the Participant shall have
rights to approve any amendment to, or any consent or waiver with respect to,
this Agreement or any other Loan Document, except to the extent such amendment,
consent or waiver would require unanimous consent of the Lenders as described in
the FIRST PROVISO to Section 10.01. In the case of any such participation, the
Participant shall be entitled to the benefit of Sections 2.16, 2.18, 2.19, 10.04
and 10.05 (but only to the extent that the Lender that sold such participation
would have been entitled to any such benefit had such participation not been
sold), and shall be obligated under Section 2.14, as though it were also a
Lender hereunder, and if amounts outstanding under this Agreement are due and
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall be deemed to have
the right of set-off in respect of its participating interest in amounts owing
under this Agreement to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement.
(e) Notwithstanding any other provision contained in this
Agreement or any other Loan Document to the contrary, any Lender may assign all
or any portion of the Loans or Notes held by it to any Federal Reserve Lender or
the United States Treasury as collateral security pursuant to Regulation A of
the Federal Reserve
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Board and any Operating Circular issued by such Federal Reserve Lender, provided
that any payment in respect of such assigned Loans or Notes made by the Company
to or for the account of the assigning or pledging Lender in accordance with the
terms of this Agreement shall satisfy the Company's obligations hereunder in
respect to such assigned Loans or Notes to the extent of such payment. No such
assignment shall release the assigning Lender from its obligations hereunder.
(f) Any Lender that is not a citizen or resident of the United
States of America, a corporation, partnership or other entity created or
organized in or under the laws of the United States of America, or an estate or
trust the income of which is subject to United States federal income taxation
regardless of the source of its income (a "NON-U.S. LENDER"), and that could
become completely exempt from withholding of any Taxes in respect of payment of
any obligations due to such Non-U.S. Lender with respect to a Term Loan if the
applicable Note were in registered form for United States federal income tax
purposes, may request the Company (through the Administrative Agent), and the
Company agrees thereupon, to exchange any promissory note(s) evidencing a Term
Loan for promissory note(s) registered as provided in this subsection 10.08(f)
(each, a "REGISTERED NOTE"). A Registered Note shall be substantially in the
form of EXHIBIT 2.02(a) hereto, except that it shall have a designated number
and be made payable to such Non-U.S. Lender or registered assigns. Registered
Notes shall be deemed to be and shall be Term Notes for all purposes of this
Agreement. Each Non-U.S. Lender holding a Registered Note (a "REGISTERED
NOTEHOLDER") shall comply with the requirements of subsection 2.16(f). The
Administrative Agent shall maintain a register (the "REGISTER") on which it
shall enter the names of the registered owners of the Term Loans evidenced by
Registered Notes. The Administrative Agent, acting as an agent of the Company
solely with respect to the maintenance of the Register, shall incur no
liabilities with respect to its maintenance of the Register and recordation of
the information therein. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Company and the Administrative Agent
shall treat each Lender in whose name a Term Loan, and the Registered Note
evidencing the same, is registered as the owner thereof for all purposes of this
Agreement, notwithstanding notice to the contrary. No assignment of a
Registered Note and the Term Loan evidenced thereby to an assignee intending to
hold a Registered Note shall be effective unless the Administrative Agent has
recorded the appropriate Assignment and Acceptance in the Register and such
assignment otherwise complies with the requirements of Section 10.08. Any
assignment or transfer of all or any part of the Term Loans, and the Registered
Note(s) evidencing the same, shall be registered on the Register only upon
surrender for registration of assignment or transfer of the Registered Note(s)
evidencing the Term Loans duly endorsed by (or accompanied by a written
instrument of assignment or transfer duly executed by) the Registered Noteholder
thereof,
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and thereupon one or more new Note(s) in the same aggregate principal amount
shall be issued to the designated assignee(s) or transferee(s). The Register
shall be available at the offices of the Administrative Agent for inspection by
the Company and any Lender at any reasonable time upon reasonable prior written
notice to the Administrative Agent.
