1
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CREDIT AGREEMENT
DATED AS OF NOVEMBER 1, 1996
AMONG
DOMINICK'S SUPERMARKETS, INC.,
AS GUARANTOR,
DOMINICK'S FINER FOODS, INC.,
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS,
BANKERS TRUST COMPANY,
AS ADMINISTRATIVE AGENT,
THE CHASE MANHATTAN BANK,
AS SYNDICATION AGENT,
AND
BANKERS TRUST COMPANY
AND
THE CHASE MANHATTAN BANK,
AS ARRANGERS
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DOMINICK'S SUPERMARKETS, INC.
AND
DOMINICK'S FINER FOODS, INC.
CREDIT AGREEMENT
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement . . . . . . . . . . . . . . 36
1.3 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.1 Commitments; Making of Loans; the Register; Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.2 Interest on the Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
2.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
2.4 Repayments, Prepayments and Reductions in Revolving Term Loan Commitments and Revolving Loan Commitments;
General Provisions Regarding Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
2.5 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
2.6 Special Provisions Governing Eurodollar Rate Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
2.7 Increased Costs; Taxes; Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
2.8 Obligation of Lenders and Issuing Lenders to Mitigate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
2.9 Replacement of Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
2.10 Certain Matters Relating to Senior Subordinated Note Indenture . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
3.1 Issuance of Letters of Credit and Revolving Lenders' Purchase of Participations Therein . . . . . . . . . . . 74
3.2 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
3.3 Drawings and Reimbursement of Amounts Drawn Under Letters of Credit. . . . . . . . . . . . . . . . . . . . . . 78
3.4 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
3.5 Indemnification; Nature of Issuing Lenders' Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
3.6 Increased Costs and Taxes Relating to Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
4.1 Conditions to Term Loans and Initial Revolving Term Loans, Revolving Loans and Swing Line Loans . . . . . . . 85
4.2 Conditions to All Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
4.3 Conditions to Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
(i) (Credit Agreement)
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PAGE
SECTION 5. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries . . . . . . . . . . . . . . . . 95
5.2 Authorization of Borrowing, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
5.3 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
5.4 No Material Adverse Change; No Restricted Junior Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 99
5.5 Title to Properties; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
5.6 Litigation; Adverse Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
5.7 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
5.8 Performance of Agreements; Materially Adverse Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
5.9 Governmental Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
5.10 Securities Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
5.11 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
5.12 Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
5.13 Environmental Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
5.14 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
5.15 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
5.16 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
5.17 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
5.18 Related Transaction Documents; Specified Existing Documents . . . . . . . . . . . . . . . . . . . . . . . . . 105
5.19 Workmen's Compensation Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
5.20 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
5.21 Parent Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
SECTION 6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
6.1 Financial Statements and Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
6.2 Corporate Existence, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
6.3 Payment of Taxes and Claims; Tax Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
6.4 Maintenance of Properties; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
6.5 Inspection; Lender Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
6.6 Compliance with Laws, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
6.7 Environmental Disclosure and Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
6.8 Loan Parties' Remedial Action Regarding Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . 116
6.9 Execution of Subsidiary Guaranty and Collateral Documents by Future Subsidiaries . . . . . . . . . . . . . . . 117
6.10 Additional Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
6.11 Release of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
6.12 Certain Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
6.13 Designation of Replacement Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
SECTION 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
7.1 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
7.2 Liens and Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
(ii) (Credit Agreement)
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7.3 Investments; Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
7.4 Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
7.5 Restricted Junior Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
7.6 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
7.7 Restriction on Fundamental Changes; Asset Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
7.8 Consolidated Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
7.9 Restriction on Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
7.10 Sales and Lease-Backs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
7.11 Sale or Discount of Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
7.12 Transactions with Shareholders and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
7.13 Disposal of Subsidiary Stock; Restrictions on Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 141
7.14 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
7.15 Amendments of Certain Documents; Designation of Designated Senior Indebtedness . . . . . . . . . . . . . . . . 142
7.16 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
8.1 Failure to Make Payments When Due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
8.2 Default in Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
8.3 Breach of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
8.4 Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
8.5 Other Defaults Under Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
8.8 Judgments and Attachments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
8.9 Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
8.10 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
8.11 Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
8.12 Invalidity of Any Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
8.13 Failure of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
8.14 Action Relating to Certain Subordinated Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
8.15 Failure to Consummate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
SECTION 9. HOLDINGS GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
9.1 Guarantied Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
9.2 Terms of Holdings Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
SECTION 10. AGENT, SYNDICATION AGENT AND ARRANGERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
10.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
10.2 Powers; General Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
10.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness . . . . . . . . . . . . . 155
10.4 Right to Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
(iii) (Credit Agreement)
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10.5 Successor Agent and Swing Line Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
10.6 Guaranties and Collateral Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
11.1 Assignments and Participations in Loans and Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . 157
11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
11.3 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
11.4 Set Off; Security Interest in Deposit Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
11.5 Ratable Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
11.6 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
11.7 Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
11.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
11.9 Survival of Representations, Warranties and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
11.10 Failure or Indulgence Not Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
11.11 Marshalling; Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
11.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
11.13 Obligations Several; Independent Nature of Lenders' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 166
11.14 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
11.15 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
11.16 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
11.17 Consent to Jurisdiction and Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
11.18 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
11.19 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168
11.20 Counterparts; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168
Signature pages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
(iv) (Credit Agreement)
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF TERM NOTE
V-A FORM OF REVOLVING TERM NOTE
V-B FORM OF REVOLVING NOTE
VI FORM OF SWING LINE NOTE
VII FORM OF COMPLIANCE CERTIFICATE
VIII-A FORM OF OPINION OF ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
VIII-B FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇, ESQ.
IX FORM OF OPINION OF O'MELVENY & ▇▇▇▇▇
X FORM OF ASSIGNMENT AGREEMENT
XI FORM OF AUDITOR'S LETTER
XII FORM OF CERTIFICATE RE NON-BANK STATUS
XIII FORM OF COLLATERAL ACCOUNT AGREEMENT
XIV FORM OF COMPANY PLEDGE AGREEMENT
XV FORM OF COMPANY SECURITY AGREEMENT
XVI FORM OF COMPANY TRADEMARK SECURITY AGREEMENT
XVII FORM OF SUBSIDIARY GUARANTY
XVIII FORM OF SUBSIDIARY PLEDGE AGREEMENT
XIX FORM OF SUBSIDIARY SECURITY AGREEMENT
XX FORM OF SUBSIDIARY TRADEMARK SECURITY AGREEMENT
XXI FORM OF MORTGAGE
XXII FORM OF HOLDINGS PLEDGE AGREEMENT
XXIII FORM OF HOLDINGS SECURITY AGREEMENT
XXIV FORM OF FINANCIAL CONDITION CERTIFICATE
(v) (Credit Agreement)
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SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1B REAL PROPERTY ASSETS
5.1 SUBSIDIARIES OF COMPANY
5.2C GOVERNMENTAL CONSENTS
5.3 CERTAIN ACCOUNTING MATTERS
5.6 LITIGATION
5.11 CERTAIN EMPLOYEE BENEFIT PLANS
5.12 BROKER'S OR FINDER'S FEES
5.13 ENVIRONMENTAL MATTERS
5.17 INTELLECTUAL PROPERTY MATTERS
5.18 AMENDMENTS TO SPECIFIED EXISTING DOCUMENTS
5.20 CERTAIN MATTERS RELATING TO PERMITS
6.13 EXCLUDED REAL PROPERTY ASSETS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
7.7 CERTAIN ASSETS TO BE SOLD
(vi) (Credit Agreement)
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DOMINICK'S SUPERMARKETS, INC.
AND
DOMINICK'S FINER FOODS, INC.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of November 1, 1996 and
entered into by and among DOMINICK'S SUPERMARKETS, INC., a Delaware corporation
("HOLDINGS"), DOMINICK'S FINER FOODS, INC., a Delaware corporation ("COMPANY"),
THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each
individually referred to herein as a "LENDER" and collectively as "LENDERS"),
BANKERS TRUST COMPANY ("BANKERS"), as administrative agent for Lenders (in such
capacity, "AGENT"), THE CHASE MANHATTAN BANK ("CHASE"), as syndication agent
for Lenders (in such capacity, "SYNDICATION AGENT"), and BANKERS and CHASE, as
arrangers for Lenders (in such capacity, each individually referred to herein
as an "ARRANGER" and collectively as "ARRANGERS").
R E C I T A L S
WHEREAS, Holdings and Company propose to engage in a series
of transactions, including the issuance by Holdings of Holdings Common Stock
(this and other capitalized terms used in these recitals without definition
being used as defined in subsection 1.1) pursuant to the IPO;
WHEREAS, Company desires that Lenders extend certain credit
facilities to Company to provide a portion of the financing necessary to
consummate the Transactions and to provide financing for working capital
requirements and other general corporate purposes of Company and its
Subsidiaries;
WHEREAS, Company proposes to use a portion of the proceeds
from the Loans, from the issuance of Holdings Common Stock pursuant to the IPO
and from cash on hand to refinance all amounts outstanding under the Existing
Credit Agreement and to pay a termination fee in connection with the
termination of the Consulting Agreement, and Holdings proposes to use a portion
of the proceeds from the Loans, from the issuance of Holdings Common Stock
pursuant to the IPO and from cash on hand to redeem all outstanding Holdings
Preferred Stock and to pay all accrued and unpaid dividends with respect to
Holdings Preferred Stock;
WHEREAS, immediately prior to the funding of the initial
Loans hereunder, pursuant to the Parent Merger Certificate, Parent proposes to
merge with and into Company, with Company being the surviving corporation (the
"PARENT MERGER");
1 (Credit Agreement)
9
WHEREAS, Holdings has agreed to guaranty the Obligations of
Company hereunder and under the other Loan Documents and to secure such
guaranty by granting to Agent, on behalf of Lenders, a first priority Lien on
all property of Holdings (including without limitation all of the outstanding
shares of the capital stock of Company);
WHEREAS, each of Company's Subsidiaries (other than BDI and
BPI) has agreed to guaranty the Obligations of Company hereunder and under the
other Loan Documents and to secure such guaranty by granting to Agent, on
behalf of Lenders, a first priority Lien on all unencumbered real, personal and
mixed property of such Subsidiary; and
WHEREAS, Company desires to secure all of the Obligations
hereunder and under the other Loan Documents by granting to Agent, on behalf of
Lenders, a first priority Lien on substantially all unencumbered real, personal
and mixed property of Company;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Holdings, Company,
Lenders, Agent, Syndication Agent and Arrangers agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"ACQUISITION DATE" means March 22, 1995.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar Rate
Loan, the rate per annum obtained by dividing (i) the arithmetic average
(rounded upward to the nearest 1/16 of one percent) of the offered quotation,
if any, to first class banks in the interbank Eurodollar market by each of the
Reference Lenders for U.S. Dollar deposits of amounts in same day funds
comparable to the principal amount of the Eurodollar Rate Loan of that
Reference Lender for which the Adjusted Eurodollar Rate is then being
determined with maturities comparable to such Interest Period as of
approximately 10:00 A.M. (New York time) on such Interest Rate Determination
Date by (ii) a percentage equal to 100% minus the stated maximum rate of all
reserve requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable on such Interest Rate
Determination Date to any member bank of the Federal Reserve System in respect
of "Eurocurrency liabilities" as defined in Regulation D (or any successor
category of liabilities under Regulation D); provided that if any Reference
Lender fails to provide Agent with its aforementioned quotation then the
Adjusted Eurodollar Rate shall be determined based on the quotation(s) provided
to Agent by the other Reference Lender(s).
2 (Credit Agreement)
10
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFILIATE", as applied to any Person, means any other
Person directly or indirectly controlling, controlled by, or under common
control with, that Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, means (i) the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise, or (ii) the
ownership of more than 10% of the voting securities of that Person; provided
that Bankers, Chase and each of their respective Affiliates (as defined above)
shall not be considered to be an "Affiliate" of Holdings or any of its
Subsidiaries.
"AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
administrative agent appointed pursuant to subsection 10.5A.
"AGREEMENT" means this Credit Agreement dated as of November
1, 1996, as it may be amended, amended and restated, supplemented or otherwise
modified from time to time.
"AMOUNT OF UNFUNDED BENEFIT LIABILITY" means, with respect
to any Pension Plan, (i) if set forth on the most recent actuarial valuation
report with respect to such Pension Plan, the amount of unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA) and (ii) otherwise,
the excess of (a) the greater of the current liability (as defined in Section
412(l)(7) of the Code) or the actuarial present value of the accrued benefits
with respect to such Pension Plan over (b) the market value of the assets of
such Pension Plan.
"APPLICABLE BASE RATE MARGIN" has the meaning assigned to
that term in subsection 2.2A(i)(a).
"APPLICABLE COMMITMENT FEE PERCENTAGE" has the meaning
assigned to that term in subsection 2.3A.
"APPLICABLE EURODOLLAR RATE MARGIN" has the meaning assigned
to that term in subsection 2.2A(i)(b).
"ARRANGERS" has the meaning assigned to that term in the
introduction to this Agreement.
"ASSET SALE" means the sale, lease (other than any lease in
the ordinary course of business consistent with past practices), assignment or
other transfer for value (collectively, a "transfer") by Company or any of its
Subsidiaries to any Person other than Company or any of its wholly-owned
Subsidiaries of (i) any of the stock of any of Company's Subsidiaries, (ii)
substantially all of the assets of any division or line of business of Company
or any of its
3 (Credit Agreement)
11
Subsidiaries, or (iii) any other assets (whether tangible or intangible) of
Company or any of its Subsidiaries excluding (a) any Cash Equivalents or
inventory sold in the ordinary course of business, (b) any such transfer to the
extent that the aggregate value of the stock or assets transferred in any
single transaction or related series of transaction is equal to $100,000 or
less; provided that such exclusion shall be limited to transfers of stock and
assets with a cumulative aggregate value not exceeding $1,000,000 in any Fiscal
Year, and (c) any transfer in an arm's-length transaction by Company or a
Subsidiary of Company to a Developer of a Development Site constituting a
Development Investment permitted under subsection 7.3(vi).
"ASSET TRANSFER AGREEMENT" means that certain Asset Transfer
Agreement dated as of March 21, 1995 by and among ▇▇▇▇ Developments L.L.C.,
Parent, Company, BDI, BPI, ▇▇▇▇ L.L.C., ▇▇▇▇ Family L.L.C., ▇▇▇▇ ▇▇▇▇▇▇▇▇
L.L.C. and ▇▇▇▇ Northfield L.L.C., as in effect on the Closing Date and as such
Asset Transfer Agreement may be amended from time to time to the extent
permitted under subsection 7.15.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit X annexed hereto.
"AUDITOR'S LETTER" means a letter, substantially in the form
of Exhibit XI annexed hereto, from Ernst & Young delivered to Agent pursuant to
subsection 4.1M.
"BANKERS" has the meaning assigned to that term in the
introduction to this Agreement.
"BANKERS TRUST NEW YORK" means Bankers Trust New York
Corporation.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor
statute.
"BASE RATE" means, at any time, the higher of (x) the Prime
Rate or (y) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate.
"BASE RATE LOANS" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2A.
"BDI" means Blackhawk Developments, Inc. (formerly known as
▇▇▇▇ Developments, Inc.), a Delaware corporation.
"BPI" means Blackhawk Properties, Inc. (formerly known as
▇▇▇▇ Properties, Inc.), a Delaware corporation.
"BUSINESS DAY" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the State of New York or the
State of Illinois or is a day on
4 (Credit Agreement)
12
which banking institutions located in the State of New York or the State of
Illinois are authorized or required by law or other governmental action to
close.
"CAPITAL LEASE", as applied to any Person, means any lease
of any property (whether real, personal or mixed) by that Person as lessee
that, in conformity with GAAP, is required to be accounted for as a capital
lease on the balance sheet of that Person.
"CASH" means money, currency or a credit balance in a
Deposit Account.
"CASH EQUIVALENTS" means, as at any date of determination,
(i) marketable securities (a) issued or directly and unconditionally guaranteed
as to interest and principal by the United States Government or (b) issued by
any agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after
such date and having, at the time of the acquisition thereof, the highest
rating obtainable from either Standard & Poor's Ratings Group ("S&P") or
▇▇▇▇▇'▇ Investors Service, Inc. ("MOODY'S"); (iii) commercial paper maturing no
more than one year from the date of creation thereof and having, at the time of
the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; (v) shares of any money market mutual fund that (a) has
at least 95% of its assets invested continuously in the types of investments
referred to in clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either S&P or
Moody's; and (vi) repurchase agreements with respect to, and which are fully
secured by a perfected security interest in, obligations of a type described in
clause (i) or clause (ii) above and are with any commercial bank described in
clause (iv) above.
"CASH PROCEEDS" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant to,
or monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale.
"CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of Exhibit XII annexed hereto delivered by a Lender
to Agent pursuant to subsection 2.7B(iii).
"CHANGE OF CONTROL" means any of the following: (i) the
acquisition by any Person (other than a Permitted Holder) or any group (within
the meaning of Section 13(d)(3) of the Exchange Act) of Persons (other than any
Permitted Holders) of beneficial ownership, directly or indirectly, in one or
more transactions, of Securities of Holdings (or other Securities convertible
into such Securities) representing 25% or more of the combined voting power of
all
5 (Credit Agreement)
13
Securities of Holdings entitled to vote in the election of directors, other
than Securities having such power only by reason of the happening of a
contingency, (ii) the occurrence of a change in the composition of the Board of
Directors of Holdings or Company such that a majority of the members of any
such Board of Directors are not Continuing Directors, (iii) the failure at any
time of Holdings to legally and beneficially own and control 100% of the issued
and outstanding shares of capital stock of Company or the failure at any time
of Holdings to have the ability to elect all of the Board of Directors of
Company, or (iv) the occurrence of any "Change of Control" as defined in the
Senior Subordinated Note Indenture or the Holdings Certificate of Designation.
As used herein, the term "beneficially own" or "beneficial ownership" shall
have the meaning set forth in the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"CHASE" has the meaning assigned to that term in the
introduction to this Agreement.
"CLOSING DATE" means the date on or before November 1, 1996,
on which the initial Loans are made.
"COLLATERAL" means, collectively, all real, personal and
mixed property collateral securing the Obligations pursuant to the Collateral
Documents.
"COLLATERAL ACCOUNT" has the meaning assigned to that term
in the Collateral Account Agreement.
"COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account
Agreement executed and delivered by Company and Agent on the Closing Date,
substantially in the form of Exhibit XIII annexed hereto, pursuant to which
Company may pledge cash to Agent to secure the obligations of Company to
reimburse Issuing Lenders for payments made under one or more Letters of Credit
as provided in Section 8, as such Collateral Account Agreement may hereafter be
amended, supplemented or otherwise modified from time to time.
"COLLATERAL DOCUMENTS" means the Pledge Agreements, the
Holdings Security Agreement, the Company Security Agreement, the Company
Trademark Security Agreement, the Collateral Account Agreement, the Subsidiary
Security Agreements, the Subsidiary Trademark Security Agreements, the
Mortgages and all other instruments or documents delivered by any Loan Party
pursuant to this Agreement or any of the other Loan Documents in order to grant
to Agent, on behalf of Lenders, Liens in real, personal or mixed property of
that Loan Party as security for the Obligations.
"COLLATERAL RELEASE CONDITIONS" has the meaning assigned to
that term in subsection 6.11.
"COLLATERAL RELEASE DATE" has the meaning assigned to that
term in subsection 6.11.
6 (Credit Agreement)
14
"COMMERCIAL LETTER OF CREDIT" means any letter of credit or
similar instrument issued for the purpose of providing the primary payment
mechanism in connection with the purchase of any materials, goods or services
by Company or any of its Subsidiaries in the ordinary course of business of
Company or such Subsidiary.
"COMMITMENTS" means the commitments of Lenders to make Loans
as set forth in subsection 2.1A.
"COMPANY" has the meaning assigned to that term in the
introduction to this Agreement.
"COMPANY PLEDGE AGREEMENT" means the Pledge Agreement
executed and delivered by Company on the Closing Date, substantially in the
form of Exhibit XIV annexed hereto, as such Pledge Agreement may hereafter be
amended, supplemented or otherwise modified from time to time.
"COMPANY SECURITY AGREEMENT" means the Security Agreement
executed and delivered by Company on the Closing Date, substantially in the
form of Exhibit XV annexed hereto, as such Security Agreement may hereafter be
amended, supplemented or otherwise modified from time to time.
"COMPANY TRADEMARK SECURITY AGREEMENT" means the Trademark
Collateral Security Agreement and Conditional Assignment executed and delivered
by Company on the Closing Date, substantially in the form of Exhibit XVI
annexed hereto, as such Trademark Collateral Security Agreement and Conditional
Assignment may hereafter be amended, supplemented or otherwise modified from
time to time.
"COMPLIANCE CERTIFICATE" means a certificate substantially
in the form of Exhibit VII annexed hereto delivered to Agent and Lenders by
Company pursuant to subsection 6.1(iv).
"CONSOLIDATED ADJUSTED EBITDA" means, without duplication,
for any period, the sum of the amounts for such period of (i) Consolidated Net
Income, (ii) Consolidated Interest Expense, (iii) provisions for taxes based on
income, (iv) total depreciation expense, (v) total amortization expense, and
(vi) other non-cash items reducing Consolidated Net Income less other non-cash
items increasing Consolidated Net Income, all of the foregoing as determined on
a consolidated basis for Company and its Subsidiaries in conformity with GAAP.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period,
an amount equal to (i) the sum of (a) the aggregate of all expenditures
(whether paid in cash or other consideration or accrued as a liability and
including that portion of Capital Leases which is capitalized on the
consolidated balance sheet of Company and its Subsidiaries) by Company and its
Subsidiaries during that period that, in conformity with GAAP, are included in
"property, plant or
7 (Credit Agreement)
15
equipment" or comparable items reflected in the consolidated balance sheets of
Company and its Subsidiaries, plus (b) to the extent not covered by clause
(i)(a) of this definition, the aggregate of all expenditures by Company and its
Subsidiaries during that period to acquire (by purchase or otherwise) the
business, property or fixed assets of any Person, or the stock or other
evidence of beneficial ownership of any Person that, as a result of such
acquisition, becomes a Subsidiary of Company, plus (c) to the extent the
purchase price thereof has been deducted from "Consolidated Capital
Expenditures" during such period or any prior period pursuant to clause
(ii)(a)(2) below, the aggregate purchase price of any Store Land Property for
which a notice has been given during such period pursuant to clause (b) of the
proviso in the definition of "Store Land Properties", minus (ii) the sum of (a)
all Consolidated Capital Expenditures (as defined in clause (i) above)
constituting (1) Development Investments permitted under subsection 7.3(vi) or
(2) the purchase price of Store Land Properties constituting undeveloped land
or land with improvements thereon existing as of the date of acquisition
thereof permitted under subsection 7.8, (b) the proceeds of Indebtedness
permitted under subsections 7.1(iii) and 7.1(viii), (c) an amount equal to the
proceeds received by Company or any of its Subsidiaries from a sale-leaseback
transaction of a store or equipment permitted under subsection 7.10 so long as
such transaction occurs within 270 days of the completion of such store and to
the extent prior expenditures, up to an equivalent amount for the asset so sold
and leased back, constituted Consolidated Capital Expenditures (as defined
above), and (d) expenditures in an amount not to exceed the proceeds of
insurance, condemnation awards (or payments in lieu thereof) or indemnity
payments received from third parties, so long as such expenditures were made
for purposes of replacing or repairing the assets in respect of which such
proceeds, awards or payments were received and so long as such expenditures are
made within 18 months of the occurrence of the damage to or loss of the assets
being replaced or repaired.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
total interest expense net of any interest income received in Cash by Company
or any of its Subsidiaries (including that portion attributable to Capital
Leases in accordance with GAAP and capitalized interest) of Company and its
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of Company and its Subsidiaries, including, without limitation,
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and net costs under
Interest Rate Agreements, plus all dividends on capital stock of Company paid
or payable in cash but excluding, however, (i) any amounts referred to in
subsection 2.3 payable to Agent and Lenders on or before the Closing Date and
(ii) any interest expenses not payable in cash (including amortization of
discounts and amortization of debt issuance costs).
"CONSOLIDATED EXCESS CASH FLOW" means, for any Fiscal Year,
an amount equal to (i) the sum (without duplication) of the amounts for such
Fiscal Year of (a) Consolidated Net Income, (b) any after-tax gains
attributable to returned surplus assets of any Pension Plan, (c) the amount of
Net Cash Proceeds of Asset Sale received in such Fiscal Year that are not
otherwise included in Consolidated Net Income and that are required to be used
to prepay the Term Loans and/or permanently reduce the Revolving Term Loan
Commitments and/or the
8 (Credit Agreement)
16
Revolving Loan Commitments pursuant to subsection 2.4B(iii)(a), (d) the
aggregate amount of Cash proceeds (net of underwriting discounts, similar
placement fees and commissions and other reasonable costs and expenses
associated therewith) from the issuance after the Closing Date of any debt
Securities of Holdings or any of its Subsidiaries that are required to be used
to prepay the Loans pursuant to subsection 2.4B(iii)(d), (e) consolidated
depreciation and amortization expense for such Fiscal Year, (f) other non-cash
charges reducing Consolidated Net Income, (g) (to the extent not included in
Consolidated Net Income) any cash extraordinary gains, (h) any Cash payments
received by Holdings or any of its Subsidiaries pursuant to the indemnification
provisions set forth in the Stock Purchase Agreement, the Tax Matters
Agreement, the Asset Transfer Agreement or the Stock Exchange Agreement to the
extent that Holdings or any such Subsidiary did not incur an expense or a
payment obligation corresponding to such Cash payment so received, (i) an
amount equal to the proceeds of Asset Sales excluded from mandatory prepayments
required to be made under subsection 2.4B(iii)(a) pursuant to clauses (i), (ii)
and (iv) of the second proviso thereof and (j) all Cash proceeds received by
Company or any of its Subsidiaries in payment or repayment of any Development
Investment previously made by Company or such Subsidiary minus (ii) the sum
(without duplication) of the amounts for such Fiscal Year of (a) Consolidated
Capital Expenditures permitted under subsection 7.8 made during such Fiscal
Year, (b) payments of principal made in respect of any outstanding Indebtedness
of Company or any of its Subsidiaries to the extent such payments are permanent
reductions in Funded Debt and not prohibited under subsection 7.5, other than
payments made pursuant to subsection 2.4B(iii)(a), which payments would have
been excluded from the mandatory prepayment provisions pursuant to clauses (ii)
and (iii) of the second proviso thereof but for the expiration of the time
periods set forth in such clauses, (c) the amount of all Development
Investments paid or payable in cash permitted under subsection 7.3(vi) made
during such Fiscal Year, (d) the purchase price of all Store Land Properties
paid or payable in cash as permitted under subsection 7.8 acquired during such
Fiscal Year, (e) other non- cash charges increasing Consolidated Net Income,
(f) the cash portion of purchases of Holdings Common Stock by Company and its
Subsidiaries as permitted under subsection 7.3(xii), and (g) $15,000,000, all
of the foregoing as determined on a consolidated basis for Company and its
Subsidiaries in conformity with GAAP.
"CONSOLIDATED FIXED CHARGES" means, without duplication, for
any period, the sum of the amounts for such period of (i) Consolidated Cash
Interest Expense, (ii) Consolidated Rental Payments, and (iii) scheduled
principal payments on all Indebtedness of Company and its Subsidiaries, all of
the foregoing as determined on a consolidated basis for Company and its
Subsidiaries in conformity with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense net of any interest income received by Company or any of its
Subsidiaries (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Company and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Company
and its Subsidiaries, including, without limitation, all commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers'
acceptance financing
9 (Credit Agreement)
17
and net costs under Interest Rate Agreements, but excluding, however, any
amounts referred to in subsection 2.3 payable to Agent and Lenders on or before
the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, the net
income (or loss) of Company and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP; provided that there shall be excluded (i) the income (or loss) of any
Person (other than a Subsidiary of Company) in which any other Person (other
than Company or any of its Subsidiaries) has a joint interest, except to the
extent of the amount of dividends or other distributions actually paid to
Company or any of its Subsidiaries by such Person during such period, (ii) the
income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary of Company or is merged into or consolidated with Company or any of
its Subsidiaries or that Person's assets are acquired by Company or any of its
Subsidiaries, (iii) the income of any Subsidiary of Company to the extent that
the declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary, (iv)
any after-tax gains or losses attributable to Asset Sales or returned surplus
assets of any Pension Plan, and (v) (to the extent not included in clauses (i)
through (iv) above) any net extraordinary gains or net non-cash extraordinary
losses.
"CONSOLIDATED NET WORTH" means, as at any date of
determination, the capital stock and additional paid-in capital plus retained
earnings (or minus accumulated deficits) of Company and its Subsidiaries on a
consolidated basis determined in conformity with GAAP.
"CONSOLIDATED RENTAL PAYMENTS" means, for any period, the
aggregate amount of all rents paid or payable by Company and its Subsidiaries
on a consolidated basis during that period under all Operating Leases to which
Company or any of its Subsidiaries is a party as lessee (net of sublease
income).
"CONSOLIDATED TOTAL DEBT" means, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness of
Company and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
"CONSULTING AGREEMENT" means the Consulting Agreement dated
as of March 22, 1995 among Yucaipa, Holdings, and Company, as such Consulting
Agreement has been amended from time to time prior to the Closing Date.
"CONTINGENT OBLIGATION", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit
10 (Credit Agreement)
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issued for the account of that Person or as to which that Person is otherwise
liable for reimbursement of drawings, or (iii) under Interest Rate Agreements
and Currency Agreements. Contingent Obligations shall include, without
limitation, (a) the direct or indirect guaranty, endorsement (otherwise than
for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the
obligation of another, (b) the obligation to make take-or-pay or similar
payments if required regardless of non- performance by any other party or
parties to an agreement, and (c) any liability of such Person for the
obligation of another through any agreement (contingent or otherwise) (X) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (Y) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (X) or (Y) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited.
"CONTINUING DIRECTORS" means, as of any date of
determination, any member of the Board of Directors of Holdings or Company who
(i) was a member of such Board of Directors on the Closing Date (after the
consummation of the Transactions) or (ii) was nominated for election or elected
to such Board of Directors with the affirmative vote of a majority of the
directors who were either members of such Board of Directors on the Closing
Date or whose nomination or election was previously so approved or (iii) in the
case of the Board of Directors of Company, was nominated for election or
elected to such Board of Directors with the affirmative written consent of a
majority of the then Continuing Directors of Holdings.
"CONTRACTUAL OBLIGATION", as applied to any Person, means
any provision of any Security issued by that Person or of any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument
to which that Person is a party or by which it or any of its properties is
bound or to which it or any of its properties is subject.
"CUMULATIVE CONSOLIDATED NET INCOME" means, at any time for
the determination thereof, Consolidated Net Income for the period (taken as one
accounting period) commencing on November 3, 1996 and ending on the last day of
the most recently ended Fiscal Quarter.
"CUMULATIVE INCOME AMOUNT" means, at any time for the
determination thereof (i) the product of (A) 0.25 multiplied by (B) Cumulative
Consolidated Net Income at such time minus (ii) the sum of (A) the aggregate
amount of cash dividends theretofore paid pursuant to subsection 7.5A(v) plus
(B) the aggregate amount of loans theretofore made pursuant to subsection
7.3(x)(b), it being understood that the Cumulative Income Amount shall be
reduced at the time of, and after giving effect to, the events described in
this clause (ii).
11 (Credit Agreement)
19
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement designed to protect Company or any of
its Subsidiaries against fluctuations in currency values.
"DEFERRED TRADE PAYABLES" means promissory notes (whether
interest bearing or non-interest bearing) executed by Company or any of its
Subsidiaries in favor of such entity's suppliers to finance the purchase price
and delivery costs of inventory in connection with such entity's opening or
acquisition of new stores or remodeling of existing stores.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DEVELOPER" means any Person which owns, leases or otherwise
controls or intends to acquire an interest in a Development Site.
"DEVELOPMENT INVESTMENT" means (a) a loan by Company or a
Subsidiary of Company to a Developer, the proceeds of which are to be used to
finance a Development Project of such Developer, (b) a cash contribution by
Company or a Subsidiary of Company to the capital of a Developer, the proceeds
of which are to be used to finance a Development Project of such Developer, or
(c) a contribution by Company or a Subsidiary of Company to the capital of a
Developer of an interest of Company or such Subsidiary in a Development Site.
The amount of any Development Investment shall be the amount of cash loaned or
contributed to a Developer for the purpose specified above or the fair market
value of the interest of a Development Site contributed to the capital of a
Developer, which fair market value shall be determined, without regard to the
proposed investment, at the time of such contribution in good faith by
resolution of the Board of Directors of Company, in each case minus the amount
of cash received by Company or any of its Subsidiaries in repayment of such
Development Investment.
"DEVELOPMENT PROJECT" means a project for the development by
or at the direction of a Developer of a Development Site, including the
construction, remodeling, expansion or renovation of a store thereon, which
store is to be leased to and operated by Company or one of its Subsidiaries.
"DEVELOPMENT SITE" means real property which is identified
by Company or one of its Subsidiaries as the intended location for a store or a
shopping center and related improvements to be constructed, remodeled, expanded
or renovated by or at the direction of the Developer thereof, which in each
case shall include a store intended to be leased to and operated by Company or
one of its Subsidiaries.
"DOLLARS" and the sign "$" mean the lawful money of the
United States of America.
12 (Credit Agreement)
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"ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank
organized under the laws of the United States or any state thereof; (ii) a
savings and loan association or savings bank organized under the laws of the
United States or any state thereof; (iii) a commercial bank organized under the
laws of any other country, or a political subdivision thereof; provided that
(x) such bank is acting through a branch or agency located in the United States
or (y) such bank is organized under the laws of a country that is a member of
the Organization for Economic Cooperation and Development or a political
subdivision of such country; and (iv) any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act) which extends
credit or buys loans as one of its businesses including, but not limited to,
insurance companies, mutual funds and lease financing companies, in each case
(under clauses (i) through (iv) above) that is reasonably acceptable to Agent;
and (B) any Lender and any Affiliate of any Lender; provided that no Affiliate
of Company shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA (i) which is, or, at any time within the five
calendar years immediately preceding the date hereof, was at any time,
maintained or contributed to by any of the Loan Parties or any of their
respective ERISA Affiliates or (ii) with respect to which any Loan Party
retains any liability, including any potential joint and several liability as a
result of an affiliation with an ERISA Affiliate or a party that would be an
ERISA Affiliate except for the fact the affiliation ceased more than five
calendar years prior to the date hereof.
"ENVIRONMENTAL CLAIM" means any accusation, allegation,
notice of violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any governmental authority or any Person for any
damage, including, without limitation, personal injury (including sickness,
disease or death), tangible or intangible property damage, contribution,
indemnity, indirect or consequential damages, damage to the environment,
nuisance, pollution, contamination or other adverse effects on the environment,
or for fines, penalties or restrictions, in each case relating to, resulting
from or in connection with Hazardous Materials and relating to Company, any of
its Subsidiaries, any of their respective Affiliates or any Facility.
"ENVIRONMENTAL LAWS" means all statutes, ordinances, orders,
rules, regulations, plans, policies or decrees and the like relating to (i)
environmental matters, including, without limitation, those relating to fines,
injunctions, penalties, damages, contribution, cost recovery compensation,
losses or injuries resulting from the Release or threatened Release of
Hazardous Materials, (ii) the generation, use, storage, transportation or
disposal of Hazardous Materials, or (iii) occupational safety and health,
industrial hygiene, land use or the protection of human, plant or animal health
or welfare, in any manner applicable to Company or any of its Subsidiaries or
any of their respective properties, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act (42
U.S.C. Section 9601 et seq.), the Hazardous Materials Transportation Act (49
U.S.C. Section 1801 et seq.), the Resource Conservation and Recovery Act (42
U.S.C. Section 6901 et seq.), the Federal Water Pollution Control Act ( 33
U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et
seq.), the
13 (Credit Agreement)
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Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 et seq.), the
Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.) and the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. Section 11001 et
seq.), each as amended or supplemented, and any analogous future or present
local, state and federal statutes and regulations promulgated pursuant thereto,
each as in effect as of the date of determination.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA AFFILIATE", as applied to any Person, means (i) any
corporation which is, or was at any time within the five calendar years
immediately preceding the date hereof, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal Revenue Code
of which that Person is, or was at any time within the five calendar years
immediately preceding the date hereof, a member; (ii) any trade or business
(whether or not incorporated) which is, or was at any time within the five
calendar years immediately preceding the date hereof, a member of a group of
trades or businesses under common control within the meaning of Section 414(c)
of the Internal Revenue Code of which that Person is, or was at any time within
the five calendar years immediately preceding the date hereof, a member; and
(iii) any member of an affiliated service group within the meaning of Section
414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is, or was at any time within the five calendar years
immediately preceding the date hereof, a member. The term "ERISA Affiliate"
shall not include any Land Trustee.
"ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any required contribution to
a Multiemployer Plan; (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of ERISA; (iv)
the withdrawal by any of the Loan Parties or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability pursuant to
Sections 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings
to terminate any Pension Plan, or the occurrence of any event or condition
which might reasonably be expected to constitute grounds under ERISA for the
termination of, or the appointment of a trustee to administer, any Pension
Plan; (vi) the imposition of liability on any of the Loan Parties or any of
their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA
or by reason of the application of Section 4212(c) of ERISA; (vii) the
withdrawal by any of the Loan Parties or
14 (Credit Agreement)
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any of their respective ERISA Affiliates in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer
Plan if there is any potential liability therefor, or the receipt by any of the
Loan Parties or any of their respective ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an
act or omission which could reasonably be expected to give rise to the
imposition on any of the Loan Parties or any of their respective ERISA
Affiliates of fines, penalties, taxes or related charges under Chapter 43 of
the Internal Revenue Code or under Section 409 or 502(c), (i) or (l) or 4071 of
ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a material
claim (other than routine claims for benefits) against any Employee Benefit
Plan other than a Multiemployer Plan or the assets thereof, or against any of
the Loan Parties or any of their respective ERISA Affiliates in connection with
any such Employee Benefit Plan; (x) receipt from the Internal Revenue Service
of notice of the failure of any Pension Plan (or any other Employee Benefit
Plan intended to be qualified under Section 401(a) of the Internal Revenue
Code) to qualify under Section 401(a) of the Internal Revenue Code, or the
failure of any trust forming part of any Pension Plan to qualify for exemption
from taxation under Section 501(a) of the Internal Revenue Code; or (xi) the
imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"EURODOLLAR RATE LOANS" means Loans bearing interest at
rates determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in
Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXCLUDED PROPERTIES" means, as of any date, provided that
there shall not then exist a Potential Event of Default or an Event of Default,
any interest in any Real Property Asset (excluding any fee interest in Real
Property Assets on which Agent shall have been granted a Lien in accordance
with the terms hereof and excluding any Replacement Properties) acquired or
constructed by Company or any of its Subsidiaries after the Closing Date for an
aggregate purchase price not exceeding $20,000,000 for any such Real Property
Asset.
"EXISTING CREDIT AGREEMENT" means the Credit Agreement dated
as of March 22, 1995, as amended, by and among Holdings, Parent, Company, the
lenders parties thereto, Bankers and Chase, as arrangers, and Bankers, as
administrative agent.
"EXISTING FUNDED DEBT" means the Indebtedness of Company
described in items 1 through 5 of Part I of Schedule 7.1 annexed hereto (and
any refinancings, renewals or extensions thereof to the extent permitted under
subsection 7.1(vi)), which Indebtedness has an aggregate outstanding principal
amount equal to approximately $6,300,000 as of immediately prior to the Closing
Date.
15 (Credit Agreement)
23
"EXISTING LETTERS OF CREDIT" means the letters of credit
listed under the heading "Existing Letters of Credit" in Schedule 7.4 annexed
hereto (but not any refinancings, renewals or extensions thereof).
"FACILITIES" means any and all real property (including,
without limitation, all buildings, fixtures or other improvements located
thereon) now, hereafter or heretofore owned, leased, operated or used by any of
the Loan Parties or any of their respective predecessors or Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published 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 which is a Business Day, the average of the quotations
for such day on such transactions received by Agent from three Federal funds
brokers of recognized standing selected by Agent.
"FISCAL PERIOD" means a fiscal period of Company and its
Subsidiaries, consisting of a four-week period or five-week period, as the case
may be.
"FISCAL QUARTER" means a fiscal quarter of Company and its
Subsidiaries, consisting of, in the case of each of the first two Fiscal
Quarters of each Fiscal Year, a 12-week period, in the case of the third Fiscal
Quarter of each Fiscal Year, a 16-week period, and in the case of the fourth
Fiscal Quarter of each Fiscal Year, a 12-week or 13-week period.
"FISCAL YEAR" means the fiscal year of the Loan Parties
(other than Land Trusts) ending on the Saturday closest to October 31 of each
calendar year. For purposes of this Agreement, any particular Fiscal Year
shall be designated by reference to the calendar year in which such Fiscal Year
ends.
"FLOOD HAZARD PROPERTIES" has the meaning assigned to that
term in subsection 4.1B to this Agreement.
"FUNDED DEBT", as applied to any Person, means all
Indebtedness of that Person which by its terms or by the terms of any
instrument or agreement relating thereto matures more than one year from, or is
directly renewable or extendable at the option of the debtor to a date more
than one year from (including an option of the debtor under a revolving credit
or similar agreement obligating the lender or lenders to extend credit over a
period of one year or more from), the date of the creation thereof.
"FUNDING AND PAYMENT OFFICE" means the office of Agent and
Swing Line Lender located at One Bankers Trust Plaza, New York, New York.
16 (Credit Agreement)
24
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting principles
set forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
federal, state or local governmental authority, agency or court.
"GUARANTOR" has the meaning assigned to that term in
Section 9.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
waste", "restricted hazardous waste", "infectious waste", "toxic substances" or
any other formulations intended to define, list or classify substances by
reason of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or "EP
toxicity" or words of similar import under any applicable Environmental Laws or
publications promulgated pursuant thereto; (ii) any oil, petroleum, petroleum
fraction or petroleum derived substance; (iii) any drilling fluids, produced
waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (iv) any
flammable substances or explosives; (v) any radioactive materials; (vi)
asbestos in any form; (vii) urea formaldehyde foam insulation; (viii)
electrical equipment which contains any oil or dielectric fluid containing
levels of polychlorinated biphenyls in excess of fifty parts per million; (ix)
pesticides; and (x) any other chemical, material or substance, exposure to
which is prohibited, limited or regulated by any governmental authority or
which may or could pose a hazard to the health and safety of the owners,
occupants or any Persons in the vicinity of the Facilities.
"HOLDINGS" has the meaning assigned to that term in the
introduction to this Agreement.
"HOLDINGS CERTIFICATE OF DESIGNATION" means the Certificate
of Designations, Preferences, and Relative, Participating, Optional and Other
Special Rights of Preferred Stock and Qualifications, Limitations and
Restrictions thereof of 15% Redeemable Exchangeable Cumulative Preferred Stock
of Holdings, as in effect on the Closing Date (and which has not been amended
or otherwise modified since the Acquisition Date) and as such Holdings
Certificate of Designation may be amended from time to time to the extent
permitted under subsection 7.15.
17 (Credit Agreement)
25
"HOLDINGS COMMON STOCK" means the Common Stock of Holdings,
par value $0.01 per share and the Class B Common Stock of Holdings, par value
$0.01 per share.
"HOLDINGS GUARANTY" has the meaning assigned to that term in
Section 9.
"HOLDINGS PLEDGE AGREEMENT" means the Pledge Agreement
executed and delivered by Holdings on the Closing Date, substantially in the
form of Exhibit XXII annexed hereto, as such Pledge Agreement may hereafter be
amended, supplemented or otherwise modified from time to time.
"HOLDINGS PREFERRED STOCK" means the 15% Redeemable
Exchangeable Cumulative Preferred Stock, Series A, of Holdings, par value $0.01
per share.
"HOLDINGS SECURITY AGREEMENT" means the Security Agreement
executed and delivered by Holdings on the Closing Date, substantially in the
form of Exhibit XXIII annexed hereto, as such Security Agreement may hereafter
be amended, supplemented or otherwise modified from time to time.
"HOLDINGS VOTING STOCK" means the Holdings Common Stock and
any additional class of capital stock of Holdings entitled (without regard to
the occurrence of any contingency) to vote for the election of members of the
Board of Directors of Holdings.
"INDEBTEDNESS", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed
money, (iv) any obligation owed for all or any part of the deferred purchase
price of property or services (excluding any such obligations incurred under
ERISA), which purchase price is (a) due more than six months (or a longer
period of up to one year, if such terms are available from suppliers in the
ordinary course of business) from the date of incurrence of the obligation in
respect thereof or (b) evidenced by a note or similar written instrument, and
(v) all indebtedness secured by any Lien on any property or asset owned or held
by that Person regardless of whether the indebtedness secured thereby shall
have been assumed by that Person or is nonrecourse to the credit of that
Person. Obligations under Interest Rate Agreements and Currency Agreements
constitute Contingent Obligations and not Indebtedness.
"INDEMNITEE" has the meaning assigned to that term in
subsection 11.3.
"INTELLECTUAL PROPERTY" means all patents, trademarks,
tradenames, copyrights, technology, know-how and processes used in or necessary
for the conduct of the business of the Loan Parties as currently conducted that
are material to the condition (financial or otherwise), business or operations
of Company or any of its Subsidiaries.
18 (Credit Agreement)
26
"INTEREST PAYMENT DATE" means (i) with respect to any Base
Rate Loan, each February 28, May 31, August 31 and November 30 of each year,
commencing on the first such date to occur after the Closing Date, and (ii)
with respect to any Eurodollar Rate Loan, the last day of each Interest Period
applicable to such Loan; provided that in the case of each Interest Period of
six months, "Interest Payment Date" shall also include the date that is three
months after the commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement designed to protect Company or any of its
Subsidiaries against fluctuations in interest rates.
"INTEREST RATE EXCHANGERS" has the meaning assigned to that
term in subsection 9.1.
"INTEREST RATE DETERMINATION DATE" means, with respect to
any Interest Period, the second Business Day prior to the first day of such
Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter.
"INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by any of the Loan Parties of, or of a beneficial interest
in, any Securities of any other Person or (ii) any direct or indirect loan,
advance (other than advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary course of
business) or capital contribution by any of the Loan Parties, to any other
Person, including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business. The amount of any Investment shall
be the original cost of such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.
"IPO" means the initial public offering of Holdings Common
Stock substantially as described in the Registration Statement.
"ISSUING LENDER" means, with respect to any Letter of
Credit, the Lender which agrees or is otherwise obligated to issue such Letter
of Credit, determined as provided in subsection 3.1B(ii).
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any corporate Subsidiary of any Person be
considered to be a Joint Venture to which such Person is a party.
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27
"LAND TRUSTEE" means the trustee of any Land Trust.
"LAND TRUST" means each land trust of which one or more Loan
Parties are the sole beneficiaries and which land trust is party to a Loan
Document.
"LENDER" and "LENDERS" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement, together with
their successors and permitted assigns pursuant to subsection 11.1, and the
term "Lenders" shall include Swing Line Lender unless the context otherwise
requires; provided that the term "Lenders", when used in the context of a
particular Commitment, shall mean Lenders having that Commitment.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Commercial
Letters of Credit and Standby Letters of Credit issued or to be issued by
Issuing Lenders for the account of Company pursuant to subsection 3.1 and the
Existing Letters of Credit.
"LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all Letters of Credit
then outstanding plus (ii) the aggregate amount of all drawings under Letters
of Credit honored by Issuing Lenders and not theretofore reimbursed by Company
(including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B).
"LEVERAGE RATIO" means, for any period, the ratio of
Consolidated Total Debt as of the last day of such period to Consolidated
Adjusted EBITDA for such period; provided that (a) the Leverage Ratio for the
four-Fiscal Quarter period for which the Margin Determination Certificate is
being delivered pursuant to subsection 4.1A(vi) shall be the ratio of
Consolidated Total Debt as of the last day of the Fiscal Quarter immediately
prior to the Closing Date (but calculated on a pro forma basis after giving
effect to the Transactions) to Consolidated Adjusted EBITDA for the four-Fiscal
Quarter period ended as of such last day, and (b) the Leverage Ratio for the
four-Fiscal Quarter period for which an Officers' Certificate is being
delivered pursuant to subsection 7.5A(v) shall be the ratio of Consolidated
Total Debt as of the date of payment of the applicable dividends (calculated on
a pro forma basis after giving effect to any Loans or other Indebtedness
borrowed or incurred on or prior to such date) to Consolidated Adjusted EBITDA
for the four-Fiscal Quarter period ended as of the last day of the most
recently ended Fiscal Quarter.
"LIEN" means any lien, mortgage, pledge, assignment,
security interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature thereof, and
any agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"LOAN" or "LOANS" means one or more of (i) the Term Loans,
(ii) the Revolving Term Loans, (iii) Revolving Loans, or (iv) the Swing Line
Loans, or any combination thereof,
20 (Credit Agreement)
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and each of the different types of Loans identified in clauses (i) through (iv)
above shall be a "TYPE" of Loan.
"LOAN DOCUMENTS" means this Agreement (including without
limitation the Holdings Guaranty set forth in Section 9), the Notes, the
Letters of Credit (and any applications for or other documents or certificates
executed by any Loan Party in favor of an Issuing Lender relating to, the
Letters of Credit), the Subsidiary Guaranty and the Collateral Documents.
"LOAN PARTY" means each of Holdings, Company, BDI, BPI, and
any of their respective Subsidiaries from time to time executing a Loan
Document, and any Land Trust (but not any Land Trustee, except solely in its
capacity as trustee of a Land Trust), and "LOAN PARTIES" means all such
Persons, collectively.
"MANAGEMENT AGREEMENT" means the Management Agreement dated
as of November 1, 1996 among Yucaipa, Holdings, and Company, as such Management
Agreement is in effect on the Closing Date and as such Management Agreement may
be amended from time to time after the Closing Date to the extent permitted
under subsection 7.15.
"MARGIN DETERMINATION CERTIFICATE" means an Officers'
Certificate of Company delivered pursuant to subsection 4.1A(vi) or 6.1(iv)
setting forth in reasonable detail the Leverage Ratio for the four-Fiscal
Quarter period ending as of the last day of the Fiscal Quarter immediately
preceding the Fiscal Quarter during which such Officers' Certificate is
delivered.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse
effect upon the business, operations, properties, assets, condition (financial
or otherwise) or prospects of the Loan Parties, taken as a whole, or (ii) the
material impairment of the ability of any Loan Party to perform, or the
impairment of the ability of Agent or Lenders to enforce, the Obligations.
"MORTGAGE" means an instrument (whether designated as a deed
of trust, a trust deed or a mortgage or by any similar title) executed and
delivered by (i) Company, and (ii) with respect to property to which title is
held in a Subsidiary of Company, such Subsidiary, and (iii) with respect to
property to which title is held in a Land Trust, such Land Trust, substantially
in the form of Exhibit XXI annexed hereto encumbering a fee or leasehold
interest in Real Property Assets, as such instrument may be amended,
supplemented or otherwise modified from time to time, and "MORTGAGES" means all
such instruments, including the Mortgages delivered to Agent pursuant to
subsection 4.1B and any other Mortgages delivered to Agent pursuant to
subsection 6.10, collectively.
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"MULTIEMPLOYER PLAN" means a "multiemployer plan", as
defined in Section 3(37) of ERISA, (i) to which any of the Loan Parties or any
of their respective ERISA Affiliates is contributing, or at any time within the
five calendar years immediately preceding the date hereof has contributed, (ii)
to which any of the Loan Parties or any of their respective ERISA Affiliates
has, or, at any time within the five calendar years immediately preceding the
date hereof, has had, an obligation to contribute or (iii) with respect to
which any of the Loan Parties retains any liability, including any potential
joint and several liability as a result of an affiliation with an ERISA
Affiliate or a party that would be an ERISA Affiliate except for the fact the
affiliation ceased more than five calendar years prior to the date hereof.
"NET CASH PROCEEDS OF ASSET SALE" means, with respect to any
Asset Sale, Cash Proceeds of such Asset Sale net of bona fide direct costs of
sale including (i) income taxes reasonably estimated to be actually payable as
a result of such Asset Sale within two years of the date of such Asset Sale and
(ii) payment of the outstanding principal amount of, premium or penalty, if
any, and interest on, any Indebtedness (other than the Loans) that is secured
by a Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale.
"NON-RECOURSE INDEBTEDNESS" means, as applied to any Person,
all Indebtedness of that Person secured by Liens on specified assets of that
Person under the terms of which (i) no recourse may be had against that or any
other Person for the payment of the principal of or interest or premium on such
Indebtedness or for any claim based thereon and (ii) the enforcement of all
obligations relating to such Indebtedness is limited to foreclosure or other
actions with respect to such specified assets.
"NOTES" means one or more of the Term Notes, Revolving Term
Notes, Revolving Notes or Swing Line Note or any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the
form of Exhibit I annexed hereto delivered by Company to Agent pursuant to
subsection 2.1B with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of Exhibit II annexed hereto delivered by Company to
Agent pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice
substantially in the form of Exhibit III annexed hereto delivered by Company to
Agent pursuant to subsection 3.1B(i) with respect to the proposed issuance of a
Letter of Credit.
"OBLIGATIONS" means all obligations of every nature of each
Loan Party from time to time owed to Agent, Syndication Agent, Arrangers,
Lenders or any of them under the Loan
22 (Credit Agreement)
30
Documents, whether for principal, interest, reimbursement of amounts drawn
under Letters of Credit, fees, expenses, indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, as applied to any
corporation, a certificate executed on behalf of such corporation by its
chairman or vice chairman of the board (if an officer) or its president or one
of its executive or senior vice presidents and by its chief financial officer,
its treasurer or its vice president of investor relations; provided that every
Officers' Certificate with respect to the compliance with a condition precedent
to the making of any Loans hereunder shall include (i) a statement that the
officer or officers making or giving such Officers' Certificate have read such
condition and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the signers, they
have made or have caused to be made such examination or investigation as is
necessary to enable them to express an informed opinion as to whether or not
such condition has been complied with, and (iii) a statement as to whether, in
the opinion of the signers, such condition has been complied with; and provided
further that any Officers' Certificate required pursuant to subsection
2.4B(iii) may be executed by any one of the officers referred to in this
definition.
"OPERATING LEASE" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) that is not a
Capital Lease other than any such lease under which that Person is the lessor.
"PARENT" means DFF Supermarkets, Inc., a Delaware
corporation.
"PARENT MERGER" has the meaning assigned to that term in the
recitals to this Agreement.
"PARENT MERGER CERTIFICATE" means that certain Certificate
of Ownership and Merger dated as of November 1, 1996, pursuant to which the
Parent Merger shall occur, as in effect on the Closing Date and as such
certificate may be amended from time to time to the extent permitted under
subsection 7.15.
"PARENT INTERCOMPANY NOTE" means that certain promissory
note dated as of March 22, 1995 issued by Parent to Company in the original
principal amount of $344,865,000 evidencing the loan made by Company to Parent
in such amount on March 22, 1995, as such Parent Intercompany Note has been
amended from time to time prior to the Closing Date.
"PBGC" means the Pension Benefit Guaranty Corporation (or
any successor thereto).
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue
Code or Section 302 of ERISA.
23 (Credit Agreement)
31
"PERMITTED ENCUMBRANCES" means the following types of Liens
(other than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of
the Internal Revenue Code or by ERISA):
(i)Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by
subsection 6.3;
(ii)statutory Liens of landlords and banks and rights of
offset, and Liens of carriers, warehousemen, workmen,
repairmen, mechanics and materialmen and other Liens imposed by
law incurred in the ordinary course of business for sums not
yet delinquent or being contested in good faith, if such
reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor;
(iii)Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation,
unemployment insurance and other types of social security, or
to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts,
trade contracts, utility payments, performance and
return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money);
(iv)any attachment or judgment Lien not constituting an
Event of Default under subsection 8.8;
(v)leases or subleases granted to others not interfering in
any material respect with the ordinary conduct of the business
of Company or any of its Subsidiaries;
(vi)easements, rights-of-way, restrictions, minor defects,
encroachments or irregularities in title and other similar
charges or encumbrances not interfering in any material respect
with the ordinary conduct of the business of Company or any of
its Subsidiaries;
(vii)any (a) interest or title of a lessor or sublessor
(other than any Loan Party) under any lease permitted by
subsection 7.9, (b) restriction or encumbrance that the
interest or title of such lessor or sublessor may be subject to
(including without limitation ground leases or other prior
leases of the demised premises, mortgages, mechanics liens, tax
liens, and easements), or (c) subordination of the interest of
the lessee or sublessee under such lease to any restrictions or
encumbrance referred to in the preceding clause (b);
(viii)Liens arising from filing UCC financing statements for
precautionary purposes relating solely to true leases of
personal property permitted by this Agreement under which
Company or any of its Subsidiaries is a lessee;
24 (Credit Agreement)
32
(ix)Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties
in connection with the importation of goods;
(x)any zoning or similar law or right reserved to or vested
in any governmental office or agency to control or regulate the
use of any real property;
(xi)Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating,
reciprocal easement or similar agreements entered into in the
ordinary course of business of Company and its Subsidiaries;
(xii)any other title exception with respect to Real Property
Assets disclosed by the preliminary title report, title
commitment report or other search of title provided to Agent in
accordance with subsection 4.1B or subsection 6.10, unless
disapproved by Agent prior to the Closing Date, with respect to
the Mortgaged Properties listed in Schedule 4.1B annexed
hereto, or unless disapproved by Agent within 30 days after
Company receives written acknowledgement from Agent of its
receipt of such report, commitment or other search, together
with all copies of all documents reflected therein, with
respect to any other Real Property Assets; and
(xiii)with respect to Real Property Assets constituting
leasehold interests, any other title exception disclosed by any
search of title previously provided to and approved by Agent.
"PERMITTED HOLDERS" means (i) Yucaipa or any entity
controlled thereby or any of the partners thereof, (ii) Apollo Advisors, L.P.
or any entity controlled thereby or (iii) any of the Permitted Transferees of
any Person in clauses (i) and (ii) hereof.
"PERMITTED TRANSFEREES" means, with respect to any Person,
(i) any Affiliate of such Person, (ii) the heirs, executors, administrators,
testamentary trustees, legatees or beneficiaries of any such Person or (iii) a
trust, the beneficiaries of which, or a corporation or partnership, the
stockholders of general or limited partners of which, include only such Person
or his or her spouse or lineal descendants, in each case to whom such Person
has transferred the beneficial ownership of any Securities of Holdings.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, joint stock companies, Joint
Ventures, associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
governments and agencies and political subdivisions thereof.
"PLEDGE AGREEMENTS" means the Holdings Pledge Agreement, the
Company Pledge Agreement, the Subsidiary Pledge Agreements or any combination
thereof.
"POTENTIAL EVENT OF DEFAULT" means a condition or event
that, after notice or lapse of time or both, would constitute an Event of
Default.
25 (Credit Agreement)
33
"PREFERRED STOCK HOLDER" means ▇▇▇▇ L.L.C., an Illinois
limited liability company.
"PREFERRED STOCK REDEMPTION AGREEMENT" means that certain
Equity Purchase Agreement, dated as of November 1, 1996 by and between Holdings
and Preferred Stock Holder pursuant to which the parties thereto agree to the
redemption of all of the issued and outstanding Holdings Preferred Stock on the
Redemption Date, as such agreement may be amended from time to time to the
extent permitted under subsection 7.15.
"PRIME RATE" means the rate that Bankers announces from time
to time as its prime lending rate, as in effect from time to time. The Prime
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. Bankers or any other Lender may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
"PRO RATA SHARE" means, on any date of determination, (i)
with respect to all payments, computations and other matters relating to the
Term Loan Commitment or the Term Loan of any Lender, the percentage obtained by
dividing (x) the Term Loan Exposure of that Lender on such date by (y) the
aggregate Term Loan Exposure of all Lenders on such date, (ii) with respect to
all payments, computations and other matters relating to the Revolving Term
Loan Commitment or the Revolving Term Loans of any Lender, the percentage
obtained by dividing (x) the Revolving Term Loan Exposure of that Lender on
such date by (y) the aggregate Revolving Term Loan Exposure of all Lenders on
such date, (iii) with respect to all payments, computations and other matters
relating to the Revolving Loan Commitment or the Revolving Loans of any Lender
or any Letters of Credit issued under the Revolving Loan Commitment or
participations therein purchased by any Lender or any participations in any
Swing Line Loans made under the Revolving Loan Commitment purchased by any
Lender, the percentage obtained by dividing (x) the Revolving Loan Exposure of
that Lender on such date by (y) the aggregate Revolving Loan Exposure of all
Lenders on such date, and (iv) for all other purposes with respect to each
Lender, the percentage obtained by dividing (x) the sum of the Term Loan
Exposure of that Lender on such date plus the Revolving Term Loan Exposure of
that Lender on such date plus the Revolving Loan Exposure of that Lender on
such date by (y) the sum of the aggregate Term Loan Exposure of all Lenders on
such date plus the aggregate Revolving Term Loan Exposure of all Lenders on
such date plus the aggregate Revolving Loan Exposure of all Lenders on such
date, in any such case as the applicable percentage may be adjusted by
assignments permitted pursuant to subsection 11.1. The initial Pro Rata Share
of each Lender for purposes of each of clauses (i) through (iv) of the
preceding sentence is set forth opposite the name of that Lender in Schedule
2.1 annexed hereto.
"RATING AGENCIES" means Standard & Poor's Ratings Group,
▇▇▇▇▇'▇ Investors Service, Inc. and Duff & ▇▇▇▇▇▇ Credit Rating Co.
26 (Credit Agreement)
34
"REAL PROPERTY ASSETS" means interests in land, buildings,
improvements, and fixtures attached thereto or used in the operation thereof,
in each case owned or leased (as lessee) by any Loan Party.
"REDEMPTION ACCOUNT" means that certain deposit account of
Holdings, Account No. ▇▇▇▇▇▇▇, maintained at The Northern Trust Company in the
State of Illinois, in which approximately $50,780,149 will be deposited on the
Closing Date for the purpose of making the payment required under Section 2 of
the Preferred Stock Redemption Agreement on the Redemption Date.
"REDEMPTION DATE" means January 2, 1997.
"REDEMPTION DOCUMENTS" means the Preferred Stock Redemption
Agreement and the Release Agreement.
"REFERENCE LENDERS" means Bankers and Chase.
"REFUNDED SWING LINE LOANS" has the meaning assigned to that
term in subsection 2.1A(iv).
"REGISTER" has the meaning assigned to that term in
subsection 2.1D.
"REGISTRATION STATEMENT" means, collectively (i) the
Registration Statement of Holdings on Form S-1 (Registration No. 333- 11177)
filed with the Securities and Exchange Commission on August 30, 1996, as
amended by Amendment Nos. 1, 2 and 3 thereto, (ii) the Registration Statement
of Holdings on Form S-1 (Registration No. 333-14995) filed with the Securities
and Exchange Commission on October 29, 1996, and (iii) the Registration
Statement of Holdings on Form S-1 (Registration No. 333-15049) filed with the
Securities and Exchange Commission on October 29, 1996.
"REGULATION D" means Regulation D of the Board of Governors
of the Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" has the meaning assigned to that term
in subsection 3.3B.
"RELATED TRANSACTION DOCUMENTS" means, collectively, the
Shareholders Agreement, the Management Agreement, the Redemption Documents, the
Termination Agreement, the Parent Merger Certificate, and all other agreements
or instruments delivered pursuant to or in connection with any of the foregoing
including any purchase agreement or registration rights agreement.
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including, without limitation, the
27 (Credit Agreement)
35
abandonment or disposal of any barrels, containers or other closed receptacles
containing any Hazardous Materials), or into or out of any Facility, including
the movement of any Hazardous Material through the air, soil, surface water,
groundwater or property.
"RELEASE AGREEMENT" means that certain Release Agreement
dated as of November 1, 1996 by and between Holdings and the Preferred Stock
Holder, as such agreement may be amended from time to time to the extent
permitted under subsection 7.15.
"REPLACEMENT PROPERTY" means any Real Property Asset which
is designated by Company as a "Replacement Property" in accordance with
subsection 6.13.
"REQUISITE LENDERS" means Lenders having or holding more
than 50% of the sum of the aggregate Term Loan Exposure of all Lenders plus the
aggregate Revolving Term Loan Exposure of all Lenders plus the aggregate
Revolving Loan Exposure of all Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of Holdings or Company now or hereafter outstanding, except a dividend
payable solely in shares of that class of stock to the holders of that class,
(ii) any redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
stock of Holdings or Company now or hereafter outstanding, (iii) any payment
made to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of stock of Holdings or
Company now or hereafter outstanding, and (iv) any payment or prepayment of
principal of, premium, if any, or interest on, or redemption, purchase,
retirement, defeasance (including in-substance or legal defeasance), sinking
fund or similar payment with respect to, any Subordinated Indebtedness.
"REVOLVING LENDER" or "REVOLVING LENDERS" means the Lender
or Lenders having a Revolving Loan Commitment or having a Revolving Loan
outstanding.
"REVOLVING LOAN COMMITMENT" means the commitment of a
Revolving Lender to make Revolving Loans pursuant to subsection 2.1A(iii), to
issue and/or purchase participations in Letters of Credit pursuant to Section 3
and, except for Swing Line Lender, to purchase participations in Swing Line
Loans pursuant to subsection 2.1A(iv), and "REVOLVING LOAN COMMITMENTS" means
such commitments of all Revolving Lenders in the aggregate.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means
April 30, 2003.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender
as of any date of determination (i) prior to the termination of the Revolving
Loan Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender plus (b) in
the event that Lender is an Issuing Lender, the aggregate Letter of Credit
Usage in respect of all Letters of Credit issued by that Lender under the
28 (Credit Agreement)
36
Revolving Loan Commitment (in each case net of any participations purchased by
other Lenders in such Letters of Credit or any unreimbursed drawings
thereunder) plus (c) the aggregate amount of all participations purchased by
that Lender in any outstanding Letters of Credit issued under the Revolving
Loan Commitment or any unreimbursed drawings under any Letters of Credit issued
under the Revolving Loan Commitment plus (d) in the case of Swing Line Lender,
the aggregate outstanding principal amount of all Swing Line Loans made under
the Revolving Loan Commitment (net of any participations therein purchased by
other Lenders) plus (e) the aggregate amount of all participations purchased by
that Lender in any outstanding Swing Line Loans made under the Revolving Loan
Commitment.
"REVOLVING LOANS" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(iii).
"REVOLVING NOTES" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E on the Closing Date to evidence the
Revolving Loans of any Lender and (ii) any promissory notes issued by Company
pursuant to the last sentence of subsection 11.1B(i) in connection with
assignments of the Revolving Loan Commitments and Revolving Loans of any
Lenders, in each case substantially in the form of Exhibit V-B annexed hereto,
as they be amended, supplemented or otherwise modified from time to time.
"REVOLVING TERM LENDER" or "REVOLVING TERM LENDERS" means
the Lender or Lenders having a Revolving Term Loan Commitment or a Revolving
Term Loan outstanding.
"REVOLVING TERM LOAN COMMITMENT" means the commitment of a
Revolving Term Lender to make Revolving Term Loans pursuant to subsection
2.1A(ii), and "REVOLVING TERM LOAN COMMITMENTS" means such commitments of all
Revolving Term Lenders in the aggregate.
