EXHIBIT 4.11
U.S. $650,000,000
CREDIT AGREEMENT
Dated as of April 23, 2002
Among
SUPERVALU INC.,
as Borrower,
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and
THE LENDERS NAMED HEREIN,
as Lenders,
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and
JPMORGAN CHASE BANK,
as Administrative Agent,
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and
BANK ONE, NA,
as Syndication Agent
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▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
and
BANC ONE CAPITAL MARKETS, INC.,
as Co-Lead Arrangers and Joint Bookrunners
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms..........................................1
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SECTION 1.02. Computation of Time Periods...................................18
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SECTION 1.03. Accounting Terms..............................................18
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ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The A Advances................................................19
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SECTION 2.02. Making the A Advances.........................................19
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SECTION 2.03. The B Advances................................................21
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SECTION 2.04. Swingline Loans...............................................25
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SECTION 2.05. Letters of Credit.............................................25
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SECTION 2.06. Fees..........................................................29
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SECTION 2.07. Termination or Reduction of the Commitments or the
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Swingline Commitment; Voluntary Reduction................31
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SECTION 2.08. Repayment of A Advances, B Advances and Swingline Loans.......32
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SECTION 2.09. Interest on Advances and Swingline Loans......................32
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SECTION 2.10. Additional Interest on LIBOR Advances.........................33
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SECTION 2.11. Interest Rate Determination...................................33
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SECTION 2.12. Voluntary Conversion of A Advances............................34
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SECTION 2.13. Prepayments of A Advances and Swingline Loans.................35
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SECTION 2.14. Increased Costs...............................................35
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SECTION 2.15. Illegality....................................................36
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SECTION 2.16. Payments and Computations.....................................37
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SECTION 2.17. Sharing of Payments, Etc......................................38
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SECTION 2.18. Taxes.........................................................38
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SECTION 2.19. Use of Proceeds...............................................41
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SECTION 2.20. Termination Date Extensions...................................41
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SECTION 2.21. Replacement of Lenders........................................42
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SECTION 2.22. Evidence of Debt..............................................42
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ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to the Effective Date....................43
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SECTION 3.02. Conditions Precedent to Each A Borrowing, Swingline
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Borrowing and Issuance of Letters of Credit..............45
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SECTION 3.03. Conditions Precedent to Each B Borrowing......................46
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower................47
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ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants.........................................52
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SECTION 5.02. Negative Covenants............................................55
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SECTION 5.03. Restrictive Financial Covenants...............................62
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ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default.............................................63
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ARTICLE VII
THE AGENT
SECTION 7.01. Appointment...................................................66
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SECTION 7.02. Nature of Duties..............................................67
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SECTION 7.03. Exculpation, Rights Etc.......................................67
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SECTION 7.04. Reliance......................................................68
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SECTION 7.05. Indemnification...............................................68
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SECTION 7.06. Agent In Its Individual Capacity..............................68
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SECTION 7.07. Notice of Default.............................................69
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SECTION 7.08. Holders of Obligations........................................69
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SECTION 7.09. Resignation by the Agent......................................69
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SECTION 7.10. Removal of Agent..............................................69
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc...............................................70
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SECTION 8.02. Notices, Etc..................................................71
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SECTION 8.03. No Waiver; Remedies...........................................71
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SECTION 8.04. Costs and Expenses............................................71
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SECTION 8.05. Right of Setoff...............................................72
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SECTION 8.06. Binding Effect................................................73
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SECTION 8.07. Assignments and Participations................................73
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SECTION 8.08. Indemnification...............................................76
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SECTION 8.09. Governing Law; Submission to Jurisdiction.....................77
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SECTION 8.10. Execution in Counterparts.....................................77
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SECTION 8.11. Confidentiality...............................................77
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SECTION 8.12. WAIVER OF JURY TRIAL, ETC.....................................78
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Schedule I - Commitments
Schedule II - Applicable Lending Offices
Schedule III - Existing Debt
Schedule IV - Subsidiaries
Schedule V - Existing Liens
Schedule VI - Excluded Restrictive Agreements
Schedule VII - Structured Lease Transactions and Exchange Note Transactions
Schedule VIII - Letters of Credit
Schedule VIIIA - PNC Letters of Credit
Schedule IX - Permitted Amendments
Exhibit A-1 - Form of A Note
Exhibit A-2 - Form of B Note
Exhibit B-1 - Form of Notice of A Borrowing
Exhibit B-2 - Form of Notice of B Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Opinion of ▇▇▇▇▇▇ & Whitney, Special Counsel
for the Borrower
Exhibit E - Form of Opinion of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Associate General
Counsel of the Borrower
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CREDIT AGREEMENT
Dated as of April 23, 2002
SUPERVALU INC., a Delaware corporation (the "Borrower"), the lenders
(together with any other lender that hereafter becomes a party to this
Agreement, the "Lenders") listed on the signature pages hereof, JPMORGAN CHASE
BANK ("JPMCB"), as administrative agent for the Lenders hereunder (the "Agent")
and BANK ONE, NA, as syndication agent (the "Syndication Agent"), agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"A Advance" means an advance by a Lender to the Borrower as part of an A
Borrowing and refers to a Base Rate Advance or a LIBOR Advance.
"A Borrowing" means a borrowing consisting of simultaneous A Advances of
the same Type made by each of the Lenders pursuant to Section 2.01.
"A Note" means a promissory note of the Borrower payable to the order of
any Lender, in substantially the form of Exhibit A-1 hereto, evidencing the
aggregate indebtedness of the Borrower to such Lender resulting from the A
Advances made by such Lender.
"Accounts Receivable" means, for any date, accounts receivables and notes
receivables that would be reflected on a Consolidated balance sheet of the
Borrower and its Subsidiaries (other than Foreign Subsidiaries) prepared as of
such date in accordance with GAAP.
"Advance" means an A Advance or a B Advance.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For the purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with") as used with
respect to any Person or group of Persons, shall mean
possession directly or indirectly of the power to direct or cause the direction
of management policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"Applicable Facility Fee Rate" means, for any period a percentage per annum
equal to the percentage set forth below determined by reference to the lower of
(x) the rating of the Borrower's long-term, senior unsecured Debt from S&P or
(y) the rating of the Borrower's long-term, senior unsecured Debt from ▇▇▇▇▇'▇,
in each case as in effect from time to time during such period:
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Borrower's
Long-Term Senior
Unsecured Debt Rating Applicable
S&P or ▇▇▇▇▇'▇ ("Level") Facility Fee Rate
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Level 1
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BBB+ or better, or Baa1 or better .150%
Level 2
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BBB or Baa2 .200%
Level 3
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BBB- or Baa3 .250%
Level 4
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BBB- and Ba1, or BB+ and Baa3 .300%
Level 5
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Worse than BB+ or worse than Ba1 .350%
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provided that if, at any time, no rating is available from S&P, ▇▇▇▇▇'▇ or any
other nationally recognized statistical rating organization designated by the
Borrower and approved in writing by the Majority Lenders, the Applicable
Facility Fee Rate shall be .350%; and provided further that (i) upon the
occurrence of a ratings differential between S&P and ▇▇▇▇▇'▇ that corresponds to
a differential of two or more Levels, the Applicable Facility Fee Rate shall be
based upon the Level that is one Level above the Level corresponding to the
lower rating and (ii) in the event of a ratings differential corresponding to
▇▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇▇ ▇, the Applicable Facility Fee Rate will be based upon Level
4.
"Applicable Interest Rate Margin" means, for each LIBOR Advance, for any
Interest Period, a percentage per annum equal to the percentage set forth below
determined by reference to the lower of (x) the rating of the Borrower's
long-term, senior unsecured Debt from S&P or (y) the rating of the Borrower's
long-term, senior unsecured Debt from ▇▇▇▇▇'▇, in each case for LIBOR Advances,
as in effect on the first day of such Interest Period:
2
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Borrower's
Long-Term Senior
Unsecured Debt Rating Applicable
S&P or ▇▇▇▇▇'▇ ("Level") Interest Rate Margin
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Level 1
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BBB+ or better, or Baa1 or better .650%
Level 2
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BBB or Baa2 .800%
Level 3
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BBB- or Baa3 1.000%
Level 4
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BBB-and Ba1, or BB+ and Baa3 1.325%
Level 5
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Worse than BB+ or worse than Ba1 1.400%
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provided that if, at any time, no rating is available from S&P, ▇▇▇▇▇'▇ or any
other nationally recognized statistical rating organization designated by the
Borrower and approved in writing by the Majority Lenders, the Applicable
Interest Rate Margin for LIBOR Advances for such Interest Period shall be
1.400%; and provided further that (i) upon the occurrence of a ratings
differential between S&P and ▇▇▇▇▇'▇ that corresponds to a differential of two
or more Levels, the Applicable Interest Rate Margin shall be based upon the
Level that is one Level above the Level corresponding to the lower rating and
(ii) in the event of a ratings differential between Level 4 and Level 5, the
Applicable Interest Rate Margin will be based upon Level 4. Notwithstanding the
foregoing, prior to the delivery of financial statements required by Section
5.01(d)(i)(x) for the Borrower's second full fiscal quarter ending following the
Effective Date, the Applicable Interest Rate Margin shall be the greater of (a)
the rate determined by reference to the ratings on the Effective Date and (b)
the Applicable Interest Rate Margin determined in accordance with the preceding
sentence.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance, such
Lender's LIBOR Lending Office in the case of a LIBOR Advance and, in the case of
a B Advance, the office of such Lender notified by such Lender to the Agent as
its Applicable Lending Office with respect to such B Advance.
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an Eligible Assignee, and accepted by the Agent, in
substantially the form of Exhibit C hereto.
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"Available LC Amount" means at any time an amount equal to the lesser of
(i) $175,000,000 and (ii) the excess, if any, of the aggregate amount of the
Commitments over the aggregate outstanding amount of A Advances plus B Advances
plus Swingline Loans at such time.
"B Advance" means an advance by a Lender to the Borrower as part of a B
Borrowing resulting from the auction bidding procedure described in Section
2.03.
"B Borrowing" means a borrowing consisting of simultaneous B Advances from
each of the Lenders whose offer to make one or more B Advances as part of such
borrowing has been accepted by the Borrower under the auction bidding procedure
described in Section 2.03.
"B Note" means a promissory note of the Borrower payable to the order of
any Lender, in substantially the form of Exhibit A-2 hereto, evidencing the
indebtedness of the Borrower to such Lender resulting from a B Advance made by
such Lender.
"B Reduction" has the meaning specified in Section 2.01.
"Base Rate" means, for any day, a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall be equal to the higher of:
(a) the Prime Rate in effect on such day; and
(b) 1/2 of one percent per annum above the Federal Funds Rate.
"Base Rate Advance" means an A Advance that bears interest as provided in
Section 2.09(a)(i).
"Borrowing" means an A Borrowing, a B Borrowing or a Swingline Borrowing.
"Business Day" means a day of the year on which banks are not required or
authorized to close in New York City and London and, if the applicable Business
Day relates to any LIBOR Advances, on which dealings are carried on in the
London interbank market.
"Capital Lease" shall mean a lease meeting one or more of the criteria set
forth in paragraph 7 of the Statement of Financial Accounting Standards No. 13
of the Financial Accounting Standards Board (as in effect from time to time or
as set forth in a statement of GAAP superseding such paragraph 7).
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"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any Capital Lease and the amount of
such obligations shall be the capitalized amount thereof determined in
accordance with GAAP.
"Commercial Letters of Credit" means (i) the commercial Letters of Credit
issued by the LC Bank for the account of the Borrower pursuant to Section 2.05,
and (ii) the commercial Letters of Credit previously issued by Wachovia Bank of
Georgia, National Association that (a) are outstanding on the date of this
Agreement and (b) are listed on Schedule VIII hereto.
"Commitment" means, with respect to each Lender, the commitment of such
Lender to make A Advances and to acquire participations in Letters of Credit and
Swingline Loans hereunder, expressed as an amount representing the maximum
aggregate amount at any time of the sum of the outstanding principal amount of
such Lender's A Advances, its LC Exposure and its Swingline Exposure at such
time, as such commitment may be (a) reduced from time to time pursuant to
Section 2.07 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 8.07. The initial amount of
each Lender's Commitment is set forth on Schedule I, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Commitment, as
applicable.
"Consolidated" refers to the consolidation of accounts of the Borrower and
its Subsidiaries in accordance with GAAP, including principles of consolidation.
"Consolidated EBITDA" means, for any period, Consolidated Net Income for
such period plus (a) without duplication and to the extent deducted in
determining such Consolidated Net Income, the sum of (i) Consolidated Interest
Expense for such period, (ii) Consolidated income tax expense for such period,
(iii) all amounts attributable to depreciation and amortization for such period
and (iv) any extraordinary or unusual non- cash charges for such period,
including, without limitation, in respect of the Borrower's fourth fiscal
quarter of 2002 only, an amount not to exceed $58,800,000 of restructuring and
other charges taken in such fiscal quarter that were announced in April 2002 and
specified in the Borrower's 2002 annual report and minus (b) without duplication
and to the extent included in determining such Consolidated Net Income, any
extraordinary gains for such period, all determined on a Consolidated basis in
accordance with GAAP.
"Consolidated Interest Expense" means, for any period (a) the interest
expense (including imputed interest expense in respect of Capital Lease
Obligations) minus (b) the interest income, in each case, of the Borrower and
its Subsidiaries for such period, determined on a Consolidated basis in
accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income or loss of
the Borrower and its Subsidiaries for such period determined on a Consolidated
basis in
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accordance with GAAP; provided that there shall be excluded (a) the income of
any Person (other than the Borrower or any Subsidiary of the Borrower) in which
any other Person (other than the Borrower or any Subsidiary or any director
holding qualifying shares in compliance with applicable law) owns an Equity
Interest, except to the extent of the amount of dividends or other distributions
actually paid to the Borrower or any of its Subsidiaries during such period, and
(b) the income or loss 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 Subsidiary of the Borrower or the date that such Person's assets are
acquired by the Borrower or any Subsidiary of the Borrower.
"Consolidated Rent Expense" means, for any period, all payment obligations
of the Borrower and its Subsidiaries during such period as lessee under any
leases other than Capital Leases (net of sub-lease income), as determined on a
Consolidated basis.
"Consolidated Tangible Assets" means at any date the sum of the Tangible
Assets of the Borrower and its Subsidiaries on a Consolidated basis after
eliminating intercompany items, all determined in accordance with GAAP,
including appropriate deductions for any minority interest in Tangible Assets of
such Consolidated Subsidiaries; provided that the Consolidated assets of the
Borrower and its Subsidiaries shall be determined by reference to the most
recent financial statements of the Borrower delivered pursuant to Section
5.01(d)(i)(x) or (y).
"Convert", "Conversion" and "Converted" each refers to a conversion of
Advances of one Type into Advances of another Type pursuant to Section 2.12 or
2.15.
"Debt" of any Person means (i) indebtedness of such Person for borrowed
money, (ii) all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments, (iii) all obligations of such Person to pay the
deferred purchase price of property or services, (iv) the present value of all
obligations of such Person as lessee under leases which shall have been or
should be, in accordance with GAAP, recorded as Capital Leases, (v) all
obligations under, or the net investments outstanding pursuant to, any Permitted
Receivables Financing, (vi) all Debt of others secured by (or for which the
holder of such Debt has an existing right, contingent or otherwise, to be
secured by) any Lien or property owned or acquired by such Persons, (vii)
obligations of the Borrower and each of its Subsidiaries under each Hedging
Agreement that (A) is in effect on the Effective Date with a counterparty that
is a Lender or an Affiliate of a Lender as of the Effective Date or (B) is
entered into after the Effective Date with any counterparty that is a Lender or
an Affiliate of a Lender at the time such Hedging Agreement is entered into, and
(viii) all obligations of such Person under direct or indirect Guarantees in
respect of, and all obligations (contingent or otherwise) of such Person to
purchase or otherwise acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or obligations of others of the kinds referred to in
clauses (i) through (iv) above (and for the purposes only of Sections 5.02(e)
and (f), excluding any Guarantee by the Borrower or
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any of its Subsidiaries of any obligations of any Person, other than the
Borrower or any of its Subsidiaries, which is existing as of the Effective Date
and of which the Agent has been notified in writing by the Borrower on or before
the Effective Date).
"Default" means any Event of Default or any event that would constitute an
Event of Default but for the requirement that notice be given or time elapse or
both.
"Domestic Lending Office" means, with respect to any Lender the office of
such Lender specified as its "Domestic Lending Office" opposite its name on
Schedule II hereto or in the Assignment and Acceptance pursuant to which it
became a Lender, or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Agent.
"Effective Date" means the date on which the conditions specified in
Section 3.01 have been satisfied.
"Eligible Accounts Receivable" means, for any date, Accounts Receivable
which are reflected on a Consolidated balance sheet of the Borrower and its
Subsidiaries (other than Foreign Subsidiaries) as current accounts receivable,
excluding (a) that portion of Accounts Receivable that have been sold to or
purchased by a Person that is not a Subsidiary (i) pursuant to any Permitted
Receivables Financing, or (ii) pursuant to any transaction permitted by clause
(iv) of Section 5.02(c), and (b) that portion of Accounts Receivable that are
subject to a Lien pursuant to any Permitted Receivables Financing.
"Eligible Assignee" means (i) a commercial bank organized under the laws of
the United States, or any State thereof, and having total assets in excess of
$1,000,000,000, (ii) a savings and loan association or savings bank organized
under the laws of the United States, or any State thereof, and having total
assets in excess of $1,000,000,000, (iii) a commercial bank organized under the
laws of any other country which is a member of the OECD or has concluded special
lending arrangements with the International Monetary Fund associated with its
General Arrangements to Borrow, or a political subdivision of any such country,
and having total assets in excess of $1,000,000,000, provided that such bank is
acting through such bank's branch, or agency, located in the United States, (iv)
the central bank of any country which is a member of the OECD, (v) a commercial
finance company organized under the laws of the United States, or any State
thereof, and having total assets in excess of $1,000,000,000, (vi) any Lender or
Affiliate of a Lender, (vii) any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business, (viii) any fund that invests in bank loans and similar
extensions of credit, and (ix) such other bank, company, financial institution
or fund to which the Borrower shall consent; provided, however, that
notwithstanding anything to the contrary set forth in this Agreement, no Person
that is organized under the laws of a jurisdiction outside the United States
shall be an Eligible Assignee if, at the
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time of an assignment pursuant to Section 8.07, such Person would be subject to
United States interest withholding tax at a rate greater than zero; provided
further, however, that neither the Borrower nor any Affiliate of the Borrower
shall qualify as an Eligible Assignee.
"Environmental Action" means any administrative, regulatory or judicial
action, suit, demand, demand letter, claim, notice of noncompliance or
violation, notice of liability or potential liability, investigation,
proceeding, consent order or consent agreement relating to any Environmental
Law, Environmental Permit or Hazardous Materials or arising from alleged injury
or threat of injury to health, safety or the environment, including, without
limitation, (a) by any governmental or regulatory authority for enforcement,
cleanup, removal, response, remedial or other actions or damages and (b) by any
governmental or regulatory authority or any third party for damages,
contribution, indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign statute,
law, ordinance, rule, regulation, code, order, judgment, decree or judicial or
agency interpretation, policy or guidance relating to the environment, health,
safety or Hazardous Materials.
"Environmental Permit" means any permit, approval, identification number,
license or other authorization required under any Environmental Law.
"Equity Interests" means shares of capital stock, partnership interests,
joint venture interests, membership interests in a limited liability or
unlimited liability company, beneficial interests in a trust or other equity
ownership interests in a Person (including, without limitation, Voting Stock) of
whatever nature and rights, including warrants or options to acquire any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" of any Person means any other Person that for purposes of
Title IV of ERISA or Section 412 of the Internal Revenue Code of 1986, as
amended from time to time, is a member of such Person's controlled group, or
under common control with such Person, within the meaning of Section 414 of the
Internal Revenue Code of 1986, as amended from time to time.