10.09 SET-OFF. In addition to any rights and remedies of the Lenders
provided by law, if an Event of Default exists, each Lender is authorized at any
time and from time to time, without prior notice to the Company, any such notice
being waived by the Company to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held by, and other indebtedness at any time owing to, such
Lender to or for the credit or the account of the Company against any and all
Obligations owing to such Lender, now or hereafter existing, irrespective of
whether or not the Administrative Agent or such Lender shall have made demand
under this Agreement or any Loan Document and although such Obligations may be
contingent or unmatured. Each Lender agrees promptly to notify the Company and
the Administrative Agent after any such set-off and application made by such
Lender; PROVIDED, HOWEVER, that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of each Lender under
this Section 10.09 are in addition to the other rights and remedies (including
other rights of set-off) which the Lender may have. NOTWITHSTANDING THE
FOREGOING, NO LENDER SHALL EXERCISE, OR ATTEMPT TO EXERCISE, ANY RIGHT OF
SET-OFF, LENDER'S LIEN, OR THE LIKE, AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF
THE COMPANY OR ANY SUBSIDIARY OF THE COMPANY HELD OR MAINTAINED BY THE LENDER
WITHOUT THE PRIOR WRITTEN CONSENT OF THE MAJORITY LENDERS.
10.10 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Lender shall
notify the Administrative Agent in writing of any changes in the address to
which notices to the Lender should be directed, of addresses of its LIBOR or
Domestic Lending Office, of payment instructions in respect of all payments to
be made to it hereunder and of such other administrative information as the
Administrative Agent shall reasonably request.
10.11 COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Agreement in any number of separate counterparts, each of which,
when so executed, shall be deemed an original, and all of said counterparts
taken together shall be deemed to constitute but one and the same instrument. A
set of the copies of this Agreement signed by all the parties shall be lodged
with the Company, the Administrative Agent and the Documentation Agent.
10.12 SEVERABILITY. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the
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legality or enforceability of the remaining provisions of this Agreement or any
instrument or agreement required hereunder.
10.13 NO THIRD PARTIES BENEFITED. This Agreement is made and entered into
for the sole protection and legal benefit of the Company, the Lenders and the
Administrative Agent, and their permitted successors and assigns, and no other
Person shall be a direct or indirect legal beneficiary of, or have any direct or
indirect cause of action or claim in connection with, this Agreement or any of
the other Loan Documents. Neither the Administrative Agent nor any Lender shall
have any obligation to any Person not a party to this Agreement or other Loan
Documents.
10.14 TIME. Time is of the essence as to each term or provision of this
Agreement and each of the other Loan Documents.
10.15 GOVERNING LAW AND JURISDICTION.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK; PROVIDED THAT
THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
AND ANY OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE
ADMINISTRATIVE AGENT, THE SWING LINE LENDER, THE ISSUING BANK AND THE LENDERS
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY, THE ADMINISTRATIVE AGENT AND
THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
COMPANY, THE ADMINISTRATIVE AGENT, THE SWING LINE LENDER, THE ISSUING BANK AND
THE LENDERS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
10.16 WAIVER OF JURY TRIAL. THE COMPANY, THE LENDERS, THE ADMINISTRATIVE
AGENT, THE SWING LINE LENDER AND THE ISSUING BANK EACH WAIVE THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE COMPANY, THE LENDERS, THE ADMINISTRATIVE AGENT, THE SWING LINE LENDER AND
THE ISSUING BANK EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY
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A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES
FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.17 ENTIRE AGREEMENT. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Company,
the Lenders and the Administrative Agent, and supersedes all prior or
contemporaneous Agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof, except for the fee
letters referenced in subsections 2.10(a) and 2.10(c), and any prior
arrangements made with respect to the payment by the Company of (or any
indemnification for) any fees, costs or expenses payable to or incurred (or to
be incurred) by or on behalf of the Administrative Agent or the Lenders.