"REVOLVING TERM LOAN COMMITMENT TERMINATION DATE" means
April 30, 2003.
"REVOLVING TERM LOAN EXPOSURE" means, with respect to any
Lender as of any date of determination (i) prior to the termination of the
Revolving Term Loan Commitments, that Lender's Revolving Term Loan Commitment
and (ii) after the termination of the Revolving Term Loan Commitments, the
aggregate outstanding principal amount of the Revolving Term Loans of that
Lender.
"REVOLVING TERM LOANS" means the Loans made by Lenders to
Company pursuant to subsection 2.1A(ii).
"REVOLVING TERM NOTES" means (i) the promissory notes of
Company issued pursuant to subsection 2.1E on the Closing Date to evidence the
Revolving Term Loans of any Lender and (ii) any promissory notes issued by
Company pursuant to the last sentence of subsection 11.1B(i) in connection with
assignments of the Revolving Term Loan Commitments and Revolving Term Loans of
any Lenders, in each case substantially in the form of Exhibit
29 (Credit Agreement)
37
V-A annexed hereto, as they be amended, supplemented or otherwise modified from
time to time.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing; provided,
however, that, solely for purposes of subsection 2.4B(iii)(d), notes issued by
Company to evidence any of the Obligations or to evidence Indebtedness incurred
after the Closing Date pursuant to subsection 7.1 shall not be deemed
"Securities".
"SECURITIES ACT" means the Securities Act of 1933, as
amended from time to time, and any successor statute.
"SENIOR SUBORDINATED NOTE INDENTURE" means the indenture
dated as of May 4, 1995, among Company, certain subsidiaries of Company, as
subsidiary guarantors, and United States Trust Company of New York, as trustee,
pursuant to which the Senior Subordinated Notes were issued, as such indenture
is in effect on the Closing Date and as such indenture may be amended from time
to time to the extent permitted under subsection 7.15.
"SENIOR SUBORDINATED NOTES" means the $200,000,000 10-7/8%
Senior Subordinated Notes due 2005 issued by Company pursuant to the Senior
Subordinated Note Indenture, as such notes are in effect on the Closing Date
and as such notes may be amended from time to time to the extent permitted
under subsection 7.15.
"SHAREHOLDERS AGREEMENT" means that certain Amended and
Restated Stockholders Agreement dated as of November 1, 1996 by and among
Holdings, Company, Yucaipa, the Yucaipa Investors and the other equity
investors named therein, as in effect on the Closing Date and as such
Shareholders Agreement may be amended from time to time to the extent permitted
under subsection 7.15.
"SOLVENT" means, with respect to any Person, that as of the
date of determination both (A)(i) the then fair saleable value of the property
of such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount that
will be required to pay the probable liabilities on such Person's then existing
debts as they become absolute and matured considering all financing
alternatives and potential asset sales reasonably available to such Person;
(ii) such Person's capital is not unreasonably small in relation to its
business or any contemplated or undertaken transaction; and (iii) such Person
does not intend to incur, or believe (nor should it reasonably believe) that it
will incur, debts beyond its ability to pay such debts as they become due; and
(B) such Person is "solvent" within the meaning given that term and similar
terms under applicable laws relating to
30 (Credit Agreement)
38
fraudulent transfers and conveyances. For purposes of this definition, the
amount of any contingent liability at any time shall be computed as the amount
that, in light of all of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"SPECIFIED EXISTING DOCUMENTS" means, collectively, the
Stock Purchase Agreement, the Shareholders Agreement, the Holdings Certificate
of Designation (if the Holdings Preferred Stock is then issued and
outstanding), the Tax Matters Agreement, the Tax Sharing Agreement, the Yucaipa
Warrant, the Stock Exchange Agreement, the Asset Transfer Agreement, the Senior
Subordinated Note Indenture and the Senior Subordinated Notes, and all other
agreements or instruments delivered pursuant to or in connection with any of
the foregoing including any purchase agreement or registration rights
agreement.
"STANDBY LETTER OF CREDIT" means any standby letter of
credit issued for the purpose of supporting (i) Indebtedness of Company or any
of its Subsidiaries in respect of industrial revenue or development bonds or
financings, (ii) workers' compensation liabilities of Company or any of its
Subsidiaries, (iii) the obligations of third party insurers of Company or any
of its Subsidiaries arising by virtue of the laws of any jurisdiction requiring
third party insurers, (iv) obligations with respect to Capital Leases or
Operating Leases of Company or any of its Subsidiaries, and (v) performance,
payment, deposit or surety obligations of Company or any of its Subsidiaries,
in any case if required by law or governmental rule or regulation or in
accordance with custom and practice in the industry; provided that Standby
Letters of Credit may not be issued for the purpose of supporting (a) trade
payables or (b) any Indebtedness constituting "antecedent debt" (as that term
is used in Section 547 of the Bankruptcy Code).
"STOCK EXCHANGE AGREEMENT" means that certain Stock Exchange
Agreement dated as of January 17, 1995 by and between Holdings and ▇▇▇▇ L.L.C.,
as in effect on the Closing Date and as such Stock Exchange Agreement may be
amended from time to time after the Closing Date to the extent permitted under
subsection 7.15.
"STOCK PURCHASE AGREEMENT" means that certain Stock Purchase
Agreement dated as of January 17, 1995, and as amended as of March 21, 1995, by
and among Holdings, DFF Acquisition Sub, Inc., ▇▇▇▇ L.L.C., ▇▇▇▇ Family L.L.C.
and ▇▇▇▇ Developments L.L.C., as in effect on the Closing Date and as such
agreement may be amended from time to time after the Closing Date to the extent
permitted under subsection 7.15.
"STORE LAND PROPERTY" means any Real Property Asset in
Illinois, Indiana or Wisconsin acquired after the Closing Date by Company or
any Subsidiary of Company in the form of undeveloped land or land with
improvements thereon existing as of the date of acquisition (i) which is
identified in good faith by the chief financial officer of Company and
evidenced by an Officers' Certificate of Company at the time of acquisition
thereof as the intended location for a grocery store or other facility to be
constructed for and owned and operated by Company or one of its Subsidiaries
within five years of the effective date of
31 (Credit Agreement)
39
acquisition thereof and (ii) with respect to which Company gives notice to
Agent in accordance with subsection 6.1(iv)(b); provided that any such Store
Land Property shall no longer be a "Store Land Property" (a) on the date of
sale by Company or any of its Subsidiaries (other than to any Loan Party or any
other Affiliate) of any Store Land Property consisting of undeveloped land or
land with improvements thereon existing as of the date of acquisition or (b) if
Company or any of its Subsidiaries constructs a grocery store or other facility
thereon, then on the date (which date shall be the first date after the
completion of the grocery store or other facility on which the Company is
required to deliver to Agent and Lenders financial statements pursuant to
subsection 6.1(ii)) that Company gives a written notice to Agent indicating
that Company shall on and after such date include the aggregate purchase price
incurred in connection with the acquisition of such Store Land Property as
"Consolidated Capital Expenditures" pursuant to clause (i)(c) of the definition
thereof (it being understood that such aggregate purchase price shall be deemed
to be Consolidated Capital Expenditures incurred during the Fiscal Year in
which such notice is given). A Store Land Property shall continue to be a
"Store Land Property" hereunder whether or not such Real Property Asset
continues to be undeveloped land or land with improvements thereon existing as
of the date of acquisition and whether or not such Real Property Asset
continues to be owned by a Loan Party and such Store Land Property shall no
longer be a "Store Land Property" only if the conditions set forth in clause
(a) or clause (b) in the immediately preceding sentence are satisfied. The
purchase price with respect to any Store Land Property shall be the amount paid
(whether paid in cash or other consideration) for such Store Land Property.
"SUBORDINATED INDEBTEDNESS" means (i) the Indebtedness of
Company evidenced by the Senior Subordinated Notes and (ii) any other
Indebtedness of Company subordinated in right of payment to the Obligations
pursuant to documentation containing maturities, amortization schedules,
covenants, defaults, remedies, subordination provisions and other material
terms in form and substance satisfactory to Agent and Requisite Lenders.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, association, joint venture or other business entity
of which more than 50% of the total voting power of shares of stock or other
ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and
policies thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty executed
and delivered by each Subsidiary of Company on the Closing Date and to be
executed and delivered by Subsidiaries of Company (other than BDI and BPI) from
time to time in accordance with subsection 6.9, substantially in the form of
Exhibit XVII annexed hereto, as such Subsidiary Guaranty may be amended,
supplemented or otherwise modified from time to time.
32 (Credit Agreement)
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"SUBSIDIARY PLEDGE AGREEMENT" means each Subsidiary Pledge
Agreement executed and delivered by each Subsidiary of Company (other than BDI
and BPI) on the Closing Date and to be executed and delivered by Subsidiaries
of Company from time to time in accordance with subsection 6.9, substantially
in the form of Exhibit XVIII annexed hereto, as such Subsidiary Pledge
Agreement may be amended, supplemented or otherwise modified from time to time,
and "SUBSIDIARY PLEDGE AGREEMENTS" means all such Subsidiary Pledge Agreements,
collectively.
"SUBSIDIARY SECURITY AGREEMENT" means each Subsidiary
Security Agreement executed and delivered by each Subsidiary of Company (other
than BDI and BPI) on the Closing Date and to be executed and delivered by
Subsidiaries of Company from time to time in accordance with subsection 6.9,
substantially in the form of Exhibit XIX annexed hereto, as such Subsidiary
Security Agreement may be amended, supplemented or otherwise modified from time
to time, and "SUBSIDIARY SECURITY AGREEMENTS" means all such Subsidiary
Security Agreements, collectively.
"SUBSIDIARY TRADEMARK SECURITY AGREEMENT" means each
Subsidiary Trademark Collateral Security Agreement and Conditional Assignment
executed and delivered by each Subsidiary of Company (other than BDI and BPI)
on the Closing Date and to be executed and delivered by Subsidiaries of Company
from time to time in accordance with subsection 6.9, substantially in the form
of Exhibit XX annexed hereto, as such Subsidiary Trademark Collateral Security
Agreement and Conditional Assignment may be amended, supplemented or otherwise
modified from time to time, and "SUBSIDIARY TRADEMARK SECURITY AGREEMENTS"
means all such Subsidiary Trademark Collateral Security Agreements and
Conditional Assignments, collectively.
"SWING LINE LENDER" means Bankers, or any Person serving as
a successor Agent hereunder, in its capacity as Swing Line Lender hereunder and
under the other Loan Documents.
"SWING LINE LOAN COMMITMENT" means the commitment of Swing
Line Lender to make Swing Line Loans to Company pursuant to subsection
2.1A(iv).
"SWING LINE LOANS" means the Loans made by Swing Line Lender
to Company pursuant to subsection 2.1A(iv).
"SWING LINE NOTE" means (i) the promissory note of Company
issued pursuant to subsection 2.1E on the Closing Date to evidence the Swing
Line Loans of Swing Line Lender and (ii) any promissory note issued by Company
to any successor Agent and Swing Line Lender pursuant to the last sentence of
subsection 10.5B, in each case substantially in the form of Exhibit VI annexed
hereto, as it may be amended, supplemented or otherwise modified from time to
time.
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"SYNDICATION AGENT" has the meaning assigned to that term in
the introduction to this Agreement.
"TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld or assessed; provided that "TAX ON THE OVERALL INCOME" of a Person
shall be construed as a reference to a tax imposed by the jurisdiction in which
that Person's principal office (and/or, in the case of a Lender, its lending
office) is located or in which that Person is organized or is deemed to be
doing business on all or part of the net income, profits, gains or receipts of
that Person (whether worldwide, or only insofar as such income, profits, gains
or receipts are considered to arise in or to relate to a particular
jurisdiction, or otherwise).
"TAX MATTERS AGREEMENT" means that certain Tax Matters
Agreement dated as of March 22, 1995 among Holdings, Parent, Company, ▇▇▇▇
L.L.C., ▇▇▇▇ Family L.L.C., ▇▇▇▇ Developments L.L.C., BDI, BPI, Dominick's
Finer Foods, Inc. of Illinois, ▇▇▇▇ Hazelcrest, Inc., ▇▇▇▇'▇ of Bloomingdale,
Inc., Jerry's Deep Discount Centers, Inc. and Save-It Discount Foods
Corporation, as in effect on the Closing Date and as such Tax Matters Agreement
may be amended from time to time to the extent permitted under subsection 7.15.
"TAX SHARING AGREEMENT" means that certain Tax Sharing
Agreement dated as of March 22, 1995 among Holdings, Parent, BDI, BPI, Company,
Dominick's Finer Foods, Inc. of Illinois, ▇▇▇▇ Hazelcrest, Inc., ▇▇▇▇'▇ of
Bloomingdale, Inc., Save-It Discount Foods Corporation and Jerry's Deep
Discount Centers, Inc., as in effect on the Closing Date and as such Tax
Sharing Agreement may be amended from time to time to the extent permitted
under subsection 7.15.
"TERM LENDER" or "TERM LENDERS" means the Lender or Lenders
having a Term Loan Commitment or having a Term Loan outstanding.
"TERM LOAN COMMITMENT" means the commitment of a Term Lender
to make a Term Loan to Company pursuant to subsection 2.1A(i), and "TERM LOAN
COMMITMENTS" means such commitments of all Term Lenders in the aggregate.
"TERM LOAN EXPOSURE" means, with respect to any Lender as of
any date of determination (i) prior to the funding of the Term Loans, that
Lender's Term Loan Commitment and (ii) after the funding of the Term Loans, the
outstanding principal amount of the Term Loan of that Lender.
"TERM LOANS" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(i).
"TERM NOTES" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E on the Closing Date to evidence Term Loans
of any Lender and (ii) any
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42
promissory notes issued by Company pursuant to the last sentence of subsection
11.1B(i) in connection with assignments of the Term Loan Commitments and Term
Loans of any Lenders, in each case substantially in the form of Exhibit IV
annexed hereto, as they may be amended, supplemented or otherwise modified from
time to time.
"TERMINATION AGREEMENT" means that certain letter agreement
dated as of November 1, 1996 by and among Holdings, Company and Yucaipa
pursuant to which the Consulting Agreement is terminated, as such letter
agreement may be amended from time to time to the extent permitted under
Subsection 7.15.
"TITLE INSURANCE POLICIES" means ALTA loan title insurance
policies issued by a title insurance company reasonably satisfactory to Agent
and Arrangers, in the amounts reasonably satisfactory to Agent with respect to
any particular Real Property Assets subject to a Mortgage, assuring Agent that
the applicable Mortgage creates a valid and enforceable first priority lien on
the respective Real Property Asset subject to such Mortgage, free and clear of
all defects and encumbrances except Permitted Encumbrances, which Title
Insurance Policies shall be in form and substance reasonably satisfactory to
Agent and Arrangers and shall include endorsements for any matters that Agent
may reasonably request and for future advances under this Agreement, the Notes
and the other Loan Documents, and shall provide for affirmative insurance and
such reinsurance as Agent may request, all of the foregoing in form and
substance reasonably satisfactory to Agent and Arrangers.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as
at any date of determination, the sum of (i) the aggregate principal amount of
all outstanding Revolving Loans (other than Revolving Loans made for the
purpose of repaying any Refunded Swing Line Loans made under the Revolving Loan
Commitment or reimbursing the applicable Issuing Lender for any amount drawn
under any Letter of Credit issued under the Revolving Loan Commitment but not
yet so applied) plus (ii) the aggregate principal amount of all outstanding
Swing Line Loans made under the Revolving Loan Commitment plus (iii) the Letter
of Credit Usage with respect to all Letters of Credit issued under the
Revolving Loan Commitment.
"TRANSACTION COSTS" means the fees, costs and expenses paid
or payable by any Loan Party pursuant hereto and other fees, costs, premiums
and expenses paid or payable by any Loan Party in connection with the
Transactions.
"TRANSACTIONS" means the transactions contemplated under
this Agreement and the other Loan Documents, the IPO, the refinancing of the
indebtedness of Company under the Existing Credit Agreement, the entering into
the Release Agreement, the Preferred Stock Redemption Agreement and the
Management Agreement, the termination of the Consulting Agreement, the
consummation of the Parent Merger pursuant to the Parent Merger Certificate,
and other transactions related to any of the foregoing.
"YUCAIPA" means The Yucaipa Companies, a California general
partnership, or any successor thereto (i) which is an Affiliate of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, (ii) which has been
35 (Credit Agreement)
43
established for the sole purpose of changing the form of The Yucaipa Companies
from that of a partnership to that of a limited liability company or such other
form acceptable to Arrangers in their sole discretion and (iii) the form and
structure of which has been approved by Arrangers in their sole discretion.
"YUCAIPA INVESTORS" means Yucaipa Blackhawk Partners L.P.,
Yucaipa Chicago Partners L.P. and Yucaipa Dominick's Partners L.P.
"YUCAIPA WARRANTS" has the meaning assigned to that term in
subsection 7.12(viii).
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF
CALCULATIONS UNDER AGREEMENT.
For purposes of this Agreement, all accounting terms not
otherwise defined herein shall have the meanings assigned to them in conformity
with GAAP. Financial statements and other information required to be delivered
by Company to Lenders pursuant to clauses (i), (ii) and (iii) of subsection 6.1
shall be prepared in accordance with GAAP as in effect at the time of such
preparation (and delivered together with the reconciliation statements provided
for in subsection 6.1(v)). Calculations in connection with the definitions,
covenants and other provisions of this Agreement shall utilize (i) accounting
principles and policies in conformity with those used to prepare the financial
statements referred to in subsection 5.3, or (ii) if any amendments to the
provisions set forth in Sections 1, 6 or 7 are made pursuant to negotiations
conducted by operation of the following sentence, accounting principles and
policies in effect at the time of the effectiveness of such amendments.
Notwithstanding the foregoing, if any changes in accounting principles from
those used in the preparation of the financial statements referred to in
subsection 5.3 hereafter occasioned by the promulgation of rules, regulations,
pronouncements or opinions by or required by the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) result in a change in the method of
calculation of financial covenants, standards or terms found in Sections 1, 6
and 7 hereof, the parties hereto agree to enter into negotiations in order to
amend such provisions so as to equitably reflect such changes with the desired
result that the criteria for evaluating Holdings' and each of its Subsidiaries'
financial condition shall be the same after such changes as if such changes had
not been made. During the period of such negotiations, but in no event for a
period longer than 60 days, Company shall not be required to deliver the
additional financial statements required pursuant to subsection 6.1(v). After
the parties agree on amendments to the provisions of Sections 1, 6 and 7
necessitated by such changes, Company shall not be required to deliver the
additional financial statements required pursuant to subsection 6.1(v) with
respect to such changes.
1.3 OTHER DEFINITIONAL PROVISIONS.
References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms
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44
defined in subsection 1.1 may, unless the context otherwise requires, be used
in the singular or the plural, depending on the reference.
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.
A. COMMITMENTS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Holdings
and Company herein set forth, each Lender hereby severally agrees to make the
Loans described in subsections 2.1A(i), 2.1A(ii) and 2.1(A)(iii), as
applicable, and Swing Line Lender hereby agrees to make the Loans described in
subsection 2.1A(iv).
(i)Term Loans. Each Term Lender severally agrees to lend to
Company on the Closing Date an amount not exceeding its Pro
Rata Share of the aggregate amount of the Term Loan Commitments
to be used for the purposes identified in subsection 2.5A. The
amount of each Term Lender's Term Loan Commitment is set forth
opposite its name on Schedule 2.1 annexed hereto and the
aggregate amount of the Term Loan Commitments is $100,000,000;
provided that the Term Loan Commitments of Term Lenders shall
be adjusted to give effect to any assignments of the Term Loan
Commitments pursuant to subsection 11.1B. Each Term Lender's
Term Loan Commitment shall expire immediately and without
further action on the earlier of the date of consummation of
the IPO and November 15, 1996 if the Term Loans are not made on
or before such earlier date. Company may make only one
borrowing under the Term Loan Commitments and such borrowing
may be made only on the Closing Date. Amounts borrowed under
this subsection 2.1A(i) and subsequently repaid or prepaid may
not be reborrowed.
(ii)Revolving Term Loans. Each Revolving Term Lender
severally agrees, subject to the limitations set forth below
with respect to the maximum amount of Revolving Term Loans
permitted to be outstanding from time to time, to lend to
Company from time to time during the period from the Closing
Date to but excluding the Revolving Term Loan Commitment
Termination Date an aggregate amount not exceeding its Pro Rata
Share of the aggregate amount of the Revolving Term Loan
Commitments to be used for the purposes identified in
subsections 2.5A and 2.5B. The original amount of each
Revolving Term Lender's Revolving Term Loan Commitment is set
forth opposite its name on Schedule 2.1 annexed hereto and the
aggregate original amount of the Revolving Term Loan
Commitments is $105,000,000; provided that the Revolving Term
Loan Commitments of Revolving Term Lenders shall be adjusted to
give effect to any assignments of the Revolving Term Loan
Commitments pursuant to subsection 11.1B; and provided further
that the amount of the Revolving Term Loan Commitments shall be
reduced from time to time by the amount of any reductions
thereto made pursuant to subsections 2.4B(ii) and 2.4B(iii).
Each
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Revolving Term Lender's Revolving Term Loan Commitment shall
expire on the Revolving Term Loan Commitment Termination Date
and all Revolving Term Loans and all other amounts owed
hereunder with respect to the Revolving Term Loans and the
Revolving Term Loan Commitments shall be paid in full no later
than that date; provided that each Revolving Term Lender's
Revolving Term Loan Commitment shall expire immediately and
without further action on the earlier of the date of
consummation of the IPO and November 15, 1996 if the Term Loans
are not made on or before such earlier date. Amounts borrowed
under this subsection 2.1A(ii) may be repaid and reborrowed to
but excluding the Revolving Term Loan Commitment Termination
Date.
Anything contained in this Agreement to the contrary
notwithstanding, in no event shall the aggregate principal
amount of all outstanding Revolving Term Loans at any time
exceed the Revolving Term Loan Commitments then in effect.
(iii)Revolving Loans. Each Revolving Lender severally
agrees, subject to the limitations set forth below with respect
to the maximum amount of Revolving Loans permitted to be
outstanding from time to time, to lend to Company from time to
time during the period from the Business Day immediately
succeeding the Closing Date to but excluding the Revolving Loan
Commitment Termination Date an aggregate amount not exceeding
its Pro Rata Share of the aggregate amount of the Revolving
Loan Commitments to be used for the purposes identified in
subsection 2.5B. The original amount of each Revolving
Lender's Revolving Loan Commitment is set forth opposite its
name on Schedule 2.1 annexed hereto and the aggregate original
amount of the Revolving Loan Commitments is $120,000,000;
provided that the Revolving Loan Commitments of Revolving
Lenders shall be adjusted to give effect to any assignments of
the Revolving Loan Commitments pursuant to subsection 11.1B;
and provided further that the amount of the Revolving Loan
Commitments shall be reduced from time to time by the amount of
any reductions thereto made pursuant to subsections 2.4B(ii)
and 2.4B(iii). Each Revolving Lender's Revolving Loan
Commitment shall expire on the Revolving Loan Commitment
Termination Date and all Revolving Loans and all other amounts
owed hereunder with respect to the Revolving Loans and the
Revolving Loan Commitments shall be paid in full no later than
that date; provided that each Revolving Lender's Revolving Loan
Commitment shall expire immediately and without further action
on the earlier of the date of consummation of the IPO and
November 15, 1996 if the Term Loans are not made on or before
such earlier date. Amounts borrowed under this subsection
2.1A(iii) may be repaid and reborrowed to but excluding the
Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, in no event shall the Total Utilization of
Revolving Loan Commitments at any time exceed the Revolving
Loan Commitments then in effect.
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46
(iv)Swing Line Loans. Swing Line Lender hereby agrees,
subject to the limitations set forth below with respect to the
maximum amount of Swing Line Loans permitted to be outstanding
from time to time, to make a portion of the Revolving Loan
Commitments available to Company from time to time during the
period from the Business Day immediately succeeding the Closing
Date to but excluding the Revolving Loan Commitment Termination
Date by making Swing Line Loans to Company in an aggregate
amount not exceeding the amount of the Swing Line Loan
Commitment to be used for the purposes identified in subsection
2.5B, notwithstanding the fact that such Swing Line Loans, when
aggregated with Swing Line Lender's outstanding Revolving Loans
and other Swing Line Loans and Swing Line Lender's Pro Rata
Share of the Letter of Credit Usage then in effect, may exceed
Swing Line Lender's Revolving Loan Commitment. The original
amount of the Swing Line Loan Commitment is $20,000,000;
provided that any reduction of the Revolving Loan Commitments
made pursuant to subsection 2.4B(ii) or 2.4B(iii) which reduces
the aggregate Revolving Loan Commitments to an amount less than
the then current amount of the Swing Line Loan Commitment shall
result in an automatic corresponding reduction of the Swing
Line Loan Commitment to the amount of the Revolving Loan
Commitments, as so reduced, without any further action on the
part of Company, Agent or Swing Line Lender. The Swing Line
Loan Commitment shall expire on the Revolving Loan Commitment
Termination Date and all Swing Line Loans and all other amounts
owed hereunder with respect to the Swing Line Loans shall be
paid in full no later than that date; provided that the Swing
Line Loan Commitment shall expire immediately and without
further action on the earlier of the date of consummation of
the IPO and November 15, 1996 if the Term Loans are not made on
or before such earlier date. Amounts borrowed under this
subsection 2.1A(iv) may be repaid and reborrowed to but
excluding the Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, in no event shall the Total Utilization of
Revolving Loan Commitments at any time exceed the Revolving
Loan Commitments then in effect.
With respect to any Swing Line Loans which have not been
voluntarily prepaid by Company pursuant to subsection 2.4B(i),
Swing Line Lender (i) may, at any time in its sole and absolute
discretion, and (ii) shall, at least once every seven days,
deliver to Agent (with a copy to Company), no later than 12:00
Noon (New York time) on the first Business Day in advance of
the proposed Funding Date, a notice requesting Revolving
Lenders to make applicable Revolving Loans that are Base Rate
Loans on such Funding Date in an amount equal to the amount of
such Swing Line Loans (the "REFUNDED SWING LINE LOANS")
outstanding on the date such notice is given which Swing Line
Lender requests Revolving Lenders to prepay. Anything
contained in this Agreement to the contrary notwithstanding,
(i) the proceeds of such Revolving Loans made by Revolving
Lenders other than Swing Line Lender shall be immediately
delivered by Agent to Swing Line Lender (and not to Company)
and
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47
applied to repay a corresponding portion of the Refunded Swing
Line Loans and (ii) on the day such Revolving Loans are made,
Swing Line Lender's Pro Rata Share of the Refunded Swing Line
Loans shall be deemed to be paid with the proceeds of a
Revolving Loan made by Swing Line Lender and such portion of
the Swing Line Loans deemed to be so paid shall no longer be
outstanding as Swing Line Loans and shall no longer be due
under the Swing Line Note of Swing Line Lender but shall
instead constitute a part of Swing Line Lender's outstanding
Revolving Loans and shall be due under the applicable Revolving
Note of Swing Line Lender. Company hereby authorizes Agent and
Swing Line Lender to charge Company's accounts with Agent and
Swing Line Lender (up to the amount available in each such
account) in order to immediately pay Swing Line Lender the
amount of the Refunded Swing Line Loans to the extent the
proceeds of such Revolving Loans made by Revolving Lenders,
including the Revolving Loan deemed to be made by Swing Line
Lender, are not sufficient to repay in full the Refunded Swing
Line Loans. If any portion of any such amount paid (or deemed
to be paid) to Swing Line Lender should be recovered by or on
behalf of Company from Swing Line Lender in bankruptcy, by
assignment for the benefit of creditors or otherwise, the loss
of the amount so recovered shall be ratably shared among all
Revolving Lenders in the manner contemplated by subsection
11.5.
Immediately upon the funding of each Swing Line Loan by
Swing Line Lender, each Revolving Lender shall be deemed to,
and hereby agrees to, have purchased, under its Revolving Loan
Commitment, a participation in such outstanding Swing Line
Loans in an amount equal to its Pro Rata Share (calculated
without giving effect to clauses (d) and (e) of the definition
of Revolving Loan Exposure) of the unpaid amount together with
accrued interest thereon. Upon one Business Day's notice from
Swing Line Lender, each Revolving Lender shall deliver to Swing
Line Lender an amount equal to its respective participation in
same day funds at the office of Swing Line Lender located at
the Funding and Payment Office. In order to evidence such
participation each Revolving Lender agrees to enter into a
participation agreement at the request of Swing Line Lender in
form and substance reasonably satisfactory to all parties. In
the event any Revolving Lender fails to make available to Swing
Line Lender the amount of such Revolving Lender's participation
as provided in this paragraph, Swing Line Lender shall be
entitled to recover such amount on demand from such Revolving
Lender together with interest thereon at the rate customarily
used by Swing Line Lender for the correction of errors among
banks for three Business Days and thereafter at the Base Rate.
In the event Swing Line Lender receives a payment of any amount
in which other Revolving Lenders have purchased participations
as provided in this paragraph, Swing Line Lender shall promptly
distribute to each such other Revolving Lender its Pro Rata
Share of such payment.
Anything contained herein to the contrary notwithstanding,
(i) each Revolving Lender's obligation to make Revolving Loans
for the purpose of repaying any Refunded Swing Line Loans
pursuant to the second preceding paragraph and each
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Revolving Lender's obligation to purchase a participation in
any unpaid Swing Line Loans pursuant to the immediately
preceding paragraph shall be absolute and unconditional and
shall not be affected by any circumstance, including without
limitation (a) any set-off, counterclaim, recoupment, defense
or other right which such Revolving Lender may have against
Swing Line Lender, Company or any other Person for any reason
whatsoever; (b) the occurrence or continuation of an Event of
Default or a Potential Event of Default; (c) any adverse change
in the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Holdings or any of its
Subsidiaries; (d) any breach of this Agreement or any other
Loan Document by any party thereto; or (e) any other
circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing; provided that such obligations
of each Revolving Lender are subject to the satisfaction of one
of the following: (X) Swing Line Lender believed in good faith
that all conditions under Section 4 to the making of the
applicable Swing Line Loans to be refunded were satisfied at
the time such Swing Line Loans were made, (Y) such Revolving
Lender had actual knowledge, by receipt of any notices required
to be delivered to Revolving Lenders pursuant to subsection
6.1(ix) or otherwise, that any such condition had not been
satisfied and such Revolving Lender failed to notify Swing Line
Lender and Agent in writing that it had no obligation to make
Revolving Loans until such condition was satisfied (any such
notice to be effective as of the date of receipt thereof by
Swing Line Lender and Agent), or (Z) the satisfaction of any
such condition not satisfied had been waived in accordance with
subsection 11.6; and (ii) Swing Line Lender shall not be
obligated to make any Swing Line Loans if it has elected not to
do so after the occurrence and during the continuation of a
Potential Event of Default or Event of Default.
B. BORROWING MECHANICS. Term Loans, Revolving Term Loans or
Revolving Loans made on any Funding Date (other than Revolving Loans made
pursuant to a request by Swing Line Lender pursuant to subsection 2.1A(iv) for
the purpose of repaying any Refunded Swing Line Loans or Revolving Loans made
pursuant to subsection 3.3B for the purpose of reimbursing any Issuing Lender
for the amount of a drawing under a Letter of Credit issued by it) that are
made as (i) Eurodollar Rate Loans shall be in an aggregate minimum amount of
$5,000,000 and integral multiples of $1,000,000 in excess of that amount or
(ii) Base Rate Loans shall be in an aggregate minimum amount of $2,000,000 and
integral multiples of $500,000 in excess of that amount. Swing Line Loans made
on any Funding Date shall be in an aggregate minimum amount of $500,000 and
integral multiples of $100,000 in excess of that amount. Whenever Company
desires that Lenders make Term Loans, Revolving Term Loans or Revolving Loans
under subsection 2.1A, it shall deliver to Agent a Notice of Borrowing no later
than 12:00 Noon (New York time) at least three Business Days in advance of the
proposed Funding Date (in the case of a Eurodollar Rate Loan) or at least one
Business Day in advance of the proposed Funding Date (in the case of a Base
Rate Loan). Whenever Company desires that Swing Line Lender make a Swing Line
Loan under subsection 2.1A(iv), it shall deliver to Agent a Notice of Borrowing
no later than 12:00 Noon (New York time) on the proposed Funding Date. The
Notice of Borrowing shall specify (i) the proposed Funding
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49
Date (which shall be a Business Day), (ii) the amount and Type of Loans
requested, (iii) in the case of Swing Line Loans, that such Loans shall be Base
Rate Loans, (iv) whether such Loans shall be Base Rate Loans or Eurodollar Rate
Loans, and (v) in the case of any Loans requested to be made as Eurodollar Rate
Loans, the initial Interest Period requested therefor. Term Loans, Revolving
Term Loans and Revolving Loans may be continued as or converted into Base Rate
Loans and Eurodollar Rate Loans in the manner provided in subsection 2.2D. In
lieu of delivering the above-described Notice of Borrowing, Company may give
Agent telephonic notice by the required time of any proposed borrowing under
this subsection 2.1B; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Borrowing to Agent on or before the
applicable Funding Date.
Neither Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that Agent
believes in good faith to have been given by a duly authorized officer or other
person authorized to borrow on behalf of Company or for otherwise acting in
good faith under this subsection 2.1B, and upon funding of Loans by Lenders in
accordance with this Agreement pursuant to any such telephonic notice Company
shall have effected Loans hereunder.
Company shall notify Agent prior to the funding of any Loans
in the event that any of the matters to which Company is required to certify in
the applicable Notice of Borrowing or Notice of Conversion/Continuation is no
longer true and correct as of the applicable Funding Date or
conversion/continuation date, and the acceptance or conversion/continuation by
Company of the proceeds of any Loans shall constitute a re-certification by
Company, as of the applicable Funding Date or conversion/continuation date, as
to the matters to which Company is required to certify in the applicable Notice
of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in
lieu thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in
accordance therewith.
C. DISBURSEMENT OF FUNDS. All Term Loans, Revolving Term Loans
and Revolving Loans under this Agreement shall be made by Lenders
simultaneously and proportionately to their respective Pro Rata Shares of the
Commitments for the particular Type of Loans requested, it being understood
that no Lender shall be responsible for any default by any other Lender in that
other Lender's obligation to make a Loan requested hereunder nor shall the
Commitment of any Lender to make the particular Type of Loan requested be
increased or decreased as a result of a default by any other Lender in that
other Lender's obligation to make a Loan requested hereunder. Promptly after
receipt by Agent of a Notice of Borrowing pursuant to subsection 2.1B (or
telephonic notice in lieu thereof), Agent shall notify each Lender or Swing
Line Lender, as the case may be, of the proposed borrowing. Each Lender shall
make the amount of its Loan available to Agent not later than 1:00 P.M. (New
York time) on the applicable Funding Date, and Swing Line Lender shall make the
amount of its Swing Line Loan available to Agent not later than 1:00 P.M. (New
York time) on the
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50
applicable Funding Date, in each case in same day funds in Dollars, at the
Funding and Payment Office. Except as provided in subsection 2.1A(iv) or
subsection 3.3B with respect to Revolving Loans used to repay Refunded Swing
Line Loans or to reimburse any Issuing Lender for the amount of a drawing under
a Letter of Credit issued by it, upon satisfaction or waiver of the conditions
precedent specified in subsections 4.1 (in the case of Loans made on the
Closing Date) and 4.2 (in the case of all Loans), Agent shall make the proceeds
of such Loans available to Company on the applicable Funding Date by causing an
amount of same day funds in Dollars equal to the proceeds of all such Loans
received by Agent from Lenders or Swing Line Lender, as the case may be, to be
credited to the account of Company at the Funding and Payment Office.
Unless Agent shall have been notified by any Lender prior to
the Funding Date for any Loans that such Lender does not intend to make
available to Agent the amount of such Lender's Loan requested on such Funding
Date, Agent may assume that such Lender has made such amount available to Agent
on such Funding Date and Agent may, in its sole discretion, but shall not be
obligated to, make available to Company a corresponding amount on such Funding
Date. If such corresponding amount is not in fact made available to Agent by
such Lender, Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Agent, at the customary rate
set by Agent for the correction of errors among banks for three Business Days
and thereafter at the Base Rate. If such Lender does not pay such
corresponding amount forthwith upon Agent's demand therefor, Agent shall
promptly notify Company and Company shall immediately pay such corresponding
amount to Agent together with interest thereon, for each day from such Funding
Date until the date such amount is paid to Agent, at the rate payable under
this Agreement for Base Rate Loans. Nothing in this subsection 2.1C shall be
deemed to relieve any Lender from its obligation to fulfill its Commitments
hereunder or to prejudice any rights that Company may have against any Lender
as a result of any default by such Lender hereunder.
D. THE REGISTER.
(i)Agent shall maintain, at its address referred to in
subsection 11.8, a register for the recordation of the names
and addresses of Lenders and the Commitments and Loans of each
Lender from time to time (the "REGISTER"). The Register shall
be available for inspection by Company or any Lender at any
reasonable time and from time to time upon reasonable prior
notice.
(ii)Agent shall record in the Register the Term Loan
Commitment, the Revolving Term Loan Commitment and the
Revolving Loan Commitment and the Term Loan, the Revolving Term
Loans and the Revolving Loans from time to time of each Lender,
the Swing Line Loan Commitment and the Swing Line Loans made
under the Revolving Loan Commitment from time to time of Swing
Line Lender, and each repayment or prepayment in respect of the
principal amount of the Term Loan, the Revolving Term Loans or
the Revolving Loans of each Lender or the Swing Line
43 (Credit Agreement)
51
Loans made under the Revolving Loan Commitment of Swing Line
Lender. Any such recordation shall be conclusive and binding
on Company and each Lender, absent manifest error; provided
that failure to make any such recordation, or any error in such
recordation, shall not affect Company's Obligations in respect
of the applicable Loans.
(iii)Each Lender shall record on its internal records
(including, without limitation, the Notes held by such Lender)
the amount of the Term Loan, each Revolving Term Loan and each
Revolving Loan made by it and each payment in respect thereof.
Any such recordation shall be conclusive and binding on
Company, absent manifest error; provided that failure to make
any such recordation, or any error in such recordation, shall
not affect Company's Obligations in respect of the applicable
Loans; and provided, further that in the event of any
inconsistency between the Register and any Lender's records,
the recordations in the Register shall govern.
(iv)Company, Agent and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and
owners of the corresponding Commitments and Loans listed
therein for all purposes hereof, and no assignment or transfer
of any such Commitment or Loan shall be effective, in each case
unless and until an Assignment Agreement effecting the
assignment or transfer thereof shall have been accepted by
Agent and recorded in the Register as provided in subsection
11.1B(ii). Prior to such recordation, all amounts owed with
respect to the applicable Commitment or Loan shall be owed to
the Lender listed in the Register as the owner thereof, and any
request, authority or consent of any Person who, at the time of
making such request or giving such authority or consent, is
listed in the Register as a Lender shall be conclusive and
binding on any subsequent holder, assignee or transferee of the
corresponding Commitments or Loans.
(v)Company hereby designates Bankers to serve as Company's
agent solely for purposes of maintaining the Register as
provided in this subsection 2.1D, and Company hereby agrees
that, to the extent Bankers serves in such capacity, Bankers
and its officers, directors, employees, agents and affiliates
shall constitute Indemnitees for all purposes under subsection
11.3.
E. NOTES. Company shall execute and deliver on the Closing
Date (i) to each Term Lender (or to Agent for that Lender) a Term Note
substantially in the form of Exhibit IV annexed hereto to evidence that
Lender's Term Loan, in the principal amount of that Lender's Term Loan and with
other appropriate insertions, (ii) to each Revolving Term Lender (or to Agent
for that Lender) a Revolving Term Note substantially in the form of Exhibit V-A
annexed hereto to evidence that Lender's Revolving Term Loans, in the principal
amount of that Lender's Revolving Term Loan Commitment and with other
appropriate insertions, (iii) to each Revolving Lender (or to Agent for that
Lender) a Revolving Note substantially in the form of Exhibit V-B annexed
hereto to evidence that Lender's Revolving Loans in the principal amount of
that Lender's Revolving Loan Commitment and with other appropriate
44 (Credit Agreement)
52
insertions, and (iv) to Swing Line Lender a Swing Line Note substantially in
the form of Exhibit VI annexed hereto to evidence Swing Line Lender's Swing
Line Loans, in the principal amount of the Swing Line Loan Commitment and with
other appropriate insertions.
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections
2.6 and 2.7, each Term Loan, each Revolving Term Loan and each Revolving Loan
shall bear interest on the unpaid principal amount thereof from the date made
through maturity (whether by acceleration or otherwise) at a rate determined by
reference to the Base Rate or the Adjusted Eurodollar Rate, as the case may be.
Subject to the provisions of subsection 2.7, each Swing Line Loan shall bear
interest on the unpaid principal amount thereof from the date made through
maturity (whether by acceleration or otherwise) at a rate determined by
reference to the Base Rate. The applicable basis for determining the rate of
interest with respect to any Loan shall be selected by Company initially at the
time a Notice of Borrowing is given with respect to such Loan pursuant to
subsection 2.1B. The basis for determining the interest rate with respect to
any Term Loan, Revolving Term Loan or any Revolving Loan may be changed from
time to time pursuant to subsection 2.2D. If on any day a Term Loan, Revolving
Term Loan or Revolving Loan is outstanding with respect to which notice has not
been delivered to Agent in accordance with the terms of this Agreement
specifying the applicable basis for determining the rate of interest, then for
that day that Loan shall bear interest determined by reference to the Base
Rate.
(i)Subject to the provisions of subsections 2.2E and 2.7,
the Term Loans, Revolving Term Loans and the Revolving Loans
shall bear interest through maturity as follows:
(a)if a Base Rate Loan, then at the sum of the Base Rate
plus the Base Rate margin (the "APPLICABLE BASE RATE
MARGIN") set forth in the table below opposite the Leverage
Ratio for the four-Fiscal Quarter period for which the
applicable Margin Determination Certificate is being
delivered pursuant to subsection 4.1A(vi) or 6.1(iv); or
(b)if a Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate plus the Eurodollar Rate margin
(the "APPLICABLE EURODOLLAR RATE MARGIN") set forth in the
table below opposite the Leverage Ratio for the four-Fiscal
Quarter period for which the applicable Margin Determination
Certificate is being delivered pursuant to subsection
4.1A(vi) or 6.1(iv):
45 (Credit Agreement)
53
Applicable Applicable
Leverage Eurodollar Rate Base Rate
Ratio Margin Margin
----------------------------- ------------------ ----------
Greater than or
equal to: 1.50% 0.50%
4.25:1.00
Greater than or
equal to:
3.75:1.00
but less than: 1.25% 0.25%
4.25:1.00
Greater than or
equal to:
3.25:1.00
but less than: 1.00% 0.00%
3.75:1.00
Less than: 0.75% 0.00%
3.25:1.00
Upon delivery of the Margin Determination Certificate by
Company to Agent pursuant to subsection 4.1A(vi) or 6.1(iv),
the Applicable Base Rate Margin and the Applicable Eurodollar
Rate Margin shall automatically be adjusted in accordance with
such Margin Determination Certificate, such adjustment to
become effective on the Closing Date with respect to the Margin
Determination Certificate delivered pursuant to subsection
4.1A(vi) and on the next succeeding Business Day following the
receipt by Agent of such Margin Determination Certificate with
respect to each Margin Determination Certificate delivered
pursuant to subsection 6.1(iv); provided that at any time a
Margin Determination Certificate is not delivered at the time
required pursuant to subsection 4.1A(vi) or 6.1(iv), from the
time such Margin Determination Certificate was required to be
delivered until delivery of such Margin Determination
Certificate, the Applicable Eurodollar Rate Margin shall be
1.50% per annum and the Applicable Base Rate Margin shall be
0.50% per annum; provided further that if a Margin
Determination Certificate erroneously indicates an applicable
margin more favorable to Company than would be afforded by the
actual calculation of the Leverage Ratio, Company shall
promptly pay such additional interest and letter of credit fees
as shall correct for such error.
(ii)Subject to the provisions of subsection 2.2E and 2.7,
the Swing Line Loans shall bear interest (computed as described
in subsection 2.2F) through
46 (Credit Agreement)
54
maturity at the sum of the Base Rate plus the Applicable Base
Rate Margin less the Applicable Commitment Fee Percentage.
B. INTEREST PERIODS. In connection with each Eurodollar Rate
Loan, Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period; provided
that:
(i)the initial Interest Period for any Eurodollar Rate Loan
shall commence on the Funding Date in respect of such Loan, in
the case of a Loan initially made as a Eurodollar Rate Loan, or
on the date specified in the applicable Notice of Conversion/
Continuation, in the case of a Loan converted to a Eurodollar
Rate Loan;
(ii)in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant
to a Notice of Conversion/Continuation, each successive
Interest Period shall commence on the day on which the next
preceding Interest Period expires;
(iii)if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire
on the next succeeding Business Day; provided that, if any
Interest Period would otherwise expire on a day that is not a
Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;
(iv)any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end
of such Interest Period) shall, subject to clause (v) of this
subsection 2.2B, end on the last Business Day of a calendar
month;
(v)no Interest Period with respect to any portion of the
Term Loans, Revolving Term Loans or the Revolving Loans shall
extend beyond the Revolving Loan Commitment Termination Date;
(vi)no Interest Period with respect to any portion of the
Term Loans shall extend beyond a date on which Company is
required to make a scheduled payment of principal of the Term
Loans unless the sum of (1) the aggregate principal amount of
Term Loans that are Base Rate Loans plus (2) the aggregate
principal amount of Term Loans that are Eurodollar Rate Loans
with Interest Periods expiring on or before such date equals or
exceeds the principal amount required to be paid on the Term
Loans on such date;
47 (Credit Agreement)
55
(vii)there shall be no more than twenty Interest Periods
outstanding at any time; and
(viii)in the event Company fails to specify an Interest
Period for any Eurodollar Rate Loan in the applicable Notice of
Borrowing or Notice of Conversion/Continuation, Company shall
be deemed to have selected an Interest Period of one month.
C. INTEREST PAYMENTS. Subject to the provisions of subsection
2.2E, interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event any Swing Line Loans or any Revolving
Loans that are Base Rate Loans or any Revolving Term Loans that are Base Rate
Loans are prepaid pursuant to subsection 2.4B(i), interest accrued on such
Swing Line Loans, Revolving Loans or Revolving Term Loans through the date of
such prepayment shall be payable on the next succeeding Interest Payment Date
applicable to Base Rate Loans (or, if earlier, at final maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of
subsection 2.6, Company shall have the option (i) to convert at any time all or
any part of its outstanding Term Loans, Revolving Term Loans or Revolving
Loans, in each case equal to $5,000,000 and integral multiples of $1,000,000 in
excess of that amount from Loans bearing interest at a rate determined by
reference to one basis to Loans bearing interest at a rate determined by
reference to an alternative basis, or (ii) upon the expiration of any Interest
Period applicable to a Eurodollar Rate Loan, to continue all or any portion of
such Loan equal to $5,000,000 and integral multiples of $1,000,000 in excess of
that amount as a Eurodollar Rate Loan; provided, however, that a Eurodollar
Rate Loan may only be converted into a Base Rate Loan on the expiration date of
an Interest Period applicable thereto; and provided further that no Loan may be
made as or converted into a Base Rate Loan during the period from December 24
of any year to and including January 7 of the immediately succeeding year for
the purpose of investing in securities bearing interest at a rate determined by
reference to any other basis for the purpose of arbitrage or speculation.
Company shall deliver an originally executed Notice of
Conversion/Continuation to Agent, in each case signed by the chief executive
officer, the chief financial officer or the treasurer of Company or by any
executive officer or cash management personnel of Company designated by any of
the above-described officers on behalf of Company in a writing delivered to
Agent, no later than 12:00 Noon (New York time) at least one Business Day in
advance of the proposed conversion date (in the case of a conversion to a Base
Rate Loan) and at least three Business Days in advance of the proposed
conversion/continuation date (in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation shall specify
(i) the proposed conversion/continuation date (which shall be a Business Day),
48 (Credit Agreement)
56
(ii) the amount and Type of the Loan to be converted/continued, (iii) the
nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of,
a Eurodollar Rate Loan, that no Potential Event of Default or Event of Default
has occurred and is continuing. In lieu of delivering the above-described
Notice of Conversion/Continuation, Company may give Agent telephonic notice by
the required time of any proposed conversion/continuation under this subsection
2.2D; provided that such notice shall be promptly confirmed in writing by
delivery of a Notice of Conversion/Continuation to Agent on or before the
proposed conversion/continuation date.
Neither Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that Agent
believes in good faith to have been given by a duly authorized officer or other
person authorized to act on behalf of Company or for otherwise acting in good
faith under this subsection 2.2D, and upon conversion or continuation of the
applicable basis for determining the interest rate with respect to any Loans in
accordance with this Agreement pursuant to any such telephonic notice Company
shall have effected a conversion or continuation, as the case may be,
hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Conversion/Continuation for conversion to, or continuation
of, a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Company shall be bound to effect a conversion or continuation in accordance
therewith.
E. DEFAULT RATE. Upon the occurrence and during the
continuation of any Event of Default, the outstanding principal amount of all
Loans and, to the extent permitted by applicable law, any interest payments
thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable upon demand at a rate that is 2% per annum in excess of the interest
rate otherwise payable under this Agreement with respect to the applicable
Loans (or, in the case of any such fees and other amounts, at a rate which is
2% per annum in excess of the interest rate otherwise payable under this
Agreement for Base Rate Loans); provided that, in the case of Eurodollar Rate
Loans, upon the expiration of the Interest Period in effect at the time any
such increase in interest rate is effective such Eurodollar Rate Loans shall
thereupon become Base Rate Loans and shall thereafter bear interest payable
upon demand at a rate which is 2% per annum in excess of the interest rate
otherwise payable under this Agreement for Base Rate Loans. Payment or
acceptance of the increased rates of interest provided for in this subsection
2.2E is not a permitted alternative to timely payment and shall not constitute
a waiver of any Event of Default or otherwise prejudice or limit any rights or
remedies of Agent or any Lender.
49 (Credit Agreement)
57
F. COMPUTATION OF INTEREST. Interest on the Loans shall be
computed on the basis of a 360-day year, in each case for the actual number of
days elapsed in the period during which it accrues. In computing interest on
any Loan, the date of the making of such Loan or the first day of an Interest
Period applicable to such Loan or, with respect to a Base Rate Loan being
converted from a Eurodollar Rate Loan, the date of conversion of such
Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Loan or the Interest Payment Date
with respect to which such interest payment is being made or, with respect to a
Base Rate Loan being converted to a Eurodollar Rate Loan, the date of
conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the case may
be, shall be excluded; provided that if a Loan is repaid on the same day on
which it is made, one day's interest shall be paid on that Loan.
2.3 FEES.
A. COMMITMENT FEES. Company agrees to pay (i) to Agent, for
distribution to each Revolving Lender in proportion to such Revolving Lender's
Pro Rata Share of the Revolving Loan Commitments, commitment fees for the
period from and including the Closing Date to and excluding the Revolving Loan
Commitment Termination Date equal to the average of the daily excess of the
Revolving Loan Commitments over the aggregate principal amount of Revolving
Loans outstanding (but not any Swing Line Loans outstanding) plus the Letter of
Credit Usage then in effect multiplied by the commitment fee percentage (the
"APPLICABLE COMMITMENT FEE PERCENTAGE") set forth in the table below opposite
the Leverage Ratio for the four-Fiscal Quarter period for which the applicable
Margin Determination Certificate is being delivered pursuant to subsection
4.1A(vi) or 6.1(iv), and (ii) to Agent, for distribution to each Revolving Term
Lender in proportion to such Revolving Term Lender's Pro Rata Share of the
Revolving Term Loan Commitments, commitment fees for the period from and
including the Closing Date to and excluding the Revolving Term Loan Commitment
Termination Date equal to the average of the daily excess of the Revolving Term
Loan Commitments over the aggregate principal amount of the Revolving Term
Loans outstanding multiplied by the Applicable Commitment Fee Percentage:
50 (Credit Agreement)
58
Applicable Commitment
Leverage Ratio Fee Percentage
--------------------- --------------------------
Greater than
or equal to:
3.75:1.00.375%
Greater than or
equal to:3.25:1.00
but less than:3.75:1.00.30%
Less than:3.25:1.00.25%,
such commitment fees to be calculated on the basis of a 360-day year and the
actual number of days elapsed and to be payable quarterly in arrears on and to
(but excluding) February 28, May 31, August 31 and November 30 of each year,
commencing on the first such date to occur after the Closing Date, and on the
Revolving Loan Commitment Termination Date or Revolving Term Loan Commitment
Termination Date, as applicable.
Upon delivery of the Margin Determination Certificate by
Company to Agent pursuant to subsection 4.1A(vi) or 6.1(iv), the Applicable
Commitment Fee Percentage shall automatically be adjusted in accordance with
such Margin Determination Certificate, such adjustment to become effective on
the Closing Date with respect to the Margin Determination Certificate delivered
pursuant to subsection 4.1A(vi) and on the next succeeding Business Day
following the receipt by Agent of such Margin Determination Certificate with
respect to each Margin Determination Certificate delivered pursuant to
subsection 6.1(iv); provided that in the event that Company fails to deliver a
Margin Determination Certificate timely in accordance with the provisions of
subsection 4.1A(vi) or 6.1(iv), from the time such Margin Determination
Certificate should have been delivered until such date as such a Margin
Determination Certificate is actually delivered, the Applicable Commitment Fee
Percentage shall be 0.375% per annum.
B. OTHER FEES. Company agrees to pay to Agent, Syndication
Agent and Arrangers such other fees in the amounts and at the times as have
been separately agreed upon among Company, Agent, Syndication Agent and
Arrangers. After receipt of such other fees from Company, Agent, Syndication
Agent and Arrangers agree to pay to each Lender such portion of such other fees
in the amounts and at the times as have been separately agreed upon in writing
among Agent, Syndication Agent, Arrangers and such Lender.
51 (Credit Agreement)
59
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN REVOLVING TERM LOAN
COMMITMENTS AND REVOLVING LOAN COMMITMENTS; GENERAL PROVISIONS
REGARDING PAYMENTS.
A. SCHEDULED PAYMENTS OF TERM LOANS. Company shall make
principal payments on the Term Loans in installments on the dates and in the
amounts set forth below:
Scheduled Repayment
Date of Term Loans
------ -----------------------
February 28, 1998 $ 2,500,000
May 31, 1998 2,500,000
August 30, 1998 2,500,000
November 30, 1998 2,500,000
February 28, 1999 $ 2,500,000
May 31, 1999 2,500,000
August 30, 1999 2,500,000
November 30, 1999 2,500,000
February 28, 2000 $ 3,750,000
May 31, 2000 3,750,000
August 30, 2000 3,750,000
November 30, 2000 3,750,000
February 28, 2001 $ 5,000,000
May 31, 2001 5,000,000
August 30, 2001 5,000,000
November 30, 2001 5,000,000
February 28, 2002 $ 7,500,000
May 31, 2002 7,500,000
August 30, 2002 7,500,000
November 30, 2002 7,500,000
February 28, 2003 $ 7,500,000
April 30, 2003 7,500,000
==============
Total: $100,000,000
52 (Credit Agreement)
60
; provided that the scheduled installments of principal of the
Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Term Loans in accordance
with subsection 2.4B(iv); and provided, further that the Term
Loans and all other amounts owed hereunder with respect to the
Term Loans shall be paid in full no later than April 30, 2003, and
the final installment payable by Company in respect of the Term
Loans on such date shall be in an amount, if such amount is
different from that specified above, sufficient to repay all
amounts owing by Company under this Agreement with respect to the
Term Loans.
B. PREPAYMENTS AND REDUCTIONS IN COMMITMENTS.
(i) Voluntary Prepayments.
(a) Company may, upon written or
telephonic notice to Agent on or prior to 12:00
Noon (New York time) on the date of prepayment,
which notice, if telephonic, shall be promptly
confirmed in writing, at any time and from time
to time prepay any Swing Line Loan on any
Business Day in whole or in part in an aggregate
minimum amount of $500,000 and integral multiples
of $100,000 in excess of that amount. Company
may, upon not less than one Business Day's prior
written or telephonic notice, in the case of Base
Rate Loans, and three Business Days' prior
written or telephonic notice, in the case of
Eurodollar Rate Loans, in each case given to
Agent by 12:00 Noon (New York time) on the date
required and, if given by telephone, promptly
confirmed in writing to Agent (which original
written or telephonic notice Agent will promptly
transmit by telefacsimile or telephone to each
Lender), at any time and from time to time prepay
any Term Loans, Revolving Term Loans or Revolving
Loans on any Business Day in whole or in part in
an aggregate minimum amount of $5,000,000 and
integral multiples of $1,000,000 in excess of
that amount for Eurodollar Rate Loans or an
aggregate minimum amount of $2,000,000 and
integral multiples of $500,000 in excess of that
amount for Base Rate Loans; provided, however,
that a Eurodollar Rate Loan may only be prepaid
on the expiration of the Interest Period
applicable thereto. Notice of prepayment having
been given as aforesaid, the principal amount of
the Loans specified in such notice shall become
due and payable on the prepayment date specified
therein. Any such voluntary prepayment shall be
applied as specified in subsection 2.4B(iv).
(b) In the event Company is entitled
to replace a non-consenting Lender pursuant to
subsection 11.6B, Company shall
53 (Credit Agreement)
61
have the right, upon five Business Days' written
notice to Agent (which notice Agent shall promptly
transmit to each of the Lenders), to prepay all
Loans, together with accrued and unpaid interest,
fees and other amounts owing to such Lender in
accordance with subsection 11.6B so long as (1) in
the case of the prepayment of the Revolving Term
Loans or Revolving Loans of any Lender pursuant to
this subsection 2.4B(i)(b), the Revolving Term
Loan Commitment or Revolving Loan Commitment of
such Lender, as applicable, is terminated
concurrently with such prepayment pursuant to
subsection 2.4B(ii)(b) (at which time Schedule 2.1
shall be deemed modified to reflect the changed
Revolving Term Loan Commitments or Revolving Loan
Commitments, as applicable), and (2) in the case
of the prepayment of the Loans of any Lender, the
consents required by subsection 11.6B in
connection with the prepayment pursuant to this
subsection 2.4B(i)(b) shall have been obtained,
and at such time, such Lender shall no longer
constitute a "Lender" for purposes of this
Agreement, except with respect to indemnifications
under this Agreement (including, without
limitation, subsections 2.6D, 2.7, 3.6, 11.2 and
11.3), which shall survive as to such Lender.
(ii) Voluntary Reductions of Revolving Loan
Commitments and Revolving Term Loan Commitments.
(a) Company may, upon not less than
three Business Days' prior written or telephonic
notice confirmed in writing to Agent (which
original written or telephonic notice Agent will
promptly transmit by telefacsimile or telephone
to each Lender), at any time and from time to
time terminate in whole or permanently reduce in
part, without premium or penalty, (1) the
Revolving Term Loan Commitments in an amount up
to the amount by which the Revolving Term Loan
Commitments exceed the aggregate principal amount
of the Revolving Term Loans at the time of such
proposed termination or reduction or (2) the
Revolving Loan Commitments in an amount up to the
amount by which the Revolving Loan Commitments
exceed the Total Utilization of Revolving Loan
Commitments at the time of such proposed
termination or reduction; provided that any such
partial reduction of the Revolving Term Loan
Commitments or the Revolving Loan Commitments, as
applicable, shall be in an aggregate minimum
amount of $2,000,000 and integral multiples of
$500,000 in excess of that amount. Company's
notice to Agent shall designate (1) the date
(which shall be a Business Day) of such
termination or reduction, (2) whether such
termination or reduction applies to the
54 (Credit Agreement)
62
Revolving Term Loan Commitments or the Revolving
Loan Commitments, and (3) the amount of any
partial reduction, and such termination or
reduction of the Revolving Term Loan Commitments
or the Revolving Loan Commitments, as applicable,
shall be effective on the date specified in
Company's notice and shall reduce the Revolving
Term Loan Commitment or the Revolving Loan
Commitments, as applicable, of each Lender
proportionately by its Pro Rata Share of such
reduction.
(b) In the event Company is entitled
to replace a non-consenting Lender pursuant to
subsection 11.6B, Company shall have the right,
upon five Business Days' written notice to Agent
(which notice Agent shall promptly transmit to
each of the Lenders), to terminate the entire
Revolving Loan Commitment and the entire
Revolving Term Loan Commitment of such Lender so
long as (1) all Loans, together with accrued and
unpaid interest, fees and other amounts owing to
such Lender are repaid, including without
limitation amounts owing to such Lender pursuant
to subsection 2.6D, pursuant to subsection
2.4B(i)(b) concurrently with the effectiveness of
such termination (at which time Schedule 2.1
shall be deemed modified to reflect such changed
amounts), and (2) the consents required by
subsection 11.6B in connection with the
prepayment pursuant to subsection 2.4B(i)(b)
shall have been obtained, and at such time, such
Lender shall no longer constitute a "Lender" for
purposes of this Agreement, except with respect
to indemnifications under this Agreement
(including, without limitation, subsections 2.6D,
2.7, 3.6, 11.2 and 11.3), which shall survive as
to such Lender.
(iii) Mandatory Prepayments of Loans and Mandatory
Reductions of Revolving Term Loan Commitments and Revolving Loan
Commitments.
(a) Prepayments and Reductions from Asset
Sales. No later than the earliest to occur of (A) the
third Business Day following the date of receipt by
Company or any of its Subsidiaries of Cash Proceeds of
any Asset Sale in an aggregate cumulative amount equal to
or exceeding $2,500,000, (B) the 270th day following the
date of any Asset Sale the Net Cash Proceeds of Asset
Sale of which have not been applied to the prepayment of
Loans pursuant to the preceding clause (A) or this clause
(B), and (C) the date of the occurrence of any Event of
Default or Potential Event of Default, (1) Company shall
prepay the Term Loans in an amount equal to the Net Cash
Proceeds of Asset Sale of such Asset Sale, (2) to the
extent the Net Cash Proceeds of Asset Sale of such Asset
Sale exceed the aggregate outstanding principal amount of
the Term
55 (Credit Agreement)
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Loans, Company shall prepay in an amount equal to such
excess (the "FIRST EXCESS AMOUNT") the Revolving Term
Loans, and the Revolving Term Loan Commitments shall be
permanently reduced in an amount equal to the First
Excess Amount; provided that if the aggregate amount of
Revolving Term Loan Commitments so permanently reduced
exceeds the Revolving Term Loans so prepaid (the "SECOND
EXCESS AMOUNT"), (x) to the extent that there are
Revolving Loans outstanding, the parties hereto agree
that Revolving Loans in an aggregate amount equal to the
Second Excess Amount shall be automatically converted
without any further action on the part of any Person into
Revolving Term Loans, and (y) to the extent the Second
Excess Amount exceeds the amount of Revolving Loans so
converted to Revolving Term Loans (the "THIRD EXCESS
AMOUNT") and to the extent that there are Swing Line
Loans outstanding, Agent shall request Revolving Lenders
to make applicable Revolving Loans to prepay Swing Line
Loans in accordance with the third paragraph of
subsection 2.1A(iv) in an amount equal to the Third
Excess Amount, and such Revolving Loans shall be
automatically converted without any further action on the
part of any Person into Revolving Term Loans, and (z)
Company shall prepay in an amount equal to the Second
Excess Amount such Revolving Term Loans, and (3) to the
extent the First Excess Amount exceeds the Revolving Term
Loan Commitments so permanently reduced, Company shall
prepay (in addition to any Swing Line Loans and Revolving
Loans which were converted and prepaid pursuant to clause
(2) above) in an amount equal to such excess (the "FOURTH
EXCESS AMOUNT") first the Swing Line Loans to the full
extent thereof, and second the Revolving Loans, and the
Revolving Loan Commitments shall be permanently reduced
in an amount equal to the Fourth Excess Amount; provided,
however, that, so long as no Event of Default or
Potential Event of Default shall have occurred and be
continuing, the following Net Cash Proceeds of Asset Sale
received by Company and its Subsidiaries from and after
the date hereof need not be applied to the mandatory
prepayment of the Loans pursuant to this subsection
2.4B(iii)(a): (i) Net Cash Proceeds of Asset Sale from
the sale of any store to the extent that such Net Cash
Proceeds of Asset Sale are reinvested in new stores or
the construction or remodeling of stores within 270 days
of such sale; (ii) Net Cash Proceeds of Asset Sale from
the sale of a store to the extent that such Net Cash
Proceeds of Asset Sale do not exceed the Consolidated
Capital Expenditures made to acquire or build a
replacement store in the general vicinity of the store
sold within 270 days preceding the date of such sale and,
so long as, in the case of clauses (i) and (ii) above,
the aggregate amount of such Net Cash Proceeds of Asset
Sale so excluded from the mandatory prepayment provisions
does not exceed $10,000,000 in any Fiscal Year; (iii) Net
Cash Proceeds of Asset Sale from the sale and concurrent
lease-back of any store opened or
56 (Credit Agreement)
64
acquired after the Acquisition Date or any equipment
acquired after the Acquisition Date, in each case within
270 days of the completion of such store or the
acquisition of such equipment, in each case to the extent
and only to the extent of Consolidated Capital
Expenditures made with respect to such store or such
equipment; and (iv) Net Cash Proceeds of Asset Sale from
the sale of worn-out or obsolete equipment, to the extent
that such Net Cash Proceeds of Asset Sale are reinvested
in the same or similar equipment within 90 days of such
sale; provided that the Net Cash Proceeds of Asset Sale
which are not being applied to the payment of the Term
Loans pursuant to clauses (ii) and (iii) above shall be
applied first to the Swing Line Loans then outstanding,
second, to the Revolving Loans then outstanding and third
to the Revolving Term Loans then outstanding, but the
Revolving Term Loan Commitments and Revolving Loan
Commitments shall not be reduced by the amount of such
Net Cash Proceeds of Asset Sale; provided still further
that Company shall, within three Business Days of the
receipt by Company or any of its Subsidiaries of any Net
Cash Proceeds of Asset Sale referred to in clauses (i)
through (iv) above, deliver to Agent an Officers'
Certificate setting forth (A) the amount of such Net Cash
Proceeds of Asset Sale and the amount of the mandatory
prepayment to be made, if any, pursuant to this
subsection 2.4B(iii)(a) and setting forth in reasonable
detail the calculations from which such amounts were
derived, (B) with respect to the receipt of Net Cash
Proceeds of Asset Sale referred to in clauses (i) and
(iv) above, in reasonable detail the intended application
of such Net Cash Proceeds of Asset Sale and the estimated
costs of the reinvestment referred to in such clauses and
(C) with respect to the receipt of Net Cash Proceeds of
Asset Sale referred to in clauses (ii) and (iii) above,
in reasonable detail the Consolidated Capital
Expenditures made by Company which accounts for the
exclusion of any such Net Cash Proceeds of Asset Sale
from the mandatory prepayment requirements of this
subsection 2.4B(iii)(a), which Officers' Certificate, in
the case of clauses (i) and (iv), may be amended by
Company during the 270-day or 90-day period, as
applicable, following receipt of such Net Cash Proceeds
of Asset Sale. In the event that any portion of any Net
Cash Proceeds of Asset Sale received by Company or any of
its Subsidiaries which are excluded from the mandatory
prepayment requirement of this subsection 2.4B(iii)(a) by
operation of clauses (i) and (iv) above are not expended
for the purposes specified in the Officers' Certificate,
as amended, delivered by Company in connection therewith
within the time periods specified in such clauses,
Company shall, immediately upon the expiration of the
applicable time period, make a mandatory prepayment of
the Loans as specified in the first sentence of this
subsection 2.4B(iii)(a) in an amount equal to such
unexpended portion, but only to the extent such amount
has not been previously applied as a mandatory prepayment
under subsection
57 (Credit Agreement)
65
2.4B(iii)(c). In the event that Company shall, at any
time after receipt of Cash Proceeds of any Asset Sale
requiring a prepayment or a reduction of the Revolving
Term Loan Commitments or Revolving Loan Commitments
pursuant to this subsection 2.4B(iii)(a), determine that
the prepayments and/or reductions of the Revolving Term
Loan Commitments or Revolving Loan Commitments, as
applicable, previously made in respect of such Asset Sale
were in an aggregate amount less than that required by
the terms of this subsection 2.4B(iii)(a), Company shall
promptly make an additional prepayment of the Term Loans,
Revolving Term Loans, Swing Line Loans or Revolving
Loans, as the case may be (and, if applicable, the
Revolving Term Loan Commitments or Revolving Loan
Commitments, as applicable, shall be permanently
reduced), in the manner described above in an amount
equal to the amount of any such deficit, and Company
shall concurrently therewith deliver to Agent an
Officers' Certificate demonstrating the derivation of the
additional Net Cash Proceeds of Asset Sale resulting in
such deficit. If, following the receipt by Company or
any of its Subsidiaries of Cash Proceeds of any Asset
Sale, Company is required to apply or cause to be applied
any portion of such Cash Proceeds to prepay any Funded
Debt (other than any Funded Debt required to be prepaid
as contemplated by clause (ii) of the definition of Net
Cash Proceeds of Asset Sale) of any Loan Party pursuant
to the applicable documents pursuant to which such Funded
Debt was issued, then, notwithstanding anything contained
in this subsection 2.4B(iii)(a), Company shall prepay the
Loans and/or reduce the Revolving Term Loan Commitments
or Revolving Loan Commitments, as applicable, in the
order set forth in this subsection 2.4B(iii)(a) so as to
eliminate any obligation to prepay such Funded Debt. Any
mandatory prepayments pursuant to this subsection
2.4B(iii)(a) shall be applied as specified in subsection
2.4B(iv).
