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EXHIBIT 10.40
$172,022,020
REVOLVING CREDIT AGREEMENT
among
THE GRAND UNION COMPANY, a Debtor-in-Possession,
as Borrower,
The Several Lenders
from Time to Time Parties Hereto,
SBC WARBURG DILLON READ INC.,
as Co-Advisor and Co-Arranger
SWISS BANK CORPORATION,
as Syndication Agent
▇▇▇▇▇▇ BROTHERS INC.,
as Co-Advisor and Co-Arranger
and
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Administrative Agent
Dated as of June 24, 1998
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS........................................................................................ 3
1.1 Defined Terms..................................................................................... 3
1.2 Other Definitional Provisions..................................................................... 20
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS................................................... 21
2.1 Revolving Credit Commitments...................................................................... 21
2.2 Procedure for Revolving Credit Borrowing.......................................................... 21
2.3 Swing Line Commitment............................................................................. 22
2.4 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans................................. 22
2.5 Repayment of Loans; Evidence of Debt.............................................................. 24
2.6 Revolving Credit Commitment Fees, etc. ........................................................... 25
2.7 Termination or Reduction of Revolving Credit Commitments.......................................... 25
2.8 Optional Prepayments.............................................................................. 25
2.9 Mandatory Prepayments and Revolving Credit Commitment Reductions.................................. 25
2.10 Conversion and Continuation Options.............................................................. 26
2.11 Minimum Amounts and Maximum Number of Eurodollar Tranches........................................ 26
2.12 Interest Rates and Payment Dates................................................................. 27
2.13 Computation of Interest and Fees................................................................. 27
2.14 Inability to Determine Interest Rate............................................................. 28
2.15 Pro Rata Treatment and Payments.................................................................. 28
2.16 Requirements of Law.............................................................................. 29
2.17 Taxes............................................................................................ 31
2.18 Indemnity........................................................................................ 33
2.19 Illegality....................................................................................... 33
2.20 Change of Lending Office......................................................................... 33
SECTION 3. LETTERS OF CREDIT.................................................................................. 34
3.1 L/C Commitment.................................................................................... 34
3.2 Procedure for Issuance of Letter of Credit........................................................ 34
3.3 Fees and Other Charges............................................................................ 35
3.4 L/C Participations................................................................................ 35
3.5 Reimbursement Obligation of the Borrower.......................................................... 36
3.6 Obligations Absolute.............................................................................. 36
3.7 Letter of Credit Payments......................................................................... 37
3.8 Applications...................................................................................... 37
SECTION 4. PRIORITY AND LIENS................................................................................. 37
4.1 Priority and Liens................................................................................ 37
4.2 Security Interest in L/C Cash Collateral Account.................................................. 38
4.3 Payment of Obligations............................................................................ 38
4.4 No Discharge; Survival of Claims.................................................................. 39
SECTION 5. REPRESENTATIONS AND WARRANTIES..................................................................... 39
5.1 Financial Condition............................................................................... 39
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5.2 No Change......................................................................................... 40
5.3 Corporate Existence; Compliance with Law.......................................................... 40
5.4 Corporate Power; Authorization; Enforceable Obligations........................................... 40
5.5 No Legal Bar...................................................................................... 40
5.6 No Material Litigation............................................................................ 41
5.7 No Default........................................................................................ 41
5.8 Ownership of Property; Liens...................................................................... 41
5.9 Intellectual Property............................................................................. 41
5.10 Taxes............................................................................................ 41
5.11 Federal Regulations.............................................................................. 41
5.12 Labor Matters.................................................................................... 41
5.13 ERISA............................................................................................ 42
5.14 Investment Company Act; Other Regulations........................................................ 42
5.15 Subsidiaries..................................................................................... 42
5.16 Use of Proceeds.................................................................................. 42
5.17 Environmental Matters............................................................................ 43
5.18 Accuracy of Information, etc..................................................................... 44
5.19 Security Documents............................................................................... 44
SECTION 6. CONDITIONS PRECEDENT............................................................................... 45
6.1 Conditions to Initial Extension of Credit......................................................... 45
6.2 Conditions to Each Extension of Credit............................................................ 46
SECTION 7. AFFIRMATIVE COVENANTS.............................................................................. 47
7.1 Financial Statements.............................................................................. 47
7.2 Certificates; Other Information................................................................... 48
7.3 Payment of Obligations............................................................................ 49
7.4 Conduct of Business and Maintenance of Existence, etc. ........................................... 49
7.5 Maintenance of Property; Insurance................................................................ 49
7.6 Inspection of Property; Books and Records; Discussions; Collateral Audit.......................... 50
7.7 Notices........................................................................................... 50
7.8 Environmental Laws................................................................................ 51
7.9 Further Assurances................................................................................ 51
SECTION 8. NEGATIVE COVENANTS................................................................................. 51
8.1 Financial Condition Covenants..................................................................... 51
8.2 Limitation on Indebtedness........................................................................ 52
8.3 Limitation on Liens............................................................................... 52
8.4 Limitation on Fundamental Changes................................................................. 53
8.5 Limitation on Disposition of Property............................................................. 53
8.6 Limitation on Restricted Payments................................................................. 54
8.7 Limitation on Capital Expenditures................................................................ 54
8.8 Limitation on Investments......................................................................... 54
8.9 Limitation on Transactions with Affiliates........................................................ 55
8.10 Limitation on Sales and Leasebacks............................................................... 55
8.11 Limitation on Changes in Fiscal Periods.......................................................... 55
8.12 Limitation on Negative Pledge Clauses............................................................ 55
8.13 Limitation on Restrictions on Subsidiary Distributions........................................... 55
8.14 Limitation on Lines of Business.................................................................. 56
8.15 Chapter 11 Claims; Payment of Pre-Petition Date Claims........................................... 56
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SECTION 9. EVENTS OF DEFAULT.................................................................................. 56
SECTION 10. THE AGENTS......................................................................................... 59
10.1 Appointment...................................................................................... 59
10.2 Delegation of Duties............................................................................. 59
10.3 Exculpatory Provisions........................................................................... 59
10.4 Reliance by Administrative Agent................................................................. 60
10.5 Notice of Default................................................................................ 60
10.6 Non-Reliance on Agents and Other Lenders......................................................... 60
10.7 Indemnification.................................................................................. 61
10.8 Agent in Its Individual Capacity................................................................. 61
10.9 Successor Administrative Agent................................................................... 61
10.10 Authorization to Release Liens.................................................................. 62
10.11 The Arranger.................................................................................... 62
SECTION 11. REMEDIES; APPLICATION OF PROCEEDS.................................................................. 62
11.1 Remedies; Obtaining the Collateral Upon Default.................................................. 62
11.2 Remedies; Disposition of the Collateral.......................................................... 63
11.3 Application of Proceeds.......................................................................... 64
11.4 WAIVER OF CLAIMS................................................................................. 65
11.5 Remedies Cumulative.............................................................................. 65
11.6 Discontinuance of Proceedings.................................................................... 65
SECTION 12. MISCELLANEOUS...................................................................................... 66
12.1 Amendments and Waivers........................................................................... 66
12.2 Notices.......................................................................................... 67
12.3 No Waiver; Cumulative Remedies................................................................... 68
12.4 Survival of Representations and Warranties....................................................... 68
12.5 Payment of Expenses.............................................................................. 68
12.6 Successors and Assigns; Participations and Assignments........................................... 69
12.7 Adjustments; Set-off............................................................................. 71
12.8 Counterparts..................................................................................... 72
12.9 Severability..................................................................................... 72
12.10 Integration..................................................................................... 72
12.11 GOVERNING LAW................................................................................... 72
12.12 Submission To Jurisdiction; Waivers............................................................. 73
12.13 Acknowledgements................................................................................ 73
12.14 Absence of Prejudice with Respect to Matters Before the Bankruptcy Court........................ 74
12.15 Confidentiality................................................................................. 74
12.16 WAIVERS OF JURY TRIAL........................................................................... 74
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SCHEDULES:
1.1 Commitments
5.16 Subsidiaries
8.2(c) Existing Indebtedness
8.3(f) Existing Liens
8.8(h) Existing Investments
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Final Order
C Form of Compliance Certificate
D Form of Closing Certificate
E Form of Assignment and Acceptance
F Form of Legal Opinion of Weil, Gotshal & ▇▇▇▇▇▇ LLP
G-1 Form of Revolving Credit Note
G-2 Form of Swing Line Note
H Form of Exemption Certificate
I Form of Budget
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REVOLVING CREDIT AGREEMENT, dated as of June 24, 1998, among
THE GRAND UNION COMPANY, a Delaware corporation (the "Borrower"), a
debtor-in-possession in a case pending under Chapter 11 of the Bankruptcy
Code, the several banks and other financial institutions or entities from time
to time parties to this Agreement (the "Lenders"), SBC WARBURG DILLON READ
INC., as co-advisor and co-arranger, SWISS BANK CORPORATION, STAMFORD BRANCH,
as syndication agent (in such capacity, the "Syndication Agent"), ▇▇▇▇▇▇
BROTHERS INC., as co-advisor and co-arranger (together with SBC Warburg Dillon
Read Inc. in their capacities as co-advisors and co-arrangers, the
"Arrangers"), and ▇▇▇▇▇▇ COMMERCIAL PAPER INC., as administrative agent (in
such capacity, the "Administrative Agent").
W I T N E S S E T H:
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WHEREAS, on June 24, 1998 (the "Petition Date"), the
Borrower filed a voluntary petition under Section 301 of the Bankruptcy Code
with the United States Bankruptcy Court for the District of New Jersey (the
"Bankruptcy Court") initiating its Chapter 11 case (the "Case") and has
continued in the possession of its assets and in the management of its
business pursuant to Sections 1107 and 1108 of the Bankruptcy Code;
WHEREAS, on the Petition Date, following a prepetition
solicitation of votes for the acceptance or rejection of the Borrower's plan
of reorganization (the "Plan of Reorganization") pursuant to Section 1126 of
the Bankruptcy Code, the Borrower filed with the Bankruptcy Court the Plan of
Reorganization, together with a certification of its balloting agent
certifying that the Plan of Reorganization had been accepted by the requisite
number and amount of claims and amount of interests pursuant to Section 1126
of the Bankruptcy Code;
WHEREAS, the Borrower requested that the Lenders make
available a revolving credit and letter of credit facility in an aggregate
principal amount not to exceed $172,022,020, under which all of the Borrower's
obligations are guaranteed by the Subsidiary Guarantors, and the proceeds of
which will be used (i) to finance the working capital needs of the Borrower
and the Subsidiary Guarantors in the ordinary course of business, (ii) for
payment of Chapter 11 expenses, including professional fees, (iii) for general
corporate purposes, and (iv) to refinance the revolving credit and term loans,
and to cash collateralize letters of credit outstanding under the Prepetition
Credit Agreement, in all cases subject to the terms of this Agreement, the
Final Order and the Budget;
WHEREAS, to provide security for the repayment of the
Revolving Credit Loans, the reimbursement of any draft drawn under the Letters
of Credit and the payment of the other Obligations of the Borrower hereunder
and under the other Loan Documents, the Borrower shall provide to the Agents
and the Lenders, pursuant to this Agreement and the Final Order, the following
(each as more fully described herein):
(a) with respect to the Obligations of the Borrower
hereunder, an allowed administrative expense claim in the Case
pursuant to Section 364(c)(1) of the Bankruptcy
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Code having priority over all administrative expenses of the kind
specified in Sections 503(b) and 507(b) of the Bankruptcy Code;
(b) a perfected first priority Lien, pursuant to Section
364(c)(2) of the Bankruptcy Code, upon all unencumbered property of
the Borrower and all cash and cash equivalents in the L/C Cash
Collateral Account;
(c) a perfected second priority Lien, pursuant to Section
364(c)(3) of the Bankruptcy Code, upon all property of the Borrower
(other than property subject to Liens securing the Prepetition
Supplemental Term Loans) that is subject to Permitted Liens,
including valid and perfected Liens in existence on the Petition
Date, junior to such Permitted Liens and other valid and perfected
Liens (except as otherwise provided in Section 4.1(c) and the Final
Order); and
(d) a perfected first priority priming Lien, pursuant to
Section 364(d)(1) of the Bankruptcy Code, upon all property of the
Borrower (including, without limitation, accounts receivable, chattel
paper, contracts, documents, equipment, general intangibles,
instruments, inventory, trademarks and trademark licenses and real
property) that is subject to the Liens securing the Prepetition
Supplemental Term Loans and any Liens granted after the Petition Date
to provide adequate protection in respect of the Prepetition
Supplemental Term Loans, which Lien in favor of the Administrative
Agent and the Lenders shall be senior in all respects to all of the
Liens securing the Prepetition Supplemental Term Loans and to any
Liens granted after the Petition Date to provide adequate protection
in respect thereof;
WHEREAS, all of the claims and the Liens granted hereunder
and pursuant to the Final Order in the Case to the Agents and the Lenders
shall be subject to the Carve-Out and the Permitted Liens, in each case to the
extent provided in Section 4.1 and the Final Order;
WHEREAS, to provide guarantees for the repayment of the
Revolving Credit Loans, the reimbursement of any draft drawn under the Letters
of Credit and the payment of the other Obligations of the Borrower hereunder
and under the other Loan Documents, the Subsidiary Guarantors shall provide to
the Agents and the Lenders (a) a guarantee of the due and punctual payment and
performance of the Obligations of the Borrower hereunder and under the
Revolving Credit Notes and (b) a perfected first priority Lien upon all
personal property of the Subsidiary Guarantors; and
WHEREAS, the Lenders are willing to make such credit
facility available upon and subject to the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms
listed in this Section 1.1 shall have the respective meanings set forth in
this Section 1.1.
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"Accounts": as to any Person, all rights to receive payment
for goods sold or leased by such Person or for services rendered in
the ordinary course of business of such Person to the extent not
evidenced by an instrument or chattel paper, together with all
interest, finance charges and other amounts payable by an account
debtor in respect thereof.
"Affiliate": 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. For purposes of this
definition, "control" of a Person means the power, directly or
indirectly, either to (a) vote 10% or more of the securities having
ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause
the direction of the management and policies of such Person, whether
by contract or otherwise.
"Agents": the collective reference to the Syndication Agent
and the Administrative Agent.
"Aggregate Exposure": with respect to any Lender at any
time, an amount equal to (a) until the Closing Date, the aggregate
amount of such Lender's Revolving Credit Commitments at such time and
(b) thereafter, the aggregate amount of such Lender's Revolving
Credit Commitment then in effect or, if the Revolving Credit
Commitments have been terminated, the amount of such Lender's
Revolving Extensions of Credit then outstanding.
"Aggregate Exposure Percentage" with respect to any Lender
at any time, the ratio (expressed as a percentage) of such Lender's
Aggregate Exposure at such time to the Aggregate Exposure of all
Lenders at such time.
"Agreement": this Revolving Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
"Application": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender
to open a Letter of Credit.
"Assignee": as defined in Section 12.6(c).
"Assignor": as defined in Section 12.6(c).
"Available Revolving Credit Commitment": as to any Lender at
any time, an amount equal to the excess, if any, of (a) such Lender's
Revolving Credit Commitment then in effect over (b) such Lender's
Revolving Extensions of Credit then outstanding; provided, that in
calculating any Lender's Revolving Extensions of Credit for the
purpose of determining such Lender's Available Revolving Credit
Commitment pursuant to Section 2.6(a), the aggregate principal amount
of Swing Line Loans then outstanding shall be deemed to be zero.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978, as
heretofore and
4
hereafter amended, and codified as 11 U.S.C. ??101 et seq.
"Bankruptcy Court": as defined in the Recitals.
"Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greatest of (a)
the Prime Rate in effect on such day, (b) the Base CD Rate in effect
on such day plus 1% and (c) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate"
shall mean the rate of interest per annum publicly announced from
time to time by Citibank N.A. as its prime or base rate in effect at
its principal office in New York City (the Prime Rate not being
intended to be the lowest rate of interest charged by Citibank N.A.
in connection with extensions of credit to debtors); "Base CD Rate"
shall mean the sum of (a) the product of (i) the Three-Month
Secondary CD Rate and (ii) a fraction, the numerator of which is one
and the denominator of which is one minus the C/D Reserve Percentage
and (b) the C/D Assessment Rate; and "Three-Month Secondary CD Rate"
shall mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such day (or,
if such day shall not be a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of
the Federal Reserve Bank of New York (which rate will, under the
current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day),
or, if such rate shall not be so reported on such day or such next
preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money
center banks in New York City received at approximately 10:00 A.M.,
New York City time, on such day (or, if such day shall not be a
Business Day, on the next preceding Business Day) by Citibank N.A.
from three New York City negotiable certificate of deposit dealers of
recognized standing selected by it. Any change in the Base Rate due
to a change in the Prime Rate, the Three-Month Secondary CD Rate or
the Federal Funds Effective Rate shall be effective as of the opening
of business on the effective day of such change in the Prime Rate,
the Three-Month Secondary CD Rate or the Federal Funds Effective
Rate, respectively.
"Base Rate Loans": Loans the rate of interest applicable to
which is based upon the Base Rate.
"Benefitted Lender": as defined in Section 12.7.
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrowing Date": any Business Day specified by the Borrower
as a date on which the Borrower requests the relevant Lenders to make
Loans hereunder.
"Budget": the monthly budget of the Borrower in the form of
Exhibit I.
"Business": as defined in Section 5.17(b)
"Business Day": (i) for all purposes other than as covered
by clause (ii) below, a day other than a Saturday, Sunday or other
day on which commercial banks in New York
5
City are authorized or required by law to close and (ii) with respect
to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day for
trading by and between banks in Dollar deposits in the interbank
eurodollar market.
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing (pursuant to a capital
lease) of fixed or capital assets or additions to equipment
(including replacements, capitalized repairs and improvements during
such period) which should be capitalized under GAAP on a consolidated
balance sheet of such Person and its Subsidiaries.
"Capital Lease Obligations": as to any Person, the
obligations of such Person to pay rent or other amounts under any
lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are
required to be classified and accounted for as capital leases on a
balance sheet of such Person under GAAP, and, for the purposes of
this Agreement, the amount of such obligations at any time shall be
the capitalized amount thereof at such time determined in accordance
with GAAP.
"Capital Stock": any and all shares, interests,
participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests in
a Person (other than a corporation) and any and all warrants, rights
or options to purchase any of the foregoing.
"Carve-Out": as defined in Section 4.1.
"Case": as defined in the Recitals.
"Cash Collateral": the meaning set forth in Section 363(a) of
the Bankruptcy Code.
"Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit
of the United States, in each case maturing within one year from the
date of acquisition; (b) certificates of deposit, time deposits,
eurodollar time deposits or overnight bank deposits having maturities
of one year or less from the date of acquisition issued by any Lender
or by any commercial bank organized under the laws of the United
States of America or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-2 by Standard & Poor's Ratings Services
("S&P") or P-2 by ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"), or
carrying an equivalent rating by a nationally recognized rating
agency, if both of the two named rating agencies cease publishing
ratings of commercial paper issuers generally, and maturing within
six months from the date of acquisition; (d) repurchase obligations
of any Lender or of any commercial bank satisfying the requirements
of clause (b) of this definition, having a term of not more than 30
days with respect to securities issued or fully guaranteed or insured
by the United States government; (e) securities with maturities of
one year or less from the date of
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acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any
foreign government, the securities of which state, commonwealth,
territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by
Moody's; (f) securities with maturities of six months or less from the
date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause
(b) of this definition; or (g) shares of money market mutual or
similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.
"C/D Assessment Rate": for any day as applied to any Base
Rate Loan, the annual assessment rate in effect on such day which is
payable by a member of the Bank Insurance Fund maintained by the
Federal Deposit Insurance Corporation (the "FDIC") classified as
well-capitalized and within supervisory subgroup "B" (or a comparable
successor assessment risk classification) within the meaning of 12
C.F.R. ? 327.4 (or any successor provision) to the FDIC (or any
successor) for the FDIC's (or such successor's) insuring time
deposits at offices of such institution in the United States.
"C/D Reserve Percentage": for any day as applied to any Base
Rate Loan, that percentage (expressed as a decimal) which is in
effect on such day, as prescribed by the Board, for determining the
maximum reserve requirement for a Depositary Institution (as defined
in Regulation D of the Board as in effect from time to time) in
respect of new non-personal time deposits in Dollars having a
maturity of 30 days or more.
"Closing Date": the date on which the conditions precedent
set forth in Section 6.1 shall have been satisfied.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by
the Final Order or any Security Document.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit C.
"Confidential Information Memorandum": the Confidential
Information Memorandum dated June 1998 and furnished to the Lenders.
"Confirmation Order": an order of the Bankruptcy Court
confirming a Plan of Reorganization in the Case.
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"Consolidated Current Assets": at any date, all amounts
(other than cash and Cash Equivalents) which would, in conformity
with GAAP, be set forth opposite the caption "total current assets"
(or any like caption) on a consolidated balance sheet of the Borrower
and its Subsidiaries at such date.
"Consolidated Current Liabilities": at any date, all amounts
which would, in conformity with GAAP, be set forth opposite the
caption "total current liabilities" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at
such date, but excluding (a) the current portion of any Funded Debt
of the Borrower and its Subsidiaries and (b) without duplication of
clause (a) above, all Indebtedness consisting of Revolving Credit
Loans or Swing Line Loans to the extent otherwise included therein.
"Consolidated EBITDA": for any period, Consolidated Net
Income for such period plus, without duplication and to the extent
reflected as a charge in the statement of such Consolidated Net
Income for such period, the sum of (a) income tax expense, (b)
interest expense, amortization or writeoff of debt discount and debt
issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness (including the Loans), (c) depreciation
and amortization expense, (d) amortization of intangibles (including,
but not limited to, goodwill) and organization costs, (e) any
extraordinary, unusual or non-recurring expenses or losses
(including, whether or not otherwise includable as a separate item in
the statement of such Consolidated Net Income for such period, losses
on sales of assets outside of the ordinary course of business), (f)
Chapter 11 expenses or administrative costs reflecting Chapter 11
expenses and (g) any other non-cash charges, and minus, to the extent
included in the statement of such Consolidated Net Income for such
period, the sum of (a) interest income, (b) any extraordinary,
unusual or non-recurring income or gains (including, whether or not
otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets
outside of the ordinary course of business; it being understood that
the foregoing excludes up to $3,000,000 per fiscal year derived from
recurring asset sales) and (c) any other non-cash income, all as
determined on a consolidated basis.
"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Interest Expense for such period.
"Consolidated Interest Expense": for any period, total
interest expense (including that attributable to Capital Lease
Obligations but excluding amortization of deferred financing costs)
of the Borrower and its Subsidiaries for such period with respect to
all outstanding Indebtedness of the Borrower and its Subsidiaries
(including, without limitation, all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under Hedge Agreements in respect
of interest rates to the extent such net costs are allocable to such
period in accordance with GAAP).
"Consolidated Leverage Ratio": as at the last day of any
period of four consecutive fiscal quarters, the ratio of (a)
Consolidated Total Debt on such day to (b) Consolidated EBITDA for
such period; provided that for purposes of calculating
8
Consolidated EBITDA of the Borrower and its Subsidiaries for any
period, the Consolidated EBITDA of any Person acquired by the Borrower
or its Subsidiaries during such period shall be included on a pro
forma basis for such period (assuming the consummation of such
acquisition and the incurrence or assumption of any Indebtedness in
connection therewith occurred on the first day of such period) if the
consolidated balance sheet of such acquired Person and its
consolidated Subsidiaries as at the end of the period preceding the
acquisition of such Person and the related consolidated statements of
income and stockholders' equity and of cash flows for the period in
respect of which Consolidated EBITDA is to be calculated (i) have been
previously provided to the Agents and the Lenders and (ii) either (A)
have been reported on without a qualification arising out of the scope
of the audit by independent certified public accountants of nationally
recognized standing or (B) have been found reasonably acceptable by
the Agents.
"Consolidated Net Income": for any period, the consolidated
net income (or loss) of the Borrower and its Subsidiaries, determined
on a consolidated basis in accordance with GAAP; provided that there
shall be excluded (a) the income (or deficit) of any Person accrued
prior to the date it becomes a Subsidiary of the Borrower or is
merged into or consolidated with the Borrower or any of its
Subsidiaries, (b) the income (or deficit) of any Person (other than a
Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any
such income is actually received by the Borrower or such Subsidiary
in the form of dividends or similar distributions and (c) the
undistributed earnings of any Subsidiary of the Borrower to the
extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the
terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.
"Consolidated Net Working Capital": at any date, the excess
of Consolidated Current Assets on such date over Consolidated Current
Liabilities on such date.
"Consolidated Total Debt": at any date, the aggregate
principal amount of all Funded Debt of the Borrower and its
Subsidiaries at such date, determined on a consolidated basis in
accordance with GAAP.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or
any of its Property is bound.
"Default": any of the events specified in Section 9, whether
or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Disposition": with respect to any Property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other
disposition thereof; the terms "Dispose" and "Disposed of" shall have
correlative meanings.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
9
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States
of America.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental
Authority or other Requirements of Law (including common law)
regulating, relating to or imposing liability or standards of conduct
concerning protection of human health or the environment, as now or
may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied
to a Eurodollar Loan, the aggregate (without duplication) of the
maximum rates (expressed as a decimal fraction) of reserve
requirements in effect on such day (including, without limitation,
basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board) maintained
by a member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
determined on the basis of the rate for deposits in Dollars for a
period equal to such Interest Period commencing on the first day of
such Interest Period appearing on Page 3750 of the Dow ▇▇▇▇▇ Markets
screen as of 11:00 A.M., London time, two Business Days prior to the
beginning of such Interest Period. In the event that such rate does
not appear on Page 3750 of the Dow ▇▇▇▇▇ Markets screen (or otherwise
on such screen), the "Eurodollar Base Rate" for purposes of this
definition shall be determined by reference to such other comparable
publicly available service for displaying eurodollar rates as may be
selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative
Agent is offered Dollar deposits at or about 11:00 A.M., New York
City time, two Business Days prior to the beginning of such Interest
Period in the interbank eurodollar market where its eurodollar and
foreign currency and exchange operations are then being conducted for
delivery on the first day of such Interest Period for the number of
days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then
10
current Interest Periods with respect to all of which begin on the
same date and end on the same later date (whether or not such Loans
shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 9,
provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"Excluded Foreign Subsidiaries": any Foreign Subsidiary in
respect of which either (i) the pledge of all of the Capital Stock of
such Subsidiary as Collateral or (ii) the guaranteeing by such
Subsidiary of the Obligations, would, in the good faith judgment of
the Borrower, result in adverse tax consequences to the Borrower.