10.18 CONFIDENTIALITY. (a) Each Lender agrees with the Company that all
information concerning the Company, USF and their respective Subsidiaries that
is furnished or has previously been furnished to such Lender by or on behalf of
the Company (herein collectively referred to as the "Confidential Information")
in connection with this Agreement or any other Loan Document, will be held and
treated by such Lender, in confidence and will not, except as hereinafter
provided, without the prior consent of the Company, be disclosed by such Lender,
in whole or in part, or be used by such Lender other than in connection with
this Agreement or the other Loan Documents. Each Lender further agrees to
disclose Confidential Information only to its affiliates, and their respective
directors, officers, employees, advisors, agents or representatives
(collectively, "Related Persons") who need to know the Confidential Information
for purposes of this Agreement or the other Loan Documents and who agree to keep
such information confidential and to be bound by the terms of the agreement
contained in this Section 10.18 to the same extent as if they were Lenders.
(b) Notwithstanding the foregoing, the following will not
constitute "Confidential Information" for purposes of the agreement contained in
this Section 10.18:
(i) information which was or becomes generally
available to the public other than as a result of a disclosure by any
Lender or Related Persons; and
129
<PAGE>
(ii) information which was or becomes available on a
nonconfidential basis from a source other than the Company who,
insofar as is known to any Lender, is not prohibited from transmitting
the information by a contractual, legal or fiduciary obligation to the
Company.
(c) Further, each Lender may disclose Confidential Information:
(i) to any Governmental Authority (or any self-
regulatory organization such as the National Association of Insurance
Commissioners) to which such Lender is or becomes subject, or in
connection with an examination of such Lender by such authority (or
organization);
(ii) pursuant to subpoena or other legal process;
(iii) to any Person and in any proceeding necessary in
such Lender's reasonable judgment to protect the interest of such
Lender in connection with any claim or dispute involving such Lender;
and
(iv) to any prospective assignee or participant of such
Lender under this Agreement, if such assignee or participant has
executed an Assignment and Acceptance or a participation agreement or
other agreement containing a confidentiality agreement substantially
in the form of the agreement contained in this Section 10.18;
PROVIDED, HOWEVER, that, if such Lender or anyone to whom such Lender supplies
any Confidential Information becomes legally compelled to disclose any
Confidential Information or otherwise intends to disclose any Confidential
Information in any of the circumstances contemplated by clauses (i) through
(iii) of this paragraph (c), such Lender agrees, to the extent it is legally
able to do so, to provide the Company as promptly as practicable with prior
written notice of such compelled or intended disclosure.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
[signature page follows]
130
<PAGE>
RYKOFF-SEXTON, INC.
By: /s/ Richard J. Martin
-------------------------
Title: Sr. V.P. and CFO
----------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
By: /s/
-------------------------
Title:
----------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Issuing Bank (as to certain
Existing Letters of Credit)
By: /s/
-------------------------
Title:
----------------------
BANK OF AMERICA ILLINOIS
Individually and as
Swing Line Lender and
Issuing Bank
By: /s/
-------------------------
Title:
----------------------
THE CHASE MANHATTAN BANK, N.A.,
Individually and as Documentation
Agent and Issuing Bank (as to
Existing USF Letters of Credit)
By: /s/
-------------------------
Title:
----------------------
<PAGE>
BA SECURITIES, INC.,
as Co-Arranger
By: /s/
-------------------------
Title:
----------------------
CHASE SECURITIES, INC.,
as Co-Arranger
By: /s/
-------------------------
Title:
----------------------
THE BANK OF NOVA SCOTIA
By: /s/
-------------------------
Title:
----------------------
BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
By: /s/
-------------------------
Title:
----------------------
BANKERS TRUST COMPANY
By: /s/
-------------------------
Title:
----------------------
BANQUE FRANCAISE DU
COMMERCE EXTERIEUR
By: /s/
-------------------------
Title:
----------------------
<PAGE>
BANQUE NATIONALE DE PARIS
(CHICAGO BRANCH)
By: /s/
---------------------------
Title:
------------------------
BANQUE PARIBAS
By: /s/
-------------------------
Title:
----------------------
CAISSE NATIONALE DE
CREDIT AGRICOLE
By: /s/
-------------------------
Title:
----------------------
CHL HIGH YIELD LOAN
PORTFOLIO, A UNIT OF
CHEMICAL BANK
By: /s/
-------------------------
Title:
----------------------
CIBC INC.