(b) Prepayments and Reductions Due to
Reversion of Surplus Assets of Pension Plans or Certain
Events with Respect to Amounts in Redemption Account.
(A) On the date of return to Company or any of its
Affiliates of any surplus assets of any pension plan of
Holdings or any of its Subsidiaries or (B) on the date on
which Holdings ceases to be obligated to pay the
Preferred Stock Holder (for any reason other than due to
full payment thereof) the entire amount owing under
Section 2 of the Preferred Stock Redemption Agreement or
(C) on the Redemption Date if an aggregate cumulative
amount exceeding $1,000,000 of the amount which was
initially deposited in the Redemption Account on the
Closing Date has not been paid to the Preferred Stock
Holder pursuant to the Preferred Stock Redemption
Agreement for any reason, (1) Company shall prepay the
Term Loans in an amount (the "NET REVERSION AMOUNT")
equal to 100% of such returned surplus assets, such
amount which ceases
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66
to be owing to the Preferred Stock Holder or such amount
in excess of $1,000,000, as the case may be, in each case
net of transaction costs and expenses incurred in
obtaining such return, including incremental taxes
payable as a result thereof, (2) to the extent the Net
Reversion Amount exceeds the aggregate outstanding
principal amount of the Term Loans, Company shall prepay
in an amount equal to such excess (the "FIRST EXCESS
AMOUNT") the Revolving Term Loans to the full extent
thereof, and the Revolving Term Loan Commitments shall be
permanently reduced in an amount equal to the First
Excess Amount; provided that if the aggregate amount of
Revolving Term Loan Commitments so permanently reduced
exceeds the Revolving Term Loans so prepaid, Company
shall prepay in an amount equal to such excess first the
Swing Line Loans to the full extent thereof and second
the Revolving Loans, and (3) to the extent the First
Excess Amount exceeds the Revolving Term Loan Commitments
so permanently reduced, Company shall prepay (in addition
to any Swing Line Loans and Revolving Loans prepaid
pursuant to clause (2) above) in an amount equal to such
excess (the "SECOND EXCESS AMOUNT") first the Swing Line
Loans to the full extent thereof, and second the
Revolving Loans, and the Revolving Loan Commitments shall
be permanently reduced in an amount equal to the Second
Excess Amount. Any such mandatory prepayments shall be
applied as specified in subsection 2.4B(iv).
(c) Prepayments and Reductions from
Consolidated Excess Cash Flow. In the event that there
shall be Consolidated Excess Cash Flow for any Fiscal
Year (commencing with Fiscal Year 1997) and in the event
that the Leverage Ratio for such Fiscal Year is greater
than 3.50:1.0, within 100 days after the last day of such
Fiscal Year (1) Company shall prepay the Term Loans in an
amount equal to 50% of such Consolidated Excess Cash Flow
and (2) to the extent such amount equal to 50% of the
Consolidated Excess Cash Flow for such Fiscal Year
exceeds the aggregate outstanding principal amount of the
Term Loans, Company shall prepay in an amount equal to
such excess (the "FIRST EXCESS AMOUNT") the Revolving
Term Loans to the full extent thereof, and the Revolving
Term Loan Commitments shall be permanently reduced in an
amount equal to the First Excess Amount; provided that if
the aggregate amount of Revolving Term Loan Commitment so
permanently reduced exceeds the Revolving Term Loans so
prepaid, Company shall prepay in an amount equal to such
excess first the Swing Line Loans to the full extent
thereof and second the Revolving Loans, and (3) to the
extent the First Excess Amount exceeds the Revolving Term
Loan Commitments so permanently reduced, Company shall
prepay (in addition to any Swing Line Loans and Revolving
Loans prepaid pursuant to clause (2) above) in an amount
equal to such excess (the "SECOND EXCESS AMOUNT") first
the
59 (Credit Agreement)
67
Swing Line Loans to the full extent thereof, and second
the Revolving Loans, and the Revolving Loan Commitments
shall be permanently reduced in an amount equal to the
Second Excess Amount. If Company is required to apply or
cause to be applied any portion of Consolidated Excess
Cash Flow for any Fiscal Year to prepay any Funded Debt
of any Loan Party pursuant to the applicable documents
pursuant to which such Funded Debt was issued, then,
notwithstanding anything contained in this subsection
2.4B(iii)(c), Company shall prepay the Loans and/or
reduce the Revolving Term Loan Commitments and/or
Revolving Loan Commitments, as applicable, in the order
set forth in this subsection 2.4B(iii)(c) so as to
eliminate any obligation to prepay such Funded Debt. Any
such mandatory prepayments shall be applied as specified
in subsection 2.4B(iv).
(d) Prepayments and Reductions Due to
Issuance of Debt Securities. No later than the first
Business Day following the date of receipt by Holdings or
any of its Subsidiaries of the Cash proceeds (net of
underwriting discounts, similar placement fees and
commissions and other reasonable costs and expenses
associated therewith) from the issuance of any debt
Securities of Holdings or any such Subsidiary, (1)
Company shall prepay the Term Loans in an amount equal to
the Applicable Prepayment Percentage of such net Cash
proceeds and (2) to the extent the amount of the
Applicable Prepayment Percentage of such net Cash
proceeds exceeds the aggregate outstanding principal
amount of the Term Loans, Company shall prepay in an
amount equal to such excess (the "FIRST EXCESS AMOUNT")
the Revolving Term Loans to the full extent thereof, and
the Revolving Term Loan Commitments shall be permanently
reduced in an amount equal to the First Excess Amount;
provided that if the aggregate amount of Revolving Term
Loan Commitment so permanently reduced exceeds the
Revolving Term Loans so prepaid, Company shall prepay in
an amount equal to such excess first the Swing Line Loans
to the full extent thereof and second the Revolving
Loans, and (3) to the extent the First Excess Amount
exceeds the Revolving Term Loan Commitments so
permanently reduced, Company shall prepay (in addition to
any Swing Line Loans and Revolving Loans prepaid pursuant
to clause (2) above) in an amount equal to such excess
(the "SECOND EXCESS AMOUNT") first the Swing Line Loans
to the full extent thereof, and second the Revolving
Loans, and the Revolving Loan Commitments shall be
permanently reduced in an amount equal to the Second
Excess Amount. For purposes of this subsection
2.4B(iii)(d), the term "APPLICABLE PREPAYMENT PERCENTAGE"
shall mean, as of any date of receipt by Holdings or any
of its Subsidiaries of any Cash proceeds from the
issuance of any debt Securities of Holdings or any such
Subsidiary, (i) 100% if the Leverage Ratio for the four-
Fiscal Quarter period ending
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68
on the last day of the Fiscal Quarter immediately
preceding such date of receipt is greater than or equal
to 2.50:1.0 and (ii) 50% if the Leverage Ratio for such
four-Fiscal Quarter period is less than 2.50:1.00. Any
such mandatory prepayments shall be applied as specified
in subsection 2.4B(iv).
(e) Prepayments Due to Reductions or
Restrictions of Revolving Loan Commitments and Revolving
Term Loan Commitments. Company shall from time to time
(i) prepay first the Swing Line Loans and second the
Revolving Loans to the extent necessary so that the Total
Utilization of Revolving Loan Commitments shall not at
any time exceed the Revolving Loan Commitments then in
effect and (ii) prepay the Revolving Term Loans to the
extent necessary so that the aggregate principal amount
of Revolving Term Loans shall not at any time exceed the
Revolving Term Loan Commitments then in effect. Any such
mandatory prepayments shall be applied as specified in
subsection 2.4B(iv).
(iv) Application of Prepayments.
(a) Application of Voluntary Prepayments by
Type of Loans and Order of Maturity. Any voluntary
prepayments pursuant to subsection 2.4B(i) shall be
applied as specified by Company in the applicable notice
of prepayment; provided that in the event Company fails
to specify the Loans to which any such prepayment shall
be applied, such prepayment shall be applied first to
repay outstanding Swing Line Loans to the full extent
thereof, second to repay outstanding Revolving Loans to
the full extent thereof, third to repay outstanding
Revolving Term Loans to the full extent thereof, and
fourth to repay outstanding Term Loans to the full extent
thereof, to be applied pro rata to each scheduled
installment of principal of the Term Loans set forth in
subsection 2.4A that is unpaid at the time of such
prepayment.
(b) Application of Mandatory Prepayments of
Term Loans by Order of Maturity. Any mandatory
prepayments of the Term Loans pursuant to subsection
2.4B(iii) shall be applied to reduce each scheduled
installment of principal of the Term Loans set forth in
subsection 2.4A that is unpaid at the time of such
prepayment first in forward order of maturity for
scheduled installments of principal occurring within the
twenty four-month period following the month in which
such prepayment occurs and second, to the extent of any
excess, on a pro rata basis.
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(c) Application of Prepayments to Base Rate
Loans and Eurodollar Rate Loans. Considering Term Loans,
Revolving Term Loans and Revolving Loans being prepaid
separately, any prepayment thereof shall be applied first
to Base Rate Loans to the full extent thereof before
application to Eurodollar Rate Loans, in each case in a
manner which minimizes the amount of any payments
required to be made by Company pursuant to subsection
2.6D. To the extent that Company is required to make a
mandatory prepayment of the Loans which is required to be
applied to Eurodollar Rate Loans (following the operation
of the immediately preceding sentence) on a date other
than the last day of an Interest Period applicable to a
Eurodollar Rate Loan, Agent shall hold the amount of such
prepayment in an account in the Agent's sole dominion and
control. Agent shall, in its sole discretion, invest the
amounts held by it in such account in Cash Equivalents.
On the last day of the Interest Period relating to the
next-maturing Eurodollar Rate Loan, Agent shall apply the
amounts held by it in such account to the prepayment of
such maturing Eurodollar Rate Loan and Agent shall notify
Company of the application of such amounts. Upon the
direction of Company, Agent may apply any earnings on
amounts held in such account to the payment of accrued
interest on such Eurodollar Rate Loan or shall release
such earnings to Company.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by
Company of principal, interest, fees and other Obligations
hereunder, under the Notes and under the other Loan Documents
shall be made in Dollars in same day funds, without defense,
setoff or counterclaim, free of any restriction or condition, and
delivered to Agent not later than 1:00 P.M. (New York time) on the
date due at its office located at the Funding and Payment Office
for the account of Lenders; funds received by Agent after that
time on such due date shall be deemed to have been paid by Company
on the next succeeding Business Day. Company hereby authorizes
Agent to charge its accounts with Agent in order to cause timely
payment to be made to Agent of all principal, interest, fees and
expenses due hereunder (subject to sufficient funds being
available in its accounts for that purpose).
(ii) Application of Payments to Principal and
Interest. Except as otherwise provided in subsection 2.2C, all
payments in respect of the principal amount of any Loan shall
include payment of accrued interest on the principal amount being
repaid or prepaid, and all such payments shall be applied to the
payment of interest before application to principal.
62 (Credit Agreement)
70
(iii) Apportionment of Payments. Aggregate principal
and interest payments in respect of Term Loans, Revolving Term
Loans and Revolving Loans shall be apportioned among all
outstanding Loans to which such payments relate, in each case
proportionately to Lenders' respective Pro Rata Shares. Agent
shall promptly distribute to each Lender, at its primary address
set forth below its name on the appropriate signature page hereof
or at such other address as such Lender may request, its Pro Rata
Share of all such payments received by Agent and the commitment
fees of such Lender when received by Agent pursuant to subsection
2.3. Notwithstanding the foregoing provisions of this subsection
2.4C(iii), if, pursuant to the provisions of subsection 2.6C, any
Notice of Conversion/Continuation is withdrawn as to any Affected
Lender or if any Affected Lender makes Base Rate Loans in lieu of
its Pro Rata Share of any Eurodollar Rate Loans, Agent shall give
effect thereto in apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment
to be made hereunder shall be stated to be due on a day that is
not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest hereunder
or of the commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that
before disposing of any Note held by it, or any part thereof
(other than by granting participations therein), that Lender will
make a notation thereon of all Loans evidenced by that Note and
all principal payments previously made thereon and of the date to
which interest thereon has been paid; provided that the failure to
make (or any error in the making of) a notation of any Loan made
under such Note shall not limit or otherwise affect the
obligations of Company hereunder or under such Note with respect
to any Loan or any payments of principal or interest on such Note.
2.5 USE OF PROCEEDS.
A. TERM LOANS. The proceeds of the Term Loans, together
with up to $100,000,000 in proceeds of the initial Revolving Term Loans and
other funds available to Company, including, without limitation, the proceeds
of the IPO and approximately $45,000,000 of cash on hand, shall be applied by
Company to (i) deposit funds in the Redemption Account in an aggregate amount
not to exceed $50,780,149, (ii) refinance all indebtedness outstanding under
the Existing Credit Agreement (which indebtedness as of the Closing Date is an
aggregate principal amount of approximately $270,000,000 plus accrued
interest), (iii) pay a termination fee in an aggregate amount not to exceed
$11,000,000 in connection with the termination of the Consulting Agreement, and
(iv) pay for the Transaction Costs in an aggregate amount of approximately
$11,000,000.
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B. REVOLVING TERM LOANS; REVOLVING LOANS; SWING LINE LOANS.
The proceeds of the initial Revolving Term Loans of up to $100,000,000 shall be
applied by Company as provided in subsection 2.5A. The proceeds of any other
Revolving Term Loans, the proceeds of any Revolving Loans and the proceeds of
any Swing Line Loans shall be applied by Company after (and excluding) the
Closing Date for working capital or general corporate purposes of Company and
its Subsidiaries, which may include the repayment of the Swing Line Loans
pursuant to subsection 2.1A(iv), the reimbursement to any Issuing Lender of any
amounts drawn under any Letters of Credit issued by such Issuing Lender as
provided in subsection 3.3, the making of intercompany loans to any of
Company's wholly-owned Subsidiaries, in accordance with subsection 7.1(iv), for
their own working capital and general corporate purposes, the redemption,
repurchase or prepayments of principal in respect of Senior Subordinated Notes
(together with premium, if any, and accrued interest relating thereto) in
accordance with subsection 7.5A(vi), and the prepayments of principal in
respect of Existing Funded Debt (together with the premium, if any, and accrued
interest relating thereto) in accordance with subsection 7.5B(iii).
C. MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by Company or any of its
Subsidiaries in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation G, Regulation U, Regulation T or Regulation
X of the Board of Governors of the Federal Reserve System or any other
regulation of such Board or to violate the Exchange Act, in each case as in
effect on the date or dates of such borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to
the contrary, the following provisions shall govern with respect to Eurodollar
Rate Loans as to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 10:00 A.M. (New York time) on each Interest Rate
Determination Date, Agent shall determine (which determination shall, absent
manifest error, be final, conclusive and binding upon all parties) the interest
rate that shall apply to the Eurodollar Rate Loans for which an interest rate
is then being determined for the applicable Interest Period and shall promptly
give notice thereof (by telefacsimile or by telephone confirmed in writing) to
Company and each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the
event that Agent shall have determined (which determination shall be final and
conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the interest rate applicable to such Loans
on the basis provided for in the definition of Adjusted
64 (Credit Agreement)
72
Eurodollar Rate, Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Agent notifies Company and Lenders
that the circumstances giving rise to such notice no longer exist and (ii) any
Notice of Borrowing or Notice of Conversion/Continuation given by Company with
respect to the Loans in respect of which such determination was made shall be
deemed to be rescinded by Company.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS.
In the event that on any date any Lender shall have determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with Company and Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not
be unlawful) or (ii) has become impracticable, or would cause such Lender
material hardship, as a result of contingencies occurring after the date of
this Agreement which materially and adversely affect the interbank Eurodollar
market or the position of such Lender in that market, then, and in any such
event, such Lender shall be an "AFFECTED LENDER" and it shall on that day give
notice (by telefacsimile or by telephone confirmed in writing) to Company and
Agent of such determination (which notice Agent shall promptly transmit to each
other Lender). Thereafter (a) the obligation of the Affected Lender to make
Loans as, or to convert Loans to Eurodollar Rate Loans shall be suspended until
such notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then
being requested by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or
convert such Loan to, as the case may be) a Base Rate Loan, (c) the Affected
Lender's obligation to maintain its outstanding Eurodollar Rate Loans (the
"AFFECTED LOANS"), shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected Loans shall automatically
convert into Base Rate Loans on the date of such termination. Notwithstanding
the foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Company
pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation,
Company shall have the option, subject to the provisions of subsection 2.6D, to
rescind such Notice of Borrowing or Notice of Conversion/Continuation as to all
Lenders by giving notice (by telefacsimile or by telephone confirmed in
writing) to Agent of such rescission on the date on which the Affected Lender
gives notice of its determination as described above (which notice of
rescission Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as,
65 (Credit Agreement)
73
or to convert Loans to, Eurodollar Rate Loans in accordance with the terms of
this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Company shall compensate each Lender, upon written request by that
Lender (which request shall set forth in reasonable detail the basis for
requesting such amounts), for all reasonable losses, expenses and liabilities
(including, without limitation, any interest paid by that Lender to lenders of
funds borrowed by it to make or carry its Eurodollar Rate Loans and any loss,
expense or liability sustained by that Lender in connection with the
liquidation or re-employment of such funds) which that Lender will sustain or
has sustained: (i) if for any reason (other than a default by that Lender) a
borrowing of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Borrowing or a telephonic request for borrowing, or a
conversion to or continuation of any Eurodollar Rate Loan does not occur on a
date specified therefor in a Notice of Conversion/Continuation or a telephonic
request for conversion or continuation, (ii) if any prepayment or other
principal payment or any conversion of any of its Eurodollar Rate Loans occurs
on a date prior to the last day of an Interest Period applicable to that Loan,
(iii) if any prepayment of any of its Eurodollar Rate Loans is not made on any
date specified in a notice of prepayment given by Company, or (iv) as a
consequence of any other default by Company in the repayment of its Eurodollar
Rate Loans when required by the terms of this Agreement.
E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make,
carry or transfer Eurodollar Rate Loans at, to, or for the account of any of
its branch offices or the office of an Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had actually funded
each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar
deposit bearing interest at the rate obtained pursuant to clause (i) of the
definition of Adjusted Eurodollar Rate in an amount equal to the amount of such
Eurodollar Rate Loan and having a maturity comparable to the relevant Interest
Period and through the transfer of such Eurodollar deposit from an offshore
office of that Lender to a domestic office of that Lender in the United States
of America; provided, however, that each Lender may fund each of its Eurodollar
Rate Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable under this
subsection 2.6 and under subsection 2.7A.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the
occurrence of and during the continuation of a Potential Event of Default or an
Event of Default, unless waived in accordance with the provisions of subsection
11.6, (i) Company may not elect to have a Loan be made or maintained as, or
converted to, a Eurodollar Rate Loan after the expiration of any Interest
Period then in effect for that Loan and (ii) subject to the
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provisions of subsection 2.6D, any Notice of Borrowing or Notice of
Conversion/Continuation given by Company with respect to a requested borrowing
or conversion/continuation that has not yet occurred shall be deemed to be
rescinded by Company.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to
the provisions of subsection 2.7B, in the event that any Lender shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that is promulgated and becomes
effective after the date hereof, or the compliance by such Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other governmental or quasi-governmental authority (whether or
not having the force of law):
(i) subjects such Lender (or its applicable lending
office) to any additional Tax (other than any Tax on the overall
income of such Lender) with respect to this Agreement or any of
its obligations hereunder or any payments to such Lender (or its
applicable lending office) of principal, interest, fees or any
other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency,
supplemental, special or other reserve), special deposit,
compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the
account of, or advances or loans by, or other credit extended by,
or any other acquisition of funds by, any office of such Lender
(other than any such reserve or other requirements with respect to
Eurodollar Rate Loans that are reflected in the definition of
Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with
respect to a Tax matter) on or affecting such Lender (or its
applicable lending office) or its obligations hereunder, or the
interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender
of agreeing to make, making or maintaining Loans hereunder or to reduce any
amount received or receivable by such Lender (or its applicable lending office)
with respect thereto; then, in any such case, Company shall promptly pay to
such Lender, upon receipt of the statement referred to in the next sentence,
such additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
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hereunder; provided that a Lender shall not be entitled to avail itself of the
benefit of this subsection 2.7A to the extent that any such increased cost or
reduction in amounts was incurred more than one year prior to the time it gives
notice to Company (as provided in the next sentence) of the relevant
circumstance, unless such circumstance arose or became applicable
retrospectively, in which case such Lender shall not be limited to such one
year period so long as such Lender has given such notice to Company no later
than one year from the time such circumstance became applicable to such Lender.
Such Lender shall deliver to Company (with a copy to Agent) a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to such Lender under this subsection 2.7A, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. Except as
provided specifically to the contrary in paragraphs (ii) and (iii)
below, all sums payable by Company or any other Loan Party to
Agent, either Arranger or any Lender under this Agreement or the
other Loan Documents shall be paid free and clear of and (except
to the extent required by law) without any deduction or
withholding on account of any Tax (other than a Tax on the overall
income of any Lender) imposed, levied, collected, withheld or
assessed by or within the United States of America or any
political subdivision in or of the United States of America or any
other jurisdiction from or to which a payment is made by or on
behalf of Company or by any federation or organization of which
the United States of America or any such jurisdiction is a member
at the time of payment.
(ii) Grossing-up of Payments. If Company or any other
Person is required by law to make any deduction or withholding on
account of any such Tax from any sum paid or payable by Company to
Agent or any Lender under any of the Loan Documents:
(a) Company shall notify Agent of any such
requirement or any change in any such requirement as soon
as Company becomes aware of it;
(b) Company shall pay any such Tax before the
date on which penalties attach thereto, such payment to
be made (if the liability to pay is imposed on Company)
for its own account or (if that liability is imposed on
Agent or such Lender, as the case may be) on behalf of
and in the name of Agent or such Lender;
(c) the sum payable by Company in respect of
which the relevant deduction, withholding or payment is
required shall be increased to the extent necessary to
ensure that, after the making of that deduction,
withholding or payment, Agent or such Lender, as the case
may be,
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receives on the due date and retains (free from any
liability in respect of any such deduction, withholding
or payment) a net sum equal to what it would have
received and so retained had no such deduction,
withholding or payment been required or made; and
(d) within 30 days after paying any sum from
which it is required by law to make any deduction or
withholding, and within 30 days after the due date of
payment of any Tax which it is required by clause (b)
above to pay, Company shall deliver to Agent evidence
satisfactory to the other affected parties of such
deduction, withholding or payment and of the remittance
thereof to the relevant taxing or other authority;
provided that no such additional amount shall be required to be
paid to any Lender under clause (c) above except to the extent
that any change after the date hereof (in the case of each Lender
listed on the signature pages hereof) or after the date of the
Assignment Agreement pursuant to which such Lender became a Lender
(in the case of each other Lender) in any such requirement for a
deduction, withholding or payment as is mentioned therein shall
result in an increase in the rate of such deduction, withholding
or payment from that in effect at the date of this Agreement or at
the date of such Assignment Agreement, as the case may be, in
respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the
laws of any jurisdiction other than the United States or
any state or other political subdivision thereof (for
purposes of this subsection 2.7B(iii), a "NON-US LENDER")
shall deliver to Agent for transmission to Company, on or
prior to the Closing Date (in the case of each Lender
listed on the signature pages hereof) or on the date of
the Assignment Agreement pursuant to which it becomes a
Lender (in the case of each other Lender), and at such
other times as may be necessary in the determination of
Company or Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue
Service Form 1001 or 4224 (or any successor forms),
properly completed and duly executed by such Lender,
together with any other certificate or statement of
exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such
Lender is not subject to deduction or withholding of
United States federal income tax with respect to any
payments to such Lender of principal, interest, fees or
other amounts payable under any of the Loan Documents or
(2) if such Lender is not a "bank" or other Person
described in Section 881(c)(3) of the Internal Revenue
Code and cannot deliver either Internal Revenue Service
Form 1001 or 4224 pursuant to clause (1)
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above, a Certificate re Non-Bank Status together with two
original copies of Internal Revenue Service Form W-8 (or
any successor form), properly completed and duly executed
by such Lender, together with any other certificate or
statement of exemption required under the Internal
Revenue Code or the regulations issued thereunder to
establish that such Lender is not subject to deduction or
withholding of United States federal income tax with
respect to any payments to such Lender of interest
payable under any of the Loan Documents.
(b) Each Lender required to deliver any
forms, certificates or other evidence with respect to
United States federal income tax withholding matters
pursuant to subsection 2.7B(iii)(a) hereby agrees, from
time to time after the initial delivery by such Lender of
such forms, certificates or other evidence, whenever a
lapse in time or change in circumstances renders such
forms, certificates or other evidence obsolete or
inaccurate in any material respect, such Lender shall (1)
deliver to Agent for transmission to Company two new
original copies of Internal Revenue Service Form 1001 or
4224, or a Certificate re Non-Bank Status and two
original copies of Internal Revenue Service Form W-8, as
the case may be, properly completed and duly executed by
such Lender, together with any other certificate or
statement of exemption required in order to confirm or
establish that such Lender is not subject to deduction or
withholding of United States federal income tax with
respect to payments to such Lender under the Loan
Documents or (2) immediately notify Agent and Company of
its inability to deliver any such forms, certificates or
other evidence.
(c) Company shall not be required to pay any
additional amount to any Non-US Lender under clause (c)
of subsection 2.7B(ii) if such Lender shall have failed
to satisfy the requirements of subsection 2.7B(iii)(a);
provided that if such Lender shall have satisfied such
requirements on the Closing Date (in the case of each
Lender listed on the signature pages hereof) or on the
date of the Assignment Agreement pursuant to which it
became a Lender (in the case of each other Lender),
nothing in this subsection 2.7B(iii)(c) shall relieve
Company of its obligation to pay any additional amounts
pursuant to clause (c) of subsection 2.7B(ii) in the
event that, as a result of any change after the date of
such satisfaction in any applicable law, treaty or
governmental rule, regulation or order, or any change
after the date of such satisfaction in the
interpretation, administration or application thereof,
such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent
date establishing the fact that such Lender is not
subject to withholding as described in subsection
2.7B(iii)(a).
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C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after
the date hereof of any law, rule or regulation (or any provision thereof)
regarding capital adequacy, or, after the date hereof, any change therein or in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its applicable lending
office) with any guideline, request or directive regarding capital adequacy
(whether or not having the force of law) of any such governmental authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on the capital of such Lender or any corporation controlling
such Lender as a consequence of, or with reference to, such Lender's Loans or
Commitments or Letters of Credit or participations therein or other obligations
hereunder with respect to the Loans or the Letters of Credit to a level below
that which such Lender or such controlling corporation could have achieved but
for such adoption, effectiveness, phase-in, applicability, change or compliance
(taking into consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy), then from time to time, within
five Business Days after receipt by Company from such Lender of the statement
referred to in the next sentence, Company shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction; provided that a Lender
shall not be entitled to avail itself of the benefit of this subsection 2.7C to
the extent that any such reduction in return was incurred more than one year
prior to the time it gives notice to Company (as provided in the next sentence)
of the relevant circumstance, unless such circumstance arose or became
applicable retrospectively, in which case such Lender shall not be limited to
such one year period so long as such Lender has given such notice to Company no
later than one year from the time such circumstance became applicable to such
Lender. Such Lender shall deliver to Company (with a copy to Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
2.8 OBLIGATION OF LENDERS AND ISSUING LENDERS TO MITIGATE.
A. Each Lender and Issuing Lender agrees that, as promptly
as practicable after the officer of such Lender or Issuing Lender responsible
for administering the Loans or Letters of Credit of such Lender or Issuing
Lender, as the case may be, becomes aware of the occurrence of an event or the
existence of a condition that would cause such Lender to become an Affected
Lender or that would entitle such Lender or Issuing Lender to receive payments
under subsection 2.7 or subsection 3.6, it will, to the extent not inconsistent
with the internal policies of such Lender or Issuing Lender and any applicable
legal or regulatory restrictions, use reasonable efforts (i) to make, issue,
fund or maintain the Commitments of such Lender or the affected Loans or
Letters of Credit of such Lender or Issuing Lender through another lending or
letter of credit office of such Lender or Issuing Lender, or (ii) take such
other measures as such Lender or
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Issuing Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender or Issuing Lender pursuant to subsection 2.7 or subsection 3.6 would be
materially reduced and if, as determined by such Lender or Issuing Lender in
its sole discretion, the making, issuing, funding or maintaining of such
Commitments or Loans or Letters of Credit through such other lending or letter
of credit office or in accordance with such other measures, as the case may be,
would not otherwise materially adversely affect such Commitments or Loans or
Letters of Credit or the interests of such Lender or Issuing Lender; provided
that such Lender or Issuing Lender will not be obligated to utilize such other
lending or letter of credit office pursuant to this subsection 2.8 unless
Company agrees to pay all incremental expenses incurred by such Lender or
Issuing Lender as a result of utilizing such other lending or letter of credit
office as described in clause (i) above. A certificate as to the amount of any
such expenses payable by Company pursuant to this subsection 2.8 (setting forth
in reasonable detail the basis for requesting such amount) submitted by such
Lender or Issuing Lender to Company (with a copy to Agent) shall be conclusive
absent manifest error.
B. If Company receives a notice pursuant to subsection 2.7A,
2.7C or 3.6, so long as (i) no Potential Event of Default or Event of Default
shall have occurred and be continuing and Company has obtained a commitment
from another Lender or an Eligible Assignee to purchase at par such Lender's
Loans, Commitments and other Obligations and to assume all obligations of the
Lender to be replaced, (ii) at such time the Lender to be replaced is not an
Issuing Lender with respect to any Letters of Credit outstanding and (iii) such
Lender to be replaced is unwilling to withdraw the notice delivered to Company,
upon 30 days prior written notice to such Lender and Agent, Company may require
the Lender giving such notice to assign all of its Loans, Commitments and other
Obligations to such other Lender or Eligible Assignee pursuant to the
provisions of subsection 11.1B; provided that, prior to or concurrently with
such replacement (i) Company has paid to the Lender giving such notice all
amounts under subsections 2.7A, 2.7C and 3.6 through such date of replacement,
(ii) Company has paid to Agent the processing and recordation fee required to
be paid by subsection 11.1B(i) and (iii) all of the requirements for such
assignment contained in subsection 11.1B, including, without limitation, the
consent of Agent (if required) and the receipt by Agent of an executed
Assignment Agreement and other supporting documents, have been fulfilled.
2.9 REPLACEMENT OF LENDER.
In the event that Company receives a notice pursuant to
subsection 2.7A, 2.7C or 3.6 or in the event of a refusal by a Lender to
consent to a proposed change, waiver, discharge or termination with respect to
this Agreement which has been approved by the Requisite Lenders as provided in
subsection 11.6, Company shall have the right, if no Potential Event of Default
or Event of Default then exists, to replace such Lender (a "REPLACED LENDER")
with one or more Eligible Assignees (collectively,
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the "REPLACEMENT LENDER") acceptable to Agent, provided that (i) at the time of
any replacement pursuant to this subsection 2.9, the Replacement Lender shall
enter into one or more Assignment Agreements pursuant to subsection 11.1B (and
with all fees payable pursuant to such subsection 11.1B to be paid by the
Replacement Lender) pursuant to which the Replacement Lender shall acquire all
of the outstanding Loans and Commitments of, and in each case participations in
Letters of Credit and Swing Line Loans by, the Replaced Lender and, in
connection therewith, shall pay to (x) the Replaced Lender in respect thereof
an amount equal to the sum of (A) an amount equal to the principal of, and all
accrued interest on, all outstanding Loans of the Replaced Lender, (B) an
amount equal to all unpaid drawings with respect to Letters of Credit that have
been funded by (and not reimbursed to) such Replaced Lender, together with all
then unpaid interest with respect thereto at such time and (C) an amount equal
to all accrued, but theretofore unpaid, fees owing to the Replaced Lender with
respect thereto, (y) the appropriate Issuing Lender an amount equal to such
Replaced Lender's Pro Rata Share of any unpaid drawings with respect to Letters
of Credit (which at such time remains an unpaid drawing) issued by it to the
extent such amount was not theretofore funded by such Replaced Lender, and (z)
Swing Line Lender an amount equal to such Replaced Lender's Pro Rata Share of
any Refunded Swing Line Loans to the extent such amount was not theretofore
funded by such Replaced Lender, and (ii) all obligations (including without
limitation all such amounts, if any, owing under subsection 2.6D) of Company
owing to the Replaced Lender (other than those specifically described in clause
(i) above in respect of which the assignment purchase price has been, or is
concurrently being, paid), shall be paid in full to such Replaced Lender
concurrently with such replacement. Upon the execution of the respective
Assignment Agreements, recordation of such assignment in the Register by Agent
pursuant to subsection 2.1D, the payment of amounts referred to in clauses (i)
and (ii) above and delivery to the Replacement Lender of the appropriate Note
or Notes executed by Company, the Replacement Lender shall become a Lender
hereunder and the Replaced Lender shall cease to constitute a Lender hereunder
except with respect to indemnification provisions under this Agreement which by
the terms of this Agreement survive the termination of this Agreement, which
indemnification provisions shall survive as to such Replaced Lender.
Notwithstanding anything to the contrary contained above, no Issuing Lender may
be replaced hereunder at any time while it has Letters of Credit outstanding
hereunder unless arrangements satisfactory to such Issuing Lender (including
the furnishing of a Standby Letter of Credit in form and substance, and issued
by an issuer, satisfactory to such Issuing Lender or the furnishing of cash
collateral in amounts and pursuant to arrangements satisfactory to such Issuing
Lender) have been made with respect to such outstanding Letters of Credit.
2.10 CERTAIN MATTERS RELATING TO SENIOR SUBORDINATED NOTE INDENTURE.
Each party hereto hereby agrees that the Term Loans and
the Revolving Term Loans shall constitute "Term Loans" as such term is used in
the definition of the
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term "Permitted Indebtedness" in the Senior Subordinated Note Indenture and in
Sections 5.17 and 11.04 of the Senior Subordinated Note Indenture.
SECTION 3. LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND REVOLVING LENDERS' PURCHASE OF
PARTICIPATIONS THEREIN.
A. LETTERS OF CREDIT. In addition to Company requesting
that Revolving Lenders make Revolving Loans pursuant to subsection 2.1A(iii)
and that Swing Line Lender make Swing Line Loans pursuant to subsection
2.1A(iv), Company may request, in accordance with the provisions of this
subsection 3.1, (a) on the Closing Date solely for purposes of issuing Letters
of Credit to replace or support certain of the existing letters of credit of
Company and (b) from time to time during the period from the Business Day
immediately succeeding the Closing Date to but excluding the Revolving Loan
Commitment Termination Date, that one or more Revolving Lenders issue Letters
of Credit for the account of Company for the purposes specified in the
definitions of Commercial Letters of Credit and Standby Letters of Credit.
Subject to the terms and conditions of this Agreement and in reliance upon the
representations and warranties of Company herein set forth, any one or more
Revolving Lenders may, but (except as provided in subsection 3.1B(ii)) shall
not be obligated to, issue such Letters of Credit in accordance with the
provisions of this subsection 3.1; provided that Company shall not request that
any Revolving Lender issue (and no Revolving Lender shall issue):
(i) any Letter of Credit if, after giving effect to
such issuance, the Total Utilization of Revolving Loan Commitments
would exceed the Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to
such issuance, the Letter of Credit Usage would exceed
$50,000,000;
(iii) any Standby Letter of Credit having an expiration
date later than the earlier of (a) the date which is 30 days prior
to the Revolving Loan Commitment Termination Date and (b) the date
which is one year from the date of issuance of such Standby Letter
of Credit; provided that the immediately preceding clause (b)
shall not prevent any Issuing Lender from agreeing that a Standby
Letter of Credit will automatically be extended for one or more
successive periods not to exceed one year each unless such Issuing
Lender elects not to extend for any such additional period;
provided, further that such Issuing Lender shall deliver a written
notice to Agent setting forth the last day on which such Issuing
Lender may give notice that it will not extend such Standby Letter
of Credit (the "NOTIFICATION DATE" with respect to such Standby
Letter of Credit) at least ten Business Days prior to such
Notification Date; and provided, further
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that, unless Requisite Lenders otherwise consent, such Issuing
Lender shall give notice that it will not extend such Standby
Letter of Credit if it has knowledge that an Event of Default has
occurred and is continuing on such Notification Date, unless such
Event of Default has been waived in accordance with the provisions
of subsection 11.6;
(iv) any Commercial Letter of Credit having an
expiration date (a) later than the earlier of (X) the date which
is 30 days prior to the Revolving Loan Commitment Termination Date
and (Y) the date which is 180 days from the date of issuance of
such Commercial Letter of Credit or (b) that is otherwise
unacceptable to the applicable Issuing Lender in its reasonable
discretion; or
(v) any Letter of Credit denominated in a currency
other than Dollars or payable other than on a sight basis.
B. MECHANICS OF ISSUANCE.
(i) Notice of Issuance. Whenever Company desires the
issuance of a Letter of Credit, it shall deliver to the proposed
Issuing Lender (with a copy to Agent if Agent is not the proposed
Issuing Lender) a Notice of Issuance of Letter of Credit
substantially in the form of Exhibit III annexed hereto no later
than 10:00 A.M. (New York time) at least five Business Days (or
such shorter period as may be agreed to by the Issuing Lender in
any particular instance) in advance of the proposed date of
issuance. The Notice of Issuance of Letter of Credit shall
specify (a) the Revolving Lender requested to issue the Letter of
Credit, (b) the proposed date of issuance (which shall be a
Business Day), (c) the face amount of the Letter of Credit, (d)
the expiration date of the Letter of Credit, (e) whether the
Letter of Credit is to be a Standby Letter of Credit or a
Commercial Letter of Credit, (f) the name and address of the
beneficiary, and (g) either the verbatim text of the proposed
Letter of Credit or the proposed terms and conditions thereof,
including a precise description of any documents and the verbatim
text of any certificates to be presented by the beneficiary which,
if presented by the beneficiary prior to the expiration date of
the Letter of Credit, would require the Issuing Lender to make
payment under the Letter of Credit; provided that the Issuing
Lender, in its reasonable discretion, may require changes in the
text of the proposed Letter of Credit or any such documents or
certificates; and provided, further that no Letter of Credit shall
require payment against a conforming draft to be made thereunder
on the same business day (under the laws of the jurisdiction in
which the office of the Issuing Lender to which such draft is
required to be presented is located) that such draft is presented
if such presentation is made after 10:00 A.M. (in the time zone of
such office of the Issuing Lender) on such business day.
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Company shall notify the applicable Issuing
Lender (and Agent, if Agent is not such Issuing Lender) prior to
the issuance of any Letter of Credit in the event that any of the
matters to which Company is required to certify in the applicable
Notice of Issuance of Letter of Credit is no longer true and
correct as of the proposed date of issuance of such Letter of
Credit, and upon the issuance of any Letter of Credit Company
shall be deemed to have re-certified, as of the date of such
issuance, as to the matters to which Company is required to
certify in the applicable Notice of Issuance of Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by
a proposed Issuing Lender of a Notice of Issuance of Letter of
Credit pursuant to subsection 3.1B(i) requesting the issuance of a
Letter of Credit, (a) in the event Agent is the proposed Issuing
Lender, Agent shall be the Issuing Lender with respect to such
Letter of Credit, notwithstanding the fact that the Letter of
Credit Usage with respect to such Letter of Credit and with
respect to all other Letters of Credit issued by Agent, when
aggregated with Agent's outstanding Revolving Loans, may exceed
Agent's Revolving Loan Commitment then in effect; and (b) in the
event any other Revolving Lender is the proposed Issuing Lender,
such Revolving Lender shall promptly notify Company and Agent
whether or not, in its sole discretion, it has elected to issue
such Letter of Credit, and (1) if such Lender so elects to issue
such Letter of Credit it shall be the Issuing Lender with respect
thereto and (2) if such Revolving Lender fails to so promptly
notify Company and Agent or declines to issue such Letter of
Credit, Company may request Agent or another Revolving Lender to
be the Issuing Lender with respect to such Letter of Credit in
accordance with the provisions of this subsection 3.1B.
(iii) Issuance of Letter of Credit. Upon satisfaction
or waiver (in accordance with subsection 11.6) of the conditions
set forth in subsection 4.3, the Issuing Lender shall issue the
requested Letter of Credit in accordance with the Issuing Lender's
standard operating procedures.
(iv) Notification to Revolving Lenders. Upon the
issuance of any Letter of Credit the applicable Issuing Lender
shall promptly notify Agent and each other Revolving Lender of
such issuance, which notice shall be accompanied by a copy of any
Standby Letter of Credit or any amendment to any Standby Letter of
Credit. Promptly after receipt of such notice, Agent shall notify
each Revolving Lender of the amount of such Revolving Lender's
respective participation in such Letter of Credit, determined in
accordance with subsection 3.1C.
(v) Reports to Revolving Lenders. On the first
Business Day of each week, so long as any Commercial Letter of
Credit shall have been outstanding during the immediately
preceding week, each Issuing Lender of any such
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Commercial Letter of Credit shall send by facsimile transmission
to Agent a report setting forth the daily maximum amount available
to be drawn during such week under the Commercial Letter of Credit
issued by such Issuing Lender that were outstanding during such
month, and within 15 days after the end of each month ending after
the Closing Date, so long as any Commercial Letters of Credit
shall have been outstanding during such month, Agent shall deliver
(to the extent the relevant information has been delivered to
Agent as aforesaid) to each Revolving Lender a report setting
forth the aggregate daily maximum amount available to be drawn
during such month under the Commercial Letters of Credit issued by
any Issuing Lender that were outstanding during such month.
C. REVOLVING LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS
OF CREDIT. Immediately upon the issuance of each Letter of Credit, each
Revolving Lender shall be deemed to, and hereby agrees to, have irrevocably
purchased, under its Revolving Loan Commitment, from the Issuing Lender a
participation in such Letter of Credit and drawings thereunder in an amount
equal to such Revolving Lender's Pro Rata Share of the maximum amount which is
or at any time may become available to be drawn thereunder. Upon satisfaction
of the conditions set forth in subsection 4.1, the Existing Letters of Credit
shall, effective as of the Closing Date, become Letters of Credit under this
Agreement to the same extent as if initially issued hereunder under the
Revolving Loan Commitment and each Revolving Lender shall be deemed to have
irrevocably purchased, under its Revolving Loan Commitment, from the Issuing
Lender(s) of such Existing Letters of Credit a participation in such Letters of
Credit and drawings thereunder in an amount equal to such Revolving Lender's
Pro Rata Share of the maximum amount which is or at any time may become
available to be drawn thereunder. All such Existing Letters of Credit which
become Letters of Credit under this Agreement shall be fully secured by the
Collateral commencing on the Closing Date to the same extent as if initially
issued hereunder on such date.
3.2 LETTER OF CREDIT FEES.
Company agrees to pay the following amounts to Agent (in
the case of the fees described in clauses (i)(b) and (ii)(b) below) and to each
Issuing Lender with respect to Letters of Credit issued by it (in the case of
all other amounts described in clauses (i), (ii) and (iii) below):
(i) with respect to each Standby Letter of Credit,
(a) a fronting fee equal to 0.25% per annum of the daily maximum
amount available to be drawn under such Standby Letter of Credit;
provided that in any event the minimum fronting fee for any
Standby Letter of Credit shall be $500; and (b) a letter of credit
fee equal to the Applicable Eurodollar Rate Margin multiplied by
the daily maximum amount available to be drawn under such Standby
Letter of Credit, in each case payable in arrears on and to (but
excluding) each February 28, May
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31, August 31 and November 30 of each year and computed on the
basis of a 360-day year for the actual number of days elapsed;
(ii) with respect to each Commercial Letter of Credit,
(a) a fronting fee equal to 0.25% per annum of the daily maximum
amount available to be drawn under such Commercial Letter of
Credit (or such lower fronting fee as may be agreed to by the
applicable Issuing Lender with respect to such Commercial Letter
of Credit); and (b) a letter of credit fee equal to (x) the
Applicable Eurodollar Rate Margin minus (y) 0.25% per annum
multiplied by the daily maximum amount available to be drawn under
such Commercial Letter of Credit, in each case payable in arrears
on and to (but excluding) each February 28, May 31, August 31 and
November 30 of each year and computed on the basis of a 360-day
year for the actual number of days elapsed; and
(iii) with respect to the issuance, amendment,
assignment or transfer of each Letter of Credit and each drawing
made thereunder (without duplication of the fees payable under
clauses (i) and (ii) above), documentary and processing charges in
accordance with such Issuing Lender's standard schedule for such
charges in effect at the time of such issuance, amendment,
assignment transfer or drawing, as the case may be.
Promptly upon receipt by Agent of any amount described in clause (i)(b) or
(ii)(b) of this subsection 3.2, Agent shall distribute to each Revolving Lender
its Pro Rata Share of such amount. With respect to Existing Letters of Credit,
the fees described in clauses (i) and (ii) above shall accrue from and
including the Closing Date.
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS DRAWN UNDER LETTERS OF
CREDIT.
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO
DRAWINGS. In determining whether to honor any drawing under any Letter of
Credit by the beneficiary thereof, the Issuing Lender shall be responsible only
to determine that the documents and certificates required to be delivered under
such Letter of Credit have been delivered and that they substantially comply on
their face with the requirements of such Letter of Credit.
B. REIMBURSEMENT BY COMPANY OF AMOUNTS DRAWN UNDER LETTERS
OF CREDIT. In the event an Issuing Lender has determined to honor a drawing
under a Letter of Credit issued by it, such Issuing Lender shall immediately
notify Company and Agent, and Company shall reimburse such Issuing Lender on or
before the Business Day immediately following the date on which such drawing is
honored (the "REIMBURSEMENT DATE") in an amount in Dollars in same day funds
equal to the amount of such drawing; provided that, anything contained in this
Agreement to the contrary notwithstanding, (i) unless Company shall have
notified Agent and such Issuing Lender prior to 11:00 A.M. (New York time) on
the date of such drawing that Company
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intends to reimburse such Issuing Lender for the amount of such drawing with
funds other than the proceeds of Revolving Loans, Company shall be deemed to
have given a timely Notice of Borrowing to Agent requesting Revolving Lenders
to make Revolving Loans that are Base Rate Loans on the Reimbursement Date in
an amount in Dollars equal to the amount of such drawing and (ii) subject to
satisfaction or waiver of the conditions specified in subsection 4.2C,
Revolving Lenders shall, on the Reimbursement Date, make such Revolving Loans
that are Base Rate Loans in the amount of such drawing, the proceeds of which
shall be applied directly by Agent to reimburse such Issuing Lender for the
amount of such drawing; and provided, further that if for any reason proceeds
of Revolving Loans are not received by such Issuing Lender on the Reimbursement
Date in an amount equal to the amount of such drawing, Company shall reimburse
such Issuing Lender, on demand, in an amount in same day funds equal to the
excess of the amount of such drawing over the aggregate amount of such
Revolving Loans, if any, which are so received. Nothing in this subsection
3.3B shall be deemed to relieve any Revolving Lender from its obligation to
make the applicable Revolving Loans on the terms and conditions set forth in
this Agreement, and Company shall retain any and all rights it may have against
any Revolving Lender resulting from the failure of such Revolving Lender to
make such Revolving Loans under this subsection 3.3B.
C. PAYMENT BY REVOLVING LENDERS OF UNREIMBURSED DRAWINGS
UNDER LETTERS OF CREDIT.
(i) Payment by Revolving Lenders. In the event that
Company shall fail for any reason to reimburse any Issuing Lender
as provided in subsection 3.3B in an amount equal to the amount of
any drawing honored by such Issuing Lender under a Letter of
Credit issued by it, such Issuing Lender shall promptly notify
each other Revolving Lender of the unreimbursed amount of such
drawing and of such other Revolving Lender's respective
participation therein based on such Revolving Lender's Pro Rata
Share. Each Revolving Lender shall make available to such Issuing
Lender an amount equal to its respective participation, in Dollars
and in same day funds, at the office of such Issuing Lender
specified in such notice, not later than 1:00 P.M. (New York time)
on the first business day (under the laws of the jurisdiction in
which such office of such Issuing Lender is located) after the
date notified by such Issuing Lender. In the event that any
Revolving Lender fails to make available to such Issuing Lender on
such business day the amount of such Revolving Lender's
participation in such Letter of Credit as provided in this
subsection 3.3C, such Issuing Lender shall be entitled to recover
such amount on demand from such Revolving Lender together with
interest thereon at the rate customarily used by such Issuing
Lender for the correction of errors among banks for three Business
Days and thereafter at the Base Rate. Nothing in this subsection
3.3C shall be deemed to prejudice the right of any Revolving
Lender to recover from any Issuing Lender any amounts made
available by such Revolving Lender to such Issuing Lender pursuant
to this subsection 3.3C in the event that it is determined by the
final judgment of a
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court of competent jurisdiction that the payment with respect to a
Letter of Credit by such Issuing Lender in respect of which
payment was made by such Revolving Lender constituted gross
negligence or willful misconduct on the part of such Issuing
Lender.
(ii) Distribution to Revolving Lenders of
Reimbursements Received From Company. In the event any Issuing
Lender shall have been reimbursed by other Revolving Lenders
pursuant to subsection 3.3C(i) for all or any portion of any
drawing honored by such Issuing Lender under a Letter of Credit
issued by it, such Issuing Lender shall distribute to each other
Revolving Lender which has paid all amounts payable by it under
subsection 3.3C(i) with respect to such drawing such other
Revolving Lender's Pro Rata Share of all payments subsequently
received by such Issuing Lender from Company in reimbursement of
such drawing when such payments are received. Any such
distribution shall be made to a Revolving Lender at its primary
address set forth below its name on the appropriate signature page
hereof or at such other address as such Revolving Lender may
request.
D. INTEREST ON AMOUNTS DRAWN UNDER LETTERS OF CREDIT.
(i) Payment of Interest by Company. Company agrees
to pay to each Issuing Lender, with respect to drawings made under
any Letters of Credit issued by it, interest on the amount paid by
such Issuing Lender in respect of each such drawing from the date
of such drawing to but excluding the date such amount is
reimbursed by Company (including any such reimbursement out of the
proceeds of Revolving Loans pursuant to subsection 3.3B) at a rate
equal to (a) for the period from the date of such drawing to but
excluding the Reimbursement Date, the rate then in effect under
this Agreement with respect to Revolving Loans that are Base Rate
Loans and (b) thereafter, a rate which is 2% per annum in excess
of the rate of interest otherwise payable under this Agreement
with respect to Revolving Loans that are Base Rate Loans.
Interest payable pursuant to this subsection 3.3D(i) shall be
computed on the basis of a 360-day year for the actual number of
days elapsed in the period during which it accrues and shall be
payable on demand or, if no demand is made, on the date on which
the related drawing under a Letter of Credit is reimbursed in
full.
(ii) Distribution of Interest Payments by Issuing
Lender. Promptly upon receipt by any Issuing Lender of any
payment of interest pursuant to subsection 3.3D(i) with respect to
a drawing under a Letter of Credit issued by it, (a) such Issuing
Lender shall distribute to each other Revolving Lender, out of the
interest received by such Issuing Lender in respect of the period
from the date of such drawing to but excluding the date on which
such Issuing Lender is reimbursed for the amount of such drawing
(including any such reimbursement out of the proceeds of Revolving
Loans pursuant to subsection 3.3B), the amount
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that such other Revolving Lender would have been entitled to
receive in respect of the letter of credit fee that would have
been payable in respect of such Letter of Credit for such period
pursuant to subsection 3.2 if no drawing had been made under such
Letter of Credit, and (b) in the event such Issuing Lender shall
have been reimbursed by other Revolving Lenders pursuant to
subsection 3.3C(i) for all or any portion of such drawing, such
Issuing Lender shall distribute to each other Revolving Lender
which has paid all amounts payable by it under subsection 3.3C(i)
with respect to such drawing such other Revolving Lender's Pro
Rata Share of any interest received by such Issuing Lender in
respect of that portion of such drawing so reimbursed by other
Revolving Lenders for the period from the date on which such
Issuing Lender was so reimbursed by other Revolving Lenders to and
including the date on which such portion of such drawing is
reimbursed by Company. Any such distribution shall be made to a
Revolving Lender at its primary address set forth below its name
on the appropriate signature page hereof or at such other address
as such Revolving Lender may request.
3.4 OBLIGATIONS ABSOLUTE.
The obligation of Company to reimburse each Issuing
Lender for drawings made under the Letters of Credit issued by it and to repay
any Revolving Loans made by Revolving Lenders pursuant to subsection 3.3B and
the obligations of Revolving Lenders under subsection 3.3C(i) shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances including, without limitation,
any of the following circumstances:
(i) any lack of validity or enforceability of any
Letter of Credit;
(ii) the existence of any claim, set-off, defense or
other right which Company or any Revolving Lender may have at any
time against a beneficiary or any transferee of any Letter of
Credit (or any Persons for whom any such transferee may be
acting), any Issuing Lender or other Revolving Lender or any other
Person or, in the case of a Revolving Lender, against Company,
whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any
underlying transaction between Company or one of its Subsidiaries
and the beneficiary for which any Letter of Credit was procured)
other than the defense of payment in accordance with the terms of
this Agreement;
(iii) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
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(iv) payment to the beneficiary of such Letter of
Credit by the applicable Issuing Lender under any Letter of Credit
against presentation of a demand, draft or certificate or other
document which does not comply with the terms of such Letter of
Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or
prospects of Holdings or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan
Document by any party thereto (other than a breach by the
applicable Issuing Lender relating to the Letter of Credit in
question);
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential
Event of Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 INDEMNIFICATION; NATURE OF ISSUING LENDERS' DUTIES.
A. INDEMNIFICATION. In addition to amounts payable as
provided in subsection 3.6, Company hereby agrees to protect, indemnify, pay
and save harmless each Issuing Lender from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses (including
reasonable fees, expenses and disbursements of counsel and of internal counsel)
which such Issuing Lender may incur or be subject to as a consequence, direct
or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful
misconduct of such Issuing Lender as determined by a final judgment of a court
of competent jurisdiction or (b) subject to the following clause (ii), the
wrongful dishonor by such Issuing Lender of a proper demand for payment made
under any Letter of Credit issued by it or (ii) the failure of such Issuing
Lender to honor a drawing under any such Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present or future de jure
or de facto government or governmental authority (all such acts or omissions
herein called "GOVERNMENTAL ACTS").
B. NATURE OF ISSUING LENDERS' DUTIES. As between Company
and any Issuing Lender, Company assumes all risks of the acts and omissions of,
or misuse of the Letters of Credit issued by such Issuing Lender by, the
respective beneficiaries of
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such Letters of Credit. In furtherance and not in limitation of the foregoing,
such Issuing Lender shall not be responsible for: (i) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of any such
Letter of Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) failure of the beneficiary of any
such Letter of Credit to comply fully with any conditions required in order to
draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission
or otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond
the control of such Issuing Lender, including without limitation any
Governmental Acts, and none of the above shall affect or impair, or prevent the
vesting of, any of such Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth in the first paragraph of this subsection 3.5B,
any action taken or omitted by any Issuing Lender under or in connection with
the Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put such Issuing
Lender under any resulting liability to Company.
Notwithstanding anything to the contrary contained in
this subsection 3.5, Company shall retain any and all rights it may have
against any Issuing Lender for any liability arising solely out of the gross
negligence or willful misconduct of such Issuing Lender, as determined by a
final judgment of a court of competent jurisdiction.
3.6 INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
In the event that any Issuing Lender or any Revolving
Lender shall determine (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto) that any law, treaty
or governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or governmental authority, in each case that is
promulgated and becomes effective after the date hereof, or the compliance by
any Issuing Lender or any Revolving Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or other
governmental or quasi-governmental authority (whether or not having the force
of law):
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(i) subjects such Issuing Lender or such Revolving
Lender (or its applicable lending or letter of credit office) to
any additional Tax (other than any Tax on the overall income of
such Issuing Lender or Revolving Lender) with respect to the
issuing or maintaining of any Letters of Credit or the purchasing
or maintaining of any participations therein or any other
obligations under this Section 3, whether directly or by such
being imposed on or suffered by any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency,
supplemental, special or other reserve), special deposit,
compulsory loan, FDIC insurance or similar requirement in respect
of any Letters of Credit issued by any Issuing Lender or
participations therein purchased by any Revolving Lender; or
(iii) imposes any other condition (other than with
respect to a Tax matter) on or affecting such Issuing Lender or
such Revolving Lender (or its applicable lending or letter of
credit office) regarding this Section 3 or any Letter of Credit or
any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or such Revolving Lender of agreeing to issue, issuing or maintaining
any Letter of Credit or agreeing to purchase, purchasing or maintaining any
participation therein or to reduce any amount received or receivable by such
Issuing Lender or such Revolving Lender (or its applicable lending or letter of
credit office) with respect thereto; then, in any case, Company shall promptly
pay to such Issuing Lender or such Revolving Lender, upon receipt of the
statement referred to in the next sentence, such additional amount or amounts
as may be necessary to compensate such Issuing Lender or such Revolving Lender
for any such increased cost or reduction in amounts received or receivable
hereunder; provided that a Lender shall not be entitled to avail itself of the
benefit of this subsection 3.6 to the extent that any such increased cost or
reduction in amounts was incurred more than one year prior to the time it gives
notice to Company (as provided in the next sentence) of the relevant
circumstance, unless such circumstance arose or became applicable
retrospectively, in which case such Lender shall not be limited to such one
year period so long as such Lender has given such notice to Company no later
than one year from the time such circumstance became applicable to such Lender.
Such Issuing Lender or such Revolving Lender shall deliver to Company a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to such Issuing Lender or such Revolving Lender under
this subsection 3.6, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
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SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance
of Letters of Credit hereunder are subject to the satisfaction of the following
conditions.
4.1 CONDITIONS TO TERM LOANS AND INITIAL REVOLVING TERM LOANS,
REVOLVING LOANS AND SWING LINE LOANS.
The obligations of Lenders to make the Term Loans,
Revolving Term Loans and any Revolving Loans and Swing Line Loans to be made on
the Closing Date are, in addition to the conditions precedent specified in
subsection 4.2, subject to prior or concurrent satisfaction of the following
conditions:
A. LOAN PARTY DOCUMENTS. On or before the Closing Date,
Company shall deliver or cause to be delivered to Lenders (or to Agent for
Lenders with sufficient originally executed copies, where appropriate, for each
Lender and its counsel) the following with respect to Holdings, Company and
each Subsidiary of Company, each, unless otherwise noted, dated the Closing
Date:
(i) Certified copies of its Certificate or Articles
of Incorporation (including, in the case of Holdings, the Holdings
Certificate of Designation), together with a good standing
certificate from the Secretary of State of the jurisdiction of its
incorporation and each other state in which it is qualified as a
foreign corporation to do business and, to the extent generally
available, a certificate or other evidence of good standing as to
payment of any applicable franchise or similar taxes from the
appropriate taxing authority of each of such states, each dated a
recent date prior to the Closing Date;
(ii) Copies of its Bylaws, certified as of the Closing
Date by its corporate secretary or an assistant secretary;
(iii) Resolutions of its Board of Directors (a)
approving and authorizing the execution, delivery and performance
of each of the Loan Documents to which it is a party, (b)
approving and authorizing the execution, delivery and performance
of the Related Transaction Documents to which it is a party and,
(c) to the extent applicable, approving and authorizing the
Transactions in accordance with and in the manner contemplated by
the Loan Documents and the Related Transaction Documents, in each
case, certified as of the Closing Date by its corporate secretary
or an assistant secretary as being in full force and effect
without modification or amendment;
(iv) Signature and incumbency certificates of its
officers executing each of the Loan Documents to which it is a
party;
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(v) Executed originals of this Agreement, the Notes
(duly executed in accordance with subsection 2.1E, drawn to the
order of each Lender and the Swing Line Lender and with
appropriate insertions) and the other Loan Documents, including,
without limitation, the Holdings Pledge Agreement, the Holdings
Security Agreement, the Company Security Agreement, the Company
Trademark Security Agreement, the Company Pledge Agreement, the
Collateral Account Agreement, the Subsidiary Guaranty executed by
each of Company's Subsidiaries (other than BDI and BPI), the
Subsidiary Security Agreements executed by each of Company's
Subsidiaries (other than BDI and BPI), the Subsidiary Trademark
Security Agreements executed by each of Company's Subsidiaries
(other than BDI and BPI), and the Subsidiary Pledge Agreements
executed by each of Company's Subsidiaries (other than BDI and
BPI);
(vi) A Margin Determination Certificate demonstrating
in reasonable detail the Leverage Ratio for the four consecutive
Fiscal Quarters ended as of the last day of the Fiscal Quarter
ended immediately prior to the Closing Date; and
(vii) Such other documents as Agent or either Arranger
may reasonably request.
B. DELIVERY OF MORTGAGES; TITLE INSURANCE POLICIES.
Schedule 4.1B annexed hereto shall set forth all Real Property Assets of the
Loan Parties as of the Closing Date. On or before the Closing Date, Agent
shall have received from the Loan Parties (i) fully executed Mortgages
encumbering the fee interest and/or leasehold interest of the Loan Parties in
each Real Property Asset designated as a "Mortgaged Property" on Schedule 4.1B
annexed hereto (each a "MORTGAGED PROPERTY" and collectively the "MORTGAGED
PROPERTIES"), together with evidence (which may be in the form of recording
instructions accepted by the title insurer) that counterparts of the Mortgages
have been or will promptly be recorded in all places to the extent necessary or
desirable, in the reasonable judgment of Agent, so as to effectively create a
valid and enforceable first priority lien (subject only to Permitted
Encumbrances) on each Mortgaged Property in favor of Agent (or such other
trustee as may be required or desired under local law) for the benefit of
Lenders; (ii) in the case of each Real Property Asset constituting a fee
Mortgaged Property, a preliminary title report, title commitment, or other
search of title satisfactory to Agent obtained by the Loan Parties in respect
of each Mortgaged Property; (iii) an opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ with respect
to the enforceability of the Mortgages and such other matters as Agent may
request, in form and substance satisfactory to Agent; (iv) in the case of each
real property leasehold interest of the Loan Parties constituting Mortgaged
Property, such consents from the landlords on such real property as may be
obtained by Agent with the cooperation of Loan Parties, which consents shall be
in form and substance reasonably satisfactory to Agent; (v) with respect to
each Real Property Asset constituting fee property, Title Insurance Policies,
with respect to the Mortgaged Properties so designated in Schedule 4.1B annexed
hereto, in amounts not less than the respective amounts
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designated on such Schedule 4.1B with respect to any particular Mortgaged
Property; (vi) information sufficient for Agent to determine whether (1) any
Mortgaged Property is in an area designated by the Federal Emergency Management
Agency as having special flood or mudslide hazards (a "FLOOD HAZARD PROPERTY")
and (2) the community in which each Flood Hazard Property is located is
participating in the National Flood Insurance Program; (vii) if there are any
Flood Hazard Properties, such Loan Party's written acknowledgment of receipt of
written notification from Agent (a) as to the existence of each such Flood
Hazard Property and (b) as to whether the community in which each such Flood
Hazard Property is located is participating in the National Flood Insurance
Program; (viii) the evidence of insurance with respect to the Mortgaged
Properties required to be provided to Agent pursuant to the Mortgages,
including flood insurance with respect to each Flood Hazard Property located in
a community which is participating in the National Flood Insurance Program; and
(ix) certified copies of the land trust agreement and all related documentation
with respect to any Land Trust by which title to any of the Real Property
Assets is held, including evidence of the release of any collateral assignments
of beneficial interests with respect thereto and certified copies of
authorization by Company for execution of all Loan Documents by the Land
Trustee. Pursuant to Section 90/4(b) of the Illinois Responsible Property
Transfer Act of 1988, the parties hereto acknowledge that they understand the
purpose and intent of the environmental disclosure required pursuant to such
statute and hereby waive the 30-day time periods with respect to notice of such
disclosure.
C. SECURITY INTERESTS. To the extent not otherwise
satisfied pursuant to subsection 4.1B, on or prior to the Closing Date, each
Loan Party shall have taken or caused to be taken (and Agent shall have
received satisfactory evidence thereof) such actions (other than the filing or
recording of items described in clauses (ii), (iii) and (iv) below) in such a
manner so that Agent has a valid and perfected first priority security interest
as of such date in the entire Collateral (subject to Liens permitted under
subsection 7.2 and except to the extent any such security interest cannot be
granted under applicable laws), including, without limitation, a lien on the
Redemption Account and all of the funds and any other assets deposited therein.
Such actions shall include, without limitation, (i) delivery to Agent of
certificates (which certificates shall be registered in the name of Agent or
properly endorsed in blank for transfer or accompanied by irrevocable undated
stock powers duly endorsed in blank, all in form and substance satisfactory to
Agent) representing the capital stock pledged pursuant to the Pledge Agreements
and promissory notes duly endorsed and delivery to Agent of all other
instruments (duly endorsed where appropriate) evidencing the Collateral, (ii)
delivery to Agent of Uniform Commercial Code financing statements as to the
Collateral for all jurisdictions as may be necessary or desirable to perfect
the security interests in the Collateral, (iii) delivery to Agent of the
Company Trademark Security Agreement and the Subsidiary Trademark Security
Agreements together with the cover sheet required for filing with the United
States Patent and Trademark Office and (iv) delivery to Agent of such other
documents and instruments that Agent deems
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necessary or advisable to establish, preserve and perfect the first priority
Liens granted to Agent on behalf of Lenders under the Collateral Documents.