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by Citibank N.A.
from three federal funds brokers of recognized standing selected by
it.
"Final Order": an order of the Bankruptcy Court entered in
the Case after a final hearing under Bankruptcy Rule 4001(c)(2)
granting final approval of this Agreement and the other Loan
Documents and granting the Liens and Super-Priority Claims in favor
of the Administrative Agent for the benefit of the Agents and the
Lenders, substantially in the form of Exhibit B, and otherwise in
form and substance reasonably satisfactory to the Agents.
"Foreign Subsidiary": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
"Funded Debt": as to any Person, all Indebtedness of such
Person that matures more than one year from the date of its creation
or matures within one year from such date but is renewable or
extendible, at the option of such Person, to a date more than one
year from such date or arises under a revolving credit or similar
agreement that obligates the lender or lenders to extend credit
during a period of more than one year from such date, including,
without limitation, all current maturities and current sinking fund
payments in respect of such Indebtedness whether or not required to
be paid within one year from the date of its creation and, in the
case of the Borrower, Indebtedness in respect of the Loans.
"Funding Office": the office specified from time to time by
the Administrative Agent as its funding office by notice to the
Borrower and the Lenders.
"GAAP": generally accepted accounting principles in the
United States of America as in effect from time to time, except that
for purposes of Section 8.1, GAAP shall be determined on the basis of
such principles in effect on the date hereof and consistent with
those used in the preparation of the most recent audited financial
statements delivered pursuant to Section 5.1(b). In the event that
any "Accounting
11
Change" (as defined below) shall occur and such change results in a
change in the method of calculation of financial covenants, standards
or terms in this Agreement, then the Borrower and the Agents agree to
enter into negotiations in order to amend such provisions of this
Agreement so as to equitably reflect such Accounting Changes with the
desired result that the criteria for evaluating the Borrower's
financial condition shall be the same after such Accounting Changes as
if such Accounting Changes had not been made. Until such time as such
an amendment shall have been executed and delivered by the Borrower,
the Agents and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Changes had not occurred.
"Accounting Changes" refers to changes in accounting principles
required by the promulgation of any rule, regulation, pronouncement or
opinion by the Financial Accounting Standards Board of the American
Institute of Certified Public Accountants or, if applicable, the
Securities and Exchange Commission (or successors thereto or agencies
with similar functions).
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government (including, without
limitation, the National Association of Insurance Commissioners).
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by each Subsidiary
Guarantor, substantially in the form of Exhibit A, as the same may be
amended, supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b)
another Person (including, without limitation, any bank under any
letter of credit) to induce the creation of which the guaranteeing
person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary
obligations") of any other third Person (the "primary obligor") in
any manner, whether directly or indirectly, including, without
limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any
Property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (iii) 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 (iv) otherwise
to assure or hold harmless the owner of any such primary obligation
against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall
be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which
such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing person may be liable pursuant to the terms of
the instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such
12
guaranteeing person may be liable are not stated or determinable, in
which case the amount of such Guarantee Obligation shall be such
guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Hedge Agreements": all interest rate swaps, caps or collar
agreements or similar arrangements entered into by the Borrower
providing for protection against fluctuations in interest rates or
currency exchange rates or the exchange of nominal interest
obligations, either generally or under specific contingencies.
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money,
(b) all obligations of such Person for the deferred purchase price of
Property or services (other than current trade payables incurred in
the ordinary course of such Person's business), (c) all obligations
of such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to
Property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such Property), (e) all
Capital Lease Obligations of such Person, (f) all obligations of such
Person, contingent or otherwise, as an account party under
acceptance, letter of credit or similar facilities, (g) all
obligations of such Person, contingent or otherwise, to purchase,
redeem, retire or otherwise acquire for value any Capital Stock of
such Person, (h) all Guarantee Obligations of such Person in respect
of obligations of the kind referred to in clauses (a) through (g)
above; (i) all obligations of the kind referred to in clauses (a)
through (h) above secured by (or for which the holder of such
obligation has an existing right, contingent or otherwise, to be
secured by) any Lien on Property (including, without limitation,
accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such
obligation, (j) for the purposes of Section 8(e) only, all
obligations of such Person in respect of Hedge Agreements and (k) the
liquidation value of any mandatorily redeemable preferred Capital
Stock of such Person or its Subsidiaries held by any Person other
than such Person and its Wholly Owned Subsidiaries.
"Indemnified Liabilities": as defined in Section 12.5.
"Indemnitee": as defined in Section 12.5.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including, without limitation, copyrights, copyright
licenses, patents, patent licenses, trademarks, trademark licenses,
technology, know-how and processes, and all rights to ▇▇▇ at law or
in equity for any infringement or other impairment thereof, including
the right to receive all proceeds and damages
13
therefrom.
"Interest Payment Date": (a) as to any Base Rate Loan, the
last day of each month to occur while such Loan is outstanding and
the final maturity date of such Loan, (b) as to any Eurodollar Loan,
the last day of such Interest Period, and (c) as to any Loan (other
than any Revolving Credit Loan that is a Base Rate Loan and any Swing
Line Loan), the date of any repayment or prepayment made in respect
thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the
case may be, with respect to such Eurodollar Loan and ending one
week, two weeks, three weeks or one month thereafter, as selected by
the Borrower in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and (b) thereafter, each
period commencing on the last day of the next preceding Interest
Period applicable to such Eurodollar Loan and ending one week, two
weeks, three weeks or one month thereafter, as selected by the
Borrower by irrevocable notice to the Administrative Agent not less
than three Business Days prior to the last day of the then current
Interest Period with respect thereto; provided that, all of the
foregoing provisions relating to Interest Periods are subject to the
following:
(i) if any Interest Period would otherwise end
on a day that is not a Business Day, such 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 that would otherwise
extend beyond the Termination Date shall end on the
Termination Date or such due date, as applicable;
(iii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the
last Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods
so as not to require a payment or prepayment of any
Eurodollar Loan during an Interest Period for such Loan.
"Investments": as defined in Section 8.8.
"Issuing Lender": Swiss Bank Corporation, in its capacity as
issuer of any Letter of Credit.
"L/C Cash Collateral Account": the account established by
the Borrower under the sole and exclusive control of the
Administrative Agent maintained at the office of the Administrative
Agent designated as "The Grand Union Company, Debtor-in-Possession
L/C Cash Collateral Account" or other similar title which shall be
used solely for the purposes set forth in Sections 3.1(b) and 4.2.
14
"L/C Commitment": $50,000,000.
"L/C Fee Payment Date": the last day of each month to occur
while Letters of Credit are outstanding and the Termination Date.
"L/C Obligations": at any time, an amount equal to the sum
of (a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of
drawings under Letters of Credit which have not then been reimbursed
pursuant to Section 3.5.
"L/C Participants": the collective reference to all the
Lenders other than the Issuing Lender.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge
or other security interest or any preference, priority or other
security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or
other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, the Security Documents and
the Notes.
"Loan Parties": the Borrower and each Subsidiary Guarantor.
"Material Adverse Effect": a material adverse effect on (a)
the business, assets, property, condition (financial or otherwise) of
the Borrower and its Subsidiaries taken as a whole or (b) the
validity or enforceability of this Agreement or any of the other Loan
Documents or the rights or remedies of the Agents or the Lenders
hereunder or thereunder, in each case, other than such effects as
result solely from the commencement of the Case.
"Material Environmental Amount": an amount payable by the
Borrower and/or its Subsidiaries in excess of $5,000,000 for remedial
costs, compliance costs, compensatory damages, punitive damages,
fines, penalties or any combination thereof.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation.
"Maturity Date": October 22, 1998.
15
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"New Lending Office": as defined in Section 2.17(d).
"Non-Excluded Taxes": as defined in Section 2.17(a).
"Non-U.S. Lender": as defined in Section 2.17(d).
"Notes": the collective reference to any promissory note
evidencing Loans.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity
of the Loans and Reimbursement Obligations and interest accruing
after the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and all other
obligations and liabilities of the Borrower to the Agents or to any
Lender (or, in the case of Hedge Agreements, any affiliate of any
Lender), whether direct or indirect, absolute or contingent, due or
to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, this Agreement, any other Loan
Document, the Letters of Credit, any Hedge Agreement entered into
with any Lender or any affiliate of any Lender or any other document
made, delivered or given in connection herewith or therewith, whether
on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including, without limitation, all
fees, charges and disbursements of counsel to the Agents or to any
Lender that are required to be paid by the Borrower pursuant hereto)
or otherwise.
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to,
this Agreement or any other Loan Document.
"Participant": as defined in Section 12.6(b).
"Payment Office": the office specified from time to time by
the Administrative Agent as its payment office by notice to the
Borrower and the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Liens": Liens permitted to exist under Section 8.3.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Petition Date": as defined in the Recitals.
16
"Plan": at a particular time, any employee benefit plan
which is covered by ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at
such time, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"Plan of Reorganization": as defined in the Recitals.
"Prepetition Agent": Bankers Trust Company in its capacity as
agent for the Prepetition Lenders under the Prepetition Credit
Agreement.
"Prepetition Credit Agreement": the Amended and Restated
Credit Agreement, dated as of June 15, 1995, among the Borrower, the
Prepetition Lenders, and the Prepetition Agent, as amended,
supplemented or otherwise modified prior to the Petition Date.
"Prepetition Collateral": all Property securing the
Prepetition Obligations.
"Prepetition Lenders": collectively, the several banks,
financial institutions and other entities from time to time parties to
the Prepetition Credit Agreement.
"Prepetition Obligations": the aggregate outstanding
principal amount of the loans and other financial accommodations made
(including letters of credit outstanding as of the Petition Date)
under or pursuant to the Prepetition Credit Agreement, and all
accrued but unpaid interest and fees, costs and other charges payable
to the Prepetition Agent or the Prepetition Lenders under or pursuant
to the Prepetition Credit Agreement.
"Prepetition Supplemental Term Loans": Supplemental Term
Loans, as defined in the Prepetition Credit Agreement.
"Pro Forma Balance Sheet": as defined in Section 5.1(a).
"Projections": as defined in Section 7.2(c).
"Properties": as defined in Section 5.17(a).
"Property": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible
or intangible, including, without limitation, Capital Stock.
"Refunded Swing Line Loans": as defined in Section 2.4(b).
"Refunding Date": as defined in Section 2.4(c).
"Register": as defined in Section 12.6(d).
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the
17
Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters
of Credit.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .27, .28, .29, .30, .31,
.32, .34 or .35 of PBGC Reg. ss. 4043.
"Required Lenders": at any time, the holders of more than
50% of (a) until the Closing Date, the Revolving Credit Commitments
and (b) thereafter, the Total Revolving Credit Commitments then in
effect or, if the Revolving Credit Commitments have been terminated,
the Total Revolving Extensions of Credit then outstanding.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its Property or to which such Person or any of its Property is
subject.
"Responsible Officer": the chief executive officer,
president, chief administrative officer or chief financial officer of
the Borrower, but in any event, with respect to financial matters, the
chief financial officer, the treasurer and controller of the Borrower.
"Restricted Payments": as defined in Section 8.6.
"Revolving Credit Commitment": as to any Lender, the
obligation of such Lender to make Revolving Credit Loans and
participate in Swing Line Loans and Letters of Credit, in an aggregate
principal and/or face amount not to exceed the amount set forth under
the heading "Revolving Credit Commitment" opposite such Lender's name
on Schedule 1.1, as the same may be changed from time to time pursuant
to the terms hereof. The original amount of the Total Revolving Credit
Commitments is $172,022,020.
"Revolving Credit Commitment Fee Rate": 1/2 of 1% per annum.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to the Termination Date.
"Revolving Credit Loans": as defined in Section 2.1.
"Revolving Credit Percentage": as to any Lender at any time,
the percentage which such Lender's Revolving Credit Commitment then
constitutes of the Total Revolving Credit Commitments (or, at any
time after the Revolving Credit Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of
such Lender's Revolving Credit Loans then outstanding constitutes of
the aggregate principal amount of the Revolving Credit Loans then
outstanding).
"Revolving Extensions of Credit": as to any Lender at any
time, an amount equal
18
to the sum of (a) the aggregate principal amount of all Revolving
Credit Loans made by such Lender then outstanding, (b) such Lender's
Revolving Credit Percentage of the L/C Obligations then outstanding
and (c) such Lender's Revolving Credit Percentage of the aggregate
principal amount of Swing Line Loans then outstanding.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, this Agreement and all other
security documents hereafter delivered to the Administrative Agent
granting a Lien on any Property of any Person to secure the
obligations and liabilities of any Loan Party under any Loan Document.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Steering Committee": the unofficial committee of holders of
the Debtor's 12% Senior Notes due September 1, 2004.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or
other ownership interests having ordinary voting power (other than
stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation, partnership
or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise qualified,
all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the
Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other
than any Excluded Foreign Subsidiary.
"Super-Priority Claim": a claim against the Borrower and in
the Case which is an administrative expense claim having priority over
any or all administrative expenses of the kind specified in Sections
503(b) or 507(b) of the Bankruptcy Code.
"Swing Line Commitment": the obligation of the Swing Line
Lender to make Swing Line Loans pursuant to Section 2.3 in an
aggregate principal amount at any one time outstanding not to exceed
$10,000,000.
"Swing Line Lender": ▇▇▇▇▇▇ Commercial Paper Inc., in its
capacity as the lender of Swing Line Loans.
"Swing Line Loans": as defined in Section 2.3.
"Swing Line Participation Amount": as defined in Section 2.4.
"Termination Date": the earliest to occur of (i) the Maturity
Date, (ii) the effective date of a Plan of Reorganization confirmed by
the Bankruptcy Court pursuant to the Confirmation Order, or (iii) the
termination of the Total Revolving Credit Commitment in accordance
with the terms hereof.
19
"Total Revolving Credit Commitments": at any time, the
aggregate amount of the Revolving Credit Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Lenders
outstanding at such time.
"Transferee": as defined in Section 12.15.
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying
shares required by law) is owned by such Person directly and/or
through other Wholly Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms
and conditions hereof, each Lender severally agrees to make revolving credit
loans ("Revolving Credit Loans") to the Borrower from time to time during the
Revolving Credit Commitment Period in an aggregate principal amount at any one
time outstanding which, when added to such Lender's Revolving Credit
Percentage of the sum of (i) the L/C Obligations then outstanding and (ii) the
20
aggregate principal amount of the Swing Line Loans then outstanding, does not
exceed the amount of such Lender's Revolving Credit Commitment then in effect.
During the Revolving Credit Commitment Period the Borrower may use the
Revolving Credit Commitments by borrowing, prepaying the Revolving Credit
Loans in whole or in part, and reborrowing, all in accordance with the terms
and conditions hereof. The Revolving Credit Loans may from time to time be
Eurodollar Loans or Base Rate Loans, as determined by the Borrower and
notified to the Administrative Agent in accordance with Sections 2.2 and 2.10,
provided that no Revolving Credit Loan shall be made as a Eurodollar Loan
after the day that is one week prior to the Termination Date.
(b) The Borrower shall repay all outstanding Revolving
Credit Loans on the Termination Date.
2.2 Procedure for Revolving Credit Borrowing. The Borrower
may borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Borrower shall give
the Administrative Agent irrevocable notice (which notice must be received by
the Administrative Agent prior to 12:00 Noon, New York City time, (a) three
Business Days prior to the requested Borrowing Date, in the case of Eurodollar
Loans, or (b) one Business Day prior to the requested Borrowing Date, in the
case of Base Rate Loans), specifying (i) the amount and Type of Revolving
Credit Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in
the case of Eurodollar Loans, the respective amounts of each such Type of Loan
and the respective lengths of the initial Interest Period therefor. Each
borrowing under the Revolving Credit Commitments shall be in an amount equal
to (x) in the case of Base Rate Loans, $1,000,000 or a whole multiple thereof
(or, if the then aggregate Available Revolving Credit Commitments are less
than $1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$5,000,000 or a whole multiple of $1,000,000 in excess thereof; provided, that
the Swing Line Lender may request, on behalf of the Borrower, borrowings under
the Revolving Credit Commitments which are Base Rate Loans in other amounts
pursuant to Section 2.4. Upon receipt of any such notice from the Borrower,
the Administrative Agent shall promptly notify each Lender thereof. Each
Lender will make the amount of its pro rata share of each borrowing available
to the Administrative Agent for the account of the Borrower at the Funding
Office prior to 12:00 Noon, New York City time, on the Borrowing Date
requested by the Borrower in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to the Borrower by the
Administrative Agent crediting the account of the Borrower on the books of the
Funding Office with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent.
2.3 Swing Line Commitment. (a) Subject to the terms and
conditions hereof, the Swing Line Lender agrees to make a portion of the
credit otherwise available to the Borrower under the Revolving Credit
Commitments from time to time during the Revolving Credit Commitment Period by
making swing line loans ("Swing Line Loans") to the Borrower; provided that
(i) the aggregate principal amount of Swing Line Loans outstanding at any time
shall not exceed the Swing Line Commitment then in effect (notwithstanding
that the Swing Line Loans outstanding at any time, when aggregated with the
Swing Line Lender's other outstanding Revolving Credit Loans hereunder, may
exceed the Swing Line Commitment then in effect) and (ii) the Borrower shall
not request, and the Swing Line Lender shall not make, any Swing Line Loan if,
after giving effect to the making of such Swing Line Loan, the aggregate
amount of the
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Available Revolving Credit Commitments would be less than zero. During the
Revolving Credit Commitment Period, the Borrower may use the Swing Line
Commitment by borrowing, repaying and reborrowing, all in accordance with the
terms and conditions hereof. Swing Line Loans shall be Base Rate Loans only.
(b) The Borrower shall repay all outstanding Swing Line
Loans on the Termination Date.
2.4 Procedure for Swing Line Borrowing; Refunding of Swing
Line Loans. (a) Whenever the Borrower desires that the Swing Line Lender make
Swing Line Loans it shall give the Swing Line Lender irrevocable telephonic
notice confirmed promptly in writing (which telephonic notice must be received
by the Swing Line Lender not later than 1:00 P.M., New York City time, on the
proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii)
the requested Borrowing Date (which shall be a Business Day during the
Revolving Credit Commitment Period). Each borrowing under the Swing Line
Commitment shall be in an amount equal to $500,000 or a whole multiple of
$100,000 in excess thereof. Not later than 3:00 P.M., New York City time, on
the Borrowing Date specified in a notice in respect of Swing Line Loans, the
Swing Line Lender shall make available to the Administrative Agent at the
Funding Office an amount in immediately available funds equal to the amount of
the Swing Line Loan to be made by the Swing Line Lender. The Administrative
Agent shall make the proceeds of such Swing Line Loan available to the
Borrower on such Borrowing Date by depositing such proceeds in the account of
the Borrower with the Administrative Agent on such Borrowing Date in
immediately available funds.
(b) The Swing Line Lender, at any time and from time to time
in its sole and absolute discretion may, on behalf of the Borrower (which
hereby irrevocably directs the Swing Line Lender to act on its behalf), on one
Business Day's notice given by the Swing Line Lender no later than 12:00 Noon,
New York City time, request each Lender to make, and each Lender hereby agrees
to make, a Revolving Credit Loan, in an amount equal to such Lender's
Revolving Credit Percentage of the aggregate amount of the Swing Line Loans
(the "Refunded Swing Line Loans") outstanding on the date of such notice, to
repay the Swing Line Lender. Each Lender shall make the amount of such
Revolving Credit Loan available to the Administrative Agent at the Funding
Office in immediately available funds, not later than 10:00 A.M., New York
City time, one Business Day after the date of such notice. The proceeds of
such Revolving Credit Loans shall be immediately made available by the
Administrative Agent to the Swing Line Lender for application by the Swing
Line Lender to the repayment of the Refunded Swing Line Loans. The Borrower
irrevocably authorizes the Swing Line Lender to charge the Borrower's accounts
with the Administrative Agent (up to the amount available in each such
account) in order to immediately pay the amount of such Refunded Swing Line
Loans to the extent amounts received from the Lenders are not sufficient to
repay in full such Refunded Swing Line Loans.
(c) If prior to the time a Revolving Credit Loan would have
otherwise been made pursuant to Section 2.4(b), if for any reason, as
determined by the Swing Line Lender in its sole discretion, Revolving Credit
Loans may not be made as contemplated by Section 2.4(b), each Lender shall, on
the date such Revolving Credit Loan was to have been made pursuant to the
notice referred to in Section 2.4(b) (the "Refunding Date"), purchase for cash
an undivided participating interest in the then outstanding Swing Line Loans
by paying to the Swing Line Lender an amount (the "Swing Line Participation
Amount") equal to (i) such Lender's Revolving
22
Credit Percentage times (ii) the sum of the aggregate principal amount of Swing
Line Loans then outstanding which were to have been repaid with such Revolving
Credit Loans.
(d) Whenever, at any time after the Swing Line Lender has
received from any Lender such Lender's Swing Line Participation Amount, the
Swing Line Lender receives any payment on account of the Swing Line Loans, the
Swing Line Lender will distribute to such Lender its Swing Line Participation
Amount (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender's participating interest was
outstanding and funded and, in the case of principal and interest payments, to
reflect such Lender's pro rata portion of such payment if such payment is not
sufficient to pay the principal of and interest on all Swing Line Loans then
due); provided, however, that in the event that such payment received by the
Swing Line Lender is required to be returned, such Lender will return to the
Swing Line Lender any portion thereof previously distributed to it by the
Swing Line Lender.
(e) Each Lender's obligation to make the Loans referred to
in Section 2.4(b) and to purchase participating interests pursuant to Section
2.4(c) shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any setoff, counterclaim,
recoupment, defense or other right which such Lender or the Borrower may have
against the Swing Line Lender, the Borrower or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of a Default or an Event of
Default or the failure to satisfy any of the other conditions specified in
Section 6; (iii) any adverse change in the condition (financial or otherwise)
of the Borrower; (iv) any breach of this Agreement or any other Loan Document
by the Borrower, any other Loan Party or any other Lender; or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
2.5 Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the appropriate Lender, (i) the then unpaid principal amount of
each Revolving Credit Loan of such Lender on the Termination Date (or such
earlier date on which the Loans become due and payable pursuant to Section 9)
and (ii) the then unpaid principal amount of each Swing Line Loan of such
Swing Line Lender on the Termination Date (or such earlier date on which the
Loans become due and payable pursuant to Section 9). The Borrower hereby
further agrees to pay interest on the unpaid principal amount of the Loans
from time to time outstanding from the date hereof until payment in full
thereof at the rates per annum, and on the dates, set forth in Section 2.12.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to
such Lender resulting from each Loan of such Lender from time to time,
including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower,
shall maintain the Register pursuant to Section 12.6(e), and a subaccount
therein for each Lender, in which shall be recorded (i) the amount of each
Loan made hereunder and any Note evidencing such Loan, the Type thereof and
each Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to
each Lender hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
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(d) The entries made in the Register and the accounts of
each Lender maintained pursuant to Section 2.5(b) shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the Borrower therein recorded; provided,
however, that the failure of any Lender or the Administrative Agent to
maintain the Register or any such account, or any error therein, shall not in
any manner affect the obligation of the Borrower to repay (with applicable
interest) the Loans made to such Borrower by such Lender in accordance with
the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a promissory note of the Borrower evidencing any Revolving Credit
Loans or Swing Line Loans, as the case may be, of such Lender, substantially
in the forms of Exhibit G-1 or G-2, respectively, with appropriate insertions
as to date and principal amount.
2.6 Revolving Credit Commitment Fees, etc. (a) The Borrower
agrees to pay to the Administrative Agent for the account of each Lender a
commitment fee for the Revolving Credit Commitment Period, computed at the
Revolving Credit Commitment Fee Rate on the average daily amount of the
Available Revolving Credit Commitment of such Lender during the period for
which payment is made, payable monthly in arrears on the last day of each
month and on the Termination Date.
(b) The Borrower agrees to pay to the Agents the fees in the
amounts and on the dates from time to time agreed to in writing by the
Borrower and the Agents.
2.7 Termination or Reduction of Revolving Credit
Commitments. The Borrower shall have the right, upon not less than three
Business Days' notice to the Administrative Agent, to terminate the Revolving
Credit Commitments or, from time to time, to reduce the amount of the
Revolving Credit Commitments; provided that no such termination or reduction
of Revolving Credit Commitments shall be permitted if, after giving effect
thereto and to any prepayments of the Revolving Credit Loans and Swing Line
Loans made on the effective date thereof, the Total Revolving Extensions of
Credit would exceed the Total Revolving Credit Commitments. Any such reduction
shall be in an amount equal to $1,000,000, or a whole multiple thereof, and
shall reduce permanently the Revolving Credit Commitments then in effect.
2.8 Optional Prepayments. The Borrower may at any time and
from time to time prepay the Loans, in whole or in part, upon irrevocable
notice delivered to the Administrative Agent at least three Business Days
prior thereto in the case of Eurodollar Loans and at least one Business Day
prior thereto in the case of Base Rate Loans, which notice shall specify the
date and amount of prepayment and whether the prepayment is of Eurodollar
Loans or Base Rate Loans; provided, that if a Eurodollar Loan is prepaid on
any day other than the last day of the Interest Period applicable thereto, the
Borrower shall also pay any amounts owing pursuant to Section 2.18. Upon
receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof. If any such notice is given, the amount specified in
such notice shall be due and payable on the date specified therein, together
with (except in the case of Revolving Credit Loans which are Base Rate Loans
and Swing Line Loans) accrued interest to such date on the amount prepaid.
Partial prepayments of Revolving Credit Loans shall be in an aggregate
principal amount of $1,000,000 or a whole multiple thereof. Partial
prepayments of Swing Line Loans shall be in an aggregate principal amount of
$100,000 or a whole multiple
24
thereof.
2.9 Mandatory Prepayments and Revolving Credit Commitment
Reductions. (a) If, at any time during the Revolving Credit Commitment Period,
the Total Revolving Extensions of Credit exceed the amount of the Total
Revolving Credit Commitments, the Borrower shall, without notice of demand,
immediately prepay the Revolving Credit Loans and/or Swing Line Loans in an
aggregate principal amount equal to such excess, together with interest
accrued to the date of such payment or prepayment.