By: /s/
-------------------------
Title:
----------------------
<PAGE>
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A. "RABOBANK
NEDERLAND", NEW YORK BRANCH
By: /s/
-------------------------
Title:
----------------------
By: /s/
-------------------------
Title:
----------------------
FEDERAL STREET PARTNERS
By: /s/
-------------------------
Title:
----------------------
THE FIRST NATIONAL BANK OF BOSTON
By: /s/
-------------------------
Title:
----------------------
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/
-------------------------
Title:
----------------------
THE FUJI BANK, LIMITED
By: /s/
-------------------------
Title:
----------------------
<PAGE>
ING CAPITAL ADVISORS, INC.,
as Agent for Bank Syndication Account
By: /s/
-------------------------
Title:
----------------------
JACKSON NATIONAL LIFE INSURANCE
COMPANY
By: PPM AMERICA, INC.,
as Attorney-in-Fact on behalf of
JACKSON NATIONAL LIFE INSURANCE
COMPANY
By: /s/
-------------------------
Title:
----------------------
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD. (CHICAGO BRANCH)
By: /s/
-------------------------
Title:
----------------------
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: /s/
-------------------------
Title:
----------------------
THE MITSUBISHI TRUST AND BANKING
CORPORATION, CHICAGO BRANCH
By: /s/
-------------------------
Title:
----------------------
<PAGE>
NATIONAL BANK OF CANADA
By: /s/
-------------------------
Title:
----------------------
By: /s/
-------------------------
Title:
----------------------
NATIONSBANK, N.A.
By: /s/
-------------------------
Title:
----------------------
NEW YORK LIFE INSURANCE AND
ANNUITY CORPORATION
By: /s/
-------------------------
Title:
----------------------
NEW YORK LIFE INSURANCE COMPANY
By: /s/
-------------------------
Title:
----------------------
PILGRIM AMERICA PRIME RATE TRUST
By: /s/
-------------------------
Title:
----------------------
PRIME INCOME TRUST
By: /s/
-------------------------
Title:
----------------------
<PAGE>
PROTECTIVE LIFE INSURANCE COMPANY
By: /s/
-------------------------
Title:
----------------------
USL CAPITAL CORPORATION
By: /s/
-------------------------
Title:
----------------------
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By: /s/
-------------------------
Title:
----------------------
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form 8-K of our report dated March 1, 1996 included in
Registration Statement File No. 333-02175. It should be noted that we have
not audited any financial statements of US Foodservice Inc. subsequent to
December 31, 1995 or performed any audit procedures subsequent to the date of
our report.
ARTHUR ANDERSEN LLP
Philadelphia, PA,
May 29, 1996
<PAGE>
Exhibit 99.1
RYKOFF-SEXTON NEWS RELEASE
Contact: Richard J. Martin
Rykoff-Sexton, Inc.
(708) 971-6598
Roger S. Pondel
Pondel Parsons & Wilkinson
(310) 207-9300
FOR IMMEDIATE RELEASE
RYKOFF-SEXTON AND US FOODSERVICE CLOSE MERGER;
PLANS CHANGE IN FISCAL YEAR
AND ADDITION OF FIVE NEW DIRECTORS
Lisle, Illinois - May 17, 1996 -- Rykoff-Sexton, Inc. (NYSE:RYK) today
announced the completion of the merger with US Foodservice Inc., creating
the third largest broadline foodservice distribution company in the United
States, with annualized sales of approximately $3.5 billion.