"ERISA Event" with respect to any Person means (a) the occurrence of a
material reportable event, within the meaning of Section 4043 of ERISA, with
respect to any Plan of such Person or any of its ERISA Affiliates, unless the
30-day notice requirement with respect to such event has been waived by the
PBGC, (b) the application for a minimum
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funding waiver with respect to any Plan of such Person or any of its ERISA
Affiliates, (c) the provision by the administrator of any Plan of such Person or
any of its ERISA Affiliates of a notice of intent to terminate such Plan,
pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect
to a plan amendment referred to in Section 4041(e) of ERISA), (d) the cessation
of operations at a facility of such Person or any of its ERISA Affiliates in the
circumstances described in Section 4062(e) of ERISA, (e) the withdrawal by such
Person or any of its ERISA Affiliates from a Multiple Employer Plan during a
plan year for which it was a substantial employer, as defined in Section
4001(a)(2) of ERISA, (f) the existence with respect to any Plan of an
"accumulated funding deficiency" (as defined in Section 412 of the Internal
Revenue Code of 1986, as amended from time to time, or Section 302 of ERISA),
whether or not waived, (g) the adoption of an amendment to a Plan of such Person
or any of its ERISA Affiliates requiring the provision of security to such Plan,
pursuant to Section 307 of ERISA, or (h) the institution by the PBGC of
proceedings to terminate a Plan of such Person or any of its ERISA Affiliates,
pursuant to Section 4042 of ERISA, or the occurrence of any event or condition
described in Section 4042 of ERISA that could constitute grounds for the
termination of, or the appointment of a trustee to administer such Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Events of Default" has the meaning specified in Section 6.01.
"Excluded Debt" means Borrowings, Letters of Credit, commercial paper, the
obligations referred to in clause (v) of the definition of the term "Debt", Debt
arising under the Borrower's existing $25,000,000 line of credit with Banca
Nazionale del Lavoro and Debt assumed in connection with any acquisition of
assets by the Borrower to the extent permitted by this Agreement (including any
refinancing, renewal, amendment, or replacement of any of the foregoing).
"Existing Notes Indenture" means the Indenture dated as of July 1, 1987
between the Borrower and Bankers Trust Company, as amended and supplemented as
of the Effective Date.
"Existing Five-Year Credit Agreement" means the Credit Agreement dated as
of August 16, 2001, as amended, modified or supplemented, among the Borrower,
the lenders named therein, JPMorgan Chase Bank (formerly known as The Chase
Manhattan Bank) as agent, Bank One, NA as syndication agent, First Bank National
Association, The Fuji Bank, Limited, Nationsbank, N.A. and PNC Bank, National
Association as co-agents, Bank of America National Trust & Savings Association,
The Bank of New York, Bank One, NA, Fleet National Bank, ▇▇▇▇▇▇ Guaranty Trust
Company of New York and
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Norwest Bank Minnesota, National Association as lead managers and Bankers Trust
Company.
"Existing 364-Day Credit Agreement" means the Credit Agreement dated as of
August 16, 2001, as amended, modified or supplemented, among the Borrower, the
lenders named therein, JPMorgan Chase Bank (formerly known as The Chase
Manhattan Bank) as agent and Bank One, NA as syndication agent.
"Federal Funds Rate" means, for any period, a current market interest rate
per annum equal for each day during such period to the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers as published for such day (or, if such day is not a
Business Day) for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
quotations for such day on such transactions received by the Agent from three
Federal funds brokers of nationally recognized standing selected by it.
"Financial Officer" means, for any Person, the chief executive officer, the
chief financial officer, the senior vice president-finance, the chief accounting
officer, the treasurer or the controller of such Person or any assistant
treasurer or any assistant controller of such Person previously identified in
writing to the Agent.
"Foreign Subsidiary" means any Subsidiary that is organized under the laws
of a jurisdiction other than the United States of America or any State thereof
or the District of Columbia.
"GAAP" means generally accepted accounting principles in the United States
of America, consistently applied.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Debt or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and including
any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or other
obligation or to purchase (or to advance or supply funds for the purchase of)
any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such Debt or
other obligation of the payment thereof, (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Debt or other obligation
or (d) as an account party in respect of any letter of credit or letter of
guaranty issued to support such Debt or
10
obligation, provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"Hazardous Materials" means petroleum and petroleum products, byproducts or
breakdown products, radioactive materials, asbestos-containing materials, radon
gas and any other chemicals, materials or substances designated, classified or
regulated as being "hazardous" or "toxic", or words of similar import, under any
federal, state, local or foreign statute, law, ordinance, rule, regulation,
code, order, judgment, decree or judicial or agency interpretation policy or
guidance.
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
"Holding Account" means an interest-bearing deposit account belonging to
the Agent for the benefit of the Lenders into which the Borrower may be required
to make cash deposits pursuant to the provisions of this Agreement, such account
to be under the sole dominion and control of the Agent and not subject to
withdrawal by the Borrower, with any amounts therein to be held for application
toward payment of any outstanding Letters of Credit when drawn upon.
"Information Memorandum" means the Confidential Information Memorandum
dated March, 2002 with respect to the Borrower.
"Immaterial Subsidiary" means any Subsidiary that has less than $5,000,000
in assets (excluding Equity Interests in such Subsidiary's Subsidiaries),
provided that the percentage of Inventory and Eligible Accounts Receivable
represented by the portion of Inventory and Eligible Accounts Receivable
attributable to the Immaterial Subsidiaries as a group will at no time exceed
5%.
"Insufficiency" means, with respect to any Plan of the Borrower or any of
its ERISA Affiliates, the amount, if any, of "unfunded benefit liabilities" (as
defined in Section 4001(a)(18) of ERISA) for such Plan.
"Interest Period" means, for each LIBOR Advance comprising part of the same
A Borrowing, the period commencing on the date of such LIBOR Advance or the date
of the Conversion of any A Advance into such a LIBOR Advance and ending on the
last day of the period selected by the Borrower pursuant to the provisions below
and, thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below. The duration of each
such Interest Period for a LIBOR Borrowing shall be 1, 2, 3 or 6 months and, if
available to all Lenders, 9 months, in each case as the Borrower may, upon
notice received by, the Agent not later than 11:00 A.M. (New York
11
City time) on the third Business Day, prior to the first day of such Interest
Period, select; provided, however, that:
(i) the duration of any Interest Period which commences before the
Termination Date and would otherwise end after such date shall end on such
date;
(ii) Interest Periods commencing on the same date for LIBOR Advances
comprising part of the same A Borrowing shall be of the same duration;
(iii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day,
provided that, if such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day; and
(iv) whenever the first day of any Interest Period occurs on a day of
an initial calendar month for which there is no numerically corresponding
day in the calendar month that succeeds such initial calendar month by the
number of months equal to the number of months in such Interest Period,
such Interest Period shall end on the last Business Day of such succeeding
calendar month.
"Inventory" means, for any date, inventory that is located in the United
States of America and would be reflected on a Consolidated balance sheet of the
Borrower and its Subsidiaries (other than Foreign Subsidiaries) prepared as of
such date in accordance with GAAP.
"LC Bank" means (i) such Lender as is designated as the LC Bank for any
Letter of Credit by written notice to the Agent from such Lender and the
Borrower, (ii) Wachovia Bank of Georgia, National Association for the Letters of
Credit listed in Schedule VIII and (iii) PNC Bank, National Association for the
Letters of Credit listed in Schedule VIIIA, in such Bank's capacity as LC Bank
under the letter of credit facility described in Section 2.05 and its successors
in such capacity.
"LC Exposure" means, at any time and for any Lender, an amount equal to
such Lender's Percentage of the aggregate amount of Letter of Credit Liabilities
at such time.
"Lender Affiliate" means, (a) with respect to any Lender, (i) an Affiliate
of such Lender or (ii) any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an Affiliate of such
Lender and (b) with respect to any Lender that is a fund that invests in bank
loans and similar extensions of credit, any other fund that
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invests in bank loans and similar extensions of credit and is managed by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.
"Lenders" means the banks party hereto and each Eligible Assignee that
shall become a party hereto pursuant to Section 8.07(c).
"Letter of Credit Liabilities" means, at any time and in respect of any
Letter of Credit, the sum, without duplication, of (i) the amount available for
drawing under such Letter of Credit plus (ii) the aggregate unpaid amount of all
Reimbursement Obligations in respect of previous drawings made under such Letter
of Credit.
"Letters of Credit" means the Commercial Letters of Credit and the Standby
Letters of Credit.
"LIBOR" means, for any Interest Period for any LIBOR Advance comprising
part of the same A Borrowing, the rate appearing on Page 3750 of the Dow ▇▇▇▇▇
Market Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to that currently provided on such page of such Service, as
determined by the Agent from time to time for the purpose of providing
quotations of interest rates applicable to U.S. dollar deposits in the London
interbank market) at approximately 11:00 A.M. (London time) two Business Days
prior to the commencement of such Interest Period, as the rate for U.S. dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then "LIBOR" with
respect to such LIBOR Advance for such Interest Period shall be an interest rate
per annum equal to the average (rounded upward to the nearest whole multiple of
1/16 of 1% per annum, if such average is not such a multiple) of the rate per
annum at which deposits in U.S. dollars are offered by the principal office of
each of the Reference Banks in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days before the first
day of such Interest Period in an amount substantially equal to the greater of
(i) $1,000,000 and (ii) such Reference Bank's LIBOR Advance comprising part of
such A Borrowing, and for a period equal to such Interest Period.
"LIBOR Advance" means an A Advance that bears interest as provided in
Section 2.09(a)(ii).
"LIBOR Lending Office" means, with respect to any Lender, the office of
such Lender specified as its "LIBOR Lending Office" opposite its name on
Schedule II hereto or in the Assignment and Acceptance pursuant to which it
became a Lender (or, if no such office is specified, its Domestic Lending
Office) or such other office of such Lender as such Lender may from time to time
specify to the Borrower and the Agent.
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"LIBOR Reserve Percentage" of any Lender for any Interest Period for any
LIBOR Advance means the reserve percentage applicable during such Interest
Period (or if more than one such percentage shall be so applicable, the daily
average of such percentages for those days in such Interest Period during which
any such percentage shall be so applicable) under regulations issued from time
to time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve requirement)
for such Lender with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities having a term equal to such Interest Period.
"Lien" means any lien, security interest or other charge or encumbrance of
any kind, or any other type of preferential arrangement concerning property,
including, without limitation, the lien or retained security title of a
conditional vendor and any other encumbrance on title to real property to secure
repayment of a liability.
"Loan Documents" means this Agreement and the Notes.
"Majority Lenders" means at any time Lenders holding at least 51% of the
then aggregate unpaid principal amount of the A Notes plus the then aggregate
unpaid amount of Reimbursement Obligations held by Lenders, or, if no such
principal amount is then outstanding, Lenders having at least 51% of the
Commitments (or if the aggregate Commitment has been terminated, Lenders holding
at least 51% of the then aggregate unpaid principal amount of the Notes plus the
then aggregate unpaid amount of Reimbursement Obligations).
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations or condition (financial or otherwise), of the
Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower
to perform any of its obligations under any Loan Document or (c) the rights of
or benefits available to the Lenders under any Loan Document.
"Material Subsidiary" means, at any time, any Subsidiary of the Borrower
which (a) is a wholly-owned limited liability company or (b) is not a Foreign
Subsidiary or an Immaterial Subsidiary.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" of any Person means a multiemployer plan, as defined
in Section 4001(a)(3) of ERISA, to which such Person or any of its ERISA
Affiliates is making or accruing an obligation to make contributions, or has
within any of the preceding five plan years made or accrued an obligation to
make contributions.
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"Multiple Employer Plan" of any Person means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
such Person or any of its ERISA Affiliates and at least one Person other than
such Person and its ERISA Affiliates or (b) was so maintained and in respect of
which such Person or any of its ERISA Affiliates could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
"Net Worth" means, as of any date, the excess of total assets over total
liabilities of the Borrower and its Subsidiaries as of such date determined on a
Consolidated basis in accordance with GAAP.
"Note" means an A Note or a B Note.
"Notice of A Borrowing" has the meaning specified in Section 2.02(a).
"Notice of B Borrowing" has the meaning specified in Section 2.03(a)(i).
"Notice of Swingline Borrowing" has the meaning specified in Section
2.04(b).
"OECD" means the Organization for Economic Cooperation and Development.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
entity thereto.
"Percentage" means, with respect to each Lender, the percentage equal to a
fraction the numerator of which is the amount of such Lender's Commitment (or,
in the event the Commitments have been terminated, such Lender's Commitment as
is in effect immediately prior to such termination) and the denominator of which
is the aggregate amount of the Commitments (or, in the event the Commitments
have been terminated, the aggregate amount of the Commitments as in effect
immediately prior to such termination) of the Lenders.
"Permitted Receivables Financing" means (a) the sale by the Borrower and
certain Subsidiaries of the Borrower of accounts receivable to the Receivables
Subsidiary pursuant to the Receivables Purchase Agreement, (b) the sale of such
accounts receivable (or participations therein) by the Receivables Subsidiary to
certain purchasers pursuant to the Receivables Transfer Agreement, (c) any other
accounts receivable financing having substantially similar effect as the
Permitted Receivables Financing referred to in clauses (a) and (b) above and the
terms of which are otherwise no more adverse to the Lenders than the terms of
the Permitted Receivables Financing referred to in clauses (a) and (b) above.
15
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan, but does
not include any such plan with a total projected benefit obligation (as defined
in Statement of Financial Accounting Standards 87) of less than $20,000,000.
"Prime Rate" means the rate of interest per annum publicly announced from
time to time by JPMorgan Chase Bank as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be effective from
and including the date such change is publicly announced as being effective.
"Receivables Purchase Agreement" means (a) each Purchase Agreement as
defined in the receivables purchase agreement referred to in clause (a) of the
definition of the term "Receivables Transfer Agreement" and (b) any agreement
replacing such Receivables Purchase Agreement, provided that such replacing
agreement contains terms that are substantially similar to such Receivables
Purchase Agreement and that are otherwise no more adverse to the Lenders than
the applicable terms of such Receivables Purchase Agreement.
"Receivables Subsidiary" means Supervalu Receivables Funding Corporation, a
Delaware corporation, and any other special-purpose, bankruptcy-remote
Subsidiary of the Borrower created and maintained solely to effect a Permitted
Receivables Financing.
"Receivables Transfer Agreement" means (a) the Receivables Purchase
Agreement dated as of August 16, 2001, among the Receivables Subsidiary, the
Borrower as servicer, Delaware Funding Corporation as conduit purchaser,
JPMorgan Chase Bank (formerly ▇▇▇▇▇▇ Guaranty Trust Company of New York) as
administrative agent and as facility agent for certain persons, Blue Ridge Asset
Funding Corporation as a conduit purchaser, Wachovia Bank N.A. as facility agent
for certain persons and the other conduit purchasers, alternate purchasers and
facility agents party thereto and the Subsidiaries party thereto, related to the
Permitted Receivables Financing and (b) any agreement replacing such Receivables
Transfer Agreement, provided that such replacing agreement contains terms that
are substantially similar to such Receivables Transfer Agreement and that are
otherwise no more adverse to the Lenders than the applicable terms of such
Receivables Transfer Agreement.
"Reference Banks" means JPMorgan Chase Bank and Bank One, NA or any
successor Reference Bank appointed pursuant to Section 2.11(c).
"Register" has the meaning specified in Section 8.07(c).
16
"Reimbursement Obligations" means at any date the obligations of the
Borrower then outstanding under Section 2.05 to reimburse the LC Bank for the
amount paid by the LC Bank in respect of a drawing under a Letter of Credit.
"S&P" means Standard & Poor's Ratings Group, Inc.
"Single Employer Plan" of any Person means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
such Person or any of its ERISA Affiliates and no Person other than such Person
and its ERISA Affiliates or (b) was so maintained and in respect of which such
Person or any of its ERISA Affiliates could have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.
"Standby Letter of Credit" means (i) any letter of credit, other than a
Commercial Letter of Credit, issued by an LC Bank for the account of the
Borrower pursuant to Section 2.05, (ii) the letters of credit, other than
Commercial Letters of Credit, issued by Wachovia Bank of Georgia, National
Association for the account of the Borrower as listed in Schedule VIII, (iii)
the letters of credit, other than Commercial Letters of Credit, issued by PNC
Bank, National Association for the account of the Borrower or SUPERVALU Holdings
Inc. as listed in Schedule VIIIA, and (iv) the letters of credit, other than
Commercial Letters of Credit, that were previously issued pursuant to the
Existing Five-Year Credit Agreement that (a) are outstanding on the date of this
Agreement and (b) listed on Schedule X hereto.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock or other Equity
Interests having ordinary voting power to elect a majority of the Board of
Directors of such entity or organization (irrespective of whether at the time
capital stock or other Equity Interests of any other class or classes of such
entity or organization shall or might have voting power upon the occurrence of
any contingency), (b) the interest in the capital or profits of such entity or
organization or (c) the beneficial interest in such trust or estate is at the
time directly or indirectly owned or controlled by such Person, by such Person
and one or more of its other Subsidiaries or by one or more of such Person's
other Subsidiaries.
"Swingline Borrowing" means a borrowing consisting of a Swingline Loan made
pursuant to Section 2.04.
"Swingline Commitment" means the obligation of the Swingline Lender to make
Swingline Loans to the Borrower in aggregate principal amount at any one time
outstanding not to exceed the lesser of (i) $10,000,000 and (ii) the excess, if
any, of the Swingline Lenders Commitment as a Lender over the sum of (x) the
aggregate
17
outstanding principal amount of the Swingline Lender's A Advances as a Lender
plus (y) the Swingline Lenders LC Exposure as a Lender, in each case at such
time.
"Swingline Exposure" means, at any time, the aggregate principal amount of
all Swingline Loans outstanding at such time. The Swingline Exposure of any
Lender at any time shall be its Percentage of the total Swingline Exposure at
such time.
"Swingline Lender" means JPMCB, in its capacity as the Swingline Lender
under the Swingline facility described in Section 2.04, and its successors in
such capacity.
"Swingline Loan" means a loan made by the Swingline Lender pursuant to
Section 2.04.
"Tangible Assets" of any Person means, at any date, the gross book value as
shown by the accounting books and records of such Person (maintained in
accordance with GAAP) of all its property both real and personal less (i) the
net book value of all its licenses, patents, patent applications, copyrights,
trademarks, trade names, goodwill, non-compete agreements or organizational
expenses and other like intangibles, (ii) unamortized indebtedness discount and
expense, (iii) all reserves for depreciation, obsolescence, depletion and
amortization of its properties and (iv) all other proper valuation reserves
against assets which in accordance with GAAP should be provided in connection
with the business conducted by such Person.
"Termination Date" means the earlier of April 23, 2005 (as the same may be
extended pursuant to Section 2.20 up to April 23, 2007) and the date of
termination in whole of the Commitments pursuant to Section 2.07 or 6.01.
"Type" when used in respect of any A Advance, shall mean Base Rate Advance
or LIBOR Advance.
"Voting Stock" means capital stock issued by a corporation, or equivalent
interests in any other Person, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even if the right so to
vote has been suspended by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(l) of ERISA.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle E of
Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word
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"from" means "from and including" and the words "to" and "until" each means "to
but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistently applied.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The A Advances. Each Lender severally agrees on the terms and
conditions hereinafter set forth, to make A Advances to the Borrower from time
to time on any Business Day during the period from the Effective Date until the
Termination Date in amounts such that the sum of (x) the aggregate principal
amount of A Advances by such Lender plus (y) such Lender's Swingline Exposure
plus (z) such Lender's LC Exposure at any one time outstanding shall not exceed
such Lender's Commitment, provided that the aggregate amount of the Commitments
of the Lenders shall be deemed used from time to time to the extent of the
aggregate amount of the B Advances then outstanding and such deemed use of the
aggregate amount of the Commitments shall be applied to the Lenders ratably
according to their respective Commitments (such deemed use of the aggregate
amount of the Commitments being a "B Reduction"), and provided further that in
no event shall the Swingline Lender be obligated to make any loan hereunder if,
after making such loan and giving effect to the application of any funds made
available at such time to prepay or repay any outstanding Swingline Loan, the
sum of the aggregate principal amount of A Advances, Swingline Loans and LC
Exposure at such time outstanding exceeds an amount equal to (i) the aggregate
Commitment less (ii) the aggregate B Reduction. Each A Borrowing shall be in an
aggregate amount not less than $20,000,000 or an integral multiple of $1,000,000
in excess thereof (or, if less, an aggregate amount equal to the difference
between the aggregate amount of a proposed B Borrowing requested by the Borrower
and the aggregate amount of B Advances offered to be made by the Lenders and
accepted by the Borrower in respect of such B Borrowing, if such B Borrowing is
made on the same date as such A Borrowing) and shall consist of A Advances of
the same Type made on the same day by the Lenders ratably according to their
respective Commitments. Within the limits of each Lender's Commitment, the
Borrower may from time to time borrow under this Section 2.01, prepay pursuant
to Section 2.13(b) and reborrow under this Section 2.01.