(b) Any reduction of the Revolving Credit Commitments shall
be accompanied by prepayment of the Revolving Credit Loans and/or Swing Line
Loans to the extent, if any, that the Total Revolving Extensions of Credit
exceed the amount of the Total Revolving Credit Commitments as so reduced,
provided that if the aggregate principal amount of Revolving Credit Loans and
Swing Line Loans then outstanding is less than the amount of such excess
(because L/C Obligations constitute a portion thereof), the Borrower shall, to
the extent of the balance of such excess, replace outstanding Letters of
Credit and/or deposit an amount in cash equal to 105% of the amount of such
excess in the L/C Cash Collateral Account. The application of any prepayment
pursuant to this Section 2.9 shall be made first to Base Rate Loans and second
to Eurodollar Loans. Each prepayment of the Loans under this Section 2.9
(except in the case of Revolving Credit Loans that are Base Rate Loans and
Swing Line Loans) shall be accompanied by accrued interest to the date of such
prepayment on the amount prepaid.
2.10 Conversion and Continuation Options. (a) The Borrower
may elect from time to time to convert Eurodollar Loans to Base Rate Loans by
giving the Administrative Agent at least two Business Days' prior irrevocable
notice of such election, provided that any such conversion of Eurodollar Loans
may only be made on the last day of an Interest Period with respect thereto.
The Borrower may elect from time to time to convert Base Rate Loans to
Eurodollar Loans by giving the Administrative Agent at least three Business
Days' prior irrevocable notice of such election (which notice shall specify
the length of the initial Interest Period therefor), provided that no Base
Rate Loan may be converted into a Eurodollar Loan (i) when any Event of
Default has occurred and is continuing and the Administrative Agent or the
Required Lenders have determined in its or their sole discretion not to permit
such conversions or (ii) after the date that is one week prior to the
Termination Date. Upon receipt of any such notice the Administrative Agent
shall promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to
such Loans, provided that no Eurodollar Loan may be continued as such (i) when
any Event of Default has occurred and is continuing and the Administrative
Agent has or the Required Lenders have determined in its or their sole
discretion not to permit such continuations or (ii) after the date that is one
week prior to the Termination Date, and provided, further, that if the
Borrower shall fail to give any required notice as described above in this
paragraph or if such continuation is not permitted pursuant to the preceding
proviso such Loans shall be automatically converted to Base Rate Loans on the
last day of such then expiring Interest Period. Upon receipt of any such
notice the Administrative Agent shall promptly notify each relevant Lender
thereof.
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2.11 Minimum Amounts and Maximum Number of Eurodollar
Tranches. Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions, continuations and optional prepayments of Eurodollar
Loans hereunder and all selections of Interest Periods hereunder shall be in
such amounts and be made pursuant to such elections so that, (a) after giving
effect thereto, the aggregate principal amount of the Eurodollar Loans
comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole
multiple of $1,000,000 in excess thereof and (b) no more than ten Eurodollar
Tranches shall be outstanding at any one time.
2.12 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such
day plus 2.50%.
(b) Each Base Rate Loan shall bear interest at a rate per
annum equal to the Base Rate plus 1.50%.
(c) (i) If all or a portion of the principal amount of any
Loan or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), all outstanding Loans and
Reimbursement Obligations (whether or not overdue) shall bear interest at a
rate per annum which is equal to (x) in the case of the Loans, the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions of
this Section 2.12 plus 2%, or (y) in the case of Reimbursement Obligations,
the rate applicable to Base Rate Loans plus 2%, and (ii) if all or a portion
of any interest payable on any Loan or Reimbursement Obligation or any
commitment fee or other amount payable hereunder shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum equal to the rate then
applicable to Base Rate Loans plus 2%, in each case, with respect to clauses
(i) and (ii) above, from the date of such non-payment until such amount is
paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of
this Section 2.12 shall be payable from time to time on demand.
2.13 Computation of Interest and Fees. (a) Interest, fees
and commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to Base
Rate Loans the rate of interest on which is calculated on the basis of the
Prime Rate, the interest thereon shall be calculated on the basis of a 365-
(or 366-, as the case may be) day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and the
relevant Lenders of each determination of a Eurodollar Rate. Any change in the
interest rate on a Loan resulting from a change in the Base Rate or the
Eurocurrency Reserve Requirements shall become effective as of the opening of
business on the day on which such change becomes effective. The Administrative
Agent shall as soon as practicable notify the Borrower and the relevant
Lenders of the effective date and the amount of each such change in interest
rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the
26
Borrower, deliver to the Borrower a statement showing the quotations used by
the Administrative Agent in determining any interest rate pursuant to Section
2.12(a).
2.14 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower)
that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Required Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such
Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrower and the relevant Lenders as soon as practicable thereafter. If
such notice is given (x) any Eurodollar Loans requested to be made on the
first day of such Interest Period shall be made as Base Rate Loans, (y) any
Loans that were to have been converted on the first day of such Interest
Period to Eurodollar Loans shall be continued as Base Rate Loans and (z) any
outstanding Eurodollar Loans shall be converted, on the first day of such
Interest Period, to Base Rate Loans. Until such notice has been withdrawn by
the Administrative Agent, no further Eurodollar Loans shall be made or
continued as such, nor shall the Borrower have the right to convert Loans to
Eurodollar Loans.
2.15 Pro Rata Treatment and Payments. (a) Each borrowing by
the Borrower from the Lenders hereunder, each payment by the Borrower on
account of any commitment fee and any reduction of the Revolving Credit
Commitments of the Lenders shall be made pro rata according to the Revolving
Credit Percentages of the relevant Lenders. Each payment (other than
prepayments) in respect of principal or interest in respect of the Loans, each
payment in respect of fees payable hereunder, and each payment in respect of
Reimbursement Obligations, shall be applied to the amounts of such obligations
owing to the Lenders pro rata according to the respective amounts then due and
owing to the Lenders.
(b) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Revolving Credit Loans shall be
made pro rata according to the respective outstanding principal amounts of the
Revolving Credit Loans then held by the Lenders.
(c) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made
prior to 12:00 Noon, New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Payment Office,
in Dollars and in immediately available funds. The Administrative Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on the Eurodollar
Loans) becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day.
27
If any payment on a Eurodollar Loan becomes due and payable on a day other than
a Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such
payment into another calendar month, in which event such payment shall be made
on the immediately preceding Business Day. In the case of any extension of any
payment of principal pursuant to the preceding two sentences, interest thereon
shall be payable at the then applicable rate during such extension.
(d) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make
the amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to
the Administrative Agent by the required time on the Borrowing Date therefor,
such Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available
to the Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this paragraph
shall be conclusive in the absence of manifest error. If such Lender's share
of such borrowing is not made available to the Administrative Agent by such
Lender within three Business Days of such Borrowing Date, the Administrative
Agent shall also be entitled to recover such amount with interest thereon at
the rate per annum applicable to Base Rate Loans under the relevant Facility,
on demand, from the Borrower.
(e) Unless the Administrative Agent shall have been notified
in writing by the Borrower prior to the date of any payment being made
hereunder that the Borrower will not make such payment to the Administrative
Agent, the Administrative Agent may assume that the Borrower is making such
payment, and the Administrative Agent may, but shall not be required to, in
reliance upon such assumption, make available to the Lenders their respective
pro rata shares of a corresponding amount. If such payment is not made to the
Administrative Agent by the Borrower within three Business Days of such
required date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate. Nothing herein
shall be deemed to limit the rights of the Administrative Agent or any Lender
against the Borrower.
2.16 Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application
thereof or compliance by any Lender with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 2.17 and changes in the rate of
taxes based on or measured by net income and franchise taxes imposed
in lieu thereof of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit,
28
compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances,
loans or other extensions of credit by, or any other acquisition of
funds by, any office of such Lender which is not otherwise included in
the determination of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or issuing or participating
in Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender
for such increased cost or reduced amount receivable. If any Lender becomes
entitled to claim any additional amounts pursuant to this Section 2.16, it
shall promptly notify the Borrower (with a copy to the Administrative Agent)
of the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any
Governmental Authority made subsequent to the date hereof shall have the
effect of reducing the rate of return on such Lender's or such corporation's
capital as a consequence of its obligations hereunder or under or in respect
of any Letter of Credit to a level below that which such Lender or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender to be
material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction.
(c) A certificate as to any additional amounts payable
pursuant to this Section 2.16 submitted by any Lender to the Borrower (with a
copy to the Administrative Agent) shall be conclusive in the absence of
manifest error. The obligations of the Borrower pursuant to this Section 2.16
shall survive the termination of this Agreement and the payment of the Loans
and all other amounts payable hereunder.
2.17 Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding taxes based on or measured by net income and
franchise taxes (imposed in lieu thereof) imposed on any Agent or any Lender
as a result of a present or former connection between such Agent or such
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than
any such connection arising solely from such Agent or such Lender having
executed, delivered or performed its obligations or received a payment under,
or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any
29
amounts payable to any Agent or any Lender hereunder, the amounts so payable
to such Agent or such Lender shall be increased to the extent necessary to
yield to such Agent or such Lender (after payment of all Non-Excluded Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, provided, however, that the Borrower
shall not be required to increase any such amounts payable to any Lender with
respect to any Non-Excluded Taxes (i) that are attributable to such Lender's
failure to comply with the requirements of paragraph (d) or paragraph (e) of
this Section 2.17 or (ii) to the extent that the obligation to withhold
amounts with respect to United States federal withholding tax existed on the
date such Lender became a party to this Agreement (or, in the case of a
Participant, on the date such Participant became a Participant hereunder) or,
with respect to payments to a New Lending Office, the date such Lender
designated such New Lending Office with respect to a Loan, except to the
extent that such Lender's assignor (if any) was entitled, at the time of
assignment or such Lender was entitled at the time the New Lending Office was
designated, to receive additional amounts from the Borrower with respect to
such Non-Excluded Taxes pursuant to this Section 2.17(a).
(b) In addition, the Borrower shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are
payable by the Borrower, as promptly as possible thereafter the Borrower shall
send to the Administrative Agent for the account of the relevant Agent or
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Agents the required receipts or other
required documentary evidence, the Borrower shall indemnify the Administrative
Agent and the Lenders for any incremental taxes, interest or penalties that
may become payable by any Agent or any Lender as a result of any such failure.
The agreements in this Section 2.17 shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable
hereunder.
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(d) Each Lender (or Transferee) that is not a United States
person as defined in Section 7701(a)(30) of the Code (a "Non-U.S. Lender")
shall deliver to the Borrower and the Administrative Agent (or, in the case of
a Participant, to the Lender from which the related participation shall have
been purchased) (x) two copies of either U.S. Internal Revenue Service Form
1001 or Form 4224, or, in the case of a Non-U.S. Lender claiming exemption
from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of "portfolio interest" a statement substantially in
the form of Exhibit H and a Form W-8, or any subsequent versions thereof or
successors thereto properly completed and duly executed by such Non-U.S.
Lender claiming complete exemption from, or a reduced rate of, U.S. federal
withholding tax on all payments by the Borrower under this Agreement and the
other Loan Documents and (y) any other related documents reasonably requested
by the Borrower. Such forms shall be delivered by each Non-U.S. Lender on or
before the date it becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related
participation) and on or before the date, if any, such Non-U.S. Lender changes
its applicable lending office by designating a different lending office (a
"New Lending Office"). In addition, each Non-U.S. Lender shall deliver such
forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify
the Borrower at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other
form of certification adopted by the U.S. taxing authorities for such
purpose). Notwithstanding any other provision of this paragraph, a Non-U.S.
Lender shall not be required to deliver any form pursuant to this paragraph
that such Non-U.S. Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in
which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law or reasonably requested by the Borrower, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate,
provided that such Lender is legally entitled to complete, execute and deliver
such documentation and in such Lender's reasonable judgment such completion,
execution or submission would not materially prejudice the legal position of
such Lender.
(f) If any Agent or any Lender determines that it has
received a refund in respect of any Non-Excluded Taxes or Other Taxes as to
which indemnification has been paid by the Borrower pursuant to Section 2.20,
it shall promptly remit such refund (including any interest) to the Borrower,
net of all out-of-pocket expenses of such Agent or such Lender; provided,
however, that the Borrower, upon the request of such Agent or such Lender,
agrees promptly to return such refund (plus any interest) to such party in the
event such party is required to repay such refund to the relevant taxing
authority requiring prepayment or such refund. Such Agent or Lender shall
provide the Borrower with a copy of any notice or assessment from the relevant
taxing authority (deleting any confidential information contained therein)
requiring repayment of such refund.
2.18 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender
may sustain or incur as a consequence of (a) default by the Borrower in making
a borrowing of, conversion into or
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continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
default by the Borrower in making any prepayment after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment of Eurodollar Loans on a day which is not the last day
of an Interest Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest which would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure
to borrow, convert or continue to the last day of such Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the
applicable rate of interest for such Loans provided for herein over (ii) the
amount of interest (as reasonably determined by such Lender) which would have
accrued to such Lender on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar market. A
certificate as to any amounts payable pursuant to this Section 2.18 submitted
to the Borrower by any Lender shall be conclusive in the absence of manifest
error. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
2.19 Illegality. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall
forthwith be cancelled and (b) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans
on the respective last days of the then current Interest Periods with respect
to such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of
the then current Interest Period with respect thereto, the Borrower shall pay
to such Lender such amounts, if any, as may be required pursuant to Section
2.18.
2.20 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.16 or
2.17(a) with respect to such Lender, it will, if requested by the Borrower,
use reasonable efforts (subject to overall policy considerations of such
Lender) to designate another lending office for any Loans affected by such
event with the object of avoiding the consequences of such event; provided,
that such designation is made on terms that, in the good faith judgment of
such Lender, cause such Lender and its lending office(s) to suffer no
economic, legal or regulatory disadvantage, and provided, further, that
nothing in this Section 2.20 shall affect or postpone any of the obligations
of any Borrower or the rights of any Lender pursuant to Section 2.16 or
2.17(a).
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SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other Lenders
set forth in Section 3.4(a), agrees to issue letters of credit ("Letters of
Credit") for the account of the Borrower on any Business Day during the
Revolving Credit Commitment Period in such form as may be approved from time
to time by the Issuing Lender; provided that the Issuing Lender shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the L/C Obligations would exceed the L/C Commitment or (ii) the
aggregate amount of the Available Revolving Credit Commitments would be less
than zero.
(b) Each Letter of Credit shall be denominated in Dollars
and expire no later than the first anniversary of the date of issuance of such
Letter of Credit (subject to certain extension provisions acceptable to the
Administrative Agent and the Issuing Lender; it being understood that
provisions which provide for the automatic extensions of up to one year unless
the Issuing Lender has given a termination notice at least 30 to 60 days prior
to the date of such automatic extension shall be permitted), provided, that if
the Termination Date occurs prior to the expiration of any Letter of Credit,
the Borrower shall, on or prior to the Termination Date, (i) cause all such
Letters of Credit to be returned to the Issuing Bank undrawn and marked
"cancelled" or (ii) to the extent that the Borrower is unable to replace and
return any such Letter of Credit, deposit cash in the L/C Cash Collateral
Account in an amount equal to 105% of the face amount of all such Letters of
Credit, as collateral security for the Borrower's reimbursement obligations in
connection therewith, such cash to be remitted to the Borrower upon the
expiration, cancellation or other termination or satisfaction of the
Borrower's reimbursement obligations in respect of all such Letters of Credit
and all other Obligations then outstanding under this Agreement. Each Letter
of Credit that remains outstanding as of the date of a refinancing of the
Lenders' Revolving Credit Commitments under this Agreement pursuant to an exit
facility agented by the Agents as contemplated under the Plan of
Reorganization shall be rolled into, and deemed to be, letters of credit
outstanding under such facility.
(c) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State
of New York.
(d) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Lender or any L/C Participant to exceed any limits imposed
by, any applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrower
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender at its address for notices specified
herein an Application therefor, completed to the satisfaction of the Issuing
Lender, and such other certificates, documents and other papers and
information as the Issuing Lender may request. Upon receipt of any
Application, the Issuing Lender will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall
the Issuing Lender be required to issue any Letter of Credit earlier than
three Business Days but no later than five Business Days after its receipt of
the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such
33
Letter of Credit to the beneficiary thereof or as otherwise may be agreed to
by the Issuing Lender and the Borrower. The Issuing Lender shall furnish a
copy of such Letter of Credit to the Borrower promptly following the issuance
thereof. The Issuing Lender shall promptly furnish to the Administrative
Agent, which shall in turn promptly furnish to the Lenders, notice of the
issuance of each Letter of Credit (including the amount thereof).
3.3 Fees and Other Charges. (a) The Borrower shall pay a fee
on the daily average undrawn amount of all outstanding Letters of Credit at a
per annum rate equal to 2.50% shared ratably among the Lenders and payable
monthly in arrears on each L/C Fee Payment Date after the issuance date. In
addition, the Borrower shall pay to the Issuing Lender for its own account a
fronting fee of 1/8 of 1% per annum, payable monthly in arrears on each L/C
Fee Payment Date after the issuance date.
(b) In addition to the foregoing fees, the Borrower shall
pay or reimburse the Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by the Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.
3.4 L/C Participations. (a) The Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce the
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases
from the Issuing Lender, on the terms and conditions hereinafter stated, for
such L/C Participant's own account and risk an undivided interest equal to
such L/C Participant's Revolving Credit Percentage in the Issuing Lender's
obligations and rights under each Letter of Credit issued hereunder and the
amount of each draft paid by the Issuing Lender thereunder. Each L/C
Participant unconditionally and irrevocably agrees with the Issuing Lender
that, if a draft is paid under any Letter of Credit for which the Issuing
Lender is not reimbursed in full by the Borrower in accordance with the terms
of this Agreement, such L/C Participant shall pay to the Issuing Lender upon
demand at the Issuing Lender's address for notices specified herein an amount
equal to such L/C Participant's Revolving Credit Percentage of the amount of
such draft, or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant
to the Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any
Letter of Credit is paid to the Issuing Lender within three Business Days
after the date such payment is due, such L/C Participant shall pay to the
Issuing Lender on demand an amount equal to the product of (i) such amount,
times (ii) the daily average Federal Funds Effective Rate during the period
from and including the date such payment is required to the date on which such
payment is immediately available to the Issuing Lender, times (iii) a fraction
the numerator of which is the number of days that elapse during such period
and the denominator of which is 360. If any such amount required to be paid by
any L/C Participant pursuant to Section 3.4(a) is not made available to the
Issuing Lender by such L/C Participant within three Business Days after the
date such payment is due, the Issuing Lender shall be entitled to recover from
such L/C Participant, on demand, such amount with interest thereon calculated
from such due date at the rate per annum equal to the rate then applicable to
Base Rate Loans plus 1.50%. A certificate of the Issuing Lender submitted to
any L/C Participant with respect to any amounts owing under this Section 3.4
shall be conclusive in the absence of manifest error.
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(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant
its pro rata share of such payment in accordance with Section 3.4(a), the
Issuing Lender receives any payment related to such Letter of Credit (whether
directly from the Borrower or otherwise, including proceeds of collateral
applied thereto by the Issuing Lender), or any payment of interest on account
thereof, the Issuing Lender will distribute to such L/C Participant its pro
rata share thereof; provided, however, that in the event that any such payment
received by the Issuing Lender shall be required to be returned by the Issuing
Lender, such L/C Participant shall return to the Issuing Lender the portion
thereof previously distributed by the Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse the Issuing Lender on each date on which the Issuing
Lender notifies the Borrower of the date and amount of a draft presented under
any Letter of Credit and paid by the Issuing Lender for the amount of (a) such
draft so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by the Issuing Lender in connection with such payment. Each such
payment shall be made to the Issuing Lender at its address for notices
specified herein in lawful money of the United States of America and in
immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this Section 3.5 from the date such
amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the rate set forth in (i) until the second
Business Day following the date of the applicable drawing, Section 2.12(b) and
(ii) thereafter, Section 2.12(c). Each drawing under any Letter of Credit
shall constitute a request by the Borrower to the Administrative Agent for a
borrowing pursuant to Section 2.2 of Base Rate Loans (or, at the option of the
Administrative Agent and the Swing Line Lender in their sole discretion, a
borrowing pursuant to Section 2.4 of Swing Line Loans) in the amount of such
drawing. The Borrowing Date with respect to such borrowing shall be the date
of such drawing.
3.6 Obligations Absolute. The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against the Issuing Lender,
any beneficiary of a Letter of Credit or any other Person. The Borrower also
agrees with the Issuing Lender that the Issuing Lender shall not be
responsible for, and the Borrower's Reimbursement Obligations under Section
3.5 shall not be affected by, among other things, the validity or genuineness
of documents or of any endorsements thereon, even though such documents shall
in fact prove to be invalid, fraudulent or forged, or any dispute between or
among the Borrower and any beneficiary of any Letter of Credit or any other
party to which such Letter of Credit may be transferred or any claims
whatsoever of the Borrower against any beneficiary of such Letter of Credit or
any such transferee. The Issuing Lender shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of the Issuing Lender. The Borrower agrees
that any action taken or omitted by the Issuing Lender under or in connection
with any Letter of Credit or the related drafts or documents, if done in the
absence of gross negligence or willful misconduct and in accordance with the
standards of care specified in the Uniform Commercial Code of the State of New
York, shall be binding on the Borrower and shall not result in any liability
of the Issuing Lender to the Borrower.
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3.7 Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Lender shall
promptly notify the Borrower of the date and amount thereof. The
responsibility of the Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to
any payment obligation expressly provided for in such Letter of Credit, be
limited to determining that the documents (including each draft) delivered
under such Letter of Credit in connection with such presentment are
substantially in conformity with such Letter of Credit.
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the
provisions of this Section 3, the provisions of this Section 3 shall apply.
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SECTION 4. PRIORITY AND LIENS
4.1 Priority and Liens. (a) The Borrower hereby covenants,
represents and warrants that, upon entry of the Final Order, the Obligations
of the Borrower hereunder and under the other Loan Documents, (i) pursuant to
Section 364(c)(1) of the Bankruptcy Code, shall at all times constitute
allowed Super-Priority Claims, (ii) pursuant to Section 364(c)(2) of the
Bankruptcy Code, shall at all times be secured by a perfected first priority
Lien on all Collateral, including without limitation, all cash maintained in
the L/C Cash Collateral Account and any direct investments of the funds
contained therein, that is otherwise not encumbered by a valid and perfected
Lien as of the Petition Date, (iii) pursuant to Section 364(c)(3) of the
Bankruptcy Code, shall be secured by a perfected second priority Lien upon all
Collateral (other than the Prepetition Collateral securing the Prepetition
Supplemental Term Loans, as to which the Lien in favor of the Agents and the
Lenders will be as described in clause (iv) of this sentence) that is subject
to a Permitted Lien, including, without limitation, valid and perfected Liens
in existence on the Petition Date or valid Liens perfected (but not granted)
thereafter to the extent such post-Petition Date perfection in respect of a
pre-Petition Date claim is expressly permitted under the Bankruptcy Code,
junior to such Permitted Liens, provided that the Liens granted in favor of
the Agents and the Lenders shall be senior to any Permitted Lien which is
expressly stated herein to be junior to the Liens in favor of the Agents and
the Lenders, and (iv) pursuant to Section 364(d)(1) of the Bankruptcy Code,
shall be secured by a perfected first priority, senior priming Lien on all of
the Prepetition Collateral securing the Prepetition Supplemental Term Loans
and any Property of the Debtors on which a Lien is granted after the Petition
Date to provide adequate protection in respect of the Prepetition Obligations,
subject and subordinate in each case with respect to subclauses (i) through
(iv) above, only to (x) following the occurrence and during the continuance of
a Default or an Event of Default, the payment (as the same may be due and
payable) of professional fees and disbursements allowed pursuant to Sections
105, 327, 328, 330, 503(b) or 1103(a) of the Bankruptcy Code and incurred by
the professionals retained by the Borrower, the Steering Committee and any
statutory committee of unsecured creditors appointed in the Case in an
aggregate amount not to exceed $1,000,000 (in addition to compensation
previously accrued (to the extent it is ultimately allowed by the Bankruptcy
Court) whether or not paid) and (y) the payment of unpaid fees pursuant to 28
U.S.C. ? 1930 and any fees payable to the Clerk of the Bankruptcy Court
(collectively, the "Carve-Out"), provided, further, that following the
Termination Date amounts in the L/C Cash Collateral Account shall not be
subject to the Carve-Out. The Lenders agree that so long as no Default or
Event of Default shall have occurred and be continuing, the Borrower shall be
permitted to pay compensation and reimbursement of expenses allowed and
payable under Sections 330 and 331 of the Bankruptcy Code, or as otherwise
required to be paid by the Plan of Reorganization, as the same may be payable,
and the amounts so paid shall not reduce the Carve-Out.
(b) As to all Collateral, including without limitation, all
real property the title to which is held by the Borrower or the possession of
which is held by the Borrower pursuant to leasehold interests, the Borrower
hereby assigns and conveys as security, grants a security interest in,
hypothecates, mortgages, pledges and sets over unto the Administrative Agent
all of the right, title and interest of the Borrower in all of such
Collateral, including without limitation, all owned real property and in all
such leasehold interests, together in each case with all of the right, title
and interest of the Borrower in and to all buildings, improvements, and
fixtures related thereto, any lease or sublease thereof, all general
intangibles relating thereto and all proceeds thereof. The Borrower
acknowledges that, pursuant to the Final Order, the Liens granted in favor
37
of the Administrative Agent (on behalf of the Agents and the Lenders) in all of
the Collateral shall be perfected without the recordation of any Uniform
Commercial Code financing statements, notices of Lien or other instruments of
mortgage or assignment. The Borrower further agrees that if requested by the
Agents, the Borrower shall enter into separate security agreements, pledge
agreements and fee and leasehold mortgages with respect to such Collateral on
terms reasonably satisfactory to the Administrative Agent.
4.2 Security Interest in L/C Cash Collateral Account.
Pursuant to Section 364(c)(2) of the Bankruptcy Code, the Borrower hereby
assigns and pledges to the Administrative Agent (for the benefit of the Agents
and the Lenders), and hereby grants to the Administrative Agent (for the
benefit of the Agents and the Lenders) a first priority security interest,
senior to all other Liens, if any, in all of the Borrower's right, title and
interest in and to the L/C Cash Collateral Account and any direct investment
of the funds contained therein.