As part of the transaction, US Foodservice stockholders will receive
1.457 shares of Rykoff-Sexton common stock for each US Foodservice share,
resulting in the issuance of approximately 12.9 million shares of Rykoff-
Sexton common stock. Rykoff-Sexton currently has approximately 14.8
million shares of common stock outstanding. Options and warrants to
acquire approximately one million shares of US Foodservice will be
converted into options and warrants to acquire Rykoff-Sexton common stock
at the same exchange ratio. US Foodservice will now operate as a wholly-
owned subsidiary of Rykoff-Sexton.
Rykoff-Sexton also announced that in conjunction with the transaction,
it will change its fiscal year to June 30, and that five new directors will
be joining the Rykoff-Sexton board.
(more)
<PAGE>
Rykoff-Sexton and US Foodservice Close Merger
2-2-2
Mark Van Stekelenburg, chairman of the board and chief executive
officer of Rykoff-Sexton, stated, "The US Foodservice merger is consistent
with our strategy to enhance shareholder value over the long term through
increased operating efficiencies and expansion of the company's
geographical coverage. Customers of both organizations will benefit from
an even broader selection of high-quality products. I would like to thank
the employees and management of both organizations for their tremendous
efforts in completing this landmark transaction," he added.
Frank H. Bevevino, a 25-year veteran of US Foodservice and its
predecessor, Unifax Inc., has been appointed president and a director of
Rykoff-Sexton. He heads the combined foodservice distribution operations
of Rykoff-Sexton and US Foodservice, which will be operated from US
Foodservice's Wilkes-Barre, Pennsylvania headquarters. The manufacturing
division, based in Los Angeles, also will report to Bevevino.
"Our new organization creates a strong national presence with many
inherent synergies," Bevevino said. "We are enthusiastic about the
prospects of our combined companies and are proceeding with our plan to
effect significant economies."
Rykoff-Sexton also announced it has obtained a new credit facility
totaling approximately $485 million, the proceeds of which are being used
to refinance existing bank debt and certain other indebtedness of Rykoff-
Sexton, the refinancing of substantially all of the debt of US Foodservice
(approximately $245 million, exclusive of US Foodservice's existing trade
receivables securitization facility of approximately $90
(more)
<PAGE>
Rykoff-Sexton and US Foodservice Close Merger
3-3-3
million), and the redemption of US Foodservice preferred stock, and to
provide working capital for the combined companies.
In addition to Frank Bevevino, four new directors, Matthias B. Bowman,
Albert J. Fitzgibbons, III, Sunil C. Khanna and Robert W. Williamson, have
been appointed to Rykoff-Sexton's twelve-person board of directors.
Bowman, Fitzgibbons, Khanna and Williamson are associated with Merrill
Lynch Capital Partners, Inc., which, together with certain of its
affiliates, manages investment partnerships that acquired approximately 36%
of Rykoff-Sexton's common stock in the merger.
In conjunction with the merger, Rykoff-Sexton said it will change its
fiscal year to June 30 from April 30. Van Stekelenburg said the change
will conform the quarterly reporting schedule of Rykoff-Sexton, Inc. to
other companies in the foodservice distribution industry.
US Foodservice had net sales for its year ended December 31, 1995 of
approximately $1.7 billion and is a distributor of food and non-food
products to the foodservice industry, serving more than 40,000 customers in
over 30 states, primarily in the Southeastern, Southwestern and Mid-
Atlantic regions.
For the twelve months ended April 28, 1996, Rykoff-Sexton had net
sales of approximately $1.8 billion. The company has distribution centers,
sales offices, contract design facilities and manufacturing, processing and
packaging operations throughout the United States.
# # #