SECTION 2.02. Making the A Advances. (a) Each A Borrowing shall be made on
notice, given not later than 11:00 A.M. (New York City time) (i) on the same
Business Day as the proposed A Borrowing in the case of an A Borrowing
consisting of
19
Base Rate Advances or (ii) on the third Business Day prior to the date of the
proposed A Borrowing in the case of an A Borrowing consisting of LIBOR Advances,
by the Borrower to the Agent, which shall give to each Lender prompt notice
thereof by telecopier, telex or cable. Each such notice of an A Borrowing (a
"Notice of A Borrowing") shall be by telecopier, or by telex or cable (confirmed
immediately in writing), in substantially the form of Exhibit B-1 hereto,
specifying therein the requested (i) date of such A Borrowing, (ii) Type of A
Advances comprising such A Borrowing, (iii) aggregate amount of such A
Borrowing, and (iv) in the case of an A Borrowing comprised of LIBOR Advances,
the initial Interest Period for each such A Advance. Each Lender shall, before
1:00 P.M. (New York City time) on the date of such A Borrowing, make available
for the account of its Applicable Lending Office to the Agent at its address
referred to in Section 8.02, in same day funds, such Lender's ratable portion of
such A Borrowing. After the Agent's receipt of such funds and upon fulfillment
of the applicable conditions set forth in Article III, the Agent will make such
funds available to the Borrower at the Agent's aforesaid address not later than
2:00 P.M. (New York City time) on such date.
(b) Anything in subsection (a) above to the contrary notwithstanding, the
Borrower may not select LIBOR Advances for any A Borrowing if the aggregate
amount of such A Borrowing is less than $20,000,000.
(c) Each Notice of A Borrowing shall be irrevocable and binding on the
Borrower. In the case of any A Borrowing that the related Notice of A Borrowing
specifies is to be comprised of LIBOR Advances, the Borrower shall indemnify
each Lender against any loss, cost or expense incurred by such Lender as a
result of any failure to fulfill on or before the date specified in such Notice
of A Borrowing for such A Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the A
Advance to be made by such Lender as part of such A Borrowing when such A
Advance, as a result of such failure, is not made on such date.
(d) Unless the Agent shall have received notice from a Lender (i) by 12:00
Noon (New York City time) on the date of any A Borrowing in the case of any A
Borrowing consisting of Base Rate Advances or (ii) by 12:00 Noon (New York City
time) on the Business Day prior to the date of any A Borrowing consisting of
LIBOR Advances that such Lender will not make available to the Agent such
Lender's ratable portion of such A Borrowing, the Agent may assume that such
Lender has made such portion available to the Agent on the date of such A
Borrowing in accordance with subsection (a) of this Section 2.02 and the Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such ratable portion available to the Agent, such Lender and the
Borrower severally agree to repay to the Agent forthwith on demand such
20
corresponding amount together with interest thereon, for each day from the date
such amount is made available by the Agent to the Borrower until the date such
amount is repaid to the Agent, at (i) in the case of the Borrower, the interest
rate applicable at the time to A Advances comprising such A Borrowing and (ii)
in the case of such Lender, the Federal Funds Rate. If such Lender shall repay
to the Agent such corresponding amount, such amount so repaid shall constitute
such Lender's A Advance as part of such A Borrowing for purposes of this
Agreement.
(e) The failure of any Lender to make the A Advance to be made by it as
part of any A Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its A Advance on the date of such A Borrowing, but no
Lender shall be responsible for the failure of any other Lender to make the A
Advance to be made by such other Lender on the date of any A Borrowing.
SECTION 2.03. The B Advances. (a) Each Lender severally agrees that the
Borrower may make B Borrowings under this Section 2.03 from time to time on any
Business Day during the period from the Effective Date until the date occurring
15 days prior to the Termination Date in the manner set forth below, provided
that following the making of each B Borrowing, the aggregate amount of the
Advances then outstanding shall not exceed an aggregate amount equal to (x) the
Commitments of the Lenders at such time (computed without regard to any B
Reduction) less (y) the aggregate LC Exposure at such time less (z) the
aggregate outstanding principal amount of Swingline Loans at such time.
(i) The Borrower may request a B Borrowing under this Section 2.03 by
delivering to the Agent, by telecopier, telex or cable, confirmed
immediately in writing, a notice of a B Borrowing (a "Notice of B
Borrowing"), in substantially the form of Exhibit B-2 hereto, specifying
therein the date and aggregate amount of the proposed B Borrowing, the
maturity date for repayment of each B Advance to be made as part of such B
Borrowing (which maturity date may be (i) 14 to 180 days after the date of
the B Borrowing in the case of fixed rate B Borrowings and (ii) 30 to 180
days after the date of the B Borrowing in the case of floating rate B
Borrowings, but in either case may not be later than the Termination Date),
the interest payment date or dates relating thereto, and any other terms to
be applicable to such B Borrowing, not later than 10:00 A.M. (New York City
time) (A) at least one Business Day prior to the date of the proposed B
Borrowing, if the Borrower shall specify in the Notice of B Borrowing that
the rates of interest to be offered by the Lenders shall be fixed rates per
annum and (B) at least four Business Days prior to the date of the proposed
B Borrowing, if the Borrower shall specify in the Notice of B Borrowing
that the rates of interest to be offered by the Lenders shall be floating
rates per annum. The Agent shall in turn promptly notify by telecopier each
Lender of each request for a B Borrowing
21
received by it from the Borrower by sending such Lender a copy of the
related Notice of B Borrowing.
(ii) Each Lender may, if, in its sole discretion, it elects to do so,
irrevocably offer to make one or more B Advances to the Borrower as part of
such proposed B Borrowing at a rate or rates of interest specified by such
Lender in its sole discretion (but conforming to the Borrower's Notice of B
Borrowing in respect thereof), by notifying the Agent (which shall give
prompt notice thereof to the Borrower), before 10:00 A.M. (New York City
time) (A) on the date of such proposed B Borrowing, in the case of a Notice
of B Borrowing delivered pursuant to clause (A) of paragraph (i) above and
(B) three Business Days before the date of such proposed B Borrowing, in
the case of a Notice of B Borrowing delivered pursuant to clause (B) of
paragraph (i) above, of the minimum amount and maximum amount of each B
Advance which such Lender would be willing to make as part of such proposed
B Borrowing (which amounts may exceed such Lender's Commitment), the rate
or rates of interest therefor and such Lender's Applicable Lending office
with respect to such B Advance, provided that if the Agent in its capacity
as a Lender shall, in its sole discretion, elect to make any such offer, it
shall notify the Borrower of such offer before 9:00 A.M. (New York City
time) on the date on which notice of such election is to be given to the
Agent by the other Lenders. Unless the Agent shall have received notice
from a Lender before 10:00 A.M. in accordance with the immediately
preceding sentence, the Agent and the Borrower may assume that such Lender
has elected not to make such an offer pursuant to this Section 2.03(a)(ii).
(iii) The Borrower shall (A) before 11:00 A.M. (New York City time) on
the date of such proposed B Borrowing, in the case of a Notice of B
Borrowing delivered pursuant to clause (A) of paragraph (i) above and (B)
before 1:00 P.M. (New York City time) on the Business Day that is three
Business Days before the date of such proposed B Borrowing, in the case of
a Notice of B Borrowing delivered pursuant to clause (B) of paragraph (i)
above, either:
(x) cancel such B Borrowing by giving the Agent notice to that
effect; or
(y) accept one or more of the offers made by any Lender or
Lenders pursuant to paragraph (ii) above, in its sole discretion, by
giving notice to the Agent of the amount of each B Advance (which
amount shall be equal to or greater than the minimum amount (subject,
however, to the second paragraph of this subsection (iii) below), and
equal to or less than the maximum amount, notified to the Borrower by
the Agent on behalf of such Lender for such B Advance pursuant to
paragraph (ii) above) to be made by each Lender as part of such B
Borrowing, and reject any
22
remaining offers made by Lenders pursuant to paragraph (ii) above by
giving the Agent notice to that effect.
The acceptance of offers by the Borrower pursuant the foregoing clause
(y) shall be on the basis of ascending rates of interest contained in the
offers made by Lenders pursuant to paragraph (ii) above, provided that in
the event that two or more of such offers contain the same rate of interest
for a greater aggregate principal amount than the amount specified in such
Notice of B Borrowing (less the aggregate principal amount of all such
offers containing lower rates of interest that have been accepted by the
Borrower pursuant to the foregoing clause (y)), the Borrower shall allocate
its acceptance of such offers among such Lenders on a pro rata basis based
on the maximum amounts bid by such Lenders pursuant to subsection (ii)
above.
(iv) If the Borrower notifies the Agent that such B Borrowing is
canceled pursuant to paragraph (iii)(x) above, the Agent shall give prompt
notice thereof to the Lenders and such B Borrowing shall not be made.
(v) If the Borrower accepts one or more of the offers made by any
Lender or Lenders pursuant to paragraph (iii)(y) above, the Agent shall in
turn promptly notify (A) each Lender that has made an offer as described in
paragraph (ii) above, of the date and aggregate amount of such B Borrowing
and whether or not any offer or offers made by such Lender pursuant to
paragraph (ii) above have been accepted by the Borrower, (B) each Lender
that is to make a B Advance as part of such B Borrowing, of the amount of
each B Advance to be made by such Lender as part of such B Borrowing and
(C) each Lender that is to make a B Advance as part of such B Borrowing,
upon receipt, that the Agent has received forms of documents appearing to
fulfill the applicable conditions set forth in Article III. Each Lender
that is to make a B Advance as part of such B Borrowing shall, before 12:00
Noon (New York City time) on the date of such B Borrowing specified in the
notice received from the Agent pursuant to clause (A) of the preceding
sentence or any later time when such Lender shall have received notice from
the Agent pursuant to clause (C) of the preceding sentence, make available
for the account of its Applicable Lending Office to the Agent at its
address referred to in Section 8.02 such Lender's portion of such B
Borrowing, in same day funds. Upon fulfillment of the applicable conditions
set forth in Article III and after receipt by the Agent of such funds, the
Agent will make such funds available to the Borrower at the Agent's
aforesaid address. Promptly after each B Borrowing the Agent will notify
each Lender of the amount of the B Borrowing, the consequent B Reduction,
and the dates upon which such B Reduction commenced and will terminate.
23
(vi) If the Borrower notifies the Agent that it accepts one or more of
the offers made by any Lender or Lenders pursuant to paragraph (iii)(y)
above, such notice of acceptance shall be irrevocable and binding on the
Borrower. The Borrower shall indemnify each Lender against any loss, cost
or expense incurred by such Lender as a result of any failure to fulfill on
or before the date specified in the related Notice of B Borrowing for such
B Borrowing the applicable conditions set forth in Article III, including,
without limitation, any loss (including loss of anticipated profits), cost
or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the B Advance to be
made by such Lender as part of such B Borrowing when such B Advance, as a
result of such failure, is not made on such date.
(b) Each B Borrowing shall be in an aggregate amount not less than
$15,000,000 or an integral multiple of $1,000,000 in excess thereof and,
following the making of each B Borrowing, the Borrower shall be in compliance
with the limitation set forth in the proviso to the first sentence of subsection
(a) above.
(c) Within the limits and on the conditions set forth in this Section 2.03,
the Borrower may from time to time borrow under this Section 2.03, repay or
prepay pursuant to subsection (d) below, and reborrow under this Section 2.03,
provided that a B Borrowing shall not be made within three Business Days of the
date of any other B Borrowing.
(d) The Borrower shall repay to the Agent for the account of each Lender
that has made a B Advance, or each other holder of a B Note, on the maturity
date of each B Advance (such maturity date being that specified by the Borrower
for repayment of such B Advance in the related Notice of B Borrowing delivered
pursuant to subsection (a)(i) above and provided in the B Note evidencing such B
Advance), the then unpaid principal amount of such B Advance. The Borrower shall
have no right to prepay any principal amount of a B Advance unless, and then
only on the terms, specified by the Borrower for such B Advance in the related
Notice of B Borrowing delivered pursuant to subsection (a)(i) above and set
forth in the B Note evidencing such B Advance.
(e) The Borrower shall pay interest on the unpaid principal amount of each
B Advance from the date of such B Advance to the date the principal amount of
such B Advance is repaid in full, at the rate of interest for such B Advance
specified by the Lender making such B Advance in its notice with respect thereto
delivered pursuant to subsection (a)(ii) above, payable on the interest payment
date or dates specified by the Borrower for such B Advance in the related Notice
of B Borrowing delivered pursuant to subsection (a)(i) above, as provided in the
B Note evidencing such B Advance.
(f) The indebtedness of the Borrower resulting from each B Advance made to
the Borrower as part of a B Borrowing shall be evidenced by a separate B Note
24
of the Borrower payable to the order of the Lender making such B Advance. Upon
the repayment in full of the indebtedness of Borrower resulting from such B
Advance, the holder of the B Note evidencing such indebtedness shall return such
B Note to the Borrower at its address specified pursuant to Section 8.02.
SECTION 2.04. Swingline Loans. (a) The Swingline Lender agrees, on the
terms and conditions set forth in this Agreement, to make loans to the Borrower
pursuant to this Section 2.04 from time to time on any Business Day during the
period from the Effective Date until the Termination Date in amounts such that
the aggregate principal amount of Swingline Loans at any one time outstanding
shall not exceed its Swingline Commitment. Each loan under this Section 2.04
shall be in a principal amount of at least $1,000,000 or any larger multiple of
$1,000,000. All Swingline Loans shall be made as Base Rate Advances. Within the
foregoing limits, the Borrower may borrow under this Section 2.04, repay
pursuant to Section 2.08(c), or to the extent permitted by Section 2.13(c),
prepay Swingline Loans and reborrow under this Section 2.04.
(b) Notice of Swingline Borrowing. The Borrower shall give the Swingline
Lender notice (a "Notice of Swingline Borrowing") not later than 1:00 P.M. (New
York City time) on the date of each Swingline Borrowing, specifying (i) the date
of such Swingline Borrowing, which shall be a Business Day, and (ii) the amount
of such Borrowing.
(c) Conversion of Swingline Loans to A Advances. The Swingline Lender, at
any time in its sole and absolute discretion, may on behalf of the Borrower
(which hereby irrevocably directs the Swingline Lender to so act on its behalf)
notify each Lender (including the Swingline Lender) to make an A Advance to the
Borrower in a principal amount equal to such Lender's Percentage of the amount
of such Swingline Loan, provided, however that such notice shall be deemed to
have automatically been given upon the occurrence of an Event of Default under
Section 6.01(e). Upon notice from the Swingline Lender, each Lender (other than
the Swingline Lender) will immediately transfer to the Swingline Lender, in
immediately available funds, an amount equal to such Lender's Percentage of the
amount of such Swingline Loan and the amounts so received shall be applied to
pay such Swingline Loan. Each Lender's obligation to transfer the amount of such
A Advance to the Swingline Lender shall be absolute and unconditional and shall
not be affected by any circumstance, including, without limitation, (i) any
set-off, counterclaim, recoupment, defense or other right which such Lender or
any other Person may have against the Swingline Lender, (ii) the occurrence or
continuance of a Default or an Event of Default or the termination of the
Commitments, (iii) any adverse change in the condition (financial or otherwise)
of the Borrower or any other Person, (iv) any breach of this Agreement by the
Borrower or any other Lender or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
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SECTION 2.05. Letters of Credit. (a) Commitment to Issue Letters of Credit.
Each LC Bank agrees, subject to the terms and conditions hereof, to issue
Letters of Credit upon the request of the Borrower on a sight basis from time to
time on any Business Day during the period from the Effective Date until the
Termination Date, provided that immediately after each such Letter of Credit is
issued, the aggregate amount of the Letter of Credit Liabilities shall not
exceed the Available LC Amount. Each Letter of Credit shall be issued in an
amount equal to or greater than $100,000. Upon the date of issuance by an LC
Bank of a Letter of Credit, the LC Bank shall be deemed, without further action
by any party hereto, to have sold to each Lender, and each Lender shall be
deemed, without further action by any party hereto, to have purchased from the
LC Bank, a participation in such Letter of Credit and the related Letter of
Credit Liabilities in proportion to its Percentage. The Borrower shall pay to
the LC Bank issuance fees and other customary fees in the amounts and at the
times as agreed between the Borrower and the LC Bank.
(b) Request for Issuance. The Borrower shall give the LC Bank at least
three Business Days' prior notice (effective upon receipt) of a request for the
issuance of a Letter of Credit specifying the date each Letter of Credit is to
be issued, and describing the proposed terms of such Letter of Credit and the
nature of the transactions proposed to be supported thereby. Upon issuance of or
amendments to a Standby Letter of Credit, the LC Bank shall promptly notify the
Agent, and the Agent shall promptly notify each Lender of the contents thereof
and of the amount of such Lender's participation in such Standby Letter of
Credit. The issuance by the LC Bank of each Letter of Credit shall, in addition
to the conditions precedent set forth in Article III, be subject to the
conditions precedent that such Letter of Credit shall be in such form and
contain such terms as shall be satisfactory to the LC Bank and that the Borrower
shall have executed and delivered such other instruments and agreements relating
to such Letter of Credit as the LC Bank shall have reasonably requested. No
Standby Letter of Credit (other than those listed in Schedule VIII) shall have
an expiration date extending beyond five days prior to the Termination Date. No
Commercial Letter of Credit (other than those listed in Schedule VIII) shall
have an expiration date extending beyond 180 days from the issuance date nor
have an expiration date less than five days prior to the Termination Date. In
the event that the LC Bank issuing any Letter of Credit is other than JPMCB,
such LC Bank will send by facsimile transmission to the Agent, promptly on the
first Business Day of each week, the daily aggregate amount available for
drawing under all Letters of Credit issued by such LC Bank for the previous
week. The Agent shall deliver to each Lender, upon the end of each calendar
month and upon each Letter of Credit fee payment, a report setting forth for
such period the daily aggregate amounts available for drawing under all Letters
of Credit issued by all ▇▇ ▇▇▇▇▇ and outstanding during such period.
(c) Reimbursement of Payments. Upon receipt from the beneficiary of any
Letter of Credit of any demand for payment or other drawing under such Letter of
26
Credit and finding such drawing in substantial compliance with the Letter of
Credit terms, the LC Bank shall notify the Borrower as to the amount to be paid
as a result of such demand or drawing and the respective payment date. If there
are at such time amounts on deposit in the Holding Account, the Borrower shall
notify the Agent thereof, and the Agent shall withdraw an amount equal to the
amount to be paid as a result of such demand or drawing or, if less, the amount
on deposit in the Holding Account, on the payment date and pay such amount to
the applicable LC Bank. Unless the applicable LC Bank is reimbursed in full from
amounts on deposit in the Holding Account, the Borrower shall reimburse the LC
Bank in an amount equal to the amount of such drawing by 1:00 P.M. (New York
City time) on the day on which such drawing is paid in immediately available
funds. If the LC Bank is not reimbursed for the amount of such drawing as
provided in the preceding sentence, the LC Bank shall notify the Agent, and the
Agent shall notify each other Lender, thereof by 1:30 P.M. (New York City time)
on the date such drawing is paid. If at any time the LC Bank shall make a
payment to a beneficiary of a Letter of Credit in respect of a drawing or in
respect of an acceptance created in connection with a drawing under such Letter
of Credit and such drawing has not been paid by the Borrower, each Lender will
pay to the Agent, for the account of the LC Bank, immediately upon the LC Bank's
demand at any time during the period commencing after such payment until
reimbursement therefor in full by the Borrower, an amount equal to such Lender's
Percentage multiplied by the amount of such payment, together with interest on
such amount for each day from the date of the LC Bank's demand for such payment
(or, if such demand is made after 3:00 P.M. (New York City time) on such date,
from the next succeeding Business Day) to the date of payment by such Lender of
such amount at a rate of interest per annum equal to the Federal Funds Rate for
such period.
(d) Reimbursement Obligations Unconditional. The Borrower shall be
irrevocably and unconditionally obligated forthwith to reimburse the LC Bank for
any amounts paid by the LC Bank upon any drawing under any Letter of Credit on
the date of such payment by the LC Bank, without presentment, demand, protest or
other formalities of any kind, provided that the Borrower shall not hereby be
precluded from asserting any claim for direct (but not consequential) damages
suffered by the Borrower to the extent, but only to the extent, caused by (i)
the willful misconduct or gross negligence (as determined by a court of
competent jurisdiction) of the LC Bank in determining whether a request
presented under any Letter of Credit complied with the terms of such Letter of
Credit or (ii) the LC Bank's failure to pay under any Letter of Credit after the
presentation to it of a request strictly complying with the terms and conditions
of the Letter of Credit. All such amounts paid by the LC Bank and remaining
unpaid by the Borrower shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the sum of 2% plus the rate applicable
to Base Rate Advances for such day. The LC Bank will promptly pay to each Lender
ratably in accordance with its Percentage all amounts received from the Borrower
for application in payment, in whole or in part, of the Reimbursement Obligation
in respect of any Letter of Credit, but only to the extent such
27
Lender has made payment to the LC Bank in respect of such Letter of Credit
pursuant to Section 2.05(c).