D. INITIAL PUBLIC OFFERING. On or prior to the Closing Date, (i)
Holdings shall have issued and sold Holdings Common Stock pursuant to the IPO,
the aggregate gross cash proceeds of Holdings Common Stock issued on the
Closing Date received by Holdings or its underwriters shall be not less than
$100,000,000, and (ii) Holdings shall have used such proceeds to (x) deposit
approximately $50,780,149 into the Redemption Account so that the Holdings
Preferred Stock can be redeemed and all accrued and unpaid dividends with
respect thereto through and including November 2, 1996 and all accrued and
unpaid interest with respect thereto through and including the Redemption Date
can be paid pursuant to the Preferred Stock Redemption Agreement, (y) pay
Transaction Costs, and (z) to contribute the remaining proceeds to Company (the
"CONTRIBUTION AMOUNT"), and the IPO shall have been consummated pursuant to
terms and conditions satisfactory to Arrangers. Holdings shall have issued and
sold not more than 30% (on a fully diluted basis) of Holdings Common Stock in
the IPO and upon consummation of the IPO, no person or group (other than
Permitted Holders) shall own or control, directly or indirectly, more than 10%
of the issued and outstanding Holdings Voting Stock. The Registration
Statement shall have been declared effective under the Securities Act of 1933,
as amended, and no stop order suspending the effectiveness of the Registration
Statement shall have been issued or threatened by the Securities and Exchange
Commission. Holdings shall have delivered to Agent an Officers' Certificate in
form and substance reasonably satisfactory to Agent setting forth in reasonable
detail the percentage of the issued and outstanding Holdings Common Stock (on a
fully diluted basis) issued and sold by Holdings on the Closing Date.
E. ARRANGEMENTS REGARDING REDEMPTION OF HOLDINGS PREFERRED
STOCK. On or before the Closing Date, (a) Holdings and the Preferred Stock
Holder shall have entered into the Preferred Stock Redemption Agreement
pursuant to which Holdings shall redeem, on the Redemption Date, all of the
issued and outstanding Holdings Preferred Stock for an aggregate amount
(including all accrued dividends and interest relating thereto) not to exceed
$51,655,749 (including $875,000 paid to the Preferred Stock Holder on the
Closing Date), (b) Holdings and the Preferred Stock Holder shall have entered
into the Release Agreement, and (c) Holdings shall have deposited approximately
$50,780,149 in the Redemption Account to redeem the Holdings Preferred Stock
pursuant to the Preferred Stock Redemption Agreement and to make all related
dividend and interest payments, in each case all on terms satisfactory to the
Arrangers. On the Closing Date, Agent shall have received evidence in form and
substance satisfactory to Agent that (i) dividends on the Holdings Preferred
Stock will stop accruing on November 2, 1996, and (ii) the aggregate amount of
funds held in the Redemption Account does not exceed $50,780,149.
F. REFINANCING OF EXISTING CREDIT AGREEMENT; EXISTING
LETTERS OF CREDIT. On the Closing Date, Company shall have repaid in full all
amounts outstanding under
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the Existing Credit Agreement and shall have terminated any commitments to lend
or make other extensions of credit thereunder. Company shall have delivered to
Agent all termination statements, assignment documents, satisfactions and
releases as to any financing statements, mortgages, deeds of trust and
assignments which shall release all liens securing any and all indebtedness
under the Existing Credit Agreement. Company shall have furnished to Agent
copies of all Existing Letters of Credit and all amendments to such Existing
Letters of Credit. Company shall have paid to the lenders with respect to such
Existing Letters of Credit all fees and other amounts owing with respect
thereto to but excluding the Closing Date.
G. EVIDENCE OF REMAINING INDEBTEDNESS. On the Closing Date,
Agent shall have received an Officers' Certificate of Company stating that
after giving effect to the transaction described in subsection 4.1F, the
Indebtedness of the Loan Parties (other than Indebtedness under the Loan
Documents and the Senior Subordinated Note Indenture) shall consist of (i)
approximately $6,300,000 of outstanding principal amount of Existing Funded
Debt described in Part I of Schedule 7.1 annexed hereto and (ii) obligations
under existing Capital Leases of all Loan Parties as of the Closing Date (which
shall be described in Part I of Schedule 7.1 annexed hereto) and reflected as
capital lease obligations on the consolidated balance sheets of Holdings
prepared in accordance with GAAP do not exceed $160,000,000. The terms and
conditions of all such remaining Indebtedness shall be in form and in substance
satisfactory to Agent and Arrangers.
H. TERMINATION OF CONSULTING AGREEMENT; MANAGEMENT
AGREEMENT. On or prior to the Closing Date, (i) Holdings and Company shall
have terminated the Consulting Agreement and shall have paid to Yucaipa all
amounts owing thereunder or owing in connection with the termination thereof
(including without limitation a termination fee) in an aggregate amount not to
exceed $11,000,000, all on terms and conditions satisfactory to Arrangers, and
(ii) Holdings and Company shall have entered into the Management Agreement with
Yucaipa, which Management Agreement shall be in form and substance satisfactory
to Arrangers.
I. RELATED TRANSACTION DOCUMENTS; SPECIFIED EXISTING
DOCUMENTS. (i) Agent shall have received a fully executed copy of each Related
Transaction Document and each Specified Existing Document, in each case as
amended, supplemented, restated or otherwise modified on or prior to the
Closing Date, and each of the Related Transaction Documents and each of the
Specified Existing Documents, in each case as so amended, supplemented,
restated or otherwise modified, shall be in full force and effect and shall be
in form and substance satisfactory to Agent and shall not have been modified or
waived in any respect without the consent of Agent, (ii) none of Holdings and
its Subsidiaries shall have failed in any material respect to perform any
material obligation or covenant required by any Related Transaction Documents
to be performed or complied with by it on or before the Closing Date, (iii) all
conditions to the Transactions (including without limitation any necessary
third party consents and approvals) shall have been satisfied or waived
pursuant to all applicable terms and
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proceedings and by Agent, and (iv) Agent shall have received an Officers'
Certificate from Company in form and substance satisfactory to Agent to the
effect set forth in this sentence, which Officers' Certificate shall have
attached thereto a copy of each such Related Transaction Document (together
with a copy of any amendment, supplement, restatement or other modification
thereof entered into on or prior to the Closing Date) as in effect on the
Closing Date and a copy of each amendment, supplement, restatement or other
modification of any Specified Existing Documents listed on Schedule 5.18
annexed hereto, as in effect on the Closing Date.
J. OPINIONS OF COUNSEL. On the Closing Date, Lenders and
their respective counsel shall have received (i) originally executed copies of
one or more favorable written opinions of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the
Loan Parties, and ▇▇▇▇▇▇ ▇▇▇▇, General Counsel of Company, in form and
substance reasonably satisfactory to Agent and Arrangers and their counsel,
dated as of the Closing Date and setting forth substantially the matters in the
opinions designated in Exhibit VIII-A and Exhibit VIII-B, respectively, annexed
hereto and as to such other matters as Agent acting on behalf of Lenders or
either Arranger may reasonably request, together with evidence satisfactory to
Agent and Arrangers that Company has requested such counsel to deliver such
opinions to Lenders, and (ii) copies of all opinions issued by counsel to any
Loan Party or issued to any Loan Party relating to the Transactions (whether
pursuant to any of the Related Transaction Documents or otherwise), each of
which opinions shall be accompanied by a written authorization from counsel
issuing such opinion stating that Agent, Arrangers and Lenders may rely on such
opinions as though such opinions were addressed to Agent, Arrangers and
Lenders.
K. OPINIONS OF AGENT'S AND ARRANGERS' COUNSEL. On the
Closing Date, Lenders shall have received originally executed copies of one or
more favorable written opinions of O'Melveny & ▇▇▇▇▇, counsel to Agent and
Arrangers, dated as of the Closing Date, substantially in the form of Exhibit
IX annexed hereto and as to such other matters as Arrangers and Agent acting on
behalf of Lenders may reasonably request.
L. PARENT MERGER. On the Closing Date, the Parent Merger
Certificate shall be in full force and effect and none of the terms thereof
(including any conditions to the consummation of the Parent Merger contained
therein) shall have been modified or waived in any material respect without the
consent of Agent, Arrangers and Requisite Lenders. On the Closing Date,
Company shall have provided evidence in form and substance satisfactory to
Agent and Arrangers that the Parent Merger has been consummated and has become
effective in all respects in accordance with the Parent Merger Certificate. On
the Closing Date, Company shall have provided evidence in form and substance
satisfactory to Agent and Arrangers that after giving effect to the Parent
Merger, Holdings owns 100% of the outstanding capital stock of Company. On the
Closing Date, Company shall have cancelled the Parent Intercompany Note.
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M. AUDITOR'S LETTER. On or prior to the Closing Date, Agent
shall have received an executed Auditor's Letter.
N. FEES. On or prior to the Closing Date, Company shall
have paid to Agent and Arrangers, for distribution (as appropriate) to Agent,
Arrangers and Lenders, the fees payable on the Closing Date referred to in
subsection 2.3.
O. NO MATERIAL ADVERSE CHANGE. Since October 28, 1995, no
material adverse change (in the sole opinion of Agent) in the business, assets,
liabilities, results of operations, properties, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries, taken as a whole,
shall have occurred.
P. NO DISRUPTION OF FINANCIAL AND CAPITAL MARKETS. There
shall have been no material adverse change after September 5, 1996 to the
syndication markets for credit facilities similar in nature to the credit
facilities provided herein and there shall not have occurred and be continuing
a material disruption of or material adverse change in financial, banking or
capital markets that would have an adverse effect on such syndication market,
in each case as determined by Arrangers in their sole discretion.
Q. FINANCIAL STATEMENTS. On or prior to the Closing Date,
Agent, Arrangers and Lenders shall have received (i) the audited consolidated
balance sheets of Holdings and its Subsidiaries as of October 28, 1995, and the
related consolidated statements of income, stockholders' equity and cash flows
of Company and its Subsidiaries for the Fiscal Year then ended, (ii) the
unaudited consolidated balance sheets of Company and its Subsidiaries as of
January 20, 1996, April 13, 1996, and August 3, 1996, and the related
consolidated statements of income, stockholders' equity and cash flows of
Company and its Subsidiaries for the Fiscal Quarters then ended, (iii) the
unaudited consolidated balance sheets of Company and its Subsidiaries as at the
last day of each of the three most recently ended Fiscal Periods that ended
more than 30 days prior to the Closing Date and the related consolidated
statements of income and cash flows of Holdings and its Subsidiaries for each
such Fiscal Period then ended and for the fiscal year-to-date fiscal period
ended on the last day of the most recent of such Fiscal Periods, (iv) projected
consolidated financial statements (including balance sheets and statements of
operations and cash flows) of Holdings and its Subsidiaries for the seven-year
period after the Closing Date, and (v) a pro forma consolidated balance sheet
of Holdings and its Subsidiaries based on financial statements dated as of
August 3, 1996, after giving pro forma effect to the IPO and the other
Transactions to be consummated on the Closing Date, each of which shall be (a)
substantially consistent with any financial statements for the same periods
delivered to Arrangers prior to September 5, 1996 and, in the case of any such
projected financial statements for subsequent periods, substantially consistent
with any projected financial results for such periods delivered to Arrangers
prior to September 5, 1996, and (b) otherwise in form and substance
satisfactory to the Arrangers.
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R. SOLVENCY ASSURANCES. On or prior to the Closing Date,
Agent, Arrangers and Lenders shall have received a certificate from the chief
financial officer of Company substantially in the form of Exhibit XXIV annexed
hereto, in each case supporting the conclusions that, after giving effect to
the IPO and the other Transactions, Company will not be insolvent or will not
be rendered insolvent by the indebtedness incurred in connection therewith, or
be left with unreasonably small capital with which to engage in its businesses
or have incurred debts beyond its ability to pay such debts as they mature.
S. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF
AGREEMENTS. Each of Holdings and Company shall have delivered to Agent an
Officers' Certificate, in form and substance satisfactory to Agent, to the
effect that the representations and warranties in Section 5 hereof are true,
correct and complete in all material respects on and as of the Closing Date to
the same extent as though made on and as of that date and that each Loan Party
shall have performed in all material respects all agreements and satisfied all
conditions which this Agreement provides shall be performed or satisfied by it
on or before the Closing Date except as otherwise disclosed to and agreed to in
writing by Agent, Arrangers and Requisite Lenders.
T. GOVERNMENTAL AUTHORIZATIONS. Loan Parties shall have
obtained all Governmental Authorizations, if any, required under any applicable
law (including without limitation the Illinois Responsible Property Transfer
Act).
U. CONSENTS. On or prior to the Closing Date, Company shall
have delivered to Agent such other consents, waivers, amendments or approvals
as any of the Loan Parties is required to obtain in connection with any
material agreement in order to enter into and carry out its obligations under
this Agreement, the other Loan Documents and the Related Transaction Documents
and to consummate the Transactions, including, without limitation, consents
from the holders of the Existing Funded Debt, and each other lender to any of
the foregoing Persons as may be required, in each case in form and substance
satisfactory to Agent.
V. TRANSACTION COSTS. On or prior to the Closing Date,
Agent and Arrangers shall have received evidence in form and substance
satisfactory to Agent and Arrangers that the aggregate amount of all
Transaction Costs paid or payable by Loan Parties is approximately $11,000,000.
W. INSURANCE CERTIFICATES. On or prior to the Closing Date,
Agent shall have received insurance certificates (or other satisfactory
evidence of endorsements) naming Agent as loss payee or additional insured
under all insurance policies of each Loan Party, in each case in form and
substance satisfactory to Agent.
X. COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby, by the other Loan Documents and by the Related Transaction
Documents and all documents inciden-
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tal thereto not previously found acceptable by Agent, acting on behalf of
Lenders, and its counsel shall be satisfactory in form and substance to Agent
and such counsel, and Agent and such counsel shall have received all such
counterpart originals or certified copies of such documents as Agent may
reasonably request.
4.2 CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding
Date (other than any Funding Date relating to any Refunded Swing Line Loans)
are subject to the following further conditions precedent:
A. Agent shall have received before that Funding Date, in
accordance with the provisions of subsection 2.1B, an originally executed
Notice of Borrowing, in each case signed by the chief executive officer, the
chief financial officer or the treasurer of Company or by any executive officer
or cash management personnel of Company designated by any of the
above-described officers on behalf of Company in a writing delivered to Agent.
B. In the case of the initial Revolving Term Loans in an
aggregate principal amount not exceeding $100,000,000, on or prior to the
Funding Date for such Revolving Term Loans, the Term Loans shall have been
made, and at least one Business Day prior to the Funding Date for any other
Revolving Term Loans, any Revolving Loans or any Swing Line Loans, the Term
Loans shall have been made.
C. As of that Funding Date:
(i) The representations and warranties contained
herein and in the other Loan Documents shall be true, correct and
complete in all material respects on and as of that Funding Date
to the same extent as though made on and as of that date, except
to the extent such representations and warranties specifically
relate to an earlier date, in which case such representations and
warranties shall have been true, correct and complete in all
material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated
by such Notice of Borrowing that would constitute an Event of
Default or a Potential Event of Default;
(iii) Each Loan Party shall have performed in all
material respects all agreements and satisfied all conditions
which this Agreement provides shall be performed or satisfied by
it on or before that Funding Date;
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(iv) No order, judgment or decree of any court,
arbitrator or governmental authority shall purport to enjoin or
restrain any Lender from making the Loans to be made by it on that
Funding Date;
(v) The making of the Loans requested on such Funding
Date shall not violate any law including, without limitation,
Regulation G, Regulation T, Regulation U or Regulation X of the
Board of Governors of the Federal Reserve System; and
(vi) There shall not be pending or, to the knowledge
of any of the Loan Parties (other than Land Trusts), threatened,
any action, suit, proceeding, governmental investigation or
arbitration against or affecting any of the Loan Parties or any
property of any of the Loan Parties that has not been disclosed by
Company in writing pursuant to subsection 5.6 or 6.1(x) prior to
the making of the last preceding Loans (or, in the case of the
initial Loans, prior to the execution of this Agreement), and
there shall have occurred no development not so disclosed in any
such action, suit, proceeding, governmental investigation or
arbitration so disclosed, that, in either event, in the opinion of
Agent or of Requisite Lenders, would be expected to have a
Material Adverse Effect; and no injunction or other restraining
order shall have been issued and no hearing to cause an injunction
or other restraining order to be issued shall be pending or
noticed with respect to any action, suit or proceeding seeking to
enjoin or otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, the Transactions, the
transactions contemplated by this Agreement or the making of Loans
hereunder.
4.3 CONDITIONS TO LETTERS OF CREDIT.
The issuance of any Letter of Credit hereunder (whether
or not the applicable Issuing Lender is obligated to issue such Letter of
Credit) is subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter
of Credit pursuant to this Agreement, the Term Loans shall have been made.
B. On or before the date of issuance of such Letter of
Credit, Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Notice of Issuance of Letter of
Credit, in each case signed by the chief executive officer, the chief financial
officer or the treasurer of Company or by any executive officer or cash
management personnel of Company designated by any of the above-described
officers on behalf of Company in a writing delivered to Agent, together with
all other information specified in subsection 3.1B(i) and such other documents
or information as the applicable Issuing Lender may reasonably require in
connection with the issuance of such Letter of Credit.
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C. On the date of issuance of such Letter of Credit, all
conditions precedent described in subsection 4.2C shall be satisfied to the
same extent as if the issuance of such Letter of Credit were the making of a
Loan and the date of issuance of such Letter of Credit were a Funding Date.
SECTION 5. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement
and to make the Loans, to induce Issuing Lenders to issue Letters of Credit and
to induce other Lenders to purchase participations therein, each of Holdings
and Company represents and warrants to each Lender, on the date of this
Agreement, on each Funding Date and on the date of issuance of each Letter of
Credit, that the following statements are true, correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Loan Party (other than
Land Trusts) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation. Each Land Trust
is an Illinois land trust duly formed and validly existing under the laws of
the State of Illinois. Each Loan Party has all requisite corporate or trust
power and authority to own and operate its properties, to carry on its business
as now conducted and as proposed to be conducted, to enter into the Loan
Documents and the Related Transaction Documents, and to carry out the
transactions contemplated thereby, in each case to the extent it is a party
thereto.
B. QUALIFICATION AND GOOD STANDING. Each Loan Party (other
than Land Trusts) is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its present business and operations, except in jurisdictions where the failure
to be so qualified or in good standing has not had and will not have, either
individually or in the aggregate for all such jurisdictions, a Material Adverse
Effect.
C. CONDUCT OF BUSINESS. Each Loan Party is engaged only in
the businesses permitted to be engaged in pursuant to subsection 7.14.
D. SUBSIDIARIES. All of the Subsidiaries of Holdings as of
the Closing Date are identified in Schedule 5.1 annexed hereto, as said
Schedule 5.1 may be supplemented from time to time pursuant to the provisions
of subsection 6.1 (xvii). The capital stock of each of the Subsidiaries of
Holdings identified in Schedule 5.1 annexed hereto is duly authorized, validly
issued, fully paid and nonassessable and none of such capital stock constitutes
Margin Stock. Each of the Subsidiaries of Holdings identified in Schedule 5.1
annexed hereto is a corporation duly organized, validly existing and in
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good standing under the laws of its respective jurisdiction of incorporation
set forth therein, has all requisite corporate power and authority to own and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted, and is qualified to do business and in good standing
in every jurisdiction where its assets are located and wherever necessary to
carry out its business and operations, in each case except where failure to be
so qualified or in good standing or to have such corporate power and authority
has not had and will not have, either individually or in the aggregate for all
such failures, a Material Adverse Effect. Schedule 5.1 annexed hereto
correctly sets forth for Holdings and each of its Subsidiaries (i) the
ownership interest of Holdings and each of its Subsidiaries in each of the
Subsidiaries of Holdings identified therein, (ii) the jurisdiction of
incorporation of Holdings and each such Subsidiary, (iii) the number of issued
and outstanding shares of capital stock of Holdings and each such Subsidiary
(both before and after giving effect to the Transactions), and (iv) whether any
such Subsidiary is inactive. The aggregate assets and the annual revenues of
all Subsidiaries identified as inactive on Schedule 5.1 annexed hereto does and
will not exceed $750,000 and $750,000, respectively.
5.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Loan Documents and the Related Transaction Documents have
been duly authorized by all necessary corporate or trust action on the part of
each Loan Party a party thereto.
B. NO CONFLICT. The execution, delivery and performance by
each Loan Party of the Loan Documents and the Related Transaction Documents to
which such Loan Party is a party, and the consummation of the Transactions and
the other transactions contemplated by the Loan Documents and the Related
Transaction Documents do not and will not (i) violate any provision of any law
or any governmental rule or regulation applicable to any of the Loan Parties,
the Certificate or Articles of Incorporation or Bylaws of any of the Loan
Parties or any order, judgment or decree of any court or other agency of
government binding on any of the Loan Parties, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of any of the Loan Parties which could
reasonably be expected to result in a Material Adverse Effect, (iii) result in
or require the creation or imposition of any Lien upon any of the properties or
assets of any of the Loan Parties (other than any Liens created under any of
the Loan Documents in favor of Agent on behalf of Lenders), or (iv) require any
approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of any of the Loan Parties, except for such approvals or
consents which will be obtained on or before the Closing Date (or, in the case
of any Loan Document executed and delivered after the Closing Date, on or
before such date of execution and delivery) and disclosed in writing to Lenders
or such approvals or consents the failure to obtain could not reasonably be
expected to individually or in the aggregate result in a Material Adverse
Effect.
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C. GOVERNMENTAL CONSENTS. The execution, delivery and
performance by each Loan Party of the Loan Documents and the Related
Transaction Documents to which such Loan Party is a party, and the consummation
of the Transactions and the other transactions contemplated by the Loan
Documents and the Related Transaction Documents do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body, except for (i) filings and recordings required in connection with the
perfection of the security interests granted pursuant to the Loan Documents and
(ii) such registrations, consents, approvals, notices or other actions which
have been obtained on or before the Closing Date and are described on Schedule
5.2C annexed hereto.
D. BINDING OBLIGATION. Each of the Loan Documents and the
Related Transaction Documents to which any Loan Party is a party has been duly
executed and delivered by each Loan Party thereto and is the legally valid and
binding obligation of such Loan Party, enforceable against such Loan Party in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.
E. VALID ISSUANCE OF HOLDINGS COMMON STOCK, HOLDINGS
PREFERRED STOCK AND THE SENIOR SUBORDINATED NOTES.
(i)(A) Holdings Common Stock. As of the Closing Date,
after giving effect to the Transactions, there are 21,359,035 shares of issued
and outstanding Holdings Common Stock and no other shares of any common stock
of Holdings is issued and outstanding. Such shares of Holdings Common Stock
have been duly and validly issued, fully paid and nonassessable. Except as
provided in the Shareholders Agreement with respect to the Holdings Common
Stock and except as provided in the Holdings Certificate of Designation with
respect to the Holdings Preferred Stock, no stockholder of Holdings has or will
have any preemptive rights to subscribe for any additional equity Securities of
Holdings. Any issuance and sale of Holdings Common Stock, upon such issuance
and sale, will either (a) have been registered or qualified under applicable
federal and state securities laws or (b) be exempt therefrom.
(B) Holdings Preferred Stock. As of the Closing
Date, after giving effect to the Transactions, there are 40,000 shares of
issued and outstanding Holdings Preferred Stock and no other shares of any
preferred stock of Holdings is issued and outstanding. Such shares of Holdings
Preferred Stock have been duly and validly issued, fully paid and
nonassessable. Except as provided in the Shareholders Agreement with respect
to the Holdings Common Stock and except as provided in the Holdings Certificate
of Designation with respect to the Holdings Preferred Stock, no stockholder of
Holdings has or will have any preemptive rights to subscribe for any additional
equity Securities of Holdings. Any issuance and sale of Holdings Preferred
Stock, upon such
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issuance and sale, will either (a) have been registered and qualified under
applicable federal and state securities laws or (b) be exempt therefrom.
(ii) Senior Subordinated Notes. Company had the
corporate power and authority to issue the Senior Subordinated Notes
outstanding as of the Closing Date at the time of issuance thereof. The Senior
Subordinated Notes are the legally valid and binding obligations of Company,
enforceable against Company in accordance with their respective terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or limiting creditors' rights generally or by
equitable principles relating to enforceability. The subordination provisions
of the Senior Subordinated Notes and of the Senior Subordinated Note Indenture
are enforceable against the holders thereof in accordance with their respective
terms and the Loans and all other monetary Obligations hereunder are and will
be within clauses (a)(i) and (a)(ii) of the definition of "Permitted
Indebtedness", within the definition of "Senior Indebtedness" and within clause
(i) of the definition of "Designated Senior Indebtedness", in each case
included in such provisions or otherwise included in the Senior Subordinated
Note Indenture. The Term Loans, the Revolving Term Loans and all other
monetary Obligations relating thereto or to the Revolving Term Commitments are
and will be within clause (a)(i) of the definition of "Permitted Indebtedness",
as defined in the Senior Subordinated Note Indenture and the Revolving Loans
and all other monetary Obligations relating thereto or to the Revolving Loan
Commitments, Swing Line Loans, Swing Line Loan Commitments or the Letters of
Credit are and will be within clause (a)(ii) of the definition of "Permitted
Indebtedness", as defined in the Senior Subordinated Note Indenture. The
monetary Obligations of the Company's Subsidiaries under the Loan Documents are
within the definition of "Guarantor Senior Indebtedness", within the definition
of "Designated Senior Indebtedness", and within clauses (a)(i) and (a)(ii) of
the definition of "Permitted Indebtedness", in each case included in the
subordination provisions of the Senior Subordinated Notes and of the Senior
Subordinated Note Indenture or otherwise included in the Senior Subordinated
Note Indenture. The Senior Subordinated Notes either (a) have been registered
or qualified under applicable federal and state securities laws or (b) are
exempt therefrom.
5.3 FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders'
request, the following financial statements and information: (i) the audited
consolidated balance sheets of Holdings and its Subsidiaries as at October 28,
1995, and the related consolidated statements of income, stockholders' equity
and cash flows of Company and its Subsidiaries for the Fiscal Year then ended,
(ii) the unaudited consolidated balance sheets of Company and its Subsidiaries
as of January 20, 1996, April 13, 1996, and August 3, 1996, and the related
consolidated statements of income, stockholders' equity and cash flows of
Company and its Subsidiaries for the Fiscal Quarters then ended, and (iii) the
unaudited consolidated balance sheets of Company and its Subsidiaries as at the
last day of each of the three most recently ended Fiscal Periods that ended
more than 30
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days prior to the Closing Date and the related consolidated statements of
income and cash flows of Company and its Subsidiaries for each such Fiscal
Period then ended and for the fiscal year-to-date fiscal period ended on the
last day of the most recent of such Fiscal Periods. All such statements were
prepared in conformity with GAAP and fairly present the financial position (on
a consolidated basis) of the entities described in such financial statements as
at the respective dates thereof and the results of operations and cash flows
(on a consolidated basis) of the entities described therein for each of the
periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments.
As of the Closing Date, none of the Loan Parties has (and will not following
the funding of the initial Loans) any Contingent Obligation, contingent
liability or liability for taxes, long-term lease or unusual forward or
long-term commitment that is not reflected in the foregoing financial
statements or the notes thereto and which in any such case is material in
relation to the business, operations, properties, assets, condition (financial
or otherwise) or prospects of the Loan Parties, taken as a whole, other than
(i) the incurrence of the Obligations and (ii) contingent obligations or
liabilities for taxes, long-term leases or forward or long-term commitments
disclosed on Schedule 5.3 annexed hereto. Immediately prior to and immediately
after the Transactions, BDI and BPI own no assets other than Cash and Cash
Equivalents or promissory notes issued by Company, which Cash and Cash
Equivalents or promissory notes are in the aggregate approximately $90,000 for
BDI and $260,000 for BPI.
5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Since October 28, 1995, no event or change has occurred
that has caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect. Since October 28, 1995, none of the Loan Parties has
directly or indirectly declared, ordered, paid or made, or set apart any sum or
property for, any Restricted Junior Payment or agreed to do so except as
permitted by subsection 7.5.
5.5 TITLE TO PROPERTIES; LIENS.
Each Loan Party has (i) good, sufficient and legal title,
subject only to Liens permitted under subsection 7.2, to (in the case of fee
interests in real property), (ii) valid leasehold interests in (in the case of
leasehold interests in real or personal property), or (iii) good title to (in
the case of all other personal property) all of its properties and assets
reflected in the financial statements referred to in subsection 5.3 or in the
most recent financial statements delivered pursuant to subsection 6.1, in each
case except for assets disposed of since the date of such financial statements
in the ordinary course of business or as otherwise permitted under subsection
7.7. Except as permitted by this Agreement, all such properties and assets are
free and clear of Liens.
99 (Credit Agreement)
107
5.6 LITIGATION; ADVERSE FACTS.
Except as described in Schedule 5.6 annexed hereto, there
are no actions, suits, proceedings, arbitrations or governmental investigations
(whether or not purportedly on behalf of any of the Loan Parties) at law or in
equity or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, pending or, to the knowledge of any Loan Party (other than Land
Trusts), threatened against or affecting any of the Loan Parties or any
property of any of the Loan Parties that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect. No Loan
Party is (i) in violation of any applicable laws that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
or (ii) subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state,
municipal or other governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all
material tax returns and reports of the Loan Parties required to be filed by
any of them have been timely filed, and all material taxes, assessments, fees
and other governmental charges upon the Loan Parties and upon their respective
properties, assets, income, businesses and franchises which are due and payable
have been paid when due and payable. No Loan Party (other than Land Trusts)
knows of any material proposed tax assessment against any of the Loan Parties
which is not being actively contested by such Loan Party in good faith and by
appropriate proceedings; provided that such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have
been made or provided therefor.
5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.
A. No Loan Party is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any of its Contractual Obligations, and no condition exists that,
with the giving of notice or the lapse of time or both, would constitute such a
default, except where the consequences, direct or indirect, of such default or
defaults, if any, individually or in the aggregate, would not have a Material
Adverse Effect.
B. No Loan Party is a party to or is otherwise subject to
any agreements or instruments or any charter or other internal restrictions
which, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect.
100 (Credit Agreement)
108
5.9 GOVERNMENTAL REGULATION.
No Loan Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act or the Investment Company Act of 1940 or under any other federal
or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the
Obligations unenforceable.
5.10 SECURITIES ACTIVITIES.
A. No Loan Party is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not
more than 25% of the value of the assets (either of Holdings only or of the
Loan Parties on a consolidated basis) subject to the provisions of subsection
7.2 or 7.7 or subject to any restriction contained in any agreement or
instrument, between Holdings or any other Loan Party and any Lender or any
Affiliate of any Lender, relating to Indebtedness and within the scope of
subsection 8.2, will be Margin Stock.
5.11 EMPLOYEE BENEFIT PLANS.
A. Each of the Loan Parties and each of their respective
ERISA Affiliates are in material compliance with all applicable provisions and
requirements of ERISA and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all
their material obligations under each Employee Benefit Plan.
B. No ERISA Events have occurred or are reasonably expected
to occur which individually or in the aggregate resulted in or might reasonably
be expected to result in a liability of any of the Loan Parties or any of their
respective ERISA Affiliates in excess of $1,500,000 during the term of this
Agreement.
C. Except as disclosed on Schedule 5.11 annexed hereto and
except to the extent required under Section 4980B of the Internal Revenue Code,
no Employee Benefit Plan provides health or welfare benefits (through the
purchase of insurance or otherwise) for any retired or former employees of any
of the Loan Parties or any of their respective ERISA Affiliates.
D. As of the most recent valuation date for any Pension
Plan, the Amount of Unfunded Benefit Liabilities individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation any
Pension Plans which have a negative Amount of Unfunded Benefit Liabilities),
does not exceed $3,000,000.
101 (Credit Agreement)
109
5.12 CERTAIN FEES.
Except as disclosed on Schedule 5.12 annexed hereto, no
broker's or finder's fee or commission will be payable with respect to this
Agreement or any of the transactions contemplated hereby or by the other
Transactions, and each of Holdings and Company hereby indemnifies Lenders
against, and agrees that it will hold Lenders harmless from, any claim, demand
or liability for any such broker's or finder's fees alleged to have been
incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.
5.13 ENVIRONMENTAL PROTECTION.
Except as set forth in Schedule 5.13 annexed hereto:
(i) the operations of each of the Loan Parties
(including, without limitation, all operations and conditions at
or in the Facilities) comply in all material respects with all
Environmental Laws;
(ii) each of the Loan Parties has obtained all
Governmental Authorizations under Environmental Laws necessary to
their respective operations, and all such Governmental
Authorizations are in good standing, and each of the Loan Parties
is in compliance with all material terms and conditions of such
Governmental Authorizations;
(iii) no Loan Party has received (a) any notice or
claim to the effect that it is or may be liable to any Person as a
result of or in connection with any Hazardous Materials except as
would not reasonably be expected to have a Material Adverse Effect
or (b) any letter or request for information under Section 104 of
the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Section 9604) or comparable state laws
regarding any matter which could reasonably be expected to result
in a Material Adverse Effect, and, to the best of Holdings' or
Company's knowledge, none of the operations of any of the Loan
Parties is the subject of any federal or state investigation
relating to or in connection with any Hazardous Materials at any
Facility or at any other location;
(iv) none of the operations of any of the Loan Parties
is subject to any judicial or administrative proceeding alleging
the violation of or liability under any Environmental Laws which
if adversely determined could reasonably be expected to have a
Material Adverse Effect;
(v) none of the Loan Parties or any of their
respective Facilities or operations are subject to any outstanding
written order or agreement with any governmental authority or
private party relating to (a) any Environmental Laws
102 (Credit Agreement)
110
or (b) any Environmental Claims which could reasonably be expected
to result in a liability to Company or any of its Subsidiaries
without giving effect to any indemnification provided pursuant to
Section 5.9 of the Stock Purchase Agreement in excess of
$10,000,000 individually or in the aggregate;
(vi) none of the Loan Parties has any contingent
liability in connection with any Release of any Hazardous
Materials by any of the Loan Parties which could reasonably be
expected to result in a liability to Company or any of its
Subsidiaries without giving effect to any indemnification provided
pursuant to Section 5.9 of the Stock Purchase Agreement in excess
of $10,000,000 individually or in the aggregate;
(vii) none of the Loan Parties or to the best knowledge
of Holdings or Company, any predecessor of any of the Loan Parties
has filed any notice under any Environmental Law indicating past
or present treatment or Release of Hazardous Materials at any
Facility except as would not reasonably be expected to have a
Material Adverse Effect, and none of Loan Parties' operations
involves the generation, transportation, treatment, storage or
disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-
270 or any state equivalent other than in compliance in all
material respects with all Environmental Laws;
(viii) no Hazardous Materials exist on, under or about
any Facility in a manner that has a reasonably possibility of
giving rise to an Environmental Claim having a Material Adverse
Effect, and no Loan Party has filed any notice or report of a
Release of any Hazardous Materials that has a reasonable
possibility of giving rise to an Environmental Claim having a
Material Adverse Effect;
(ix) none of the Loan Parties or, to the best
knowledge of Holdings or Company, any of their respective
predecessors has disposed of any Hazardous Materials in a manner
that has a reasonable possibility of giving rise to an
Environmental Claim having a Material Adverse Effect;
(x) no unpermitted underground storage tanks or
surface impoundments are on or at any Facility; and
(xi) no material Lien in favor of any Person relating
to or in connection with any Environmental Claim has been filed or
has been attached to any Facility.
Notwithstanding anything in this subsection 5.13 to the contrary, no event or
condition has occurred with respect to any of the Loan Parties relating to any
Environmental Laws or any Release of Hazardous Materials at any Facility or any
other location, including,
103 (Credit Agreement)
111
without limitation, any matter disclosed on Schedule 5.13 annexed hereto,
which, individually, or in the aggregate, has had a Material Adverse Effect.
5.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or
threatened involving any of the Loan Parties that could reasonably be expected
to have a Material Adverse Effect.
5.15 SOLVENCY.
Each of the Loan Parties (other than Land Trusts) is and,
upon the incurrence of any Obligations by Company on any date on which this
representation is made, will be, Solvent.
5.16 DISCLOSURE.
No representation or warranty of any of the Loan Parties
contained in any Loan Document, or in any other document, certificate or
written statement furnished to Lenders by or at the direction of any Loan Party
for use in connection with the transactions contemplated by this Agreement
contains any untrue statement of a material fact or omits to state a material
fact (known to Holdings or Company, in the case of any document not furnished
by it) necessary in order to make the statements contained herein or therein
not misleading in light of the circumstances in which the same were made. Any
projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by Holdings or
Company, as the case may be, to be reasonable at the time made, it being
recognized by Lenders that such projections as to future events are not to be
viewed as facts and that actual results during the period or periods covered by
any such projections may differ from the projected results. There are no facts
known (or which should upon the reasonable exercise of diligence be known) to
Holdings or Company (other than matters of a general economic nature) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect and that have not been disclosed herein or in such
other documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby. Without limiting the
generality of the foregoing, as of the Closing Date, the financial condition of
Company and its Subsidiaries is in all material respects as set forth on the
pro forma balance sheet of Holdings and its Subsidiaries dated as of the
Closing Date delivered to Agent, Arrangers and Lenders pursuant to subsection
4.1Q.
5.17 INTELLECTUAL PROPERTY.
A. All Intellectual Property as of the Closing Date is
identified on Schedule 5.17 annexed hereto. Except as set forth on Schedule
5.17 annexed hereto, Company
104 (Credit Agreement)
112
and its Subsidiaries own, or are licensed to use, the Intellectual Property and
all such Intellectual Property is fully protected and duly and properly
registered, filed or issued in the appropriate office and jurisdictions for
such registrations, filing or issuances, and the Loan Parties own all of the
right, title and interest in and to the "Dominick's" trademark, other
trademarks set forth on Schedule A to the Company Trademark Security Agreement
or the Subsidiary Trademark Security Agreements, as the case may be, and all of
the other Intellectual Property under the applicable laws of the United States
free and clear of any Lien (other than the Liens created in favor of Agent on
behalf of Lenders pursuant to the Loan Documents).
B. Except as disclosed in Schedule 5.17, no material claim
has been asserted by any Person with respect to the use of any such
Intellectual Property, or challenging or questioning the validity or
effectiveness of any such Intellectual Property. Except as disclosed in
Schedule 5.17, the use of such Intellectual Property by Company or any of its
Subsidiaries does not infringe on the rights of any Person, subject to such
claims and infringements as do not, in the aggregate, give rise to any
liabilities on the part of Company or any of its Subsidiaries that are material
to Company or any of its Subsidiaries. The consummation of the transactions
contemplated by this Agreement or the other Transactions will not in any
material manner or to any material extent impair the ownership of (or the
license to use, as the case may be) any of such Intellectual Property by
Company or any of its Subsidiaries.
5.18 RELATED TRANSACTION DOCUMENTS; SPECIFIED EXISTING DOCUMENTS.
Company has delivered to Lenders complete and correct
copies of the Related Transaction Documents, in each case as in effect as of
the Closing Date, and of all exhibits and schedules thereto. Except as set
forth in Schedule 5.18 annexed hereto, none of the Specified Existing Documents
have been amended, supplemented, restated or otherwise modified on or before
the Closing Date since the date any such Specified Existing Document was first
entered into. Company has delivered to Lenders complete and correct copies of
the Specified Existing Documents (together with each amendment, supplement,
restatement or modification of Specified Existing Documents as set forth in
Schedule 5.18 annexed hereto), in each case as in effect as of the Closing
Date, and of all exhibits and schedules thereto.
5.19 WORKMEN'S COMPENSATION CLAIMS.
There are no workmen's compensation claims against or
relating to any Loan Party that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
105 (Credit Agreement)
113
5.20 PERMITS.
Except as disclosed in Schedule 5.20 annexed hereto, each
of the Loan Parties, prior to and after giving effect to the Transactions, has
such certificates, permits, licenses, franchises, consents, approvals,
authorizations and clearances that are material to the condition (financial or
otherwise), business or operations of any Loan Party ("PERMITS") and is (and
will be immediately after the consummation of the Transactions) in compliance
in all material respects with all applicable laws as are necessary to own,
lease or operate its properties and to conduct its businesses in the manner as
presently conducted and to be conducted immediately after the consummation of
the Transactions, and all such Permits are valid and in full force and effect
and will be valid and in full force and effect immediately upon consummation of
the Transactions. Each of the Loan Parties, prior to and after giving effect
to the Transactions, is and will be in compliance in all material respects with
its obligations under such Permits and no event has occurred that allows, or
after notice or lapse of time would allow, revocation or termination of such
Permits, except for any such revocation or termination which could not
reasonably be expected to individually or in the aggregate have a Material
Adverse Effect.
5.21 PARENT MERGER.
Upon the filing of the Certificate of the Merger with the
Secretary of State of the State of Delaware, the Parent Merger shall become
effective and as a result of the Parent Merger, Company, as the surviving
corporation of the Parent Merger, by operation of law (with no further action
required), will succeed to all of the rights, assets, properties, obligations
and liabilities of Parent as of the effective date of the Parent Merger, which
date shall be the date of filing of such certificate.
SECTION 6. AFFIRMATIVE COVENANTS
Each of Holdings and Company covenants and agrees that,
so long as any of the Commitments hereunder shall remain in effect and until
payment in full of all of the Loans and other Obligations and the cancellation
or expiration of all Letters of Credit, unless Requisite Lenders shall
otherwise give prior written consent, each of Holdings and Company shall
perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Holdings will maintain, and cause each of its
Subsidiaries to maintain, a system of accounting established and administered
in accordance with sound business practices to permit preparation of financial
statements in conformity with GAAP. Company will deliver to Agent and Lenders:
106 (Credit Agreement)
114
(i) Fiscal Period Financials: as soon as practicable
and in any event within 30 days (or (a) in the case of the first
Fiscal Period of each Fiscal Year, 50 days (provided that such
delivery shall be within 30 days if Company's management
information system permits), (b) in the case of the last Fiscal
Period in any Fiscal Quarter (other than the last Fiscal Quarter
in any Fiscal Year), 45 days or (c) in the case of the last Fiscal
Period in any Fiscal Year, 90 days) after the end of each Fiscal
Period ending after the Closing Date, (1) the consolidated balance
sheets of Company and its Subsidiaries as at the end of such
Fiscal Period, (2) the related consolidated statements of
operations, stockholders' equity and cash flows of Company and its
Subsidiaries, and (3) a schedule containing a summary of sales and
a summary of comparable store sales growth, in each case for each
of Company and its Subsidiaries on a consolidated basis, the
Dominick's division and the Omni division, in each case for such
Fiscal Period and for the period from the beginning of the then
current Fiscal Year to the end of such Fiscal Period, setting
forth in each case in comparative form the corresponding figures
for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the consolidated plan and financial
forecast for the current Fiscal Year delivered pursuant to
subsection 6.1(xiii), all in reasonable detail and certified by
the chief financial officer of Company that they fairly present
the financial condition of such entities as at the dates indicated
and the results of its operations and its cash flows for the
periods indicated, subject to changes resulting from audit and
normal year-end adjustments;
(ii) Quarterly Financials: as soon as practicable and
in any event within 45 days after the end of each of the first
three Fiscal Quarters of each Fiscal Year and within 90 days after
the end of the fourth Fiscal Quarter of each Fiscal Year, the
consolidated balance sheets of each of Holdings and its
Subsidiaries and of Company and its Subsidiaries, in each case as
at the end of such Fiscal Quarter and the related consolidated
statements of operations, stockholders' equity and cash flows of
each of Holdings and its Subsidiaries and Company and its
Subsidiaries, as applicable, for such Fiscal Quarter and for the
period from the beginning of the then current Fiscal Year to the
end of such Fiscal Quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding
periods of the previous Fiscal Year and the corresponding figures
from the consolidated plan and financial forecast for the current
Fiscal Year delivered pursuant to subsection 6.1(xiii), all in
reasonable detail and certified by the chief financial officer of
Company that they fairly present the financial condition of each
of Holdings and its Subsidiaries and Company and its Subsidiaries,
as the case may be, as at the dates indicated and the results of
their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end
adjustments;
(iii) Year-End Financials: as soon as practicable and
in any event within 90 days after the end of each Fiscal Year, (a)
the consolidated balance
107 (Credit Agreement)
115
sheets of each of Holdings and its Subsidiaries and Company and
its Subsidiaries, in each case as at the end of such Fiscal Year
and the related consolidated statements of operations,
stockholders' equity and cash flows of each of Holdings and its
Subsidiaries and Company and its Subsidiaries, as applicable, for
such Fiscal Year, setting forth in each case in comparative form
the corresponding figures for the previous Fiscal Year and the
corresponding figures from the consolidated plan and financial
forecast for the current Fiscal Year delivered pursuant to
subsection 6.1(xiii) for the Fiscal Year covered by such financial
statements, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present the
financial condition of each of Holdings and its Subsidiaries and
Company and its Subsidiaries, as the case may be, as at the dates
and the results of their operations and their cash flows for the
periods indicated, and (b) in the case of such consolidated
financial statements, (1) a report thereon of Ernst & Young LLP or
other independent certified public accountants of recognized
national standing selected by Company and satisfactory to Agent,
which report shall be unqualified as to scope of audit, shall
express no doubts about the ability each of Holdings and its
Subsidiaries and of Company and its Subsidiaries to continue as a
going concern, and shall state that such consolidated financial
statements fairly present the consolidated financial position of
each of Holdings and its Subsidiaries and Company and its
Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated in
conformity with GAAP applied on a basis consistent with prior
years (except as otherwise disclosed in such financial statements)
and that the examination by such accountants in connection with
such consolidated financial statements has been made in accordance
with generally accepted auditing standards and (2) a letter from
Ernst & Young LLP or other independent certified public
accountants, substantially in the form of Exhibit XI annexed
hereto with such changes as are approved by Agent, acknowledging
that Lenders will receive such consolidated financial statements
and such report and will use such financial statements and report
in their credit analyses of Holdings and its Subsidiaries and
Company and its Subsidiaries;
(iv) Officers', Margin Determination and Compliance
Certificates: (a) together with each delivery of financial
statements of Holdings and its Subsidiaries and Company and its
Subsidiaries pursuant to subdivisions (ii) and (iii) above, (1) an
Officers' Certificate of Company stating that the signers have
reviewed the terms of this Agreement and have made, or caused to
be made under their supervision, a review in reasonable detail of
the transactions and condition of each of Holdings and its
Subsidiaries and Company and its Subsidiaries during the
accounting period covered by such financial statements and that
such review has not disclosed the existence during or at the end
of such accounting period, and that the signers do not have
knowledge of the existence as at the date of such Officers'
Certificate, of any condition or event that constitutes an Event
of Default or Potential Event of Default, or, if any such
108 (Credit Agreement)
116
condition or event existed or exists, specifying the nature and
period of existence thereof and what action Company has taken, is
taking and proposes to take with respect thereto; (2) a Margin
Determination Certificate demonstrating in reasonable detail the
Leverage Ratio for the four consecutive Fiscal Quarters ending on
the last day of the accounting period covered by such financial
statements; and (3) a Compliance Certificate demonstrating in
reasonable detail compliance during and at the end of the
applicable accounting periods with the restrictions contained in
Section 7; (b) together with each delivery of financial statements
of Holdings and its Subsidiaries and Company and its Subsidiaries
pursuant to subdivision (ii) above, (x) a written notice of the
acquisition of any Store Land Property during the Fiscal Quarter
covered by such financial statements, which notice shall include
the purchase price of each such Store Land Property, and (y) a
written notice of any sale of any Store Land Property during such
Fiscal Quarter, which notice shall include the sale price and the
purchase price of each such Store Land Property; and (c) within
100 days after the beginning of each Fiscal Year (other than
Fiscal Year 1997) and in any event on or prior to the date of any
mandatory prepayments made pursuant to subsection 2.4B(iii)(c)
during such Fiscal Year, an Officers' Certificate of Company
setting forth the Consolidated Excess Cash Flow for the Fiscal
Year covered by such financial statements and the Leverage Ratio
for such Fiscal Year and demonstrating in reasonable detail the
derivation of such Consolidated Excess Cash Flow and such Leverage
Ratio;
(v) Reconciliation Statements: if, as a result of
any change in accounting principles and policies from those used
in the preparation of the audited financial statements referred to
in subsection 5.3, the consolidated financial statements of
Holdings and its Subsidiaries or Company and its Subsidiaries
delivered pursuant to subdivisions (i), (ii), (iii) or (xiii) of
this subsection 6.1 will differ in any material respect from the
consolidated financial statements that would have been delivered
pursuant to such subdivisions had no such change in accounting
principles and policies been made, then, subject to subsection
1.2, (a) together with the first delivery of financial statements
pursuant to subdivision (i), (ii), (iii) or (xiii) of this
subsection 6.1 following such change, consolidated financial
statements of Holdings and its Subsidiaries or Company and its
Subsidiaries for the current Fiscal Year to the effective date of
such change, in each case prepared on a pro forma basis as if such
change had been in effect during such periods, and (b) together
with each delivery of financial statements pursuant to subdivision
(i), (ii), (iii) or (xiii) of this subsection 6.1 following such
change, such financial statements prepared on a basis consistent
with the accounting principles and policies used in the
preparation of the financial statements delivered immediately
prior to such change;
109 (Credit Agreement)
117
(vi) Accountants' Certification: together with each
delivery of consolidated financial statements of each of Holdings
and its Subsidiaries and Company and its Subsidiaries pursuant to
subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating
whether, in connection with their audit examination, any condition
or event that constitutes an Event of Default or Potential Event
of Default that relates to accounting matters has come to their
attention and, if such a condition or event has come to their
attention, specifying the nature and period of existence thereof;
provided that such accountants shall not be liable by reason of
any failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the
course of their audit examination, and (b) stating that based on
their audit examination nothing has come to their attention that
causes them to believe that the information contained in the
certificates delivered therewith pursuant to subdivision (iv)
above is not correct;
(vii) Accountants' Reports: promptly upon receipt
thereof (unless restricted by applicable professional standards),
copies of all reports (other than reports of a routine or
ministerial nature which are not material) submitted to Holdings
or Company by independent certified public accountants in
connection with each annual, interim or special audit of the
financial statements of Holdings and its Subsidiaries or Company
and its Subsidiaries, as the case may be, made by such
accountants, including, without limitation, any comment letter
submitted by such accountants to management in connection with
their annual audit;
(viii) SEC Filings and Press Releases: promptly upon
the sending or filing thereof, copies of (a) all financial
statements, reports, notices and proxy statements sent or made
available generally by Holdings or Company to its security holders
or by any Subsidiary of Company to its security holders other than
Holdings, Company or another Subsidiary of Company, (b) all
regular and periodic reports and all registration statements
(other than on Form S-8 or a similar form) and prospectuses, if
any, filed by Holdings or any of its Subsidiaries with any
securities exchange or with the Securities and Exchange Commission
or any governmental or private regulatory authority (other than
reports of a routine or ministerial nature which are not
material), and (c) all press releases and other statements made
available generally by Holdings or any of its Subsidiaries to the
public concerning material developments in the business of
Holdings or any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any
officer of any Loan Party (other than Land Trusts) obtaining
knowledge (a) that a condition or event that constitutes an Event
of Default or Potential Event of Default has occurred and is
continuing, or becoming aware that any Lender or Agent has given
any notice (other than to Agent) or taken any other action with
respect to a claimed Event of Default or Potential Event of
Default, (b) that any Person has given any
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notice to Holdings or any of its Subsidiaries or taken any other
action with respect to a claimed default or event or condition of
the type referred to in subsection 8.2, (c) of any condition or
event that would be required to be disclosed in a current report
filed by any Loan Party which is not a reporting company under the
Exchange Act with the Securities and Exchange Commission on Form
8-K (Items 1, 2, 4, 5 and 6 of such Form as in effect on the date
hereof) if such Loan Party were required to file such reports
under the Exchange Act, or (d) of the occurrence of any event or
change that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect, an Officers' Certificate
specifying the nature and period of existence of such condition,
event or change, or specifying the notice given or action taken by
any such Person and the nature of such claimed Event of Default,
Potential Event of Default, default, event or condition, and what
action such Loan Party has taken, is taking and proposes to take
with respect thereto;
(x) Litigation or Other Proceedings: promptly upon
any officer of Company obtaining knowledge of (X) the institution
of, or non-frivolous threat of, any action, suit, proceeding
(whether administrative, judicial or otherwise), governmental
investigation or arbitration against or affecting Holdings or any
of its Subsidiaries or any property of Holdings or any of its
Subsidiaries (collectively, "PROCEEDINGS") not previously
disclosed in writing by Company to Lenders or (Y) any material
development in any Proceeding that, in any case:
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect;
or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain
relief as a result of, the transactions to occur or which
have occurred pursuant to the Loan Documents or any of
the Related Transaction Documents;
written notice thereof together with such other information as may
be reasonably available to Company to enable Lenders and their
counsel to evaluate such matters;
(xi) ERISA Events: promptly upon becoming aware of
the occurrence of or forthcoming occurrence of any ERISA Event, a
written notice specifying the nature thereof, what action Holdings
or any of its Subsidiaries or any of their respective ERISA
Affiliates has taken, is taking or proposes to take with respect
thereto and, when known, any action taken or threatened by the
Internal Revenue Service, the Department of Labor or the PBGC with
respect thereto;
(xii) ERISA Notices: with reasonable promptness,
copies of (a) each Schedule B (Actuarial Information) to the
annual report (Form 5500 Series) filed
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by Holdings or any of its Subsidiaries or any of their respective
ERISA Affiliates with the Internal Revenue Service with respect to
each Pension Plan; (b) all notices received by Holdings or any of
its Subsidiaries or any of their respective ERISA Affiliates from
a Multiemployer Plan sponsor concerning an ERISA Event; and (c)
such other documents or governmental reports or filings relating
to any Employee Benefit Plan as Agent shall reasonably request;
(xiii) Financial Plans: as soon as practicable and in
any event no later than 60 days after the beginning of each Fiscal
Year, in the case of Company and its Subsidiaries, a consolidated
plan and financial forecast for such Fiscal Year, including,
without limitation, (a) forecasted consolidated balance sheets and
forecasted consolidated statements of operations and cash flows of
Company and its Subsidiaries, in each case for such Fiscal Year,
together with pro forma Compliance Certificates for such Fiscal
Year and an explanation of the assumptions on which such forecasts
are based, (b) forecasted consolidated statements of operations
and cash flows of Company and its Subsidiaries for each Fiscal
Period of such Fiscal Year, together with an explanation of the
assumptions on which such forecasts are based, and (c) such other
information and projections as either Arranger may reasonably
request;
(xiv) Insurance: as soon as practicable and in any
event by the date which is 30 days after the beginning of each
Fiscal Year, an Officers' Certificate or other report, in each
case in form and substance satisfactory to Agent outlining all
material insurance coverage maintained as of the date of such
Officers' Certificate or report by Holdings and its Subsidiaries
and all material insurance coverage planned to be maintained by
Holdings and its Subsidiaries in such Fiscal Year;
(xv) Environmental Audits and Reports: as soon as
practicable following receipt thereof, copies of all environmental
audits and reports (other than routine follow-up reports to
matters previously disclosed to Lenders), whether prepared by
personnel of Holdings or any of its Subsidiaries or by independent
consultants, with respect to significant environmental matters at
any Facility or which relate to an Environmental Claim which could
reasonably be expected to result in a Material Adverse Effect;
(xvi) Board of Directors: with reasonable promptness,
written notice of any change in the Board of Directors of Holdings
or Company;
(xvii) Additional Subsidiaries: promptly upon any
Person becoming Subsidiary of Holdings, a written notice setting
forth with respect to such Person (a) the date on which such
Person became a Subsidiary of Holdings and (b) all of the data
required to be set forth in Schedule 5.1 annexed hereto with
respect to all Subsidiaries of Holdings (it being understood that
such written notice shall
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be deemed to supplement Schedule 5.1 annexed hereto for all
purposes of this Agreement);
(xviii) Requirements under Collateral Documents. on or
prior to the date required to be delivered under the applicable
Collateral Documents, such reports, certificates and other
documents as are required to be delivered by any Loan Party under
the Collateral Documents;
(xix) Notice Under the Stock Purchase Agreement.
within five Business Days of receipt thereof any, notice received
by any Loan Party pursuant to Section 12.3(i) of the Stock
Purchase Agreement or any certificate, other confirmation or any
written agreements received by any Loan Party pursuant to any
other provisions of Section 12.3 of the Stock Purchase Agreement;
and
(xx) Other Information: with reasonable promptness,
such other information and data with respect to Holdings or any of
its Subsidiaries as from time to time may be reasonably requested
by any Lender.
6.2 CORPORATE EXISTENCE, ETC.
Except as permitted under subsection 7.7, each of
Holdings and Company will, and will cause each of its Subsidiaries to, at all
times preserve and keep in full force and effect its corporate existence and
all rights and franchises material to its business; provided that the corporate
existence and rights and franchises of those Subsidiaries of Holdings
identified on Schedule 5.1 annexed hereto as inactive (so long as such
Subsidiary owns assets in an aggregate fair market value (without netting any
such fair market value against any liabilities of such Subsidiary) not
exceeding $200,000) may be terminated.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Each of Holdings and Company will, and will cause each of
its Subsidiaries to, pay all material taxes, assessments and other governmental
charges imposed upon it or any of its material properties or assets or in
respect of any of its income, businesses or franchises before any material
penalty accrues thereon, and all claims (including, without limitation, claims
for labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its properties or
assets, prior to the time when any material penalty or fine shall be incurred
with respect thereto; provided that no such charge or claim need be paid if
being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted and if such reserve or other appropriate provision, if
any, as shall be required in conformity with GAAP shall have been made
therefor.
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B. Each of Holdings and Company will not, nor will it permit
any of its Subsidiaries to, file or consent to the filing of any consolidated
income tax return with any Person (other than Holdings so long as the filing of
such consolidated income tax return is required by applicable law and other
than Company or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE.
Each of Holdings and Company will, and will cause each of
its Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all of the Collateral
(without limiting any obligations under the Collateral Documents) and all other
material properties used or useful in the business of Holdings and its
Subsidiaries (including, without limitation, Intellectual Property) and from
time to time will make or cause to be made all appropriate repairs, renewals
and replacements thereof. Each of Holdings and Company will maintain or cause
to be maintained, with financially sound and reputable insurance companies or
associations or with self-insurance programs, in each case to the extent
consistent with prudent business practices and customary in their respective
industries, insurance with respect to its properties and business and the
properties and businesses of its Subsidiaries against loss or damage of the
kinds (including, in any event, business interruption insurance) and in the
amounts customarily carried or maintained under similar circumstances by
corporations of established reputation engaged in similar businesses and owning
similar properties in the same general areas in which Holdings, Company or any
of their respective Subsidiaries, as the case may be, operates. In addition,
each of Holdings and Company will maintain or cause to be maintained flood
insurance with respect to each Flood Hazard Property included in the Collateral
and located in a community that participates in the National Flood Insurance
Program. All insurance relating to the Collateral shall comply with the
insurance provisions of the Collateral Documents.
6.5 INSPECTION; LENDER MEETING.
Each of Holdings and Company shall, and shall cause each
of its Subsidiaries to, permit any authorized representatives designated by any
Lender to visit and inspect any of the properties of Holdings or any of its
Subsidiaries, including its and their financial and accounting records, and to
make copies and take extracts therefrom, and to discuss its and their affairs,
finances and accounts with its and their officers and independent public
accountants (provided that representatives of Holdings or any of its
Subsidiaries may, if it so chooses, be present at or participate in any such
discussion), all upon reasonable notice and at such reasonable times during
normal business hours and as often as may be reasonably requested. Without in
any way limiting the foregoing, each of Holdings and Company will, upon the
request of Agent or Requisite Lenders, participate in a meeting of Agent and
Lenders once during each Fiscal Year to be held at Company's corporate offices
(or such other location as may be agreed to by Company and Agent) at such time
as may be agreed to by Company and Agent.
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6.6 COMPLIANCE WITH LAWS, ETC.
Each of Holdings and Company shall, and shall cause each
of its Subsidiaries to, comply with the requirements of all applicable laws,
rules, regulations and orders of any governmental authority, noncompliance with
which could reasonably be expected to cause a Material Adverse Effect.
6.7 ENVIRONMENTAL DISCLOSURE AND INSPECTION.
A. Each of Holdings and Company shall, and shall cause each
of its Subsidiaries to, exercise all due diligence in order to comply and cause
(i) all tenants under any leases or occupancy agreements affecting any portion
of the Facilities and (ii) all other Persons on or occupying such property, to
comply with all Environmental Laws.
B. Each of Holdings and Company agrees that Agent may, from
time to time and in its sole and absolute discretion, retain, at Company's
expense, an independent professional consultant to review any report relating
to Hazardous Materials prepared by or for Holdings or any of its Subsidiaries
and to conduct its own investigation of any Facility currently owned, leased,
operated or used by Holdings or any of its Subsidiaries, and each of Holdings
and Company agrees to use its best efforts to obtain permission for Agent's
professional consultant to conduct its own investigation of any Facility
previously owned, leased, operated or used by Holdings or any of its
Subsidiaries. Each of Holdings and Company hereby grants (to the extent it is
authorized to do so) to Agent and its agents, employees, consultants and
contractors the right to enter into or on to the Facilities currently owned,
leased, operated or used by Holdings or any of its Subsidiaries to perform such
tests on such property as are reasonably necessary to conduct such a review
and/or investigation. Any such investigation of any Facility shall be
conducted, unless otherwise agreed to by such Person and Agent, during normal
business hours and, to the extent reasonably practicable, shall be conducted so
as not to interfere with the ongoing operations at any such Facility or to
cause any damage or loss to any property at such Facility. Each of Holdings
and Company and Agent hereby acknowledge and agree that any report of any
investigation conducted at the request of Agent pursuant to this subsection
6.7B will be obtained and shall only be used by Agent and Lenders for the
purposes of Lenders' internal credit decisions, to monitor and police the Loans
and to protect Lenders' security interests, if any, created by the Loan
Documents. Agent agrees to deliver a copy of any such report to Company with
the understanding that Company acknowledges and agrees that (i) it will
indemnify and hold harmless Agent and each Lender from any costs, losses or
liabilities relating to Holdings' or any of its Subsidiaries' use of or
reliance on such report, (ii) neither Agent nor any Lender makes any
representation or warranty with respect to such report, and (iii) by delivering
such report to Company, neither Agent nor any Lender is requiring or
recommending the implementation of any suggestions or recommendations contained
in such report.
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C. Company shall promptly advise Lenders in writing and in
reasonable detail of (i) any Release of any Hazardous Materials required to be
reported to any federal, state or local governmental or regulatory agency under
any applicable Environmental Laws, (ii) any and all written communications with
any governmental authority or any adverse party with respect to any
Environmental Claims that have a reasonable possibility of giving rise to a
Material Adverse Effect or with respect to any Release of Hazardous Materials
at any Facility required to be reported to any federal, state or local
governmental or regulatory agency, (iii) any remedial action taken by Holdings
or any of its Subsidiaries or any other Person in response to (x) any Hazardous
Materials on, under or about any Facility, the existence of which has a
reasonable possibility of resulting in an Environmental Claim having a Material
Adverse Effect, or (y) any Environmental Claim that could reasonably be
expected to result in a Material Adverse Effect, (iv) Holdings' or any of its
Subsidiaries' discovery of any occurrence or condition on any real property
adjoining or in the vicinity of any Facility that could cause such Facility or
any part thereof to be subject to any material restrictions on the ownership,
occupancy, transferability or use thereof under any Environmental Laws, and (v)
any request for information from any governmental agency that suggests such
agency is investigating whether Holdings or any of its Subsidiaries may be
potentially responsible for a Release of Hazardous Materials.
D. Company shall promptly notify Lenders of (i) any proposed
acquisition of stock, assets, or property by Holdings or any of its
Subsidiaries that could reasonably be expected to expose Holdings or any of its
Subsidiaries to, or result in, Environmental Claims that could have a Material
Adverse Effect or that could reasonably be expected to have a material adverse
effect on any Governmental Authorization then held by Holdings or any of its
Subsidiaries and (ii) any proposed action to be taken by Holdings or any of its
Subsidiaries to commence manufacturing, industrial or other operations that
could reasonably be expected to subject Holdings or any of its Subsidiaries to
additional laws, rules or regulations which could reasonably be expected to
have a Material Adverse Effect, including, without limitation, laws, rules and
regulations requiring additional environmental permits or licenses.
E. Each of Holdings and Company shall, at its own expense,
provide copies of such documents or information as Agent may reasonably request
in relation to any matters disclosed pursuant to this subsection 6.7.
6.8 LOAN PARTIES' REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.
Each of Holdings and Company shall promptly take, and
shall cause each of its Subsidiaries promptly to take, any and all necessary
remedial action in connection with the presence, storage, use, disposal,
transportation or Release of any Hazardous Materials on, under or about any
Facility in order to comply with all applicable Environmental Laws and
Governmental Authorizations. In the event Holdings or any of its Subsidiaries
undertakes any remedial action with respect to any Hazardous Materials
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on, under or about any Facility, Holdings or such Subsidiary shall conduct and
complete such remedial action in compliance with all applicable Environmental
Laws, and in accordance with the policies, orders and directives of all
federal, state and local governmental authorities except when, and only to the
extent that, Holdings' or such Subsidiary's liability for such presence,
storage, use, disposal, transportation or discharge of any Hazardous Materials
is being contested in good faith by Holdings or such Subsidiary.
6.9 EXECUTION OF SUBSIDIARY GUARANTY AND COLLATERAL DOCUMENTS BY
FUTURE SUBSIDIARIES.