4.3 Payment of Obligations. Upon the maturity (whether by
acceleration or otherwise) of any of the Obligations under this Agreement or
any of the other Loan Documents, the Lenders shall be entitled to immediate
payment of such Obligations without further application to or order of the
Bankruptcy Court.
4.4 No Discharge; Survival of Claims. The Borrower agrees
that to the extent its Obligations hereunder are not satisfied in full, (i)
its Obligations arising hereunder shall not be discharged by the entry of a
Confirmation Order (and the Borrower pursuant to Section 1141(d)(4) of the
Bankruptcy Code hereby waives any such discharge) and (ii) the Super-Priority
Claim granted to the Administrative Agent and the Lenders pursuant to the
Final Order and described in Section 4.1 and the Liens granted to the
Administrative Agent pursuant to the Final Order and described in Section 4.1
shall not be affected in any manner by the entry of a Confirmation Order.
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Borrower represents and warrants to each Agent and each Lender
that:
5.1 Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of the Borrower and its consolidated Subsidiaries
as at August 15, 1998 (including the notes thereto) (the "Pro Forma Balance
Sheet"), copies of which have heretofore been furnished to each Lender, has
been prepared giving effect (as if such events had occurred on such date) to
(i) the Loans to be made on the Closing Date and the use of proceeds thereof
and (ii) the payment of fees and expenses in connection with the foregoing.
The Pro Forma Balance Sheet has been prepared based on the best information
available to the Borrower as of the date of delivery thereof, and presents
fairly on a pro forma basis the estimated financial position of Borrower and
its consolidated Subsidiaries as at August 15, 1998, assuming that the events
specified in the preceding sentence had actually occurred at such date.
(b) The audited consolidated balance sheets of the Borrower
and its Subsidiaries as at March 28, 1998, March 29, 1997 and March 30, 1996,
and the related consolidated
38
statements of income and of cash flows for the fiscal years ended on such
dates, reported on by and accompanied by a report from Price Waterhouse LLP,
present fairly the consolidated financial condition of the Borrower as at such
date, and the consolidated results of its operations and its consolidated cash
flows for the respective fiscal years then ended. All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by the aforementioned firm of accountants and
disclosed therein). The Borrower and its Subsidiaries do not have any material
Guarantee Obligations, contingent liabilities and liabilities for taxes, or any
long-term leases or unusual forward or long-term commitments, including,
without limitation, any interest rate or foreign currency swap or exchange
transaction or other obligation in respect of derivatives, which are not
reflected in the most recent financial statements referred to in this
paragraph. During the period from March 28, 1998 to and including the date
hereof there has been no Disposition by the Borrower of any material part of
its business or Property.
5.2 No Change. Since March 28, 1998 there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect, other than (a) those which customarily occur as a
result of events leading up to and following the commencement of a proceeding
under Chapter 11 of the Bankruptcy Code, and (b) the commencement of the Case.
5.3 Corporate Existence; Compliance with Law. Each of the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate its
Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation 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 and (d) is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.
39
5.4 Corporate Power; Authorization; Enforceable Obligations.
Upon entry by the Bankruptcy Court of the Final Order, each Loan Party shall
have the corporate power and authority, and the legal right, to make, deliver
and perform the Loan Documents to which it is a party and, in the case of the
Borrower, to borrow hereunder. Each Loan Party has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Loan Documents to which it is a party and, in the case of the Borrower, to
authorize the borrowings on the terms and conditions of this Agreement and the
Final Order. No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority (other than entry of the
Final Order) or any other Person is required in connection with the
transactions and the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement or any of the Loan
Documents, except the filings referred to in Section 5.19. Each Loan Document
has been duly executed and delivered on behalf of each Loan Party thereto.
This Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Loan Party thereto,
enforceable against each such Loan Party in accordance with its terms and the
Final Order, except, with respect to the Subsidiary Guarantors, as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by equitable principles (whether enforcement
is sought by proceedings in equity or at law).
5.5 No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, the issuance of Letters of
Credit, the borrowings hereunder and the use of the proceeds thereof will not
violate any Requirement of Law or any Contractual Obligation of the Borrower
(to the extent such Contractual Obligation has been entered into after the
Petition Date) or any of its Subsidiaries and will not result in, or require,
the creation or imposition of any Lien on any of their respective properties
or revenues pursuant to any Requirement of Law or any such Contractual
Obligation (other than the Liens created by the Security Documents and the
Final Order). No Requirement of Law or Contractual Obligation applicable to
the Borrower or any of its Subsidiaries could reasonably be expected to have a
Material Adverse Effect.
5.6 No Material Litigation. Except with respect to the Case,
no litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against
any of their respective properties or revenues (a) with respect to any of the
Loan Documents or any of the transactions contemplated hereby or thereby, or
(b) which could reasonably be expected to have a Material Adverse Effect.
5.7 No Default. Except as may result from the commencement
of the Case and except for existing defaults under the Prepetition Credit
Agreement (without regard to waivers thereof) and the Borrower's outstanding
12% Senior Notes, neither the Borrower nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect.
No Default or Event of Default has occurred and is continuing.
5.8 Ownership of Property; Liens. Each of the Borrower and
its Subsidiaries has title in fee simple to, or a valid leasehold interest in,
all its real property, and good title to, or a valid leasehold interest in,
all its other Property, and none of such Property is subject to any Lien
40
except Permitted Liens.
5.9 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted. No material claim has
been asserted and is pending by any Person challenging or questioning the use
of any Intellectual Property or the validity or effectiveness of any
Intellectual Property, nor does the Borrower know of any valid basis for any
such claim. The use of Intellectual Property by the Borrower and its
Subsidiaries does not infringe on the rights of any Person in any material
respect.
5.10 Taxes. Each of the Borrower and each of its
Subsidiaries has filed or caused to be filed all Federal, state and other
material tax returns which are required to be filed and has paid all taxes
shown to be due and payable on said returns or on any assessments made against
it or any of its Property and all other material taxes, fees or other charges
imposed on it by any Governmental Authority (other than any the amount or
validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have
been provided on the books of the Borrower or its Subsidiaries, as the case
may be.
5.11 Federal Regulations. No part of the proceeds of any
Loans will be used for "purchasing" or "carrying" any "margin stock" within
the respective meanings of each of the quoted terms under Regulation U as now
and from time to time hereafter in effect or for any purpose which violates
the provisions of the Regulations of the Board. If requested by any Lender or
the Administrative Agent, the Borrower will furnish to the Administrative
Agent and each Lender a statement to the foregoing effect in conformity with
the requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.
5.12 Labor Matters. There are no strikes or other labor
disputes against the Borrower or any of its Subsidiaries pending or, to the
knowledge of the Borrower, threatened that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect. Hours worked
by and payment made to employees of the Borrower and its Subsidiaries have not
been in violation of the Fair Labor Standards Act or any other applicable
Requirement of Law dealing with such matters that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect. All
payments due from the Borrower or any of its Subsidiaries on account of
employee health and welfare insurance that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect if not paid
have been paid or accrued as a liability on the books of the Borrower or the
relevant Subsidiary.
5.13 ERISA. Except for the commencement of the Case and the
voluntary petition filed by the Borrower in the Bankruptcy Court for the
District of Delaware in 1995, neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made
41
or deemed made, exceed the value of the assets of such Plan allocable to such
accrued benefits by a material amount. Neither the Borrower nor any Commonly
Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan which has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any material liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding
the date on which this representation is made or deemed made. To the knowledge
of the Borrower, no such Multiemployer Plan is in Reorganization or Insolvent.
5.14 Investment Company Act; Other Regulations. No Loan
Party is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended. No Loan Party is subject to regulation under any Requirement of Law
(other than Regulation X of the Board) which limits its ability to incur
Indebtedness.
5.15 Subsidiaries. The Subsidiaries listed on Schedule 5.16
constitute all the Subsidiaries of the Borrower at the date hereof.
5.16 Use of Proceeds. The proceeds of the Revolving Credit
Loans and the Swing Line Loans, and the Letters of Credit, shall be used (i)
to finance the working capital needs of the Borrower and the Subsidiary
Guarantors in the ordinary course of business, (ii) for payment of Chapter 11
expenses, including professional fees, (iii) for general corporate purposes,
and (iv) to refinance the revolving credit and term loans, and to cash
collateralize, replace or backstop letters of credit outstanding, under the
Borrower's Prepetition Credit Agreement, in all cases subject to the terms of
this Agreement, the Final Order and the Budget.
5.17 Environmental Matters.
(a) The facilities and properties owned, leased or operated
by the Borrower or any of its Subsidiaries (the "Properties") do not contain,
and have not previously contained, any Materials of Environmental Concern in
amounts or concentrations or under circumstances which (i) constitute or
constituted a violation of, or (ii) could give rise to liability under, any
Environmental Law, except in either case insofar as such violation or
liability, or any aggregation thereof, could not reasonably be expected to
result in the payment of a Material Environmental Amount.
(b) The Properties and all operations at the Properties are
in material compliance, and have in the last five years been in material
compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business operated by
the Borrower or any of its Subsidiaries (the "Business") which could
materially interfere with the continued operation of the Properties taken as a
whole or materially impair the fair saleable value of the Properties taken as
a whole. Neither the Borrower nor any of its Subsidiaries has assumed any
liability of any other Person under Environmental Laws.
(c) Neither the Borrower nor any of its Subsidiaries has
received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability
42
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the Business, nor does the Borrower have
knowledge or reason to believe that any such notice will be received or is
being threatened, except insofar as such notice or threatened notice, or any
aggregation thereof, does not involve a matter or matters that could reasonably
be expected to result in the payment of a Material Environmental Amount.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a manner
or to a location which could give rise to liability under, any Environmental
Law, nor have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Properties in violation of,
or in a manner that could give rise to liability under, any applicable
Environmental Law, except insofar as any such violation or liability referred
to in this paragraph, or any aggregation thereof, could not reasonably be
expected to result in the payment of a Material Environmental Amount.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be named
as a party with respect to the Properties or the Business, nor are there any
consent decrees or other decrees, consent orders, administrative orders or
other orders, or other administrative or judicial requirements outstanding
under any Environmental Law with respect to the Properties or the Business,
except insofar as such proceeding, action, decree, order or other requirement,
or any aggregation thereof, could not reasonably be expected to result in the
payment of a Material Environmental Amount.
(f) There has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or arising from
or related to the operations of the Borrower or any Subsidiary in connection
with the Properties or otherwise in connection with the Business, in violation
of or in amounts or in a manner that could give rise to liability under
Environmental Laws, except insofar as any such violation or liability referred
to in this paragraph, or any aggregation thereof, could not reasonably be
expected to result in the payment of a Material Environmental Amount.
43
5.18 Accuracy of Information, etc. No statement or
information contained in this Agreement, any other Loan Document, the Plan of
Reorganization and the disclosure statement related thereto, the Confidential
Information Memorandum or any other document, certificate or statement
furnished to the Arrangers, the Agents, the Lenders, the Bankruptcy Court or
any of them, by or on behalf of any Loan Party for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents,
contained as of the date such statement, information, document or certificate
was so furnished (or, in the case of the Confidential Information Memorandum,
as of the date of this Agreement), any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances under
which such statements are made. The projections and pro forma financial
information contained in the materials referenced above are based upon good
faith estimates and assumptions believed by management of the Borrower to be
reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as
fact and that actual results during the period or periods covered by such
financial information may differ from the projected results set forth therein
by a material amount. There is no fact known to any Loan Party that could
reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, in the Confidential
Information Memorandum or in any other documents, certificates and statements
furnished to the Arrangers, the Agents, the Lenders or the Bankruptcy Court
for use in connection with the transactions contemplated hereby and by the
other Loan Documents.
5.19 Security Documents. The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Lenders, a legal, valid and enforceable security interest in
all right, title and interest of the Subsidiary Guarantors in the Collateral
described therein and proceeds thereof. In the case of the Collateral (other
than Pledged Stock) described in the Guarantee and Collateral Agreement, when
financing statements in appropriate form are filed in the offices specified on
Schedule 2 of the Guarantee and Collateral Agreement, the Guarantee and
Collateral Agreement shall constitute, as security for the Obligations (as
defined in the Guarantee and Collateral Agreement), a fully perfected Lien on,
and security interest in, all right, title and interest of the Subsidiary
Guarantors in such Collateral and the proceeds thereof, as set forth in
Section 4.3 of the Guarantee and Collateral Agreement.
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions to Initial Extension of Credit. The agreement
of each Lender to make the initial extension of credit requested to be made by
it is subject to the satisfaction, prior to or concurrently with the making of
such extension of credit on the Closing Date, of the following conditions
precedent:
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly
authorized officer of the Borrower, (ii) the Guarantee and Collateral
Agreement, executed and delivered by a duly authorized officer of
each Subsidiary Guarantor, and (iii) for the account of each relevant
Lender, Notes conforming to the requirements hereof and executed and
delivered by a duly authorized officer of the Borrower.
44
(b) Final Order. The Administrative Agent shall have
received a copy of the Final Order approving the Loan Documents and
granting the Super-Priority Claim status and Liens described in
Section 4.1 and finding that the Lenders are extending credit to the
Borrower in good faith within the meaning of Section 364(e) of the
Bankruptcy Code, which Final Order (i) shall be in form and substance
reasonably satisfactory to the Agents, (ii) shall have been entered
upon an application of the Borrower reasonably satisfactory in form
and substance to the Agents, (iii) shall be in full force and effect
and (iv) shall not have been stayed, reversed, vacated, rescinded,
modified or amended in any respect.
(c) First Day Orders. All orders submitted to the Bankruptcy
Court on or about the Petition Date shall be in form and substance
reasonably satisfactory to the Agents.
(d) Pro Forma Balance Sheet; Financial Statements. The
Lenders shall have received (i) the Pro Forma Balance Sheet and (ii)
the audited consolidated financial statements of the Borrower for the
1998 fiscal year.
(e) Related Agreements. The Administrative Agent shall have
received (in a form reasonably satisfactory to the Agents), with a
copy for each Lender, true and correct copies, certified as to
authenticity by the Borrower, of such documents or instruments as may
be reasonably requested by the Agents, including, without limitation,
a copy of any other debt instrument, security agreement or other
material contract to which the Loan Parties may be a party.
(f) Fees. The Lenders, the Arrangers and the Agents shall
have received all fees required to be paid, and all expenses for
which invoices have been presented, on or before the Closing Date.
All such amounts will be paid with proceeds of Loans made on the
Closing Date and will be reflected in the funding instructions given
by the Borrower to the Administrative Agent on or before the Closing
Date.
(g) Budget. The Agents and the Lenders shall have received
the initial Budget for the first fiscal period (or portion thereof)
of the Case and a budget covering the period from the Petition Date
through the Maturity Date and other cash flow and financial
projections that itemize on a weekly basis all revenues projected to
be received and all material expenditures proposed to be made prior
to the Maturity Date, in form and substance reasonably satisfactory
to the Agents.
(h) Lien Searches. The Administrative Agent shall have
received the results of a recent lien search in each of the
jurisdictions where assets of the Loan Parties are located, and such
search shall reveal no liens on any of the assets of the Borrower or
its Subsidiaries except for (i) Permitted Liens, and (ii) such liens
as may be reasonably satisfactory to the Agents.
(i) Certification. The Administrative Agent shall have
received a certification from the Borrower's balloting agent
evidencing the receipt of the requisite acceptances from each class
of creditors and interest holders entitled to vote on the Plan of
Reorganization in accordance with Section 1126 of the Bankruptcy
Code.
45
(j) Closing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each
Loan Party, dated the Closing Date, substantially in the form of
Exhibit D, with appropriate insertions and attachments.
(k) Legal Opinions. The Administrative Agent shall have
received the executed legal opinion of Weil, Gotshal & ▇▇▇▇▇▇ LLP,
counsel to the Borrower and its Subsidiaries, substantially in the
form of Exhibit F. Such legal opinion shall cover such other matters
incident to the transactions contemplated by this Agreement as the
Agents may reasonably require.
(l) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing
statement) required by the Security Documents or under law or
reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Agents and the Lenders,
a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than Permitted Liens),
shall be in proper form for filing, registration or recordation.
(m) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 7.5.
6.2 Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it on any
date (including, without limitation, its initial extension of credit) is
subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant
to the Loan Documents shall be true and correct in all material
respects on and as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
(c) Bankruptcy Court Approval. The Final Order shall be in
full force and effect and shall not have been stayed, reversed,
vacated, rescinded, modified or amended in any respect.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 6.2 have been satisfied.
46
SECTION 7. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Revolving
Credit Commitments remain in effect, any Letter of Credit remains outstanding
or any Loan or other amount is owing to any Lender or any Agent hereunder, the
Borrower shall and shall cause each of its Subsidiaries to:
7.1 Financial Statements. Furnish to each Agent and each
Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the
audited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such year and the related
audited consolidated statements of income and of cash flows for such
year, setting forth in each case in comparative form the figures for
the previous year, reported without a "going concern" or like
qualification or exception (other than with respect to the Case) by
Price Waterhouse LLP or other independent certified public
accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of
each fiscal year of the Borrower, the unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end
of such quarter and the related unaudited consolidated statements of
income and of cash flows for such quarter and the portion of the
fiscal year through the end of such quarter, setting forth in each
case in comparative form the figures for the previous year, certified
by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments); and
(c) as soon as available, but in any event not later than 45
days after the end of each month occurring during each fiscal year of
the Borrower (other than the third, sixth, ninth and twelfth such
month), the unaudited consolidated balance sheets of the Borrower and
its Subsidiaries as at the end of such month and the related
unaudited consolidated statements of income and of cash flows for
such month and the portion of the fiscal year through the end of such
month, setting forth in each case in comparative form the figures for
the previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year end audit
adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with
GAAP applied consistently throughout the periods reflected therein and with
prior periods (except as approved by such accountants or officer, as the case
may be, and disclosed therein).
7.2 Certificates; Other Information. Furnish to each Agent
and each Lender, or, in the case of clause (i), to the relevant Lender:
(a) concurrently with the delivery of the financial
statements referred to in Section 7.1(a), a certificate of the
independent certified public accountants reporting on such financial
statements stating that in making the examination necessary therefor no
47
knowledge was obtained of any Default or Event of Default, except as
specified in such certificate;
(b) concurrently with the delivery of any financial
statements pursuant to Section 7.1, (i) a certificate of a
Responsible Officer stating that, to the best of each such
Responsible Officer's knowledge, each Loan Party during such period
has observed or performed all of its covenants and other agreements,
and satisfied every condition, contained in this Agreement and the
other Loan Documents to which it is a party to be observed, performed
or satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in
such certificate and (ii) in the case of quarterly or annual
financial statements, (x) a Compliance Certificate containing all
information necessary for determining compliance by the Borrower and
its Subsidiaries with the provisions of this Agreement referred to
therein as of the last day of the fiscal quarter or fiscal year of
the Borrower, as the case may be, and (y) to the extent not
previously disclosed to the Administrative Agent, a listing of any
county or state within the United States where any Guarantor
Subsidiary keeps inventory or equipment and of any Intellectual
Property acquired by any Loan Party since the date of the most recent
list delivered pursuant to this clause (y) (or, in the case of the
first such list so delivered, since the Closing Date);
(c) no later than five days before the end of each fiscal
period following the Closing Date, the Budget for the succeeding
fiscal period in the form of Exhibit I or otherwise in a format
reasonably satisfactory to the Agents;
(d) no later than 20 days after the first day of each fiscal
period following the Closing Date, a variance report for the
preceding fiscal period in a form reasonably satisfactory to the
Agents;
(e) on a weekly basis, reports in a form reasonably
satisfactory to the Agents detailing the Borrower's compliance with
the then current Budget and status of the Collateral;
(f) to counsel to the Agents, promptly after the same is
available, copies of all pleadings, motions, applications, judicial
information, financial information or other documents filed on or on
behalf of the Borrower with the Bankruptcy Court or the United States
Trustee in the Case, or distributed by or on behalf of the Borrower
to any official committee appointed in the Case;
(g) within five days after the same are sent, copies of all
financial statements and reports which the Borrower sends to the
holders of any class of its debt securities or public equity
securities and, within five days after the same are filed, copies of
all financial statements and reports which the Borrower may make to,
or file with, the Securities and Exchange Commission or any successor
or analogous Governmental Authority; and
(h) promptly, such additional financial and other
information as any Lender may from time to time reasonably request.
48
7.3 Payment of Obligations. Except in accordance with the
Bankruptcy Code or by an applicable order of the Bankruptcy Court, pay,
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its material obligations of whatever
nature that constitute administrative expenses under Section 503(b) of the
Bankruptcy Code in the Case, except, so long as no material Property or assets
(other than money for such obligation and the interest or penalty accruing
thereon) of the Borrower or any of its Subsidiaries is in danger of being lost
or forfeited as a result thereof, no such obligation need be paid if the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of the Borrower or its Subsidiaries,
as the case may be.
7.4 Conduct of Business and Maintenance of Existence, etc.
(_) (a) (i) Preserve, renew and keep in full force and effect its corporate
existence and (ii) take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business, except, in each case, as otherwise permitted by Section 8.4 and
except, in the case of clause (ii) above, to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; and (_) (b)
subject to the effect of the Case, comply with all Contractual Obligations
(unless otherwise not required as a result of the Case) and Requirements of
Law except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
7.5 Maintenance of Property; Insurance. (a) Keep all
Property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted and (b) maintain with financially
sound and reputable insurance companies insurance on all its Property in at
least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption) as are usually
insured against in the same general area by companies engaged in the same or a
similar business.
7.6 Inspection of Property; Books and Records; Discussions;
Collateral Audit. (a) Keep proper books of records and account in which full,
true and correct entries in conformity with GAAP and all Requirements of Law
shall be made of all dealings and transactions in relation to its business and
activities, (b) permit representatives of any Lender to visit and inspect any
of its properties and examine and make abstracts from any of its books and
records at any reasonable time and as often as may reasonably be desired and
to discuss the business, operations, properties and financial and other
condition of the Borrower and its Subsidiaries with officers and employees of
the Borrower and its Subsidiaries and with its independent certified public
accountants and (c) permit employees, representatives and/or agents of the
Lenders, from time to time at the Administrative Agent's reasonable request,
during normal business hours, to enter into the premises of the Borrower and
its Subsidiaries to conduct an audit of the Collateral, the reasonable cost
and expense of which shall be borne by the Borrower.
7.7 Notices. Promptly give notice to the Administrative
Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
Contractual Obligation of the
49
Borrower (to the extent such Contractual Obligation has been entered
into after the Petition Date) or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental
Authority, which in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;
(c) except for the Case, any litigation or proceeding
affecting the Borrower or any of its Subsidiaries in which the amount
involved is $500,000 or more and not covered by insurance or in which
injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any
event within 30 days after the Borrower knows or has reason to know
thereof: (i) the occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal
from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the
taking of any other action by the PBGC or the Borrower or any
Commonly Controlled Entity or any Multiemployer Plan with respect to
the withdrawal from, or the termination, Reorganization or Insolvency
of, any Plan; and
(e) any development or event which has had or could
reasonably be expected to have a Material Adverse Effect, other than
changes which result solely from the Case.
Each notice pursuant to this Section 7.7 shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary
proposes to take with respect thereto.
7.8 Environmental Laws. (a) Comply in all material respects
with, and ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws, and obtain and
comply in all material respects with and maintain, and ensure that all tenants
and subtenants obtain and comply in all material respects with and maintain,
any and all licenses, approvals, notifications, registrations or permits
required by applicable Environmental Laws.
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required
under Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws.
7.9 Further Assurances. From time to time execute and
deliver, or cause to be executed and delivered, such additional instruments,
certificates or documents, and take all such actions, as the Administrative
Agent may reasonably request, for the purposes of implementing or effectuating
the provisions of this Agreement, the other Loan Documents and the Final
Order, or of more fully perfecting or renewing the rights of the
Administrative Agent and the Lenders with respect to the Collateral (or with
respect to any additions thereto or replacements or proceeds thereof or with
respect to any other property or assets hereafter acquired by the Borrower
which may be deemed to be part of the Collateral) pursuant hereto or thereto.
Upon the exercise by the Administrative Agent or any Lender of any power,
right, privilege or remedy pursuant to this Agreement, the other Loan
Documents or the Final Order which requires any
50
consent, approval, recording, qualification or authorization of any
Governmental Authority, the Borrower will execute and deliver, or will cause
the execution and delivery of, all applications, certifications, instruments
and other documents and papers that the Administrative Agent or such Lender may
be required to obtain from the Borrower or any of its Subsidiaries for such
governmental consent, approval, recording, qualification or authorization.
SECTION 8. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Revolving
Credit Commitments remain in effect, any Letter of Credit remains outstanding
or any Loan or other amount is owing to any Lender or any Agent hereunder, the
Borrower shall not, and shall not permit any of its Subsidiaries to, directly
or indirectly:
8.1 Financial Condition Covenants. If the Plan of
Reorganization shall not have been consummated on or before August 31, 1998,
permit the Consolidated Leverage Ratio to exceed, and the Consolidated
Interest Coverage Ratio to be less than, certain ratios to be agreed upon by
the Agents and the Borrower; it being understood that (i) such ratios shall be
set at approximately 80% of the Borrower's "T-2 Business Plan" and shall be
measured on a monthly basis, and (ii) such ratios shall utilize the defined
terms relative to such ratios as contained in Section 1.
8.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness of the Borrower to any Subsidiary and of
any Wholly Owned Subsidiary Guarantor to the Borrower or any other
Subsidiary; provided that any such Indebtedness shall be evidenced by
a promissory note which shall be pledged collaterally to the
Administrative Agent;
(c) Indebtedness outstanding on the date hereof and listed
on Schedule 8.2(c), but excluding the refinancing of any such
Indebtedness; and
(d) Capital Lease Obligations with respect to vehicles and
office equipment leased in the ordinary course of the Borrower's
business.