(e) Indemnification. The Borrower hereby indemnifies and holds harmless
each Lender and the Agent from and against any and all claims and damages,
losses, liabilities, costs or expenses which such Lender or the Agent may incur
(or which may be claimed against such Lender or the Agent by any Person
whatsoever) by reason of or in connection with the execution and delivery or
transfer of or payment or failure to pay under any Letter of Credit, including,
without limitation, any claims, damages, losses, liabilities, costs or expenses
which the LC Bank may incur by reason of or in connection with the failure of
any other Lender to fulfill or comply with its obligations to the LC Bank
hereunder (but nothing herein contained shall affect any rights the Borrower may
have against such defaulting Lender), provided that the Borrower shall not be
required to indemnify any Lender or the Agent for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the extent, caused by
(i) the willful misconduct or gross negligence (as determined by a court of
competent jurisdiction) of the LC Bank, such Lender or the Agent in determining
whether a request presented under any Letter of Credit complied with the terms
of such Letter of Credit or (ii) the LC Bank's failure to pay under any Letter
of Credit after the presentation to it of a request strictly complying with the
terms and conditions of the Letter of Credit. Nothing in this Section 2.05(e) is
intended to limit the obligations of the Borrower under any other provision of
this Agreement.
(f) Limited Liability of the LC Bank. The Borrower assumes all risks of the
acts or omissions of any beneficiary and any transferee of any Letter of Credit
with respect to its use of such Letter of Credit. The Lenders, the LC Bank and
their respective officers and directors shall not be liable or responsible for,
and the obligations of each Lender to make payments, and of the Borrower to
reimburse the LC Bank for payments, pursuant to this Section 2.05 shall not be
excused by, any action or inaction of any Lender or the LC Bank related to any
of: (i) the use which may be made of any Letter of Credit or any acts or
omissions of any beneficiary or transferee in connection therewith; (ii) the
validity, sufficiency or genuineness of documents presented under any Letter of
Credit, or of any endorsements thereon, even if such documents should in fact
prove to be in any or all respects invalid, insufficient, fraudulent or forged;
(iii) payment by the LC Bank against presentation of documents to the LC Bank
which do not strictly comply with the terms of any Letter of Credit, including
failure of any documents to bear any reference or adequate reference to such
Letter of Credit, absent such LC Bank's gross negligence or willful misconduct;
or (iv) any other circumstances whatsoever in making or failing to make or
notifying or failing to notify the LC Bank that it is required to make any
payment under any Letter of Credit. Notwithstanding the foregoing, the Borrower
shall have a claim against the LC Bank and the LC Bank shall be liable to the
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential, damages suffered by the Borrower which were caused by (i) the LC
Bank's willful misconduct or gross negligence
28
(as determined by a court of competent jurisdiction) in determining whether
documents presented under any Letter of Credit comply with the terms thereof or
(ii) the LC Bank's willful failure to pay, or to notify any Lender that it is
required to pay, under any Letter of Credit after the presentation to the LC
Bank by any beneficiary (or a successor beneficiary to whom such Letter of
Credit has been transferred in accordance with its terms) of documents strictly
complying with the terms and conditions of such Letter of Credit. Subject to the
preceding sentence, the LC Bank may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary unless any beneficiary (or a successor
beneficiary to whom such Letter of Credit has been transferred in accordance
with its terms) or the Borrower shall have notified the LC Bank that such
documents do not comply with the terms and conditions of such Letter of Credit.
Each Lender shall, ratably in accordance with its Percentage, indemnify the LC
Bank (to the extent not reimbursed by the Borrower) against any cost, expense
(including counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from the LC Bank's gross negligence or willful
misconduct) that the LC Bank may suffer or incur in connection with this
Agreement or any action taken or omitted by the LC Bank hereunder.
(g) Letters of Credit Outside Facility. Nothing in this Section shall be
construed as limiting the right of the Borrower to request, or of any Lender to
issue, letters of credit for the account of the Borrower that are not "Letters
of Credit" for purposes of this Agreement. No request by the Borrower to any
Lender for the issuance of a letter or credit shall be deemed a request for the
issuance of a Letter of Credit under this Agreement unless (i) the Borrower's
request for such letter of credit states in writing that such letter of credit,
when issued, shall be a Letter of Credit under this Agreement, or (ii) such
Lender conditions its agreement to issue such letter of credit, in writing, on
the Borrower's agreement that such letter of credit constitute a Letter of
Credit under this Agreement.
(h) Cash Collateral. If after giving effect to any reduction of the
Commitments pursuant to Section 2.07, the aggregate amount available to be drawn
under all outstanding Letters of Credit exceeds the aggregate amount of the
Commitments, the Borrower shall deposit into the Holding Account an amount in
cash sufficient to cause the amount deposited in the Holding Account to equal
such excess. At any time after such deposit is made, if an outstanding Letter of
Credit expires or is reduced without the full amount thereof having been drawn,
the Agent shall withdraw from the Holding Account and deliver to the Borrower an
amount equal to the amount by which the amount on deposit in the Holding Account
exceeds the aggregate amount by which the amount available to be drawn under
outstanding Letters of Credit (after giving effect to such expiration or
reduction) exceeds the aggregate amount of the Commitments.
29
SECTION 2.06. Fees. (a) Facility Fee. The Borrower agrees to pay to the
Agent for the account of each Lender a facility fee on the amount of such
Lender's Commitment (whether used or unused and without giving effect to any B
Reductions) from the Effective Date in the case of each Lender that is a
signatory hereto or, in the case of an assignee Lender, from the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender,
until the Termination Date (and following the Termination Date on the amount of
outstanding Advances, Swingline Loans and Letter of Credit Liabilities), payable
in arrears on the last Business Day of each March, June, September and December
during the term of such Lender's Commitment, commencing on the first such date
to occur after the date hereof, and on the Termination Date, at a rate per annum
equal to the Applicable Facility Fee Rate in effect from time to time, provided
that any facility fees accruing after the Termination Date shall be payable
on demand.
(b) Letter of Credit Commission. The Borrower agrees to pay to the Agent
for the account of each Lender a Letter of Credit commission with respect to
each Letter of Credit, computed for each day from and including the date of
issuance of such Letter of Credit until the last day a drawing is available
under such Letter of Credit, at a rate per annum equal to the Applicable
Interest Rate Margin in effect from time to time on the undrawn amount of such
Letter of Credit on such day. Such commission shall be payable quarterly in
arrears on the last Business Day of each March, June, September and December
during the term of each Letter of Credit, and on the Termination Date, provided
that any Letter of Credit commissions accruing after the Termination Date shall
be payable on demand.
(c) Agent's Fees. The Borrower shall pay to the Agent for its own account
such fees, and at such times, as set forth in the letter, dated March 20, 2002,
between the Borrower and the Agent.
(d) LC Bank Fees. The Borrower hereby agrees to pay directly to an LC Bank
upon issuance of, drawing under, and/or amendment of, a Letter of Credit issued
by it such amount as shall at the time of such issuance, drawing or amendment be
the administrative charge which such LC Bank is customarily charging for
issuances of, drawings under or amendments of, letters of credit issued by it.
(e) Utilization Fees. The Borrower agrees to pay to the Agent for the
account of each Lender ratably in accordance with such Lender's Commitment, a
utilization fee, which shall accrue at a rate equal to 0.25% per annum on all
outstanding Advances, Swingline Loans and Letter of Credit Liabilities for each
day that the sum of (i) the aggregate outstanding Advances, (ii) the aggregate
outstanding Swingline Loans and (iii) the aggregate Letter of Credit Liabilities
are in excess of 50% of the sum of the aggregate Commitments, provided that if
any Lender continues to have any outstanding Advances, LC Exposure or Swingline
Exposure when the Commitments terminate, then
30
such utilization fee shall continue to accrue during any period that such
Advances, LC Exposure or Swingline Exposure have not been repaid or satisfied in
full. Accrued utilization fees shall be payable in arrears on the last Business
Day of March, June, September and December of each year and on the Termination
Date, commencing on the first such date to occur after the date hereof, provided
that any utilization fees accruing after the Termination Date shall be payable
on demand.
SECTION 2.07. Termination or Reduction of the Commitments or the Swingline
Commitment; Voluntary Reduction; Increase in Aggregate Commitment. The Borrower
shall have the right, upon at least three Business Days' notice to the Agent, to
terminate in whole or reduce ratably in part the unused portions of (x) the
respective Commitments of the Lenders or (y) the Swingline Commitment, provided
that the aggregate amount of the Commitments of the Lenders shall not be reduced
to an amount that is less than the sum of the aggregate principal amount of the
Advances and Swingline Loans then outstanding plus the aggregate outstanding
amount of the Letter of Credit Liabilities, and the aggregate amount of the
Swingline Commitment shall not be reduced to an amount that is less than the
aggregate principal amount of the Swingline Loans then outstanding, and provided
further that each partial reduction shall be in the aggregate amount of
$25,000,000 ($1,000,000 in the case of the Swingline Commitment) or an integral
multiple of $1,000,000 ($1,000,000 in the case of the Swingline Commitment) in
excess thereof.
SECTION 2.08. Repayment of A Advances, B Advances and Swingline Loans. (a)
The Borrower hereby unconditionally promises to pay, and shall repay, the
principal amount of each A Advance made by each Lender on the Termination Date,
which advance is evidenced by the A Note to the order of such Lender.
(b) The Borrower hereby unconditionally promises to pay, and shall repay,
the principal amount of each B Advance made by each Lender on the date
determined in accordance with the procedures for B Advances set forth in Section
2.03, and in no event later than the Termination Date, which advance is
evidenced by the B Note to the order of such Lender.
(c) On the last Business Day of each calendar quarter, the Borrower shall
repay all Swingline Loans in full and may not reborrow Swingline Loans until the
next succeeding Business Day.
SECTION 2.09. Interest on Advances and Swingline Loans. (a) Ordinary
Interest on A Advances. The Borrower shall pay interest on the unpaid principal
amount of each A Advance made by each Lender from the date of such A Advance
until such principal amount shall be paid in full, at the following rates per
annum:
31
(i) Base Rate Advances. If such A Advance is a Base Rate Advance, a
rate per annum equal at all times to, from the Effective Date to the
Termination Date, the Base Rate in effect from time to time, payable
quarterly on the last Business Day of each March, June, September and
December.
(ii) LIBOR Advances. If such A Advance is a LIBOR Advance, a rate per
annum equal at all times during each Interest Period for such A Advance to
the sum of (x) the LIBOR for such Interest Period for such A Advance plus
(y) the Applicable Interest Rate Margin in effect on the first day of such
Interest Period, payable on the last day of such Interest Period and, if
such Interest Period has a duration of more than three months, on each day
that occurs during such Interest Period every three months from the first
day of such Interest Period and on the date such LIBOR Advance shall be
Converted or paid in full.
(b) Interest on Swingline Loans. The Borrower shall pay interest on the
unpaid principal amount of each Swingline Loan made by the Swingline Lender from
the date of such Swingline Loan until such principal amount shall be paid in
full at a rate per annum equal at all times to the Base Rate in effect from time
to time, payable quarterly on the last Business Day of each March, June,
September and December.
(c) Default Interest. The Borrower shall pay interest on the unpaid
principal amount of each Advance and Swingline Loan that is not paid when due
and on the unpaid amount of all interest, fees and other amounts payable
hereunder that is not paid when due, payable on demand, at a rate per annum
equal at all times to 2% per annum above the Base Rate in effect from time to
time.
SECTION 2.10. Additional Interest on LIBOR Advances. The Borrower shall pay
to each Lender, so long as such Lender shall be required under regulations of
the Board of Governors of the Federal Reserve System to maintain reserves with
respect to liabilities or assets consisting of or including Eurocurrency
Liabilities, additional interest on the unpaid principal amount of each LIBOR
Advance of such Lender, from the date of such A Advance until such principal
amount is paid in full, at an interest rate per annum equal at all times to the
remainder obtained by subtracting (i) the LIBOR for the Interest Period for such
A Advance from (ii) the rate obtained by dividing such LIBOR by a percentage
equal to 100% minus the LIBOR Reserve Percentage of such Lender for such
Interest Period, payable on each date on which interest is payable on such A
Advance. Such additional interest shall be determined by such Lender and
notified in writing to the Borrower through the Agent.
SECTION 2.11. Interest Rate Determination. (a) The Agent shall give prompt
notice to the Borrower and the Lenders of the applicable interest rate
determined by the Agent for purposes of Section 2.09(a)(i) or (ii), and, if
necessary, the applicable
32
rate, if any, furnished by each Reference Bank for the purpose of determining
the applicable interest rate under Section 2.09(a)(ii).
(b) If LIBOR for any LIBOR Advance cannot be determined because the rate
based on Page 3750 of the Dow ▇▇▇▇▇ Market Services is not available for any
reason and if fewer than two Reference Banks furnish timely information to the
Agent for determining the LIBOR for any LIBOR Advances, the LIBOR with respect
to such LIBOR Advance shall be determined by the Agent to be the offered rate
per annum at which deposits in dollars appear with respect to the relevant
Interest Period on the Reuters Screen LIBOR Page (or any successor page) in each
case as of 11:00 A.M. (London time), two Business Days prior to the beginning of
such Interest Period or in the event that the foregoing offered rates are not
available then:
(i) the Agent shall forthwith notify the Borrower and the Lenders that
the interest rate cannot be determined for such LIBOR Advances,
(ii) each such Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance (or if
such Advance is then a Base Rate Advance, will continue as a Base Rate
Advance), and
(iii) the obligation of the Lenders to make, or to Convert A Advances
into, LIBOR Advances shall be suspended until the Agent shall notify the
Borrower and the Lenders that the circumstances giving rise to such notice
no longer exist.
(c) If any Reference Bank shall fail to furnish timely information to the
Agent the Borrower may, with the consent of the Agent (which consent shall not
be unreasonably withheld), appoint another Lender as a replacement for such
Reference Bank.
(d) If, with respect to any LIBOR Advances, the Majority Lenders notify the
Agent that the LIBOR for any Interest Period for such Advances will not
adequately reflect the cost to such Majority Lenders of making, funding or
maintaining their respective LIBOR Advances for such Interest Period, the Agent
shall forthwith so notify the Borrower and the Lenders, whereupon:
(i) each LIBOR Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance, and
(ii) the obligation of the Lenders to make, or to Convert A Advances
into, LIBOR Advances shall be suspended until the Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no
longer exist.
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(e) If the Borrower shall fail to select a new Interest Period for any
outstanding LIBOR Advances in accordance with the provisions contained in the
definition of "Interest Period" in Section 1.01, the Agent will forthwith so
notify the Borrower and the Lenders and such Advances will automatically, on the
last day of the then existing Interest Period therefor, Convert into Base Rate
Advances.
(f) On the date on which the aggregate unpaid principal amount of A
Advances comprising any A Borrowing shall be reduced, by payment or prepayment
or otherwise, to less than $20,000,000, such A Advances shall, if they are LIBOR
Advances, automatically Convert into Base Rate Advances, and on and after such
date the right of the Borrower to Convert such A Advances into LIBOR Advances
shall terminate, provided, however that if and so long as each such A Advance
shall be of the same Type and have the same Interest Period as A Advances
comprising another A Borrowing or other A Borrowings, and the aggregate unpaid
principal amount of all such A Advances shall equal or exceed $20,000,000, the
Borrower shall have the right to continue all such A Advances as, or to Convert
all such A Advances into, Advances of such Type having such Interest Period.
SECTION 2.12. Voluntary Conversion of A Advances. The Borrower may on any
Business Day, upon notice given to the Agent not later than 11:00 A.M. (New York
City time) on the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Sections 2.11 and 2.15, Convert all
A Advances of one Type comprising the same A Borrowing into A Advances of the
other Type, provided, however that any Conversion of any LIBOR Advances into
Base Rate Advances shall be made on, and only on, the last day of an Interest
Period for such LIBOR Advances and any Conversion of Base Rate Advances into
LIBOR Advances shall be in an amount not less than $20,000,000, and provided
further that the Borrower shall not convert any Base Rate Advances into LIBOR
Advances if a Default has occurred and is continuing. Each such notice of a
Conversion shall, within the restrictions specified above, specify (i) the date
of such Conversion, (ii) the A Advances to be Converted and (iii) if such
Conversion is into LIBOR Advances, the duration of the initial Interest Period
for each such A Advance. Each notice of Conversion shall be irrevocable and
binding on the Borrower.
SECTION 2.13. Prepayments of A Advances and Swingline Loans. (a) The
Borrower shall have no right to prepay any principal amount of any A Advances
other than as provided in subsection (b) below, or any principal amount of any
Swingline Loans other than as provided in subsection (c) below.
(b) The Borrower may, upon at least one Business Day's notice in the case
of Base Rate Advances, and three Business Days' notice in the case of LIBOR
Advances to the Agent stating the proposed date and aggregate principal amount
of the prepayment, and if such notice is given the Borrower shall, prepay the
outstanding principal amounts of the A Advances comprising part of the same A
Borrowing in whole or ratably in part,
34
together with accrued interest to the date of such prepayment on the principal
amount prepaid, provided, however, that (x) each partial prepayment shall be in
an aggregate principal amount not less than $1,000,000 or an integral multiple
thereof and (y) in the case of any such prepayment of a LIBOR Advance, the
Borrower shall be obligated to reimburse the Lenders in respect thereof pursuant
to Section 8.04(b).
(c) The Borrower may, upon notice to the Swingline Lender, prepay any
Swingline Loan in whole by paying the principal amount thereof.
SECTION 2.14. Increased Costs. (a) If, due to either (i) the introduction
of or any change (other than any change by way of imposition or increase of
reserve requirements included in the LIBOR Reserve Percentage) in or in the
interpretation of any law, regulation, rule or guideline promulgated or made
after the date this Agreement is executed and delivered by the Borrower or (ii)
the compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) promulgated or
made after the date this Agreement is executed and delivered by the Borrower,
there shall be any increase in the cost to any Lender of agreeing to make or
making, funding or maintaining LIBOR Advances, then the Borrower shall from time
to time, upon written demand by such Lender (with a copy of such written demand
to the Agent), pay to the Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost, provided
that the Borrower shall not be obligated to pay any such additional amounts that
are attributable to the period (the "Excluded Period") ending 90 days prior to
the Borrower's receipt of such written notice, provided further that to the
extent such additional amounts accrue during the Excluded Period because of the
retroactive effect of the applicable law, rule, regulation, guideline or request
promulgated during the 90 day period prior to the Borrower's receipt of such
written notice, the limitation set forth in the foregoing proviso shall not
apply. A certificate, made in good faith and in reasonable detail, as to the
amount of such increased cost, submitted to the Borrower and the Agent by such
Lender, shall, except for demonstrable or calculation error, be conclusive and
binding for all purposes.
(b) If any Lender determines that compliance with any law or regulation or
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law) promulgated or made after the date this
Agreement is executed and delivered by the Borrower affects or would affect the
amount of capital required or expected to be maintained by such Lender or any
corporation controlling such Lender and that the amount of such capital is
increased by or based upon the existence of such Lender's commitment to lend
hereunder and other commitments of this type, then, within 30 days after written
notice and demand from such Lender (with a copy of such demand to the Agent),
the Borrower shall immediately pay to the Agent for the account of such Lender,
from time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender or such corporation in the light of such
35
circumstances, to the extent that such Lender reasonably determines such
increase in capital to be allocable to the existence of such Lender's commitment
to lend hereunder, provided that the Borrower shall not be obligated to pay any
such additional amounts that are attributable to the Excluded Period, provided
further that to the extent such additional amounts accrue during the Excluded
Period because of the retroactive effect of the applicable law, rule,
regulation, guideline or request promulgated during the 90 day period prior to
the Borrower's receipt of such written notice, the limitation set forth in the
foregoing proviso shall not apply. A certificate, made in good faith and in
reasonable detail, as to such amounts submitted to the Borrower and the Agent by
such Lender shall, except for demonstrable or calculation error, be conclusive
and binding for all purposes.
(c) Any Lender claiming any additional amounts payable pursuant to this
Section 2.14 shall use reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions) to change the jurisdiction of its lending
office if the making of such a change would avoid the need for, or reduce the
amount of, any such additional amounts that may thereafter accrue and would not,
in the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.