In the event that (i) BDI or BPI owns assets with a fair
market value (without netting such assets against liabilities) exceeding
$10,000 at any time after the one month anniversary of the Closing Date or (ii)
any Person becomes a Subsidiary of Company after the date hereof, Company will
promptly notify Agent of that fact and cause such Subsidiary (including BDI or
BPI, as applicable) to execute and deliver to Agent a counterpart of the
Subsidiary Guaranty and, if such Person became or becomes a Subsidiary of
Company before the Collateral Release Date, cause (i) such Subsidiary to
execute and deliver to Agent a counterpart of a Subsidiary Security Agreement,
a Subsidiary Pledge Agreement, a Subsidiary Trademark Security Agreement and
Mortgages and to take all such further action and execute all such further
documents and instruments as may be required to grant and perfect in favor of
Agent, for the benefit of Lenders, a first-priority security interest in all of
the real, personal and mixed property assets of such Subsidiary (other than
with respect to Excluded Properties, and other than any such assets which are
subject to Liens permitted under subsection 7.2A(vi) and other Real Property
Assets that such Subsidiary would not be obligated to pledge to Agent pursuant
to subsection 6.10 (it being understood and agreed that all of the requirements
of subsection 6.10 are applicable to the Real Property Assets of such
Subsidiary, with the date such Subsidiary became a Subsidiary of the Company
being treated for purposes of subsection 6.10 as the date on which such
Subsidiary acquired all of its Real Property Assets)) and (ii) the parent of
such Subsidiary to execute and deliver to Agent a counterpart of the Pledge
Agreement or a Pledge Amendment to the Pledge Agreement previously executed by
such parent effecting the pledge by such parent to Agent on behalf of Lenders
of all of the capital stock of such Subsidiary. Company shall deliver to
Agent, together with such counterpart of the Subsidiary Guaranty and/or such
Collateral Documents, (i) certified copies of such Subsidiary's Articles or
Certificate of Incorporation, together with a good standing certificate from
the Secretary of State of the jurisdiction of its incorporation, each to be
dated a recent date prior to their delivery to Agent, (ii) a copy of such
Subsidiary's Bylaws, certified by its corporate secretary or an assistant
corporate secretary as of a recent date prior to their delivery to Agent, (iii)
a certificate executed by the secretary or an assistant secretary of such
Subsidiary as to (a) the incumbency and signatures of the officers of such
Subsidiary executing the Subsidiary Guaranty and, if such Person became or
becomes a Subsidiary of Company before the Collateral Release Date, the
Collateral Documents to which such Subsidiary is
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a party and (b) the fact that the attached resolutions of the Board of
Directors of such Subsidiary authorizing the execution, delivery and
performance of the Subsidiary Guaranty and, if such Person became or becomes a
Subsidiary of Company before the Collateral Release Date, such Collateral
Documents are in full force and effect and have not been modified or rescinded,
(iv) if such Person became or becomes a Subsidiary of Company before the
Collateral Release Date, the certificate or certificates evidencing all of the
capital stock of such Subsidiary, and (v) a favorable opinion of counsel to
Company and such Subsidiary, in form and substance satisfactory to Agent and
its counsel, as to (a) the due organization and good standing of such
Subsidiary, (b) the due authorization, execution and delivery by such
Subsidiary of the Subsidiary Guaranty and, if such Person became or becomes a
Subsidiary of Company before the Collateral Release Date, such Collateral
Documents, (c) the enforceability of the Subsidiary Guaranty and, if such
Person became or becomes a Subsidiary of Company before the Collateral Release
Date, such Collateral Documents against such Subsidiary, and (d) such other
matters as Agent may reasonably request, all of the foregoing to be
satisfactory in form and substance to Agent and its counsel.
6.10 ADDITIONAL REAL PROPERTY.
After the Closing Date, each of Holdings and Company
shall, and shall cause its Subsidiaries to,
(i) with respect to each leasehold interest in Real
Property Assets hereafter acquired by such Person prior to the
Collateral Release Date (whether directly or through a land trust
or other vehicle) (the holder of such leasehold interest being
referred to herein as the "LESSEE"), use its reasonable efforts
(which shall not be deemed to include the payment of monetary
consideration other than nominal monetary consideration and
out-of-pocket expenses incurred by any lessor in connection with
obtaining the items listed below, but shall include efforts to
include each of the items listed below in the terms of the lease
itself) to obtain and deliver to Agent within three months after
such Real Property Asset is designated by Company prior to
Collateral Release Date as Replacement Property:
(a) the agreement of the lessor (if required
under the lease) to the encumbrancing of such Lessee's
leasehold interest under the lease pursuant to a Mortgage
and to the assignment of such leasehold interest to Agent
or its Affiliate following a default hereunder, and if
the lease allows the lessor to unreasonably withhold
consent to an assignment of the leasehold interest by
Agent or its Affiliate to a subsequent third party
assignee, the agreement of the lessor not to unreasonably
withhold such consent, and
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(b) an original memorandum of the lease
executed and acknowledged by the lessor thereunder (or,
in the case of an existing leasehold interest which is of
record and which is acquired by the Lessee by assignment,
a memorandum of or a recordable duplicate original of
such assignment, executed and acknowledged by the
assigning Lessee), in form sufficient to give
constructive notice (when recorded) of the Lessee's
leasehold interest under the lease to third-party
purchasers and encumbrancers of the affected real
property and otherwise in form reasonably satisfactory to
Agent, together with evidence of its recordation in all
places necessary or desirable, in the reasonable judgment
of Agent, to give constructive notice of the Lessee's
leasehold interest to third parties, and
(II) with respect to each leasehold interest in Real
Property Assets listed in Parts I and II of Schedule 4.1B annexed
hereto (to the extent the items listed below in this clause (ii)
of this subsection 6.10 have not been obtained or delivered to
Agent on the Closing Date) and each Real Property Asset in which
Holdings or any of its Subsidiaries acquires fee title or a
leasehold interest after the Closing Date but before the
Collateral Release Date (in each case other than Excluded
Properties, parcels number 4 and 5 of location number 851,
leasehold interests as to which encumbrancing requires the consent
of the lessor or fee interests listed on Schedule 4.1B annexed
hereto as to which encumbrancing requires the consent of a senior
lienholder, where Holdings and its Subsidiaries have been unable
to obtain the applicable lessor's or senior lienholder's consent
thereto, and assets subject to Liens permitted under subsection
7.2A(iv) and (vi)) (collectively, "COVERED REAL PROPERTY"), as
soon as practicable and in any event within one month after the
applicable Real Property Asset becomes Covered Real Property (it
being understood that any Real Property Asset which is (1)
designated by Company as a Replacement Property (to the extent it
was not already Covered Real Property) shall become Covered Real
Property as of the date of such designation and (2) an Excluded
Property shall become Covered Real Property as of the date of the
occurrence of a Potential Event of Default or an Event of
Default), deliver:
(a) fully executed counterparts of a
Mortgage, or an amendment to a Mortgage, in form
satisfactory to Agent, which Mortgage or amendment shall
encumber such Covered Real Property, together with
evidence that counterparts of such Mortgage or amendment
have been recorded in all places to the extent necessary
or desirable, in the reasonable judgment of Agent, so as
to effectively create a valid and enforceable first
priority lien (subject only to Permitted Encumbrances) on
such Covered Real Property in favor of Agent (or such
other trustee as may be required or desired under local
law) for the benefit of Lenders,
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(b) in the case of a Mortgage encumbering
Covered Real Property located outside the State of
Illinois, if requested by Agent, an opinion of counsel
(which counsel shall be reasonably satisfactory to Agent)
in the state in which such Covered Real Property is
located with respect to the enforceability of the
Mortgage recorded in such state and such other matters as
Agent may reasonably request, in form and substance
reasonably satisfactory to Agent,
(c) in the case of each such Covered Real
Property consisting of a leasehold interest, a copy of
the lease (including all amendments thereto), together
with such consents and agreements from the lessor on such
real property as were obtained pursuant to clause (i)
above,
(d) with respect to Real Property Assets
constituting fee property, environmental audits prepared
by professional consultants mutually acceptable to
Company and Agent, in form, scope and substance
satisfactory to Agent in its reasonable discretion,
(e) with respect to Real Property Assets
constituting fee property, if requested by Agent, a Title
Insurance Policy, in an amount reasonably satisfactory to
Agent, with respect to Agent's lien thereon,
(f) information sufficient for Agent to
determine whether (1) any such Real Property Asset is
Flood Hazard Property and (2) the community in which each
Flood Hazard Property is located is participating in the
National Flood Insurance Program, and
(g) upon Company's or such Subsidiary's
receipt of written notification from Agent (1) as to the
existence of each such Flood Hazard Property and (2) as
to whether the community in which each such Flood Hazard
Property is located is participating in the National
Flood Insurance Program, written acknowledgment of the
receipt of such notification; and
(h) the evidence of insurance with respect to
such Real Property Asset required to be provided to Agent
pursuant to the terms of the Mortgages, including flood
insurance with respect to each Flood Hazard Property
located in a community that is participating in the
National Flood Insurance Program.
Company shall, and shall cause each of its Subsidiaries
to, permit any authorized representatives designated by Agent to visit and
inspect any Real Property Asset for the purpose of obtaining an appraisal of
value, conducted by consultants retained by Agent in compliance with all
applicable banking regulations; provided, however, that pursuant to subsection
11.2 hereof, Holdings and Company shall be
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obligated to pay for all actual costs and reasonable expenses of obtaining and
reviewing any appraisal provided for under this subsection 6.10 for not more
than one appraisal each year for each Real Property Asset.
6.11 RELEASE OF COLLATERAL.
If, as of the first Business Day of any Fiscal Quarter,
(i) the actual or implied rating established and publicly announced or provided
in a private letter from the Rating Agencies or published by at least two of
the Rating Agencies with respect to senior, unsecured, non-credit enhanced long
term debt of Company is BBB- or Baa3, as applicable, or higher as of such date
and the actual or implied rating established and publicly announced or provided
in a private letter from the Rating Agencies or published by the same two
Rating Agencies with respect to senior, unsecured, non-credit enhanced long
term debt of Company has continuously been BBB- or Baa3, as applicable, or
higher during the two consecutive Fiscal Quarters immediately preceding such
date, (ii) Company is not and shall not have been on credit watch with negative
implications by either of the same two Rating Agencies, and (iii) no Event of
Default or Potential Event of Default has occurred and is continuing (the
conditions set forth in clauses (i), (ii) and (iii) above being referred to
herein as the "COLLATERAL RELEASE CONDITIONS"), then Company may on such date
request that Agent execute and deliver to Company reconveyance documents and
releases (including without limitation UCC termination statements) releasing
all Liens on the Collateral that were granted in favor of Agent on behalf of
the Lenders and the Interest Rate Exchangers pursuant to the Collateral
Documents (other than the Collateral Account Agreement). Company shall make
such request in writing and shall concurrently deliver to Agent evidence in
form and substance satisfactory to Agent showing that the Collateral Release
Condition set forth in clauses (i) and (ii) above has been satisfied and an
Officers' Certificate certifying that each of the Collateral Release Conditions
has been satisfied as of such date and that no Event of Default or Potential
Event of Default has occurred and is continuing or will be caused by such
release of Collateral. The date on which each Collateral Release Condition has
been satisfied and on which each such delivery has been made is referred to
herein as the "COLLATERAL RELEASE DATE". Upon receiving such request, Agent
shall, at Company's expense, promptly execute and deliver to Company such
reconveyance documents and releases, in recordable form, and deliver to Company
upon Company's request and at its expense, against receipt and without recourse
to Agent, such of stock certificates (together with stock powers that were
delivered to Agent by the Loan Parties) and promissory notes pledged by the
Loan Parties pursuant to the Pledge Agreements as shall not have been sold or
applied pursuant to the terms of the Pledge Agreements; provided that, at the
time of Agent's execution and delivery of such reconveyance documents and
releases and delivery of such stock powers and promissory notes, no Event of
Default or Potential Event of Default shall have occurred and be continuing or
shall be caused by such release of Collateral.
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6.12 CERTAIN PAYMENTS.
Each of Holdings and Company shall, and shall cause each
of its Subsidiaries to, immediately upon receipt by such Person of any payments
pursuant to the Stock Purchase Agreement, the Tax Matters Agreement or any
other Specified Existing Document (including without limitation pursuant to
indemnification provisions contained therein), notify Agent of such receipt and
provide Agent with information relating thereto as Agent may request and, in
the case of Holdings, contribute, or cause to be contributed, immediately upon
receipt thereof, all of such payments to Company.
6.13 DESIGNATION OF REPLACEMENT PROPERTIES.
If, on any date after the Closing Date, Agent no longer
has a Lien on any Real Property Asset ("REPLACED PROPERTY") which Agent had
prior to such date (whether due to an Asset Sale relating to such Real Property
Asset, due to a termination of lease relating to such Real Property Asset or
otherwise), then Company shall designate on or before such date a Real Property
Asset (other than any Real Property Asset existing as of the Closing Date)
which is not subject to any Liens as a "Replacement Property" for such Replaced
Property; provided, however, that Company shall not be required to designate
any Replacement Property with respect to the Real Property Assets listed on
Schedule 6.13 annexed hereto; provided, further, that Company shall not be
required to designate any Replacement Property for any Replaced Property to the
extent the Net Cash Proceeds of Asset Sale relating to such Replaced Property
are actually applied to (a) repay Term Loans or (b) permanently reduce
Revolving Term Loan Commitments or Revolving Loan Commitments pursuant to
subsection 2.4B(iii)(a). If the Replaced Property is a leasehold interest in a
grocery store, then the Replacement Property for such Replaced Property shall
be a leasehold interest in a grocery store and shall have annual sales that are
equal to or greater than the Replaced Property. If the Replaced Property is a
fee interest, then the Replacement Property for such Replaced Property shall be
a fee interest and shall have a fair market value (as determined in good faith
by the chief financial officer of Company and evidenced by an Officers'
Certificate of Company certifying as to the fair market value thereof) that is
equal to or greater than the fair market value (also as determined in the same
manner) of the Replaced Property; provided, that if such Replacement Property
has a fair market value greater than the fair market value of the Replaced
Property, then such excess fair market value (i) may be applied as fair market
value of Replacement Property for another Real Property Asset which
concurrently becomes a Replaced Property or (ii) shall be reserved and may be
applied as fair market value of Replacement Property for any Real Property
Asset which subsequently becomes a Replaced Property. If the Replaced Property
is a leasehold interest in a Real Property Asset which is not a grocery store,
then the Replacement Property for such Replaced Property shall be a Real
Property Asset which has a collateral value (as determined in good faith by
chief financial officer of Company and evidenced by an Officers' Certificate of
Company certifying as to the collateral value thereof) that is greater than or
equal to the collateral value (also as determined in the
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same manner) of such Replaced Property. Concurrently with the designation of
any Replacement Property, Company shall deliver to Agent an Officers'
Certificate (i) setting forth all such information as Agent may reasonably
request with respect to such Replacement Property and the related Replaced
Property (including without limitation the fair market value thereof (if a fee
interest) and annual sales figures with respect thereto (if a leasehold
interest in a grocery store)) as Agent may reasonably request, (ii) certifying
that the Replacement Property complies with each of the requirements set forth
in this subsection 6.13, and (iii) setting forth a summary report of all
Replacement Properties theretofore designated by Company and the related
Replaced Properties (including without limitation the aggregate fair market
value thereof (if fee interests) and aggregate annual sales figures with
respect thereto (if leasehold interests in grocery stores)).
SECTION 7. NEGATIVE COVENANTS
Each of Holdings and Company covenants and agrees that,
so long as any of the Commitments hereunder shall remain in effect and until
payment in full of all of the Loans and other Obligations and the cancellation
or expiration of all Letters of Credit, unless Requisite Lenders shall
otherwise give prior written consent, each of Holdings and Company shall
perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Section 7.
7.1 INDEBTEDNESS.
Each of Holdings and Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur,
assume or guaranty, or otherwise become or remain directly or indirectly liable
with respect to, any Indebtedness, except:
(i) Company may become and remain liable with respect
to Indebtedness which is included among the Obligations;
(ii) Holdings and its Subsidiaries may become and
remain liable with respect to Contingent Obligations permitted by
subsection 7.4 and, upon any matured obligations actually arising
pursuant thereto, the Indebtedness corresponding to the Contingent
Obligations so extinguished;
(iii) Company and its Subsidiaries may become and
remain liable with respect to Indebtedness in respect of Capital
Leases; provided that such Capital Leases are permitted under the
terms of subsection 7.9;
(iv) Holdings may become and remain liable with
respect to Indebtedness to Company to the extent permitted under
subsection 7.3(x), Company may become and remain liable with
respect to Indebtedness to any of
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its wholly-owned Subsidiaries, and any wholly-owned Subsidiary of
Company may become and remain liable with respect to Indebtedness
to Company or any other wholly-owned Subsidiary of Company
incurred by such wholly-owned Subsidiary in the ordinary course of
its business provided that (a) all such intercompany Indebtedness
shall be evidenced by promissory notes that are, until the
Collateral Release Date, pledged to Agent pursuant to the terms of
the applicable Collateral Document, (b) all such intercompany
Indebtedness owed by Company to any of its Subsidiaries shall be
subordinated in right of payment to the payment in full of the
Obligations pursuant to the terms of the applicable promissory
notes or an intercompany subordination agreement, in each case
approved by Agent, (c) any payment by any Subsidiary of Company
under any guaranty of the Obligations shall result in a pro tanto
reduction of the amount of any intercompany Indebtedness owed by
such Subsidiary to Company or to any of its Subsidiaries for whose
benefit such payment is made, and (d) any payment by Holdings
under the Holdings Guaranty shall result in a pro tanto reduction
of the amount of any intercompany Indebtedness owed by Holdings to
Company;
(v) BDI and BPI may remain liable with respect to
existing Indebtedness described in Part II of Schedule 7.1 annexed
hereto, so long as (A) Company is indemnified from and against any
and all costs, expenses, losses, damages, fines, penalties or
liabilities arising from such Indebtedness pursuant to the
indemnity set forth in Section 6 of the Asset Transfer Agreement
and (B) none of Holdings or any of its Subsidiaries (other than
BDI or BPI) has any liability to any Person in respect of such
Indebtedness;
(vi) Company and its Subsidiaries, as applicable, may
remain liable with respect to each of the items of existing
Indebtedness described in Part I of Schedule 7.1 annexed hereto
and any Indebtedness incurred to refinance such existing
Indebtedness; provided that after giving effect to such
refinancing Indebtedness and the repayment of the corresponding
existing Indebtedness with the proceeds thereof, (a) the aggregate
principal amount of the refinancing Indebtedness and the
corresponding existing Indebtedness so refinanced shall not be
greater than the outstanding principal amount of such existing
Indebtedness immediately prior to such refinancing, (b) the
weighted average life to maturity of such refinancing Indebtedness
shall be no shorter than the existing Indebtedness being
refinanced and (c) such refinancing Indebtedness shall not be
secured by any additional property than that which secures the
existing Indebtedness being refinanced;
(vii) Company may become and remain liable with respect
to Indebtedness evidenced by the Senior Subordinated Notes in an
aggregate principal amount not exceeding $200,000,000 minus the
aggregate principal amount thereof from time to time repurchased,
redeemed or prepaid;
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(viii) Company and its Subsidiaries may become and
remain liable with respect to Indebtedness incurred to finance (a)
the purchase price of equipment, fixtures and any other similar
property or the remodeling or other improvement costs of any
facility of Company or any of its Subsidiaries or (b) the purchase
price of any Real Property Assets consisting of fee interests in
stores; provided that the aggregate principal amount of such
Indebtedness when incurred shall not be less than 80% or more than
100% of the fair market value of (a) the equipment, fixtures and
any other similar property acquired plus the reasonable
installation and delivery charges associated therewith or the
remodeling or other improvement costs relating to such facility or
(b) such Real Property Assets, as applicable; provided further
that (1) the aggregate principal amount of all such Indebtedness
incurred during any Fiscal Year for purposes described in the
first clause (a) of this subsection 7.1(viii) shall not exceed
$30,000,000, and (2) the aggregate principal amount of all
Indebtedness incurred to finance the purchase price of any such
Real Property Assets shall not exceed $25,000,000 at any time;
(ix) Subsidiaries of Company acquired after the
Closing Date, the acquisition of which is permitted under
subsection 7.3(v) and subsection 7.7(ii), may remain liable with
respect to Indebtedness existing immediately prior to the time any
such entity became a Subsidiary of Company in an aggregate amount
for all such Subsidiaries not to exceed $5,000,000 at any time
outstanding; provided that such Indebtedness is not incurred in
contemplation of such acquisition;
(x) Company and its Subsidiaries may become and
remain liable with respect to Indebtedness represented by Deferred
Trade Payables in an aggregate amount for all such Indebtedness
not to exceed $10,000,000 at any time outstanding;
(xi) Company may become and remain liable with respect
to Indebtedness evidenced by promissory notes subordinated to the
Obligations and issued to employees or former employees of Company
and its Subsidiaries in lieu of cash payments for stock of
Holdings required to be repurchased pursuant to Company's stock
option or other stock plans; provided that the aggregate amount of
such Indebtedness does not exceed $5,000,000 at any time
outstanding; and
(xii) Company may become and remain liable with respect
to Indebtedness to BDI and BPI in an aggregate principal amount
not to exceed $350,000; provided that (a) all such Indebtedness
shall be evidenced by promissory notes that are, until the
Collateral Release Date, pledged to Agent pursuant to the terms of
the applicable Subsidiary Pledge Agreement and (b) all such
Indebtedness owed by Company shall be subordinated in right of
payment to the payment in full of the Obligations pursuant to the
terms of the applicable
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promissory notes or an intercompany subordination agreement, in
each case approved by Agent; and
(xiii) Company and its Subsidiaries may become and
remain liable with respect to other Indebtedness in an aggregate
principal amount not to exceed $15,000,000 at any time
outstanding.
7.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Each of Holdings and Company shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly,
create, incur, assume or permit to exist any Lien on or with respect to any
property or asset of any kind (including any document or instrument in respect
of goods or accounts receivable) of Holdings or any of its Subsidiaries,
whether now owned or hereafter acquired, or any income or profits therefrom, or
file or permit the filing of, or permit to remain in effect, any financing
statement or other similar notice of any Lien with respect to any such
property, asset, income or profits under the Uniform Commercial Code of any
State or under any similar recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral
Documents, including Liens granted in favor of a Lender or an
Affiliate of such Lender which is a counterparty to an Interest
Rate Agreement permitted under subsection 7.4 (iii);
(iii) existing Liens described in Schedule 7.2 annexed
hereto;
(iv) Liens on (a) Real Property Assets consisting of
fee interests in stores or (b) equipment, fixtures and other
similar property of Company and any of its Subsidiaries, in each
case securing Indebtedness described in subsections 7.1(iii) and
7.1(viii), and Liens on inventory of Company and its Subsidiaries,
securing Indebtedness described in subsection 7.1(x); provided
that such Liens shall extend only to the equipment, fixtures, and
other similar property and inventory so financed and the proceeds
thereof; provided, further, that with respect to any such Lien
described in clause (a) above, (1) no Event of Default or
Potential Event of Default shall have occurred and be continuing
at the time of incurrence of such Lien, (2) such Lien is limited
to such Real Property Assets, (3) the Indebtedness secured by such
Lien is Non-Recourse Indebtedness, and (4) the aggregate principal
amount of all Indebtedness secured by all such Liens shall not at
any time exceed $25,000,000;
(v) Liens in favor of third parties as consignors (or
as creditors of such consignors) in goods which are delivered to
Company or any of its Subsidiaries by such third parties on
consignment in the ordinary course of business and
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consistent with past practices, the value of which goods so held
on consignment shall at no time exceed $10,000,000 in the
aggregate for Company and its Subsidiaries;
(vi) Liens securing Indebtedness permitted under
subsection 7.1(ix), which Liens are existing prior to the time the
entity which incurred such Indebtedness became a Subsidiary of
Company; provided that such Liens were not incurred in connection
with, or in contemplation of, the acquisition of such Subsidiary
and such Liens extend or cover only the property and assets of
such entity which were covered by such Liens and which were owned
by such entity, in each case at the time such entity became a
Subsidiary of Company;
(vii) Liens not otherwise permitted by clauses (i)
through (vi) above securing Indebtedness of Company or any of its
Subsidiaries; provided that (a) the aggregate principal amount of
Indebtedness secured by Liens permitted by this clause (vii) shall
not exceed $5,000,000 at any time outstanding, (b) any such
Indebtedness shall be permitted under subsection 7.1 and (c) such
Liens shall not attach to any Collateral; and
(viii) the replacement, extension or renewal of any Lien
permitted by this subsection 7.2A upon or in the same property
subject to such Lien and as security for the same obligations or
any refinancings thereof to the extent such refinancings are
permitted under subsection 7.1; provided that such Lien does not
extend to or cover any property other than the property covered by
such Lien immediately prior to such replacement, extension or
renewal of such Lien and the principal of the obligations secured
thereby is not increased.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Holdings or any
of its Subsidiaries shall create or assume any Lien upon any of its properties
or assets, whether now owned or hereafter acquired, other than Liens excepted
by the provisions of subsection 7.2A, it shall make or cause to be made
effective provision whereby the Obligations will be secured by such Lien
equally and ratably with any and all other Indebtedness secured thereby as long
as any such Indebtedness shall be so secured; provided that, notwithstanding
the foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not permitted by the
provisions of subsection 7.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to
specific property encumbered to secure payment of particular Indebtedness or to
be sold pursuant to an executed agreement with respect to an Asset Sale,
neither Holdings nor any of its Subsidiaries shall enter into any agreement
except as provided in the Senior Subordinated Note Indenture prohibiting the
creation or assumption of any Lien upon any of its properties or assets,
whether now owned or hereafter acquired. The foregoing shall not prohibit the
execution or renewal of a store lease which by its terms prohibits
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the hypothecation of the leasehold interest thereunder (but does not prohibit
the incurrence of liens on any property of Holdings and its Subsidiaries other
than such leasehold interest and equipment related thereto) if, despite the
best efforts of Holdings and its Subsidiaries in accordance with subsection
6.10, the lessor will not agree to permit such hypothecation.
7.3 INVESTMENTS; JOINT VENTURES.
Each of Holdings and Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, make or own any
Investment in any Person, including any Joint Venture, except:
(i) Holdings and its Subsidiaries may make and own
Investments in Cash Equivalents to the extent, in the case of
Holdings, BDI and BPI, permitted under subsection 7.14;
(ii) Company and its Subsidiaries may make
intercompany loans to the extent permitted under subsection
7.1(iv) and BDI and BPI may make intercompany loans to Company to
the extent permitted under subsection 7.1(xii);
(iii) Holdings and its Subsidiaries may continue to own
the Investments owned by them as of the Closing Date in any
Subsidiaries of Holdings and described on Schedule 5.1 annexed
hereto as in effect on the Closing Date;
(iv) Company and its Subsidiaries may continue to own
the Investments owned by them and described in Schedule 7.3
annexed hereto;
(v) Company and its Subsidiaries may create or
acquire new Subsidiaries to the extent otherwise permitted under
this Agreement; provided that (a) any such new Subsidiary is
wholly-owned by Company or one of its wholly-owned Subsidiaries
and the provisions of subsections 6.9 and 6.10 have been complied
with and (b) to the extent such creation or acquisition
constitutes a Consolidated Capital Expenditure, such Consolidated
Capital Expenditure is permitted under subsection 7.8;
(vi) Company or any of its Subsidiaries may, so long
as no Potential Event of Default or Event of Default has occurred
and is continuing or occurs as a result thereof, make Development
Investments in or to any Developer; provided that (a) no such
Development Investment shall be permitted unless, at the time of
the making of such Development Investment, the Development Site
and the store located or to be located at the Development Site
have been leased or irrevocably committed by the Developer to be
leased to Company or one of its Subsidiaries, (b) neither Company
nor any of its Subsidiaries may be or
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become a general partner of any Developer or otherwise be liable
in any manner for any Indebtedness or any other obligations of any
Developer (other than pursuant to customary provisions contained
in any lease pertaining to a Development Site or a store leased to
Company or one of its Subsidiaries) and (c) the aggregate
Development Investments shall not exceed $30,000,000 at any time
outstanding;
(vii) Company and its Subsidiaries may accept
promissory notes received in consideration of, or the deferral of
a portion of the sales price accepted with respect to, any Asset
Sale permitted under subsection 7.7(viii); provided that (a) the
aggregate principal amount of such promissory notes and the
deferred portion of such sales prices shall not at any time exceed
$7,000,000 and (b) any such promissory notes so accepted shall be
pledged as security for the Obligations pursuant to the Company
Security Agreement, the applicable Subsidiary Security Agreement
or the applicable Pledge Agreement, as the case may be, until the
Collateral Release Date;
(viii) Company and its Subsidiaries may make and own
Investments received in connection with the bankruptcy of
suppliers and customers or received pursuant to a plan of
reorganization of any supplier or customer, in each case in
settlement of delinquent obligations or disputes with such
suppliers or customers;
(ix) Company and its Subsidiaries may make and own
Investments (a) in suppliers in anticipation of becoming a
customer of such suppliers and in lieu of deposits, cash discounts
or concessions and (b) in connection with joint ventures with
suppliers entered into in the ordinary course of business;
provided that the aggregate amount of all such Investments under
clauses (a) and (b), together with the amount of guarantees
permitted under subsection 7.4(v) shall not exceed $5,000,000 at
any time outstanding;
(x) Company may make and maintain loans to the extent
permitted under subsection 7.1(iv) to Holdings (a) for the
purposes described in subsection 7.5A(ii)(b) in an aggregate
amount made in any Fiscal Year which, together with the amount of
Restricted Junior Payments made for such purposes, shall not
exceed the amount of Restricted Junior Payments Company may make
to Holdings under subsection 7.5A(ii)(b) during such Fiscal Year,
and (b) so long as each of the conditions set forth in clauses
(x), (y) and (z) in the proviso of subsection 7.5A(v) are
satisfied, for the purposes described in subsection 7.5A(v) in an
aggregate amount made in any Fiscal Year which, together with the
amount of Restricted Junior Payments made for such purposes, shall
not exceed the amount of Restricted Junior Payments Company may
make to Holdings under subsection 7.5A(v) during such Fiscal Year;
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(xi) So long as no Potential Event of Default or Event
of Default shall have occurred and be continuing, Company or any
of its Subsidiaries may make loans to its employees for the
purpose of purchasing Holdings Common Stock; provided that the
aggregate amount of such loans shall not exceed $5,000,000 at any
time outstanding;
(xii) Company and its Subsidiaries may purchase
Holdings Common Stock (a) from a stock option or other stock plan
of any Loan Party as required pursuant to the applicable plan or
agreement, (b) from participants in any such plan or from any
employee of any Loan Party as required pursuant to the applicable
plan or agreement or (c) from any former employee of any Loan
Party (or any employee of any Loan Party who will become a former
employee within 10 days of entering into an agreement to so
purchase Holdings Common Stock so long as such purchase does not
become effective until such employee becomes a former employee of
Loan Parties); provided that the cash portion of such purchases
and the cash payments with respect to promissory notes issued to
such participants, holders, former employees and employees shall
not exceed the sum of (1) $3,500,000 in any Fiscal Year plus (2)
the aggregate amount of cash proceeds received by Holdings in such
Fiscal Year from its sale of shares of Holdings Common Stock to a
stock option or other stock plan of any Loan Party or to
participants in any such plan or to any employee of any Loan Party
during such Fiscal Year; and
(xiii) Company and its Subsidiaries may make and own
other Investments in an aggregate amount not to exceed at any time
$10,000,000.
7.4 CONTINGENT OBLIGATIONS.
Each of Holdings and Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create or become or
remain liable with respect to any Contingent Obligation, except:
(i) Company may become and remain liable with respect
to Contingent Obligations in respect of Letters of Credit;
provided that no Loan Party shall have granted any Lien securing
any obligations (including any reimbursement obligations) relating
to any Existing Letters of Credit (other than pursuant to the Loan
Documents);
(ii) Holdings may become and remain liable with
respect to Contingent Obligations under the Holdings Guaranty and
Subsidiaries of Company may become and remain liable with respect
to Contingent Obligations under the Subsidiary Guaranty, including
Contingent Obligations thereunder for the benefit of a Lender or
an Affiliate of such Lender which is a counterparty to an Interest
Rate Agreement permitted under subsection 7.4(iii);
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(iii) Company may become and remain liable with respect
to Contingent Obligations under Interest Rate Agreements with
respect to Indebtedness, which Interest Rate Agreements are in
form and substance satisfactory to Agent and Arrangers;
(iv) Company and its Subsidiaries may become and
remain liable with respect to Contingent Obligations in respect of
customary indemnification and purchase price adjustment
obligations incurred in connection with Asset Sales or other sales
of assets, other than guarantees of Indebtedness incurred by any
Person acquiring all or any portion of such assets for the purpose
of financing such acquisition; provided that the maximum assumable
liability in respect of all such obligations shall at no time
exceed the gross proceeds actually received by Company and its
Subsidiaries in connection with such Asset Sales and other sales;
(v) Company and its Subsidiaries may become and
remain liable with respect to Contingent Obligations under
guarantees in the ordinary course of business of the obligations
of suppliers, customers, franchisees and licensees of Company and
its Subsidiaries in an aggregate amount which, together with the
amount of Investments permitted under subsection 7.3(ix), shall
not exceed at any time $5,000,000;
(vi) Company and its Subsidiaries, as applicable, may
remain liable with respect to existing Contingent Obligations
described in Schedule 7.4 annexed hereto;
(vii) Holdings and its Subsidiaries (other than
Company) may become and remain liable with respect to Contingent
Obligations under guaranties made under Article Eleven of the
Senior Subordinated Note Indenture;
(viii) Company may become and remain liable with respect
to Contingent Obligations under guarantees in respect of Capital
Leases and Operating Leases entered into by Company's Subsidiaries
which are permitted under subsection 7.9;
(ix) BDI and BPI may each remain liable with respect
to existing Contingent Obligations of such Person to mortgage
lenders in connection with existing mortgage loans in an aggregate
principal amount not exceeding $45,000,000, secured by BDI
Property or BPI Property (as each is defined in the Asset Transfer
Agreement), or any portion thereof (the "BDI/BPI MORTGAGE LOANS"),
so long as (A) Company is indemnified from and against any and all
costs, expenses, losses, damages, fines, penalties, or liabilities
arising from such Contingent Obligations pursuant to the indemnity
set forth in Section 6 of the Asset Transfer Agreement, (B) except
with respect to Indebtedness described in
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Part II of Schedule 7.1 annexed hereto, neither BDI nor BPI has
any liability, contingent or otherwise, for the payment of
principal or interest on any of the BDI/BPI Mortgage Loans and (C)
none of Holdings or any of its Subsidiaries (other than BDI and
BPI) has any liability in respect of the BDI/BPI Mortgage Loans to
any Person; and
(x) Company and its Subsidiaries may become and
remain liable with respect to other Contingent Obligations;
provided that the maximum aggregate liability, contingent or
otherwise, of Company and its Subsidiaries in respect of all such
Contingent Obligations shall at no time exceed $10,000,000.
7.5 RESTRICTED JUNIOR PAYMENTS.
A. Each of Holdings and Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, declare, order, pay,
make or set apart any sum for any Restricted Junior Payment; provided that so
long as no Event of Default or Potential Event of Default shall have occurred
and be continuing or shall be caused thereby, (i) Company may make payments of
regularly scheduled interest in respect of the Senior Subordinated Notes in
accordance with the terms of, to the extent required by and subject to the
subordination provisions contained in the Senior Subordinated Note Indenture,
(ii) Company may make cash dividends to Holdings for the sole purposes of (a)
allowing Holdings to pay its obligations in respect of the Illinois franchise
tax in an amount not to exceed $250,000 per Fiscal Year and (b) allowing
Holdings to pay for its general operating expenses, franchise tax obligations,
accounting, legal, corporate reporting and administrative expenses incurred in
the ordinary course of its business in an amount not to exceed, together with
the loans made for such purposes pursuant to subsection 7.3(x)(a), $1,000,000
in the aggregate in any Fiscal Year, (iii) Company and its Subsidiaries may
purchase shares of Holdings Common Stock (a) from a stock option or other stock
plan of any Loan Party as required pursuant to the applicable agreement or plan
permitted under subsection 7.12, (b) from participants in such plan and from
employees of any Loan Party as required pursuant to the applicable agreement or
plan permitted under subsection 7.12 or (c) from any former employee of any
Loan Party (or any employee of any Loan Party who will become a former employee
within 10 days of entering into an agreement to so purchase Holdings Common
Stock so long as such purchase does not become effective until such employee
becomes a former employee of Loan Parties), in each case in an aggregate amount
not to exceed the amount permitted under subsection 7.3(xii) in any Fiscal
Year, (iv) Company and its Subsidiaries may make cash dividends to Holdings for
the sole purpose of paying Holdings' and its Subsidiaries' income tax
obligations, in each case to the extent and at the times required by the Tax
Sharing Agreement, (v) Company may make cash dividends to Holdings, provided
that Holdings promptly thereafter uses such cash proceeds, together with cash
proceeds of loans by Company pursuant to subsection 7.3(x)(b), to pay cash
dividends to the holders of Holdings Common Stock so long as (x) the aggregate
amount of cash dividends paid in any Fiscal Year of Company pursuant to this
clause (v), together with
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the loans made for such purposes pursuant to subsection 7.3(x)(b) during such
Fiscal Year, shall not exceed the sum of (1) $3,000,000 and (2) the lesser of
(A) the Cumulative Income Amount at such time and (B) $2,000,000, (y) the
Leverage Ratio for the four-Fiscal Quarter period ending as of the last day of
the most recently ended Fiscal Quarter (which Leverage Ratio shall be evidenced
by an Officers' Certificate of Holdings delivered to Agent at least three
Business Days prior to declaration of such dividends) does not exceed
3.00:1.00, and (z) Company is permitted to make such cash dividends under
Section 5.03 of the Senior Subordinated Note Indenture, (vi) in addition to the
foregoing, Company may redeem, repurchase or make prepayments of principal in
respect of Senior Subordinated Notes (together with the premium, if any, and
accrued interest relating thereto) in an aggregate amount not to exceed
$70,000,000 (plus the premium, if any, and accrued interest relating thereto);
and (vii) Holdings may pay cash dividends on the Closing Date to the Preferred
Stock Holder in respect of the Holding Preferred Stock in an aggregate amount
not exceeding $875,000; provided, further that Holdings may redeem the Holdings
Preferred Stock in accordance with the terms of the Preferred Stock Redemption
Agreement on the Redemption Date.
B. Each of Holdings and Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, declare, order, pay,
make or set apart any sum for any payment or prepayment of principal of,
premium, if any, or interest on, or redemption, purchase, retirement,
defeasance (including in-substance or legal defeasance), sinking fund or
similar payment with respect to, any of the Existing Funded Debt; provided
that, so long as no Event of Default or Potential Event of Default shall have
occurred and be continuing or occurs as a result thereof, (i) Company may make
payments of regularly scheduled interest and regularly scheduled payments of
principal in respect of the Existing Funded Debt, in each case in accordance
with the terms of and to the extent required by the agreements relating to the
Existing Funded Debt, as the case may be, (ii) Company may refinance Existing
Funded Debt so long as such refinancing is permitted under subsections 7.1(vi)
and 7.15A; and (iii) in addition to the foregoing, Company may make prepayments
of principal in respect of Existing Funded Debt (together with the premium, if
any, and accrued interest relating thereto) in an aggregate amount not to
exceed $10,000,000 (plus, the premium, if any, and accrued interest relating
thereto).
7.6 FINANCIAL COVENANTS.
A. MINIMUM FIXED CHARGE COVERAGE RATIO. Company shall not
permit the ratio of (i) Consolidated Adjusted EBITDA plus Consolidated Rental
Payments to (ii) Consolidated Fixed Charges for any four-Fiscal Quarter period
ending as of the last day of any Fiscal Quarter occurring during any of the
periods set forth below to be less than the correlative ratio indicated:
MINIMUM FIXED
PERIOD CHARGE COVERAGE RATIO
------ ---------------------
133 (Credit Agreement)
141
1st Fiscal Quarter 1997 1.30:1.00
2nd Fiscal Quarter, 1997
through and including
1st Fiscal Quarter, 1999 1.35:1.00
2nd Fiscal Quarter, 1999
through and including
3rd Fiscal Quarter, 1999 1.40:1.00
4th Fiscal Quarter, 1999
through and including
3rd Fiscal Quarter, 2000 1.45:1.00
4th Fiscal Quarter, 2000
through and including
3rd Fiscal Quarter, 2001 1.50:1.00
4th Fiscal Quarter, 2001
through and including
3rd Fiscal Quarter, 2002 1.55:1.00
4th Fiscal Quarter, 2002
through and including
2nd Fiscal Quarter, 2003
and each Fiscal Quarter
thereafter 1.60:1.00
B. MAXIMUM LEVERAGE RATIO. Company shall not permit the ratio of
(i) Consolidated Total Debt as of the last day of any Fiscal Quarter occurring
during any of the periods set forth below to (ii) Consolidated Adjusted EBITDA
for the four-Fiscal Quarter period ending on such last day, to exceed the
correlative ratio indicated:
PERIOD MAXIMUM LEVERAGE RATIO
------ ----------------------
1st Fiscal Quarter, 1997 5.30:1.00
2nd Fiscal Quarter, 1997 5.20:1.00
3rd Fiscal Quarter, 1997 5.00:1.00
4th Fiscal Quarter, 1997 4.80:1.00
1st Fiscal Quarter, 1998 4.50:1.00
2nd Fiscal Quarter, 1998 4.30:1.00
3rd Fiscal Quarter, 1998 4.00:1.00
4th Fiscal Quarter, 1998 4.00:1.00
134 (Credit Agreement)
142
1st Fiscal Quarter, 1999 3.80:1.00
2nd Fiscal Quarter, 1999 3.70:1.00
3rd Fiscal Quarter, 1999 3.50:1.00
4th Fiscal Quarter, 1999 3.30:1.00
1st Fiscal Quarter, 2000 3.20:1.00
2nd Fiscal Quarter, 2000
through and including
2nd Fiscal Quarter, 2003
and each Fiscal Quarter
thereafter 3.00:1.00
C. MINIMUM CONSOLIDATED NET WORTH. Company shall not permit
Consolidated Net Worth at any time during any of the periods set forth below to
be less than the correlative amount indicated:
MINIMUM CONSOLIDATED
PERIOD NET WORTH
------ --------------------
Closing Date through and
including 2nd Fiscal Quarter, 1997 $130,000,000
3rd Fiscal Quarter, 1997 $135,000,000
4th Fiscal Quarter, 1997 $140,000,000
1st Fiscal Quarter, 1998 $140,000,000
2nd Fiscal Quarter, 1998 $140,000,000
3rd Fiscal Quarter, 1998 $145,000,000
4th Fiscal Quarter, 1998 $150,000,000
1st Fiscal Quarter, 1999 $160,000,000
2nd Fiscal Quarter, 1999 $165,000,000
3rd Fiscal Quarter, 1999 $175,000,000
4th Fiscal Quarter, 1999 $185,000,000
1st Fiscal Quarter, 2000 $190,000,000
2nd Fiscal Quarter, 2000 $200,000,000
3rd Fiscal Quarter, 2000 $210,000,000
4th Fiscal Quarter, 2000 $220,000,000
1st Fiscal Quarter, 2001 $230,000,000
2nd Fiscal Quarter, 2001 $245,000,000
3rd Fiscal Quarter, 2001 $260,000,000
135 (Credit Agreement)
143
4th Fiscal Quarter, 2001 $275,000,000
1st Fiscal Quarter, 2002 $280,000,000
2nd Fiscal Quarter, 2002 $295,000,000
3rd Fiscal Quarter, 2002 $315,000,000
4th Fiscal Quarter, 2002 $340,000,000
1st Fiscal Quarter, 2003 $350,000,000
2nd Fiscal Quarter, 2003
and thereafter $360,000,000
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES.
Holdings shall not, and shall not permit any of its
Subsidiaries to, alter the corporate, capital or legal structure of Holdings or
any of its Subsidiaries, including the creation or acquisition of any
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, sub-lease, transfer or otherwise dispose
of, in one transaction or a series of transactions, all or any part of its
business, property or fixed assets, whether now owned or hereafter acquired, or
acquire by purchase or otherwise all or a substantial portion of the business,
property or fixed assets of, or stock or other evidence of beneficial ownership
of, any Person or any division or line of business of any Person, except:
(i) Holdings may consummate the IPO;
(ii) Company and its Subsidiaries may make Consolidated
Capital Expenditures permitted under subsection 7.8 and Development
Investments (to the extent such Development Investments do not
constitute Consolidated Capital Expenditures) permitted under
subsection 7.3(vi);
(iii) Company and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
provided that the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof;
(iv) Company and its Subsidiaries may sell or otherwise
dispose of damaged, worn-out or obsolete assets that are no longer
necessary for the proper conduct of their respective business for fair
market value in the ordinary course of business;
(v) Company and its Subsidiaries may sell grocery stores
(including equipment therein acquired after the Closing Date) opened or
acquired after the
136 (Credit Agreement)
144
Closing Date and grocery store equipment, warehouse equipment,
distribution equipment and office equipment, in each case acquired
after the Closing Date, in connection with a concurrent lease-back of
such grocery stores (including such equipment) and such grocery store
equipment, warehouse equipment, distribution equipment and office
equipment to the extent such transactions are permitted under
subsection 7.10;
(vi) Company and its Subsidiaries may lease or sublease any
of their respective real or personal property in the ordinary course of
business;
(vii) (A) any wholly-owned Subsidiary of Company may be
merged or consolidated with or into Company or any wholly-owned
Subsidiary of Company, or all or any part of its business, property or
assets may be conveyed, sold, leased, transferred or otherwise disposed
or, in one transaction or a series or transactions, to Company or any
wholly-owned Subsidiary of Company; provided that, in the case of such
a merger or consolidation involving Company, Company shall be the
continuing or surviving corporation; and (B) the corporate existence of
those Subsidiaries of Holdings identified as inactive on Schedule 5.1
annexed hereto may be terminated to the extent permitted under
subsection 6.2;
(viii) subject to subsection 7.13, Company and its
Subsidiaries may (a) sell (1) either or both the warehouse facility
located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and the garage
connected to Donna's Meat Facility located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, (2) either or both the warehouse described in
Schedule 7.7 annexed hereto or the office building described in
Schedule 7.7 annexed hereto, and (3) store number 92 described in
Schedule 4.1B annexed hereto, (b) sell and concurrently lease-back the
equipment described in Schedule 7.7 annexed hereto and (c) make
additional Asset Sales of assets having an aggregate fair market value
not in excess of $5,000,000 in the aggregate for all such Asset Sales
in any Fiscal Year; provided that in each case for clauses (a), (b) and
(c) above, (1) the consideration received for such assets shall be in
an amount at least equal to the fair market value thereof and (2) not
less than 50% of the consideration received therefor shall be cash; and
(ix) Company and its Subsidiaries may make Asset Sales of
stores which are no longer useful to the business of Company and its
Subsidiaries; provided that the aggregate number of any stores sold
pursuant to this clause (ix) shall not exceed five in any Fiscal Year
plus, for Fiscal Year 1998 and each Fiscal Year thereafter, a number of
stores equal to the difference between five and the number of stores
sold under this clause (ix) in the immediately preceding Fiscal Year.
137 (Credit Agreement)
145
7.8 CONSOLIDATED CAPITAL EXPENDITURES.
Holdings shall not make or incur any Consolidated Capital
Expenditures and Company shall not, and shall not permit its
Subsidiaries to, make or incur Consolidated Capital Expenditures, in
any Fiscal Year indicated below, in an aggregate amount in excess of
the corresponding amount (the "MAXIMUM CONSOLIDATED CAPITAL
EXPENDITURES AMOUNT") set forth below opposite such Fiscal Year;
provided that the Maximum Consolidated Capital Expenditures Amount (i)
for any Fiscal Year (other than Fiscal Year 1997) may be increased by
an amount equal to the excess, if any, (but in no event more than 30%
of the Maximum Consolidated Capital Expenditures Amount for the
immediately preceding Fiscal Year, as set forth in the table below) of
the Maximum Consolidated Capital Expenditures Amount for the previous
Fiscal Year (as adjusted in accordance with this proviso) over the
actual amount of Consolidated Capital Expenditures for such previous
Fiscal Year, (ii) for any Fiscal Year may be increased by an amount up
to, but in no event greater than, 30% of the Maximum Consolidated
Capital Expenditures Amount for the immediately following Fiscal Year,
as set forth in the table below, which amount described in this clause
(ii) shall reduce the Maximum Consolidated Capital Expenditures Amount
for the immediately following Fiscal Year and (iii) for any Fiscal Year
may be increased by an amount equal to (but in no event greater than
$10,000,000 for any Fiscal Year) the aggregate amount of Net Cash
Proceeds (other than insurance proceeds, condemnation awards and
indemnity payments) received by Company and its Subsidiaries from Asset
Sales of stores during such Fiscal Year to the extent such Net Cash
Proceeds have been reinvested in new stores or the construction or
remodeling of stores of Company and its Subsidiaries within 270 days of
receipt in accordance with subsection 2.4B(iii)(a)(i); provided,
however, that the amount which may be added to the Maximum Consolidated
Capital Expenditures Amount for any Fiscal Year pursuant to clauses (i)
and (ii) of the immediately preceding proviso shall not exceed 30% of
the Maximum Consolidated Capital Expenditures Amount for such Fiscal
Year as set forth in the table below:
MAXIMUM CONSOLIDATED CAPITAL
FISCAL YEAR EXPENDITURES AMOUNT
----------- ----------------------------
Fiscal Year 1997 $75,000,000
Fiscal Year 1998 $70,000,000
Fiscal Year 1999 $70,000,000
Fiscal Year 2000 $75,000,000
Fiscal Year 2001 $75,000,000
Fiscal Year 2002 $80,000,000
Fiscal Year 2003
138 (Credit Agreement)
146
through April 30,
2003 $38,000,000
Notwithstanding anything to the contrary contained herein, (i) the
aggregate cumulative amount of purchase price with respect to all Store
Land Properties shall not exceed at any time $25,000,000 minus the
aggregate cumulative amount of losses incurred by Loan Parties after
the Closing Date with respect to any Store Land Property acquired after
the Closing Date (which losses shall be calculated on or after the date
of the sale or other disposition of such Store Land Property as the
purchase price of such Store Land Property minus the Cash Proceeds
received by the applicable Loan Party on or before such date of
calculation in connection with such sale or other disposition); and
(ii) Company and its Subsidiaries shall not acquire any Store Land
Properties so long as a Potential Event of Default or Event of Default
has occurred and is continuing or occurs as a result thereof.
7.9 RESTRICTION ON LEASES.
Holdings shall not become liable in any way, whether directly
or by assignment or as a guarantor or other surety, for the obligations of the
lessee under any lease, whether an Operating Lease or a Capital Lease, and
Company shall not, and shall not permit any of its Subsidiaries to, become
liable in any way, whether directly or by assignment or as a guarantor or other
surety, for the obligations of the lessee under any lease, whether an Operating
Lease or a Capital Lease (other than intercompany leases between Company and
its wholly-owned Subsidiaries), unless, immediately after giving effect to the
incurrence of liability with respect to such lease, all amounts paid or payable
under all Capital Leases and Operating Leases at the time in effect during the
then current Fiscal Year (or, in the case of Fiscal Year 2003, during the
period beginning on the first day of such Fiscal Year and ending on April 30,
2003) shall not exceed the corresponding amount set forth below opposite such
Fiscal Year:
MAXIMUM LEASE
FISCAL YEAR PAYMENTS
---------------------------------- -----------------
Fiscal Year 1997 $82,000,000
Fiscal Year 1998 $100,000,000
Fiscal Year 1999 $115,000,000
Fiscal Year 2000 $130,000,000
Fiscal Year 2001 $135,000,000
Fiscal Year 2002 $140,000,000
Fiscal Year 2003 (through April 30, 2003) $75,000,000
139 (Credit Agreement)
147
7.10 SALES AND LEASE-BACKS.
Each of Holdings and Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, become or remain liable as
lessee or as a guarantor or other surety with respect to any lease, whether an
Operating Lease or a Capital Lease, of any property (whether real, personal or
mixed), whether now owned or hereafter acquired, (i) which Holdings or any of
its Subsidiaries has sold or transferred or is to sell or transfer to any other
Person (other than Holdings or any of its Subsidiaries) or (ii) which Holdings
or any of its Subsidiaries intends to use for substantially the same purpose as
any other property which has been or is to be sold or transferred by Holdings
or any of its Subsidiaries to any Person (other than Holdings or any of its
Subsidiaries) in connection with such lease; provided that Company and its
Subsidiaries may become and remain liable as lessee, guarantor or other surety
with respect to any such lease if and to the extent that Company or any of its
Subsidiaries would be permitted to enter into, and remain liable under, such
lease under subsection 7.9.
7.11 SALE OR DISCOUNT OF RECEIVABLES.
Each of Holdings and Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, sell with recourse, or
discount or otherwise sell for less than the face value thereof, any of its
notes receivable or accounts receivable.
7.12 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Each of Holdings and Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, enter into or permit to
exist any transaction (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service) with any Affiliate
of such Person, on terms that are less favorable to such Person or that
Subsidiary, as the case may be, than those that might be obtained at the time
from Persons who are not such an Affiliate; provided that the foregoing
restriction shall not apply to (i) any transaction between Company and any of
its wholly-owned Subsidiaries or between any of its wholly-owned Subsidiaries,
(ii) transactions relating to the termination of the Consulting Agreement and
the payment of a termination fee thereunder as described in subsection 4.1H,
(iii) reasonable and customary fees paid to members of the Boards of Directors
of Holdings and its Subsidiaries, (iv) issuances of stock, payments of bonuses
and other transactions pursuant to employment or compensation agreements, stock
option agreements, indemnification agreements and other arrangements, in each
case satisfactory in form and in substance to Agent and Arrangers and as in
effect as of the Closing Date and unamended, and substantially similar
agreements as may hereafter become effective, in each case with officers or
directors who are Affiliates of Holdings or any of its Subsidiaries, (v)
payment of consulting and other fees and expenses under the Management
Agreement, as amended to the extent permitted pursuant to subsection 7.15, and
in form and substance satisfactory to Agent and Arrangers, (vi) to the extent
140 (Credit Agreement)
148
permitted under subsection 7.3(xii), any repurchase of stock of Holdings from
Company's stock option or other stock plan or participants in such plan, in
each case to the extent such repurchases are required by the terms of such
plan, (vii) payments by Holdings and its Subsidiaries pursuant to the Tax
Sharing Agreement, and (viii) the issuance by Holdings of Holdings Common Stock
to Yucaipa pursuant to Yucaipa's warrant issued to it on the Acquisition Date
by Holdings (as in effect on the Closing Date and as it may be amended from
time to time thereafter to the extent permitted under subsection 7.15, the
"YUCAIPA WARRANTS").
7.13 DISPOSAL OF SUBSIDIARY STOCK; RESTRICTIONS ON SUBSIDIARIES.
A. Except for any sale of 100% of the capital stock or other
equity Securities of any of Company's Subsidiaries in compliance with the
provisions of subsection 7.7(vii) and except pursuant to the Collateral
Documents, Holdings will not and will not permit any of its Subsidiaries to
directly or indirectly sell, assign, pledge or otherwise encumber or dispose of
any shares of capital stock or other equity Securities of any of its
Subsidiaries, except to qualify directors if required by applicable law, or in
the case of Company's Subsidiaries, to Company or to a wholly-owned Subsidiary
of Company.
B. Except as provided herein or in any other Loan Document,
Holdings will not, and will not permit any of its Subsidiaries to, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary of
Company to (i) pay dividends or make any other distributions on any of such
Subsidiary's capital stock owned by Company or any other Subsidiary of Company,
(ii) repay or prepay any Indebtedness owed by such Subsidiary to Company or any
other Subsidiary of Company, (iii) make loans or advances to Company or any
other Subsidiary of Company, or (iv) transfer any of its property or assets to
Company or any other Subsidiary of Company.
7.14 CONDUCT OF BUSINESS.
From and after the Closing Date, notwithstanding anything to the
contrary set forth in this Agreement or any other Loan Documents, Company shall
not, and shall not permit any of its Subsidiaries to, engage in any business
other than (i) the businesses engaged in by Company and its Subsidiaries on the
Closing Date and similar or related businesses and (ii) such other lines of
business as may be consented to by Requisite Lenders. From and after the
Closing Date, notwithstanding anything to the contrary set forth in this
Agreement or any other Loan Documents, Holdings shall not engage in any
business other than owning the capital stock of Company and entering into and
performing its obligations under and in accordance with the Loan Documents, the
Related Transaction Documents and the Specified Existing Documents to which it
is a party, and shall not own any assets other than (a) the capital stock of
Company, (b) Cash and Cash Equivalents in an amount not to exceed $500,000 at
any one time for the purpose of paying general operating expenses of Holdings,
(c) Cash which has been
141 (Credit Agreement)
149
paid to Holdings for the purpose of allowing Holdings to make the payments
described in clause (iv) of subsection 7.5A; provided that Holdings shall make
such payments immediately upon (and in any event on the date of) receipt of
such Cash, and (d) Cash and Cash Equivalents until the Redemption Date for the
sole purpose of allowing Holdings to make the payments required under the
Preferred Stock Redemption Agreement; provided that Holdings shall make such
payments on or before the Redemption Date. Holdings shall continue to hold all
of the funds initially deposited in the Redemption Account on the Closing Date
in the Redemption Account until the Redemption Date and shall not use any such
funds for any purpose other than for the purpose of paying the Preferred Stock
Holder in accordance with the Preferred Stock Redemption Agreement. From and
after the Closing Date, notwithstanding anything to the contrary set forth in
this Agreement or any other Loan Documents, neither BDI nor BPI shall engage in
any business other than (i) owning the Cash and Cash Equivalents or promissory
notes issued by Company required to be owned by them in amounts less than
$90,000 and $260,000, respectively, and (ii) entering into and performing its
obligations under and in accordance with the Loan Documents, the Related
Transaction Documents and the Specified Existing Documents to which it is a
party, and neither BDI nor BPI shall own any assets other than such Cash and
Cash Equivalents or promissory notes or incur any Indebtedness or Contingent
Obligations other than under the Loan Documents or as specifically permitted
under subsections 7.1(v) and 7.4(ix).
7.15 AMENDMENTS OF CERTAIN DOCUMENTS; DESIGNATION OF DESIGNATED SENIOR
INDEBTEDNESS.
A. Holdings shall not, and shall not permit any of its
Subsidiaries to, amend or otherwise change the terms of any Subordinated
Indebtedness (including without limitation the Senior Subordinated Notes, the
Senior Subordinated Note Indenture and each of the exhibits thereto), any of
the guaranties entered into by any Loan Party in connection with any
Subordinated Indebtedness or any agreements relating to the Existing Funded
Debt (collectively, the "RESTRICTED AGREEMENTS"), or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate on such Subordinated
Indebtedness, such guaranties, or any such Restricted Agreement, change any
dates upon which payments of principal or interest are due thereon, change any
of the covenants with respect thereto in a manner which is more restrictive to
Holdings or any of its Subsidiaries, change any event of default or condition
to an event of default with respect thereto, change the redemption, prepayment
or defeasance provisions thereof, change the subordination provisions (if any)
thereof (or of any guaranty thereof), or change any collateral therefor (other
than to release such collateral), or if the effect of such amendment or change,
together with all other amendments or changes made, is to increase the
obligations of the obligor thereunder or to confer any additional rights on the
holders of such Subordinated Indebtedness, such guaranties, or any such
Restricted Agreement (or a trustee or other representative on their behalf)
which would be adverse to any Loan Party or Lenders.
142 (Credit Agreement)
150
B. Holdings shall not, and shall not permit any of its
Subsidiaries to, amend, waive any of its rights under, or otherwise change the
terms of any of the Management Agreement, the Redemption Documents, the
Termination Agreement, the Release Agreement, the Stock Purchase Agreement, the
Stock Exchange Agreement, the Holdings Certificate of Designation, the Asset
Transfer Agreement, the Tax Matters Agreement, the Yucaipa Warrants or the
Shareholders Agreement, in each case as in effect on the Closing Date, without
the prior written consent of the Requisite Lenders, if such amendment, waiver
or change would increase materially the obligations of Holdings or any of its
Subsidiaries or confer additional rights on any other party to any such
agreement which would be adverse to Holdings or any of its Subsidiaries or to
Lenders (it being understood that any amendment of the Preferred Stock
Redemption Agreement or the Release Agreement which extends the Redemption Date
shall be deemed to be adverse to Lenders).
C. Neither Holdings nor Company shall amend or otherwise change
the terms of the Parent Merger Certificate or the Tax Sharing Agreement without
the prior written consent of Requisite Lenders.
D. None of the Loan Parties shall designate any Indebtedness as
"Designated Senior Indebtedness" (as defined in the Senior Subordinated Note
Indenture) for purposes of the Senior Subordinated Note Indenture without the
prior written consent of Requisite Lenders.
7.16 FISCAL YEAR.
No Loan Party (other than Land Trusts) shall change its Fiscal
Year-end from the Saturday closest to October 31 of each calendar year.
SECTION 8. EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF
DEFAULT") shall occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal of any
Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; failure by Company
to pay when due any amount payable to an Issuing Lender in reimbursement of any
drawing under a Letter of Credit; or failure by Company to pay any interest on
any Loan or any fee or any other amount due under this Agreement within five
days after the date due; or
143 (Credit Agreement)
151
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of any of Holdings or any of its Subsidiaries
to pay when due (a) any principal of or interest on any Indebtedness (other
than Indebtedness referred to in subsection 8.1) in an individual principal
amount of $5,000,000 or more or any items of Indebtedness with an aggregate
principal amount of $10,000,000 or more or (b) any Contingent Obligation in an
individual principal amount of $5,000,000 or more or any Contingent Obligations
with an aggregate principal amount of $10,000,000 or more, in each case beyond
the end of any grace period provided therefor; or (ii) breach or default by any
of Holdings or any of its Subsidiaries with respect to any other material term
of (a) any evidence of any Indebtedness in an individual principal amount of
$5,000,000 or more or any items of Indebtedness with an aggregate principal
amount of $10,000,000 or more or any Contingent Obligation in an individual
principal amount of $5,000,000 or more or any Contingent Obligations with an
aggregate principal amount of $10,000,000 or more or (b) any loan agreement,
mortgage, indenture or other agreement relating to such Indebtedness or
Contingent Obligation(s), if the effect of such breach or default is to cause,
or to permit the holder or holders of that Indebtedness or Contingent
Obligation(s) (or a trustee on behalf of such holder or holders) to cause, that
Indebtedness or Contingent Obligation(s) to become or be declared due and
payable prior to its stated maturity or the stated maturity of any underlying
obligation, as the case may be (upon the giving or receiving of notice, lapse
of time, both, or otherwise); or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of Holdings or Company to perform or comply with any
term or condition contained in subsection 2.5, 6.2 or 6.13 or Section 7 of this
Agreement; or
8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement
made by any of the Loan Parties in any Loan Document or in any statement or
certificate at any time given by any of the Loan Parties in writing pursuant
hereto or thereto or in connection herewith or therewith shall be false in any
material respect on the date as of which made; or
8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or
compliance with any term contained in this Agreement or any of the other Loan
Documents, other than any such term referred to in any other subsection of this
Section 8, and such default shall not have been remedied or waived within 30
days after the receipt by Company of notice from Agent or any Lender of such
default; or
144 (Credit Agreement)
152
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall
enter a decree or order for relief in respect of any of Holdings or any of its
Subsidiaries (other than an inactive Subsidiary identified as such in Schedule
5.1 annexed hereto (other than BDI and BPI) whose aggregate assets and annual
revenues do not exceed $500,000 and $500,000, respectively, and whose financial
condition does not adversely affect any other Loan Party ("INSIGNIFICANT
SUBSIDIARY")) in an involuntary case under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar relief shall
be granted under any applicable federal or state law; or (ii) an involuntary
case shall be commenced against any of Holdings or any of its Subsidiaries
(other than an Insignificant Subsidiary) under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over any of Holdings or any of its
Subsidiaries (other than an Insignificant Subsidiary), or over all or a
substantial part of its property, shall have been entered; or there shall have
occurred the involuntary appointment of an interim receiver, trustee or other
custodian of any of Holdings or any of its Subsidiaries (other than an
Insignificant Subsidiary) for all or a substantial part of its property; or a
warrant of attachment, execution or similar process shall have been issued
against any substantial part of the property of any of Holdings or any of its
Subsidiaries (other than an Insignificant Subsidiary), and any such event
described in this clause (ii) shall continue for 60 days unless dismissed,
bonded or discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) any of Holdings or any of its Subsidiaries shall have
an order for relief entered with respect to it or commence a voluntary case
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect, or shall consent to the entry of an
order for relief in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or shall consent to the
appointment of or taking possession by a receiver, trustee or other custodian
for all or a substantial part of its property; or any of Holdings or any of its
Subsidiaries shall make any assignment for the benefit of creditors; or (ii)
any of Holdings or any of its Subsidiaries shall be unable or shall fail,
generally, or shall admit in writing its inability, to pay its debts as such
debts become due; or the Board of Directors of any of Holdings or any of its
Subsidiaries (or any committee thereof) shall adopt any resolution or otherwise
authorize any action to approve any of the actions referred to in clause (i)
above or this clause (ii); or
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8.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar
process involving (i) in any individual case an amount in excess of $5,000,000
or (ii) in the aggregate at any time an amount in excess of $10,000,000 (in
either case not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against any of Holdings or any of its Subsidiaries or any of their
respective assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of 60 days (or in any event later than five days prior to
the date of any proposed sale thereunder); or
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against any of
Holdings or any of its Subsidiaries decreeing the dissolution or split up of
such Person and such order shall remain undischarged or unstayed for a period
in excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually
or in the aggregate results in or could reasonably be expected to result in
liability of any of the Loan Parties or any of their respective ERISA
Affiliates in excess of $5,000,000 during the term of this Agreement; or there
shall exist an Amount of Unfunded Benefit Liabilities, individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation any
Pension Plans which have a negative Amount of Unfunded Benefit Liabilities),
which exceeds $10,000,000; or
8.11 CHANGE IN CONTROL.
A Change of Control shall have occurred; or
8.12 INVALIDITY OF ANY GUARANTY.
Either the Holdings Guaranty or, upon execution and delivery
thereof, the Subsidiary Guaranty for any reason, other than the satisfaction in
full of all Obligations, ceases to be in full force and effect (other than in
accordance with its terms) or is declared to be null and void, or any Loan
Party denies that it has any further liability, including without limitation
with respect to future advances by Lenders, under any Loan Document to which it
is a party, or gives notice to such effect; or
8.13 FAILURE OF SECURITY.
Any Collateral Document shall, at any time, cease to be in full
force and effect (other than by reason of a release of Collateral in accordance
with the terms
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hereof or thereof) or shall be declared null and void, or the validity or
enforceability thereof shall be contested by any Loan Party, or Agent shall not
have or cease to have a valid and perfected first priority security interest in
any significant part of the Collateral (other than by reason of any release of
Collateral in accordance with the terms hereof or thereof); or
8.14 ACTION RELATING TO CERTAIN SUBORDINATED INDEBTEDNESS.
Any holder of any Subordinated Indebtedness evidenced by the
Senior Subordinated Notes shall file an action seeking the rescission thereof
or damages or injunctive relief relating thereto; or any event shall occur
which, under the terms of the Senior Subordinated Note Indenture, shall require
Holdings or any of its Subsidiaries to purchase, redeem or otherwise acquire or
offer to purchase, redeem or otherwise acquire all or any portion of any such
Subordinated Indebtedness; or Holdings or any of its Subsidiaries shall for any
other reason purchase, redeem or otherwise acquire or offer to purchase, redeem
or otherwise acquire, or make any other payments in respect of, all or any
portion of any such Subordinated Indebtedness, except to the extent expressly
permitted by subsection 7.5; or
8.15 FAILURE TO CONSUMMATE TRANSACTIONS.
(i) Any of the Transactions shall not be consummated in
accordance with the Loan Documents and the Related Transaction Documents prior
to or concurrently with the making of the Term Loans, (ii) the redemption of
all of the Holdings Preferred Stock shall not be consummated in accordance with
the terms of the Preferred Stock Redemption Agreement and Release Agreement on
or prior to the Redemption Date, or (iii) any of the Transactions or such
redemption shall be unwound, reversed or otherwise rescinded or modified in
whole or in part for any reason:
THEN (i) upon the occurrence of any Event of Default described in subsection
8.6 or 8.7, each of (a) the unpaid principal amount of and accrued interest on
the Loans, (b) an amount equal to the maximum amount that may at any time be
drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any such Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents or certificates
required to draw under such Letter of Credit), and (c) all other Obligations
shall automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by Holdings and Company, and the obligation of each Lender to
make any Loan (including the obligation of Swing Line Lender to make any Swing
Line Loan), the obligation of Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon
terminate, and (ii) upon the occurrence and during the continuation of any
other Event of Default, Agent shall, upon the written request or with the
written consent of Requisite Lenders, by written notice to Company, declare all
or any portion of the amounts described in clauses (a) through (c)
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above to be, and the same shall forthwith become, immediately due and payable,
and the obligation of each Lender to make any Loan (including the obligation of
Swing Line Lender to make any Swing Line Loan), the obligation of Agent to
issue any Letter of Credit and the right of any Lender to issue any Letter of
Credit hereunder shall thereupon terminate; provided that the foregoing shall
not affect in any way the obligations of Revolving Lenders to purchase
participations in Letters of Credit as provided in subsection 3.3C or the
obligations of Revolving Lenders to purchase participations in any unpaid Swing
Line Loans as provided in subsection 2.1A(iv).