8.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its Property, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the
Borrower or its Subsidiaries, as the case may be, in conformity with
GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of
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more than 30 days or which are being contested in good faith by
appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) 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 materially interfere with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule
8.3(f), securing Indebtedness permitted by Section 8.2(c), provided
that no such Lien is spread to cover any additional Property after
the Closing Date and that the amount of Indebtedness secured thereby
is not increased;
(g) Liens created pursuant to the Loan Documents and the
Final Order, replacement Liens granted to the holders of Supplemental
Term Loans pursuant to the Cash Collateral Order, existing Liens
granted to such holders, and existing and replacement Liens granted
to the other holders of the Prepetition Obligations under the Cash
Collateral Order;
(h) any interest or title of a lessor under any lease
entered into by the Borrower or any other Subsidiary in the ordinary
course of its business and covering only the assets so leased; and
(i) with the consent of the Administrative Agent, Liens in
respect of deposits with utilities in the ordinary course of
business; provided, however, that (i) the Borrower shall use its best
efforts not to make any such deposits with utilities, (ii) the
Borrower shall use its best efforts to terminate all such deposit
arrangements and (iii) the aggregate amount of such deposits at any
time shall not exceed $4,000,000.
8.4 Limitation on Fundamental Changes. Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or Dispose of all or
substantially all of its Property or business, except that:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
Subsidiary Guarantor (provided that the Subsidiary Guarantor shall be
the continuing or surviving corporation); and
(b) any Subsidiary of the Borrower may Dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the
Borrower or any Subsidiary Guarantor.
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8.5 Limitation on Disposition of Property. Dispose of any of
its Property (including, without limitation, receivables and leasehold
interests), whether now owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to any
Person, except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 8.4(b); and
(d) the sale or issuance of any Subsidiary's Capital Stock
to the Borrower or any Subsidiary Guarantor.
8.6 Limitation on Restricted Payments. Declare or pay any
dividend (other than dividends payable solely in common stock of the Person
making such dividend) on, or make any payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of, any Capital Stock of the
Borrower or any Subsidiary, whether now or hereafter outstanding, or make any
other distribution in respect thereof, either directly or indirectly, whether
in cash or property or in obligations of the Borrower or any Subsidiary
(collectively, "Restricted Payments"), except that any Subsidiary may make
Restricted Payments to the Borrower or any Subsidiary Guarantor.
8.7 Limitation on Capital Expenditures. Make or commit to
make any Capital Expenditure except as otherwise set forth in the Budget.
8.8 Limitation on Investments. Make any advance, loan,
extension of credit (by way of guaranty or otherwise) or capital contribution
to, or purchase any Capital Stock, bonds, notes, debentures or other debt
securities of, or any assets constituting an ongoing business from, or make
any other investment in, any other Person (all of the foregoing,
"Investments"), except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) Investments arising in connection with the incurrence of
Indebtedness permitted by Section 8.2(b);
(d) loans and advances to employees of the Borrower or any
Subsidiaries of the Borrower in the ordinary course of business
(including, without limitation, for travel, entertainment and
relocation expenses) in an aggregate amount for the Borrower and
Subsidiaries of the Borrower not to exceed $500,000 at any one time
outstanding;
(e) Investments pursuant to the Loan Documents and the Final
Order;
(f) Investments (other than those relating to the incurrence
of Indebtedness permitted by Section 8.8(c)) by the Borrower or any
of its Subsidiaries in the Borrower or
53
any Person that, prior to such investment, is a Subsidiary Guarantor;
(g) Investments in existence on the date hereof listed on
Schedule 8.8(h);
(h) debt or equity securities received in connection with
the bankruptcy or reorganization of suppliers and/or customers and in
settlement of delinquent obligations of, and other disputes with,
customers and/or suppliers in the ordinary course of business; and
(i) additional Investments of a nature not contemplated
pursuant to the foregoing clauses (a) through (i); provided that all
Investments pursuant to this clause (l) shall not exceed $1,000,000
at any one time.
8.9 Limitation on Transactions with Affiliates. Enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the
Borrower or any Subsidiary Guarantor) unless such transaction is (a) otherwise
permitted under this Agreement, (b) in the ordinary course of business of the
Borrower or such Subsidiary, as the case may be, and (c) upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary, as the
case may be, than it would obtain in a comparable arm's length transaction
with a Person which is not an Affiliate.
8.10 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary.
8.11 Limitation on Changes in Fiscal Periods. Permit the
fiscal year of the Borrower to end on a day other than the Saturday closest to
the last day in March or change the Borrower's method of determining fiscal
periods.
8.12 Limitation on Negative Pledge Clauses. Enter into or
suffer to exist or become effective any agreement which prohibits or limits
the ability of the Borrower or any of its Subsidiaries to create, incur,
assume or suffer to exist any Lien upon any of its Property or revenues,
whether now owned or hereafter acquired, to secure the Obligations or, in the
case of any guarantor, its obligations under the Guarantee and Collateral
Agreement, other than (a) this Agreement and the other Loan Documents, (b) any
agreements governing any purchase money Liens or Capital Lease Obligations
otherwise permitted hereby (in which case, any prohibition or limitation shall
only be effective against the assets financed thereby) and (c) the Prepetition
Credit Agreement.
8.13 Limitation on Restrictions on Subsidiary Distributions.
Enter into or suffer to exist or become effective any consensual encumbrance
or restriction on the ability of any Subsidiary to (a) make Restricted
Payments in respect of any Capital Stock of such Subsidiary held by, or pay
any Indebtedness owed to, the Borrower or any other Subsidiary, (b) make
Investments in the Borrower or any other Subsidiary or (c) transfer any of its
assets to the Borrower or any other Subsidiary, except for such encumbrances
or restrictions existing under or
54
by reason of (i) any restrictions existing under the Loan Documents, (ii) any
restrictions with respect to a Subsidiary imposed pursuant to an agreement
which has been entered into in connection with the Disposition of all or
substantially all of the Capital Stock or assets of such Subsidiary and (iii)
any restrictions existing under the Prepetition Credit Agreement.
8.14 Limitation on Lines of Business. Enter into any
business, either directly or through any Subsidiary, except for those
businesses in which the Borrower and its Subsidiaries are engaged on the date
of this Agreement or which are reasonably related thereto.
8.15 Chapter 11 Claims; Payment of Pre-Petition Date Claims.
(a) Except for the Carve-Out, incur, create, assume, suffer to exist or permit
any other Super-Priority Claim or Lien which is pari passu with or senior to
the claims of (i) the Agents and the Lenders granted pursuant to this
Agreement and the Final Order or (ii) other than for claims referenced in
clause (a), the Prepetition Agent and the Prepetition Lenders granted pursuant
to Section 4.1 and the Final Order.
(b) Make any payments of Indebtedness relating to
pre-Petition Date obligations other than (i) as permitted under the Final
Order, (ii) as permitted by the Bankruptcy Court, including pre-petition wages
and benefits and other employee-related claims, (iii) to refinance the
Borrower's Prepetition Obligations under the Prepetition Credit Agreement
(except with respect to Prepetition Supplemental Term Loans), and (iv) as
otherwise permitted under this Agreement.
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan
or Reimbursement Obligation when due in accordance with the terms
hereof; or the Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder or
under any other Loan Document, within five days after any such
interest or other amount becomes due in accordance with the terms
hereof; or
(b) Any representation or warranty made or deemed made by
any Loan Party in any Loan Document or which is contained in any
certificate, document or financial or other statement furnished by it
at any time under or in connection with this Agreement or any such
other Loan Document shall prove to have been inaccurate in any
material respect on or as of the date made or deemed made; or
(c) Any Loan Party shall default in the observance or
performance of any agreement contained in Section 7.4(a) (with
respect to the Borrower only), Section 7.7(a) or Section 8; or
(d) Any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section 9), and such default shall continue unremedied
for a period of 30 days; or
55
(e) (i) The Case shall be dismissed or converted to a case
under Chapter 7 of the Bankruptcy Code or (ii) an order of the
Bankruptcy Court shall be entered in the Case appointing a trustee
under Chapter 11 of the Bankruptcy Code; or
(f) (i) Unless all the Lenders otherwise agree, except for
the Carve-Out, an order of the Bankruptcy Court shall be entered
granting another Super-Priority Claim or Lien pari passu with or
senior to that granted (x) to the Administrative Agent and the
Lenders pursuant to this Agreement and the Final Order, or (y) to the
Prepetition Lenders pursuant to the Final Order (other than pursuant
to clause (x) above), (ii) an order of a court of competent
jurisdiction shall be entered staying, reversing, vacating or
otherwise modifying the Final Order without the Agents' and the
Required Lenders' consent, (iii) the Prepetition Supplemental Term
Loan holders' Cash Collateral shall be used in a manner inconsistent
with the Final Order, or (iv) an order of a court of competent
jurisdiction shall be entered terminating the use of the Prepetition
Supplemental Term Loan holders' Cash Collateral; or
(g) An order of the Bankruptcy Court shall be entered in the
Case appointing an examiner having enlarged powers (beyond those set
forth under Sections 1106(a)(3) and (4) of the Bankruptcy Code) under
Section 1106(b) of the Bankruptcy Code; or
(h) The entry of an order granting relief from the automatic
stay so as to allow a third party to proceed against any asset or
assets of the Borrower or any Guarantor which have a value in excess
of $500,000 in the aggregate; or
(i) The filing of any pleading by the Borrower or any of its
Subsidiaries seeking, or otherwise consenting to, any of the matters
set forth in paragraphs (e) through (h); or
(j) The Borrower or any of its Subsidiaries files any
pleading seeking, or otherwise consenting to, (i) the invalidation,
subordination or other challenging of the Liens granted to secure the
Obligations or (ii) any relief under Section 506(c) of the Bankruptcy
Code with respect to any Property which secures the Prepetition
Obligations; or
(k) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor of
the PBGC or a Plan shall arise on the assets of the Borrower or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of
ERISA, (v) the Borrower or any Commonly Controlled Entity shall, or
in the reasonable opinion of the Required Lenders is likely to, incur
any liability in connection with a withdrawal from, or the Insolvency
or Reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Plan; and in each
case in clauses (i)
56
through (vi) above, such event or condition, together with all other
such events or conditions, if any, could, in the sole judgment of the
Required Lenders, reasonably be expected to have a Material Adverse
Effect; or
(l) One or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance as to
which the relevant insurance company has acknowledged coverage) of
$5,000,000 or more, and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within 30
days from the entry thereof; or
(m) Any of the Security Documents shall cease, for any
reason, to be in full force and effect, or any Loan Party or any
Affiliate of any Loan Party shall so assert, or any Lien created by
any of the Security Documents shall cease to be enforceable and of
the same effect and priority purported to be created thereby; or
(n) The guarantee contained in Section 2 of the Guarantee
and Collateral Agreement shall cease, for any reason, to be in full
force and effect or any Loan Party or any Affiliate of any Loan Party
shall so assert;
then, and in every such event and at any time thereafter during the
continuance of such event, and without further order of or application to the
Bankruptcy Court, the Agents may, and, at the request of the Required Lenders,
the Agents shall, by notice to the Borrower (with a copy to counsel for any
statutory committee of unsecured creditors appointed in the Case, counsel for
the Steering Committee and to the United States Trustee), take one or more of
the following actions, at the same or different times (provided, that with
respect to clause (iv) below and the enforcement of Liens or other remedies
with respect to the Collateral under clause (v) below, the Agents shall
provide the Borrower (with a copy to counsel for any statutory committee of
unsecured creditors appointed in the Case, counsel for the Steering Committee
and to the United States Trustee) with five Business Days' written notice
prior to taking the action contemplated thereby): (i) terminate forthwith the
Revolving Credit Commitments; (ii) declare the Revolving Credit Loans then
outstanding to be forthwith due and payable, whereupon the principal of the
Revolving Credit Loans, any Letter of Credit outstandings constituting then
drawn and unreimbursed Letters of Credit, together with accrued interest
thereon and any unpaid accrued fees and all other Obligations of the Borrower
accrued hereunder and under any other Loan Document, shall become forthwith
due and payable, without presentment, demand, protest or any other notice of
any kind, all of which are hereby expressly waived by the Borrower, anything
contained herein or in any other Loan Document to the contrary
notwithstanding; (iii) require the Borrower upon demand to forthwith deposit
in the L/C Cash Collateral Account cash in an amount equal to 105% of the face
amount of each outstanding and undrawn Letter of Credit and, to the extent the
Borrower shall fail to furnish such funds as demanded by the Agents, the
Administrative Agent shall be authorized to debit the accounts of the Borrower
maintained with the Administrative Agent in such amount for the deposit of
such amounts in the L/C Cash Collateral Account; (iv) set-off amounts in the
L/C Cash Collateral Account or any other accounts of the Borrower and apply
such amounts to the Obligations of the Borrower hereunder and under the other
Loan Documents; and (v) exercise any and all remedies under this Agreement,
the Final Order, and applicable law available to the Agents and the Lenders.
After all such Letters of Credit shall have expired or been fully drawn upon,
all Reimbursement Obligations shall have been satisfied and all other
obligations of the Borrower hereunder and
57
under the other Loan Documents shall have been paid in full, the balance, if
any, in such L/C Cash Collateral Account shall be returned to the Borrower (or
such other Person as may be lawfully entitled thereto).
SECTION 10. THE AGENTS
10.1 Appointment. Each Lender hereby irrevocably designates
and appoints the Agents as the agents of such Lender under this Agreement and
the other Loan Documents, and each such Lender irrevocably authorizes each
Agent, in such capacity, to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to the such Agent by
the terms of this Agreement and the other Loan Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, no Agent shall have any
duties or responsibilities, except those expressly set forth herein, or 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 any Agent.
10.2 Delegation of Duties. Each Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it
with reasonable care.
10.3 Exculpatory Provisions. Neither any Agent nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by any Loan Party or
any officer thereof contained in this Agreement or any other Loan Document or
in any certificate, report, statement or other document referred to or
provided for in, or received by the Agents under or in connection with, this
Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or for any failure of any Loan Party a party thereto
to perform its obligations hereunder or thereunder. The Agents shall not be
under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party.
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10.4 Reliance by Administrative Agent. Each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Loan Parties), independent accountants and other experts selected by the
Administrative Agent. The Agents may deem and treat the payee of any Note as
the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Administrative
Agent. Each Agent 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 Required Lenders (or, if so
specified by this Agreement, all Lenders) as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and
the other Loan Documents in accordance with a request of the Required Lenders
(or, if so specified by this Agreement, all Lenders), and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Loans.
10.5 Notice of Default. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, 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 reasonably
directed by the Required Lenders (or, if so specified by this Agreement, all
Lenders); provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
10.6 Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereinafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations,
property, financial and other condition and creditworthiness of the Loan
Parties and their affiliates and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Loan Parties and their affiliates. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the
59
Administrative Agent hereunder, no Agent shall have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, property, condition (financial or otherwise), prospects
or creditworthiness of any Loan Party or any affiliate of a Loan Party which
may come into the possession of such Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
10.7 Indemnification. The Lenders agree to indemnify each
Agent in its capacity as such (to the extent not reimbursed by the Borrower
and without limiting the obligation of the Borrower to do so), ratably
according to their respective Aggregate Exposure Percentages in effect on the
date on which indemnification is sought under this Section 10.7 (or, if
indemnification is sought after the date upon which the Revolving Credit
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with such Aggregate Exposure Percentages immediately
prior to such date), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Loans) be imposed on,
incurred by or asserted against such Agent in any way relating to or arising
out of, the Revolving Credit Commitments, this Agreement, any of the other
Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by such Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements which are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from such Agent's gross negligence or willful misconduct. The agreements in
this Section 10.7 shall survive the payment of the Loans and all other amounts
payable hereunder.
10.8 Agent in Its Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent was not an Agent.
With respect to its Loans made or renewed by it and with respect to any Letter
of Credit issued or participated in by it, each Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not an Agent, and the terms
"Lender" and "Lenders" shall include each Agent in its individual capacity.
10.9 Successor Administrative Agent. The Administrative
Agent may resign as Administrative Agent upon 10 days' notice to the Lenders
and the Borrower. If the Administrative Agent shall resign as Administrative
Agent under this Agreement and the other Loan Documents, then the Required
Lenders shall appoint from among the Lenders a successor agent for the
Lenders, which successor agent shall (unless an Event of Default under Section
9(a) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor
agent has accepted appointment as Administrative Agent by the date that is 10
days following a retiring Administrative Agent's notice of resignation, the
retiring
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Administrative Agent's resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. The Syndication Agent may, at
any time, by notice to the Lenders and the Administrative Agent, resign as
Syndication Agent hereunder, whereupon the duties, rights, obligations and
responsibilities hereunder shall automatically be assumed by, and inure to the
benefit of, the Administrative Agent, without any further act by the
Syndication Agent, the Administrative Agent or any Lender. After any retiring
Agent's resignation as Agent, the provisions of this Section 10 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement and the other Loan Documents.
10.10 Authorization to Release Liens. The Administrative
Agent is hereby irrevocably authorized by each of the Lenders to release any
Lien covering any Property of the Borrower or any of its Subsidiaries that is
the subject of a Disposition which is permitted by this Agreement or which has
been consented to in accordance with Section 12.1.
10.11 The Arrangers. The Arrangers, in their capacity as
such, shall have no duties or responsibilities, and shall incur no liability,
under this Agreement and the other Loan Documents.
SECTION 11. REMEDIES; APPLICATION OF PROCEEDS
11.1 Remedies; Obtaining the Collateral Upon Default. Upon
the occurrence and during the continuance of an Event of Default, to the
extent any such action is not inconsistent with the Final Order and Section 9,
the Agents, in addition to any rights now or hereafter existing under
applicable law, and without application to or order of the Bankruptcy Court,
shall have all rights as a secured creditor under the Uniform Commercial Code
in all relevant jurisdictions and may:
(a) personally, or by agents or attorneys, immediately
retake possession of the Collateral or any part thereof, from the
Borrower or any other Person who then has possession of any part
thereof with or without notice or process of law (but subject to any
Requirements of Law), and for that purpose may enter upon the
Borrower's premises where any of the Collateral is located and remove
the same and use in connection with such removal any and all
services, supplies, aids and other facilities of the Borrower;
(b) instruct the obligor or obligors on any agreements,
instrument or other obligation constituting the Collateral to make
any payment required by the terms of such instrument or agreement
directly to the L/C Cash Collateral Account;
(c) withdraw all monies, securities and instruments in the
L/C Cash Collateral Account for application to the Obligations;
(d) sell, assign or otherwise liquidate, or direct the
Borrower to sell, assign or otherwise liquidate, any or all of the
Collateral or any part thereof, and take possession of the proceeds
of any such sale or liquidation;
(e) take possession of the Collateral or any part thereof,
by directing the
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Borrower in writing to deliver the same to the Agents at any place or
places designated by the Agents, in which event the Borrower shall at
its own expense:
(i) forthwith cause the same to be moved to the
place or places so designated by the Agents and there
delivered to the Agents,
(ii) store and keep any Collateral so delivered
to the Agents at such place or places pending further action
by the Agents as provided in Section 10.2, and
(iii) while the Collateral shall be so stored
and kept, provide such guards and maintenance services as
shall be necessary to protect the same and to preserve and
maintain them in good condition;
it being understood that the Borrower's obligation so to deliver the
Collateral is of the essence of this Agreement and that, accordingly, upon
application to the Bankruptcy Court, the Agents shall be entitled to a decree
requiring specific performance by the Borrower of such obligation.
11.2 Remedies; Disposition of the Collateral. Upon the
occurrence and during the continuance of an Event of Default, and to the
extent not inconsistent with the Final Order and Section 9, without
application to or order of the Bankruptcy Court, any Collateral repossessed by
the Agents under or pursuant to Section 11.1 or the Final Order or otherwise,
and any other Collateral whether or not so repossessed by the Agents, may be
sold, assigned, leased or otherwise disposed of under one or more contracts or
as an entirety, and without the necessity of gathering at the place of sale
the property to be sold, and in general in such manner, at such time or times,
at such place or places and on such terms as the Agents may, in compliance
with any Requirements of Law, determine to be commercially reasonable. Any of
the Collateral may be sold, leased or otherwise disposed of, in the condition
in which the same existed when taken by the Agents or after any overhaul or
repair which the Agents shall determine to be commercially reasonable. Any
such disposition which shall be a private sale or other private proceeding
permitted by applicable Requirements of Law shall be made upon not less than
10 days' written notice to the Borrower specifying the time at which such
disposition is to be made and the intended sale price or other consideration
therefor, and shall be subject, for the 10 days after the giving of such
notice, to the right of the Borrower or any nominee of the Borrower to acquire
the Collateral involved at a price or for such other consideration at least
equal to the intended sale price or other consideration so specified. Any such
disposition which shall be a public sale permitted by applicable Requirements
of Law shall be made upon not less than 10 days' written notice to the
Borrower specifying the time and place of such sale and, in the absence of
applicable Requirement of Law, shall be by public auction (which may, at the
Agents' option, be subject to reserve), after publication of notice of such
auction not less than 10 days prior thereto in two newspapers in general
circulation in New York City and Wayne, New Jersey. Subject to Section 11.4,
to the extent permitted by any such Requirement of Law, the Agents on behalf
of the Lenders may bid for and become the purchaser of the Collateral or any
item thereof, offered for sale in accordance with this subsection 11.2 without
accountability to the Borrower or the Prepetition Lenders (except to the
extent of surplus money received). If, under mandatory Requirements of Law,
the Agents shall be required to make disposition of the Collateral within a
period of time which does not permit the giving of notice to the Borrower as
hereinabove specified, the Agents need give the Borrower only such notice of
disposition as shall be
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reasonably practicable.
11.3 Application of Proceeds. (a) Notwithstanding anything
to the contrary contained in this Agreement or any other Loan Document, (i) if
the Agents take action under clause (i) or (ii) of Section 9 upon the
occurrence and during the continuance of an Event of Default, any payment by
the Borrower on account of principal of and interest on the Loans and any
proceeds arising out of any realization (including after foreclosure) upon the
Collateral shall be applied, subject to the Carve-Out, as follows: first, to
the payment in full of all costs and expenses (including without limitation,
reasonable attorneys' fees and disbursements) paid or incurred by the Agents
or any of the Lenders in connection with any such realization upon the
Collateral, second, as a permanent reduction of the Revolving Credit
Commitments, pro rata to the payment in full of the Revolving Credit Loans
(including any accrued and unpaid interest thereon, and any fees and other
Obligations in respect thereof), third, as a permanent reduction of the
Revolving Credit Commitments, to the payment in full of the Swing Line Loans
(including any accrued and unpaid interest thereon, and any fees and other
Obligations in respect thereof), fourth, as a permanent reduction of the
Revolving Credit Commitments, to the payment in full of Letter of Credit
outstandings constituting unreimbursed drawings under any Letter of Credit,
fifth, as a permanent reduction of the Revolving Credit Commitments, to cash
collateralize Letters of Credit in an amount equal to 105% of the aggregate
amount of all Letter of Credit outstandings constituting undrawn Letters of
Credit in the manner set forth in Section 3.1(b), and sixth, to the payment in
full of the Prepetition Obligations, and (ii) any payments or distributions of
any kind or character, whether in cash, property or securities, made by the
Borrower or otherwise in a manner inconsistent with clause (i) of this Section
11.3(a) shall be held in trust and paid over or delivered to the
Administrative Agent so that the priorities and requirements set forth in such
clause (i) are satisfied.
(b) It is understood that the Borrower shall remain liable
to the extent of any deficiency between the amount of the proceeds of the
Collateral and the amount of the Obligations.
11.4 WAIVER OF CLAIMS. EXCEPT AS OTHERWISE PROVIDED IN THIS
AGREEMENT, THE BORROWER HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE AGENTS' TAKING
POSSESSION OR THE AGENTS' DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING,
WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT
REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH THE BORROWER WOULD OTHERWISE HAVE
UNDER ANY REQUIREMENT OF LAW AND THE BORROWER HEREBY FURTHER WAIVES, TO THE
EXTENT PERMITTED BY LAW:
(a) all damages occasioned by such taking of possession
except any damages which are the direct result of the Agent's or any
Lender's gross negligence or wilful misconduct;
(b) all other requirement to the time, place and terms of
sale or other requirements with respect to the enforcement of the
Agent's rights hereunder; and
(c) all rights of redemption, appraisement, valuation, stay,
extension or
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moratorium now or hereafter in force under any applicable law in order
to prevent or delay the enforcement of this Agreement or the absolute
sale of the Collateral or any portion thereof, and the Borrower, for
itself and all who may claim under it, insofar as it now or hereafter
lawfully may, hereby waives the benefit of all such laws.
11.5 Remedies Cumulative. Each and every right, power and
remedy hereby specifically given to the Agents shall be in addition to every
other right, power and remedy specifically given under this Agreement, the
Final Order or the other Loan Documents or now or hereafter existing at law or
in equity, or by statute and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from time to
time or simultaneously and as often and in such order as may be deemed
expedient by the Agents. All such rights, powers and remedies shall be
cumulative and the exercise or the beginning of exercise of one shall not be
deemed a waiver of the right to exercise of any other or others. No delay or
omission of the Agents in the exercise of any such right, power or remedy and
no renewal or extension of any of the Obligations shall impair any such right,
power or remedy or shall be construed to be a waiver of any Default or Event
of Default or an acquiescence therein. In the event that the Agents shall
bring any suit to enforce any of their rights hereunder and shall be entitled
to judgment, then in such suit the Agents may recover reasonable expenses,
including attorney's fees, and the amounts thereof shall be included in such
judgment.
11.6 Discontinuance of Proceedings. In case the Agents shall
have instituted any proceeding to enforce any right, power or remedy under
this Agreement by foreclosure, sale, entry or otherwise, and such proceeding
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Agents, then and in every such case the Borrower,
the Agents and each holder of any of the Obligations shall be restored to
their former positions and rights hereunder with respect to the Collateral
subject to the security interest created under this Agreement, and all rights,
remedies and powers of the Agents and the Lenders shall continue as if no such
proceeding had been instituted.