SECTION 2.15. Illegality. Notwithstanding any other provision of this
Agreement, if any Lender shall notify the Agent that the introduction of or any
change in or in the interpretation of any law or regulation makes it unlawful,
or any central bank or other governmental authority asserts that it is unlawful,
for any Lender or its LIBOR Lending Office to perform its obligations hereunder
to make LIBOR Advances or to fund or maintain LIBOR Advances hereunder, (i) the
obligation of such Lender to make, or to Convert A Advances into, LIBOR Advances
shall be suspended until such Lender shall notify the Borrower and the Agent
that the circumstances causing such suspension no longer exist and (ii) the
Borrower shall, on the last day of the Interest Period then applicable thereto
or, if it is unlawful for such Lender to maintain such LIBOR Advances for the
balance of any such Interest Period, on the last day on which the Borrower has
been notified by such Lender that such LIBOR Advances may be lawfully
maintained, Convert all LIBOR Advances of such Lender then outstanding into Base
Rate Advances in accordance with Section 2.12.
SECTION 2.16. Payments and Computations. (a) The Borrower shall make each
payment hereunder and under the Notes without set-off or counterclaim not later
than 12:00 Noon (New York City time) on the day when due in U.S. dollars to the
Agent at its address referred to in Section 8.02 in same day funds. The Agent
will promptly thereafter cause to be distributed like funds relating to the
payment of principal or interest or facility fees or utilization fees ratably
(other than amounts payable pursuant to Section 2.03, 2.10, 2.14, 2.18 or
8.04(b)) to the Lenders for the account of their respective Applicable Lending
Offices, and like funds relating to the payment of any other amount payable to
any Lender to such Lender for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this
36
Agreement. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 8.07(c),
from and after the effective date specified in such Assignment and Acceptance,
the Agent shall make all payments hereunder and under the Notes in respect of
the interest assigned thereby to the Lender assignee thereunder, and the parties
to such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) All computations of interest based on the Prime Rate shall be made by
the Agent on the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest based on the LIBOR or the Federal Funds Rate (for all
purposes other than the calculation of the Base Rate) and of Letter of Credit
commissions, facility fees and utilization fees shall be made by the Agent, and
all computations of interest pursuant to Section 2.10 shall be made by a Lender,
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest, commissions or fees are payable. Each determination by the
Agent (or, in the case of Section 2.10, by a Lender) of an interest rate
hereunder shall be conclusive and binding for all purposes, absent calculation
or demonstrable error.
(c) Whenever any payment hereunder or under the Notes shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest, commissions or fees, as the
case may be, provided, however that if such extension would cause payment of
interest on or principal of LIBOR Advances to be made in the next following
calendar month, such payment shall be made on the next preceding Business Day.
(d) Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Lenders hereunder that the Borrower
will not make such payment in full, the Agent may assume that the Borrower has
made such payment in full to the Agent on such date and the Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent that the Borrower shall not have so made such payment in full to the
Agent, each Lender shall repay to the Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Agent, at the Federal Funds Rate.
SECTION 2.17. Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the A Advances owing to it (other than
pursuant to Section 2.10, 2.14, 2.18 or 8.04(b)) in excess of its ratable share
of payments on account of the
37
A Advances obtained by all the Lenders, such Lender shall forthwith purchase
from the other Lenders such participations in the A Advances owing to them as
shall be necessary to cause such purchasing Lender to share the excess payment
ratably with each of them, provided, however that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
of (i) the amount of such Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.17 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
SECTION 2.18. Taxes. (a) Any and all payments by the Borrower hereunder or
under the Notes shall be made, in accordance with Section 2.16, free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Agent, net income taxes
that are imposed by the United States and franchise taxes and net income taxes
that are imposed on such Lender or the Agent by the state or foreign
jurisdiction under the laws of which such Lender or the Agent (as the case may
be) is organized or any political subdivision thereof and, in the case of each
Lender, franchise taxes and net income taxes that are imposed on such Lender by
the state or foreign jurisdiction of such Lender's Applicable Lending Office or
any political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Lender or
the Agent, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.18) such Lender or the Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or under the other Loan
Documents or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or the other Loan Documents (hereinafter referred to
as "Other Taxes").
38
(c) The Borrower will indemnify each Lender and the Agent for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section
2.18) imposed on or paid by such Lender or the Agent (as the case may be) and
any liability (including penalties, additions to tax, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally imposed or asserted by the relevant governmental
authority. This indemnification shall be made within 30 days from the date such
Lender or the Agent (as the case may be) makes written demand therefor. A
certificate, made in good faith and in reasonable detail, as to the amount of
such payment or liability delivered to the Borrower by a Lender, or by the Agent
on its own behalf on or behalf of a Lender, shall be conclusive absent manifest
error.
(d) Each Lender shall, at the time of any written demand for
indemnification as set forth in subsection (c) above, provide to the Borrower a
receipt for, or other evidence of the imposition of or the payment of, Taxes or
Other Taxes to be indemnified under this Section 2.18.
(e) Within 30 days after the date of any payment of Taxes, the Borrower
will furnish to the Agent, at its address referred to in Section 8.02,
appropriate evidence of payment thereof.
(f) For purposes of this Section 2.18, the terms "United States" and
"United States person" shall have the meanings specified in Section 7701 of the
Internal Revenue Code of 1986, as amended from time to time.
(g) Each Lender organized under the laws of a jurisdiction outside the
United States shall, on or prior to the date of its execution and delivery of
this Agreement in the case of each Lender that is a signatory hereto, and on the
date of the Assignment and Acceptance pursuant to which it became a Lender in
the case of each other Lender, and from time to time thereafter if requested in
writing by the Borrower or the Agent (but only so long thereafter as such Lender
remains lawfully able to do so), provide the Agent and the Borrower with
Internal Revenue Service Form ▇-▇▇▇▇, ▇-▇▇▇▇ or W-9, as appropriate, or any
successor or other form prescribed by the Internal Revenue Service, certifying
that such Lender is exempt from or entitled to a reduced rate of United States
withholding tax on payments of interest pursuant to this Agreement or the Notes.
If the form provided by a Lender at the time such Lender first becomes a party
to this Agreement indicates a United States interest withholding tax rate in
excess of zero, withholding tax at such rate shall be considered excluded from
Taxes unless and until such Lender provides the appropriate form certifying that
a lesser rate applies, whereupon withholding tax at such lesser rate only shall
be considered excluded from Taxes for periods governed by such form, provided,
however, that, if at the date of the Assignment and Acceptance pursuant to which
a Lender assignee becomes a party to this Agreement,
39
the Lender assignor was entitled to payments under subsection (a) in respect of
United States withholding tax with respect to interest paid at such date, then,
to the extent such tax results in liability for such payments, the term Taxes
shall include (in addition to withholding taxes that may be imposed in the
future or other amounts otherwise includable in Taxes) United States interest
withholding tax, if any, applicable with respect to the Lender assignee on such
date.
(h) For any period with respect to which a Lender has failed to provide the
Borrower with the appropriate form described in subsection (g) (other than if
such failure is due to a change in law occurring subsequent to the date on which
a form originally was required to be provided, or if such form otherwise is not
required under subsection (g)), such Lender shall not be entitled to
indemnification under subsection (a) or (c) with respect to Taxes imposed by the
United States by reason of such failure, provided, however, should a Lender
become subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as such Lender shall reasonably
request to assist such Lender to recover such Taxes.
(i) Any Lender claiming any additional amounts payable pursuant to this
Section 2.18 shall use reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions) to change the jurisdiction of its lending
office if the making of such a change would avoid the need for, or reduce the
amount of, any such additional amounts that may thereafter accrue and would not,
in the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.
(j) In the event the Borrower is required pursuant to this Section 2.18 to
pay any amount to any Lender or the Agent or on behalf of any of them to any
taxing authority, such Lender shall, if no Default has occurred and is
continuing, upon the request of the Borrower delivered to such Lender and the
Agent, assign, pursuant to and in accordance with the provisions of Section
8.07, all of its rights and obligations under this Agreement and under the Notes
to an Eligible Assignee selected by the Borrower in consideration for (i) the
payment by such assignee to the assigning Lender of the principal of, and
interest accrued and unpaid to the date of such assignment on, the Note or Notes
of such Lender, (ii) the payment by the Borrower to the assigning Lender of any
and all other amounts owing to such Lender under any provision of this Agreement
accrued and unpaid to the date of such assignment including any additional
amounts payable pursuant to this Section 2.18 and (iii) the Borrower's release
of the assigning Lender from any further obligation or liability under this
Agreement. The assignment fee required under Section 8.07(a) for such assignment
shall be paid by the Borrower. Notwithstanding anything to the contrary in this
Section 2.18(j), in no event shall the replacement of any Lender result in a
decrease or reallocation of the aggregate Commitments without the written
consent of the Majority Lenders.
40
SECTION 2.19. Use of Proceeds. On the Effective Date, the Borrower shall
prepay, with interest and fees accrued and unpaid thereon, all amounts
outstanding under the Existing Five-Year Credit Agreement and the Existing
364-Day Credit Agreement from the proceeds of Advances made on the Effective
Date in accordance with the borrowing procedures set forth in Sections 2.02 and
2.03. The proceeds of any subsequent Advances, Swingline Loans and Letters of
Credit shall be available, and the Borrower agrees that it will use such
proceeds, solely for the general corporate purposes of the Borrower and its
Subsidiaries, including, without limitation, acquisitions that have been
approved by the board of directors of the acquired entity and stock repurchases.
SECTION 2.20. Termination Date Extensions. At any time after the second
anniversary of the Effective Date, the Borrower may make a written request to
the Agent, who shall forward a copy of each such request to each of the Lenders,
that the Termination Date then in effect be extended to the date which is one
year after such existing Termination Date, provided, however, that the Borrower
shall not be permitted to obtain more than two extensions pursuant to this
Section 2.20. Such request shall be accompanied by a certificate of a Financial
Officer of the Borrower stating that no Default or Event of Default has occurred
and is continuing. If, by the date (a "Response Date") which is 30 days after
the date of such request, Lenders holding at least 70% of the Commitments then
outstanding agree thereto in writing, the Termination Date of each Lender then
consenting, or that thereafter consents, to such extension (each, a "Continuing
Lender") shall be automatically extended to the first anniversary of the then
existing Termination Date. In the event that the Borrower has not obtained
agreement to the requested extension from the requisite percentage of Lenders to
permit an extension by the Response Date, the Borrower may extend the deadline
for obtaining such percentage to the thirtieth day following such Response Date
in order to take such actions, including those contemplated by Section 2.21,
with respect to any Lender that has not agreed to such extension (each, a
"Non-Continuing Lender"), as the Borrower deems appropriate in order to obtain
agreement to such extension from the requisite percentage of Lenders. If the
Borrower obtains agreement from the requisite percentage of the Lenders during
such thirty day period, the Termination Date shall be extended as to the
Continuing Lenders as provided in the second preceding sentence. The Agent shall
notify the Borrower and each Lender of the effectiveness of any such extension.
No Lender shall be obligated to agree to any extension pursuant to this Section
2.20, and the extension of the Termination Date as to any Lender shall be in its
sole discretion. The Termination Date shall not be extended pursuant to this
Section 2.20 for any Lender that is a Non-Continuing Lender.
SECTION 2.21. Replacement of Lenders. Any Lender claiming any additional
amounts payable pursuant to Section 2.14, invoking the provisions of Section
2.15 or becoming a Non-Continuing Lender shall, if no Default has occurred and
is continuing, upon the request of the Borrower delivered to such Lender and the
Agent, assign, pursuant to and in accordance with the provisions of Section
8.07, all of its rights
41
and obligations under this Agreement and under the other Loan Documents to an
Eligible Assignee selected by the Borrower in consideration for (i) the payment
by such assignee to the assigning Lender of the principal of, and interest
accrued and unpaid to the date of such assignment on, the Note or Notes of such
Lender, (ii) the payment by the Borrower to the assigning Lender of any and all
other amounts owing to such Lender under any provision of this Agreement accrued
and unpaid to the date of such assignment and (iii) the Borrower's release of
the assigning Lender from any further obligation or liability under this
Agreement. The assignment fee required under Section 8.07(a) for such assignment
shall be paid by the Borrower. Notwithstanding anything to the contrary in this
Section 2.21, in no event shall the replacement of any Lender result in a
decrease or reallocation of the aggregate Commitments without the written
consent of the Majority Lenders.
SECTION 2.22. Evidence of Debt. (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Advance owing to
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder in respect of
Advances. The Borrower agrees that upon notice by any Lender to the Borrower
(with a copy of such notice to the Agent) to the effect that a Note is required
or appropriate in order for such Lender to evidence (whether for purposes of
pledge, enforcement or otherwise) the Advances owing to, or to be made by, such
Lender, the Borrower shall promptly execute and deliver to such Lender a Note
payable to the order of such Lender in a principal amount up to the Commitment
of such Lender.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to the Effective Date. The obligations
of the Lenders to make Advances, the obligation of the Swingline Lender to make
Swingline Loans and the obligation of the LC Bank to issue Letters of Credit
hereunder shall not become effective until the date on which each of the
following conditions is satisfied:
(a) This Agreement (including all schedules, exhibits, certificates
and opinions delivered pursuant hereto), and each other Loan Document shall
have been duly executed and delivered by or on behalf of the Borrower and,
in the case of this Agreement, by the Lenders.
42
(b) There shall have occurred no material adverse change in the
condition (financial or otherwise) or results of operations of the Borrower
and its Subsidiaries, taken as a whole, since February 23, 2002.
(c) There shall exist no action, suit, investigation, litigation or
proceeding affecting the Borrower or any of its Subsidiaries pending or
threatened before any court, governmental agency or arbitrator that (i)
could reasonably be expected to result in a material adverse change in the
condition (financial or otherwise) or results of operations or prospects of
the Borrower and its Subsidiaries, taken as a whole, or (ii) purports to
affect the legality, validity or enforceability of this Agreement or any
other Loan Document or the consummation of the transactions contemplated
hereby.
(d) All governmental and third-party consents and approvals necessary
in connection with the transactions contemplated hereby shall have been
obtained (without the imposition of any conditions that are not acceptable
to the Lenders) and shall remain in effect, and no law or regulation shall
be applicable that restrains, prevents or imposes materially adverse
conditions upon the transactions contemplated hereby.
(e) The Borrower shall have notified the Agent in writing as to the
proposed Effective Date.
(f) The Borrower shall have paid all accrued fees and expenses of the
Agent that have been billed (including the accrued fees and expenses of
counsel to the Agent).
(g) The Agent shall have received on or before the Effective Date the
following, each dated such date, in form and substance satisfactory to the
Agent and (except for the Notes) in sufficient copies for each Lender:
(i) certified copies of the resolutions of the Board of Directors
of the Borrower approving this Agreement and the other Loan Documents,
and of all documents evidencing other necessary corporate action and
government approvals, if any, with respect to this Agreement and the
other Loan Documents,
(ii) a certificate of the Secretary or an Assistant Secretary of
the Borrower certifying the names and true signatures of the officers
of the Borrower authorized to sign this Agreement, the other Loan
Documents and the other documents to be delivered hereunder,
43
(iii) a copy of a certificate of the Secretary of State of the
jurisdiction of incorporation of the Borrower (as of a date reasonably
near the Effective Date) that (A) attached thereto is a true and
correct copy of the Borrower's charter and each amendment thereto, (B)
such amendments are the only amendments to the Borrower's charter on
file in his office, (C) the Borrower has paid all franchise taxes to
the date of such certificate and (D) the Borrower is duly incorporated
and in good standing under the laws of its jurisdiction of
incorporation,
(iv) a certificate of the Borrower, signed by its President or a
Vice President and its Secretary or any Assistant Secretary, dated the
Effective Date, certifying (A) as to the absence of any amendments to
the charter of the Borrower since the date of the Secretary of State's
certificate from its jurisdiction of incorporation, (B) that attached
is a true and correct copy of the by-laws of the Borrower as in effect
on the Effective Date, (C) as to the due incorporation and good
standing of the Borrower as a corporation organized under the laws of
its jurisdiction of incorporation, and the absence of any proceeding
for the dissolution or liquidation of the Borrower, (D) as to the
truth and correctness of the representations and warranties contained
in Section 4.01 of this Agreement as though made on and as of the
Effective Date and (E) as to the absence of any event occurring and
continuing, or resulting from the effectiveness of this Agreement or
any other Loan Document, if any, that constitutes a Default,
(v) a favorable opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, special counsel
for the Borrower, substantially in the form of Exhibit D hereto and as
to such other matters as any Lender through the Agent may reasonably
request,
(vi) a favorable opinion of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Associate General
Counsel of the Borrower, substantially in the form of Exhibit E hereto
and as to such other matters as any Lender through the Agent may
reasonably request,
(vii) evidence of the termination of the commitments under the
Existing Five-Year Credit Agreement and the Existing 364-Day Credit
Agreement and the repayment in full of all obligations owing under
such agreements, and
(viii) such other approvals, opinions or documents as any Lender,
through the Agent, may reasonably request.
44
SECTION 3.02. Conditions Precedent to Each A Borrowing, Swingline Borrowing
and Issuance of Letters of Credit. The obligation of each Lender to make an A
Advance on the occasion of each A Borrowing (including the initial A Borrowing
but other than an A Advance pursuant to section 2.04(c)) resulting in an
increase in the aggregate amount of outstanding A Advances, the obligation of
each LC Bank to issue a Letter of Credit on the occasion of a request therefor
by the Borrower (other than an extension of a maturing Letter of Credit that
provides for a drawing thereunder in the absence of such extension), and the
obligation of the Swingline Lender to make a Swingline Loan on the occasion of
each Swingline Borrowing shall be subject to the further conditions precedent
that on the date of such A Borrowing, the issuance of such Letter of Credit or
such Swingline Borrowing, as the case may be, the following statements shall be
true (and each of the giving of the applicable Notice of A Borrowing, request
for issuance of Letter of Credit or Notice of Swingline Borrowing, as the case
may be, and the acceptance by the Borrower of the proceeds of such A Borrowing
or Swingline Borrowing or benefits of the issuance of such Letter of Credit, as
the case may be, shall constitute a representation and warranty by the Borrower
that on the date of such A Borrowing, the issuance of such Letter of Credit or
such Swingline Borrowing, as the case may be, such statements are true):
(i) the representations and warranties contained in Section 4.01 are
correct on and as of the date of such A Borrowing, the issuance of such
Letter of Credit or such Swingline Borrowing, as the case may be before and
after giving effect to such A Borrowing, the issuance of such Letter of
Credit or such Swingline Borrowing, as the case may be, and to the
application of the proceeds therefrom, as though made on and as of such
date, and
(ii) no event has occurred and is continuing, or would result from
such A Borrowing, the issuance of such Letter of Credit or such Swingline
Borrowing, as the case may be, or from the application of the proceeds
therefrom, which constitutes a Default.
SECTION 3.03. Conditions Precedent to Each B Borrowing. The obligation of
each Lender that is to make a B Advance on the occasion of a B Borrowing
(including the initial B Borrowing) to make such B Advance as part of such B
Borrowing is subject to the conditions precedent that (i) the Agent shall have
received the written confirmatory Notice of B Borrowing with respect thereto,
(ii) (x) in the case of any B Borrowing (except as otherwise set forth in
subclause (y) below), on or before the date of such B Borrowing, but prior to
such B Borrowing, and (y) in the case of same day, fixed rate B Borrowings,
promptly after any such B Borrowing, the Agent shall have received a B Note
payable to the order of such Lender for each of the one or more B Advances to be
made by such Lender as part of such B Borrowing, in a principal amount equal to
the principal amount of the B Advance to be evidenced thereby and otherwise on
such terms as were agreed to for such B Advance in accordance with
45
Section 2.03 and (iii) on the date of such B Borrowing the following statements
shall be true (and each of the giving of the applicable Notice of B Borrowing
and the acceptance by the Borrower of the proceeds of such B Borrowing shall
constitute a representation and warranty by the Borrower that on the date of
such B Borrowing such statements are true):
(a) the representations and warranties contained in Section 4.01 are
correct on and as of the date of such B Borrowing, before and after giving
effect to such B Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date,
(b) no event has occurred and is continuing, or would result from such
B Borrowing or from the application of the proceeds therefrom, which
constitutes a Default, and
(c) no event has occurred and no circumstance exists as a result of
which the information concerning the Borrower that has been provided to the
Agent and each Lender by the Borrower in connection herewith would include
an untrue statement of a material fact or omit to state any material fact
or any fact necessary, to make the statements contained therein, in the
light of the circumstances under which they were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:
(a) Each of the Borrower and its Subsidiaries is a corporation or
entity duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization and, except where the
failure to be so (individually or in the aggregate) would not reasonably be
expected to have a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
(b) The execution, delivery and performance by the Borrower of this
Agreement and the other Loan Documents, and the consummation of the
transactions contemplated hereunder and thereunder, are within the
Borrower's corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene the charter or by-laws of the
Borrower or any of its Subsidiaries, (ii) violate any law, rule,
regulation, order, writ, judgment,
46
determination or award binding on or affecting the Borrower or any of its
Subsidiaries except where such violation, individually and together with
all other such violations, would not reasonably be expected to require
payments by the Borrower and its Subsidiaries of $25,000,000 or more or
have a Material Adverse Effect or (iii) conflict with or result in the
breach of, or constitute a default under, any agreement or instrument
binding on or affecting the Borrower or any of its Subsidiaries except
where such conflict, default or breach, individually, and together with all
other such conflicts, defaults or breaches, would not reasonably be
expected to require payments by the Borrower and its Subsidiaries of
$25,000,000 or more or have a Material Adverse Effect.