Any amounts described in clause (b) above, when received by
Agent, shall be held by Agent pursuant to the terms of the Collateral Account
Agreement and shall be applied as therein provided.
Notwithstanding anything contained in the second preceding
paragraph, if at any time within 60 days after an acceleration of the Loans
pursuant to such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as
a result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this
Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in each
case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to subsection 11.6, then Requisite Lenders, by
written notice to Company, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to
bind Lenders to a decision which may be made at the election of Requisite
Lenders and are not intended to benefit Company and do not grant Company the
right to require Lenders to rescind or annul any acceleration hereunder, even
if the conditions set forth herein are met.
SECTION 9. HOLDINGS GUARANTY
Holdings (for purposes of this Section 9, "GUARANTOR") hereby
consents to and confirms its guaranty of all Obligations of Company and all
obligations of Company under Interest Rate Agreements permitted under
subsection 7.4(iii) to which a Lender or an Affiliate of such Lender is a
counterparty (such guaranty being the "HOLDINGS GUARANTY"). In furtherance of
the foregoing, Guarantor hereby agrees as follows:
9.1 GUARANTIED OBLIGATIONS.
As consideration for Lenders agreeing to enter into this
Agreement and extend the Commitments, make the Loans hereunder and issue the
Letters of Credit, Guarantor hereby unconditionally and irrevocably guaranties,
as primary obligor and not
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merely as a surety, the due and punctual payment when due (whether at stated
maturity, by required prepayment, declaration, demand or otherwise) (including
amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)) of all
Obligations of Company (including, without limitation, interest which, but for
the filing of a petition in bankruptcy with respect to Company would accrue on
such Obligations) and all obligations of Company under Interest Rate Agreements
(collectively, the "LENDER INTEREST RATE AGREEMENTS") permitted under
subsection 7.4(iii) to which a Lender or an Affiliate of such Lender (in such
capacity, collectively, "INTEREST RATE EXCHANGERS") is a counterparty (the
"GUARANTIED OBLIGATIONS"). Lenders and Interest Rate Exchangers are each
referred to herein as a "GUARANTEED PARTY" and collectively as the "GUARANTIED
PARTIES".
9.2 TERMS OF HOLDINGS GUARANTY.
Guarantor agrees that the Guarantied Obligations may be
extended or renewed, and the Loans repaid and reborrowed in whole or in part,
without notice or further assent from it, and that it will remain bound upon
this Holdings Guaranty notwithstanding any extension, renewal or other
alteration of any such Guarantied Obligation or repayment and reborrowing of
the Loans.
Guarantor waives presentation of, demand of, payment from and
protest of any Guarantied Obligation and also waives notice of protest for
nonpayment. The obligations of Guarantor under this Holdings Guaranty shall
not be affected by, and Guarantor hereby waives its rights (to the extent
permitted by law) in connection with:
(a) the failure of Agent or any Guarantied Party to assert
any claim or demand or to enforce any right or remedy against Company
under the provisions of this Agreement, any Loan Documents or the
Lender Interest Rate Agreements or any other agreement or otherwise,
(b) any extension or renewal of any provision thereof,
(c) any rescission, waiver, amendment or modification of
any of the terms or provisions of this Agreement or any instrument
executed pursuant hereto or the Lender Interest Rate Agreements,
(d) the release of any of the security held by Agent for
any of the Guarantied Obligations,
(e) the failure of Agent or any Guarantied Party to
exercise any right or remedy against any other guarantor of any of the
Guarantied Obligations,
(f) Agent or any Guarantied Party taking and holding
security or collateral for the payment of this Holdings Guaranty, any
other guaranties of the
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Guarantied Obligations or other liabilities of the Company, and
exchanging, enforcing, waiving and releasing any such security or
collateral,
(g) Agent or any Guarantied Party applying any such
security or collateral and directing the order or manner of sale
thereof as Agent in its discretion may determine, or
(h) Agent or any Guarantied Party settling, releasing,
compromising, collecting or otherwise liquidating the Guarantied
Obligations and any security or collateral therefor in any manner
determined by Agent or such Guarantied Party .
Guarantor further agrees that this Holdings Guaranty
constitutes a guaranty of payment when due and not of collection and waives any
right to require that any resort be had by Agent or any other Person to any
security held for payment of the Guarantied Obligations or to any balance of
any deposit account or credit on the books of Agent or any other Person in
favor of Company or any other Person.
The obligations of Guarantor under this Holdings Guaranty shall
not be subject to any reduction, limitation, impairment or termination for any
reason, including, without limitation, any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Guarantied Obligations, discharge of
Company from such Guarantied Obligations in a bankruptcy or similar proceeding
or otherwise. Without limiting the generality of the foregoing, the
obligations of Guarantor under this Holdings Guaranty shall not be discharged
or impaired or otherwise affected by the failure of Agent or any Guarantied
Party to assert any claim or demand or to enforce any remedy under this
Agreement or any other agreement, by any waiver or modification of any
provision thereof, by any default, failure or delay, willful or otherwise, in
the performance of the Guarantied Obligations, or by any other act or thing or
omission or delay to do any other act or thing that may or might in any manner
or to any extent vary the risk of Guarantor or would otherwise operate as a
discharge of Guarantor as a matter of law or equity.
Agent may, at its election, foreclose on any security held by
Agent by one or more judicial or nonjudicial sales, or exercise any other right
or remedy Agent may have against Company or any security without affecting or
impairing in any way the liability of Guarantor hereunder except to the extent
the Guarantied Obligations have been paid. Guarantor waives any defense
arising out of such election by Agent, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or other right
or remedy of Guarantor against Company or any security, so long as Agent has
acted in a commercially reasonable manner.
Guarantor further agrees that this Holdings Guaranty shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part
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thereof, of principal of or interest on any Guarantied Obligation is rescinded
or must otherwise be restored by Agent upon the bankruptcy or reorganization of
Company or otherwise.
Guarantor hereby further agrees, in furtherance of the
foregoing and not in limitation of any other right that Agent may have at law
or in equity against Guarantor by virtue hereof, upon the failure of Company to
pay any of its Guarantied Obligations when and as the same shall become due
(whether by required prepayment, declaration, demand or otherwise), Guarantor
will forthwith pay, or cause to be paid, in cash, to Agent an amount equal to
the sum of the unpaid principal amount of such Guarantied Obligations, accrued
and unpaid interest on such Guarantied Obligations and all other Obligations of
Company to Agent.
Until the Guarantied Obligations shall have been indefeasibly
paid in full and the Commitments shall have terminated and all Letters of
Credit shall have expired or been cancelled and all Lender Interest Rate
Agreements shall have terminated, expired or been cancelled, Guarantor shall
withhold exercise of (i) any claim, right or remedy, direct or indirect, that
Guarantor now has or may hereafter have against Company or any of its assets in
connection with this Holdings Guaranty or the performance by Guarantor of its
obligations hereunder, in each case whether such claim, right or remedy arises
in equity, under contract, by statute, under common law or otherwise and
including without limitation (a) any right of subrogation, reimbursement or
indemnification that Guarantor now has or may hereafter have against Company,
(b) any right to enforce, or to participate in, any claim, right or remedy that
Agent or any Guarantied Party now has or may hereafter have against Company,
and (c) any benefit of, and any right to participate in, any collateral or
security now or hereafter held by Agent or any Guarantied Party, and (ii) any
right of contribution Guarantor may have against any other guarantor of any of
the Guarantied Obligations. Guarantor further agrees that, to the extent the
agreement to withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification Guarantor may have against
Company or against any collateral or security, and any rights of contribution
Guarantor may have against any such other guarantor, shall be junior and
subordinate to any rights Agent or Guarantied Parties may have against Company,
to all right, title and interest Agent or Guarantied Parties may have in any
such collateral or security, and to any right Agent or Guarantied Parties may
have against such other guarantor. Agent, on behalf of Guarantied Parties, may
use, sell or dispose of any item of collateral or security as it sees fit
without regard to any subrogation rights Guarantor may have, and upon any such
disposition or sale any rights of subrogation Guarantor may have shall
terminate. If any amount shall be paid to Guarantor on account of any such
subrogation, reimbursement or indemnification rights at any time when all
Guarantied Obligations shall not have been paid in full, such amount shall be
held in trust for Agent on behalf of Guarantied Parties and shall forthwith be
paid over to Agent for the benefit of Guarantied Parties to
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be credited and applied against the Guarantied Obligations, whether matured or
unmatured, in accordance with the terms hereof.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon failure of
Company to pay its Guarantied Obligations when due (whether by required
prepayment, declaration, demand or otherwise) and consequent acceleration of
the Obligations pursuant to Section 8, Agent is hereby authorized by Guarantor
at any time or from time to time, without notice to Guarantor or to any other
Person, any such notice being hereby expressly waived to the extent permitted
by applicable law, to set off and to appropriate and to apply any and all
deposits (general or special, including, not limited to, Indebtedness evidenced
by certificates of deposit, whether matured or unmatured, but not including
trust accounts) and any other Indebtedness at any time owing by Agent to or for
the credit or the account of Guarantor against and on account of the
obligations and liabilities of Guarantor to Agent under this Holdings Guaranty,
including, but not limited to, all such obligations and liabilities with
respect to all claims of any nature or description arising out of or connected
with this Agreement, this Holdings Guaranty or the Letters of Credit or any of
the other Loan Documents, irrespective of whether or not Agent, with respect to
any Obligation owed under the Letters of Credit or this Agreement, shall have
made any demand hereunder. Agent agrees promptly to notify Guarantor after any
such set-off and application is made by Agent.
Notwithstanding anything contained in this Section 9 to the
contrary, this Holdings Guaranty shall not be effective or in full force and
effect until the Closing Date.
SECTION 10. AGENT, SYNDICATION AGENT AND ARRANGERS
10.1 APPOINTMENT.
Each Lender and, by its acceptance of the benefits hereof and
of the other Loan Documents, each Interest Rate Exchanger hereby appoints
Bankers as Agent hereunder and under the other Loan Documents and each Lender
and, by its acceptance of the benefits hereof and of the other Loan Documents,
each Interest Rate Exchanger hereby authorizes Agent to act as its agent in
accordance with the terms of this Agreement and the other Loan Documents. Each
Lender and, by its acceptance of the benefits hereof and of the other Loan
Documents, each Interest Rate Exchanger hereby appoints Chase as Syndication
Agent hereunder. Each Lender and, by its acceptance of the benefits hereof and
of the other Loan Documents, each Interest Rate Exchanger hereby appoints
Bankers and Chase as Arrangers hereunder. Agent agrees to act upon the express
conditions contained in this Agreement and the other Loan Documents, as
applicable. The provisions of this Section 10 are solely for the benefit of
Agent, Syndication Agent, Arrangers, Lenders and Interest Rate Exchangers and
no Loan Party shall have any rights as a third party beneficiary of any of the
provisions thereof. In
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performing its functions and duties under this Agreement and other than as
expressly provided for in subsection 2.1D(v), Agent shall act solely as an
agent of Lenders and Interest Rate Exchangers and does not assume and shall not
be deemed to have assumed any obligation towards or relationship of agency or
trust with or for any Loan Party. Each Lender named as an Arranger hereunder
or as the Syndication Agent shall have no duties or responsibilities under this
Agreement or any other Loan Document (other than as specifically set forth
herein) to any Person, other than as a Lender hereunder and thereunder, and in
the case of Bankers, other than as Agent hereunder and thereunder.
10.2 POWERS; GENERAL IMMUNITY.
A. DUTIES SPECIFIED. Each Lender and, by its acceptance of the
benefits hereof and of the other Loan Documents, each Interest Rate Exchanger
irrevocably authorizes Agent, Syndication Agent and Arrangers to take such
action on such Lender's behalf or such Interest Rate Exchanger's behalf and to
exercise such powers hereunder and under the other Loan Documents as are
specifically delegated to Agent, Syndication Agent and Arrangers, by the terms
hereof and thereof, together with such powers as are reasonably incidental
thereto. Agent, Syndication Agent and Arrangers shall have only those duties
and responsibilities that are expressly specified in this Agreement and the
other Loan Documents and each of them may perform such duties by or through its
agents or employees. Agent, Syndication Agent and Arrangers shall not have, by
reason of this Agreement or any of the other Loan Documents, a fiduciary
relationship in respect of any Lender or any Interest Rate Exchanger; and
nothing in this Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose upon Agent,
Syndication Agent or Arrangers any obligations in respect of this Agreement or
any of the other Loan Documents except as expressly set forth herein or
therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. Agent, Syndication
Agent and Arrangers shall not be responsible to any Lender or any Interest Rate
Exchanger for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any
other documents furnished or made by Agent, Syndication Agent or Arrangers to
Lenders and Interest Rate Exchangers or by or on behalf of any Loan Party to
Agent, Syndication Agent, Arrangers or any Lender or any Interest Rate
Exchanger in connection with the Loan Documents and the transactions
contemplated thereby or for the financial condition or business affairs of any
Loan Party or any other Person liable for the payment of any Obligations, nor
shall Agent or Arrangers be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Loan Documents or as to the use
of the proceeds of the Loans or the use of the Letters of Credit or as to the
existence or possible existence of any Event of Default or Potential Event of
Default. Anything contained in this
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Agreement to the contrary notwithstanding, Agent shall not have any liability
arising from confirmations of the amount of outstanding Loans or the Letter of
Credit Usage or the component amounts thereof.
C. EXCULPATORY PROVISIONS. Neither Agent nor Syndication Agent
nor any Arranger nor any of their respective officers, directors, employees or
agents shall be liable to Lenders or Interest Rate Exchangers for any action
taken or omitted by Agent, Syndication Agent or Arrangers under or in
connection with any of the Loan Documents except to the extent caused by such
Person's gross negligence or willful misconduct. If Agent, Syndication Agent
or Arrangers shall request instructions from Lenders with respect to any act or
action (including the failure to take an action) in connection with this
Agreement or any of the other Loan Documents, Agent, Syndication Agent and
Arrangers shall be entitled to refrain from such act or taking such action
unless and until Agent, Syndication Agent or Arrangers, as the case may be,
shall have received instructions from Requisite Lenders. Without prejudice to
the generality of the foregoing, (i) each of Agent, Syndication Agent and
Arrangers shall be entitled to rely, and shall be fully protected in relying,
upon any communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and
shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Loan Parties), accountants,
experts and other professional advisors selected by it; and (ii) no Lender or
Interest Rate Exchanger shall have any right of action whatsoever against
Agent, Syndication Agent or Arrangers, as the case may be, as a result of
Agent, Syndication Agent or Arrangers, as the case may be, acting or (where so
instructed) refraining from acting under this Agreement or any of the other
Loan Documents in accordance with the instructions of Requisite Lenders. Each
of Agent, Syndication Agent and Arrangers shall be entitled to refrain from
exercising any power, discretion or authority vested in it under this Agreement
or any of the other Loan Documents unless and until it has obtained the
instructions of Requisite Lenders.
D. AGENT, SYNDICATION AGENT AND ARRANGER ENTITLED TO ACT AS
LENDER. The agency hereby created shall in no way impair or affect any of the
rights and powers of, or impose any duties or obligations upon, Agent,
Syndication Agent or either Arranger in its individual capacity as a Lender
hereunder. With respect to its participation in the Loans and the Letters of
Credit, each of Agent, Syndication Agent and each Arranger shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not performing the duties and functions delegated to it
hereunder, and the term "Lender" or "Lenders" or any similar term shall, unless
the context clearly otherwise indicates, include each of Agent, Syndication
Agent and each Arranger in its individual capacity. Each of Agent, Syndication
Agent and each Arranger and each of their respective Affiliates may accept
deposits from, lend money to and generally engage in any kind of banking,
trust, financial advisory or other business with Holdings or any of its
Affiliates as if it were not performing the duties specified herein, and may
accept fees and other consideration from any Loan Party for
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services in connection with this Agreement and otherwise without having to
account for the same to Lenders or Interest Rate Exchangers.
10.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of the Loan
Parties in connection with the making of the Loans and the issuance of Letters
of Credit hereunder and that it has made and shall continue to make its own
appraisal of the creditworthiness of the Loan Parties. Neither Agent, nor
Syndication Agent nor any Arranger shall have any duty or responsibility,
either initially or on a continuing basis, to make any such investigation or
any such appraisal on behalf of Lenders or to provide any Lender with any
credit or other information with respect thereto, whether coming into its
possession before the making of the Loans or at any time or times thereafter,
and neither Agent, nor Syndication Agent, nor any Arranger shall have any
responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.
10.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify each of Agent, Syndication Agent and each Arranger, to the
extent that Agent, Syndication Agent, or such Arranger shall not have been
reimbursed by any Loan Party, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against Agent, Syndication Agent or such Arranger in
performing its duties hereunder or under the other Loan Documents or otherwise
in its capacity as Agent, Syndication Agent or Arranger, as the case may be, in
any way relating to or arising out of this Agreement or the other Loan
Documents; provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from Agent's, Syndication
Agent's or such Arranger's gross negligence or willful misconduct. If any
indemnity furnished to Agent, Syndication Agent or either Arranger, as the case
may be, for any purpose shall, in the opinion of Agent, Syndication Agent or
such Arranger, as the case may be, be insufficient or become impaired, Agent,
Syndication Agent or such Arranger may call for additional indemnity and cease,
or not commence, to do the acts indemnified against until such additional
indemnity is furnished.
10.5 SUCCESSOR AGENT AND SWING LINE LENDER.
A. SUCCESSOR AGENT. Agent may resign at any time by giving 30
days' prior written notice thereof to Lenders and Company, and Agent may be
removed at any time with or without cause by an instrument or concurrent
instruments in writing delivered to
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Company and Agent and signed by Requisite Lenders. Upon any such notice of
resignation or any such removal, Requisite Lenders shall have the right, upon
five Business Days' notice to Company, to appoint a successor Agent. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, that
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Agent and the
retiring or removed Agent shall be discharged from its duties and obligations
under this Agreement. After any retiring or removed Agent's resignation or
removal hereunder as Agent, the provisions of this Section 10 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
B. SUCCESSOR SWING LINE LENDER. Any resignation or removal of
Agent pursuant to subsection 10.5A shall also constitute the resignation or
removal of Bankers or its successor as Swing Line Lender, and any successor
Agent appointed pursuant to subsection 10.5A shall, upon its acceptance of such
appointment, become the successor Swing Line Lender for all purposes hereunder.
In such event (i) Company shall prepay any outstanding Swing Line Loans made by
the retiring or removed Agent in its capacity as Swing Line Lender, (ii) upon
such prepayment, the retiring or removed Agent and Swing Line Lender shall
surrender the Swing Line Note held by it to Company for cancellation, and (iii)
Company shall issue a new Swing Line Note to the successor Agent and Swing Line
Lender substantially in the form of Exhibit VI annexed hereto, in the principal
amount of the Swing Line Loan Commitment then in effect and with other
appropriate insertions.
10.6 GUARANTIES AND COLLATERAL DOCUMENTS.
Each Lender and, by its acceptance of the benefits hereof and
of the other Loan Documents, each Interest Rate Exchanger hereby further
authorizes Agent to enter into the Collateral Documents as secured party on
behalf of and for the benefit of Lenders and Interest Rate Exchangers and
agrees to be bound by the terms of the Collateral Documents; provided that,
except as otherwise provided in subsection 6.11 or 11.6, Agent shall not enter
into or consent to any amendment, modification, termination or waiver of any
provision contained in the Collateral Documents without the prior consent of
Requisite Lenders. Anything contained in the Loan Documents to the contrary
notwithstanding, each Lender and, by its acceptance of the benefits hereof and
of the other Loan Documents, each Interest Rate Exchanger agrees that (i) no
Lender or Interest Rate Exchanger shall have any right individually to realize
upon the Holdings Guaranty, the Subsidiary Guaranty or any of the Collateral
under the Collateral Documents, it being understood and agreed that all rights
and remedies under the Collateral Documents may be exercised solely by Agent
for the benefit of Lenders and Interest Rate Exchangers and the other
beneficially interested parties under the Collateral Documents and the other
Loan Documents in accordance with the terms thereof, and (ii) Agent may release
all Liens on the Collateral in accordance with subsection 6.11 without the
prior consent of any Lender or Interest Rate Exchanger.
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SECTION 11. MISCELLANEOUS
11.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
A. GENERAL. Each Lender shall have the right at any time to (i)
sell, assign or transfer to any Eligible Assignee, or (ii) sell participations
to any Person in, all or any part of its Commitments or any Loan or Loans made
by it or its Letters of Credit or participations therein or any other interest
herein or in any other Obligations owed to it; provided that no such sale,
assignment, transfer or participation shall, without the consent of Company,
require Company to file a registration statement with the Securities and
Exchange Commission or apply to qualify such sale, assignment, transfer or
participation under the securities laws of any state; provided, further that no
such sale, assignment or transfer described in clause (i) above shall be
effective unless and until an Assignment Agreement effecting such sale,
assignment or transfer shall have been accepted by Agent and recorded in the
Register as provided in subsection 11.1B(ii); provided, further that no such
sale, assignment, transfer or participation of any Letter of Credit or any
participation therein may be made separately from a sale, assignment, transfer
or participation of a corresponding interest in the Revolving Loan Commitment
and the Revolving Loans of the Lender effecting such sale, assignment, transfer
or participation; and provided, further that, anything contained herein to the
contrary notwithstanding, the Swing Line Loan Commitment and the Swing Line
Loans of Swing Line Lender may not be sold, assigned or transferred as
described in clause (i) above to any Person other than a successor Agent and
Swing Line Lender to the extent contemplated by subsection 10.5. Except as
otherwise provided in this subsection 11.1, no Lender shall, as between Company
and such Lender, be relieved of any of its obligations hereunder as a result of
any sale, assignment or transfer of, or any granting of participations in, all
or any part of its Commitments or the Loans, the Letters of Credit or
participations therein, or the other Obligations owed to such Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Commitment,
Loan, Letter of Credit or participation therein, or other Obligation
may (a) be assigned in any amount to another Lender, or to an Affiliate
of the assigning Lender or another Lender, with the giving of notice to
Company and Agent or (b) be assigned in an aggregate amount of not less
than $5,000,000 (or such lesser amount as shall constitute the
aggregate amount of the Commitments, Loans, Letters of Credit and
participations therein, and other Obligations of the assigning Lender)
to any other Eligible Assignee with the giving of notice to Company
and, with the consent of Company and Agent (which consent of Company
and Agent shall not be unreasonably withheld); provided that any such
assignment in accordance with either (a) or (b) above shall effect a
pro rata assignment of (i) the Revolving Term Loan Commitment and
Revolving Term Loans of the
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assigning Lender, on the one hand, and (ii) the Revolving Loan
Commitment and Revolving Loans of the assigning Lender, on the other
hand. To the extent of any such assignment in accordance with either
clause (a) or (b) above, the assigning Lender shall be relieved of its
obligations with respect to its Commitments, Loans, Letters of Credit
or participations therein, or other Obligations or the portion thereof
so assigned. The parties to each such assignment shall execute and
deliver to Agent, for its acceptance and recording in the Register, an
Assignment Agreement, together with a processing and recordation fee
of, in the case of assignments to a Lender or an Affiliate of a Lender,
$3,500 and, in the case of assignments to any other Eligible Assignee,
$3,500 and such forms, certificates or other evidence, if any, with
respect to United States federal income tax withholding matters as the
assignee under such Assignment Agreement may be required to deliver to
Agent pursuant to subsection 2.7B(iii)(a). Upon such execution,
delivery, and acceptance and recordation, from and after the effective
date specified in such Assignment Agreement, (y) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such
Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and (z) the assigning Lender thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant
to such Assignment Agreement, relinquish its rights and be released
from its obligations under this Agreement (and, in the case of an
Assignment Agreement covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto). The Commitments hereunder
shall be modified to reflect the Commitment of such assignee and any
remaining Commitment of such assigning Lender and, if any such
assignment occurs after the issuance of the Notes hereunder, the
assigning Lender shall, upon the effectiveness of such assignment or as
promptly thereafter as practicable, surrender its applicable Notes to
Agent for cancellation, and thereupon new Notes shall be issued to the
assignee and/or to the assigning Lender, substantially in the form of
Exhibit IV, Exhibit V-A or Exhibit V-B annexed hereto, as the case may
be, with appropriate insertions, to reflect the new Commitments and/or
outstanding Term Loans, as the case may be, of the assignee and/or the
assigning Lender.
(ii) Acceptance by Agent; Recordation in Register. Upon
its receipt of an Assignment Agreement executed by an assigning Lender
and an assignee representing that it is an Eligible Assignee, together
with the processing and recordation fee referred to in subsection
11.1B(i) and any forms, certificates or other evidence with respect to
United States federal income tax withholding matters that such assignee
may be required to deliver to Agent pursuant to subsection
2.7B(iii)(a), Agent shall, if such Assignment Agreement has been
completed and is in substantially the form of Exhibit X hereto and if
Agent and Company have consented to the assignment evidenced thereby
(in each case to
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the extent such consent is required pursuant to subsection 11.1B(i)),
(a) accept such Assignment Agreement by executing a counterpart thereof
as provided therein (which acceptance shall evidence any required
consent of Agent to such assignment), (b) record the information
contained therein in the Register, and (c) give prompt notice thereof
to Company. Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection
11.1B(ii).
C. PARTICIPATIONS. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of
any Loan allocated to such participation, (ii) a reduction of the principal
amount of or the rate of interest payable on any Loan allocated to such
participation, (iii) the release of the Liens held by Agent on behalf of
Lenders with respect to all or substantially all of the Collateral except as
expressly provided in the Loan Documents or (iv) a reduction of the amount of
any fees payable hereunder to the extent subject to such participation, and all
amounts payable by Company hereunder (including without limitation amounts
payable to such Lender pursuant to subsections 2.6D, 2.7 and 3.6) shall be
determined as if such Lender had not sold such participation. Company and each
Lender hereby acknowledge and agree that, solely for purposes of subsections
11.4 and 11.5, (a) any participation will give rise to a direct obligation of
Company to the participant and (b) the participant shall be considered to be a
"Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 11.1, any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender, and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank; provided that (i) no Lender shall, as between
Company and such Lender, be relieved of any of its obligations hereunder as a
result of any such assignment and pledge and (ii) in no event shall such
Federal Reserve Bank be considered to be a "Lender" or be entitled to require
the assigning Lender to take or omit to take any action hereunder.
E. INFORMATION. Each Lender may furnish any information
concerning Holdings and its Subsidiaries in the possession of that Lender from
time to time to assignees and participants (including prospective assignees and
participants), subject to subsection 11.19.
11.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, each of Holdings and Company agrees to pay promptly (i) all the
actual
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and reasonable costs and expenses of preparation of the Loan Documents; (ii)
all the costs of furnishing all opinions by counsel for Holdings and its
Subsidiaries (including without limitation any opinions requested by Lenders as
to any legal matters arising hereunder) and of each Loan Party's performance of
and compliance with all agreements and conditions on its part to be performed
or complied with under this Agreement and the other Loan Documents including,
without limitation, with respect to confirming compliance with environmental
and insurance requirements; (iii) the reasonable fees, expenses and
disbursements of counsel to Agent and Arrangers (including internal counsel) in
connection with the negotiation, preparation, execution and administration of
the Loan Documents and the Loans and any consents, amendments, waivers or other
modifications hereto or thereto and any other documents or matters requested by
any Loan Party; (iv) all the actual costs and reasonable expenses of creating
and perfecting Liens in favor of Agent on behalf of Lenders pursuant to any
Loan Document, including filing and recording fees and expenses, title
insurance, fees and expenses of counsel for providing such opinions as Agent or
Requisite Lenders may reasonably request and fees and expenses of legal counsel
to Agent, Syndication Agent and Arrangers; (v) all the actual costs and
reasonable expenses of obtaining and reviewing any appraisals provided for
under subsection 6.10 and any environmental audits or reports provided for
under subsection 6.10; (vi) the reasonable fees, expenses and disbursements of
any accountants retained by Agent in its reasonable discretion in connection
with the review and analysis of any financial statements of Holdings and its
Subsidiaries or any other reports furnished to Agent by or on behalf of
Holdings or any of its Subsidiaries pursuant to or for use in connection with
this Agreement; (vii) all other actual and reasonable costs and expenses
incurred by Agent, Syndication Agent and Arrangers in connection with the
syndication of the Commitments and the negotiation, preparation and execution
of the Loan Documents and the transactions contemplated hereby and thereby; and
(viii) after the occurrence of an Event of Default, all costs and expenses,
including reasonable attorneys' fees (including internal counsel) and costs of
settlement, incurred by Agent, Syndication Agent, Arrangers and Lenders in
enforcing any Obligations of or in collecting any payments due from any Loan
Party hereunder or under the other Loan Documents by reason of such Event of
Default or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.
11.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection
11.2, whether or not the transactions contemplated hereby shall be consummated,
each of Holdings and Company agrees to defend, indemnify, pay and hold harmless
Agent, Syndication Agent, Arrangers and Lenders and any holder of any of the
Notes, and the officers, directors, employees, agents and affiliates of Agent,
Syndication Agent, Arrangers, Lenders and such holders (collectively called the
"INDEMNITEES") from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature
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whatsoever (including without limitation the reasonable fees and disbursements
of counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened by any Person,
whether or not any such Indemnitee shall be designated as a party or a
potential party thereto), whether direct, indirect or consequential and whether
based on any federal, state or foreign laws, statutes, rules or regulations
(including without limitation securities and commercial laws, statutes, rules
or regulations and Environmental Laws), on common law or equitable cause or on
contract or otherwise, that may be imposed on, incurred by, or asserted against
any such Indemnitee, in any manner relating to or arising out of this Agreement
or the other Loan Documents or any Related Transaction Documents or the
transactions contemplated hereby or thereby (including without limitation
Lenders' agreement to make the Loans hereunder or the use or intended use of
the proceeds of any of the Loans or the issuance of Letters of Credit hereunder
or the use or intended use of any of the Letters of Credit) or the statements
contained in the commitment letter delivered by any Lender to any Loan Party
with respect thereto (collectively called the "INDEMNIFIED LIABILITIES");
provided that each of Holdings and Company shall not have any obligation to any
Indemnitee hereunder with respect to any Indemnified Liabilities to the extent
such Indemnified Liabilities arise solely from the gross negligence or willful
misconduct of that Indemnitee as determined by a final judgment of a court of
competent jurisdiction. To the extent that the undertaking to defend,
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, each of
Holdings and Company shall contribute the maximum portion that it is permitted
to pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnitees or any of them.
11.4 SET OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by each of
Holdings and Company at any time or from time to time, without notice to
Holdings or Company or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, Indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not
including trust accounts) and any other Indebtedness at any time held or owing
by that Lender to or for the credit or the account of Holdings or Company
against and on account of the obligations and liabilities of Holdings or
Company to that Lender under this Agreement, the Notes, the Letters of Credit
and participations therein and the other Loan Documents, including, but not
limited to, all claims of any nature or description arising out of or connected
with this Agreement, the Notes, the Letters of Credit and participations
therein or any other Loan Document, irrespective of whether or not (i) that
Lender shall have made any demand hereunder or (ii) the principal of or the
interest on the Loans or any amounts in respect of the Letters of Credit or any
other amounts due hereunder shall have become
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due and payable pursuant to Section 8 and although said obligations and
liabilities, or any of them, may be contingent or unmatured. Company hereby
further grants to Agent and each Lender a security interest in all deposits and
accounts maintained with Agent or such Lender as security for the Obligations.
11.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them
shall, whether by voluntary payment, by realization upon security, through the
exercise of any right of set-off or banker's lien, by counterclaim or cross
action or by the enforcement of any right under the Loan Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, amounts payable in respect of Letters
of Credit, fees and other amounts then due and owing to that Lender hereunder
or under the other Loan Documents (collectively, the "AGGREGATE AMOUNTS DUE" to
such Lender) which is greater than the proportion received by any other Lender
in respect of the Aggregate Amounts Due to such other Lender, then the Lender
receiving such proportionately greater payment shall (i) notify Agent and each
other Lender of the receipt of such payment and (ii) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Amounts Due to the
other Lenders so that all such recoveries of Aggregate Amounts Due shall be
shared by all Lenders in proportion to the Aggregate Amounts Due to them;
provided that if all or part of such proportionately greater payment received
by such purchasing Lender is thereafter recovered from such Lender upon the
bankruptcy or reorganization of Holdings or any of its Subsidiaries or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. Each of Holdings and its
Subsidiaries expressly consents to the foregoing arrangement and agrees that
any holder of a participation so purchased may exercise any and all rights of
banker's lien, set-off or counterclaim with respect to any and all monies owing
by Holdings or any of its Subsidiaries to that holder with respect thereto as
fully as if that holder were owed the amount of the participation held by that
holder.
11.6 AMENDMENTS AND WAIVERS.
A. No amendment, modification, termination or waiver of any
provision of this Agreement or of the Notes, or consent to any departure by
Holdings or Company therefrom, shall in any event be effective without the
written concurrence of Requisite Lenders; provided that no such amendment,
modification, termination, waiver or consent shall, without the consent of each
Lender (with Obligations directly affected in the case of the following clause
(i)): (i) extend the scheduled final maturity of any Loan or Note, or extend
the stated expiration date of any Letter of Credit beyond the Revolving
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Loan Commitment Termination Date, or reduce the rate of interest (other than
any waiver of any increase in the interest rate applicable to any of the Loans
pursuant to subsection 2.2E) or fees thereon, or extend the time of payment of
interest or fees thereon, or reduce the principal amount thereof, (ii) release
all or substantially all of the Collateral, release all or substantially all of
the Loan Parties that are party to the Subsidiary Guaranty from the Subsidiary
Guaranty or release Holdings from the Holdings Guaranty, in each case except as
expressly provided in the Loan Documents, (iii) amend, modify, terminate or
waive any provision of this subsection 11.6, (iv) reduce the percentage
specified in the definition of Requisite Lenders (it being understood that,
with the consent of the Requisite Lenders, additional extensions of credit
pursuant to this Agreement may be included in the determination of the
Requisite Lenders on substantially the same basis as the extensions of Term
Loans, Revolving Term Loans and Revolving Loan Commitments are included on the
Closing Date) or (v) consent to the assignment or transfer by Holdings or
Company of any of their respective rights and obligations under this Agreement;
provided further that no such amendment, modification, termination or waiver
shall (1) increase the Commitments of any Lender over the amount thereof then
in effect without the consent of such Lender (it being understood that
amendments, modifications or waivers of conditions precedent, covenants,
Potential Events of Default or Events of Default or of a mandatory reduction in
the Commitments shall not constitute an increase of the Commitment of any
Lender, and that an increase in the available portion of any Commitment of any
Lender shall not constitute an increase in the Commitment of such Lender); (2)
without the consent of the Swing Line Lender, amend, modify, terminate or waive
any provision of subsection 2.1A(iv) or any other provision of this Agreement
relating to the Swing Line Loan Commitment or the Swing Line Loans; (3) amend,
modify, terminate or waive any obligations of Revolving Lenders relating to the
purchase of participations in Letters of Credit shall be effective without the
written concurrence of each Issuing Lender having a Letter of Credit then
outstanding or which has not been reimbursed for a drawing under a Letter of
Credit issued by it and of Agent; or (4) without the consent of Agent,
Syndication Agent or the applicable Arranger, as the case may be, amend,
modify, terminate or waive any provision of Section 10 as the same applies to
Agent, Syndication Agent or any Arranger or of any other provision of this
Agreement as the same applies to the rights or obligations of Agent,
Syndication Agent or any Arranger.
B. If, in connection with any proposed amendment, modification,
termination or waiver to any of the provisions of this Agreement or the Notes
as contemplated by clauses (i) through (v) of the first proviso of subsection
11.6A, the consent of the Requisite Lenders is obtained but the consent of one
or more of such other Lenders whose consent is required is not obtained, then
Company shall have the right, so long as all non-consenting Lenders whose
individual consent is required are treated as described in either clause (i) or
(ii) below, to either (i) replace each such non-consenting Lender or Lenders
with one or more Replacement Lenders pursuant to subsection 2.9 so long as at
the time of such replacement, each such Replacement Lender consents to the
proposed amendment, modification, termination or waiver, or (ii) terminate such
non-consenting
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Lender's Commitments and repay in full its outstanding Loans in accordance with
subsections 2.4B(i)(b) and 2.4B(ii)(b); provided that unless the Commitments
that are terminated and the Loans that are repaid pursuant to the preceding
clause (ii) are immediately replaced in full at such time through the addition
of new Lenders or the increase of the Commitments and/or outstanding Loans of
existing Lenders (who in each case must specifically consent thereto), then in
the case of any action pursuant to the preceding clause (ii), the Requisite
Lenders (determined before giving effect to the proposed action) shall
specifically consent thereto; provided further that Company shall not have the
right to terminate such non-consenting Lender's Commitment and repay in full
its outstanding Loans pursuant to clause (ii) of this subsection 11.6B if,
immediately after the termination of such Lender's Revolving Loan Commitment or
such Lender's Revolving Term Loan Commitment in accordance with subsection
2.4B(ii)(b), (a) the Revolving Loan Exposure of all Lenders would exceed the
Revolving Loan Commitments of all Lenders, or (b) the Revolving Term Loan
Exposure of all Lenders would exceed the Revolving Term Loan Commitments of all
Lenders; provided still further that Company shall not have the right to
replace a Lender solely as a result of the exercise of such Lender's rights
(and the withholding of any required consent by such Lender) pursuant to the
second proviso to subsection 11.6A.
C. Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Holdings or Company in any case shall entitle
Holdings or Company, as the case may be, to any other or further notice or
demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this subsection 11.6
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by Holdings or Company, on Holdings or Company as the case may
be.
11.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.
11.8 NOTICES.
Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in
writing and may be personally served, telexed or sent by telefacsimile or
United States mail or courier service and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of telefacsimile
or telex, or three Business Days after depositing it
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in the United States mail with postage prepaid and properly addressed; provided
that notices to Agent shall not be effective until received. For the purposes
hereof, the address of each party hereto shall be as set forth under such
party's name on the signature pages hereof or (i) as to Holdings, Company and
Agent, such other address as shall be designated by such Person in a written
notice delivered to the other parties hereto and (ii) as to each other party,
such other address as shall be designated by such party in a written notice
delivered to Agent.
11.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and the making of
the Loans and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of Holdings and Company set forth in subsections
2.6D, 2.7, 3.5A, 3.6, 11.2, 11.3 and 11.4 and the agreements of Lenders set
forth in subsections 10.2C, 10.4 and 11.5 shall survive the payment of the
Loans, the cancellation or expiration of the Letters of Credit and the
reimbursement of any amounts drawn thereunder, and the termination of this
Agreement.
11.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Agent or any Lender in the
exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
11.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Agent nor any Lender shall be under any obligation to
marshal any assets in favor of Holdings, Company or any other party or against
or in payment of any or all of the Obligations. To the extent that any Loan
Party makes a payment or payments to Agent or Lenders (or to Agent for the
benefit of Lenders), or Agent or Lenders enforce any security interests or
exercise their rights of setoff, and such payment or payments or the proceeds
of such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all
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Liens, rights and remedies therefor or related thereto, shall be revived and
continued in full force and effect as if such payment or payments had not been
made or such enforcement or setoff had not occurred.
11.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or
the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
11.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no
action taken by Lenders pursuant hereto or thereto, shall be deemed to
constitute Lenders as a partnership, an association, a joint venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and it shall not
be necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
11.14 HEADINGS.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or be given any substantive effect.
11.15 APPLICABLE LAW.
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
11.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of Lenders (it being understood
that Lenders' rights of assignment are subject to subsection 11.1). The terms
and provisions of this Agreement shall inure to the benefit of any assignee or
transferee of any of the Loans, and in the event of any such transfer or
assignment the rights and privileges herein conferred upon
166 (Credit Agreement)
174
Lenders shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. None of Holdings',
or Company's rights or obligations hereunder nor any interest therein may be
assigned or delegated by Holdings or Company without the prior written consent
of all Lenders.
11.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST HOLDINGS OR COMPANY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY
OBLIGATION MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT EACH OF HOLDINGS AND COMPANY ACCEPTS FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH THIS AGREEMENT, SUCH OTHER LOAN DOCUMENT OR SUCH OBLIGATION.
Each of Holdings and Company hereby agrees that service of all process in any
such proceeding in any such court may be made by registered or certified mail,
return receipt requested, to Holdings or Company, as the case may be, at its
address provided in subsection 11.8, such service being hereby acknowledged by
Holdings and Company, as the case may be, to be sufficient for personal
jurisdiction in any action against Holdings or Company, as the case may be, in
any such court and to be otherwise effective and binding service in every
respect. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of any Lender to bring
proceedings against Holdings or Company in the courts of any other
jurisdiction.
11.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION
OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of
this waiver is intended to be all- encompassing of any and all disputes that
may be filed in any court and that relate to the subject matter of this
transaction, including without limitation contract claims, tort claims, breach
of duty claims and all other common law and statutory claims. Each party
hereto acknowledges that this waiver is a material inducement to enter into a
business relationship, that each has already relied on this waiver in entering
into this Agreement, and that each will continue to rely on this waiver in
their related future
167 (Credit Agreement)
175
dealings. Each party hereto further warrants and represents that it has
reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO
THE LOANS MADE HEREUNDER. In the event of litigation, this Agreement may be
filed as a written consent to a trial by the court.
11.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained
pursuant to the requirements of or in connection with this Agreement which has
been identified as confidential by Company in accordance with such Lender's
customary procedures for handling confidential information of this nature and
in accordance with safe and sound banking practices, it being understood and
agreed by Holdings and Company that in any event a Lender may make disclosures
reasonably required by any bona fide assignee, transferee or participant in
connection with the contemplated assignment or transfer by such Lender of any
Loans or any participation therein or as required or requested by any
governmental agency or representative thereof or pursuant to legal process;
provided that, unless specifically prohibited by applicable law or court order,
each Lender shall notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure
of such information; and provided, further that in no event shall any Lender be
obligated or required to return any materials furnished by Holdings or any of
its Subsidiaries.
11.20 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
168 (Credit Agreement)
176
Company and Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
[Remainder of page intentionally left blank]
169 (Credit Agreement)
177
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
GUARANTOR: DOMINICK'S SUPERMARKETS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Title: Vice President
-----------------------------
Notice Address:
Dominick's Supermarkets, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating
Officer
S-1 (Credit Agreement)
178
COMPANY:
DOMINICK'S FINER FOODS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Title: Vice President
------------------------------
Notice Address:
Dominick's Finer Foods, Inc.
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating
Officer
S-2 (Credit Agreement)
179
LENDERS:
BANKERS TRUST COMPANY,
individually and as Administrative
Agent and Arranger
By: /s/ ▇▇▇▇ ▇▇ ▇▇▇▇▇
------------------------------
Title: Assistant Vice President
------------------------------
Notice Address:
Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
S-3 (Credit Agreement)
180
THE CHASE MANHATTAN BANK,
individually and as Syndication Agent
and Arranger
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Title: Vice President
------------------------------
Notice Address:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ Tower
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
S-4 (Credit Agreement)
▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Title: Managing Director
------------------------------
Notice Address:
Bank of America
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
S-5 (Credit Agreement)
▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title: Managing Director
------------------------------
Notice Address:
The First National Bank of
Chicago
1 First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-6 (Credit Agreement)
183
MARINE MIDLAND BANK
By: /s/ ▇.▇. ▇▇▇▇▇
---------------------------------
Title: SVP
------------------------------
Notice Address:
Marine Midland Bank
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
S-7 (Credit Agreement)
184
THE MITSUBISHI TRUST & BANKING
CORPORATION
By: /s/
---------------------------------
Title: Senior Vice President
------------------------------
Notice Address:
The Mitsubishi Trust & Banking
Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
S-8 (Credit Agreement)
▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, N.A.
By: /s/ ▇▇▇ ▇. ▇▇▇
---------------------------------
Title: Vice President
------------------------------
Notice Address:
Union Bank of California, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-9 (Credit Agreement)
186
ABN AMRO BANK N.V., CHICAGO BRANCH
BY ABN AMRO NORTH AMERICA, INC.,
AS AGENT FOR ABN AMRO BANK N.V.,
CHICAGO BRANCH
By: /s/ ▇▇▇▇ ▇▇. Stronger
--------------------------------
Title: Group V.P. and Director
------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. McGuiger
--------------------------------
Title: Group Vice President and Director
------------------------------
Notice Address:
ABN AMRO BANK N.V., CHICAGO
BRANCH
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-10 (Credit Agreement)
187
LASALLE NATIONAL BANK
By: /s/
---------------------------------
Title: FVP
------------------------------
Notice Address:
LaSalle National Bank
▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
S-11 (Credit Agreement)
188
BANQUE PARIBAS
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Title: Group Vice President
------------------------------
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
------------------------------
Notice Address:
Banque Paribas
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-12 (Credit Agreement)
189
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE
By: /s/ ▇▇▇▇▇ ▇'▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
Title: Vice President First Vice President
--------------------------------------------
Notice Address:
Compagnie Financiere de CIC et
de l'Union Europeenne
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
S-13 (Credit Agreement)
190
THE NORTHERN TRUST COMPANY
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Title: VP
------------------------------
Notice Address:
The Northern Trust Company
▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-14 (Credit Agreement)
▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
By: /s/ F.C.H. ▇▇▇▇▇
---------------------------------
Title: Senior Manager Loan Operations
------------------------------
Notice Address:
The Bank of Nova Scotia
▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
S-15 (Credit Agreement)
192
CAISSE NATIONAL DE CREDIT AGRICOLE
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: First Vice President
------------------------------
Notice Address:
Caisse National de Credit
Agricole
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-16 (Credit Agreement)
193
CREDIT LYONNAIS CHICAGO BRANCH
By: /s/ ▇▇▇▇▇ Kanek
---------------------------------
Title: Vice President
------------------------------
Notice Address:
Credit Lyonnais
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
S-17 (Credit Agreement)
194
THE DAI-ICHI KANGYO BANK, LTD.
By: /s/
---------------------------------
Title: Vice President
------------------------------
Notice Address:
Dai-Ichi Kangyo Bank
▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-18 (Credit Agreement)
195
THE FUJI BANK, LIMITED CHICAGO BRANCH
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Title: Joint General Manager
------------------------------
Notice Address:
The Fuji Bank, Limited Chicago
Branch
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-19 (Credit Agreement)
196
MITSUI LEASING (U.S.A.) INC.
By: /s/
---------------------------------
Title: Senior Vice President
------------------------------
Notice Address:
Mitsui Leasing (U.S.A.) Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
S-20 (Credit Agreement)
▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ PLC
By: /s/ Grant F. Staddort
---------------------------------
Title: Senior Vice President & Manager
------------------------------
Notice Address:
The Royal Bank of Scotland plc
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
S-21 (Credit Agreement)
198
THE SAKURA BANK, LIMITED
By: /s/ Shurji Sakurai
---------------------------------
Title: Joint General Manager
------------------------------
Notice Address:
The Sakura Bank, Limited
▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-22 (Credit Agreement)
199
THE SUMITOMO TRUST & BANKING CO., LTD.,
NEW YORK BRANCH
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Senior Vice President
------------------------------
Manager, Corporate Finance Dept.
Notice Address:
The Sumitomo Trust & Banking Co., Ltd.,
New York Branch
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
S-23 (Credit Agreement)
200
EXHIBIT I
[FORM OF NOTICE OF BORROWING]
NOTICE OF BORROWING
Pursuant to that certain Credit Agreement dated as of November
1, 1996, as amended, amended and restated, supplemented or otherwise modified
to the date hereof (said Credit Agreement, as so amended, amended and restated,
supplemented or otherwise modified, being the "CREDIT AGREEMENT", the terms
defined therein and not otherwise defined herein being used herein as therein
defined), by and among Dominick's Supermarkets, Inc., a Delaware corporation,
Dominick's Finer Foods, Inc., a Delaware corporation ("COMPANY"), the financial
institutions listed therein as Lenders, Bankers Trust Company ("BANKERS"), as
Agent, The Chase Manhattan Bank ("CHASE"), as Syndication Agent, and Bankers
and Chase, as Arrangers, this represents Company's request to borrow on
_____________, _____ [from Lenders, in accordance with their applicable Pro
Rata Shares, $______________ in [Term/Revolving Term/Revolving] Loans as
[Base/Eurodollar Rate Loans] [from Swing Line Lender $___________ in Swing Line
Loans under the Revolving Loan Commitment as Base Rate Loans]. [The initial
Interest Period for such Loans is requested to be a _________ month period.]
The proceeds of such Loans are to be deposited in Company's account at Agent.
The undersigned officer, in his/her capacity as an officer of
Company and to the best of his or her knowledge, and Company certify that:
(i) The representations and warranties contained in the
Credit Agreement and the other Loan Documents are true, correct and
complete in all material respects on and as of the date hereof to the
same extent as though made on and as of the date hereof, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties were
true, correct and complete in all material respects on and as of such
earlier date;
(ii) No event has occurred and is continuing or would
result from the consummation of the borrowing contemplated hereby that
would constitute an Event of Default or a Potential Event of Default;
(iii) Each Loan Party has performed in all material respects
all agreements and satisfied all conditions which the Credit Agreement
provides shall be performed or satisfied by it on or before the date
hereof; [and]
(iv) Each of the other conditions to funding set forth in
[subsection 4.1 and] subsection 4.2C has been satisfied[; and] [.]
(Credit Agreement)
201
[(v) After giving effect to the [[Revolving
Term/Revolving/Swing Line] Loans requested hereby, the Total
Utilization of [Revolving Term/Revolving] Loan Commitments does not
exceed the [Revolving Term/Revolving] Loan Commitments.
DATED: ____________________ DOMINICK'S FINER FOODS, INC.
By: ___________________________
Title: ________________________
(Credit Agreement)
202
EXHIBIT II
[FORM OF NOTICE OF CONVERSION/CONTINUATION]
NOTICE OF CONVERSION/CONTINUATION
Pursuant to that certain Credit Agreement dated as of November
1, 1996, as amended, amended and restated, supplemented or otherwise modified
to the date hereof (said Credit Agreement, as so amended, amended and restated,
supplemented or otherwise modified, being the "CREDIT AGREEMENT", the terms
defined therein and not otherwise defined herein being used herein as therein
defined), by and among Dominick's Supermarkets, Inc., a Delaware corporation,
Dominick's Finer Foods, Inc., a Delaware corporation ("COMPANY"), the financial
institutions listed therein as Lenders, Bankers Trust Company ("BANKERS"), as
Agent, The Chase Manhattan Bank ("CHASE"), as Syndication Agent, and Bankers
and Chase, as Arrangers, this represents the Company's request to [SELECT A OR
B WITH APPROPRIATE INSERTIONS AND DELETIONS: [A: convert $_________ in
principal amount of presently outstanding [Term/Revolving Term/Revolving] Loans
that are [Base/Eurodollar] Rate Loans [having an Interest Period that expires
on _____________, ____] to [Base/Eurodollar] Rate Loans on ____________, ____.
[The initial Interest Period for such Eurodollar Rate Loans is requested to be
a _________ month period.]] [B: continue as Eurodollar Rate Loans $_________
in principal amount of presently outstanding [Term/Revolving Term/Revolving]
Loans having an Interest Period that expires on ____________, ____. The
Interest Period for such Eurodollar Rate Loans commencing on _____________,
_____ is requested to be a ________ month period.]]
[FOR CONVERSIONS TO OR CONTINUATIONS OF EURODOLLAR RATE LOANS
ONLY: The undersigned officer, in his/her capacity as an officer of Company
and to the best of his or her knowledge, and Company certify that no Event of
Default or Potential Event of Default has occurred and is continuing under the
Credit Agreement.]
DATED: _____________________ DOMINICK'S FINER FOODS, INC.
By: __________________________
Title: _______________________
(Credit Agreement)
203
EXHIBIT III
[FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT]
NOTICE OF ISSUANCE OF LETTER OF CREDIT
Pursuant to that certain Credit Agreement dated as of November
1, 1996, as amended, amended and restated, supplemented or otherwise modified
to the date hereof (said Credit Agreement, as so amended, amended and restated,
supplemented or otherwise modified, being the "CREDIT AGREEMENT", the terms
defined therein and not otherwise defined herein being used herein as therein
defined), by and among Dominick's Supermarkets, Inc., a Delaware corporation,
Dominick's Finer Foods, Inc., a Delaware corporation ("COMPANY"), the financial
institutions listed therein as Lenders, Bankers Trust Company ("BANKERS"), as
Agent, The Chase Manhattan Bank ("CHASE"), as Syndication Agent, and Bankers
and Chase, as Arrangers, this represents the Company's request that [proposed
Issuing Lender] issue a [Commercial/Standby] Letter of Credit under the
Revolving Loan Commitment on __________, ____ in the face amount of
_________________ with an expiration date of ____________, ____. The
beneficiary of such proposed Letter of Credit shall be [Name of beneficiary]
and such Person's address is _____________________________________. Attached
hereto is [the verbatim text of such proposed Letter of Credit] [a description
of the proposed terms and conditions of such Letter of Credit, including a
precise description of any documents and the verbatim text of any certificates
to be presented by the beneficiary which, if presented by the beneficiary prior
to the expiration date of such Letter of Credit, would require the Issuing
Lender to make payment under such Letter of Credit].
The undersigned officer, in his/her capacity as an officer of
Company and to the best of his or her knowledge, and Company certify that:
(i) The representations and warranties contained in the
Credit Agreement and the other Loan Documents are true, correct and
complete in all material respects on and as of the date hereof to the
same extent as though made on and as of the date hereof, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties were
true, correct and complete in all material respects on and as of such
earlier date;
(ii) No event has occurred and is continuing or would
result from the issuance of the Letter of Credit contemplated hereby
that would constitute an Event of Default or a Potential Event of
Default;
(iii) Each Loan Party has performed in all material respects
all agreements and satisfied all conditions which the Credit Agreement
provides shall be performed or satisfied by it on or before the date
hereof;
(Credit Agreement)
204
(iv) Each of the other conditions to the issuance of the
Letter of Credit contemplated hereby described in subsections 4.3A and
4.3C has been satisfied; and
(v) After giving effect to the issuance of the Letter of
Credit requested hereby, (a) the Total Utilization of Revolving Loan
Commitments does not exceed the Revolving Loan Commitments, and (b) the
Letter of Credit Usage does not exceed $50,000,000.
DATED: ____________________ DOMINICK'S FINER FOODS, INC.
By: ________________________
Title: _____________________
(Credit Agreement)
205
EXHIBIT IV
[FORM OF TERM NOTE]
DOMINICK'S FINER FOODS, INC.
PROMISSORY NOTE DUE APRIL 30, 2003
$[1] Los Angeles, California
November 1, 1996
FOR VALUE RECEIVED, DOMINICK'S FINER FOODS, INC., a Delaware
corporation ("COMPANY"), promises to pay to [2] ("PAYEE") or its registered
assigns the principal amount of [3] DOLLARS ($[1]) in the installments referred
to below.
Company also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Credit Agreement dated as of November 1, 1996 by and among Company,
Dominick's Supermarkets, Inc., the financial institutions listed therein as
Lenders, Agent, Syndication Agent and Arrangers (said Credit Agreement, as it
may be amended, amended and restated, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
Company shall make principal payments on this Note in
consecutive quarterly installments, commencing on February 28, 1998 and ending
on April 30, 2003. Each such installment shall be due on the date specified in
the Credit Agreement and in an amount determined in accordance with the
provisions thereof; provided that the last such installment shall be in an
amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
This Note is one of Company's "Term Notes" in the aggregate
principal amount of $100,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Term Loan
evidenced hereby was made and is to be repaid.
__________________________________
[1] Insert amount of Lender's Term Loan in numbers.
[2] Insert Lender's name in capital letters.
[3] Insert amount of Lender's Term Loan in words.
(Credit Agreement)
206
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the Funding and Payment Office or at such other place as shall be designated
in writing for such purpose in accordance with the terms of the Credit
Agreement. Unless and until an Assignment Agreement effecting the assignment
or transfer of this Note shall have been accepted by Agent and recorded in the
Register as provided in subsection 11.1B(ii) of the Credit Agreement, Company
and Agent shall be entitled to deem and treat Payee as the owner and holder of
this Note and the Loan evidenced hereby. Payee hereby agrees, by its
acceptance hereof, that before disposing of this Note or any part hereof it
will make a notation hereon of all principal payments previously made hereunder
and of the date to which interest hereon has been paid; provided, however, that
the failure to make a notation of any payment made on this Note shall not limit
or otherwise affect the obligations of Company hereunder with respect to
payments of principal of or interest on this Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
subsection 2.4B(iii) of the Credit Agreement and to prepayment at the option of
Company as provided in subsection 2.4B(i) of the Credit Agreement.
THE CREDIT AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in subsections 11.1 and 11.16 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of
this Note or the Credit Agreement shall alter or impair the obligations of
Company, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the
currency herein prescribed.
(Credit Agreement)
207
Company promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in subsection 11.2 of the Credit
Agreement, incurred in the collection and enforcement of this Note. Company
and any endorsers of this Note hereby consent to renewals and extensions of
time at or after the maturity hereof, without notice, and hereby waive
diligence, presentment, protest, demand and notice of every kind and, to the
full extent permitted by law, the right to plead any statute of limitations as
a defense to any demand hereunder.
[Remainder of page intentionally left blank]
(Credit Agreement)
208
IN WITNESS WHEREOF, Company has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
DOMINICK'S FINER FOODS, INC.
By: _________________________
Title: ______________________
(Credit Agreement)
209
EXHIBIT V-A
[FORM OF REVOLVING TERM NOTE]
DOMINICK'S FINER FOODS, INC.
PROMISSORY NOTE DUE APRIL 30, 2003
$[3] Los Angeles, California
November 1, 1996
FOR VALUE RECEIVED, DOMINICK'S FINER FOODS, INC., a Delaware
corporation ("COMPANY"), promises to pay to [4] ("PAYEE") or its registered
assigns, on or before April 30, 2003, the lesser of (x) [5] DOLLARS ($[1]) and
(y) the unpaid principal amount of all advances made by Payee to Company as
Revolving Term Loans under the Credit Agreement referred to below.
Company also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Credit Agreement dated as of November 1, 1996 by and among Company,
Dominick's Supermarkets, Inc., the financial institutions listed therein as
Lenders, Agent, Syndication Agent and Arrangers (said Credit Agreement, as it
may be amended, amended and restated, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
This Note is one of Company's "Revolving Term Notes" in the
aggregate principal amount of $105,000,000 and is issued pursuant to and
entitled to the benefits of the Credit Agreement, to which reference is hereby
made for a more complete statement of the terms and conditions under which the
Revolving Term Loans evidenced hereby were made and are to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the Funding and Payment Office or at such other place as shall be designated
in writing for such purpose in accordance with the terms of the Credit
Agreement. Unless and until an Assignment Agreement effecting the assignment
or transfer of this Note shall have been accepted by Agent and recorded in the
Register as provided in subsection 11.1B(ii) of the Credit
__________________________________
[3] Insert amount of Lender's Revolving Term Loan Commitment in numbers.
[4] Insert Lender's name in capital letters.
[5] Insert amount of Lender's Revolving Term Loan Commitment in words.
(Credit Agreement)
210
Agreement, Company and Agent shall be entitled to deem and treat Payee as the
owner and holder of this Note and the Loans evidenced hereby. Payee hereby
agrees, by its acceptance hereof, that before disposing of this Note or any
part hereof it will make a notation hereon of all principal payments previously
made hereunder and of the date to which interest hereon has been paid;
provided, however, that the failure to make a notation of any payment made on
this Note shall not limit or otherwise affect the obligations of Company
hereunder with respect to payments of principal of or interest on this Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
subsection 2.4B(iii) of the Credit Agreement and to prepayment at the option of
Company as provided in subsection 2.4B(i) of the Credit Agreement.
THE CREDIT AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in subsections 11.1 and 11.16 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of
this Note or the Credit Agreement shall alter or impair the obligations of
Company, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the
currency herein prescribed.
Company promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in subsection 11.2 of the Credit
Agreement, incurred in the collection and enforcement of this Note. Company
and any endorsers of this Note hereby consent to renewals and extensions of
time at or after the maturity hereof, without notice, and hereby waive
diligence, presentment, protest, demand and notice of every kind and, to the
full extent permitted by law, the right to plead any statute of limitations as
a defense to any demand hereunder.
(Credit Agreement)
211
[Remainder of page intentionally left blank]
(Credit Agreement)
212
IN WITNESS WHEREOF, Company has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
DOMINICK'S FINER FOODS, INC.
By: _________________________
Title: ______________________
(Credit Agreement)
213
TRANSACTIONS
ON
REVOLVING TERM NOTE
Outstanding
Type of Amount of Amount of Principal
Loan Made Loan Made Principal Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- ----------- ------------- --------------- --------------- -------
214
EXHIBIT V-B
[FORM OF REVOLVING NOTE]
DOMINICK'S FINER FOODS, INC.
PROMISSORY NOTE DUE APRIL 30, 2003
$[6] Los Angeles, California
November 1, 1996
FOR VALUE RECEIVED, DOMINICK'S FINER FOODS, INC., a Delaware
corporation ("COMPANY"), promises to pay to [7] ("PAYEE") or its registered
assigns, on or before April 30, 2003, the lesser of (x) [8] DOLLARS ($[1]) and
(y) the unpaid principal amount of all advances made by Payee to Company as
Revolving Loans under the Credit Agreement referred to below.
Company also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Credit Agreement dated as of November 1, 1996 by and among Company,
Dominick's Supermarkets, Inc., the financial institutions listed therein as
Lenders, Agent, Syndication Agent and Arrangers (said Credit Agreement, as it
may be amended, amended and restated, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
This Note is one of Company's "Revolving Notes" in the
aggregate principal amount of $120,000,000 and is issued pursuant to and
entitled to the benefits of the Credit Agreement, to which reference is hereby
made for a more complete statement of the terms and conditions under which the
Revolving Loans evidenced hereby were made and are to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the Funding and Payment Office or at such other place as shall be designated
in writing for such purpose in accordance with the terms of the Credit
Agreement. Unless and until an Assignment Agreement effecting the assignment
or transfer of this Note shall have been accepted by Agent and recorded in the
Register as provided in subsection 11.1B(ii) of the Credit
__________________________________
[6] Insert amount of Lender's Revolving Loan Commitment in numbers.
[7] Insert Lender's name in capital letters.
[8] Insert amount of Lender's Revolving Loan Commitment in words.
(Credit Agreement)
215
Agreement, Company and Agent shall be entitled to deem and treat Payee as the
owner and holder of this Note and the Loans evidenced hereby. Payee hereby
agrees, by its acceptance hereof, that before disposing of this Note or any
part hereof it will make a notation hereon of all principal payments previously
made hereunder and of the date to which interest hereon has been paid;
provided, however, that the failure to make a notation of any payment made on
this Note shall not limit or otherwise affect the obligations of Company
hereunder with respect to payments of principal of or interest on this Note.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
subsection 2.4B(iii) of the Credit Agreement and to prepayment at the option of
Company as provided in subsection 2.4B(i) of the Credit Agreement.
THE CREDIT AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in subsections 11.1 and 11.16 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of
this Note or the Credit Agreement shall alter or impair the obligations of
Company, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the
currency herein prescribed.
Company promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in subsection 11.2 of the Credit
Agreement, incurred in the collection and enforcement of this Note. Company
and any endorsers of this Note hereby consent to renewals and extensions of
time at or after the maturity hereof, without notice, and hereby waive
diligence, presentment, protest, demand and notice of every kind and, to the
full extent permitted by law, the right to plead any statute of limitations as
a defense to any demand hereunder.
(Credit Agreement)
216
[Remainder of page intentionally left blank]
(Credit Agreement)
217
IN WITNESS WHEREOF, Company has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
DOMINICK'S FINER FOODS, INC.
By: _________________________
Title: ______________________
(Credit Agreement)
218
TRANSACTIONS
ON
REVOLVING NOTE
Outstanding
Type of Amount of Amount of Principal
Loan Made Loan Made Principal Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- ----------- ------------- --------------- --------------- -------
219
EXHIBIT VI
[FORM OF SWING LINE NOTE]
DOMINICK'S FINER FOODS, INC.
PROMISSORY NOTE DUE APRIL 30, 2003
$20,000,000.00 Los Angeles, California
November 1, 1996
FOR VALUE RECEIVED, DOMINICK'S FINER FOODS, INC., a Delaware
corporation ("COMPANY"), promises to pay to BANKERS TRUST COMPANY ("PAYEE"), on
or before April 30, 2003, the lesser of (x) TWENTY MILLION AND NO/100 DOLLARS
($20,000,000.00) and (y) the unpaid principal amount of all advances made by
Payee to Company as Swing Line Loans under the Credit Agreement referred to
below.
Company also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Credit Agreement dated as of November 1, 1996 by and among Company,
Dominick's Supermarkets, Inc., the financial institutions listed therein as
Lenders, Agent, Syndication Agent and Arrangers (said Credit Agreement, as it
may be amended, amended and restated, supplemented or otherwise modified from
time to time, being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
This Note is Company's "Swing Line Note" and is issued pursuant
to and entitled to the benefits of the Credit Agreement, to which reference is
hereby made for a more complete statement of the terms and conditions under
which the Swing Line Loans evidenced hereby were made and are to be repaid.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the Funding and Payment Office or at such other place as shall be designated
in writing for such purpose in accordance with the terms of the Credit
Agreement.
Whenever any payment on this Note shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest on this Note.
(Credit Agreement)
220
This Note is subject to mandatory prepayment as provided in
subsection 2.4B(iii) of the Credit Agreement and to prepayment at the option of
Company as provided in subsection 2.4B(i) of the Credit Agreement.
THE CREDIT AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in subsections 11.1 and 11.16 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of
this Note or the Credit Agreement shall alter or impair the obligations of
Company, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the
currency herein prescribed.
Company promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in subsection 11.2 of the Credit
Agreement, incurred in the collection and enforcement of this Note. Company
and any endorsers of this Note hereby consent to renewals and extensions of
time at or after the maturity hereof, without notice, and hereby waive
diligence, presentment, protest, demand and notice of every kind and, to the
full extent permitted by law, the right to plead any statute of limitations as
a defense to any demand hereunder.