SECTION 12. MISCELLANEOUS
12.1 Amendments and Waivers. Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 12.1. The Required Lenders and each Loan Party to the relevant Loan
Document may, or (with the written consent of the Required Lenders) the Agents
and each Loan Party to the relevant Loan Document may, from time to time, (a)
enter into written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on
such terms and conditions as the Required Lenders, or the Agents, as the case
may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and
its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall (i) forgive the principal amount
or extend the final scheduled date of maturity of any Loan, reduce the stated
rate of any interest or fee payable hereunder or extend the scheduled date of
any payment thereof, or increase the amount or extend the expiration date of
any Revolving Credit Commitment or modify the Super-Priority Claim status of
any Lender, in each case without the consent of each
64
Lender directly affected thereby; (ii) amend, modify or waive any provision of
this Section 12.1 or reduce any percentage specified in the definition of
Required Lenders, consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement and the other Loan
Documents, release all or substantially all of the Collateral or release all or
substantially all of the Subsidiary Guarantors from their obligations under the
Guarantee and Collateral Agreement, in each case without the consent of all
Lenders; (iii) amend, modify or waive any condition precedent to any extension
of credit under the Revolving Credit Facility set forth in Section 6.2
(including, without limitation, in connection with any waiver of an existing
Default or Event of Default) without the consent of the Required Lenders; (iv)
amend, modify or waive any provision of Section 10 without the consent of the
Agents; (v) amend, modify or waive any provision of Section 2.3 or 2.4 without
the written consent of the Swing Line Lender; (vi) amend, modify or waive any
provision of Section 2.15 without the consent of each Lender directly affected
thereby; or (vii) amend, modify or waive any provision of Section 3 without the
consent of the Issuing Lender. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Loan Parties, the Lenders, the Agents and all future
holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders
and the Agents shall be restored to their former position and rights hereunder
and under the other Loan Documents, and any Default or Event of Default waived
shall be deemed to be cured and not continuing; but no such waiver shall extend
to any subsequent or other Default or Event of Default, or impair any right
consequent thereon. Any such waiver, amendment, supplement or modification
shall be effected by a written instrument signed by the parties required to
sign pursuant to the foregoing provisions of this Section 12.1; provided, that
delivery of an executed signature page of any such instrument by facsimile
transmission shall be effective as delivery of a manually executed counterpart
thereof.
12.2 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including
by telecopy), and, unless otherwise expressly provided herein, shall be deemed
to have been duly given or made when delivered, or three Business Days after
being deposited in the mail, postage prepaid, or, in the case of telecopy
notice, when received, addressed (a) in the case of the Borrower, the
Syndication Agent and the Administrative Agent, as follows and (b) in the case
of the Lenders, as set forth on Schedule 1.1 or, in the case of a Lender which
becomes a party to this Agreement pursuant to an Assignment and Acceptance, in
such Assignment and Acceptance or (c) in the case of any party, to such other
address as such party may hereafter notify to the other parties hereto:
The Borrower: The Grand Union Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
65
The Administrative Agent: ▇▇▇▇▇▇ Commercial Paper Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Trust, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Syndication Agent: Swiss Bank Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
Stamford, Conn. 06912
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Trust, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the either Agent or any
Lender shall not be effective until received.
12.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Agents or any Lender, any
right, remedy, power or privilege hereunder under the other Loan Documents or
the Final Order 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. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
12.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
12.5 Payment of Expenses. The Borrower agrees (a) to pay or
reimburse the Agents for all their reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to,
66
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of
the transactions contemplated hereby and thereby, including, without
limitation, the reasonable fees and disbursements of counsel to the Agents, (b)
to pay or reimburse each Lender and the Agents for all their costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, the other Loan Documents and any such other documents,
including, without limitation, the fees and disbursements of counsel (including
the allocated fees and expenses of in-house counsel), consultants and other
experts to each Lender and of counsel to the Agents (including the on-going
monitoring by the Agents of the Case, including attendance by the Agents and
the Agents' counsel at hearings or other proceedings and the on-going review of
documents filed with the Bankruptcy Court), (c) to pay, indemnify, and hold
each Lender and the Agents harmless from, any and all recording and filing fees
and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the Agents and
their respective officers, directors, employees, affiliates, agents and
controlling persons (each, an "Indemnitee") harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance
and administration of this Agreement, the other Loan Documents and any such
other documents, including, without limitation, any of the foregoing relating
to the use of proceeds of the Loans or the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of the
Borrower any of its Subsidiaries or any of the Properties (all the foregoing in
this clause (d), collectively, the "Indemnified Liabilities"), provided, that
the Borrower shall have no obligation hereunder to any Indemnitee with respect
to Indemnified Liabilities to the extent such Indemnified Liabilities are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of such
Indemnitee. Without limiting the foregoing, and to the extent permitted by
applicable law, the Borrower agrees not to assert and to cause its Subsidiaries
not to assert, and hereby waives and agrees to cause its Subsidiaries so to
waive, all rights for contribution or any other rights of recovery with respect
to all claims, demands, penalties, fines, liabilities, settlements, damages,
costs and expenses of whatever kind or nature, under or related to
Environmental Laws, that any of them might have by statute or otherwise against
any indemnitee. The agreements in this Section 12.5 shall survive repayment of
the Loans and all other amounts payable hereunder.
12.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agents, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of the Agents and each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a "Participant") participating
interests in any Loan owing to such Lender, any Revolving Credit Commitment of
such Lender or any other interest of such Lender hereunder and under the other
67
Loan Documents. In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under this Agreement to
the other parties to this Agreement shall remain unchanged, such Lender shall
remain solely responsible for the performance thereof, such Lender shall
remain the holder of any such Loan for all purposes under this Agreement and
the other Loan Documents, and the Borrower and the Agents shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Loan Documents. In
no event shall any Participant under any such participation have any right to
approve any amendment or waiver of any provision of any Loan Document, or any
consent to any departure by any Loan Party therefrom, except to the extent
that such amendment, waiver or consent would reduce the principal of, or
interest on, the Loans or any fees payable hereunder, or postpone the date of
the final maturity of the Loans, in each case to the extent subject to such
participation. The Borrower agrees that if amounts outstanding under this
Agreement and the Loans are due or unpaid, or shall have been declared or
shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall, to the maximum extent permitted by applicable law, be
deemed to have the right of setoff 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, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 12.7(a) as fully as if it were a
Lender hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of Sections 2.16, 2.17 and 2.18 with respect to its
participation in the Revolving Credit Commitments and the Loans outstanding
from time to time as if it was a Lender; provided, that no Participant shall
be entitled to receive any greater amount pursuant to any such Section than
the transferor Lender would have been entitled to receive in respect of the
amount of the participation transferred by such transferor Lender to such
Participant had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with
applicable law, at any time and from time to time assign to any Lender or any
Affiliate thereof or, with the consent of the Borrower, the Agents and the
Issuing Lender, which, in each case, shall not be unreasonably withheld or
delayed, to a bank, financial institution or other entity (an "Assignee") all
or any part of its rights and obligations under this Agreement pursuant to an
Assignment and Acceptance, substantially in the form of Exhibit E, executed by
such Assignee and such Assignor and delivered to the Administrative Agent for
its acceptance and recording in the Register; provided that no such assignment
to an Assignee shall be in an aggregate principal amount of less than
$2,000,000 (other than in the case of an assignment of all of a Lender's
interests under this Agreement). Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with a Revolving Credit Commitment
and/or Loans as set forth therein, and (y) the Assignor thereunder shall, to
the extent provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of an Assignor's rights and obligations under this
Agreement, such Assignor shall cease to be a party hereto). Notwithstanding
any provision of this Section 12.6, the consent of the Borrower shall not be
required for any assignment which occurs at any time when any Event of Default
shall have occurred and be continuing.
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(d) The Administrative Agent shall maintain at its address
referred to in Section 12.2 a copy of each Assignment and Acceptance delivered
to it and a register (the "Register") for the recordation of the names and
addresses of the Lenders and the Revolving Credit Commitment of, and principal
amount of the Loans owing to, each Lender from time to time. The entries in
the Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agents and the Lenders shall treat each Person whose name is
recorded in the Register as the owner of the Loans and any Notes evidencing
such Loans recorded therein for all purposes of this Agreement. Any assignment
of any Loan, whether or not evidenced by a Note, shall be effective only upon
appropriate entries with respect thereto being made in the Register (and each
Note shall expressly so provide). Any assignment or transfer of all or part of
a Loan evidenced by a Note shall be registered on the Register only upon
surrender for registration of assignment or transfer of the Note evidencing
such Loan, accompanied by a duly executed Assignment and Acceptance; thereupon
one or more new Notes in the same aggregate principal amount shall be issued
to the designated Assignee, and the old Notes shall be returned by the
Administrative Agent to the Borrower marked "cancelled". The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an Assignor and an Assignee (and, in any case where the consent of
any other Person is required by Section 12.6(c), by each such other Person)
together with payment to the Administrative Agent of a registration and
processing fee of $3,500 (except that no such registration and processing fee
shall be payable (y) in connection with an assignment involving ▇▇▇▇▇▇
Commercial Paper Inc. or Swiss Bank Corporation or (z) in the case of an
Assignee which is already a Lender or is an affiliate of a Lender or a Person
under common management with a Lender), the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) on the effective date
determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Lenders and
the Borrower. On or prior to such effective date, the Borrower, at its own
expense, upon request, shall execute and deliver to the Administrative Agent
(in exchange for the Note of the assigning Lender) a new Note to the order of
such Assignee in an amount equal to the Revolving Credit Commitment assumed or
acquired by it pursuant to such Assignment and Acceptance and, if the Assignor
has retained a Revolving Credit Commitment, upon request, a new Note to the
order of the Assignor in an amount equal to the Revolving Credit Commitment
retained by it hereunder. Such new Note or Notes shall be dated the Closing
Date and shall otherwise be in the form of the Note or Notes replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 12.6 concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions
do not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
12.7 Adjustments; Set-off. (a) Except to the extent that
this Agreement provides for payments to be allocated to a particular Lender,
if any Lender (a "Benefitted Lender") shall at any time receive any payment of
all or part of the Obligations owing to it, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off, or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender's
Obligations, such Benefitted Lender shall purchase for cash from
69
the other Lenders a participating interest in such portion of each such other
Lender's Obligations, or shall provide such other Lenders with the benefits of
any such collateral, as shall be necessary to cause such Benefitted Lender to
share the excess payment or benefits of such collateral ratably with each of
the Lenders; provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such Benefitted Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest.
(b) Subject to (i) the Carve-Out and (ii) the giving of the
notice as described in Section 9, notwithstanding the provisions of Section
362 of the Bankruptcy Code and any other rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and
all deposits (general or special, time or demand, provisional or final), in
any currency, and any other credits, indebtedness or claims, in any currency,
in each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower, as the case may
be. Each Lender agrees promptly to notify the Borrower and the Administrative
Agent after any such setoff and application made by such Lender, provided that
the failure to give such notice shall not affect the validity of such setoff
and application.
12.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
12.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
12.10 Integration. This Agreement and the other Loan
Documents represent the agreement of the Borrower, the Administrative Agent
and the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof not expressly set forth
or referred to herein or in the other Loan Documents.
12.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
AND, TO THE EXTENT APPLICABLE, THE BANKRUPTCY CODE.
12.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably
70
and unconditionally:
(a) submits for itself and its Property in any legal action
or proceeding relating to this Agreement and the other Loan Documents
to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general
jurisdiction of the Bankruptcy Court and, if the Bankruptcy Court
does not have (or abstains from) jurisdiction, to the non-exclusive
general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of
New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower, as the case may be at its address set forth
in Section 12.2 or at such other address of which the Administrative
Agents shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this Section 12.12 any special, exemplary,
punitive or consequential damages.
12.13 Acknowledgements. The Borrower hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan
Documents;
(b) neither the Agents nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents,
and the relationship between the Agents and Lenders, on one hand, and
the Borrower, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
12.14 Absence of Prejudice with Respect to Matters Before
the Bankruptcy Court. The Borrower acknowledges that the Bankruptcy Code and
Bankruptcy Rules require it to seek Bankruptcy Court authorization for certain
matters that may also be addressed in this Agreement. The Borrower will not
mention in any pleading or argument before the Bankruptcy
71
Court in support of, or in any way relating to, a position that Bankruptcy
Court authorization should be granted on the ground that such authorization is
permitted by this Agreement (unless a Person opposing any such pleading or
argument relies on this Agreement to assert or question the propriety of such).
12.15 Confidentiality. Each of the Agents and the Lenders
agrees to keep confidential all non-public information provided to it by any
Loan Party pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent any Agent or any
Lender from disclosing any such information (a) to any other Agent, any other
Lender or any affiliate of any Lender, (b) to any Participant or Assignee
(each, a "Transferee") or prospective Transferee which agrees to comply with
the provisions of this Section 12.15, (c) any of its employees, directors,
agents, attorneys, accountants and other professional advisors, (d) upon the
request or demand of any Governmental Authority having jurisdiction over it,
(e) in response to any order of any court or other Governmental Authority or
as may otherwise be required pursuant to any Requirement of Law, (f) if
requested or required to do so in connection with any litigation or similar
proceeding, (g) which has been publicly disclosed other than in breach of this
Section 12.15, (h) to the National Association of Insurance Commissioners or
any similar organization or any nationally recognized rating agency that
requires access to information about a Lender's investment portfolio in
connection with ratings issued with respect to such Lender or (i) in
connection with the exercise of any remedy hereunder or under any other Loan
Document.
12.16 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
72
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.
THE GRAND UNION COMPANY
By:
----------------------------------
Name:
Title:
▇▇▇▇▇▇ BROTHERS INC.,
as Co-Arranger
By:
----------------------------------
Name:
Title:
▇▇▇▇▇▇ COMMERCIAL PAPER INC., as
Administrative Agent and as a Lender
By:
----------------------------------
Name:
Title:
SBC WARBURG DILLON READ INC., as
Co-Arranger
By:
----------------------------------
Name:
Title:
SWISS BANK CORPORATION, STAMFORD
BRANCH, as Syndication Agent and as a
Lender
By:
----------------------------------
Name:
Title:
73
SWISS BANK CORPORATION, STAMFORD
BRANCH, as Syndication Agent and as a
Lender
By:
----------------------------------
Name:
Title:
EXHIBIT 10.41
GUARANTEE AND COLLATERAL AGREEMENT
made by
GRAND UNION STORES, INC. OF VERMONT
GRAND UNION STORES OF NEW HAMPSHIRE, INC.,
MERCHANDISING SERVICES, INC., and
SPECIALTY MERCHANDISING SERVICES, INC.
in favor of
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Administrative Agent
Dated as of June 24, 1998
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINED TERMS.......................................................... 1
1.1 Definitions.......................................................... 1
1.2 Other Definitional Provisions........................................ 5
SECTION 2. GUARANTEE.............................................................. 5
2.1 Guarantee............................................................ 5
2.2 Right of Contribution................................................ 6
2.3 No Subrogation....................................................... 6
2.4 Amendments, etc. with respect to the Borrower Obligations............ 7
2.5 Guarantee Absolute and Unconditional................................. 7
2.6 Reinstatement........................................................ 8
2.7 Payments............................................................. 8
SECTION 3. GRANT OF SECURITY INTEREST............................................. 8
3.1 Collateral........................................................... 8
3.2 Grant of Security Interest........................................... 9
SECTION 4. REPRESENTATIONS AND WARRANTIES......................................... 9
4.1 Representations in Credit Agreement.................................. 9
4.2 Title; No Other Liens................................................ 10
4.3 Perfected Liens...................................................... 10
4.4 Chief Executive Office............................................... 10
4.5 Inventory and Equipment.............................................. 10
4.6 Farm Products........................................................ 10
4.7 Receivables.......................................................... 10
4.8 Contracts............................................................ 11
4.9 Intellectual Property................................................ 11
SECTION 5. COVENANTS.............................................................. 12
5.1 Covenants in Credit Agreement....................................... 12
5.2 Delivery of Instruments and Chattel Paper........................... 12
5.3 Maintenance of Insurance............................................ 12
5.4 Payment of Obligations.............................................. 13
5.5 Maintenance of Perfected Security Interest; Further Documentation... 13
5.6 Changes in Locations, Name, etc..................................... 13
5.7 Notices............................................................. 14
5.8 Pledged Securities.................................................. 14
5.9 Receivables......................................................... 15
5.10 Contracts........................................................... 15
i
Page
----
5.11 Intellectual Property............................................... 15
5.12 Vehicles............................................................ 17
SECTION 6. REMEDIAL PROVISIONS.................................................... 17
6.1 Certain Matters Relating to Receivables.............................. 17
6.2 Communications with Obligors; Guarantors Remain Liable............... 18
6.3 Pledged Stock........................................................ 18
6.4 Proceeds to be Turned Over To Administrative Agent................... 19
6.5 Application of Proceeds.............................................. 20
6.6 Code and Other Remedies.............................................. 20
6.7 Registration Rights.................................................. 21
6.8 Waiver; Deficiency................................................... 22
SECTION 7. THE ADMINISTRATIVE AGENT............................................... 22
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc.......... 22
7.2 Duty of Administrative Agent......................................... 24
7.3 Execution of Financing Statements.................................... 24
7.4 Authority of Administrative Agent.................................... 24
SECTION 8. MISCELLANEOUS.......................................................... 25
8.1 Amendments in Writing............................................... 25
8.2 Notices............................................................. 25
8.3 No Waiver by Course of Conduct; Cumulative Remedies................. 25
8.4 Enforcement Expenses; Indemnification............................... 25
8.5 Successors and Assigns.............................................. 26
8.6 Set-Off............................................................. 26
8.7 Counterparts........................................................ 26
8.8 Severability........................................................ 26
8.9 Section Headings.................................................... 27
8.10 Integration......................................................... 27
8.11 GOVERNING LAW....................................................... 27
8.12 Submission To Jurisdiction; Waivers................................. 27
8.13 Acknowledgements.................................................... 28
8.14 Additional Guarantors............................................... 28
8.15 Releases............................................................ 28
8.16 WAIVERS OF JURY TRIAL............................................... 29
ii
GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of June 24,
1998, made by each of the signatories hereto (together with any other entity
that may become a party hereto as provided herein, the "Guarantors"), in favor
of ▇▇▇▇▇▇ Commercial Paper Inc., as administrative agent (in such capacity,
the "Administrative Agent") for the banks and other financial institutions
(the "Lenders") from time to time parties to the Revolving Credit Agreement,
dated as of June 24, 1998 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among The Grand Union Company (the
"Borrower"), the Lenders, SBC Warburg Dillon Read Inc., as co-advisor and
co-arranger, Swiss Bank Corporation, Stamford Branch, as Syndication Agent,
▇▇▇▇▇▇ Brothers Inc., as co-advisor and co-arranger, and the Administrative
Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower upon the terms
and subject to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of
companies that includes each Guarantor;
WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Borrower to make valuable
transfers to one or more of the Guarantors in connection with the operation of
their respective businesses;
WHEREAS, the Borrower and the Guarantors are engaged in
related businesses, and each Guarantor will derive substantial direct and
indirect benefit from the making of the extensions of credit under the Credit
Agreement; and
WHEREAS, it is a condition precedent to the obligation of
the Lenders to make their respective extensions of credit to the Borrower
under the Credit Agreement that the Guarantors shall have executed and
delivered this Agreement to the Administrative Agent for the ratable benefit
of the Lenders;
NOW, THEREFORE, in consideration of the premises and to
induce the Agents and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the
Borrower thereunder, each Guarantor hereby agrees with the Administrative
Agent, for the ratable benefit of the Agents and the Lenders, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement, and the following terms which are defined in
the Uniform Commercial Code in effect in the State of New York on the date
hereof are used herein as so defined: Accounts, Chattel Paper,
2
Documents, Equipment, Farm Products, Instruments, Inventory and Investment
Property.
(b) The following terms shall have the following meanings:
"Agreement": this Guarantee and Collateral Agreement, as the
same may be amended, supplemented or otherwise modified from time to
time.
"Borrower Obligations": the collective reference to the
unpaid principal of and interest on the Loans and Reimbursement
Obligations and all other obligations and liabilities of the Borrower
(including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity
of the Loans and Reimbursement Obligations to the Agents or any
Lender (or, in the case of any Hedge Agreement, any Affiliate of any
Lender), whether direct or indirect, absolute or contingent, due or
to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, the Credit Agreement, this
Agreement, the other Loan Documents, any Letter of Credit or any
Hedge Agreement entered into by the Borrower with any Lender (or any
Affiliate of any Lender) or any other document made, delivered or
given in connection therewith, in each case whether on account of
principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees
and disbursements of counsel to the Agents or to the Lenders that are
required to be paid by the Borrower pursuant to the terms of any of
the foregoing agreements).
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by
the Administrative Agent as provided in Section 6.1 or 6.4.
"Contracts": the contracts and agreements in effect as of
the date hereof, as the same may be amended, supplemented or
otherwise modified from time to time, including, without limitation,
(i) all rights of any Guarantor to receive moneys due and to become
due to it thereunder or in connection therewith, (ii) all rights of
any Guarantor to damages arising thereunder and (iii) all rights of
any Guarantor to perform and to exercise all remedies thereunder.
"Copyrights": (i) all copyrights arising under the laws of
the United States, any other country or any political subdivision
thereof, whether registered or unregistered and whether published or
unpublished, all registrations and recordings thereof, and all
applications in connection therewith, including, without limitation,
all registrations, recordings and applications in the United States
Copyright Office, and (ii) the right to obtain all renewals thereof.
"Copyright Licenses": any written agreement naming any
Guarantor as licensor or licensee granting any right under any
Copyright, including, without limitation, the grant of rights to
manufacture, distribute, exploit and sell materials derived from any
Copyright.
"General Intangibles": all "general intangibles" as such
term is defined in Section
9-106 of the Uniform Commercial Code in
effect in the State of New York on the date hereof and, in any event,
including, without limitation, with respect to any Guarantor, all
contracts, agreements, instruments and indentures in any form, and
portions thereof, to which such Guarantor is a party or under which
such Guarantor has any right, title or interest or to which such
Guarantor or any property of such Guarantor is subject, as the same
may from time to time be amended, supplemented or otherwise modified,
including, without limitation, (i) all rights of such Guarantor to
receive moneys due and to become due to it thereunder or in
connection therewith, (ii) all rights of such Guarantor to damages
arising thereunder and (iii) all rights of such Guarantor to perform
and to exercise all remedies thereunder, in each case to the extent
the grant by such Guarantor of a security interest pursuant to this
Agreement in its right, title and interest in such contract,
agreement, instrument or indenture is not prohibited by such
contract, agreement, instrument or indenture without the consent of
any other party thereto, would not give any other party to such
contract, agreement, instrument or indenture the right to terminate
its obligations thereunder, or is permitted with consent if all
necessary consents to such grant of a security interest have been
obtained from the other parties thereto (it being understood that the
foregoing shall not be deemed to obligate such Guarantor to obtain
such consents); provided, that the foregoing limitation shall not
affect, limit, restrict or impair the grant by such Guarantor of a
security interest pursuant to this Agreement in any Receivable or any
money or other amounts due or to become due under any such contract,
agreement, instrument or indenture.
"Guarantor Obligations": with respect to any Guarantor, all
obligations and liabilities of such Guarantor which may arise under
or in connection with this Agreement (including, without limitation,
Section 2) or any other Loan Document to which such Guarantor is a
party, in each case whether on account of guarantee obligations,
reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements
of counsel to the Agents or to the Lenders that are required to be
paid by such Guarantor pursuant to the terms of this Agreement or any
other Loan Document).
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including, without limitation, the Copyrights, the
Copyright Licenses, the Patents, the Patent Licenses, the Trademarks
and the Trademark Licenses, and all rights to ▇▇▇ at law or in equity
for any infringement or other impairment thereof, including the right
to receive all proceeds and damages therefrom.
"Issuers": the collective reference to each issuer of a
Pledged Security.
"New York UCC": the Uniform Commercial Code as from time to
time in effect in the State of New York.
"Obligations": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"Patents": (i) all letters patent of the United States, any
other country or any political subdivision thereof, all reissues and
extensions thereof and all goodwill
3
associated therewith, (ii) all applications for letters patent of the
United States or any other country and all divisions, continuations and
continuations-in-part thereof, and (iii) all rights to obtain any
reissues or extensions of the foregoing.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to any Guarantor of any right to
manufacture, use or sell any invention covered in whole or in part by a
Patent.
"Pledged Notes": all promissory notes issued to or held by
any Guarantor (other than promissory notes issued in connection with
extensions of trade credit by any Guarantor in the ordinary
course of business) while this Agreement is in effect.
"Pledged Securities": the collective reference to the Pledged
Notes and the Pledged Stock.
"Pledged Stock": shares, stock certificates, options or
rights of any nature whatsoever in respect of the Capital Stock of any
Person that may be issued or granted to, or held by, any Guarantor
while this Agreement is in effect.
"Proceeds": all "proceeds" as such term is defined in
Section 9-306(1) of the Uniform Commercial Code in effect in the
State of New York on the date hereof and, in any event, shall
include, without limitation, all dividends or other income from the
Pledged Securities, collections thereon or distributions or payments
with respect thereto.
"Receivable": any right to payment for goods sold or leased
or for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned
by performance (including, without limitation, any Account).
"Securities Act": the Securities Act of 1933, as amended.
"Trademarks": (i) all trademarks, trade names, corporate
names, company names, business names, fictitious business names,
trade styles, service marks, logos and other source or business
identifiers, and all goodwill associated therewith, now existing or
hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in the
United States Patent and Trademark Office or in any similar office or
agency of the United States, any State thereof or any other country
or any political subdivision thereof, or otherwise, and all
common-law rights related thereto, and (ii) the right to obtain all
renewals thereof.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Guarantor of any right to use any
Trademark.
"Vehicles": all cars, trucks, trailers, construction and
earth moving equipment and other vehicles covered by a certificate of
title law of any state and all tires and other appurtenances to any
of the foregoing.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein", "hereto"
5
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Guarantor, shall
refer to such Guarantor's Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby, jointly
and severally, unconditionally and irrevocably, guarantees to the
Administrative Agent, for the ratable benefit of the Agents and the Lenders
and their respective successors, indorsees, transferees and assigns, the
prompt and complete payment and performance by the Borrower when due (whether
at the stated maturity, by acceleration or otherwise) of the Borrower
Obligations.
(b) Anything herein or in any other Loan Document to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder
and under the other Loan Documents shall in no event exceed the amount which
can be guaranteed by such Guarantor under applicable federal and state laws
relating to the insolvency of debtors (after giving effect to the right of
contribution established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations may
at any time and from time to time exceed the amount of the liability of such
Guarantor hereunder without impairing the guarantee contained in this Section
2 or affecting the rights and remedies of either Agent or any Lender
hereunder.
(d) The guarantee contained in this Section 2 shall remain
in full force and effect until all the Borrower Obligations and the
obligations of each Guarantor under the guarantee contained in this Section 2
shall have been satisfied by payment in full, no Letter of Credit shall be
outstanding and the Commitments shall be terminated, notwithstanding that from
time to time during the term of the Credit Agreement the Borrower may be free
from any Borrower Obligations.