(c) This Agreement has been, and each other Loan Document when
delivered hereunder will have been, duly executed and delivered by the
Borrower. This Agreement is, and the other Loan Documents when delivered
hereunder will be, legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their respective terms.
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body, or any third
party that is a party to any agreement or instrument binding on the
Borrower or any of its Subsidiaries is required for the due execution,
delivery or performance by the Borrower of this Agreement or any other Loan
Document, or for the consummation of the transactions contemplated by this
Agreement or the other Loan Documents.
(e) (i) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at February 23, 2002, and the related statements of income
and retained earnings of the Borrower and its Subsidiaries for the fiscal
year then ended, accompanied by an opinion of KPMG LLP, independent public
accountants, copies of which have been furnished to each Lender, fairly
present the Consolidated financial condition of the Borrower and its
Subsidiaries as at such date and the Consolidated results of the operations
of the Borrower and its Subsidiaries for the period ended on such date, all
in accordance with GAAP. Since February 23, 2002, there has been no
material adverse change in the business, assets, operations or condition
(financial or otherwise) of the Borrower and its Subsidiaries, taken as a
whole; and (ii) except as disclosed in the financial statements referred to
above or the notes thereto or in the Information Memorandum, none of the
Borrower or its Subsidiaries has, as of the Effective Date, any material
contingent liabilities, long-term commitments that were not incurred by the
Borrower or its Subsidiaries in the ordinary course of their business or
unrealized losses.
47
(f) There is no pending or threatened action, suit, investigation,
litigation or proceeding, including, without limitation, any Environmental
Action, affecting the Borrower or any of its Subsidiaries before any court,
governmental agency or arbitrator, that (i) is likely to result in a
material adverse change in the condition (financial or otherwise) or
results of operations or prospects of the Borrower and its Subsidiaries,
taken as a whole, or (ii) purports to affect the legality, validity or
enforceability of this Agreement or any other Loan Document or the
consummation of the transactions contemplated hereby.
(g) (i) No information, exhibit or report furnished by or on behalf of
the Borrower to the Agent or any Lender in connection with the negotiation
of the Loan Documents (including but not limited to the Information
Memorandum) or pursuant to the terms of the Loan Documents contained any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements made therein not misleading in light of
the circumstances under which such statements were made; and (ii) all
financial projections that have been provided by or on behalf of the
Borrower to the Agent or any Lender were prepared in good faith based on
reasonable assumptions (it being understood that such projections are
subject to significant uncertainties and contingencies beyond the
Borrower's control, and that no assurance can be given that the projections
will be realized).
(h) Following application of the proceeds of each Advance, Swingline
Loan and Letter of Credit, not more than 25% of the value of the assets
(either of the Borrower only or of the Borrower and its Subsidiaries on a
Consolidated basis) subject to the provisions of Section 5.02(a) or Section
5.02(c) or subject to any restriction contained in any agreement or
instrument between the Borrower and any Lender or any Affiliate of any
Lender relating to Debt will be margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal Reserve
System).
(i) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan of the Borrower or any of its ERISA Affiliates
that has resulted in or is reasonably likely to result in a liability of
the Borrower or any of its ERISA Affiliates in excess of $25,000,000 in any
one case or $50,000,000 in the aggregate.
(j) Schedule B (Actuarial Information) to the most recently filed
annual report (Form 5500 Series) for each Plan of the Borrower or any of
its ERISA Affiliates, copies of which have been filed with the Internal
Revenue Service and furnished to the Lenders to the extent required under
Section 5.01(d)(iv), is complete and accurate and fairly presents the
funding status of such Plan, and since the date of such Schedule B there
has been no material adverse change in such funding status.
48
(k) Neither the Borrower nor any of its ERISA Affiliates has incurred
or is reasonably expected to incur any Withdrawal Liability to any
Multiemployer Plan in excess of $25,000,000 in any one case or $50,000,000
in the aggregate.
(l) Neither the Borrower nor any of its ERISA Affiliates has been
notified by the sponsor of a Multiemployer Plan of the Borrower or any of
its ERISA Affiliates that such Multiemployer Plan is in reorganization or
has been terminated, within the meaning of Title IV of ERISA, and no such
Multiemployer Plan is reasonably expected to be in reorganization or to be
terminated, within the meaning of Title IV of ERISA, if as a result thereof
the Borrower or any of its ERISA Affiliates would incur or would reasonably
be expected to incur, any liability in excess of $25,000,000 in any one
case or $50,000,000 in the aggregate.
(m) The fair market value of the assets of all Plans, as at February
23, 2002, was not less than 80% of the present value of all projected
benefit obligations under such Plans (based on the assumptions used for
purposes of Statement of Financial Accounting Standards No. 87), as of the
date of the most recent financial statements reflecting such amounts.
(n) The aggregate annualized amount paid net of the retiree annual
contributions (including, without limitation, the cost of insurance
premiums) with respect to post-retirement benefits under Welfare Plans for
which the Borrower and its Subsidiaries are liable does not exceed
$12,000,000.
(o) Each of the Borrower and its Subsidiaries has filed or caused to
be filed all tax returns which are required to be filed, and all taxes
related to such returns and any assessments made against it or any of its
respective properties and all other taxes, fees or other charges imposed on
it or any of its respective properties by any governmental authority (other
than those the amount or validity of which is 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) have been paid, except to the extent the
failure to make such filings or payments would not reasonably be expected
to have a Material Adverse Effect.
(p) Neither the Borrower nor any of its Subsidiaries is (i) an
"investment company", or an "affiliated person" of, or "promotor" or
"principal underwriter" for an "investment company", as such terms are
defined in the investment Company Act of 1940, as amended, or (ii) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935, as amended.
49
(q) Except for such matters individually or in the aggregate that
would not reasonably be expected to have a Material Adverse Effect: (i) the
operations and properties of the Borrower and each of its Subsidiaries
comply with all Environmental Laws, all necessary Environmental Permits
have been obtained and are in effect for the operations and properties of
the Borrower and its Subsidiaries and the Borrower and its Subsidiaries are
in compliance with all such Environmental Permits, and (ii) no
circumstances exist that could be reasonably likely to (x) form the basis
of an Environmental Action against the Borrower or any of its Subsidiaries
or any of their respective properties, or (y) cause any such property to be
subject to any restrictions on ownership, occupancy, use or transferability
under any Environmental Law.
(r) (i) Each of the Borrower and its Subsidiaries has good title to,
or valid leasehold interests in, all its real and personal property
material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted,
to utilize such properties for their intended purposes or which would not
reasonably be expected to have a Material Adverse Effect.
(ii) Each of the Borrower and its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and
other intellectual property material to its business, and the use
thereof by the Borrower and its Subsidiaries does not infringe upon
the rights of any other Person, except for any such infringements
that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
(s) Schedule IV sets forth the name of, and the ownership interest of
the Borrower and its applicable Subsidiaries in, each Subsidiary of the
Borrower as of the Effective Date.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. Until the Commitments have expired or
terminated and the principal of and interest on each Advance and Swingline Loan
shall have been repaid in full, all fees payable hereunder have been paid in
full, each Note shall have been repaid, all Letters of Credit have expired or
terminated and all Reimbursement Obligations shall have been satisfied, the
Borrower will, unless the Majority Lenders shall otherwise consent in writing:
50
(a) Compliance with Laws, Payment of Taxes, Etc. Comply, and cause
each of its Subsidiaries to comply, except where such failure to comply
would not reasonably be expected to have a Material Adverse Effect, with
(i) all its payment obligations (other than in respect of Debt and
judgments or orders for the payment of money), (ii) all applicable laws
(including, without limitation, ERISA and Environmental Laws), rules,
regulations and orders, such compliance to include, without limitation,
paying and discharging before the same become delinquent all taxes,
assessments and governmental charges imposed upon it or upon its property,
except, in each case, where (A) the validity or amount thereof is being
contested in good faith by appropriate proceedings, (B) the Borrower or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (C) such contest effectively suspends
collection of the contested obligation and the enforcement of any Lien
securing such obligation, and (iii) all material contracts to which it or
its Subsidiaries is a party.
(b) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its corporate
existence, rights (charter and statutory) and franchises, provided,
however, that the Borrower and any Subsidiary may consummate any merger,
consolidation, liquidation or dissolution permitted under Section 5.02(b),
and provided further that the Borrower and its Subsidiaries shall not be
required to preserve any right or franchise if the Borrower and the
relevant Subsidiary shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Borrower and its
Subsidiaries and that the loss thereof is not disadvantageous in any
material respect to the Borrower and its Subsidiaries, taken as a whole.
(c) Keeping of Books. Keep, and cause each Subsidiary to keep, proper
books of record and account in which full and correct entries shall be made
of all financial transactions and the assets and business of the Borrower
and each Subsidiary in order to permit the Borrower to prepare Consolidated
financial statements of the Borrower in accordance with GAAP.
(d) Reporting Requirements. Furnish to each Lender:
(i) (x) as soon as available and in any event within 45 days
after the end of each of the first three quarters of each fiscal year
of the Borrower, the Consolidated balance sheet of the Borrower and
its Subsidiaries as of the end of such quarter and Consolidated
statements of income and retained earnings of the Borrower and its
Subsidiaries for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter, duly certified by
a Financial Officer of the Borrower as having been prepared in
accordance with GAAP;
51
(y) as soon as available and in any event within 90 days after
the end of each fiscal year of the Borrower, a copy of the
Consolidated annual report for such year for the Borrower and its
Subsidiaries, containing Consolidated financial statements for such
year, certified in a manner acceptable to the Majority Lenders by KPMG
LLP or other nationally recognized independent public accountants; and
(z) together with each delivery of financial statements required
by clauses (x) and (y) above, a certificate of a Financial Officer (A)
stating that the signer has reviewed or caused to be reviewed under
his or her supervision the terms of this Agreement and the other Loan
Documents and the transactions and condition of the Borrower and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence as at
the date of such certificate of any condition or event that
constitutes a Default, and (B) setting forth (except to the extent
specifically set forth in such financial statements) information in
reasonable detail necessary to demonstrate the Borrower's compliance
as at the end of such accounting period with Section 5.02(e), (f), (g)
and (n) (including, but not limited to, a description of and amounts
comprising the elements of Consolidated Debt, each determined in
accordance with GAAP);
(ii) as soon as possible and in any event within five days after
any Financial Officer of the Borrower has knowledge of the occurrence
of each Default continuing on the date of such statement, a statement
of a Financial Officer of the Borrower setting forth the details of
such Default and the action which the Borrower has taken and proposes
to take with respect thereto;
(iii) promptly after the sending or filing thereof, copies of all
reports which the Borrower sends to its shareholders, and copies of
all reports and registration statements which the Borrower or any
Subsidiary files with the Securities and Exchange Commission or any
national securities exchange;
(iv) promptly and in any event within 30 days after the filing
thereof with the Internal Revenue Service, copies of each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Plan of the Borrower or any of its ERISA Affiliates,
provided that this clause (iv) shall apply only to the extent that the
total "current liability" indicated on any such Schedule B exceeds
$8,000,000;
52
(v) promptly and in any event within 15 Business Days after the
Borrower or any of its ERISA Affiliates knows or has reason to know
that any ERISA Event has occurred, a statement of a Financial Officer
of the Borrower describing such ERISA Event and the action, if any,
which the Borrower or such ERISA Affiliate proposes to take with
respect thereto;
(vi) promptly and in any event within five Business Days after
receipt thereof by the Borrower or any of its ERISA Affiliates, copies
of each notice from the PBGC stating its intention to terminate any
Plan of the Borrower or any of its ERISA Affiliates or to have a
trustee appointed to administer any Plan of the Borrower or any of its
ERISA Affiliates;
(vii) promptly after commencement thereof, notice of all actions
and proceedings before any court, governmental agency or arbitrator
affecting the Borrower or any of its Subsidiaries of the type
described in Section 4.01(f); and
(viii) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its
Subsidiaries as any Lender through the Agent may from time to time
reasonably request.
(e) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks
as is usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Borrower or such
Subsidiary operates.
(f) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve all of its properties
that are used or useful in the conduct of its business in good working
order and condition, ordinary wear and tear excepted, provided, however,
that neither the Borrower nor any of its Subsidiaries shall be required to
maintain or preserve any properties if the Borrower determines, in its
reasonable business judgment, that the maintenance and preservation thereof
is no longer desirable in the conduct of the business of the Borrower or
such Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to the Borrower or such Subsidiary.
(g) Visitation Rights. At any reasonable time upon the occurrence and
during the continuance of a Default while any Advance is outstanding,
permit the Agent or any of the Lenders, or any agents or representatives
thereof, to examine and make copies of and abstracts from the records and
books of account of, and visit the properties of, the Borrower and any of
its Subsidiaries, and to discuss the
53
affairs, finances and accounts of the Borrower and any of its Subsidiaries
with any of their officers and with their independent certified public
accountants.
SECTION 5.02. Negative Covenants. Until the Commitments have expired or
terminated and the principal of and interest on each Advance and Swingline Loan
shall have been repaid in full, all fees payable hereunder have been paid in
full, each Note shall have been repaid, all Letters of Credit have expired or
terminated and all Reimbursement Obligations shall have been satisfied, the
Borrower will not, without the written consent of the Majority Lenders:
(a) Liens, Etc. Create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist, any Lien upon or with respect to
any of its properties, whether now owned or hereafter acquired, or assign,
or permit any of its Subsidiaries to assign, any right to receive income,
in each case to secure or provide for the payment of any Debt of any
Person, other than:
(i) in the case of the Borrower, purchase money Liens to secure
Debt incurred solely for the purpose of financing the acquisition of
any real property, fixtures or equipment acquired by the Borrower with
the proceeds of such Debt, provided that any such Liens attach only to
the assets so purchased and the Debt (including any extensions,
renewals or refinancings thereof) secured by any such Lien does not
exceed 100% of the purchase price of the property being purchased, or
(ii) in the case of any Subsidiary of the Borrower, purchase
money Liens to secure Debt incurred by such Subsidiary solely to
finance the purchase price of real property, fixtures or equipment to
the extent permitted pursuant to clause (ii) of Section 5.02(d),
provided that any such Liens attach only to the assets so purchased
and the Debt (including any extensions, renewals or refinancings
thereof) secured by any such Lien does not exceed 100% of the purchase
price of the property being purchased, or
(iii) in the case of any Subsidiary of the Borrower, Liens to
secure Debt assumed by such Subsidiary solely in connection with the
acquisition of real property, fixtures or equipment to the extent
permitted pursuant to clause (iii) of Section 5.02(d), provided that
any such Liens attach only to the assets so purchased and the Debt
(including any extensions, renewals or refinancings thereof) secured
by any such Lien does not exceed 100% of the purchase price of the
property being purchased, or
(iv) in the case of any Person acquired by the Borrower or any
Subsidiary of the Borrower, which Person will be, upon such
acquisition, a
54
Subsidiary of the Borrower, Liens to secure Debt to the extent
permitted pursuant to clause (iv) of Section 5.02(d), provided that
any such Liens attach only to the assets of the Person so acquired and
the Debt (including any extensions, renewals or refinancings thereof)
secured by any such Lien does not exceed 100% of the purchase price of
the Person being acquired, or
(v) in the case of the Borrower, Liens existing on property at
the time of the acquisition thereof by the Borrower (other than any
such Lien created in contemplation of such acquisition that was not
incurred to finance the acquisition of such property), or
(vi) any extensions, renewals or replacements of any of the Liens
permitted by subclauses (i) through (v) above or subclause (ix) below
for the same or a lesser amount, provided, however, that no such Liens
shall extend to or cover any real property, fixtures, equipment or
other assets not theretofore subject to the Lien being extended,
renewed or replaced, or
(vii) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings and for which appropriate
reserves have been made in accordance with GAAP, or
(viii) Liens incidental to the conduct of its business or the
ownership of its property and assets which were not incurred in
connection with the borrowing of money or the obtaining of advances or
credit, and which do not in the aggregate materially detract from the
value of its property or assets or materially impair the use thereof
in the operation of its business, or
(ix) Liens existing on the Effective Date and set forth on
Schedule V, or
(x) Liens incurred by the Receivables Subsidiary in a Permitted
Receivables Financing, or
(xi) Liens not otherwise permitted by the foregoing clauses of
this Section 5.02(a) securing Debt, provided that the aggregate
principal amount of Debt secured by such Liens at the time any such
Lien is created (after giving effect to such Lien) does not exceed 5%
of Consolidated Tangible Assets (determined by reference to the most
recent balance sheet submitted pursuant to Section 5.01(d)(i)), and
provided further that such Liens shall only apply to assets of
Subsidiaries of the Borrower if such Liens secure only Debt of
Subsidiaries of the Borrower that is permitted pursuant to clause
(viii) of Section 5.02(d).
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Without limiting the generality of the foregoing, neither the Borrower nor
any of its Subsidiaries will incur, create or permit to exist any Lien on
its Inventory or Eligible Accounts Receivables other than (i) Liens created
by statute and (ii) Liens that are unperfected and inconsequential and held
by vendors of the Borrower and its Subsidiaries in the ordinary course of
business.
(b) Mergers, Etc. Merge or consolidate with or into, liquidate or
dissolve, or convey, transfer, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) all or substantially all of
its assets (whether now owned or hereafter acquired) to any Person, or
permit any of its Subsidiaries to do so, except that:
(i) any Subsidiary of the Borrower may merge or consolidate with
or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or with any one or more other
Subsidiaries of the Borrower,
(ii) the Borrower or any Subsidiary of the Borrower may sell,
lease, transfer or otherwise dispose of any of its assets to the
Borrower or any Subsidiary of the Borrower, as the case may be,
(iii) the Borrower or any Subsidiary of the Borrower may merge
with any other corporation, provided that the Borrower or, in the case
of any Subsidiary, a Subsidiary shall be the continuing or surviving
corporation, and the Borrower shall be in compliance on a pro forma
basis after giving effect to such merger, with the covenants contained
in Sections 5.02(e),(f), (g) and (n) recomputed as at the last day of
the most recently ended fiscal quarter of the Borrower for which
financial statements are available, as if such merger (and any related
incurrence or repayment of Debt) had occurred on the first day of each
relevant period for testing such compliance,
(iv) the Borrower may engage in transactions permitted by Section
5.02(c), and
(v) any Subsidiary may liquidate or dissolve if the Borrower
determines in good faith that such liquidation or dissolution is in
the best interests of the Borrower and is not materially
disadvantageous to the Lenders,
provided that, in the case of each transaction permitted under this Section
5.02(b), at the time of such proposed transaction and immediately after
giving effect to such proposed transaction, no Default shall have occurred
and be continuing.
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(c) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose
of, or permit any of its Subsidiaries to sell, lease, transfer or otherwise
dispose of, its assets, or grant any option or other right to purchase,
lease or otherwise acquire its assets, other than:
(i) sales of inventory in the ordinary course of its business,
(ii) any sale of assets in a transaction authorized by
subsections (b)(i), (ii), (iii) or (v) of this Section 5.02,
(iii) the sale of the Borrower's interest in any Subsidiary
engaged principally in manufacturing or production businesses,
(iv) sales of rights to payment and the security therefor to the
extent such sales are accounted for as true sales in accordance with
GAAP,
(v) other sales, leases, transfers or other dispositions of
assets of the Borrower or any of its Subsidiaries not to exceed in the
aggregate 10% of the Consolidated Tangible Assets (determined by
reference to the most recent balance sheet submitted pursuant to
Section 5.01(d)(i)) for all such sales, leases, transfers or other
dispositions, and
(vi) sales pursuant to a Permitted Receivables Financing.