[Remainder of page intentionally left blank]
(Credit Agreement)
221
IN WITNESS WHEREOF, Company has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
DOMINICK'S FINER FOODS, INC.
By: _________________________
Title: ______________________
(Credit Agreement)
222
TRANSACTIONS
ON
SWING LINE NOTE
Outstanding
Amount of Amount of Principal
Loan Made Principal Paid Balance Notation
Date This Date This Date This Date Made By
---- ------------- --------------- --------------- -------
223
EXHIBIT VII
[FORM OF COMPLIANCE CERTIFICATE]
COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFY IN OUR CAPACITY AS OFFICERS OF COMPANY THAT:
(1) We are the duly elected [Title] and [Title] of
Dominick's Finer Foods, Inc., a Delaware corporation
("COMPANY");
(2) We have reviewed the terms of that certain Credit
Agreement dated as of November 1, 1996, as amended, supplemented or
otherwise modified to the date hereof (said Credit Agreement, as so
amended, amended and restated, supplemented or otherwise modified,
being the "CREDIT AGREEMENT", the terms defined therein and not
otherwise defined in this Certificate (including Attachment No. 1
annexed hereto and made a part hereof) being used in this Certificate
as therein defined), by and among Dominick's Supermarkets, Inc.,
Company, the financial institutions listed therein as Lenders, Bankers
Trust Company, as Administrative Agent, The Chase Manhattan Bank, as
Syndication Agent, and the Arrangers, and the terms of the other Loan
Documents, and we have made, or have caused to be made under our
supervision, a review in reasonable detail of the transactions and
condition of Dominick's Supermarkets, Inc. and its Subsidiaries during
the accounting period covered by the attached financial statements; and
(3) The examination described in paragraph (2) above did
not disclose, and we have no knowledge of, the existence of any
condition or event which constitutes an Event of Default or Potential
Event of Default during or at the end of the accounting period covered
by the attached financial statements or as of the date of this
Certificate[, except as set forth below].
[Set forth [below] [in a separate attachment to this
Certificate] are all exceptions to paragraph (3) above listing, in detail, the
nature of the condition or event, the period during which it has existed and
the action which Company has taken, is taking, or proposes to take with respect
to each such condition or event:
______________________________________________________________________________
______________________________________________________________________________
_____________________________________________________________________________]
(Credit Agreement)
224
The foregoing certifications, together with the computations
set forth in Attachment No. 1 annexed hereto and made a part hereof and the
financial statements delivered with this Certificate in support hereof, are
made and delivered this __________ day of _____________, _____ pursuant to
subsection 6.1(iv) of the Credit Agreement.
DOMINICK'S FINER FOODS, INC.
By: _________________________
Title: ______________________
By: __________________________
Title: _______________________
(Credit Agreement)
225
ATTACHMENT NO. 1
TO COMPLIANCE CERTIFICATE
This Attachment No. 1 is attached to and made a part of a
Compliance Certificate dated as of ____________, ____ and pertains to the
period from ____________, ____ to ____________, ____. Subsection references
herein relate to subsections of the Credit Agreement.
A. INDEBTEDNESS
1. Aggregate amount of Indebtedness
evidenced by the Senior Subordinated
Notes permitted under subsection $_____________
7.1(vii):
2. Aggregate principal amount of Senior
Subordinated Notes that have been
repurchased, redeemed or prepaid since
May 4, 1995: $_____________
3. Maximum aggregate amount of
Indebtedness permitted under
subsection 7.1(vii) ($200,000,000 $_____________
minus A(2)):
-----
4. Aggregate principal amount of
Indebtedness incurred to finance the
purchase price of equipment, fixtures
and other similar property or
remodeling or other improvement costs
of any facility of Company or any of
its Subsidiaries during the current
Fiscal Year permitted under subsection $_____________
7.1(viii):
5. Maximum aggregate amount of
Indebtedness permitted under
subsection 7.1(viii)(a) for the
current Fiscal Year: $ 30,000,000
6. Aggregate outstanding principal amount
of Indebtedness incurred since the
Closing Date to finance the purchase
price of any Real Property Assets
consisting of fee
(Credit Agreement)
226
interests in stores permitted under
subsection 7.1(viii):
$_____________
7. Maximum aggregate principal amount of
all Indebtedness incurred to finance
the purchase price of any such Real
Property Assets under subsection
7.1(viii) at any time:
$ 25,000,000
8. Aggregate amount of Indebtedness of
Subsidiaries of Company acquired after
the Closing Date, the acquisition of
which was permitted under
subsections 7.3(v) and 7.7(ii),
existing immediately prior to the time
any such entity became a Subsidiary of
Company and not incurred in
contemplation of such acquisition $_____________
permitted under subsection 7.1(ix):
9. Maximum aggregate amount of
Indebtedness permitted under
subsection 7.1(ix): $ 5,000,000
10. Aggregate amount of Indebtedness
represented by Deferred Trade Payables
permitted under subsection 7.1(x): $_____________
11. Maximum aggregate amount of
Indebtedness permitted under $ 10,000,000
subsection 7.1(x):
12. Aggregate amount of Indebtedness
evidenced by promissory notes
subordinated to the Obligations and
issued to employees or former
employees of Company and its
Subsidiaries in lieu of cash payments
for stock of Holdings required to be
repurchased pursuant to Company's
stock option or other stock plans $_____________
permitted under subsection 7.1(xi):
13. Maximum aggregate amount of
Indebtedness permitted under $ 5,000,000
subsection 7.1(xi):
14. Aggregate amount of Indebtedness to
BDI
(Credit Agreement)
227
and BPI permitted under subsection
7.1(xii): $_____________
15. Maximum aggregate amount of
Indebtedness to BDI and BPI permitted
under subsection 7.1(xii): $ 350,000
16. Aggregate amount outstanding of other
Indebtedness incurred by Company and
its Subsidiaries permitted under $_____________
subsection 7.1(xiii):
17. Maximum aggregate amount outstanding
of other Indebtedness incurred by
Company and its Subsidiaries permitted
under subsection 7.1(xiii): $ 15,000,000
B. LIENS
1. Aggregate principal amount of
Indebtedness secured by Liens on Real
Property Assets consisting of fee
interests in stores permitted under
subsection 7.2A(iv)(a): $_____________
2. Maximum aggregate principal amount of
Indebtedness secured by such Liens
permitted under subsection $ 25,000,000
7.2A(iv)(a):
3. Aggregate value of goods held on
consignment secured by Liens in favor
of third parties as consignors (or as
creditors of such consignors) in the
ordinary course of business and
consistent with past practices
permitted under subsection 7.2A(v): $_____________
4. Maximum aggregate value of such goods
permitted to be so held under
subsection 7.2A(v): $ 10,000,000
5. Aggregate amount of Indebtedness of
Company or any of its Subsidiaries
secured by Liens not otherwise
permitted by
(Credit Agreement)
228
clauses 7.2A(i) through (vi) permitted
under subsection 7.2A(vii): $_____________
6. Maximum aggregate amount of
Indebtedness secured by Liens
permitted under subsection 7.2A(vii): $ 5,000,000
C. INVESTMENTS: JOINT VENTURES
1. Aggregate outstanding amount of
Development Investments permitted
under subsection 7.3(vi): $_____________
2. Maximum aggregate outstanding amount
of Development Investments permitted
under subsection 7.3(vi): $ 30,000,000
3. Aggregate principal amount of
promissory notes received by Company
and its Subsidiaries in consideration
of, or the deferral of a portion of
the sales price accepted with respect
to, any Asset Sale permitted under
subsection 7.7(viii) as permitted $_____________
under 7.3(vii):
4. Maximum aggregate principal amount of
such promissory notes permitted under
subsection 7.3(vii): $ 7,000,000
5. Aggregate amount of Investments made
by Company and its Subsidiaries in
suppliers made in anticipation of
becoming a customer of such suppliers
and in lieu of deposits, cash
discounts or concessions and in
connection with joint ventures with
suppliers entered into in the ordinary
course of business permitted under
subsection 7.3(ix): $_____________
6. Maximum aggregate amount of
Investments permitted under subsection
7.3(ix) ($5,000,000 - D(1)): $_____________
(Credit Agreement)
229
7. Aggregate amount of loans made during
this Fiscal Year by Company to
Holdings for the purposes described in
subsection 7.5A(ii)(b) permitted under
subsection 7.3(x)(a): $_____________
8. Maximum aggregate amount of loans made
during this Fiscal Year by Company to
Holdings for the purposes described in
subsection 7.5A(ii)(b) permitted under
subsection 7.3(x)(a) ($1,000,000 - $_____________
E(3)):
9. Aggregate amount of loans made during
this Fiscal Year by Company to
Holdings for the purposes described in
subsection 7.5A(v) permitted under
subsection 7.3(x)(b): $_____________
10. Maximum aggregate amount of loans made
during this Fiscal Year by Company to
Holdings for the purposes described in
subsection 7.5A(v) permitted under
subsection 7.3(x)(b) (($3,000,000 plus
----
the lesser of (A) E(13) and (B)
$2,000,000) - E(7)): $_____________
11. Aggregate amount of loans made by
Company or any of its Subsidiaries to
its employees for the purpose of
purchasing Holdings Common Stock
permitted under subsection 7.3(xi): $_____________
12. Maximum aggregate amount of such loans
made by Company or any of its
Subsidiaries to their respective
employees permitted under subsection $ 5,000,000
7.3(xi):
(Credit Agreement)
230
13. Aggregate amount of (i) the cash
portion of the purchase by Company and
its Subsidiaries of Holdings Common
Stock during the current Fiscal Year
(a) from a stock option or other stock
plan of any Loan Party as required
pursuant to the applicable plan or
agreement, (b) from participants in
any such plan or from any employee of
any Loan Party as required pursuant to
the applicable plan or agreement or
(c) from any former employee of any
Loan Party (or any employee of any
Loan Party who will become a former
employee within 10 days) and (ii) the
cash payments with respect to
promissory notes issued to any such
participants, holders, former
employees and employees as permitted
under subsection 7.3(xii): $_____________
14. Aggregate amount of cash proceeds
received by Holdings in the current
Fiscal Year from its sale of shares of
Holdings Common Stock to a stock
option or other stock plan of any Loan
Party or to participants in any such
plan or to any employee of any Loan
Party during the current Fiscal Year: $_____________
15. Maximum aggregate amount of the cash
portion of such purchases and cash
payments with respect to such
promissory notes permitted under
subsection 7.3(xii) in any Fiscal Year
($3,500,000 + C(14)): $_____________
16. Aggregate amount of other Investments
permitted under subsection 7.3(xiii): $_____________
17. Maximum aggregate amount of other
Investments permitted under subsection
7.3(xiii): $ 10,000,000
(Credit Agreement)
231
D. CONTINGENT OBLIGATIONS
1. Aggregate amount of Contingent
Obligations under guarantees in the
ordinary course of business of the
obligations of suppliers, customers,
franchisees and licensees permitted
under subsection 7.4(v): $_____________
2. Maximum aggregate amount of Contingent
Obligations under such guarantees
permitted under subsection 7.4(v)
($5,000,000 - C(5)): $_____________
3. Aggregate amount of other Contingent
Obligations permitted under subsection
7.4(x): $_____________
4. Maximum aggregate liability,
contingent or otherwise, permitted in
respect of all such Contingent
Obligations under subsection 7.4(x): $ 10,000,000
E. RESTRICTED JUNIOR PAYMENTS (for the four-Fiscal Quarter period
ending _____________, _____)
1. Aggregate amount of cash dividends
made by Company to Holdings for the
sole purpose of allowing Holdings to
pay its obligations in respect of the
Illinois franchise tax permitted under
subsection 7.5A(ii)(a): $_____________
2. Maximum amount of cash dividends
7.5A(ii)(a): $ 250,000
3. Aggregate amount of cash dividends
made by Company to Holdings for the
sole purpose of allowing Holdings to
pay for its general operating expenses
and other items permitted under
subsection 7.5A(ii)(b) in the current
Fiscal Year: $_____________
(Credit Agreement)
232
4. Maximum aggregate amount of cash
dividends made by Company to Holdings
for the sole purpose of allowing
Holdings to pay its general operating
expenses and other items permitted
under subsection 7.5A(ii)(b) in the
current Fiscal Year ($1,000,000 - $_____________
C(7)):
(Calculate E(5) only for Fiscal Quarters in
which Holdings made cash dividends to holders
of Holdings Common Stock)
5. Leverage Ratio for the four-Fiscal
Quarter period ending as of the last
day of the most recently ended Fiscal
Quarter: _____:1.00
6. Maximum Leverage Ratio permitted under
subsection 7.5A(v) before cash
dividends can be declared: 3.00:1.00
7. Aggregate amount of cash dividends
made by Company to Holdings for the
purpose of allowing Holdings to pay
cash dividends to the holders of
Holdings Common Stock in the current
Fiscal Year permitted under subsection $_____________
7.5A(v) (Measure compliance against
E(14)):
8. Aggregate amount of cash dividends
made by Company to Holdings for the
purpose of allowing Holdings to pay
cash dividends to the holders of
Holdings Common Stock after November
3, 1996 and prior to the commencement
of the current Fiscal Year permitted $_____________
under subsection 7.5A(v):
9. Aggregate amount of cash dividends
made by Company to Holdings for the
purpose of allowing Holdings to pay
cash dividends to the holders of
Holdings Common Stock since the
Closing Date (E(7) + E(8)): $_____________
(Credit Agreement)
233
10. Aggregate amount of loans made after
November 3, 1996 and prior to the
commencement of the current Fiscal
Year by Company to Holdings for the
purposes described in subsection $_____________
7.5A(v) permitted under subsection
7.3(x)(b):
11. Aggregate amount of loans made by
Company to Holdings to pay cash
dividends to the holders of Holdings
Common Stock since the Closing Date
(E(10) + C(9)): $_____________
12. Cumulative Consolidated Net Income: $_____________
13. Cumulative Income Amount ((E(12) x
0.25) minus the sum of (A) E(9) and
(B) E(11)): $_____________
14. Maximum aggregate amount of cash
dividends permitted to be made by
Company to Holdings under subsection
7.5A(v) for the purpose of allowing
Holdings to pay cash dividends to
holders of Holdings Common Stock in
the current Fiscal Year (($3,000,000
plus the lesser of (A) E(13) and (B)
$2,000,000) minus C(9)): $_____________
15. Aggregate amount of redemptions,
repurchases or other prepayments of
principal made by the Company since
the Closing Date in respect of Senior
Subordinated Notes permitted under $_____________
subsection 7.5A(vi):
16. Maximum aggregate amount of
redemptions, repurchases or other
prepayments of principal made by the
Company in respect of Senior
Subordinated Notes permitted under
subsection 7.5A(ix): $ 70,000,000
(Credit Agreement)
234
17. Aggregate amount of prepayments of
principal made by the Company since
the Closing Date in respect of
Existing Funded Debt permitted under $_____________
subsection 7.5B(iii):
18. Maximum aggregate amount of
prepayments made by the Company in
respect of Existing Funded Debt
permitted under subsection 7.5B(iii): $ 10,000,000
F. MINIMUM FIXED CHARGE COVERAGE RATIO (for the four-Fiscal Quarter period
ending ______________, _____.)
1. Consolidated Net Income: $_____________
2. Consolidated Interest Expense: $_____________
3. Provisions for taxes based on income: $_____________
4. Total depreciation expense: $_____________
5. Total amortization expense: $_____________
6. Other non-cash items reducing
Consolidated Net Income: $_____________
7. Other non-cash items increasing
Consolidated Net Income: $_____________
8. Consolidated Adjusted EBITDA (F(1) +
F(2) + F(3) + F(4) + F(5) + F(6) -
F(7)): $_____________
9. Consolidated Rental Payments: $_____________
10. Consolidated Cash Interest Expense: $_____________
11. Aggregate amount of scheduled
principal payments on all Indebtedness
of Company and its Subsidiaries: $_____________
12. Consolidated Fixed Charges (F(9) +
F(10) + F(11)): $_____________
(Credit Agreement)
235
13. Fixed Charge Coverage Ratio (F(8) +
F(9):F(12)): ____:1.00
14. Minimum Fixed Charge Coverage Ratio
required under subsection 7.6A: ____:1.00
G. MAXIMUM LEVERAGE RATIO (for the four-Fiscal Quarter period
ending ______________, _______.)
1. Consolidated Total Debt: $____________
2. Consolidated Adjusted EBITDA (F(8)
above): $____________
3. Leverage Ratio (G(1): G(2)):* _______:1.00
4. Maximum Leverage Ratio permitted under
subsection 7.6B: _______:1.00
H. MINIMUM CONSOLIDATED NET WORTH
1. Consolidated Net Worth: $_____________
2. Minimum Consolidated Net Worth
required under subsection 7.6C: $_____________
I. FUNDAMENTAL CHANGES
1. Aggregate fair market value of assets
sold in Asset Sales made in this
Fiscal Year permitted under clause (c)
of subsection 7.7(viii): $_____________
2. Maximum value of assets sold in Asset
Sales during this Fiscal Year
permitted under clause (c) of $ 5,000,000
subsection 7.7(viii):
3. Aggregate number of stores sold under
subsection 7.7(ix) during this Fiscal _____________
year:
* This ratio to match the Leverage Ratio set forth in the applicable
Margin Determination Certificate.
(Credit Agreement)
236
4. Aggregate number of stores sold under
subsection 7.7(ix) in the immediately
preceding Fiscal Year (other than
Fiscal Year 1996): _____________
5. Greater of (i) 0 and (ii) 5 minus item
I(4) above (this item to be zero for
Fiscal Years 1996 and 1997): _____________
6. Maximum aggregate number of stores
permitted to be sold under subsection
7.7(ix) during this Fiscal Year (I(5)
plus 5): _____________
J. CONSOLIDATED CAPITAL EXPENDITURES
1. Consolidated Capital Expenditures for
Fiscal Year-to-date included in clause
(i) of definition thereof: $_____________
2. Aggregate amount of Consolidated
Capital Expenditures constituting (a)
Development Investments permitted
under subsection 7.3(vi) or (b) the
purchase price of Store Land
Properties constituting undeveloped
land or land with improvements thereon
existing as of the date of acquisition
thereof permitted under subsection 7.8
for Fiscal Year-to-date: $_____________
3. Aggregate amount of proceeds of
Indebtedness permitted under
subsections 7.1(iii) and 7.1(viii) for
Fiscal Year-to-date: $_____________
4. Aggregate amount of proceeds from
sale-leaseback transactions of a store
or equipment permitted under
subsection 7.10 occurring within 270
days of completion of such store and
to the extent prior expenditures, up
to an equivalent amount for the asset
so sold and leased back,
(Credit Agreement)
237
constituted Consolidated Capital
Expenditures: $_____________
5. Aggregate amount of expenditures in an
amount not to exceed the proceeds of
insurance, condemnation awards (or
payments in lieu thereof) or
indemnities, so long as such
expenditures were made for purposes of
replacing or repairing damaged assets
within 18 months of occurrence of $_____________
damage or loss:
6. Consolidated Capital Expenditures for
Fiscal Year-to-date as defined (J(1)
minus (J(2) + J(3) + J(4) + J(5)))
(Measure compliance against J(16)): $_____________
7. Maximum Consolidated Capital
Expenditures Amount for such Fiscal
Year (as set forth on the table in
subsection 7.8): $_____________
8. Maximum Consolidated Capital
Expenditures Amount for the previous
Fiscal Year (as set forth on the table
in subsection 7.8): $_____________
9. Maximum Consolidated Capital
Expenditures Amount for the previous
Fiscal Year (as set forth on the table
in subsection 7.8), as adjusted in
accordance with the first proviso in $_____________
subsection 7.8:
10. Aggregate amount of Consolidated
Capital Expenditures incurred during
the previous Fiscal Year: $_____________
11. Amount permitted to carry-forward from
previous Fiscal Year (this item to be
zero for Fiscal Year 1997; for
subsequent Fiscal Years, the lesser of
(a) J(9) - J(10) and (b) 30% of J(8)): $_____________
(Credit Agreement)
238
12. Amount permitted to be utilized from
following Fiscal Year (30% of Maximum
Consolidated Capital Expenditures
Amount for following Fiscal Year as
set forth on the table in subsection $_____________
7.8):
13. Maximum aggregate amount permitted to
be carried-forward and/or utilized for
current Fiscal Year (lesser of (a)
J(11) + J(12) and (b) 30% of J(7)): $_____________
14. Lesser of (a) $10,000,000 and (b) the
aggregate amount of Net Cash Proceeds
(other than insurance proceeds,
condemnation awards and indemnity
payments) received by Company and its
Subsidiaries from Asset Sales of
stores during the Fiscal Year to the
extent such Net Cash Proceeds have
been reinvested in new stores or the
construction or remodeling of stores
within 270 days of receipt: $_____________
15. Aggregate amount of current Fiscal
Year's amount that was carried back
and utilized in the previous Fiscal
Year pursuant to clause (ii) of the
first proviso in subsection 7.8: $_____________
16. Maximum Consolidated Capital
Expenditures for current Fiscal Year
permitted under subsection 7.8 (J(7) +
J(13) + J(14) - J(15)): $_____________
17. Aggregate cumulative amount of
purchase price paid with respect to
all Store Land Properties made by
Company and its Subsidiaries acquired
after the Closing Date permitted under
subsection 7.8 (Measure compliance
against J(19)): $_____________
(Credit Agreement)
239
18. Aggregate cumulative amount of losses
incurred by Loan Parties after the
Closing Date with respect to any Store
Land Property acquired after the
Closing Date (which losses shall be
calculated on or after the date of the
sale or other disposition of such
Store Land Property as the purchase
price of such Store Land Property
minus the Cash Proceeds received by
the applicable Loan Party on or before
such date of calculation in connection
with such sale or other disposition): $_____________
19. Maximum aggregate cumulative amount of
purchase price paid with respect to
all Store Land Properties made by
Company and its Subsidiaries acquired
after the Closing Date permitted under
subsection 7.8 ($25,000,000 J (18)): $_____________
K. LEASES
1. Aggregate amount paid or payable under
all Capital Leases during the current
Fiscal Year: $_____________
2. Aggregate amount paid or payable under
all Operating Leases during the
current Fiscal Year: $_____________
3. Aggregate amount paid or payable under
all Capital Leases and Operating
Leases during the current Fiscal Year
(K(1) + K(2)): $_____________
4. Maximum aggregate amount paid or
payable under all Capital Leases and
Operating Leases for the current
Fiscal Year permitted under
subsection 7.9: $_____________
(Credit Agreement)
240
L. CONDUCT OF BUSINESS
1. Aggregate amount of Cash and Cash
Equivalents held by Holdings permitted
under subsection 7.14: $_____________
2. Maximum aggregate amount of Cash and
Cash Equivalents Holdings is permitted
to hold under subsection 7.14: $500,000
3. Aggregate amount of Cash and Cash
Equivalents or promissory notes issued
by Company held by BDI permitted under
subsection 7.14: $_____________
4. Maximum aggregate amount of Cash and
Cash Equivalents or promissory notes
issued by Company held by BDI
permitted under subsection 7.14: $90,000
5. Aggregate amount of Cash and Cash
Equivalents or promissory notes issued
by Company held by BPI permitted under
subsection 7.14: $_____________
6. Maximum aggregate amount of Cash and
Cash Equivalents or promissory notes
issued by Company held by BPI
permitted under subsection 7.14: $260,000
(Credit Agreement)
241
EXHIBIT VIII-A
FORM OF OPINION OF
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
[pending]
(Credit Agreement)
242
EXHIBIT VIII-B
FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇, ESQ.
[Dominick's Finer Foods, Inc. Letterhead]
November 1, 1996
Bankers Trust Company,
as Administrative Agent and Arranger
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
The Chase Manhattan Bank,
as Syndication Agent and Arranger
The Lenders Listed on
Schedule I Attached Hereto
Re: Credit Agreement dated as of November 1, 1996 by and among
Dominick's Supermarkets, Inc., as Guarantor, Dominick's Finer
Foods, Inc., as Borrower, the financial institutions listed on
the signature pages thereto as Lenders, Bankers Trust Company,
as Administrative Agent, The Chase Manhattan Bank, as
Syndication Agent, and Bankers Trust Company and The Chase
Manhattan Bank, as Arrangers
Ladies and Gentlemen:
I have acted as counsel to Dominick's Supermarkets, Inc., a Delaware
corporation ("Holdings"), Dominick's Finer Foods, Inc., a Delaware corporation
("Company"), Dominick's Finer Foods, Inc. of Illinois, an Illinois corporation
("Dominick's Illinois"), ▇▇▇▇'▇ of Bloomingdale, Inc., an Illinois corporation
("Kohl's"), ▇▇▇▇ Hazelcrest, Inc., a Delaware corporation ("▇▇▇▇ Hazelcrest"),
Save-It Discount Foods Corporation, an Illinois corporation ("Save-It
Discount"), DFF Equipment Leasing Company, an Illinois corporation ("Equipment
Leasing" and together with Dominick's Illinois, ▇▇▇▇'▇, ▇▇▇▇ Hazelcrest and
Save-It Discount, the "Subsidiary Guarantors"), Blackhawk Developments, Inc., a
Delaware corporation ("BDI"), and Blackhawk Properties, Inc., a
(Credit Agreement)
243
Bankers Trust Company, as Administrative Agent and Arranger
The Chase Manhattan Bank, as Syndication Agent and Arranger
The Lenders listed on
Schedule 1 Attached Hereto
November 1, 1996
Page 67
Delaware corporation ("BPI"), in each case in connection with the Credit
Agreement dated as of November 1, 1996 (the "Credit Agreement") by and among
Holdings, as Guarantor, Company, as Borrower, Lenders, Agent, Syndication
Agent, and Arrangers and the other Loan Documents. Capitalized terms defined
in the Credit Agreement, used herein and not otherwise defined herein, shall
have the meanings given them in the Credit Agreement.
For purposes of this opinion, Holdings, Company and the Subsidiary
Guarantors are each referred to individually as a "Loan Party" and are
collectively referred to as the "Loan Parties." For purpose of this opinion,
"Loan Documents" shall mean the following documents:
(a) the Credit Agreement;
(b) the Term Notes, the Revolving Term Notes, the Revolving
Notes and the Swing Line Note (collectively, the "Notes");
(c) the Company Pledge Agreement;
(d) the Company Security Agreement;
(e) the Company Trademark Security Agreement and Conditional
Assignment;
(f) the Collateral Account Agreement;
(g) the Subsidiary Guaranty;
(h) the Subsidiary Pledge Agreements;
(i) the Subsidiary Security Agreements;
(j) the Subsidiary Trademark Security Agreements (together
with the Company Trademark Security Agreement, the "Trademark Security
Agreements");
(k) the Holdings Pledge Agreement (together with the Company
Pledge Agreement and the Subsidiary Pledge Agreements, the "Pledge
Agreements");
(Credit Agreement)
244
Bankers Trust Company, as Administrative Agent and Arranger
The Chase Manhattan Bank, as Syndication Agent and Arranger
The Lenders Listed on
Schedule 1 Attached Hereto
November 1, 1996
Page 68
(l) the Holdings Security Agreement (together with the Company
Security Agreement and the Subsidiary Security Agreements, the
"Security Agreements"); and
(m) the Mortgages executed on the date hereof.
This opinion is rendered to you pursuant to Section 4.1J of the Credit
Agreement.
As such counsel, I have examined such matters of fact and questions of
law as I have considered appropriate for purposes of rendering the opinions
expressed below. I have examined originals of the charter and bylaws, each of
which are in full force and effect as of the date hereof, records of
organization and stockholder records of Company, the Subsidiary Guarantors, BDI
and BPI.
In my examination, I have assumed the genuineness of all signatures,
the legal capacity of all natural persons executing documents, the authenticity
of all documents submitted to me as originals, and the conformity to authentic
original documents of all documents submitted to me as copies, whether or not
certified.
In addition to the foregoing, I have obtained and relied upon such
certificates and assurances from public officials as I have deemed necessary.
I have made such factual and legal examinations and inquiries as I
have deemed advisable for the purpose of rendering the opinions expressed
below, except where a statement is qualified as to knowledge, in which case I
have made no or limited inquiry as specified below. I am opining herein as to
the effect on the subject transactions only of the federal laws of the United
States, the internal laws of the State of Illinois, and the General Corporation
Law of the State of Delaware, and I express no opinion with respect to the
applicability thereto, or the effect thereon, of the laws of any other
jurisdiction or, in the case of Delaware, any other laws or as to any matter of
municipal laws or the laws of any other local agencies within any state.
Subject to the foregoing and the other matters set forth herein, and
in reliance thereon, it is our opinion that, as of the date hereof.
1. Each of ▇▇▇▇ Hazelcrest, BDI and BPI (i) has been duly
incorporated and is validly existing and in good standing under the laws of the
State of Delaware, (ii) has
(Credit Agreement)
245
Bankers Trust Company, as Administrative Agent and Arranger
The Chase Manhattan Bank, as Syndication Agent and Arranger
The Lenders Listed on
Schedule 1 Attached Hereto
November 1, 1996
Page 69
the corporate power and authority to enter into each of the Loan Documents to
which it is a party and to perform its obligations thereunder, (iii) is
qualified to do business and in good standing in the State of Illinois, and
(iv) has the corporate power and authority to conduct its business as now
conducted and to own, or hold under lease, its assets.
2. Each of Dominick's Illinois, Kohl's, Save-It Discount and
Equipment Leasing (i) has been duly incorporated and is validly existing and in
good standing under the laws of the State of Illinois, (ii) has the corporate
power and authority to enter into each of the Loan Documents to which it is a
party and to perform its obligations thereunder, and (iii) has the corporate
power and authority to conduct its business as now conducted and to own, or
hold under lease, its assets.
3. The shares of the capital stock listed on Schedule II attached
hereto have been duly authorized and validly issued and are fully paid and
nonassessable. As of the date hereof, the owners listed on Schedule II attached
hereto, directly or indirectly, own of record and, to my knowledge,
beneficially, all of the issued and outstanding capital stock of the Subsidiary
Guarantors, BDI and BPI.
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, quoted to or relied upon by
any other person, firm or corporation for any purpose, without my prior written
consent. At your request, I hereby consent to reliance hereon by any future
participants or assigns of your interest in the Credit Agreement which are
financial institutions as expressly permitted by Section 11.1 of the Credit
Agreement; provided that you have notified such participant or assign that this
opinion speaks only as of the date hereof and to its addressee and that I have
no responsibility or obligation to update this opinion, to consider its
applicability or correctness to other than its addressee, or to take into
account changes in law, facts or any other development of which I may later
become aware.
Very truly yours,
▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice President and
General Counsel
(Credit Agreement)
246
SCHEDULE I
List of Lenders
Bankers Trust Company, Individually and as Administrative Agent and Arranger
The Chase Manhattan Bank, Individually and as Syndication Agent and Arranger
Bank of America Illinois
The First National Bank of Chicago
Marine Midland Bank
The Mitsubishi Trust & Banking Corporation
Union Bank of California, N.A.
ABN AMRO Bank N.V., Chicago Branch
LaSalle National Bank
Banque Paribas
Compagnie Financiere de CIC et de L'Union Europeenne
The Northern Trust Company
The Bank of Nova Scotia
Caisse National de Credit Agricole
Credit Lyonnais Chicago Branch
The Dai-Ichi Kangyo Bank, Ltd.
The Fuji Bank, Limited Chicago Branch
Mitsui Leasing (U.S.A.) Inc.
The Royal Bank of Scotland plc
The Sakura Bank, Limited
The Sumitomo Trust & Banking Co., Ltd., New York Branch
(Credit Agreement)
247
SCHEDULE II
Stock Owner Stock Issuer Stock Nos. Value Shares
----------- ------------ --------- ---- ----- ----------
Dominick's Finer Foods, Inc. ▇▇▇▇ Hazelcrest, Inc. Common No. 1 $0.10 10,000
Dominick's Finer Foods, Inc. Kohl's of Common No. 2 $1.00 1,000
Bloomingdale, Inc.
Dominick's Finer Foods, Inc. DFF Equipment Leasing Common No. 1 No Par 1,000
Company
Dominick's Finer Foods, Inc. Dominick's Finer Common No. 3 No Par 15
Foods, Inc. of
Illinois
Dominick's Finer Foods, Inc. Blackhawk Common No. 3 $0.10 10,000
Developments, Inc.
Dominick's Finer Foods, Inc. Blackhawk Properties, Common No. 3 No Par 1,000
Inc.
Dominick's Finer Foods, Inc. Save-It Discount Food Common No. 1 No Par 1,000
of Illinois Corporation
(Credit Agreement)
248
EXHIBIT IX
[FORM OF OPINION OF O'MELVENY & ▇▇▇▇▇ LLP]
[O'M&M Letterhead]
November
1st
1 9 9 6
045,710-571
LA1-715876.V4
Bankers Trust Company, as Agent
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and
The Syndication Agent, Arrangers and Lenders
Listed on Schedule A Hereto
Re: Credit Agreement dated as of November 1, 1996 among
Dominick's Supermarkets, Inc., Dominick's Finer
Foods, Inc., the financial institutions listed on the
signature pages thereof as Lenders, Bankers Trust
Company, as Agent, The Chase Manhattan Bank, as
Syndication Agent, and Bankers Trust Company and The
Chase Manhattan Bank, as Arrangers
Ladies and Gentlemen:
We have acted as counsel to Bankers Trust Company, as
administrative agent (in such capacity, "Agent"), and as counsel to Bankers
Trust Company and The Chase Manhattan Bank, N.A., as arrangers (in such
capacity, "Arrangers"), in connection with the preparation and delivery of a
Credit Agreement dated as of November 1, 1996 (the "Credit Agreement") among
Dominick's Supermarkets, Inc., Dominick's Finer Foods, Inc. ("Company"), the
financial institutions listed on the signature pages thereof as Lenders, Agent,
Syndication Agent and Arrangers, and in connection with the preparation and
delivery of certain related documents.
We have participated in various conferences with
representatives of Company, Agent, Syndication Agent and Arrangers and
conferences and telephone calls with ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to Company, and
with your representatives, during which the Credit Agreement and related
matters have been discussed, and we have also participated in the meeting held
on the date hereof (the "Closing") incident to the funding of the initial loans
made under the Credit Agreement. We have reviewed the forms of the Credit
Agreement and the exhibits thereto, including the forms of the promissory notes
annexed thereto (the "Notes"), and the opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ and the
opinion of ▇▇▇▇▇▇ ▇▇▇▇, general counsel of Dominick's Finer Foods, Inc.,
delivered pursuant to subsection 4.1J(i) (the "Opinions") and the officers'
certificates and other documents delivered at the Closing. We have assumed the
genuineness of all signatures, the authenticity of all documents submitted to
us as originals or copies and the due authority of all persons executing the
same, and we have relied as to factual matters on the documents that we have
reviewed.
Although we have not independently considered all of the
matters covered by the Opinions to the extent necessary to enable us to express
the conclusions therein stated, we believe that the Credit Agreement and the
exhibits thereto are in substantially acceptable legal form and that the
Opinions and the officers' certificates and other documents delivered in
connection with the
(Opinion of O'M&M) (Credit Agreement)
249
execution and delivery of, and as conditions to the making of the initial loans
under, the Credit Agreement and the Notes are substantially responsive to the
requirements of the Credit Agreement.
Respectfully submitted,
(Opinion of O'M&M) (Credit Agreement)
250
Schedule A
Bankers Trust Company, individually and as Administrative Agent and Arranger
The Chase Manhattan Bank, individually and as Syndication Agent and Arranger
Bank of America Illinois
The First National Bank of Chicago
Marine Midland Bank
The Mitsubishi Trust & Banking Corporation
Union Bank of California, N.A.
ABN AMRO Bank N.V., Chicago Branch
LaSalle National Bank
Banque Paribas
Compagnie Financiere de CIC et de L'Union Europeenne
The Northern Trust Company
The Bank of Nova Scotia
Caisse National de Credit Agricole
Credit Lyonnais Chicago Branch
The Dai-Ichi Kangyo Bank, Ltd.
The Fuji Bank, Limited Chicago Branch
Mitsui Leasing (U.S.A.) Inc.
The Royal Bank of Scotland plc
The Sakura Bank, Limited
The Sumitomo Trust & Banking Co., Ltd., New York Branch
(Opinion of O'M&M) (Credit Agreement)
251
EXHIBIT X
[FORM OF ASSIGNMENT AGREEMENT]
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT (this "AGREEMENT") is entered into
by and between the parties designated as Assignor ("ASSIGNOR") and Assignee
("ASSIGNEE") above the signatures of such parties on the Schedule of Terms
attached hereto and hereby made an integral part hereof (the "SCHEDULE OF
TERMS") and relates to that certain Credit Agreement described in the Schedule
of Terms (said Credit Agreement, as amended, amended and restated, supplemented
or otherwise modified to the date hereof and as it may hereafter be amended,
amended and restated, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT", the terms defined therein and not otherwise
defined herein being used herein as therein defined).
IN CONSIDERATION of the agreements, provisions and covenants
herein contained, the parties hereto hereby agree as follows:
SECTION 1. ASSIGNMENT AND ASSUMPTION.
(a) Effective as of the Settlement Date specified in Item
4 of the Schedule of Terms (the "SETTLEMENT DATE"), Assignor hereby sells and
assigns to Assignee, without recourse, representation or warranty (except as
expressly set forth herein), and Assignee hereby purchases and assumes from
Assignor, that percentage interest in all of Assignor's rights and obligations
as a Lender arising under the Credit Agreement and the other Loan Documents
with respect to Assignor's Commitments and outstanding Loans, if any, which
represents, as of the Settlement Date, the percentage interest (which
percentage interest shall be the same for all of (i) the Revolving Term Loan
Commitment and Revolving Term Loans of the Assignor, on the other hand, and
(ii) the Revolving Loan Commitment and Revolving Loans of the Assignor, on the
other hand) specified in Item 3 of the Schedule of Terms of all rights and
obligations of Lenders arising under the Credit Agreement and the other Loan
Documents with respect to the Commitments and any outstanding Loans (the
"ASSIGNED SHARE"). Without limiting the generality of the foregoing, the
parties hereto hereby expressly acknowledge and agree that any assignment of
all or any portion of Assignor's rights and obligations relating to Assignor's
Revolving Loan Commitment shall include (i) in the event Assignor is an Issuing
Lender with respect to any outstanding Letters of Credit (any such Letters of
Credit being "ASSIGNOR LETTERS OF CREDIT"), the sale to Assignee of a
participation in the Assignor Letters of Credit and any drawings thereunder as
contemplated by subsection 3.1C of the Credit Agreement and (ii) the sale to
Assignee of a ratable portion of any participation previously purchased by
Assignor pursuant to said subsection 3.1C with respect to any Letters of Credit
other than the Assignor Letters of Credit.
(b) In consideration of the assignment described above,
Assignee hereby agrees to pay to Assignor, on the Settlement Date, the
principal amount of any outstanding Loans included within the Assigned Share,
such payment to be made by wire transfer of immediately available funds in
accordance with the applicable payment instructions set forth in Item 5 of the
Schedule of Terms.
(c) Assignor hereby represents and warrants that Item 3
of the Schedule of Terms correctly sets forth the amount of the Commitments,
the outstanding Term Loans and the Pro Rata Share of Assignee after giving
effect to the assignment and assumption described above.
(d) Assignor and Assignee hereby agree that, upon giving
effect to the assignment and assumption described above, (i) Assignee shall be
a party to the Credit Agreement and shall have all of the rights and
obligations under the Loan Documents, and shall be deemed to have made all of
the covenants and agreements contained in the Loan Documents, arising out of or
otherwise related to the Assigned Share, and (ii) Assignor shall be absolutely
released from any of such obligations, covenants and agreements assumed or made
by Assignee in respect of the Assigned Share. Assignee hereby acknowledges and
agrees that the agreement set forth in this Section 1(d) is expressly made for
the benefit of Holdings, Company, Agent, Syndication Agent, Arrangers, Assignor
and the other Lenders and their respective successors and permitted assigns.
(Credit Agreement)
252
(e) Assignor and Assignee hereby acknowledge and confirm
their understanding and intent that (i) this Agreement shall effect the
assignment by Assignor and the assumption by Assignee of Assignor's rights and
obligations with respect to the Assigned Share, (ii) any other assignments by
Assignor of a portion of its rights and obligations with respect to the
Commitments and any outstanding Loans shall have no effect on the Commitments,
the outstanding Term Loans and the Pro Rata Share of Assignee set forth in Item
3 of the Schedule of Terms or on the interest of Assignee in any outstanding
Revolving Term Loans or Revolving Loans corresponding thereto, and (iii) from
and after the Settlement Date, Agent shall make all payments under the Credit
Agreement in respect of the Assigned Share (including without limitation all
payments of principal and accrued but unpaid interest, commitment fees and
letter of credit fees with respect thereto) (A) in the case of any such
interest and fees that shall have accrued prior to the Settlement Date, to
Assignor, and (B) in all other cases, to Assignee; provided that Assignor and
Assignee shall make payments directly to each other to the extent necessary to
effect any appropriate adjustments in any amounts distributed to Assignor
and/or Assignee by Agent under the Loan Documents in respect of the Assigned
Share in the event that, for any reason whatsoever, the payment of
consideration contemplated by Section 1(b) occurs on a date other than the
Settlement Date.
SECTION 2. CERTAIN REPRESENTATIONS, WARRANTIES AND
AGREEMENTS.
(a) Assignor represents and warrants that it is the legal
and beneficial owner of the Assigned Share, free and clear of any adverse
claim.
(b) Assignor shall not be responsible to Assignee for the
execution, effectiveness, genuineness, validity, enforceability, collectibility
or sufficiency of any of the Loan Documents or for any representations,
warranties, recitals or statements made therein or made in any written or oral
statements or in any financial or other statements, instruments, reports or
certificates or any other documents furnished or made by Assignor to Assignee
or by or on behalf of Holdings or Company or any of their respective
Subsidiaries to Assignor or Assignee in connection with the Loan Documents and
the transactions contemplated thereby or for the financial condition or
business affairs of Holdings, Company or any other Person liable for the
payment of any Obligations, nor shall Assignor be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or
as to the use of the proceeds of the Loans or the use of the Letters of Credit
or as to the existence or possible existence of any Event of Default or
Potential Event of Default.
(c) Assignee represents and warrants that it is an
Eligible Assignee; that it has experience and expertise in the making of loans
such as the Loans; that it has acquired the Assigned Share for its own account
and not with any present intention of selling all or any portion of such
interest (it being understood that, subject to provisions of subsection 11.1 of
the Credit Agreement, the disposition of the Assigned Share or any interests
therein shall at all times remain within its exclusive control); and that it
has received, reviewed and approved a copy of the Credit Agreement (including
all Exhibits and Schedules thereto).
(d) Assignee represents and warrants that it has received
from Assignor such financial information regarding Holdings or Company and
their respective Subsidiaries as is available to Assignor and as Assignee has
requested, that it has made its own independent investigation of the financial
condition and affairs of Holdings or Company and their respective Subsidiaries
in connection with the assignment evidenced by this Agreement, and that it has
made and shall continue to make its own appraisal of the creditworthiness of
Holdings or Company and their respective Subsidiaries. Assignor shall have no
duty or responsibility, either initially or on a continuing basis, to make any
such investigation or any such appraisal on behalf of Assignee or to provide
Assignee with any other credit or other information with respect thereto,
whether coming into its possession before the making of the initial Loans or at
any time or times thereafter, and Assignor shall not have any responsibility
with respect to the accuracy of or the completeness of any information provided
to Assignee.
(e) Each party to this Agreement represents and warrants
to the other party hereto that it has full power and authority to enter into
this Agreement and to perform its obligations hereunder in accordance with the
provisions hereof, that this Agreement has been duly authorized, executed and
delivered by such party and that this Agreement constitutes a legal, valid and
binding obligation of such party, enforceable against such party in accordance
with its terms, except as enforceability may be
(Credit Agreement)
253
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and by general
principles of equity.
SECTION 3. MISCELLANEOUS.
(a) Each of Assignor and Assignee hereby agrees from time
to time, upon request of the other such party hereto, to take such additional
actions and to execute and deliver such additional documents and instruments as
such other party may reasonably request to effect the transactions contemplated
by, and to carry out the intent of, this Agreement.
(b) Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated, except by an instrument in writing
signed by the party (including, if applicable, any party required to evidence
its consent to or acceptance of this Agreement) against whom enforcement of
such change, waiver, discharge or termination is sought.
(c) Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given shall be
in writing and may be personally served, telexed or sent by telefacsimile or
United States mail or courier service and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of telefacsimile
or telex, or three Business Days after depositing it in the United States mail
with postage prepaid and properly addressed. For the purposes hereof, the
notice address of each of Assignor and Assignee shall be as set forth on the
Schedule of Terms or, as to either such party, such other address as shall be
designated by such party in a written notice delivered to the other such party.
In addition, the notice address of Assignee set forth on the Schedule of Terms
shall serve as the initial notice address of Assignee for purposes of
subsection 11.8 of the Credit Agreement.
(d) In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
(e) THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
(f) This Agreement shall be binding upon, and shall inure
to the benefit of, the parties hereto and their respective successors and
assigns.
(g) This Agreement may be executed in one or more
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document.
(h) This Agreement shall become effective upon the date
(the "EFFECTIVE DATE") upon which all of the following conditions are
satisfied: (i) the execution of a counterpart hereof by each of Assignor and
Assignee, (ii) the execution of a counterpart hereof by Company as evidence of
its consent hereto to the extent required under subsection 11.1B(i) of the
Credit Agreement, (iii) the receipt by Agent of the processing and recordation
fee referred to in subsection 11.1B(i) of the Credit Agreement, (iv) in the
event Assignee is a Non-US Lender (as defined in subsection 2.7B(iii)(a) of the
Credit Agreement), the delivery by Assignee to Agent of such forms,
certificates or other evidence with respect to United States federal income tax
withholding matters as Assignee may be required to deliver to Agent pursuant to
said subsection 2.7B(iii)(a), (v) the execution of a counterpart hereof by
Agent as evidence of its consent hereto to the extent required under subsection
11.1B(i) of the Credit Agreement and its acceptance hereof to the extent
required in accordance with subsection 11.1B(ii) of the Credit Agreement, (vi)
the receipt by Agent of originals or telefacsimiles of the counterparts
described above and authorization of delivery thereof, and (vii) the
recordation by Agent in the Register of the pertinent information regarding the
assignment effected hereby in accordance with subsection 11.1B(ii) of the
Credit Agreement.
(Credit Agreement)
254
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized, such execution being made as of the Effective Date
in the applicable spaces provided on the Schedule of Terms.
[Remainder of page intentionally left blank]
(Credit Agreement)
255
SCHEDULE OF TERMS
1. Borrower: Dominick's Finer Foods, Inc.
2. Name and Date of Credit Agreement: Credit Agreement dated as of
November 1, 1996 by and among Dominick's Supermarkets, Inc., Dominick's
Finer Foods, Inc., the financial institutions listed therein as
Lenders, Agent, Syndication Agent, and Arrangers.
3. Amounts:
-------
Re: Re:
Re: Revolving Revolving
Term Loans Term Loans Loans
---------- ---------- ---------
(a) Aggregate Commitments of all Lenders: $________ $________ $________
(b) Assigned Share/Pro Rata Share:* _______% _______% _______%
(c) Amount of Assigned Share of Commitments: $________ $________ $________
(d) Amount of Assigned Share of Term Loans: $________
4. Settlement Date: ____________, ____
5. Payment Instructions:
ASSIGNOR: ASSIGNEE:
---------------------------- ----------------------------
---------------------------- ----------------------------
Attention: _________________ Attention: _________________
Reference: _________________ Reference: _________________
6. Notice Addresses:
ASSIGNOR: ASSIGNEE:
---------------------------- ----------------------------
---------------------------- ----------------------------
____________________________ ____________________________
* The percentages for Revolving Term Loans and Revolving Loans are required to
be identical.
256
7. Signatures:
[NAME OF ASSIGNOR], [NAME OF ASSIGNEE],
as Assignor as Assignee
By: By:
-------------------------------------- ---------------------------
Title: Title:
----------------------------------- ------------------------
[Consented to in accordance with subsection [Consented to in accordance with
11.1B(i) of the Credit Agreement subsection 11.1B(i) and accepted
in accordance with subsection
11.1B(ii) of the Credit
Agreement
DOMINICK'S FINER FOODS, INC. BANKERS TRUST COMPANY, as Agent
By: By:
-------------------------------------- ---------------------------
Title: ] Title: ]
----------------------------------- -----------------------
(Credit Agreement)
257
EXHIBIT XI
[FORM OF AUDITOR'S LETTER]
[LETTERHEAD OF ERNST & YOUNG LLP]
November 1, 1996
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and COO
Dominick's Finer Foods, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Re: Credit Agreement (Credit Agreement) dated November 1, 1996, among
Dominick's Supermarkets, Inc., Dominick's Finer Foods, Inc., the
Lenders named therein, the Agent, the Syndication Agent and the
Arrangers (collectively, the "Lenders")
Dear ▇▇. ▇▇▇▇▇▇▇:
▇▇▇▇▇ & ▇▇▇▇▇ LLP has been engaged to conduct an audit, in accordance with
generally accepted auditing standards, of the consolidated and consolidating
balance sheets at October 28, 1995 and the related consolidated and
consolidating statements of income and changes in stockholders' equity and cash
flows for the year then ended of each of Dominick's Supermarkets, Inc. and its
subsidiaries (collectively referred to hereafter as the "Company") for the
primary purpose of expressing an opinion on whether the consolidated and
consolidating financial statements present fairly its financial position of the
Company at October 28, 1995 and the results of its operations and cash flows
for the year then ended in conformity with generally accepted accounting
principles. Our audit of the Company's 1995 financial statements is being made
for the purpose stated above, and has not been planned or conducted for the
benefit of the Lenders or in contemplation of the Credit Agreement. Therefore,
items of possible interest to the Lenders may not be specifically addressed.
We understand, however, that the Company plans to provide the Lenders with a
copy of the audited financial statements referred to above and of our reports
thereon, and that the Lenders intend to use the audited financial statements as
part of their consideration of the Credit Agreement.
In providing this letter, we advise both you and the Lenders of the following.
The financial statements are the representations of management of the Company
and management has the responsibility for adopting sound accounting policies,
for maintaining an adequate and effective system of accounts, for safeguarding
the assets, and for devising an adequate internal control structure. Because
there are inherent limitations involved in any audit that is intended to
express an opinion on the fairness of the presentation of the financial
statements
(Credit Agreement)
258
being reported on, an auditors' report is never intended to be a warranty or
guaranty of any sort, but rather is an opinion, arrived at in accordance with
recognized professional standards, whether the financial statements as a whole
present fairly, in all material respects, in conformity with generally accepted
accounting principles, the Company's financial position as of the balance sheet
date and the results of its operations and its cash flows for the period then
ended. Our use of professional judgment and our assessment of materiality for
the purpose of our work mean that matters may have existed that would have been
assessed differently by others, including the Lenders in connection with the
Credit Agreement. Our audit should not be taken to supplant the inquiries and
procedures that the Lenders should undertake for the purpose of satisfying
themselves of the Company's credit worthiness or compliance with the provisions
of the Credit Agreement referred to above. In addition, we will perform no
procedures subsequent to the date of our reports to update such reports or the
related financial statements.
Our opinion should never be mistaken as authorization or approval for a credit
decision. A lender's credit decision should be based not only on the
borrower's financial statements, but also on the lender's exercise of
reasonable due diligence with respect to many other factors, some of which are
internal and some of which are external to the borrower. Moreover, a lender
needs to monitor those factors on an on-going basis and not rely solely on a
once-a-year report by an auditor on the historical financial statements of the
borrower. We wish to emphasize, therefore, that any lender would be remiss in
placing its reliance primarily upon our report in making its credit decision
with respect to the Company and that it is our understanding that the Lenders
are not relying primarily on the financial statements audited by Ernst & Young
LLP in connection with the Credit Agreement.
By providing you with this letter, and a copy of it to the Lenders, we are
explicitly limiting our liability, so as to exclude all parties other than you
and the Lenders, pursuant to Section 30.1 of the Illinois Public Accounting
Act.
Very truly yours,
cc: Bankers Trust Company,
as Agent and Arranger for the Lenders
The Chase Manhattan Bank,
as Syndication Agent and Arranger for the Lenders
Each of the Lenders
(Credit Agreement)
259
EXHIBIT XII
[FORM OF CERTIFICATE RE NON-BANK STATUS]
CERTIFICATE RE NON-BANK STATUS
Reference is hereby made to that certain Credit Agreement
dated as of November 1, 1996 (said Credit Agreement, as amended, amended and
restated, supplemented or otherwise modified to the date hereof, being the
"CREDIT AGREEMENT") by and among Dominick's Supermarkets, Inc., Dominick's
Finer Foods, Inc., the financial institutions listed therein as Lenders, Agent,
Syndication Agent, and Arrangers. Pursuant to subsection 2.7B(iii) of the
Credit Agreement, the undersigned hereby certifies that it is not a "bank" or
other Person (as defined in the Credit Agreement) described in Section
881(c)(3) of the Internal Revenue Code of 1986, as amended.
[NAME OF LENDER]
By: ____________________
Title: _________________
(Credit Agreement)
260
EXHIBIT XIII
[FORM OF COLLATERAL ACCOUNT AGREEMENT]
COLLATERAL ACCOUNT AGREEMENT
This COLLATERAL ACCOUNT AGREEMENT (this "AGREEMENT") is dated
as of November 1, 1996 and entered into by and between DOMINICK'S FINER FOODS,
INC. ("PLEDGOR") and BANKERS TRUST COMPANY, as agent for and representative of
(in such capacity herein called "SECURED PARTY") the financial institutions
("LENDERS") party to the Credit Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS
▇. ▇▇▇▇▇▇▇▇'▇ Supermarkets, Inc., Pledgor, the financial
institutions listed therein as Lenders, Secured Party, Syndication Agent, and
Arrangers have entered into a Credit Agreement dated as of November 1, 1996
(said Credit Agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined) pursuant to which Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Pledgor.
B. It is a condition precedent to the initial extensions
of credit by Lenders under the Credit Agreement that Pledgor shall have granted
the security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce Lenders to make Loans and issue Letters of Credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Pledgor hereby agrees with Secured
Party as follows:
SECTION 1. CERTAIN DEFINITIONS. The following terms used in
this Agreement shall have the following meanings:
"COLLATERAL" means (i) the Collateral Account, (ii) all
amounts on deposit from time to time in the Collateral Account, (iii) all
interest, cash, instruments, securities and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the Collateral, and (iv) to the extent not covered by clauses (i)
through (iii) above, all proceeds of any or all of the foregoing Collateral.
"COLLATERAL ACCOUNT" means the restricted deposit account
established and maintained by Pledgor with Secured Party pursuant to Section
2(a).
"SECURED OBLIGATIONS" means all obligations and liabilities of
every nature of Pledgor now or hereafter existing under or arising out of or in
connection with the Credit Agreement and the other Loan Documents and all
extensions or renewals thereof, whether for principal, interest (including
without limitation interest that, but for the filing of a petition in
bankruptcy with respect to Pledgor, would accrue on such obligations),
(Credit Agreement)
261
reimbursement of amounts drawn under Letters of Credit, fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such
obligations or liabilities that are paid, to the extent all or any part of such
payment is avoided or recovered directly or indirectly from Secured Party or
any Lender as a preference, fraudulent transfer or otherwise, and all
obligations of every nature of Pledgor now or hereafter existing under this
Agreement.
SECTION 2. ESTABLISHMENT AND OPERATION OF COLLATERAL ACCOUNT.
(a) Pledgor hereby authorizes and directs Secured Party
to establish and maintain at its office at the Funding and Payment Office, as a
blocked account in the name of Pledgor but under the sole dominion and control
of Secured Party, a restricted deposit account designated as "Dominick's Finer
Foods, Inc. Collateral Account".
(b) The Collateral Account shall be operated in accordance
with the terms of this Agreement.
(c) Secured Party shall be fully protected and shall
suffer no liability in acting in accordance with any written instructions
reasonably believed by it to have been given by Pledgor with respect to any
aspect of the operation of the Collateral Account.
(d) Anything contained herein to the contrary
notwithstanding, the Collateral Account shall be subject to such applicable
laws, and such applicable regulations of the Board of Governors of the Federal
Reserve System and of any other appropriate banking or governmental authority,
as may now or hereafter be in effect.
SECTION 3. DEPOSITS OF CASH COLLATERAL.
(a) All deposits of funds in the Collateral Account shall
be made by wire transfer (or, if applicable, by intra-bank transfer from
another account of Pledgor) of immediately available funds, in each case
addressed as follows:
Account No.:
ABA No.:
Reference:
Attention:
Pledgor shall, promptly after initiating a transfer of funds to the Collateral
Account, give notice to Secured Party by telefacsimile of the date, amount and
method of delivery of such deposit.
(b) If an Event of Default has occurred and is continuing
and, in accordance with Section 8 of the Credit Agreement, Pledgor is required
to pay to Secured Party an amount (the "AGGREGATE AVAILABLE AMOUNT") equal to
the maximum amount that may at any time be drawn under all Letters of Credit
then outstanding under the Credit Agreement, Pledgor shall deliver funds in
such an amount for deposit in the Collateral Account in accordance with Section
3(a). If for any reason the aggregate amount delivered by Pledgor for deposit
in the Collateral Account as aforesaid is less than the Aggregate Available
Amount, the aggregate amount so delivered by Pledgor shall be apportioned among
all outstanding Letters of Credit for purposes of this Section 3(b) in
accordance with
(Credit Agreement)
262
the ratio of the maximum amount available for drawing under each such Letter of
Credit (as to such Letter of Credit, the "MAXIMUM AVAILABLE AMOUNT") to the
Aggregate Available Amount. Upon any drawing under any outstanding Letter of
Credit in respect of which Pledgor has deposited in the Collateral Account any
amounts described above, Secured Party shall apply such amounts to reimburse
the Issuing Lender for the amount of such drawing. In the event of
cancellation or expiration of any Letter of Credit in respect of which Pledgor
has deposited in the Collateral Account any amounts described above, or in the
event of any reduction in the Maximum Available Amount under such Letter of
Credit, Secured Party shall apply the amount then on deposit in the Collateral
Account in respect of such Letter of Credit (less, in the case of such a
reduction, the Maximum Available Amount under such Letter of Credit immediately
after such reduction) first, to the payment of any amounts payable to Secured
Party pursuant to Section 14, second, to the extent of any excess, to the cash
collateralization pursuant to the terms of this Agreement of any outstanding
Letters of Credit in respect of which Pledgor has failed to pay all or a
portion of the amounts described above (such cash collateralization to be
apportioned among all such Letters of Credit in the manner described above),
third, to the extent of any further excess, to the payment of any other
outstanding Secured Obligations, and fourth, to the extent of any further
excess, to the payment to whomsoever shall be lawfully entitled to receive such
funds.
SECTION 4. PLEDGE OF SECURITY FOR SECURED OBLIGATIONS.
Pledgor hereby pledges and grants to Secured Party a security interest in all
of Pledgor's right, title and interest in and to the Collateral as collateral
security for the prompt payment or performance in full when due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including the payment of amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. Section 362(a)), of all Secured Obligations.
SECTION 5. NO INVESTMENT OF AMOUNTS IN THE COLLATERAL
ACCOUNT; INTEREST ON AMOUNTS IN THE COLLATERAL ACCOUNT.
(a) Cash held by Secured Party in the Collateral Account
shall not be invested by Secured Party but instead shall be maintained as a
cash deposit in the Collateral Account pending application thereof as elsewhere
provided in this Agreement.
(b) To the extent permitted under Regulation Q of the
Board of Governors of the Federal Reserve System, any cash held in the
Collateral Account shall bear interest at the standard rate paid by Secured
Party to its customers for deposits of like amounts and terms.
(c) Subject to Secured Party's rights under Section 12,
any interest earned on deposits of cash in the Collateral Account in accordance
with Section 5(b) shall be deposited directly in, and held in the Collateral
Account.
SECTION 6. REPRESENTATIONS AND WARRANTIES. Pledgor
represents and warrants as follows:
(a) Ownership of Collateral. Pledgor is (or at the time
of transfer thereof to Secured Party will be) the legal and beneficial owner of
the Collateral from time to time transferred by Pledgor to Secured Party, free
and clear of any Lien except for the security interest created by this
Agreement.
(Credit Agreement)
263
(b) Governmental Authorizations. No authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for either (i) the grant by Pledgor of
the security interest granted hereby, (ii) the execution, delivery or
performance of this Agreement by Pledgor, or (iii) the perfection of or the
exercise by Secured Party of its rights and remedies hereunder (except as may
have been taken by or at the direction of Pledgor).
(c) Perfection. The pledge of the Collateral pursuant to
this Agreement creates a valid and perfected first priority security interest
in the Collateral, securing the payment of the Secured Obligations; provided
that Secured Party retains physical possession of the Collateral; further
provided that additional actions may be required with respect to the perfection
of proceeds of the Collateral.
(d) Other Information. All information heretofore,
herein or hereafter supplied to Secured Party by or on behalf of Pledgor with
respect to the Collateral is accurate and complete in all respects.
SECTION 7. FURTHER ASSURANCES. Pledgor agrees that from time
to time, at the expense of Pledgor, Pledgor will promptly execute and deliver
all further instruments and documents, and take all further action, that
Secured Party may reasonably deem to be necessary or desirable, or that Secured
Party may reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable Secured Party
to exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, Pledgor will:
(a) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as Secured Party may reasonably
deem to be necessary or desirable, or as Secured Party may reasonably request,
in order to perfect and preserve the security interests granted or purported to
be granted hereby and (b) at Secured Party's reasonable request, appear in and
defend any action or proceeding that may adversely affect Pledgor's title to or
Secured Party's security interest in all or any part of the Collateral.
SECTION 8. TRANSFERS AND OTHER LIENS. Pledgor agrees that it
will not (a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral or (b) create or suffer to exist any Lien upon
or with respect to any of the Collateral, except for the security interest
under this Agreement.
SECTION 9. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Pledgor
hereby irrevocably appoints Secured Party as Pledgor's attorney-in-fact, with
full authority in the place and stead of Pledgor and in the name of Pledgor,
Secured Party or otherwise, from time to time in Secured Party's discretion to
take any action and to execute any instrument that Secured Party may reasonably
deem necessary or advisable to accomplish the purposes of this Agreement,
including without limitation to file one or more financing or continuation
statements, or amendments thereto, relative to all or any part of the
Collateral without the signature of Pledgor. Secured Party shall not exercise
any powers granted pursuant to this appointment as attorney-in-fact at any time
(i) that Pledgor is fully performing its obligation hereunder and (ii) that no
Event of Default has occured and is then continuing. This appointment as
attorney-in-fact shall terminate upon the termination of this Agreement
pursuant to Section 15.
SECTION 10. SECURED PARTY MAY PERFORM. If Pledgor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of,
(Credit Agreement)
264
such agreement, and the expenses of Secured Party incurred in connection
therewith shall be payable by Pledgor under Section 14.
SECTION 11. STANDARD OF CARE. The powers conferred on
Secured Party hereunder are solely to protect its interest in the Collateral
and shall not impose any duty upon it to exercise any such powers. Except for
the exercise of reasonable care in the custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder,
Secured Party shall have no duty as to any Collateral, it being understood that
Secured Party shall have no responsibility for (a) taking any necessary steps
(other than steps taken in accordance with the standard of care set forth above
to maintain possession of the Collateral) to preserve rights against any
parties with respect to any Collateral or (b) taking any necessary steps to
collect or realize upon the Secured Obligations or any guarantee therefor, or
any part thereof, or any of the Collateral. Secured Party shall be deemed to
have exercised reasonable care in the custody and preservation of Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which Secured Party accords its own property of like kind.
SECTION 12. REMEDIES.
(a) If any Event of Default shall have occurred and be
continuing, Secured Party may (i) transfer any or all of the Collateral to an
account established in Secured Party's name (whether at Secured Party or
otherwise) or (ii) otherwise register title to any Collateral in the name of
Secured Party or one of its nominees or agents, without reference to any
interest of Pledgor.
(b) If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the Uniform Commercial Code as in effect in any relevant jurisdiction
(the "CODE") (whether or not the Code applies to the affected Collateral).
(c) If the proceeds of any disposition of the Collateral
are insufficient to pay all the Secured Obligations, Pledgor shall be liable
for the deficiency and the fees of any attorneys employed by Secured Party to
collect such deficiency.
(d) Anything contained herein to the contrary
notwithstanding, any of the Collateral consisting of cash held by Secured Party
in the Collateral Account shall be subject to Secured Party's rights of set-off
under subsection 11.4 of the Credit Agreement.
SECTION 13. APPLICATION OF PROCEEDS. If any Event of Default
shall have occurred and be continuing, all cash held by Secured Party as
Collateral may, in the discretion of Secured Party, be held by Secured Party as
Collateral for, and/or then, or at any other time thereafter, applied in full
or in part by Secured Party against, the Secured Obligations in the following
order of priority:
FIRST: To the payment of all reasonable costs and expenses of
such sale, collection or other realization, including reasonable
compensation to Secured Party and its agents and counsel, and all
other reasonable expenses, liabilities and advances made or incurred
by Secured Party in connection therewith, and all amounts for which
Secured Party is entitled to indemnification hereunder and all
reasonable advances made by Secured Party hereunder for the account of
Pledgor, and to the payment of all reasonable costs and expenses paid
or incurred by Secured Party in
(Credit Agreement)
265
connection with the exercise of any right or remedy hereunder, all in
accordance with Section 14;
SECOND: To the payment of all other Secured Obligations (for
the ratable benefit of the holders thereof) then due and payable; and
THIRD: To the payment to or upon the order of Pledgor, or to
whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
SECTION 14. INDEMNITY AND EXPENSES.
(a) Pledgor agrees to indemnify Secured Party and each
Lender from and against any and all claims, losses and liabilities in any way
relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including, without limitation, enforcement of
this Agreement), except to the extent such claims, losses or liabilities result
solely from Secured Party's or such Lender's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
(b) Pledgor shall pay to Secured Party upon demand the
amount of any and all reasonable costs and expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that Secured
Party may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the
failure by Pledgor to perform or observe any of the provisions hereof.
SECTION 15. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the Collateral
and shall (a) remain in full force and effect until the indefeasible payment in
full of the Secured Obligations (other than Obligations which are contingent
and unliquidated and not due and owing on such date and which pursuant to the
provisions of the Credit Agreement, Interest Rate Agreements, Letters of Credit
or the Collateral Documents survive the termination of the Credit Agreement,
the repayment of the Secured Obligations, the termination of the Commitments,
the expiration or cancellation of all Letters of Credit or the termination,
expiration or cancellation of all Interest Rate Agreements), the cancellation
or termination of the Commitments and the cancellation or expiration of all
outstanding Letters of Credit, (b) be binding upon Pledgor, its successors and
assigns, and (c) inure, together with the rights and remedies of Secured Party
hereunder, to the benefit of Secured Party and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), but
subject to the provisions of subsection 11.1 of the Credit Agreement, any
Lender may assign or otherwise transfer any Loans held by it to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to Lenders herein or otherwise. Upon the
indefeasible payment in full of all Secured Obligations (other than Obligations
which are contingent and unliquidated and not due and owing on such date and
which pursuant to the provisions of the Credit Agreement, Interest Rate
Agreements, Letters of Credit or the Collateral Documents survive the
termination of the Credit Agreement, the repayment of the Secured Obligations,
the termination of the Commitments, the expiration or cancellation of all
Letters of Credit or the termination, expiration or cancellation of all
Interest Rate Agreements), the cancellation or termination of the Commitments
and the cancellation or expiration of all outstanding Letters of Credit, the
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to Pledgor. Upon any such
(Credit Agreement)
266
termination Secured Party shall, at Pledgor's expense, execute and deliver to
Pledgor such documents as Pledgor shall reasonably request to evidence such
termination and Pledgor shall be entitled to the return, upon its request and
at its expense, against receipt and without recourse to Secured Party, of such
of the Collateral as shall not have been otherwise applied pursuant to the
terms hereof.