(e) No payment made by the Borrower, any of the Guarantors,
any other guarantor or any other Person or received or collected by either
Agent or any Lender from the Borrower, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any
payment made by such Guarantor in respect of the Borrower Obligations or any
payment received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations are paid
in full, no Letter of Credit shall be
outstanding and the Commitments are terminated.
2.2 Right of Contribution. Each Guarantor hereby agrees that
to the extent that a Guarantor shall have paid more than its proportionate
share of any payment made hereunder, such Guarantor shall be entitled to seek
and receive contribution from and against any other Guarantor hereunder which
has not paid its proportionate share of such payment. Each Guarantor's right
of contribution shall be subject to the terms and conditions of Section 2.3.
The provisions of this Section 2.2 shall in no respect limit the obligations
and liabilities of any Guarantor to the Agents and the Lenders, and each
Guarantor shall remain liable to the Agents and the Lenders for the full
amount guaranteed by such Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
either Agent or any Lender, no Guarantor shall be entitled to be subrogated to
any of the rights of either Agent or any Lender against the Borrower or any
other Guarantor or any collateral security or guarantee or right of offset
held by either Agent or any Lender for the payment of the Borrower
Obligations, nor shall any Guarantor seek or be entitled to seek any
contribution or reimbursement from the Borrower or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing
to the Agents and the Lenders by the Borrower on account of the Borrower
Obligations are paid in full, no Letter of Credit shall be outstanding and the
Commitments are terminated. If any amount shall be paid to any Guarantor on
account of such subrogation rights at any time when all of the Borrower
Obligations shall not have been paid in full, such amount shall be held by
such Guarantor in trust for the Agents and the Lenders, segregated from other
funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor,
be turned over to the Administrative Agent in the exact form received by such
Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if
required), to be applied against the Borrower Obligations, whether matured or
unmatured, in such order as the Administrative Agent may determine.
2.4 Amendments, etc. with respect to the Borrower
Obligations. Each Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against any Guarantor and without
notice to or further assent by any Guarantor, any demand for payment of any of
the Borrower Obligations made by either Agent or any Lender may be rescinded
by any such Agent or Lender and any of the Borrower Obligations continued, and
the Borrower Obligations, or the liability of any other Person upon or for any
part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by either Agent or any Lender, and the Credit
Agreement and the other Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Agents (or the requisite Lenders, as
the case may be) may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by any Agent or any
Lender for the payment of the Borrower Obligations may be sold, exchanged,
waived, surrendered or released. Neither any Agent nor any Lender shall have
any obligation to protect, secure, perfect or insure any Lien at any time held
by it as security for the Borrower Obligations or for the guarantee contained
in this Section 2 or any property subject thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor
waives any and all
7
notice of the creation, renewal, extension or accrual of any of the Borrower
Obligations and notice of or proof of reliance by either Agent or any Lender
upon the guarantee contained in this Section 2 or acceptance of the guarantee
contained in this Section 2; the Borrower Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon the guarantee contained
in this Section 2; and all dealings between the Borrower and any of the
Guarantors, on the one hand, and the Agents and the Lenders, on the other
hand, likewise shall be conclusively presumed to have been had or consummated
in reliance upon the guarantee contained in this Section 2. Each Guarantor
waives diligence, presentment, protest, demand for payment and notice of
default or nonpayment to or upon the Borrower or any of the Guarantors with
respect to the Borrower Obligations. Each Guarantor understands and agrees
that the guarantee contained in this Section 2 shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to
(a) the validity or enforceability of the Credit Agreement or any other Loan
Document, any of the Borrower Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by either Agent or any Lender, (b) any defense, set-off
or counterclaim (other than a defense of payment or performance) which may at
any time be available to or be asserted by the Borrower or any other Person
against either Agent or any Lender, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of the Borrower or such Guarantor)
which constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower for the Borrower Obligations, or of such Guarantor
under the guarantee contained in this Section 2, in bankruptcy or in any other
instance. When making any demand hereunder or otherwise pursuing its rights
and remedies hereunder against any Guarantor, either Agent or any Lender may,
but shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as it may have against the Borrower, any other
Guarantor or any other Person or against any collateral security or guarantee
for the Borrower Obligations or any right of offset with respect thereto, and
any failure by the Agents or any Lender to make any such demand, to pursue
such other rights or remedies or to collect any payments from the Borrower,
any other Guarantor or any other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release
of the Borrower, any other Guarantor or any other Person or any such
collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of either Agent or any Lender against any Guarantor. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at
any time payment, or any part thereof, of any of the Borrower Obligations is
rescinded or must otherwise be restored or returned by either Agent or any
Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any Guarantor, or upon or as a result of the appointment of
a receiver, intervenor or conservator of, or trustee or similar officer for,
any Guarantor or any substantial part of its property, or otherwise, all as
though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the office of the Administrative Agent located at
the Payment Office specified in the Credit Agreement.
8
SECTION 3. GRANT OF SECURITY INTEREST
3.1 Collateral. For the purposes of this Agreement, all of
the following property now owned or at any time hereafter acquired by a
Guarantor or in which a Guarantor now has or at any time in the future may
acquire any right, title or interest is collectively referred the
"Collateral":
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Documents;
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
(j) all Pledged Securities;
(k) all Vehicles;
(l) all Investment Property;
(m) all deposit accounts and other bank accounts;
(n) all books and records pertaining to the Collateral; and
(o) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security
and guarantees given by any Person with respect to any of the
foregoing.
3.2 Grant of Security Interest. As collateral security for
the prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of such Guarantor's Obligations, each
Guarantor hereby assigns and transfers to the Administrative Agent, and grants
to the Administrative Agent for the ratable benefit of the Agents and,
effective upon the initial Extension of Credit pursuant to the Credit
Agreement, the Lenders, a security interest in all of its Collateral.
9
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrower thereunder, each Guarantor hereby represents and
warrants to the Agents and each Lender that:
4.1 Representations in Credit Agreement. In the case of each
Guarantor, the representations and warranties set forth in Section 5 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which is hereby incorporated herein
by reference, are true and correct, and the Agents and each Lender shall be
entitled to rely on each of them as if they were fully set forth herein,
provided that each reference in each such representation and warranty to the
Borrower's knowledge shall, for the purposes of this Section 5.1, be deemed to
be a reference to such Guarantor's knowledge.
4.2 Title; No Other Liens. Except for the security interests
granted to the Administrative Agent for the ratable benefit of the Agents and
the Lenders pursuant to this Agreement and the other Liens permitted to exist
on the Collateral by the Credit Agreement, such Guarantor owns each item of
the Collateral free and clear of any and all Liens or claims of others. No
financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except such as
have been filed in favor of the Administrative Agent, for the ratable benefit
of the Agents and the Lenders, pursuant to this Agreement or as are permitted
by the Credit Agreement.
4.3 Perfected Liens. (a) The security interests granted
pursuant to this Agreement upon completion of the filings and other actions
specified on Schedule 2 (which, in the case of all filings and other documents
referred to on said Schedule, have been delivered to the Administrative Agent
in completed and duly executed form) will constitute valid perfected security
interests in the Collateral in favor of the Administrative Agent, for the
ratable benefit of the Agents and the Lenders, having the priority ascribed to
such security interests in Section 3.
(b) The security interests granted pursuant to this
Agreement upon completion of the filings specified on Schedule 2 (which, in
the case of all filings and other documents referred to on said Schedule, have
been delivered to the Administrative Agent in completed and duly executed
form) are prior to all other Liens on the Collateral in existence on the date
of the initial Extension of Credit pursuant to the Credit Agreement except for
(i) Liens described in Schedule 5, and (ii) unrecorded Liens permitted by the
Credit Agreement which have priority over the Liens on the Collateral by
operation of law.
4.4 Chief Executive Office. On the date hereof, such
Guarantor's jurisdiction of organization and the location of such Guarantor's
chief executive office or sole place of business are specified on Schedule 3.
4.5 Inventory and Equipment. On the date hereof, such
Guarantor's Inventory and the Equipment (other than mobile goods) are kept at
the locations listed on Schedule 4.
4.6 Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
10
4.7 Receivables. (a) No amount payable to such Guarantor
under or in connection with any Receivable is evidenced by any Instrument or
Chattel Paper which has not been delivered to the Administrative Agent.
(b) None of the obligors on any Receivables is a Governmental
Authority.
(c) The amounts represented by such Guarantor to the Lenders
from time to time as owing to such Guarantor in respect of the Receivables
will at such times be accurate.
4.8 Contracts. (a) No consent of any party (other than such
Guarantor) to any Contract is required, or purports to be required, in
connection with the execution, delivery and performance of this Agreement.
(b) Each Contract is in full force and effect and
constitutes a valid and legally enforceable obligation of the Guarantor party
thereto, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing.
(c) No consent or authorization of, filing with or other act
by or in respect of any Governmental Authority is required in connection with
the execution, delivery, performance, validity or enforceability of any of the
Contracts by any Guarantor party thereto other than those which have been duly
obtained, made or performed, are in full force and effect and do not subject
the scope of any such Contract to any material adverse limitation, either
specific or general in nature.
(d) Neither such Guarantor nor (to the best of such
Guarantor's knowledge) any of the other parties to the Contracts is in default
in the performance or observance of any of the terms thereof in any manner
that, in the aggregate, could reasonably be expected to have a Material
Adverse Effect.
(e) The right, title and interest of such Guarantor in, to
and under the Contracts are not subject to any defenses, offsets,
counterclaims or claims that, in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
(f) No amount payable to such Guarantor under or in
connection with any Contract is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Administrative Agent.
(g) None of the parties to any Contract is a Governmental
Authority.
4.9 Intellectual Property. (a) On the date hereof, all
material Intellectual Property is valid, subsisting, unexpired and
enforceable, has not been abandoned and does not infringe the intellectual
property rights of any other Person.
(b) On the date hereof, none of the Intellectual Property is
the subject of any licensing or franchise agreement pursuant to which such
Guarantor is the licensor or franchisor which could reasonably be expected to
have a Material Adverse Effect.
11
(c) No holding, decision or judgment has been rendered by
any Governmental Authority which would limit, cancel or question the validity
of, or such Guarantor's rights in, any Intellectual Property in any respect
that could reasonably be expected to have a Material Adverse Effect.
(d) No action or proceeding is pending, or, to the knowledge
of such Guarantor, threatened, on the date hereof (i) seeking to limit, cancel
or question the validity of any Intellectual Property or such Guarantor's
ownership interest therein, or (ii) which, if adversely determined, would have
a material adverse effect on the value of any Intellectual Property.
SECTION 5. COVENANTS
Each Guarantor covenants and agrees with the Agents and the
Lenders that, from and after the date of this Agreement until the Obligations
shall have been paid in full, no Letter of Credit shall be outstanding and the
Commitments shall have terminated:
5.1 Covenants in Credit Agreement. In the case of each
Guarantor, such Guarantor shall take, or shall refrain from taking, as the
case may be, each action that is necessary to be taken or not taken, as the
case may be, so that no Default or Event of Default is caused by the failure
to take such action or to refrain from taking such action by such Guarantor.
5.2 Delivery of Instruments and Chattel Paper. If any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any Instrument or Chattel Paper, such Instrument or Chattel Paper
shall be immediately delivered to the Administrative Agent, duly indorsed in a
manner satisfactory to the Administrative Agent, to be held as Collateral
pursuant to this Agreement.
5.3 Maintenance of Insurance. (a) Such Guarantor will
maintain, with financially sound and reputable companies, insurance policies
(i) insuring the Inventory, Equipment and Vehicles against loss by fire,
explosion, theft and such other casualties as may be reasonably satisfactory
to the Administrative Agent and (ii) to the extent requested by the
Administrative Agent, insuring such Guarantor, the Agents and the Lenders
against liability for personal injury and property damage relating to such
Inventory, Equipment and Vehicles, such policies to be in such form and
amounts and having such coverage as may be reasonably satisfactory to the
Administrative Agent and the Lenders.
(b) All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after receipt by the
Administrative Agent of written notice thereof, (ii) name the Administrative
Agent as insured party or loss payee, (iii) if reasonably requested by the
Administrative Agent, include a breach of warranty clause and (iv) be
reasonably satisfactory in all other respects to the Administrative Agent.
(c) The Borrower shall deliver to the Administrative Agent a
report of a reputable insurance broker with respect to such insurance
substantially concurrently with the delivery by the Borrower to the
Administrative Agent of its audited financial statements for each fiscal year
12
and such supplemental reports with respect thereto as the Administrative Agent
may from time to time reasonably request.
5.4 Payment of Obligations. Such Guarantor will pay and
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all taxes, assessments and governmental
charges or levies imposed upon the Collateral or in respect of income or
profits therefrom, as well as all claims of any kind (including, without
limitation, claims for labor, materials and supplies) against or with respect
to the Collateral, except that no such charge need be paid if the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with GAAP with respect thereto have been
provided on the books of such Guarantor and such proceedings could not
reasonably be expected to result in the sale, forfeiture or loss of any
material portion of the Collateral or any interest therein.
5.5 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Guarantor shall maintain the security interests
created by this Agreement as a perfected security interests having at least
the priorities described in Section 4.3 and shall defend such security
interests against the claims and demands of all Persons whomsoever.
(b) Such Guarantor will furnish to the Administrative Agent
from time to time statements and schedules further identifying and describing
the Collateral and such other reports in connection with the Collateral as the
Administrative Agent may reasonably request, all in reasonable detail.
(c) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such
Guarantor, such Guarantor will promptly and duly execute and deliver, and have
recorded, such further instruments and documents and take such further actions
as the Administrative Agent may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and of the rights
and powers herein granted, including, without limitation, the filing of any
financing or continuation statements under the Uniform Commercial Code (or
other similar laws) in effect in any jurisdiction with respect to the security
interests created hereby.
5.6 Changes in Locations, Name, etc. Such Guarantor will
not, except upon 15 days' prior written notice to the Administrative Agent and
delivery to the Administrative Agent of (a) all additional executed financing
statements and other documents reasonably requested by the Administrative
Agent to maintain the validity, perfection and priority of the security
interests provided for herein and (b) if applicable, a written supplement to
Schedule 4 showing any additional location at which Inventory or Equipment
shall be kept:
(i) permit any of the Inventory or Equipment to be kept at a
location other than those listed on Schedule 4;
(ii) change the location of its chief executive office or
sole place of business from that referred to in Section 4.4; or
(iii) change its name, identity or corporate structure to
such an extent that any financing statement filed by the
Administrative Agent in connection with this Agreement
13
would become misleading.
5.7 Notices. Such Guarantor will advise the Agents and the
Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby
or Liens permitted under the Credit Agreement) on any of the Collateral which
would adversely affect the ability of the Administrative Agent to exercise any
of its remedies hereunder; and
(b) of the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the aggregate
value of the Collateral or on the security interests created hereby.
5.8 Pledged Securities. (a) If such Guarantor shall become
entitled to receive or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Guarantor shall accept
the same as the agent of the Agents and the Lenders, hold the same in trust
for the Agents and the Lenders and deliver the same forthwith to the
Administrative Agent in the exact form received, duly indorsed by such
Guarantor to the Administrative Agent, if required, together with an undated
stock power covering such certificate duly executed in blank by such Guarantor
and with, if the Administrative Agent so requests, signature guaranteed, to be
held by the Administrative Agent, subject to the terms hereof, as additional
collateral security for the Obligations. Any sums paid upon or in respect of
the Pledged Securities upon the liquidation or dissolution of any Issuer shall
be paid over to the Administrative Agent to be held by it hereunder as
additional collateral security for the Obligations, and in case any
distribution of capital shall be made on or in respect of the Pledged
Securities or any property shall be distributed upon or with respect to the
Pledged Securities pursuant to the recapitalization or reclassification of the
capital of any Issuer or pursuant to the reorganization thereof, the property
so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Pledged Securities shall be received by such
Guarantor, such Guarantor shall, until such money or property is paid or
delivered to the Administrative Agent, hold such money or property in trust
for the Agents and the Lenders, segregated from other funds of such Guarantor,
as additional collateral security for the Obligations.
(b) Without the prior written consent of the Administrative
Agent, such Guarantor will not (i) vote to enable, or take any other action to
permit, any Issuer to issue any stock or other equity securities of any nature
or to issue any other securities convertible into or granting the right to
purchase or exchange for any stock or other equity securities of any nature of
any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or
grant any option with respect to, the Pledged Securities or Proceeds thereof
(except pursuant to a transaction expressly permitted by the Credit
Agreement), (iii) create, incur or permit to exist any Lien or option in favor
of, or any claim of any Person with respect to, any of the Pledged Securities
or Proceeds thereof, or any interest therein, except for the security
interests created by this
14
Agreement or (iv) enter into any agreement or undertaking restricting the
right or ability of such Guarantor or the Administrative Agent to sell, assign
or transfer any of the Pledged Securities or Proceeds thereof.
(c) In the case of each Guarantor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement
relating to the Pledged Securities issued by it and will comply with such
terms insofar as such terms are applicable to it, (ii) it will notify the
Administrative Agent promptly in writing of the occurrence of any of the
events described in Section 5.8(a) with respect to the Pledged Securities
issued by it and (iii) the terms of Sections 6.3(c) and 6.7 shall apply to it,
mutatis mutandis, with respect to all actions that may be required of it
pursuant to Section 6.3(c) or 6.7 with respect to the Pledged Securities
issued by it.
5.9 Receivables. (a) Other than in the ordinary course of
business consistent with its past practice, such Guarantor will not (i) grant
any extension of the time of payment of any Receivable, (ii) compromise or
settle any Receivable for less than the full amount thereof, (iii) release,
wholly or partially, any Person liable for the payment of any Receivable, (iv)
allow any credit or discount whatsoever on any Receivable or (v) amend,
supplement or modify any Receivable in any manner that could adversely affect
the value thereof.
(b) Such Guarantor will deliver to the Administrative Agent
a copy of each material demand, notice or document received by it that
questions or calls into doubt the validity or enforceability of more than 5%
of the aggregate amount of the then outstanding Receivables.
5.10 Contracts. (a) Such Guarantor will perform and comply
in all material respects with all its obligations under the Contracts.
(b) Such Guarantor will not amend, modify, terminate or
waive any provision of any Contract in any manner which could reasonably be
expected to materially adversely affect the value of such Contract as
Collateral.
(c) Such Guarantor will exercise promptly and diligently
each and every material right which it may have under each Contract (other
than any right of termination).
(d) Such Guarantor will deliver to the Administrative Agent
a copy of each material demand, notice or document received by it relating in
any way to any Contract that questions the validity or enforceability of such
Contract.
5.11 Intellectual Property. (a) Such Guarantor (either
itself or through licensees) will (i) continue to use each material Trademark
on each and every trademark class of goods applicable to its current line as
reflected in its current catalogs, brochures and price lists in order to
maintain such Trademark in full force free from any claim of abandonment for
non-use, (ii) maintain as in the past the quality of products and services
offered under such Trademark, (iii) use such Trademark with the appropriate
notice of registration and all other notices and legends required by
applicable Requirements of Law, (iv) not adopt or use any ▇▇▇▇ which is
confusingly similar or a colorable imitation of such Trademark unless the
Administrative Agent, for the ratable benefit of the Agents and the Lenders,
shall obtain a perfected security interest in such ▇▇▇▇ pursuant to this
Agreement, and (v) not (and not permit any licensee or sublicensee thereof to)
do any act or knowingly omit to do any act whereby such Trademark may become
invalidated
15
or impaired in any way.
(b) Such Guarantor (either itself or through licensees) will
not do any act, or omit to do any act, whereby any material Patent may become
forfeited, abandoned or dedicated to the public.
(c) Such Guarantor (either itself or through licensees) (i)
will employ each material Copyright and (ii) will not (and will not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of the Copyrights may become invalidated or
otherwise impaired. Such Guarantor will not (either itself or through
licensees) do any act whereby any material portion of the Copyrights may fall
into the public domain.
(d) Such Guarantor (either itself or through licensees) will
not do any act that knowingly uses any material Intellectual Property to
infringe the intellectual property rights of any other Person.
(e) Such Guarantor will notify the Agents and the Lenders
immediately if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse
determination or development (including, without limitation, the institution
of, or any such determination or development in, any proceeding in the United
States Patent and Trademark Office, the United States Copyright Office or any
court or tribunal in any country) regarding such Guarantor's ownership of, or
the validity of, any material Intellectual Property or such Guarantor's right
to register the same or to own and maintain the same.
(f) Whenever such Guarantor, either by itself or through any
agent, employee, licensee or designee, shall file an application for the
registration of any Intellectual Property with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or
agency in any other country or any political subdivision thereof, such
Guarantor shall report such filing to the Administrative Agent within five
Business Days after the last day of the fiscal quarter in which such filing
occurs. Upon request of the Administrative Agent, such Guarantor shall execute
and deliver, and have recorded, any and all agreements, instruments,
documents, and papers as the Administrative Agent may request to evidence the
Agents' and the Lenders' security interest in any Copyright, Patent or
Trademark and the goodwill and general intangibles of such Guarantor relating
thereto or represented thereby.
(g) Such Guarantor will take all reasonable and necessary
steps, including, without limitation, in any proceeding before the United
States Patent and Trademark Office, the United States Copyright Office or any
similar office or agency in any other country or any political subdivision
thereof, to maintain and pursue each application (and to obtain the relevant
registration) and to maintain each registration of the material Intellectual
Property, including, without limitation, filing of applications for renewal,
affidavits of use and affidavits of incontestability.
(h) In the event that any material Intellectual Property is
infringed, misappropriated or diluted by a third party, such Guarantor shall
(i) take such actions as such Guarantor shall reasonably deem appropriate
under the circumstances to protect such Intellectual
16
Property and (ii) if such Intellectual Property is of material economic
value, promptly notify the Administrative Agent after it learns thereof and
▇▇▇ for infringement, misappropriation or dilution, to seek injunctive relief
where appropriate and to recover any and all damages for such infringement,
misappropriation or dilution.
5.12 Vehicles. (a) No Vehicle shall be removed from the
state which has issued the certificate of title/ownership therefor for a
period in excess of four months.
(b) Within 30 days after the date hereof, and, with respect
to any Vehicles acquired by such Guarantor subsequent to the date hereof,
within 30 days after the date of acquisition thereof, all applications for
certificates of title/ownership indicating the Administrative Agent's first
priority security interest in the Vehicle covered by such certificate, and any
other necessary documentation, shall be filed in each office in each
jurisdiction which the Administrative Agent shall deem advisable to perfect
its security interests in the Vehicles.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The
Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Guarantor shall furnish all such assistance and
information as the Administrative Agent may require in connection with such
test verifications. At any time and from time to time, upon the Administrative
Agent's request and at the expense of the relevant Guarantor, such Guarantor
shall cause independent public accountants or others satisfactory to the
Administrative Agent to furnish to the Administrative Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Receivables.
(b) The Administrative Agent hereby authorizes each
Guarantor to collect such Guarantor's Receivables, subject to the
Administrative Agent's direction and control, and the Administrative Agent may
curtail or terminate said authority at any time after the occurrence and
during the continuance of an Event of Default. If required by the
Administrative Agent at any time after the occurrence and during the
continuance of an Event of Default, any payments of Receivables, when
collected by any Guarantor, (i) shall be forthwith (and, in any event, within
two Business Days) deposited by such Guarantor in the exact form received,
duly indorsed by such Guarantor to the Administrative Agent if required, in a
Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for
the account of the Agents and the Lenders only as provided in Section 6.5, and
(ii) until so turned over, shall be held by such Guarantor in trust for the
Agents and the Lenders, segregated from other funds of such Guarantor. Each
such deposit of Proceeds of Receivables shall be accompanied by a report
identifying in reasonable detail the nature and source of the payments
included in the deposit.
(c) At the Administrative Agent's request, each Guarantor
shall deliver to the Administrative Agent all original and other documents
evidencing, and relating to, the agreements and transactions which gave rise
to the Receivables, including, without limitation, all original orders,
invoices and shipping receipts.
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6.2 Communications with Obligors; Guarantors Remain Liable.
(a) The Administrative Agent in its own name or in the name of others may at
any time communicate with obligors under the Receivables and parties to the
Contracts to verify with them to the Administrative Agent's satisfaction the
existence, amount and terms of any Receivables or Contracts.
(b) Upon the request of the Administrative Agent at any time
after the occurrence and during the continuance of an Event of Default, each
Guarantor shall notify obligors on the Receivables and parties to the
Contracts that the Receivables and the Contracts have been assigned to the
Administrative Agent for the ratable benefit of the Agents and the Lenders and
that payments in respect thereof shall be made directly to the Administrative
Agent.
(c) Anything herein to the contrary notwithstanding, each
Guarantor shall remain liable under each of the Receivables and Contracts to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise thereto. Neither the Agents nor any Lender shall have any
obligation or liability under any Receivable (or any agreement giving rise
thereto) or Contract by reason of or arising out of this Agreement or the
receipt by either Agent or any Lender of any payment relating thereto, nor
shall either Agent or any Lender be obligated in any manner to perform any of
the obligations of any Guarantor under or pursuant to any Receivable (or any
agreement giving rise thereto) or Contract, to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by it or
as to the sufficiency of any performance by any party thereunder, to present
or file any claim, to take any action to enforce any performance or to collect
the payment of any amounts which may have been assigned to it or to which it
may be entitled at any time or times.
6.3 Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have given
notice to the relevant Guarantor of the Administrative Agent's intent to
exercise its corresponding rights pursuant to Section 6.3(b), each Guarantor
shall be permitted to receive all cash dividends paid in respect of the
Pledged Stock and all payments made in respect of the Pledged Notes, in each
case paid in the normal course of business of the relevant Issuer and
consistent with past practice, to the extent permitted in the Credit
Agreement, and to exercise all voting and corporate rights with respect to the
Pledged Securities; provided, however, that no vote shall be cast or corporate
right exercised or other action taken which, in the Administrative Agent's
reasonable judgment, would impair the Collateral or which would be
inconsistent with or result in any violation of any provision of the Credit
Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and
the Administrative Agent shall give notice of its intent to exercise such
rights to the relevant Guarantor or Guarantors, (i) the Administrative Agent
shall have the right to receive any and all cash dividends, payments or other
Proceeds paid in respect of the Pledged Securities and make application
thereof to the Obligations in the order set forth in Section 6.5, and (ii) any
or all of the Pledged Securities shall be registered in the name of the
Administrative Agent or its nominee, and the Administrative Agent or its
nominee may thereafter exercise (x) all voting, corporate and other rights
pertaining to such Pledged Securities at any meeting of shareholders of the
relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Pledged Securities as if
18
it were the absolute owner thereof (including, without limitation, the right
to exchange at its discretion any and all of the Pledged Securities upon the
merger, consolidation, reorganization, recapitalization or other fundamental
change in the corporate structure of any Issuer, or upon the exercise by any
Guarantor or the Administrative Agent of any right, privilege or option
pertaining to such Pledged Securities, and in connection therewith, the right
to deposit and deliver any and all of the Pledged Securities with any
committee, depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as the Administrative Agent may determine), all
without liability except to account for property actually received by it, but
the Administrative Agent shall have no duty to any Guarantor to exercise any
such right, privilege or option and shall not be responsible for any failure
to do so or delay in so doing.