(d) Subsidiary Debt. Permit any of its Subsidiaries to create, incur,
assume or suffer to exist any Debt, other than:
(i) Debt owed to the Borrower or to a wholly owned Subsidiary of
the Borrower,
(ii) Debt (including Capital Leases) incurred after the Effective
Date to finance the purchase price of real property, fixtures or
equipment acquired by such Subsidiary from a Person other than the
Borrower or any other Subsidiary of the Borrower, provided that such
real property, fixtures or equipment shall be purchased on an
arm's-length basis and at a fair market value as reasonably determined
at the time of such acquisition by the authorized officers or the
Board of Directors of the Borrower, as the case may be, in a manner
consistent with the Borrower's standard procedures, and extensions,
refinancings and renewals of such Debt, provided further that the
aggregate principal amount of Debt (including Capital Leases) incurred
by all Subsidiaries pursuant to this clause (ii) or clause (iii) below
shall not exceed (A) $150,000,000 during the Borrower's 2003 fiscal
year and (B) in any fiscal year of the Borrower thereafter, 15%
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of Consolidated EBITDA for the Borrower's immediately preceding fiscal
year,
(iii) secured Debt assumed after the Effective Date by such
Subsidiary in connection with the acquisition of real property,
fixtures or equipment which Debt (x) is secured only by such property
and (y) is outstanding at the time of the acquisition of such property
and not incurred to finance the acquisition thereof, and extensions,
refinancings and renewals of such Debt, provided that the aggregate
principal amount of Debt (including Capital Leases) incurred by all
Subsidiaries pursuant to this clause (iii) or clause (ii) above shall
not exceed (A) $150,000,000 during the Borrower's 2003 fiscal year and
(B) in any fiscal year of the Borrower thereafter, 15% of Consolidated
EBITDA for the Borrower's immediately preceding fiscal year,
(iv) Debt of a Person that is acquired by such Subsidiary or the
Borrower, which Person will be, upon such acquisition, a Subsidiary of
the Borrower and which Debt (x) is secured, if at all, only by the
assets of such Person and (y) is outstanding at the time of the
acquisition of such Person and not incurred to finance the acquisition
thereof, provided that the Borrower shall be in compliance on a pro
forma basis after giving effect to such acquisition with the covenants
contained in Sections 5.02(e),(f), (g) and (n) recomputed as at the
last day of the most recently ended fiscal quarter of the Borrower for
which financial statements are available, as if such acquisition (and
any related incurrence or repayment of Debt) had occurred on the first
day of each relevant period for testing such compliance,
(v) indorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business,
(vi) Debt existing on the Effective Date (all Debt of the
Subsidiaries of the Borrower for borrowed money in a principal amount
of $5,000,000 or greater existing on the Effective Date is described
on Schedule III),
(vii) any extension, refinancing, or renewal of any of the Debt
specified in subclause (iv) and subclause (vi) of this subsection (d)
not resulting in an increase in the principal amount of such Debt so
extended, refinanced, or renewed,
(viii) Debt of such Subsidiary not otherwise permitted by the
foregoing clauses of this Section 5.02(d), provided that the aggregate
58
principal amount of such Debt of all Subsidiaries at any one time
outstanding does not exceed $75,000,000,
(ix) Debt incurred pursuant to the Loan Documents, and
(x) Debt incurred by the Receivables Subsidiary in a Permitted
Receivables Financing.
(e) Interest Expense Coverage Ratio. Permit the ratio of (a)
Consolidated EBITDA plus Consolidated Rent Expense to (b) Consolidated
Interest Expense plus Consolidated Rent Expense, in each case for any
period of four consecutive fiscal quarters of the Borrower ending on any
date on or after the Effective Date to be less than 3.2 to 1.0.
(f) Leverage Ratio. Permit the ratio of (a) Consolidated Debt any day
to (b) Consolidated EBITDA for the period of four consecutive fiscal
quarters ending on, or most recently ended prior to, such day to be greater
than 3.0 to 1.0.
(g) Asset Coverage Ratio. Permit, on any day, the ratio of (i)
Consolidated Inventory plus Eligible Accounts Receivable on such day to
(ii) the sum of the aggregate principal amount of outstanding Borrowings on
such day plus the aggregate LC Exposure on such day, to be less than 2.0 to
1.0.
(h) Sale and Leaseback Transactions. Enter into, or permit any of its
Subsidiaries to enter into, any arrangement, directly or indirectly,
whereby it shall sell or transfer any property, real or personal, used or
useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease such property or other property that it intends to
use for substantially the same purpose or purposes as the property sold or
transferred, except for any such sale or transfer of any real property,
fixtures or equipment that (i) is made for cash consideration in an amount
not less than the cost of such fixed or capital asset and is consummated
within 90 days after the Borrower or such Subsidiary acquires or completes
the construction of such real property, fixtures or equipment or (ii) is
made for cash consideration in an amount not less than the fair value (as
reasonably determined by the Borrower in good faith) of such fixed or
capital asset and is effected pursuant to Section 5.02(c)(v).
(i) Transactions with Affiliates. Sell, lease or otherwise transfer,
or permit any of its Subsidiaries to sell, lease or otherwise transfer, any
property or assets to, or purchase, lease or otherwise acquire any property
or assets from, or otherwise engage in any other transactions (other than
for the provision of accounting, payroll, treasury, cash management,
financial, legal and other administrative services, in each case, in the
ordinary course of business) with, any
59
of its Affiliates, except transactions in the ordinary course of business
that are at prices and on terms and conditions not less favorable to the
Borrower or such Subsidiary than could be obtained on an arm's-length basis
from unrelated third parties.
(j) Business of Borrower and Subsidiaries. Engage, or permit any of
its Subsidiaries to engage, at any time, in any business or business
activity to the extent doing so would cause the predominant business of the
Borrower and its Subsidiaries (taken as a whole) at any time to be a
business that is not a business conducted by the Borrower or its
Subsidiaries on the date hereof or business activities reasonably related
or incidental thereto.
(k) Restrictive Agreements. Enter into, incur or permit to exist, or
permit any of its Material Subsidiaries to enter into, incur or permit to
exist, directly or indirectly, any agreement or other arrangement, other
than any agreement or arrangement that is terminable at any time by the
Borrower or such Material Subsidiary at its sole option for cash
consideration (including the repayment of any Debt, fees, expenses or other
amounts in respect thereof) that does not exceed $10,000,000 in the
aggregate for all such agreements and arrangements, that prohibits,
restricts or imposes any condition upon (a) the ability of the Borrower or
any Material Subsidiary of the Borrower to create, incur or permit to exist
any Lien upon any of its property or assets, or (b) the ability of any
Material Subsidiary of the Borrower to pay dividends or other distributions
with respect to any shares of its capital stock or to make or repay loans
or advances to the Borrower or any other Subsidiary of the Borrower or to
Guarantee Debt of the Borrower or any other Subsidiary of the Borrower,
provided that (i) the foregoing shall not apply to restrictions and
conditions imposed by law or by any Loan Document, (ii) the foregoing shall
not apply to restrictions and conditions existing on the Effective Date
identified in Schedule VI (or to any extension or renewal of, or any
amendment or modification of, or any other restrictions or conditions
contained in agreements replacing or refinancing the agreements imposing
the restrictions and conditions described in Schedule VI, in each case that
do not expand the scope of any such restriction or condition described in
Schedule VI, except that expansions of the scope of any such restrictions
as a result of provisions existing on the date hereof that automatically
incorporate changes to this Agreement shall be permitted), (iii) the
foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such
sale, provided such restrictions and conditions apply only to the
Subsidiary that is to be sold and such sale is permitted hereunder, (iv)
clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Debt permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Debt
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and (v) clause (a) of the foregoing shall not apply to customary provisions
in leases and other contracts restricting the assignment thereof.
(l) Amendment of Material Documents. Amend, modify or waive, or permit
any of its Subsidiaries to amend, modify or waive in any manner that is
materially adverse to the Lenders, any of its rights under (a) its
certificate of incorporation, by-laws or other organizational documents,
(b) any documents or agreements entered into in connection with a Permitted
Receivables Financing, the Existing Notes Indenture, the transactions
described in Schedule VII (other than as expressly permitted under Schedule
IX) and (c) any other documents or agreements that are material to the
Borrower and its Subsidiaries taken as a whole.
(m) Debt of the Borrower. Allow the aggregate principal amount of Debt
(other than Excluded Debt) of the Borrower that is created or incurred
after the Effective Date (including any refinancing or replacement thereof)
and scheduled to amortize or mature prior to the date that is three months
after the Termination Date to exceed $75,000,000 at any one time
outstanding.
(n) Net Worth. Permit the Net Worth as of any day following the
Effective Date to be less than the sum of $1,500,000,000 plus 50% of
Consolidated Net Income (if positive) for each fiscal quarter for which
Consolidated Net Income is positive that ends after the Effective Date and
on or prior to the date of determination.
SECTION 5.03. Restrictive Financial Covenants. If the Borrower enters into,
incurs or permits to exist, or permits any of its Subsidiaries to enter into,
incur or permit to exist, directly or indirectly, any agreement or other
arrangement in respect of any Debt or other monetary obligations for an
aggregate amount of more than $25,000,000 that imposes any condition or covenant
measuring the Borrower's or such Subsidiary's financial performance or financial
standing which is more restrictive than the covenants in Section 5.02 (e), (f)
or (g), such condition or covenant shall be deemed to be incorporated into this
Agreement, provided that this Section shall not apply in respect of the covenant
contained in Section 4.7(e) of the Indenture dated as of June 26, 1997 among
Shoppers Food Warehouse Corp. as issuer, SFW Holding Corp. as guarantor and
Norwest Bank Minnesota, National Association as trustee, as amended as of the
Effective Date.
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ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events ("Events of
Default") shall occur and be continuing:
(a) the Borrower shall fail to pay (i) any principal of any Borrowings
or Reimbursement Obligation when the same becomes due and payable; (ii) any
interest on Borrowings or any other amount due hereunder (other than as set
forth in clause (iii) of this subsection (a)), in each case within three
days of the date on which the same becomes due and payable; or (iii) fees
required to be paid pursuant to Section 2.06, and amounts due under Section
8.08, in each case within three days of notice thereof by the Agent to the
Borrower; or
(b) any written representation or warranty made at any time prior to
or on or after the Effective Date by the Borrower (or any of its officers)
herein or in any other Loan Document or in connection with this Agreement
or any other Loan Document shall prove to have been incorrect in any
material respect when made; or
(c) the Borrower shall fail to perform or observe (i) any term,
covenant or agreement contained in Section 2.19, 5.01(b) (as to the
Borrower's corporate existence), 5.01(d), 5.01(e) or 5.02, or (ii) any
other term, covenant or agreement contained in this Agreement on its part
to be performed or observed if the failure to perform or observe such other
term, covenant or agreement shall remain unremedied for thirty days after
the earliest of: (i) the date written notice thereof shall have been given
to the Borrower by the Agent or any Lender; (ii) the date written notice
thereof shall have been given by the Borrower to the Agent or any Lender;
and (iii) the date by which the Borrower was required to have delivered to
the Lenders the statement required under Section 5.01(d)(ii); or
(d) the Borrower or any of its Subsidiaries shall fail to pay any
principal of or premium or interest on any Debt that is outstanding in a
principal amount of at least $25,000,000 individually or $50,000,000 in the
aggregate (but excluding Debt evidenced by the Notes) of the Borrower or
such Subsidiary (as the case may be), when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand
or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Debt; or the Borrower or any of its Subsidiaries shall fail to be in
compliance with any covenant under any agreement or instrument relating to
any Debt outstanding in a principal amount of at least $25,000,000
individually or $50,000,000 in the aggregate (but excluding Debt evidenced
by the
62
Notes) and such failure shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such
event or condition is to accelerate or to permit the acceleration of, the
maturity of such Debt; or any Debt outstanding in a principal amount of at
least $25,000,000 individually or $50,000,000 in the aggregate (but
excluding Debt evidenced by the Notes) shall be declared to be due and
payable, or required to be prepaid (other than by a required prepayment
which does not arise because of a failure to comply with any such
covenant), redeemed, purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each case
prior to the stated maturity thereof; or
(e) the Borrower or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or against
the Borrower or any of its Subsidiaries seeking to adjudicate it a bankrupt
or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for
it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of sixty days,
or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment of
a receiver, trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or the Borrower or any of
its Subsidiaries shall take any corporate action to authorize any of the
actions set forth above in this subsection (e); or
(f) any judgment or order for the payment of money in excess of
$25,000,000 or more in the case of any one judgment or order and
$50,000,000 or more in the aggregate for all such judgments and orders (to
the extent not covered by insurance), or otherwise materially adverse to
the business, condition (financial or otherwise), results of operations or
prospects of the Borrower and its Subsidiaries taken as a whole shall be
rendered against the Borrower or any of its Subsidiaries and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of ten consecutive days
during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(g) any ERISA Event shall have occurred with respect to a Plan of the
Borrower or any of its ERISA Affiliates and the sum (determined as of the
date of occurrence of such ERISA Event) of the Insufficiency of such Plan
and the
63
Insufficiency of any and all other Plans of the Borrower and its ERISA
Affiliates with respect to which an ERISA Event shall have occurred and
then exist (or the liability of the Borrower and its ERISA Affiliates
related to such ERISA Event) exceeds $25,000,000 in any one case or
$50,000,000 in the aggregate; or
(h) the Borrower or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of the Borrower or any of
its ERISA Affiliates that it has incurred Withdrawal Liability to such
Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Borrower and its
ERISA Affiliates as Withdrawal Liability (determined as of the date of such
notification), exceeds $25,000,000 in any one case or $50,000,000 in the
aggregate; or
(i) the Borrower or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of the Borrower or any of
its ERISA Affiliates that such Multiemployer Plan is in reorganization or
is being terminated, within the meaning of Title IV of ERISA, and as a
result of such reorganization or termination the aggregate contributions of
the Borrower and its ERISA Affiliates to all Multiemployer Plans that are
then in reorganization or being terminated have been or will be increased
over the amounts otherwise required to be contributed to such Multiemployer
Plans by an amount exceeding $25,000,000 in any one case or $50,000,000 in
the aggregate;
(j) (i) any Person or two or more Persons acting in concert shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of
1934), directly or indirectly, of Voting Stock of the Borrower (or other
securities convertible into such Voting Stock) representing 20% or more of
the combined voting power of all Voting Stock of the Borrower; or (ii)
during any period of up to 24 consecutive months, commencing before or
after the date of this Agreement, individuals who at the beginning of such
24-month period were directors of the Borrower shall cease for any reason
(other than due to death or disability) to constitute a majority of the
board of directors of the Borrower (except to the extent that individuals
who at the beginning of such 24-month period were replaced by individuals
(x) elected by 66-2/3% of the remaining members of the board of directors
of the Borrower or (y) nominated for election by a majority of the
remaining members of the board of directors of the Borrower and thereafter
elected as directors by the shareholders of the Borrower); or (iii) any
Person or two or more Persons acting in concert shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation, will result in its or their acquisition of control
over Voting Stock of the Borrower (or other securities convertible into
such Voting Stock) representing 20% or more of the combined voting power of
all Voting Stock of the Borrower; or
64
(k) any default or other event (other than expiration at the end of
the scheduled term thereof or in connection with a refinancing thereof that
is a Permitted Receivables Financing) shall have occurred under the
Receivables Transfer Agreement or any other document governing any
Permitted Receivables Financing if the effect of such default or other
event is to cause any Person (other than the Borrower and its Subsidiaries)
to terminate any purchases of accounts receivable by such Person from the
Borrower or any of the Borrower's Subsidiaries pursuant to the Permitted
Receivables Financing;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Majority Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Majority Lenders, by notice to the Borrower, declare the
Borrowings, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Borrowings, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower, and demand that the Borrower pay
into the Holding Account an amount of cash equal to the aggregate amount
available for drawing under all outstanding Letters of Credit, provided,
however, that, in the event of an actual or deemed entry of an order for relief
with respect to the Borrower under the Federal Bankruptcy Code, (A) the
obligation of each Lender to make Advances shall automatically be terminated,
(B) the Notes and all Borrowings, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower and (C) the Borrower will pay to the Agent, for deposit in the
Holding Account, an amount of cash equal to the aggregate amount available for
drawing under all outstanding Letters of Credit.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment. The Lenders hereby appoint JPMCB as the Agent to
act as specified herein and in the other Loan Documents. Each Lender hereby
irrevocably authorizes and each holder of any Note by the acceptance of such
Note shall be deemed to irrevocably authorize the Agent to take such action on
its behalf under the provisions hereof, the Notes (including, without
limitation, to give notices and take such actions on behalf of the Majority
Lenders as are consented to in writing by the Majority Lenders) and any other
instruments, documents and agreements referred to herein or therein and to
exercise such powers hereunder and thereunder as are specifically delegated to
the Agent by the terms hereof and thereof and such other powers as are
65
reasonably incidental thereto. The Agent may perform any of its duties hereunder
and under the Notes, by or through its officers, directors, agents, employees or
affiliates, and the provisions of Sections 7.03 and 7.05 shall apply to such
officers, directors, agents, employees and affiliates.
SECTION 7.02. Nature of Duties. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement. The duties
of the Agent shall be mechanical and administrative in nature. EACH LENDER
HEREBY ACKNOWLEDGES AND AGREES THAT THE AGENT SHALL NOT HAVE, BY REASON OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENTS, A FIDUCIARY RELATIONSHIP TO OR IN RESPECT
OF ANY LENDER. Nothing in this Agreement or in any other Loan Documents,
expressed or implied, is intended to or shall be so construed as to impose upon
the Agent any obligations in respect of this Agreement or any other Loan
Documents except as expressly set forth herein or therein. The Agent shall not
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated by the
Loan Documents that the Agent is required to exercise in writing by the Majority
Lenders. Each Lender shall make its own independent investigation of the
financial condition and affairs of the Borrower in connection with the making
and the continuance of the Borrowings hereunder and shall make its own appraisal
of the credit worthiness of the Borrower, and the Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect thereto, whether coming into
its possession before making of the Borrowings or at any time or times
thereafter (except as set forth in this Agreement). The Agent will promptly
notify each Lender at any time that the Majority Lenders have instructed it to
act or refrain from acting pursuant to Article VI. None of the Syndication Agent
or the Co-Lead Arrangers and Joint Bookrunners, shall have any specified duties
under this Agreement.
SECTION 7.03. Exculpation, Rights Etc. Neither the Agent nor any of its
officers, directors, agents, employees or affiliates shall be liable for any
action taken or omitted by them hereunder or under any Note, or in connection
herewith or therewith, unless caused by its or their gross negligence or willful
misconduct. The Agent shall not be responsible to any Lender for any recitals,
statements, representations or warranties herein or in any other Loan Document
or for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, or sufficiency of this Agreement or any other Loan Document or
any other document or the financial condition of the Borrower. The Agent shall
not be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any other Loan Document or any other document or the financial condition of the
Borrower, or the existence or possible existence of any Default or Event of
Default unless requested to do so by the Majority Lenders. The Agent may at any
time request instructions from the Lenders with respect to any actions or
approvals (including the failure to act or approve) which by the terms of this
Agreement or the other Loan Documents, the Agent is
66
permitted or required to take or to grant, and if such instructions are
requested, the Agent shall be absolutely entitled to refrain from taking any
action or to withhold any approval and shall not be under any liability
whatsoever to any Person for refraining from any action or withholding any
approval under this Agreement or the other Loan Documents until it shall have
received such instructions from the Majority Lenders. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against the Agent
as a result of the Agent acting, approving or refraining from acting or
approving under any of the Loan Documents in accordance with the instructions of
the Majority Lenders or, to the extent required by Section 8.01, all of the
Lenders.
SECTION 7.04. Reliance. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any notice, writing, resolution, statement,
certificate, order or other document or any telephone, telex, teletype or
telecopier message believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person, and, with respect to all matters
pertaining herein or to any other Loan Document and its duties hereunder or
thereunder, upon advice of counsel selected by the Agent.
SECTION 7.05. Indemnification. To the extent the Agent is not reimbursed
and indemnified by the Borrower, the Lenders will reimburse and indemnify the
Agent for and against any and all liabilities, obligations, losses, damages,
claims, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Agent in any way relating to or arising out of this
Agreement or any other Loan Document or any action taken or omitted by the Agent
under this Agreement or any other Loan Document, in proportion to each Lender's
Percentage, provided, however, that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, claims, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Agent's
gross negligence or willful misconduct. The obligations of the Lenders under
this Section shall survive the payment in full of all principal and interest on
each Advance and Swingline Loan, all fees payable hereunder and the expiration
or termination of all Letters of Credit and the satisfaction of all
Reimbursement Obligations and the termination of this Agreement or any other
Loan Document.