(c) Each Guarantor hereby authorizes and instructs each
Issuer of any Pledged Securities pledged by such Guarantor hereunder to (i)
comply with any instruction received by it from the Administrative Agent in
writing that (x) states that an Event of Default has occurred and is
continuing and (y) is otherwise in accordance with the terms of this
Agreement, without any other or further instructions from such Guarantor, and
each Guarantor agrees that each Issuer shall be fully protected in so
complying, and (ii) unless otherwise expressly permitted hereby, pay any
dividends or other payments with respect to the Pledged Securities directly to
the Administrative Agent.
6.4 Proceeds to be Turned Over To Administrative Agent. In
addition to the rights of the Administrative Agent and the Lenders specified
in Section 6.1 with respect to payments of Receivables, if an Event of Default
shall occur and be continuing, all Proceeds received by any Guarantor
consisting of cash, checks and other near-cash items shall be held by such
Guarantor in trust for the Agents and the Lenders, segregated from other funds
of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be
turned over to the Administrative Agent in the exact form received by such
Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if
required). All Proceeds received by the Administrative Agent hereunder shall
be held by the Administrative Agent in a Collateral Account maintained under
its sole dominion and control. All Proceeds while held by the Administrative
Agent in a Collateral Account (or by such Guarantor in trust for the Agents
and the Lenders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5.
6.5 Application of Proceeds. At such intervals as may be
agreed upon by the Borrower and the Administrative Agent, or, if an Event of
Default shall have occurred and be continuing, at any time at the
Administrative Agent's election, the Administrative Agent may apply all or any
part of Proceeds constituting Collateral, whether or not held in any
Collateral Account, and any proceeds of the guarantee set forth in Section 2,
in payment of the Obligations in the following order:
First, to pay incurred and unpaid fees and expenses of the
Agents under the Loan Documents;
Second, to the Administrative Agent, for application by it
towards payment of amounts then due and owing and remaining unpaid in
respect of the Obligations, pro rata among the Lenders according to
the amounts of such obligations then due and owing and remaining
unpaid to the Lenders; and
19
Third, any balance of such Proceeds remaining after the
Obligations shall have been paid in full, no Letters of Credit shall
be outstanding (or such Letters of Credit shall be cash collaterized
or secured by a backstop letter of credit as provided in the Credit
Agreement) and the Commitments shall have terminated shall be paid
over to the Borrower or to whomsoever may be lawfully entitled to
receive the same.
6.6 Code and Other Remedies. If an Event of Default shall
occur and be continuing, the Administrative Agent, on behalf of the Agents and
the Lenders, may exercise, in addition to all other rights and remedies
granted to them in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies
of a secured party under the New York UCC or any other applicable law. Without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon any Guarantor or any other Person (all and each of which demands,
defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign,
give option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, at any exchange,
broker's board or office of either Agent or any Lender or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may
deem best, for cash or on credit or for future delivery without assumption of
any credit risk. Either Agent or any Lender shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in any Guarantor, which right
or equity is hereby waived and released. Each Guarantor further agrees, at the
Administrative Agent's request, to assemble the Collateral and make it
available to the Administrative Agent at places which the Administrative Agent
shall reasonably select, whether at such Guarantor's premises or elsewhere.
The Administrative Agent shall apply the net proceeds of any action taken by
it pursuant to this Section 6.6, after deducting all reasonable costs and
expenses of every kind incurred in connection therewith or incidental to the
care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Agents and the Lenders hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to the
payment in whole or in part of the Obligations, in such order as Section 6.5
shall proscribe, and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-504(1)(c) of the New York UCC, need
the Administrative Agent account for the surplus, if any, to any Guarantor. To
the extent permitted by applicable law, each Guarantor waives all claims,
damages and demands it may acquire against either Agent or any Lender arising
out of the exercise by them of any rights hereunder. If any notice of a
proposed sale or other disposition of Collateral shall be required by law,
such notice shall be deemed reasonable and proper if given at least 10 days
before such sale or other disposition.
6.7 Registration Rights. (a) If the Administrative Agent
shall determine to exercise its right to sell any or all of the Pledged Stock
pursuant to Section 6.6, and if in the opinion of the Administrative Agent it
is necessary or advisable to have the Pledged Stock, or that portion thereof
to be sold, registered under the provisions of the Securities Act, the
relevant Guarantor will cause the Issuer thereof to (i) execute and deliver,
and cause the directors and
20
officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
opinion of the Administrative Agent, necessary or advisable to register the
Pledged Stock, or that portion thereof to be sold, under the provisions of the
Securities Act, (ii) use its best efforts to cause the registration statement
relating thereto to become effective and to remain effective for a period of
one year from the date of the first public offering of the Pledged Stock, or
that portion thereof to be sold, and (iii) make all amendments thereto and/or
to the related prospectus which, in the opinion of the Administrative Agent,
are necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. Each Guarantor agrees to cause such Issuer to
comply with the provisions of the securities or "Blue Sky" laws of any and all
jurisdictions which the Administrative Agent shall designate and to make
available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions of
Section 11(a) of the Securities Act.
(b) Each Guarantor recognizes that the Administrative Agent
may be unable to effect a public sale of any or all the Pledged Stock, by
reason of certain prohibitions contained in the Securities Act and applicable
state securities laws or otherwise, and may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale
thereof. Each Guarantor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. The Administrative Agent shall be under no obligation to delay a sale
of any of the Pledged Stock for the period of time necessary to permit the
Issuer thereof to register such securities for public sale under the
Securities Act, or under applicable state securities laws, even if such Issuer
would agree to do so.
(c) Each Guarantor agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Stock pursuant to this Section 6.7
valid and binding and in compliance with any and all other applicable
Requirements of Law. Each Guarantor further agrees that a breach of any of the
covenants contained in this Section 6.7 will cause irreparable injury to the
Agents and the Lenders, that the Agents and the Lenders have no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section 6.7 shall be specifically enforceable
against such Guarantor, and such Guarantor hereby waives and agrees not to
assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Credit Agreement.
6.8 Waiver; Deficiency. Each Guarantor waives and agrees not
to assert any rights or privileges which it may acquire under Section 9-112 of
the New York UCC. Each Guarantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient
to pay its Obligations and the fees and disbursements of any attorneys
employed by the Agents or any Lender to collect such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
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7.1 Administrative Agent's Appointment as Attorney-in-Fact,
etc. (a) Each Guarantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Guarantor and in the name
of such Guarantor or in its own name, for the purpose of carrying out the
terms of this Agreement, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, and, without limiting the
generality of the foregoing, each Guarantor hereby gives the Administrative
Agent the power and right, on behalf of such Guarantor, without notice to or
assent by such Guarantor, to do any or all of the following:
(i) in the name of such Guarantor or its own name, or
otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any Receivable or Contract or with respect to any
other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting
any and all such moneys due under any Receivable or Contract or with
respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and
deliver, and have recorded, any and all agreements, instruments,
documents and papers as the Administrative Agent may request to
evidence the Agents' and the Lenders' security interest in such
Intellectual Property and the goodwill and general intangibles of
such Guarantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on
or threatened against the Collateral, effect any repairs or any
insurance called for by the terms of this Agreement and pay all or
any part of the premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in
Section 6.6 or 6.7, any indorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral;
and
(v) (1) direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due or to become
due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (2) ask or demand for, collect,
and receive payment of and receipt for, any and all moneys, claims
and other amounts due or to become due at any time in respect of or
arising out of any Collateral; (3) sign and indorse any invoices,
freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices
and other documents in connection with any of the Collateral; (4)
commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in
respect of any Collateral; (5) defend any suit, action or proceeding
brought against such Guarantor with respect to any Collateral; (6)
settle, compromise or adjust any such suit, action or proceeding and,
in connection therewith, give such discharges or releases as the
Administrative Agent may deem appropriate; (7) assign any Copyright,
Patent or Trademark (along with the goodwill of the business to which
any such Copyright, Patent
22
or Trademark pertains), throughout the world for such term or terms,
on such conditions, and in such manner, as the Administrative Agent
shall in its sole discretion determine; and (8) generally, sell,
transfer, pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all
purposes, and do, at the Administrative Agent's option and such
Guarantor's expense, at any time, or from time to time, all acts and
things which the Administrative Agent deems necessary to protect,
preserve or realize upon the Collateral and the Administrative
Agent's and the Lenders' security interests therein and to effect the
intent of this Agreement, all as fully and effectively as such
Guarantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the
power of attorney provided for in this Section 7.1(a) unless an Event of
Default shall have occurred and be continuing.
(b) If any Guarantor fails to perform or comply with any of
its agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due Revolving Credit Loans that are
Base Rate Loans under the Credit Agreement, from the date of payment by the
Administrative Agent to the date reimbursed by the relevant Guarantor, shall
be payable by such Guarantor to the Administrative Agent on demand.
(d) Each Guarantor hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released.
7.2 Duty of Administrative Agent. The Administrative Agent's
sole duty with respect to the custody, safekeeping and physical preservation
of the Collateral in its possession, under Section 9-207 of the New York UCC
or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar property for its own account. Neither
the Agents, any Lender nor any of their respective officers, directors,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
any Guarantor or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof. The powers conferred on the
Agents and the Lenders hereunder are solely to protect the Agents' and the
Lenders' interests in the Collateral and shall not impose any duty upon either
Agent or any Lender to exercise any such powers. The Agents and the Lenders
shall be accountable only for amounts that they actually receive as a result
of the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to any Guarantor for any
act or failure to act hereunder, except for their own gross negligence or
willful misconduct.
7.3 Execution of Financing Statements. Pursuant to Section
9-402 of the New
23
York UCC and any other applicable law, each Guarantor authorizes the
Administrative Agent to file or record financing statements and other filing
or recording documents or instruments with respect to the Collateral without
the signature of such Guarantor in such form and in such offices as the
Administrative Agent reasonably determines appropriate to perfect the security
interests of the Administrative Agent under this Agreement. A photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement or other filing or recording document or instrument for filing or
recording in any jurisdiction.
7.4 Authority of Administrative Agent. Each Guarantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the
Administrative Agent and the Lenders, be governed by the Credit Agreement and
by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the Guarantors, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Agents and the Lenders with full and valid authority so to act or refrain
from acting, and no Guarantor shall be under any obligation, or entitlement,
to make any inquiry respecting such authority.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions
of this Agreement may be waived, amended, supplemented or otherwise modified
except in accordance with Section 12.1 of the Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon
the Administrative Agent or any Guarantor hereunder shall be effected in the
manner provided for in Section 12.2 of the Credit Agreement; provided that any
such notice, request or demand to or upon any Guarantor shall be addressed to
such Guarantor at its notice address set forth on Schedule 1.
8.3 No Waiver by Course of Conduct; Cumulative Remedies.
Neither the Agents nor any Lender shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise
be deemed to have waived any right or remedy hereunder or to have acquiesced
in any Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of either Agent or any Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by either Agent or any Lender of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which such Agent or such Lender would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each
Guarantor agrees to pay or reimburse each Lender and Agent for all its costs
and expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under
this Agreement and the other Loan Documents to which such Guarantor is a
24
party, including, without limitation, the reasonable fees and disbursements of
counsel (including the allocated reasonable fees and expenses of in-house
counsel) to each Lender and of counsel to the Agents.
(b) Each Guarantor agrees to pay, and to save the Agents and
the Lenders harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement.
(c) Each Guarantor agrees to pay, and to save the Agents and
the Lenders harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement to the
extent the Borrower would be required to do so pursuant to Section 12.5 of the
Credit Agreement.
(d) The agreements in this Section 8.4 shall survive
repayment of the Obligations and all other amounts payable under the Credit
Agreement and the other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of each Guarantor and shall inure to the
benefit of the Agents and the Lenders and their successors and assigns;
provided that no Guarantor may assign, transfer or delegate any of its rights
or obligations under this Agreement without the prior written consent of the
Administrative Agent.
8.6 Set-Off. Each Guarantor hereby irrevocably authorizes
the Agents and each Lender at any time and from time to time, without notice
to such Guarantor or any other Guarantor, any such notice being expressly
waived by each Guarantor, to set-off and appropriate and apply any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Agent or such Lender to or for
the credit or the account of such Guarantor, or any part thereof in such
amounts as such Agent or such Lender may elect, against and on account of the
obligations and liabilities of such Guarantor to such Agent or such Lender
hereunder and claims of every nature and description of such Agent or such
Lender against such Guarantor, in any currency, whether arising hereunder,
under the Credit Agreement, any other Loan Document or otherwise, as such
Agent or such Lender may elect, whether or not either Agent or any Lender has
made any demand for payment and although such obligations, liabilities and
claims may be contingent or unmatured. The Agents and each Lender shall notify
such Guarantor promptly of any such set-off and the application made by such
Agent or such Lender of the proceeds thereof, provided that the failure to
give such notice shall not affect the validity of such set-off and
application. The rights of the Agents and each Lender under this Section 8.6
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) which such Agent or such Lender may have.
8.7 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said
25
counterparts taken together shall be deemed to constitute one and the same
instrument.
8.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
8.10 Integration. This Agreement and the other Loan
Documents represent the agreement of the Guarantors, the Agents and the
Lenders with respect to the subject matter hereof and thereof, and there are
no promises, undertakings, representations or warranties by either Agent or
any Lender relative to subject matter hereof and thereof not expressly set
forth or referred to herein or in the other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
8.12 Submission To Jurisdiction; Waivers. Each Guarantor
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Agreement and the other Loan Documents
to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general
jurisdiction of the Bankruptcy Court and, if the Bankruptcy Court
does not have (or abstains from) jurisdiction, to the non-exclusive
general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of
New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Guarantor at its address referred to in Section 8.2
or at such other address of which the Administrative Agent shall have
been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to ▇▇▇ in any other jurisdiction; and
26
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.
8.13 Acknowledgements. Each Guarantor hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents
to which it is a party;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to any Guarantor arising out of
or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Guarantors, on the one
hand, and the Administrative Agent and Lenders, on the other hand, in
connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Guarantors and the
Lenders.
8.14 Additional Guarantors. Each Subsidiary of the Borrower
that is required to become a party to this Agreement pursuant to the Credit
Agreement shall become a Guarantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the
form of Annex 1 hereto.
8.15 Releases. (a) At such time as the Loans, the
Reimbursement Obligations and the other Obligations shall have been paid in
full, the Commitments have been terminated and no Letters of Credit shall be
outstanding, cash collateralized or backstopped, the Collateral shall be
released from the Liens created hereby, and this Agreement and all obligations
(other than those expressly stated to survive such termination) of the
Administrative Agent and each Guarantor hereunder shall terminate, all without
delivery of any instrument or performance of any act by any party, and all
rights to the Collateral shall revert to the Guarantors. At the request and
sole expense of any Guarantor following any such termination, the
Administrative Agent shall deliver to such Guarantor any Collateral held by
the Administrative Agent hereunder, and execute and deliver to such Guarantor
such documents as such Guarantor shall reasonably request to evidence such
termination.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Guarantor in a transaction permitted by the
Credit Agreement, then the Administrative Agent, at the request and sole
expense of such Guarantor, shall execute and deliver to such Guarantor all
releases or other documents reasonably necessary or desirable for the release
of the Liens created hereby on such Collateral. At the request and sole
expense of the Borrower, a Guarantor shall be released from its obligations
hereunder in the event that all the Capital Stock of such Guarantor shall be
sold, transferred or otherwise disposed of in a transaction permitted by the
Credit Agreement; provided that the Borrower shall have delivered to the
Administrative Agent, at least ten Business Days prior to the date of the
proposed release, a written request for release identifying the relevant
Guarantor and the terms of the sale or other disposition in reasonable detail,
including the price thereof and any expenses in connection therewith, together
with a certification by the Borrower stating that such transaction is in
compliance with the Credit
27
Agreement and the other Loan Documents.
8.16 WAIVERS OF JURY TRIAL. THE AGENTS, THE LENDERS AND EACH
GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
28
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
GRAND UNION STORES, INC. OF VERMONT
By:
----------------------
Name:
Title:
GRAND UNION STORES OF
NEW HAMPSHIRE, INC.
By:
---------------------
Name:
Title:
MERCHANDISING SERVICES, INC.
By:
---------------------
Name:
Title:
SPECIALTY MERCHANDISING
SERVICES, INC.
By:
---------------------
Name:
Title:
Annex 1 to
Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT, dated as of _______________, 1998,
made by ___________________________, a ______________ corporation (the
"Additional Guarantor"), in favor of ▇▇▇▇▇▇ Commercial Paper Inc., as
administrative agent (in such capacity, the "Administrative Agent") for the
banks and other financial institutions (the "Lenders") from time to time
parties to the Revolving Credit Agreement, dated as of June 24, 1998 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among The Grand Union Company (the "Borrower"), the Lenders, SBC
Warburg Dillon Read Inc., as co-advisor and co-arranger, Swiss Bank
Corporation, Stamford Branch, as Syndication Agent, ▇▇▇▇▇▇ Brothers Inc., as
co-advisor and co-arranger, and the Administrative Agent. All capitalized
terms not defined herein shall have the meaning ascribed to them in such
Credit Agreement.
W I T N E S S E T H :
WHEREAS, The Borrower, the Lenders, the Agent and the
Arrangers have entered into the Credit Agreement;
WHEREAS, in connection with the Credit Agreement, the
Borrower and certain of its Affiliates (other than the Additional Guarantor)
have entered into the Guarantee and Collateral Agreement, dated as of June 24,
1998 (as amended, supplemented or otherwise modified from time to time, the
"Guarantee and Collateral Agreement") in favor of the Administrative Agent for
the benefit of the Agents and the Lenders;
WHEREAS, the Credit Agreement requires the Additional
Guarantor to become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Guarantor has agreed to execute and
deliver this Assumption Agreement in order to become a party to the Guarantee
and Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and
delivering this Assumption Agreement, the Additional Guarantor, as provided in
Section 8.15 of the Guarantee and Collateral Agreement, hereby becomes a party
to the Guarantee and Collateral Agreement as a Guarantor thereunder with the
same force and effect as if originally named therein as a Guarantor and,
without limiting the generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Guarantor thereunder. The information set
forth in Annex 1-A hereto is hereby added to the information set forth in
Schedules 2 through 9 to the Guarantee and Collateral Agreement. The
Additional Guarantor hereby represents and warrants that each of the
representations and warranties contained in Section 4 of the Guarantee and
Collateral Agreement
2
applicable to it is true and correct on and as the date hereof (after giving
effect to this Assumption Agreement) as if made on and as of such date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this
Assumption Agreement to be duly executed and delivered as of the date first
above written.
[ADDITIONAL GUARANTOR]
By:
--------------------
Name:
Title:
EXHIBIT G-1
FORM OF
REVOLVING CREDIT NOTE
THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE REVOLVING CREDIT AGREEMENT
REFERRED TO BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED
HEREBY MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT
PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT.
New York, New York
$________________ ___________, 1998
FOR VALUE RECEIVED, the undersigned, The Grand Union
Company, a Delaware corporation (the "Borrower"), hereby unconditionally
promises to pay to __________________ (the "Lender") or its registered assigns
at the Payment Office specified in the Credit Agreement (as hereinafter
defined) in lawful money of the United States and in immediately available
funds, the principal amount of (a) ___________________________
($____________), or, if less, (b) the unpaid principal amount of the Revolving
Credit Loan made by the Lender pursuant to Section 2.1 of the Credit
Agreement. The principal amount shall be paid in the amounts and on the dates
specified in Section 2.5 of the Credit Agreement. The Borrower further agrees
to pay interest in like money at such office on the unpaid principal amount
hereof from time to time outstanding at the rates and on the dates specified
in Section 2.12 of the Credit Agreement.
The holder of this Note is authorized to endorse on the
schedules annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof the date, Type and
amount of each Revolving Credit Loan made pursuant to the Credit Agreement and
the date and amount of each payment or prepayment of principal thereof, each
continuation thereof, each conversion of all or a portion thereof to another
Type and, in the case of Eurodollar Loans, the length of each Interest Period
with respect thereto. Each such endorsement shall constitute prima facie
evidence of the accuracy of the information endorsed. The failure to make any
such endorsement or any error in any such endorsement shall not affect the
obligations of the Borrower in respect of any Revolving Credit Loan.
This Note (a) is one of the Revolving Credit Notes referred
to in the Revolving Credit Agreement dated as of June 24, 1998 (as amended,
supplemented or modified from time to time, the "Credit Agreement"), among The
Grand Union Company (the "Borrower"), the financial institutions from time to
time party thereto as lenders (the "Lenders"), SBC Warburg Dillon Read Inc.,
as co-advisor and co-arranger, Swiss Bank Corporation, Stamford Branch, as
Syndication Agent, ▇▇▇▇▇▇ Brothers Inc., as co-advisor and co-arranger, and
▇▇▇▇▇▇ Commercial Paper Inc., as Administrative Agent, (b) is subject to the
provisions of the Credit Agreement and (c) is subject to optional and
mandatory prepayment in whole or in part as provided in the Credit Agreement.
This Note is secured and guaranteed as provided in the Loan Documents.
Reference is hereby made to the Loan Documents for a description of the
properties and assets in which a security interest has been granted, the
nature and extent of the security and
2
the guarantees, the terms and conditions upon which the security interests and
each guarantee were granted and the rights of the holder of this Note in
respect thereof.
Upon the occurrence of any one or more of the Events of
Default, all principal and all accrued interest then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable, all
as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or otherwise,
hereby waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR
IN THE CREDIT AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO
AND IN ACCORDANCE WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 12.6
OF THE CREDIT AGREEMENT.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
THE GRAND UNION COMPANY
By:
-----------------------------------
Name:
Title:
Schedule A
to Revolving Credit Note
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
Amount of
Amount Principal of Amount of Base Rate Unpaid Principal
Amount of Base Converted to Base Rate Loans Converted to Balance of Base
Date Rate Loans Base Rate Loans Loans Repaid Eurodollar Loans Rate Loans Notation Made By
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Schedule B
to Revolving Credit Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
Unpaid
Interest Period Amount of Amount of Principal
Amount and Europdollar Principal of Eurodollar Loans Balance of
Amount of Converted to Rate with Eurodollar Loans Converted to Eurodollar Notation
Date Eurodollar Loans Eurodollar Loans Respect Thereto Repaid Base Rate Loans Loans Made By
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EXHIBIT G-2
FORM OF
SWING LINE NOTE
THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE REVOLVING CREDIT AGREEMENT
REFERRED TO BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED
HEREBY MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT
PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT.
$10,000,000 New York, New York
__________, 1998
FOR VALUE RECEIVED, the undersigned, The Grand Union
Company, a Delaware corporation (the "Borrower"), hereby unconditionally
promises to pay to ▇▇▇▇▇▇ Commercial Paper Inc. (the "Swing Line Lender") or
its registered assigns at the Payment Office specified in the Credit Agreement
(as hereinafter defined) in lawful money of the United States and in
immediately available funds, the principal amount of (a) TEN MILLION DOLLARS
($10,000,000), or, if less, (b) the unpaid principal amounts of all Swing Line
Loans made by the Swing Line Lenders pursuant to Section 2.3 of the Credit
Agreement. The principal amount shall be paid in the amounts and on the dates
specified in Section 2.5 of the Credit Agreement. The Borrower further agrees
to pay interest in like money at such office on the unpaid principal amount
hereof from time to time outstanding at the rates and on the dates specified
in Section 2.12 of the Credit Agreement.
The holder of this Note is authorized to endorse on the
schedules annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof the date and amount of
each Swing Line Loan made pursuant to the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof. Each such
endorsement shall constitute prima facie evidence of the accuracy of the
information endorsed. The failure to make any such endorsement or any error in
any such endorsement shall not affect the obligations of the Borrower in
respect of any Swing Line Loan.
This Note (a) is one of the Swing Line Notes referred to in
the Credit Agreement dated as of June 24, 1998 (as amended, supplemented or
modified from time to time, the "Credit Agreement"), among The Grand Union
Company (the "Borrower"), the financial institutions from time to time party
thereto as lenders (the "Lenders"), SBC Warburg Dillon Read Inc., as
co-advisor and co-arranger, Swiss Bank Corporation, Stamford Branch, as
Syndication Agent, ▇▇▇▇▇▇ Brothers Inc., as co-advisor and co-arranger, and
▇▇▇▇▇▇ Commercial Paper Inc., as Administrative Agent, (b) is subject to the
provisions of the Credit Agreement and (c) is subject to optional and
mandatory prepayment in whole or in part as provided in the Credit Agreement.
This Note is secured and guaranteed as provided in the Loan Documents.
Reference is hereby made to the Loan Documents for a description of the
properties and assets in which a security interest has been granted, the
nature and extent of the security and the guarantees, the terms and conditions
upon which the security interests and each guarantee were granted and the
rights of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of
Default, all principal and all
2
accrued interest then remaining unpaid on this Note shall become, or may be
declared to be, immediately due and payable, all as provided in the Credit
Agreement.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or otherwise,
hereby waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR
IN THE CREDIT AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO
AND IN ACCORDANCE WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 12.6
OF THE CREDIT AGREEMENT.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
THE GRAND UNION COMPANY
By:
----------------------------------
Name:
Title:
Schedule A
to Swing Line Note
LOANS AND REPAYMENTS OF SWING LINE LOANS
Amount of Amount of Principal of Swing Unpaid Principal Balance of
Date Swing Line Loans Line Loans Repaid Swing Line Loans Notation Made By
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