SECTION 7.06. Agent In Its Individual Capacity. With respect to its
Advances, Swingline Loans, Commitment (and its Percentage thereof), Swingline
Commitment and Letters of Credit, the Agent shall have and may exercise the same
rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender or holder
of obligations hereunder. The terms "Lenders", "holder of obligations" or
"Majority Lenders" or any similar terms shall, unless the context clearly
otherwise indicates, include the Agent in its individual capacity as a Lender,
one of the Majority Lenders or a holder of obligations hereunder. The Agent may
accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with the Borrower or any Subsidiary or
Affiliate of the Borrower as
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if it were not acting as the Agent hereunder or under the Notes, including,
without limitation, the acceptance of fees or other consideration for services
without having to account for the same to any of the Lenders.
SECTION 7.07. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received written 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
Agent receives such a notice, the Agent shall give prompt notice thereof to the
Lenders.
SECTION 7.08. Holders of Obligations. The Agent may deem and treat the
payee of any obligation hereunder as reflected on the books and records of the
Agent as the owner thereof for all purposes hereof unless and until a written
notice of the assignment or transfer thereof shall have been filed with the
Agent pursuant to Section 8.07(c). Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is the holder of any obligation hereunder shall be conclusive and
binding on any subsequent holder, transferee or assignee of such obligation or
of any obligation or obligations granted in exchange therefor.
SECTION 7.09. Resignation by the Agent. (a) The Agent may resign from the
performance of all its functions and duties hereunder at any time by giving
thirty Business Days' prior written notice to the Borrower and the Lenders. Such
resignation shall take effect upon the acceptance by a successor Agent of
appointment pursuant to clauses (b) and (c) below or as otherwise provided
below.
(b) Upon any such notice of resignation, the Majority Lenders shall appoint
a successor Agent who shall be satisfactory to the Borrower and shall be an
incorporated bank or trust company.
(c) If a successor Agent shall not have been so appointed within said
thirty Business Day period, the Agent, with the consent of the Borrower, shall
then appoint a successor Agent who shall serve as the Agent until such time, if
any, as the Majority Lenders, with the consent of the Borrower, appoint a
successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to clause (b) and if
the Borrower has not provided the necessary consent pursuant to clause (c) by
the thirty-fifth Business Day after the date such notice of resignation was
given by the Agent, the Agent's resignation shall become effective and the
Majority Lenders shall thereafter perform all the duties of the Agent hereunder
until such time, if any, as the Majority Lenders, with the consent of Borrower,
appoint a successor Agent as provided above.
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SECTION 7.10. Removal of Agent. (a) The Majority Lenders may, at any time,
remove the Agent by giving thirty Business Days' prior written notice to the
Agent and the Borrower. The Borrower shall have the right to remove the Agent by
written notice to the Agent if (i) the Agent is adjudged bankrupt or insolvent,
(ii) a receiver or other public officer takes charge of the Agent or its
property, (iii) the Agent is in material breach of its obligations hereunder or
(v) the Agent otherwise becomes incapable of acting. Such removal shall take
effect upon the appointment of a successor Agent pursuant to paragraph (b) or
(c) below or as otherwise provided below.
(b) Upon any such notice of removal, the Majority Lenders shall appoint a
successor Agent who shall be satisfactory to the Borrower and shall be an
incorporated bank or trust company.
(c) If a successor Agent shall not have been so appointed within said
thirty Business Day period, the Borrower shall then appoint a successor Agent
who shall serve as the Agent until such time, if any, as the Majority Lenders,
with the consent of the Borrower, appoint a successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to clause (b) and if
the Borrower has not provided the necessary consent pursuant to clause (c) by
the thirty- fifth Business Day after the date such notice of removal was given
to the Agent, the Majority Lenders shall thereafter perform all the duties of
Agent hereunder until such time, if any, as the Majority Lenders, with the
consent of Borrower, appoint a successor Agent as provided above.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision of
this Agreement or the A Notes nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Majority Lenders (and, if the rights or duties of the Agent,
any LC Bank or the Swingline Lender are affected thereby, by the Agent, such LC
Bank or the Swingline Lender, as the case may be), and then such waiver, consent
or other agreement shall be effective only in the specific instance and for the
specific purpose for which given, provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by all the Lenders affected
thereby, do any of the following: (a) waive any of the conditions specified in
Section 3.01, 3.02 or 3.03, (b) increase the Commitments of the Lenders or
subject the Lenders to any additional obligations, (c) reduce the principal of,
or interest on, the Notes or any fees or other amounts payable hereunder, (d)
postpone any date fixed for any payment of principal of, or interest on, the
Notes, the Borrowings or
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any fees or other amounts payable hereunder, (e) reduce the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes or the
Borrowings, or the number of Lenders, that shall be required for the Lenders or
any of them to take any action hereunder, (f) extend the Termination Date except
as provided pursuant to Section 2.20, (g) extend the expiration date of any
Letter of Credit to a date beyond the latest possible Termination Date then in
effect under this Agreement, or (h) amend this Section 8.01, and provided
further that no amendment, waiver or consent shall, unless in writing and signed
by the Agent in addition to the Lenders required above to take such action,
affect the rights or duties of the Agent under this Agreement or any Note.
SECTION 8.02. Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including telecopier, telegraphic, telex or
cable communication) and mailed, transmitted, telegraphed, telexed, cabled or
delivered, if to the Borrower, at its address at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Treasurer, with a copy to the Corporate Secretary
of the Borrower, at the aforesaid address, if to any Lender, at its Domestic
Lending Office specified opposite its name on Schedule II hereto; if to any
other Lender, at its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender; and if to the Agent, JPMorgan
Chase Bank, Loan and Agency Services Group, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Telecopy No.
(▇▇▇) ▇▇▇-▇▇▇▇), with a copy to JPMorgan Chase Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇); or as to
the Borrower or the Agent, at such other address as shall be designated by such
party in a written notice to the other parties and, as to each other party, at
such other address as shall be designated by such party in a written notice to
the Borrower and the Agent. All such notices and communications shall, when
mailed, transmitted, telegraphed, telexed or cabled, be effective when deposited
in the mails, telecopied, delivered to the telegraph company, confirmed by telex
answerback or delivered to the cable company, respectively, except that notices
and communications to the Agent pursuant to Article II or VII shall not be
effective until received by the Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any Lender or
the Agent to exercise, and no delay in exercising, any right hereunder or under
any other Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on demand
all reasonable out-of-pocket costs and expenses of the Agent and the Co-Lead
Arrangers and Joint Bookrunners in connection with the negotiation, preparation,
execution, syndication, delivery, administration, modification and amendment of
this
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Agreement, the other Loan Documents and the other documents to be delivered
hereunder, including, without limitation, the reasonable fees and expenses of
counsel for the Agent with respect thereto and with respect to advising the
Agent as to its rights and responsibilities under this Agreement. The Borrower
further agrees to pay on demand all reasonable costs and expenses, if any
(including, without limitation, reasonable counsel fees and expenses) of the
Agent and the Lenders, in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the other Loan
Documents and the other documents to be delivered hereunder, including, without
limitation, reasonable counsel fees and expenses in connection with the
enforcement of rights under this Section 8.04(a).
(b) If any payment of principal of, or Conversion of, any LIBOR Advance, or
any B Advance which bears interest based on a rate per annum at which deposits
in U.S. dollars are offered to prime banks in the London interbank market, is
made by the Borrower to or for the account of a Lender other than on the last
day of the Interest Period for such Advance, as a result of a payment or
Conversion pursuant to Section 2.11(f), 2.13 or 2.15 or acceleration of the
maturity of the Notes pursuant to Section 6.01 or for any other reason, the
Borrower shall, upon written demand by such Lender (with a copy of such demand
to the Agent), pay to the Agent for the account of such Lender any amounts
required to compensate such Lender for any additional losses, costs or expenses
that it may reasonably incur as a result of such payment or Conversion,
including, without limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain such Advance.
(c) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
Section 2.18 shall survive the payment in full of principal and interest
hereunder and under the Notes.
SECTION 8.05. Right of Setoff. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of Section 6.01,
each Lender and the Agent are hereby authorized at any time and from time to
time, to the fullest extent permitted by law to set- off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender or the Agent to or
for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement and
any Note held by such Lender or the Agent, whether or not such Lender or the
Agent shall have made any demand under this Agreement or such Note and although
such obligations may be unmatured. Each Lender and the Agent agree promptly to
notify the Borrower after any such set-off and application made by such Lender
or the Agent, provided that the
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failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender and the Agent under this Section 8.05 are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) which such Lender and the Agent may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective (other
than Sections 2.01 and 2.03, which shall only become effective upon satisfaction
of the conditions set forth in Section 3.01) when it shall have been executed by
the Borrower and the Agent and when the Agent shall have been notified by each
Lender that is a signatory hereto that such Lender has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Agent and each Lender and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders.
SECTION 8.07. Assignments and Participations. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Lenders.
(b) Any Lender may at any time grant to one or more lenders or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its A Advances. In the event of any such grant by a Lender of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Lender shall remain responsible for the performance
of its obligations hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement pursuant to which any
Lender may grant such a participating interest shall provide that such Lender
shall retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement, provided
that such participation agreement may provide that such Lender will not agree to
any modification, amendment or waiver of this Agreement described in clause (c)
or (d) or (g) of Section 8.01 without the consent of the Participant. The
Borrower agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Article VII with respect
to its participating interest. An assignment or other transfer which is not
permitted by subsection (c) or (d) below shall be given effect for purposes of
this Agreement only to the extent of a participating interest granted in
accordance with this subsection (b).
(c) Any Lender may at any time, and so long as no Default shall have
occurred and be continuing, if demanded by the Borrower pursuant to Section 2.21
upon at least five Business Days' notice to such Lender and the Agent will,
assign to one or
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more Eligible Assignees (each an "Assignee") all, or a proportionate part (such
portion to be in an amount equal to all of such Lender's Commitment or equal to
or greater than $5,000,000 or an integral multiple of $1,000,000 in excess
thereof, unless otherwise agreed to by the Borrower and the Agent) of all, of
its rights and obligations under this Agreement and the other Loan Documents,
and such Assignee shall assume such rights and obligations, pursuant to an
assignment and acceptance in substantially the form of Exhibit C hereto (an
"Assignment and Acceptance") executed by such Assignee and such transferor
Lender, with (and subject to) the subscribed consent of the Borrower and the
Agent, such consents not to be unreasonably withheld, provided that if an
Assignee is a Lender Affiliate of such transferor Lender or another Lender,
neither the Borrower's nor the Agent's consent shall be required and, if any
Event of Default shall have occurred and be continuing, the Borrower's consent
shall not be required, and provided further that such assignment may, but need
not, include rights of the transferor Lender in respect of outstanding B
Advances. Notwithstanding the foregoing, no assigning Lender shall, after giving
effect to any such assignment, and as determined on the effective date of the
Assignment and Acceptance with respect thereto, retain a Commitment hereunder of
less than $5,000,000 (unless otherwise agreed to by the Borrower and the Agent).
Upon execution of an Assignment and Acceptance and the payment of a
nonrefundable assignment fee of $3,500 in immediately available funds to the
Agent in connection with each such assignment, written notice thereof by such
transferor Lender to the Agent and the recording by the Agent of such assignment
in the register (the "Register") maintained by the Agent and the resulting
effect upon the Advances of the assigning Lender and the Assignee, the Assignee
shall have, to the extent of such assignment, the same rights and benefits as it
would have if it were a Lender hereunder and the holder of a Note (provided that
the Borrower and the Agent shall be entitled to continue to deal solely and
directly with the assignor Lender in connection with the interests so assigned
to the Assignee until written notice of such assignment, together with payment
instructions, addresses and related information with respect to the Assignee,
shall have been given to the Borrower and the Agent by the assignor Lender and
the Assignee) and, if the Assignee has expressly assumed, for the benefit of the
Borrower, some or all of the transferor Lender's obligations hereunder, such
transferor Lender shall be relieved of its obligations hereunder to the extent
of such assignment and assumption. If the Assignee is not incorporated under the
laws of the United States of America or a state thereof, it shall, prior to the
date it becomes a Lender under this Agreement, deliver to the Borrower and the
Agent certification as to exemption from deduction or withholding of any United
States federal income taxes in accordance with Section 2.18. Each Assignee shall
take such Advances and Commitment subject to the provisions of this Agreement
and to any request made, waiver or consent given or other action taken
hereunder, prior to the receipt by the Agent and the Borrower of written notice
of such transfer, by each previous holder of such Advances and Commitment. Such
Assignment and Acceptance shall be deemed to amend this Agreement and Schedule I
hereto, to the extent, and only to the extent, necessary to reflect the addition
of such Assignee as a Lender and the resulting adjustment of all or a portion of
the rights and obligations of such transferor Lender under
73
this Agreement, the determination of its Percentage (in each case, rounded to
twelve decimal places), the Advances and any new Notes to be issued, at the
Borrower's expense, to such Assignee, and no further consent or action by the
Borrower or the Lenders shall be required to effect such amendments.
(d) Notwithstanding any other provision set forth in this Agreement, any
Lender may at any time pledge or assign all or any portion of its rights under
this Agreement and the other documents executed and delivered in connection
herewith (including, without limitation, the Note held by it) to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to any Federal Reserve Bank in accordance with Regulation A of the
Federal Reserve Board without notice to, or the consent of, the Borrower or the
Agent and this Section shall not apply to any such pledge or assignment of a
security interest, provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(e) No Assignee, Participant or other transferee of any Lender's rights
shall be entitled to receive any greater payment under Section 2.14 than such
Lender would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 2.14 or 2.15 requiring such
Lender to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
(f) Notwithstanding anything to the contrary contained herein, any Lender
(a "Designating Lender"):
(i) may grant to one or more special purpose funding vehicles (each,
an "SPV"), identified as such in writing from time to time by the
Designating Lender to the Agent and the Borrower, the option to provide to
the Borrower all or any part of any Advance that such Designating Lender
would otherwise be obligated to make to the Borrower pursuant to this
Agreement, provided that (A) nothing herein shall constitute a commitment
by any SPV to make any Advance; (B) if an SPV elects not to exercise such
option or otherwise fails to provide all or any part of such Advance, the
Designating Lender shall be obligated to make such Advance pursuant to the
terms hereof and (C) the Designating Lender shall remain liable for any
indemnity or other payment obligation with respect to its Commitment
hereunder. The making of an Advance by an SPV hereunder shall utilize the
Commitment of the Designating Lender to the same extent, and as if, such
Advance were made by such Designating Lender.
(ii) As to any Advances or portion thereof made by it, each SPV shall
have all the rights that a Lender making such Advances or portion thereof
would
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have had under this Agreement, provided, however, that each SPV shall have
granted to its Designating Lender an irrevocable power of attorney, to
deliver and receive all communications and notices under this Agreement and
any other Loan Documents and to exercise on such SPV's behalf, all of such
SPV's voting rights under this Agreement. No Note shall be required to
evidence the Advances or portion thereof made by an SPV; and the related
Designating Lender shall be deemed to hold its Note (if such Note is
requested by the Designated Lender under this Agreement) as agent for such
SPV to the extent of the Advances or portion thereof funded by such SPV. In
addition, any payments for the account of any SPV shall be paid to its
Designating Lender as agent for such SPV.
(iii) Each party hereto hereby agrees that no SPV shall be liable for
any indemnity or payment under this Agreement for which a Lender would
otherwise be liable. In furtherance of the foregoing, each party hereto
hereby agrees (which agreements shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior
indebtedness of any SPV, it will not institute against, or join any other
person in instituting against, such SPV any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the
United States or any State thereof.
(iv) In addition, notwithstanding anything to the contrary contained
in this Section 8.07(f) or otherwise in this Agreement, any SPV may (A) at
any time and without paying any processing fee therefor, assign or
participate all or a portion of its interest in any Advances to the
Designating Lender or to any financial institutions providing liquidity
and/or credit support to or for the account of such SPV to support the
funding or maintenance of Advances and (B) disclose on a confidential basis
any non-public information relating to its Advances to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancements to such SPV. This Section 8.07(f) may not be amended
without the written consent of any Designating Lender affected thereby.
SECTION 8.08. Indemnification. The Borrower agrees to indemnify and hold
harmless the Agent, each Lender and each of their Affiliates and their
respective directors, officers, employees, agents, advisors and representatives
(each, an "Indemnified Party"), from and against, and to promptly reimburse them
and each of them, for any and all liabilities, obligations, losses, damages,
actions, judgments, suits, claims, costs, out-of-pocket expenses and
disbursements (including, without limitation, interest, penalties and all
reasonable attorneys' fees and expenses) and settlement costs that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of, or in connection with the
preparation for a defense of, any litigation or proceeding or governmental
action or investigation (administrative or judicial), arising out of, related to
or in connection with the actual or
75
proposed use of the proceeds of the Advances or arising out of this Agreement or
any other Loan Document, whether or not such investigation, litigation or
proceeding is brought by the Borrower, its directors, shareholders or creditors
or an Indemnified Party or any other Person or any Indemnified Party is
otherwise a party thereto or is otherwise required to respond thereto, provided
that the Borrower shall not be liable hereunder to the extent such claim,
damage, loss, liability, or expense (i) arises out of any settlement made
without the Borrower's consent, which consent shall not unreasonably be
withheld, (ii) arises out of any proceeding brought against any Indemnified
Party by a security holder of such Indemnified Party based upon rights afforded
such security holder solely in its capacity as such, (iii) arises solely from
disputes among two or more Indemnified Parties, (iv) is found in a final,
non-appealable judgment of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnified Party or (v)
is found in a final, non-appealable judgment of a court of competent
jurisdiction to have resulted solely from such Indemnified Party's breach of its
obligations under the Loan Documents.
SECTION 8.09. Governing Law; Submission to Jurisdiction. This Agreement and
the Notes shall be governed by, and construed in accordance with, the laws of
the State of New York. The Borrower hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York City for purposes
of all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby.
SECTION 8.10. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page by telecopier shall be
effective as delivery of an original executed counterpart of this Agreement.
SECTION 8.11. Confidentiality. Except to the extent permitted by this
Section, the Lenders shall keep confidential all non-public information obtained
by them from the Borrower pursuant to this Agreement that has been identified as
such by the Borrower and the Lenders shall refrain from using such information
other than in connection with this Agreement and the transactions contemplated
hereby, provided, however, that Lenders may make such disclosure thereof as is
required or requested by any governmental agency or self-regulatory organization
or representative thereof with supervisory jurisdiction over it or pursuant to
legal process, or as may otherwise be required by law or court order, provided
further, however, that, unless specifically prohibited by applicable law or
court order, each Lender shall notify the Borrower of any request received by it
from any governmental agency or self-regulatory organization or representative
thereof (other than any such request in connection with an examination of
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such Lender by a governmental agency or self-regulatory organization with
supervisory jurisdiction over it) for disclosure of any such non-public
information prior to disclosure of such information so that the Borrower may
seek an appropriate protective order or make a public disclosure of such
information if the Borrower determines in its sole discretion that such
disclosure may be required under SEC Regulation FD. The Borrower authorizes each
Lender to disclose to any of its Affiliates, attorneys, auditors and accountants
and any prospective Lender or Participant any and all information in such
Lender's possession concerning the Borrower and any Subsidiary of the Borrower
that has been delivered to such Lender by or on behalf of the Borrower pursuant
to Section 5.01(d), provided that each such Person shall agree to keep such
information confidential in accordance with this Section 8.11. In no event shall
any Lender be obligated or required to return any materials furnished by or on
behalf of the Borrower or any of its Subsidiaries but such Lender shall be
responsible for the destruction thereof or confidential safekeeping in
accordance with its standard procedures for keeping information of a similar
nature. Notwithstanding the foregoing, this Section 8.11 shall not apply to any
information that is or becomes generally available to the public other than as a
result of the disclosure by (a) the Borrower to any Lender or (b) any Lender,
Participant, prospective Lender or Participant or their respective
representatives.
SECTION 8.12. WAIVER OF JURY TRIAL, ETC. EACH OF THE BORROWER, THE AGENT,
THE SYNDICATION AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS, THE ADVANCES OR THE ACTIONS OF THE BORROWER, THE AGENT, THE
SYNDICATION AGENT OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE
OR ENFORCEMENT THEREOF.
(Signature Page Follows)
77
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
SUPERVALU INC.
By:
-------------------------------------
Name:
Title:
JPMORGAN CHASE BANK,
as Agent
By:
-------------------------------------
Name:
Title:
BANK ONE, NA,
as Syndication Agent
By:
-------------------------------------
Name:
Title:
78