SECTION 16. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders. Secured Party shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Agreement and the Credit Agreement.
(b) Secured Party shall at all times be the same Person
that is Agent under the Credit Agreement. Written notice of resignation by
Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute notice of resignation as Secured Party under this Agreement; removal
of Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute removal as Secured Party under this Agreement; and appointment of a
successor Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute appointment of a successor Secured Party under this Agreement. Upon
the acceptance of any appointment as Agent under subsection 10.5A of the Credit
Agreement by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly (i) transfer to such
successor Secured Party all sums held by Secured Party hereunder (which shall
be deposited in a new Collateral Account established and maintained by such
successor Secured Party), together with all records and other documents
necessary or appropriate in connection with the performance of the duties of
the successor Secured Party under this Agreement, and (ii) execute and deliver
to such successor Secured Party such amendments to financing statements, and
take such other actions, as may be necessary or appropriate in connection with
the assignment to such successor Secured Party of the security interests
created hereunder, whereupon such retiring or removed Secured Party shall be
discharged from its duties and obligations under this Agreement. After any
retiring or removed Agent's resignation or removal hereunder as Secured Party,
the provisions of this Agreement shall inure to its benefit as to any actions
taken or omitted to be taken by it under this Agreement while it was Secured
Party hereunder.
SECTION 17. AMENDMENTS; ETC. No amendment or waiver of any
provision of this Agreement, or consent to any departure by Pledgor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by Secured Party (or, in the case of an amendment hereto, by Pledgor and
Secured Party), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given.
SECTION 18. NOTICES. Unless otherwise specifically provided
herein, any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile or telex, or three Business Days after depositing it in the
United States mail with postage prepaid and properly addressed. For the
purposes hereof, the address of each party hereto shall be as set forth under
such party's name on the
(Credit Agreement)
267
signature pages hereof or, as to either party, such other address as shall be
designated by such party in a written notice delivered to the other party
hereto.
SECTION 19. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
SECTION 20. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 21. HEADINGS. Section and subsection headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 22. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein or in the
Credit Agreement, terms used in Articles 8 and 9 of the Uniform Commercial Code
in the State of New York are used herein as therein defined.
SECTION 23. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
Pledgor hereby agrees that service of all process in any such proceeding in any
such court may be made by registered or certified mail, return receipt
requested, to Pledgor at its address provided in Section 18, such service being
hereby acknowledged by Pledgor to be sufficient for personal jurisdiction in
any action against Pledgor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
Secured Party to bring proceedings against Pledgor in the courts of any other
jurisdiction.
(Credit Agreement)
268
SECTION 24. WAIVER OF JURY TRIAL. PLEDGOR AND SECURED PARTY
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Pledgor and Secured
Party each acknowledge that this waiver is a material inducement for Pledgor
and Secured Party to enter into a business relationship, that Pledgor and
Secured Party have already relied on this waiver in entering into this
Agreement and that each will continue to rely on this waiver in their related
future dealings. Pledgor and Secured Party further warrant and represent that
each has reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the
event of litigation, this Agreement may be filed as a written consent to a
trial by the court.
SECTION 25. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
[Remainder of page intentionally left blank]
(Credit Agreement)
269
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
DOMINICK'S FINER FOODS, INC., as Pledgor
By: ____________________________________
Title:
Notice Address: Dominick's Finer Foods, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By: ____________________________________
Title:
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
(Credit Agreement)
270
EXHIBIT XIV
[FORM OF COMPANY PLEDGE AGREEMENT]
COMPANY PLEDGE AGREEMENT
This COMPANY PLEDGE AGREEMENT (this "AGREEMENT") is dated as
of November 1, 1996 and entered into by and between DOMINICK'S FINER FOODS,
INC., a Delaware corporation ("PLEDGOR"), and BANKERS TRUST COMPANY ("SECURED
PARTY"), as agent for and representative of (in such capacity herein called
"SECURED PARTY") the financial institutions ("LENDERS") party to the Credit
Agreement referred to below and the Interest Rate Exchangers (as hereinafter
defined).
PRELIMINARY STATEMENTS
A. Pledgor is the legal and beneficial owner of (i) the
shares of stock (the "PLEDGED SHARES") described in Part A of Schedule I
annexed hereto and issued by the corporations named therein and (ii) the
indebtedness (the "PLEDGED DEBT") described in Part B of said Schedule I and
issued by the obligors named therein.
B. Lenders, Secured Party, Syndication Agent and
Arrangers have entered into a Credit Agreement dated as of November 1, 1996
(said Credit Agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined) with Dominick's Supermarkets, Inc., a Delaware
corporation, and Pledgor, pursuant to which Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Pledgor.
C. It is contemplated that Pledgor may from time to time
enter into Interest Rate Agreements with one or more Lenders or their
Affiliates (collectively, the "INTEREST RATE EXCHANGERS") and Pledgor desires
that its obligations under such agreements, including the obligation to make
payments in the event of early termination thereunder (all of such obligations
being the "INTEREST RATE OBLIGATIONS"), be given the benefits of the security
interest created hereby.
D. It is a condition precedent to the initial extensions
of credit by Lenders under the Credit Agreement that Pledgor shall have granted
the security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises, in order to
induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Pledgor hereby agrees with Secured
Party as follows:
SECTION 1. PLEDGE OF SECURITY. Pledgor hereby pledges and
grants to Secured Party a security interest in, all of Pledgor's right, title
and interest in and to the following (the "PLEDGED COLLATERAL"):
(Credit Agreement)
271
(a) the Pledged Shares and the certificates representing
the Pledged Shares and any interest of Pledgor in the entries on the books of
any financial intermediary pertaining to the Pledged Shares, and all dividends,
cash, warrants, rights, instruments and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of the Pledged Shares;
(b) the Pledged Debt and the instruments evidencing the
Pledged Debt, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Debt;
(c) all additional shares of, and all securities
convertible into and warrants, options and other rights to purchase or
otherwise acquire, stock of any issuer of the Pledged Shares from time to time
acquired by Pledgor in any manner (which shares shall be deemed to be part of
the Pledged Shares), the certificates or other instruments representing such
additional shares, securities, warrants, options or other rights and any
interest of Pledgor in the entries on the books of any financial intermediary
pertaining to such additional shares, and all dividends, cash, warrants,
rights, instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such additional shares, securities, warrants, options or other rights;
(d) all additional indebtedness from time to time owed to
Pledgor by any obligor on the Pledged Debt and the instruments evidencing such
indebtedness, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such indebtedness;
(e) all shares of, and all securities convertible into
and warrants, options and other rights to purchase or otherwise acquire, stock
of any Person that, after the date of this Agreement, becomes, as a result of
any occurrence, a direct Subsidiary of Pledgor (which shares shall be deemed to
be part of the Pledged Shares), the certificates or other instruments
representing such shares, securities, warrants, options or other rights and any
interest of Pledgor in the entries on the books of any financial intermediary
pertaining to such shares, and all dividends, cash, warrants, rights,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares, securities, warrants, options or other rights;
(f) all indebtedness from time to time owed to Pledgor by
any Person that, after the date of this Agreement, becomes, as a result of any
occurrence, a direct or indirect Subsidiary of Pledgor, and all interest, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such indebtedness; and
(g) to the extent not covered by clauses (a) through (f)
above, all proceeds of any or all of the foregoing Pledged Collateral. For
purposes of this Agreement, the term "PROCEEDS" includes whatever is receivable
or received when Pledged Collateral or proceeds are sold, exchanged, collected
or otherwise disposed of, whether such disposition is voluntary or involuntary,
and includes, without limitation, proceeds of any indemnity or guaranty payable
to Pledgor or Secured Party from time to time with respect to any of the
Pledged Collateral.
(Credit Agreement)
272
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures,
and the Pledged Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of
all obligations and liabilities of every nature of Pledgor now or hereafter
existing under or arising out of or in connection with the Credit Agreement,
the other Loan Documents and the Interest Rate Agreements entered into with any
Interest Rate Exchanger, and all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Pledgor, would accrue on
such obligations), reimbursement of amounts drawn under Letters of Credit,
fees, expenses, indemnities or otherwise, whether voluntary or involuntary,
direct or indirect, absolute or contingent, liquidated or unliquidated, whether
or not jointly owed with others, and whether or not from time to time decreased
or extinguished and later increased, created or incurred, and all or any
portion of such obligations or liabilities that are paid, to the extent all or
any part of such payment is avoided or recovered directly or indirectly from
Secured Party or any Lender or any Interest Rate Exchanger as a preference,
fraudulent transfer or otherwise (all such obligations and liabilities being
the "UNDERLYING DEBT"), and all obligations of every nature of Pledgor now or
hereafter existing under this Agreement (all such obligations of Pledgor,
together with the Underlying Debt, being the "SECURED OBLIGATIONS").
SECTION 3. DELIVERY OF PLEDGED COLLATERAL. All certificates
or instruments representing or evidencing the Pledged Collateral shall be
delivered to and held by or on behalf of Secured Party pursuant hereto and
shall be in suitable form for transfer by delivery or, as applicable, shall be
accompanied by Pledgor's endorsement, where necessary, or duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Secured Party. Secured Party shall have the right, at any time
in its discretion and without notice to Pledgor, to register in the name of
Secured Party or any of its nominees, as pledgee, any or all of the Pledged
Collateral. In addition, Secured Party shall have the right at any time to
exchange certificates or instruments representing or evidencing Pledged
Collateral for certificates or instruments of smaller or larger denominations.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Pledgor
represents and warrants as follows:
(a) Due Authorization, etc. of Pledged Collateral. All
of the Pledged Shares have been duly authorized and validly issued and are
fully paid and non-assessable. All of the Pledged Debt has been duly
authorized, authenticated or issued, and delivered and is the legal, valid and
binding obligation of the issuers thereof and is not in default.
(b) Description of Pledged Collateral. The Pledged
Shares constitute one hundred percent (100%) of the issued and outstanding
shares of stock of each of the direct Subsidiaries of Pledgor, and there are no
outstanding warrants, options or other rights to purchase, or other agreements
outstanding with respect to, or property that is now or hereafter convertible
into, or that requires the issuance or sale of, any Pledged Shares. The
Pledged Debt constitutes all of the issued and outstanding intercompany
indebtedness evidenced by a promissory note of the respective issuers thereof
owing to Pledgor.
(c) Ownership of Pledged Collateral. Pledgor is the
legal, record and beneficial owner of the Pledged Collateral free and clear of
any Lien except for the security interest created by this Agreement.
(Credit Agreement)
273
(d) Governmental Authorizations. No authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for either (i) the pledge by Pledgor
of the Pledged Collateral pursuant to this Agreement and the grant by Pledgor
of the security interest granted hereby, (ii) the execution, delivery or
performance of this Agreement by Pledgor, or (iii) the exercise by Secured
Party of the voting or other rights, or the remedies in respect of the Pledged
Collateral, provided for in this Agreement (except as may be required in
connection with a disposition of Pledged Collateral by laws affecting the
offering and sale of securities generally).
(e) Perfection. The pledge of the Pledged Shares and
Pledged Debt pursuant to this Agreement creates a valid and perfected first
priority security interest in such Pledged Shares and Pledged Debt, securing
the payment of the Secured Obligations; provided that Secured Party retains
physical possession of the Pledged Collateral.
(f) Margin Regulations. The pledge of the Pledged
Collateral pursuant to this Agreement does not violate Regulation G, T, U or X
of the Board of Governors of the Federal Reserve System.
(g) Other Information. All information heretofore,
herein or hereafter supplied to Secured Party by or on behalf of Pledgor with
respect to the Pledged Collateral is accurate and complete in all material
respects.
SECTION 5. TRANSFERS AND OTHER LIENS; ADDITIONAL PLEDGED
COLLATERAL; ETC. Pledgor shall:
(a) not, except as expressly permitted by the Credit
Agreement, (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Pledged Collateral,
(ii) create or suffer to exist any Lien upon or with respect to any of the
Pledged Collateral, except for the security interest under this Agreement, or
(iii) permit any issuer of Pledged Shares to merge or consolidate unless all
the outstanding capital stock of the surviving or resulting corporation is,
upon such merger or consolidation, pledged hereunder and no cash, securities or
other property is distributed in respect of the outstanding shares of any other
constituent corporation; provided that in the event Pledgor makes an Asset Sale
permitted by the Credit Agreement and the assets subject to such Asset Sale are
Pledged Shares, Secured Party shall release the Pledged Shares that are the
subject of such Asset Sale to Pledgor free and clear of the lien and security
interest under this Agreement concurrently with the consummation of such Asset
Sale; provided, further that, as a condition precedent to such release, Secured
Party shall have received evidence reasonably satisfactory to it that
arrangements reasonably satisfactory to it have been made for delivery to
Secured Party of the Net Cash Proceeds of Asset Sale of such Asset Sale if
required under subsection 2.4B(iii)(a) of the Credit Agreement;
(b) (i) cause each issuer of Pledged Shares not to issue
any stock or other securities in addition to or in substitution for the Pledged
Shares issued by such issuer, except to Pledgor, (ii) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and all
additional shares of stock or other securities of each issuer of Pledged
Shares, and (iii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all shares of stock of any Person that, after
the date of this Agreement, becomes, as a result of any occurrence, a direct
Subsidiary of Pledgor;
(Credit Agreement)
274
(c) (i) pledge hereunder, immediately upon their
issuance, any and all instruments or other evidences of additional indebtedness
from time to time owed to Pledgor by any obligor on the Pledged Debt, and (ii)
pledge hereunder, immediately upon their issuance, any and all instruments or
other evidences of indebtedness from time to time owed to Pledgor by any Person
that after the date of this Agreement becomes, as a result of any occurrence, a
direct or indirect Subsidiary of Pledgor;
(d) promptly deliver to Secured Party all material
written notices received by it with respect to the Pledged Collateral; and
(e) pay promptly when due all material taxes, assessments
and governmental charges or levies imposed upon, and all claims against, the
Pledged Collateral, except to the extent the validity thereof is being
contested in good faith; provided that Pledgor shall in any event pay such
taxes, assessments, charges, levies or claims not later than five days prior to
the date of any proposed sale under any judgement, writ or warrant of
attachment entered or filed against Pledgor or any of the Pledged Collateral as
a result of the failure to make such payment.
SECTION 6. FURTHER ASSURANCES; PLEDGE AMENDMENTS.
(a) Pledgor agrees that from time to time, at the expense
of Pledgor, Pledgor will promptly execute and deliver all further instruments
and documents, and take all further action, that Secured Party may reasonably
deem to be necessary or desirable, or that Secured Party may reasonably
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any Pledged
Collateral. Without limiting the generality of the foregoing, Pledgor will:
(i) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as Secured Party may reasonably
deem to be necessary or desirable, or as Secured Party may reasonably request,
in order to perfect and preserve the security interests granted or purported to
be granted hereby and (ii) at Secured Party's reasonable request, appear in and
defend any action or proceeding that may adversely affect Pledgor's title to or
Secured Party's security interest in all or any part of the Pledged Collateral.
(b) Pledgor further agrees that it will, upon obtaining
any additional shares of stock or other securities or instruments required to
be pledged hereunder as provided in Section 5(b) or (c), promptly (and in any
event within five Business Days) deliver to Secured Party a Pledge Amendment,
duly executed by Pledgor, in substantially the form of Schedule II annexed
hereto (a "PLEDGE AMENDMENT"), in respect of the additional Pledged Shares or
Pledged Debt to be pledged pursuant to this Agreement. Pledgor hereby
authorizes Secured Party to attach each Pledge Amendment to this Agreement and
agrees that all Pledged Shares or Pledged Debt listed on any Pledge Amendment
delivered to Secured Party shall for all purposes hereunder be considered
Pledged Collateral; provided that the failure of Pledgor to execute a Pledge
Amendment with respect to any additional Pledged Shares or Pledged Debt pledged
pursuant to this Agreement shall not impair the security interest of Secured
Party therein or otherwise adversely affect the rights and remedies of Secured
Party hereunder with respect thereto.
SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.
(a) So long as no Event of Default shall have occurred and be
continuing:
(Credit Agreement)
275
(i) Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged
Collateral or any part thereof for any purpose not inconsistent with
the terms of this Agreement or the Credit Agreement; provided,
however, that Pledgor shall not exercise or refrain from exercising
any such right if Secured Party shall have notified Pledgor that, in
Secured Party's judgment, such action would have a material adverse
effect on the value of the Pledged Collateral or any part thereof; and
provided, further, that Pledgor shall give Secured Party at least five
Business Days' prior written notice of the manner in which it intends
to exercise, or the reasons for refraining from exercising, any such
right. It is understood, however, that neither (A) the voting by
Pledgor of any Pledged Shares for or Pledgor's consent to the election
of directors at a regularly scheduled annual or other meeting of
stockholders or with respect to incidental matters at any such meeting
nor (B) Pledgor's consent to or approval of any action otherwise
permitted under the Credit Agreement shall be deemed inconsistent with
the terms of this Agreement or the Credit Agreement within the meaning
of this Section 7(a)(i), and no notice of any such voting or consent
need be given to Secured Party;
(ii) Pledgor shall be entitled to receive and retain, and
to utilize free and clear of the lien of this Agreement, any and all
dividends and interest paid in respect of the Pledged Collateral;
provided, however, that any and all
(A) dividends and interest paid or payable other
than in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of,
or in exchange for, any Pledged Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Pledged Collateral in
connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus
or paid-in- surplus, and
(C) cash paid, payable or otherwise distributed
in respect of principal or in redemption of or in exchange for
any Pledged Collateral,
shall be, and shall (1) forthwith be delivered to Secured Party to
hold as, Pledged Collateral and shall, if received by Pledgor, be
received in trust for the benefit of Secured Party, be segregated from
the other property or funds of Pledgor and be forthwith delivered to
Secured Party as Pledged Collateral in the same form as so received
(with all necessary endorsements) or (2) in the case of any such cash
payment, at the option of Pledgor (with the consent of Secured Party,
which consent shall not be unreasonably withheld), forthwith be
delivered to Secured Party to be immediately applied to prepay the
Loans in accordance with subsection 2.4B(iii)(a) of the Credit
Agreement as if such cash payments were Net Cash Proceeds of Asset
Sale that are required to be used to prepay the Loans pursuant to the
terms of the Credit Agreement; and
(iii) Secured Party shall promptly execute and deliver (or
cause to be executed and delivered) to Pledgor all such proxies,
dividend payment orders and other instruments as Pledgor may from time
to time reasonably request for the purpose of enabling Pledgor to
exercise the voting and other consensual rights which it is entitled
to exercise pursuant to paragraph (i) above and to receive the
dividends, principal or interest payments which it is authorized to
receive and retain pursuant to paragraph (ii) above.
(Credit Agreement)
276
(b) Upon the occurrence and during the continuation of an
Event of Default:
(i) upon written notice from Secured Party to Pledgor,
all rights of Pledgor to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise pursuant to
Section 7(a)(i) shall cease, and all such rights shall thereupon
become vested in Secured Party who shall thereupon have the sole right
to exercise such voting and other consensual rights;
(ii) all rights of Pledgor to receive the dividends and
interest payments which it would otherwise be authorized to receive
and retain pursuant to Section 7(a)(ii) shall cease, and all such
rights shall thereupon become vested in Secured Party who shall
thereupon have the sole right to receive and hold as Pledged
Collateral such dividends and interest payments; and
(iii) all dividends, principal and interest payments which
are received by Pledgor contrary to the provisions of paragraph (ii)
of this Section 7(b) shall be received in trust for the benefit of
Secured Party, shall be segregated from other funds of Pledgor and
shall forthwith be paid over to Secured Party as Pledged Collateral in
the same form as so received (with any necessary endorsements).
(c) In order to permit Secured Party to exercise the
voting and other consensual rights which it may be entitled to exercise
pursuant to Section 7(b)(i) and to receive all dividends and other
distributions which it may be entitled to receive under Section 7(a)(ii) or
Section 7(b)(ii), (i) Pledgor shall promptly execute and deliver (or cause to
be executed and delivered) to Secured Party all such proxies, dividend payment
orders and other instruments as Secured Party may from time to time reasonably
request and (ii) without limiting the effect of the immediately preceding
clause (i), Pledgor hereby grants to Secured Party an irrevocable proxy to vote
the Pledged Shares and to exercise all other rights, powers, privileges and
remedies to which a holder of the Pledged Shares would be entitled (including,
without limitation, giving or withholding written consents of shareholders,
calling special meetings of shareholders and voting at such meetings), which
proxy shall be effective, automatically and without the necessity of any action
(including any transfer of any Pledged Shares on the record books of the issuer
thereof) by any other Person (including the issuer of the Pledged Shares or any
officer or agent thereof), upon the occurrence of an Event of Default and which
proxy shall only terminate upon the indefeasible payment in full of the Secured
Obligations.
SECTION 8. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Pledgor
hereby irrevocably appoints Secured Party as Pledgor's attorney-in-fact, with
full authority in the place and stead of Pledgor and in the name of Pledgor,
Secured Party or otherwise, from time to time in Secured Party's discretion to
take any action and to execute any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement, including
without limitation:
(a) to file one or more financing or continuation
statements, or amendments thereto, relative to all or any part of the Pledged
Collateral without the signature of Pledgor;
(b) to ask, demand, collect, ▇▇▇ for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Pledged Collateral;
(Credit Agreement)
277
(c) to receive, endorse and collect any instruments made
payable to Pledgor representing any dividend, principal or interest payment or
other distribution in respect of the Pledged Collateral or any part thereof and
to give full discharge for the same; and
(d) to file any claims or take any action or institute
any proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Pledged Collateral or otherwise to enforce the rights
of Secured Party with respect to any of the Pledged Collateral.
Secured Party shall not exercise any powers granted pursuant
to this appointment as attorney-in-fact (other than with respect to clause (a)
above) until the occurrence of and only during the continuation of an Event of
Default. This appointment as attorney-in-fact shall terminate upon the
termination of this Agreement pursuant to Section 14.
SECTION 9. SECURED PARTY MAY PERFORM. If Pledgor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party
incurred in connection therewith shall be payable by Pledgor under Section
13(b).
SECTION 10. STANDARD OF CARE. The powers conferred on
Secured Party hereunder are solely to protect its interest in the Pledged
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the exercise of reasonable care in the custody of any Pledged
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Secured Party shall have no duty as to any Pledged Collateral, it
being understood that Secured Party shall have no responsibility for (a)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Pledged Collateral,
whether or not Secured Party has or is deemed to have knowledge of such
matters, (b) taking any necessary steps (other than steps taken in accordance
with the standard of care set forth above to maintain possession of the Pledged
Collateral) to preserve rights against any parties with respect to any Pledged
Collateral, (c) taking any necessary steps to collect or realize upon the
Secured Obligations or any guarantee therefor, or any part thereof, or any of
the Pledged Collateral, or (d) initiating any action to protect the Pledged
Collateral against the possibility of a decline in market value. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of Pledged Collateral in its possession if such Pledged Collateral
is accorded treatment substantially equal to that which Secured Party accords
its own property consisting of negotiable securities.
SECTION 11. REMEDIES.
(a) If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Pledged Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the Uniform Commercial Code as in effect in any relevant jurisdiction
(the "CODE") (whether or not the Code applies to the affected Pledged
Collateral), and Secured Party may also in its sole discretion, without notice
except as specified below, sell the Pledged Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange or broker's
board or at any of Secured Party's offices or elsewhere, for cash, on credit or
for future delivery, at such time or times and at such price or prices and upon
such other terms as Secured Party may deem commercially
(Credit Agreement)
278
reasonable, irrespective of the impact of any such sales on the market price of
the Pledged Collateral. Secured Party or any Lender may be the purchaser of
any or all of the Pledged Collateral at any such sale and Secured Party, as
agent for and representative of Lenders and Interest Rate Exchangers (but not
any Lender, Lenders, Interest Rate Exchanger or Interest Rate Exchangers in its
or their respective individual capacities unless Requisite Lenders shall
otherwise agree in writing), shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of
the Pledged Collateral sold at any such public sale, to use and apply any of
the Secured Obligations as a credit on account of the purchase price for any
Pledged Collateral payable by Secured Party at such sale. Each purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of Pledgor, and Pledgor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Pledgor agrees that, to the extent
notice of sale shall be required by law, at least ten days' written notice to
Pledgor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. Secured
Party shall not be obligated to make any sale of Pledged Collateral regardless
of notice of sale having been given. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Pledgor hereby waives any claims against
Secured Party arising by reason of the fact that the price at which any Pledged
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Secured Party accepts
the first offer received and does not offer such Pledged Collateral to more
than one offeree; provided that such sale was conducted in a commercially
reasonable manner. If the proceeds of any sale or other disposition of the
Pledged Collateral are insufficient to pay all the Secured Obligations, Pledgor
shall be liable for the deficiency and the fees of any attorneys employed by
Secured Party to collect such deficiency.
(b) Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act, and applicable state securities
laws, Secured Party may be compelled, with respect to any sale of all or any
part of the Pledged Collateral conducted without prior registration or
qualification of such Pledged Collateral under the Securities Act and/or such
state securities laws, to limit purchasers to those who will agree, among other
things, to acquire the Pledged Collateral for their own account, for investment
and not with a view to the distribution or resale thereof. Pledgor
acknowledges that any such private sales may be at prices and on terms less
favorable than those obtainable through a public sale without such restrictions
(including, without limitation, a public offering made pursuant to a
registration statement under the Securities Act) and, notwithstanding such
circumstances, Pledgor agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner and that Secured Party shall
have no obligation to engage in public sales and no obligation to delay the
sale of any Pledged Collateral for the period of time necessary to permit the
issuer thereof to register it for a form of public sale requiring registration
under the Securities Act or under applicable state securities laws, even if
such issuer would, or should, agree to so register it.
(c) If Secured Party determines to exercise its right to
sell any or all of the Pledged Collateral, upon written request, Pledgor shall
and shall cause each issuer of any Pledged Shares to be sold hereunder from
time to time to furnish to Secured Party all such information as Secured Party
may reasonably request in order to determine the number of shares and other
instruments included in the Pledged Collateral which may be sold by Secured
Party in exempt transactions under the Securities Act and the rules and
regulations
(Credit Agreement)
279
of the Securities and Exchange Commission thereunder, as the same are from time
to time in effect.
(d) Notwithstanding anything in this Agreement to the
contrary, Secured Party shall exercise, or shall refrain from exercising, any
remedy provided for in Section 11(a) in accordance with the instructions of
Requisite Lenders, and the Interest Rate Exchangers, by their acceptance of the
benefits of this Agreement and the other Loan Documents, hereby agree to be
bound by such instructions. The sole rights of the Interest Rate Exchangers
under this Agreement shall be to be secured by the Pledged Collateral and to
receive the payments provided for in Section 12.
SECTION 12. APPLICATION OF PROCEEDS. Except as expressly
provided elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any sale of, collection from, or other realization upon all or any
part of the Pledged Collateral may, in the discretion of Secured Party, be held
by Secured Party as Pledged Collateral for, and/or then, or at any time
thereafter, applied in full or in part by Secured Party against, the Secured
Obligations in the following order of priority:
FIRST: To the payment of all reasonable costs and expenses of
such sale, collection or other realization, including reasonable
compensation to Secured Party and its agents and counsel, and all
other reasonable expenses, liabilities and advances made or incurred
by Secured Party in connection therewith, and all amounts for which
Secured Party is entitled to indemnification hereunder and all
reasonable advances made by Secured Party hereunder for the account of
Pledgor, and to the payment of all reasonable costs and expenses paid
or incurred by Secured Party in connection with the exercise of any
right or remedy hereunder, all in accordance with Section 13;
SECOND: To the payment of all other Secured Obligations (for
the ratable benefit of the holders thereof) then due and payable; and
THIRD: To the payment to or upon the order of Pledgor, or to
whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
SECTION 13. INDEMNITY AND EXPENSES.
(a) Pledgor agrees to indemnify Secured Party, each
Lender and each Interest Rate Exchanger from and against any and all claims,
losses and liabilities in any way relating to, growing out of or resulting from
this Agreement and the transactions contemplated hereby (including, without
limitation, enforcement of this Agreement), except to the extent such claims,
losses or liabilities result solely from Secured Party's, such Lender's or such
Interest Rate Exchanger's gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
(b) Pledgor shall pay to Secured Party upon demand the
amount of any and all reasonable costs and expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that Secured
Party may incur in connection with (i) the administration of this Agreement,
(ii) the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the
failure by Pledgor to perform or observe any of the provisions hereof.
(Credit Agreement)
280
SECTION 14. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the Pledged
Collateral and shall (a) remain in full force and effect until (i) the
indefeasible payment in full of all Secured Obligations (other than Obligations
which are contingent and unliquidated and not due and owing on such date and
which pursuant to the provisions of the Credit Agreement, Interest Rate
Agreements, Letters of Credit or the Loan Documents survive the termination of
the Credit Agreement, the repayment of the Secured Obligations, the termination
of the Commitments, the expiration or cancellation of all Letters of Credit or
the termination, expiration or cancellation of all Interest Rate Agreements),
the cancellation or termination of the Commitments, the cancellation or
expiration of all outstanding Letters of Credit, and the termination,
expiration or cancellation of all Interest Rate Agreements, or (ii) the release
of the Liens on the Pledged Collateral by Secured Party in writing in
accordance with the terms of subsection 6.11 of the Credit Agreement, (b) be
binding upon Pledgor, its successors and assigns, and (c) inure, together with
the rights and remedies of Secured Party hereunder, to the benefit of Secured
Party and its successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), but subject to the provisions of
subsection 11.1 of the Credit Agreement, any Lender may assign or otherwise
transfer any Loans held by any of them to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect thereof
granted to Lenders herein or otherwise and any Interest Rate Exchanger may
assign or otherwise transfer any Interest Rate Obligations owing to it to
another Lender or an Affiliate of such Lender or another Lender, and such other
Lender or Affiliate shall thereupon become vested with all the benefits in
respect thereof granted to such Interest Rate Exchanger herein or otherwise.
Upon (i) the indefeasible payment in full of all Secured Obligations (other
than Obligations which are contingent and unliquidated and not due and owing on
such date and which pursuant to the provisions of the Credit Agreement,
Interest Rate Agreements, Letters of Credit or the Loan Documents survive the
termination of the Credit Agreement, the repayment of the Secured Obligations,
the termination of the Commitments, the expiration or cancellation of all
Letters of Credit or the termination, expiration or cancellation of all
Interest Rate Agreements), the cancellation or termination of the Commitments,
the cancellation or expiration of all outstanding Letters of Credit and the
termination, expiration or cancellation of all Interest Rate Agreements, or
(ii) the release of the Liens on the Pledged Collateral by Secured Party in
writing in accordance with the terms of subsection 6.11 of the Credit
Agreement, the security interest granted hereby shall terminate and all rights
to the Pledged Collateral shall revert to Pledgor. Upon any such termination
Secured Party will, at Pledgor's expense, execute and deliver to Pledgor such
documents as Pledgor shall reasonably request to evidence such termination and
Pledgor shall be entitled to the return, upon its request and at its expense,
against receipt and without recourse to Secured Party, of such of the Pledged
Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof.
SECTION 15. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders and, by their acceptance of the benefits of this
Agreement and the other Loan Documents, by each Interest Rate Exchanger.
Secured Party shall be obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from exercising any rights,
and to take or refrain from taking any action (including, without limitation,
the release or substitution of Pledged Collateral), solely in accordance with
this Agreement and the Credit Agreement and upon the instructions of Requisite
Lenders, and the Interest Rate Exchangers, by their acceptance of the benefits
of this Agreement and other Loan Documents, hereby agree to be bound by such
instructions.
(Credit Agreement)
281
(b) Secured Party shall at all times be the same Person
that is Agent under the Credit Agreement. Written notice of resignation by
Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute notice of resignation as Secured Party under this Agreement; removal
of Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute removal as Secured Party under this Agreement; and appointment of a
successor Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute appointment of a successor Secured Party under this Agreement. Upon
the acceptance of any appointment as Agent under subsection 10.5A of the Credit
Agreement by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly (i) transfer to such
successor Secured Party all sums, securities and other items of Collateral held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Secured Party, the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it under this Agreement while it was Secured Party
hereunder.
SECTION 16. AMENDMENTS; ETC. No amendment or waiver of any
provision of this Agreement, or consent to any departure by Pledgor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by Secured Party (or, in the case of an amendment hereto, by Pledgor and
Secured Party), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given; provided
that any amendment or waiver which adversely affects the interests of the
Interest Rate Exchangers but does not result in a similar adverse effect on the
interests of Lenders shall only be effective with the consent of the holders of
a majority of the Interest Rate Obligations given the benefit of the security
hereunder.
SECTION 17. NOTICES. Any notice or other communication
herein required or permitted to be given shall be in writing and may be
personally served, telexed or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage
prepaid and properly addressed. For the purposes hereof, the address of each
party hereto shall be as set forth under such party's name on the signature
pages hereof or, as to either party, such other address as shall be designated
by such party in a written notice delivered to the other party hereto.
SECTION 18. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
(Credit Agreement)
282
SECTION 19. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 20. HEADINGS. Section and subsection headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 21. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Credit Agreement, terms used in Articles 8 and 9 of the Uniform
Commercial Code in the State of New York are used herein as therein defined.
SECTION 22. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
Pledgor hereby agrees that service of all process in any such proceeding in any
such court may be made by registered or certified mail, return receipt
requested, to Pledgor at its address provided in Section 17, such service being
hereby acknowledged by Pledgor to be sufficient for personal jurisdiction in
any action against Pledgor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
Secured Party to bring proceedings against Pledgor in the courts of any other
jurisdiction.
SECTION 23. WAIVER OF JURY TRIAL. PLEDGOR AND SECURED PARTY
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Pledgor and Secured
Party each acknowledge that this waiver is a material inducement for Pledgor
and Secured Party to enter into a business relationship, that Pledgor and
Secured Party have already relied on this waiver in entering into this
Agreement and that each will continue to rely on this waiver in their related
future dealings. Pledgor and Secured Party further warrant and represent that
each has reviewed this waiver with its legal counsel, and that each knowingly
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283
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the
event of litigation, this Agreement may be filed as a written consent to a
trial by the court.
SECTION 24. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
[Remainder of page intentionally left blank]
(Credit Agreement)
284
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
DOMINICK'S FINER FOODS, INC., as Pledgor
By: ____________________________________
Title:
Notice Address: Dominick's Finer Foods, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By: ____________________________________
Title:
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
(Credit Agreement)
285
SCHEDULE I
Attached to and forming a part of the Company Pledge Agreement
dated as of November 1, 1996 between Dominick's Finer Foods, Inc., as Pledgor,
and Bankers Trust Company, as Secured Party.
Part A
Class of Stock Certi- Par Number of
Stock Issuer Stock ficate Nos. Value Shares
------------ -------- ------------ ----- -----------
▇▇▇▇ Hazelcrest, Inc. Common 1 $0.10 10,000
▇▇▇▇'▇ of Bloomingdale, Inc. Common 2 $1.00 1,000
DFF Equipment Leasing Company (f/k/a
Jerry's Deep Discount Centers, Inc.) Common 1 No Par 1,000
Dominick's Finer Foods, Inc. of Illinois Common 3 No Par 15
Blackhawk Developments, Inc. Common 3 $0.10 10,000
Blackhawk Properties, Inc. Common 3 No Par 1,000
Save-It Discount Foods Corporation Common 2 No Par 1,000
Part B
Debt Issuer Amount of Indebtedness
----------- ----------------------
▇▇▇▇ Hazelcrest, Inc. Amounts outstanding from time to time
▇▇▇▇'▇ of Bloomingdale, Inc. Amounts outstanding from time to time
DFF Equipment Leasing Company (f/k/a
Jerry's Deep Discount Centers, Inc.) Amounts outstanding from time to time
Dominick's Finer Foods, Inc. of Illinois Amounts outstanding from time to time
Save-It Discount Foods Corporation Amounts outstanding from time to time
(Credit Agreement)
286
SCHEDULE II
PLEDGE AMENDMENT
This Pledge Amendment, dated ____________, [19/20]__, is
delivered pursuant to Section 6(b) of the Company Pledge Agreement referred to
below. The undersigned hereby agrees that this Pledge Amendment may be
attached to the Company Pledge Agreement dated November 1, 1996, between the
undersigned and Bankers Trust Company, as Secured Party (the "COMPANY PLEDGE
AGREEMENT," capitalized terms defined therein being used herein as therein
defined), and that the [Pledged Shares] [Pledged Debt] listed on this Pledge
Amendment shall be deemed to be part of the [Pledged Shares] [Pledged Debt] and
shall become part of the Pledged Collateral and shall secure all Secured
Obligations.
DOMINICK'S FINER FOODS, INC.
By: ___________________________
Title:
Class of Stock Certi- Par Number of
Stock Issuer Stock ficate Nos. Value Shares
------------ -------- ------------ ----- ---------
Debt Issuer Amount of Indebtedness
(Credit Agreement)
287
EXHIBIT XV
[FORM OF COMPANY SECURITY AGREEMENT]
COMPANY SECURITY AGREEMENT
This COMPANY SECURITY AGREEMENT (this "AGREEMENT") is dated as
of November 1, 1996 and entered into by and between DOMINICK'S FINER FOODS,
INC., a Delaware corporation ("GRANTOR"), and BANKERS TRUST COMPANY, as agent
for and representative of (in such capacity herein called "SECURED PARTY") the
financial institutions ("LENDERS") party to the Credit Agreement referred to
below and the Interest Rate Exchangers (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Lenders, Secured Party, Syndication Agent and
Arrangers have entered into a Credit Agreement dated as of November 1, 1996
(said Credit Agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined) with Dominick's Supermarkets, Inc., a Delaware
corporation, and Grantor pursuant to which Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Grantor.
B. It is contemplated that Grantor may from time to time
enter into Interest Rate Agreements with one or more Lenders or their
Affiliates (collectively, the "INTEREST RATE EXCHANGERS") and Grantor desires
that its obligations under such agreements, including the obligation to make
payments in the event of early termination thereunder (all such obligations
being the "INTEREST RATE OBLIGATIONS"), be given the benefits of the security
interest created hereby.
C. It is a condition precedent to the initial extensions
of credit by Lenders under the Credit Agreement that Grantor shall have granted
the security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises, in order to
induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Grantor hereby agrees with Secured
Party as follows:
SECTION 1. GRANT OF SECURITY. Grantor hereby grants to
Secured Party a security interest in, all of Grantor's right, title and
interest in and to the following, in each case whether now or hereafter
existing or in which Grantor now has or hereafter acquires an interest and
wherever the same may be located (the "COLLATERAL"):
(a) all equipment in all of its forms (including but not
limited to, all distribution, retailing, data processing, office and motor
vehicle equipment in all of its forms), all parts thereof and all accessions
thereto; excluding, however, any such equipment, parts or accessions listed on
Schedule 1(a) annexed hereto located as of the Closing Date (or
(Credit Agreement)
288
as of the date such Schedule 1(a) is supplemented pursuant to Section 5(c)
hereof) at Grantor's stores listed on Schedule 1(a) annexed hereto (any and all
such equipment, parts and accessions not so excluded pursuant to the preceding
clause being the "EQUIPMENT");
(b) all inventory in all of its forms (including, but not
limited to, (i) all goods held by Grantor for sale or lease or to be furnished
under contracts of service or so leased or furnished, (ii) all raw materials,
work in process, finished goods, and materials used or consumed in the
manufacture, packing, shipping, advertising, selling, leasing, furnishing or
production of such inventory or otherwise used or consumed in Grantor's
business, (iii) all goods in which Grantor has an interest in mass or a joint
or other interest or right of any kind, and (iv) all goods which are returned
to or repossessed by Grantor and all accessions thereto and products thereof;
excluding, however, any such inventory listed on Schedule 1(b) annexed hereto
located (as of the date such Schedule 1(b) is delivered pursuant to Section
5(c) hereof) at Grantor's stores listed on Schedule 1(b) annexed hereto (all
such inventory, accessions and products not so excluded pursuant to the
preceding clause being the "INVENTORY") and all negotiable documents of title
(including without limitation warehouse receipts, dock receipts and bills of
lading) issued by any Person covering any Inventory (any such negotiable
documents of title being a "NEGOTIABLE DOCUMENT OF TITLE");
(c) all accounts, contract rights, chattel paper,
documents, instruments, general intangibles and other rights and obligations of
any kind and all rights in, to and under all security agreements, leases and
other contracts securing or otherwise relating to any such accounts, contract
rights, chattel paper, documents, instruments, general intangibles or other
obligations (any and all such accounts, contract rights, chattel paper,
documents, instruments, general intangibles and other obligations being the
"ACCOUNTS", and any and all such security agreements, leases and other
contracts being the "RELATED CONTRACTS");
(d) the agreements listed in Schedule 1(d) annexed hereto
and all other agreements, contracts, and assignments whereby Grantor obtains
goods or services that are useful or necessary to the business of such Grantor,
as each such agreement may be amended, supplemented or otherwise modified from
time to time (said agreements, as so amended, supplemented or otherwise
modified, being referred to herein individually as an "ASSIGNED AGREEMENT" and
collectively as the "ASSIGNED AGREEMENTS"), including without limitation (i)
all rights of Grantor to receive moneys due or to become due under or pursuant
to the Assigned Agreements, (ii) all rights of Grantor to receive proceeds of
any insurance, indemnity, warranty or guaranty with respect to the Assigned
Agreements, (iii) all claims of Grantor for damages arising out of any breach
of or default under the Assigned Agreements, and (iv) all rights of Grantor to
terminate, amend, supplement, modify or exercise rights or options under the
Assigned Agreements, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder;
(e) all deposit accounts, including without limitation
the deposit accounts specified on Schedule 1(e) annexed hereto and all other
deposit accounts maintained with Secured Party (the "DEPOSIT ACCOUNTS");
(f) all trademarks, tradenames, tradesecrets, business
names, patents, patent applications, licenses, copyrights, registrations and
franchise rights, and all goodwill associated with any of the foregoing;
(g) to the extent not included in any other paragraph of
this Section 1, all other general intangibles (including, without limitation,
tax refunds, rights to payment or
(Credit Agreement)
289
performance, choses in action and judgments taken on any rights or claims
included in the Collateral);
(h) all plant fixtures, business fixtures and other
fixtures and storage and office facilities, and all accessions thereto and
products thereof; excluding, however, any such fixtures, facilities, additions,
accession, replacements and products listed on Schedule 1(h) annexed hereto
located as of the Closing Date (or as of the date such Schedule 1(h) is
supplemented pursuant to Section 5(c) hereof) at Grantor's stores listed on
Schedule 1(h) annexed hereto;
(i) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related data processing
software that at any time evidence or contain information relating to any of
the Collateral or are otherwise necessary or helpful in the collection thereof
or realization thereupon; and
(j) all proceeds, products, rents and profits of or from
any and all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is the
loss payee thereof), or any indemnity, warranty or guaranty, payable by reason
of loss or damage to or otherwise with respect to any of the foregoing
Collateral. For purposes of this Agreement, the term "PROCEEDS" includes
whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary.
Notwithstanding the foregoing provisions of this Section 1,
the Collateral shall not include, and Grantor shall not hereby be deemed to
grant a security interest in, any rights of Grantor (i) under any license,
lease, agreement or contract existing as of the Closing Date that expressly
prohibits any such security interest; provided, however, that in the event that
any such prohibition may be waived or avoided upon Grantor's obtaining a
consent to such security interest or through the satisfaction of any other
condition precedent and such consent is obtained or such condition precedent is
satisfied, the foregoing provisions of this sentence shall not be effective
with respect to such license, lease, agreement or contract, or (ii) in any
funds which are proceeds from sales of tickets to events by Grantor on behalf
of third parties, as long as such funds are not Grantor's funds, and so long as
such funds are segregated in separate deposit accounts from Grantor's other
funds.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures,
and the Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of
all obligations and liabilities of every nature of Grantor now or hereafter
existing under or arising out of or in connection with the Credit Agreement,
the other Loan Documents and the Interest Rate Agreements entered into with any
Interest Rate Exchanger, and all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Grantor, would accrue on
such obligations), reimbursement of amounts drawn under Letters of Credit,
fees, expenses, indemnities or otherwise, whether voluntary or involuntary,
direct or indirect, absolute or contingent, liquidated or unliquidated, whether
or not jointly owed with others, and whether or not from time to time decreased
or extinguished and later increased, created or incurred, and all or any
portion of such obligations or liabilities that are paid, to the extent all or
any part of such payment is avoided or recovered directly or indirectly from
Secured Party or any Lender or any Interest Rate Exchanger as a preference,
fraudulent
(Credit Agreement)
290
transfer or otherwise (all such obligations and liabilities being the
"UNDERLYING DEBT"), and all obligations of every nature of Grantor now or
hereafter existing under this Agreement (all such obligations of Grantor,
together with the Underlying Debt, being the "SECURED OBLIGATIONS").
SECTION 3. GRANTOR REMAINS LIABLE. Anything contained herein
to the contrary notwithstanding, (a) Grantor shall remain liable under any
contracts and agreements included in the Collateral, to the extent set forth
therein, to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by Secured
Party of any of its rights hereunder shall not release Grantor from any of its
duties or obligations under the contracts and agreements included in the
Collateral, and (c) Secured Party shall not have any obligation or liability
under any contracts and agreements included in the Collateral by reason of this
Agreement, nor shall Secured Party be obligated to perform any of the
obligations or duties of Grantor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Grantor
represents and warrants as follows:
(a) Ownership of Collateral. Except for Permitted
Encumbrances and the security interest created by this Agreement, Grantor owns
the Collateral free and clear of any Lien. Except such as may have been filed
in favor of Secured Party relating to this Agreement and any Permitted
Encumbrances, no effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office.
(b) Location of Equipment and Inventory. All of the
Equipment (other than any motor vehicles included in Equipment) and Inventory
(other than Equipment or Inventory in transit to Indiana or Illinois) is, as of
the date hereof, located at the places specified in Schedule 4(b) annexed
hereto.
(c) Office Locations; Other Names. As of the date
hereof, the chief place of business, the chief executive office and the office
where Grantor keeps its records regarding the Accounts and all originals of all
chattel paper that evidence Accounts is, and has been for the four month period
preceding the date hereof, located at the places specified in Schedule 4(c)
annexed hereto. As of the date hereof, Grantor has not in the past five years
done, and does not now do, business under any other name (including any
trade-name or fictitious business name) other than those specified in Schedule
4(c) annexed hereto.
(d) Delivery of Certain Collateral. All notes and other
instruments (excluding checks) and, to the extent required to be delivered
pursuant to Section 5(a), chattel paper comprising any and all items of
Collateral have been delivered to Secured Party duly endorsed and accompanied
by duly executed instruments of transfer or assignment in blank.
(e) Governmental Authorizations. Except for the filing
or recording of Uniform Commercial Code financing statements necessary to
perfect the security interest created hereunder and the indication of the
security interest created hereunder on the certificate of title issued with
respect to any item of Equipment under a statute of any jurisdiction requiring
such indication of such security interest as a condition of perfection thereof,
all of which have been made or done (other than with respect to the motor
vehicles of Grantor), as the case may be, no authorization, approval or other
action by, and no notice
(Credit Agreement)
291
to or filing with, any governmental authority or regulatory body is required
for either (i) the grant by Grantor of the security interest granted hereby,
(ii) the execution, delivery or performance of this Agreement by Grantor, or
(iii) the perfection of or the exercise by Secured Party of its rights and
remedies hereunder (except as may have been taken by or at the direction of
Grantor).
(f) Perfection. This Agreement, together with the filing
of financing statements containing the description of the Collateral with the
Secretary of State of the State of Illinois, and with the applicable county
offices, which will be made immediately following the Closing Date, creates a
valid, perfected and, except for Permitted Encumbrances, first priority
security interest in the Collateral (excluding the security interest in the
Deposit Accounts) securing the payment of the Secured Obligations; provided
that Secured Party retains physical possession of any Collateral, the
possession of which is required for perfection; further provided that
additional actions may be required with respect to the perfection of proceeds
of the Collateral; provided still further that the security interest granted to
Secured Party in the motor vehicles of Grantor will not be perfected.
(g) Other Information. All information heretofore,
herein or hereafter supplied to Secured Party by or on behalf of Grantor with
respect to the Collateral is accurate and complete in all material respects.
SECTION 5. FURTHER ASSURANCES.
(a) Grantor agrees that from time to time, at the expense of
Grantor, Grantor will promptly execute and deliver all further instruments and
documents, and take all further action, that Secured Party may reasonably deem
to be necessary or desirable, or that Secured Party may reasonably request, in
order to perfect and protect any security interest granted or purported to be
granted hereby or to enable Secured Party to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, Grantor will: (i) at the request of Secured
Party, ▇▇▇▇ conspicuously each item of chattel paper included in the Accounts,
each Related Contract and, at the request of Secured Party, each of its records
pertaining to the Collateral, with a legend, in form and substance reasonably
satisfactory to Secured Party, indicating that such Collateral is subject to
the security interest granted hereby, (ii) if any Account shall be evidenced by
a promissory note or other instrument (excluding checks) or chattel paper,
deliver and pledge to Secured Party hereunder such note or instrument and, at
the request of Secured Party, the original counterpart of such chattel paper,
duly endorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance reasonably satisfactory to Secured Party,
(iii) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as Secured Party may reasonably
deem to be necessary or desirable, or as Secured Party may reasonably request,
in order to perfect and preserve the security interests granted or purported to
be granted hereby, (iv) upon the request of Secured Party, promptly after the
acquisition by Grantor of any item of Equipment which is covered by a
certificate of title under a statute of any jurisdiction under the law of which
indication of a security interest on such certificate is required as a
condition of perfection thereof, execute and file with the registrar of motor
vehicles or other appropriate authority in such jurisdiction an application or
other document requesting the notation or other indication of the security
interest created hereunder on such certificate of title, (v) upon the request
of Secured Party, within 30 days after the end of each calendar quarter,
deliver to Agent copies of all such applications or other documents filed
during such calendar quarter and copies of all such certificates of title
issued during such calendar quarter indicating the security interest created
hereunder in the items of Equipment covered
(Credit Agreement)
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thereby, (vi) at any reasonable time, upon request by Secured Party, exhibit
the Collateral to and allow inspection of the Collateral by Secured Party, or
persons designated by Secured Party, and (vii) at Secured Party's reasonable
request, appear in and defend any action or proceeding that may adversely
affect Grantor's title to or Secured Party's security interest in all or any
material part of the Collateral.
(b) Grantor hereby authorizes Secured Party to file one
or more financing or continuation statements, and amendments thereto, relative
to all or any part of the Collateral without the signature of Grantor. Grantor
agrees that a carbon, photographic or other reproduction of this Agreement or
of a financing statement signed by Grantor shall be sufficient as a financing
statement and may be filed as a financing statement in any and all
jurisdictions.
(c) Grantor will furnish to Secured Party from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail. Without limiting the generality
of the foregoing, Grantor shall deliver a supplement to Schedule 1(a), Schedule
1(b) and Schedule 1(h) annexed hereto, which supplement shall set forth the
excluded equipment, parts and accessions described in Section 1(a) hereof,
excluded inventory described in Section 1(b) hereof or excluded fixtures and
products described in Section 1(h) hereof, as the case may be, to the extent,
and only to the extent, that Liens on such equipment, parts and accessions or
fixtures and products, as the case may be, are permitted under subsection
7.2A(iv) of the Credit Agreement, as soon as practicable but in no event later
than 5 days of the creation or incurrence of such Lien.
SECTION 6. CERTAIN COVENANTS OF GRANTOR. Grantor shall:
(a) not use or permit any Collateral to be used
unlawfully or in violation of any provision of this Agreement or any applicable
statute, regulation or ordinance or any policy of insurance covering any such
Collateral;
(b) notify Secured Party of any change in Grantor's name,
identity or corporate structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of
any change in Grantor's chief place of business, chief executive office or
residence or the office where Grantor keeps its records regarding any Accounts
and all originals of all chattel paper that evidence any Accounts;
(d) if Secured Party gives value to enable Grantor to
acquire rights in or the use of any Collateral, use such value for such
purposes; and
(e) pay promptly when due all material property and other
taxes, assessments and governmental charges or levies imposed upon, and all
material claims (including claims for labor, materials and supplies) against,
the Collateral, except to the extent the validity thereof is being contested in
good faith; provided that, notwithstanding any other provision in the Loan
Documents, Grantor shall in any event pay such taxes, assessments, charges,
levies or claims not later than five days prior to the date of any proposed
sale under any judgement, writ or warrant of attachment entered or filed
against Grantor or any of the Collateral as a result of the failure to make
such payment.
(Credit Agreement)
293
SECTION 7. SPECIAL COVENANTS WITH RESPECT TO EQUIPMENT AND
INVENTORY. Grantor shall:
(a) keep the Equipment and Inventory (other than
Equipment or Inventory in transit to Indiana or Illinois) at the places
therefor specified on Schedule 4(b) annexed hereto or, upon 30 days' prior
written notice to Secured Party, at such other places in jurisdictions where
all action that Secured Party may reasonably deem to be necessary or desirable,
or that Secured Party may reasonably request, in order to perfect and protect
any security interest granted or purported to be granted hereby, or to enable
Secured Party to exercise and enforce its rights and remedies hereunder, with
respect to such Equipment and Inventory shall have been taken;
(b) cause the Equipment to be maintained and preserved in
the same condition, repair and working order as when new, ordinary wear and
tear excepted, and in accordance with Grantor's past practices, and shall
forthwith, or, in the case of any loss or damage to any of the Equipment when
subsection (c) of Section 8 is not applicable, as quickly as practicable after
the occurrence thereof, make or cause to be made all repairs, replacements and
other improvements in connection therewith that are necessary or desirable to
such end. Grantor shall promptly furnish to Secured Party a statement
respecting any material loss or damage to any of the Equipment which involves
loss or damage exceeding $1,000,000 in the aggregate during any Fiscal Year for
Grantor;
(c) keep correct and accurate records of the Inventory,
itemizing and describing the kind, type and quantity of Inventory, Grantor's
cost therefor and (where applicable) the current list prices for the Inventory,
provided that nothing in this Section 7 with respect to Inventory being sold in
the ordinary course in Grantor's retail stores shall require Grantor to
maintain records in any manner different from those being maintained by Grantor
as of the date hereof;
(d) if any Inventory is in possession or control of any
of Grantor's agents or processors, upon the occurrence of an Event of Default,
instruct such agent or processor to hold all such Inventory for the account of
Secured Party and subject to the instructions of Secured Party; and
(e) promptly upon the issuance and delivery to Grantor of
any Negotiable Document of Title, upon the request of Secured Party after the
occurrence of an Event of Default or Potential Event of Default, deliver such
Negotiable Document of Title to Secured Party.
SECTION 8. INSURANCE.
(a) Grantor shall, at its own expense, maintain insurance
with respect to the Equipment and Inventory in such amounts, against such
risks, in such form and with such insurers as shall be satisfactory to Secured
Party from time to time as provided in subsection 6.4 of the Credit Agreement.
Such insurance shall include, without limitation, property damage insurance and
liability insurance. Each policy for (i) liability insurance shall name
Secured Party as additional insured and (ii) property damage insurance shall be
subject to a loss payee endorsement, naming Secured Party, as additional
insured, as loss payee, subject in the case of any insurance referred to in
clause (ii) to normal and customary rights granted in the ordinary course of
business to (A) any landlord (with respect to the property covered by any
lease), (B) in the case of any equipment financing, to any equipment lessor or
lender (with respect to the equipment covered thereby), or (C)
(Credit Agreement)
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mortgagees of any Real Property Asset. All proceeds of insurance that are (i)
payable during the existence of an Event of Default or (ii) payable at any time
resulting in aggregate insurance proceeds in excess of $1,000,000 (a "MAJOR
LOSS"), shall be payable to Secured Party. Grantor hereby authorizes and
directs any affected insurance company to make payment of such proceeds
directly to Secured Party. If Grantor receives or shall be holding any
proceeds of insurance during the existence of an Event of Default or at any
time resulting from a Major Loss, Grantor shall promptly pay over such proceeds
to Secured Party. Grantor shall not settle, adjust or compromise any claims
for loss, damage or destruction of its property or any party thereof under any
policy or policies of insurance as a result of a Major Loss without the prior
written consent of Secured Party to such settlement, adjustment or compromise;
and during the existence of an Event of Default hereunder Secured party shall
have the sole and exclusive right, and Grantor hereby authorizes and empowers
Secured Party to settle, adjust or compromise any insurance claims, and any
such action taken by Grantor without Secured Party's written consent shall be
null and void. Each policy shall (i) contain an agreement by the insurer that
any loss thereunder shall be payable to Secured Party notwithstanding any
action, inaction or breach of representation or warranty by Grantor, (ii)
provide that there shall be no recourse against Secured Party for payment of
premiums or other amounts with respect thereto, and (iii) provide that at least
30 days' prior written notice of cancellation, material amendment, reduction in
scope or limits of coverage or of lapse shall be given to Secured Party by the
insurer. Grantor shall, if so requested by Secured Party, deliver to Secured
Party original or duplicate policies of such insurance and, as often as Secured
Party may reasonably request, a report of a reputable insurance broker with
respect to such insurance. Further, Grantor shall, at the request of Secured
Party, duly execute and deliver instruments of assignment of such insurance
policies to comply with the requirements of Section 5(a) and cause the
respective insurers to acknowledge notice of such assignment.
(b) Reimbursement under any liability insurance
maintained by Grantor pursuant to this Section 8 may be paid directly to the
Person who shall have incurred liability covered by such insurance. In case of
any loss involving damage to Equipment or Inventory when subsection (c) of this
Section 8 is not applicable, Grantor shall make or cause to be made the
necessary repairs to or replacements of such Equipment or Inventory, and any
proceeds of insurance maintained by Grantor pursuant to this Section 8 shall be
paid to Grantor as reimbursement for the costs of such repairs or replacements.
(c) So long as no Event of Default has occurred and is
then continuing, after deducting therefrom all costs and expenses (regardless
of the particular nature thereof and whether incurred with or without suit),
including reasonable attorneys' fees, incurred by Secured Party in connection
with such Major Loss or the collection of insurance proceeds, Secured Party
shall disburse the insurance proceeds held by it in connection with any loss,
damage or destruction of any Collateral to Grantor, in accordance with and
subject to such customary terms, conditions and procedures as Secured Party may
require, for the sole purpose of paying the cost of restoration or replacement
of such Collateral. If an Event of Default has occurred and is continuing,
Secured Party may elect, in its sole and absolute discretion, (i) to apply all
or any portion of such insurance proceeds to the restoration or replacement of
the Collateral, subject to conditions determined by Secured Party, (ii) to
disburse any such proceeds to Grantor for the purposes set forth in the
preceding sentence, (iii) to hold such insurance proceeds as additional
Collateral hereunder or (iv) to apply such insurance proceeds as specified in
Section 18.
(Credit Agreement)
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SECTION 9. SPECIAL COVENANTS WITH RESPECT TO ACCOUNTS AND
RELATED CONTRACTS.
(a) Grantor shall keep its chief place of business and
chief executive office and the office where it keeps its records concerning the
Accounts and Related Contracts, and all originals of all chattel paper that
evidence Accounts, at the location therefor specified in Section 4 or, upon 10
days' prior written notice to Secured Party, at such other location in a
jurisdiction where all action that Secured Party may reasonably deem to be
necessary or desirable, or that Secured Party may reasonably request, in order
to perfect and protect any security interest granted or purported to be granted
hereby, or to enable Secured Party to exercise and enforce its rights and
remedies hereunder, with respect to such Accounts and Related Contracts shall
have been taken. Grantor will hold and preserve such records and chattel paper
and will permit representatives of Secured Party at any time during normal
business hours to inspect and make abstracts from such records and chattel
paper, and Grantor agrees to render to Secured Party, at Grantor's cost and
expense, such clerical and other assistance as may be reasonably requested with
regard thereto. Promptly upon the reasonable request of Secured Party, Grantor
shall deliver to Secured Party complete and correct copies of each Related
Contract.
(b) Except as otherwise provided in this subsection (c),
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to Grantor under the Accounts and Related Contracts. In connection
with such collections, Grantor may take (and, after the occurrence and during
the continuation of an Event of Default, at Secured Party's direction, shall
take) such action as Grantor or after the occurrence and during the
continuation of an Event of Default, Secured Party may reasonably deem
necessary or advisable to enforce collection of amounts due or to become due
under the Accounts; provided, however, that Secured Party shall have the right
at any time, upon the occurrence and during the continuation of an Event of
Default and upon written notice to Grantor of its intention to do so, to notify
the account debtors or obligors under any Accounts of the assignment of such
Accounts to Secured Party and to direct such account debtors or obligors to
make payment of all amounts due or to become due to Grantor thereunder directly
to Secured Party, to notify each Person maintaining a lockbox or similar
arrangement to which account debtors or obligors under any Accounts have been
directed to make payment to remit all amounts representing collections on
checks and other payment items from time to time sent to or deposited in such
lockbox or other arrangement directly to Secured Party and, upon such
notification and at the expense of Grantor, to enforce collection of any such
Accounts and to adjust, settle or compromise the amount or payment thereof, in
the same manner and to the same extent as Grantor might have done. After
receipt by Grantor of the notice from Secured Party referred to in the proviso
to the preceding sentence, (i) all amounts and proceeds (including checks and
other instruments) received by Grantor in respect of the Accounts and Related
Contracts shall be received in trust for the benefit of Secured Party
hereunder, shall be segregated from other funds of Grantor and shall be
forthwith paid over or delivered to Secured Party in the same form as so
received (with any necessary endorsement) to be held as cash Collateral and
applied as provided by Section 18, and (ii) Grantor shall not adjust, settle or
compromise the amount or payment of any such Account, or release wholly or
partly any account debtor or obligor thereof, or allow any credit or discount
thereon.
(Credit Agreement)
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SECTION 10. SPECIAL PROVISIONS WITH RESPECT TO THE ASSIGNED
AGREEMENTS.
Grantor shall at its expense:
(i) perform and observe all material terms and
provisions of the Assigned Agreements to be performed or observed by
it, maintain the Assigned Agreements in full force and effect, enforce
the Assigned Agreements in accordance with their terms, except in each
case as any Assigned Agreement is amended, modified or terminated in
Grantor's business judgment as necessary or desirable or terminated in
accordance with its own terms (unless such amendment or modification
or termination is prohibited or otherwise restricted by subsection
7.15 of the Credit Agreement), and take all such action to such end as
may be from time to time reasonably requested by Secured Party; and
(ii) from time to time (A) furnish to Secured
Party such information and reports regarding the Assigned Agreements
as Secured Party may reasonably request and (B) upon the reasonable
request of Secured Party make to each other party to any Assigned
Agreement such demands and requests for information and reports or for
action as Grantor is entitled to make under such Assigned Agreement.
Solely for purposes of this Section 10, the real property
leases as to which Grantor is a lessee thereunder shall not be deemed to be
"Assigned Agreements."
SECTION 11. DEPOSIT ACCOUNTS. Upon the occurrence and during
the continuation of an Event of Default, Secured Party may exercise dominion
and control over, and refuse to permit further withdrawals (whether of money,
securities, instruments or other property) from any deposit accounts maintained
with Secured Party constituting part of the Collateral.
SECTION 12. LICENSE OF PATENTS, TRADEMARKS, COPYRIGHTS, ETC.
Effective upon the occurrence of any Event of Default and upon written notice
from Secured Party, Grantor hereby assigns, transfers and conveys to Secured
Party, the nonexclusive right and license to use all trademarks, tradenames,
copyrights, patents or technical processes owned or used by Grantor that relate
to the Collateral and any other collateral granted by Grantor as security for
the Secured Obligations, together with any goodwill associated therewith
(excluding, however, any of the foregoing which is not material to Grantor
which is held or used by Grantor pursuant to any license that expressly
prohibits any such assignment, transfer or conveyance), all to the extent
necessary to enable Secured Party to use, possess and realize on the Collateral
and to enable any successor or assign to enjoy the benefits of the Collateral.
This right and license shall inure to the benefit of all successors, assigns
and transferees of Secured Party and its successors, assigns and transferees,
whether by voluntary conveyance, operation of law, assignment, transfer,
foreclosure, deed in lieu of foreclosure or otherwise. Such right and license
is granted free of charge, without requirement that any monetary payment
whatsoever be made to Grantor.
SECTION 13. TRANSFERS AND OTHER LIENS. Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, except as permitted by the Credit
Agreement; or
(Credit Agreement)
297
(b) except for the security interest created by this
Agreement and Permitted Encumbrances, create or suffer to exist any Lien upon
or with respect to any of the Collateral to secure the indebtedness or other
obligations of any Person.
As long as no Event of Default has occurred and is then
continuing, in the event Grantor sells or transfers for value any portion of
the Collateral as permitted under subsection 7.7 of the Credit Agreement,
Secured Party shall release the Collateral that is the subject of such asset
sale to Grantor free and clear of the Lien under this Agreement concurrently
with the consummation of such asset sale, and Secured Party shall, upon the
reasonable request of and at the expense of Grantor, execute an amendment with
respect to the applicable financing statement filed under this Agreement to
effect such release.
SECTION 14. SECURED PARTY APPOINTED ATTORNEY-IN-FACT.
Grantor hereby irrevocably appoints Secured Party as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Secured Party or otherwise, from time to time in Secured
Party's discretion to take any action and to execute any instrument that
Secured Party may deem necessary or advisable to accomplish the purposes of
this Agreement, including without limitation:
(a) to obtain and adjust insurance required to be
maintained by Grantor or paid to Secured Party pursuant to Section 8;
(b) to ask for, demand, collect, ▇▇▇ for, recover,
compound, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral;
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clauses (a) and (b)
above;
(d) to file any claims or take any action or institute
any proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or placed upon
or threatened against any of the Collateral, the legality or validity thereof
and the amounts necessary to discharge the same to be determined by Secured
Party in its sole discretion, any such payments made by Secured Party to become
obligations of Grantor to Secured Party, due and payable immediately without
demand;
(f) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with the Accounts and
other documents relating to the Collateral; and
(g) generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though Secured Party were the absolute owner thereof for all
purposes, and to do, at Secured Party's option and Grantor's expense, at any
time or from time to time, all acts and things that Secured Party reasonably
deems necessary to protect, preserve or realize upon the Collateral and Secured
Party's security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as Grantor might do.
(Credit Agreement)
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Secured Party shall not exercise any powers granted
pursuant to this appointment as attorney-in-fact at any time (i) that Grantor
is fully performing its obligations hereunder and (ii) that no Event of Default
has occurred and is then continuing. This appointment as attorney-in-fact
shall terminate upon the termination of this Agreement pursuant to Section 20.
SECTION 15. SECURED PARTY MAY PERFORM. If Grantor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party
incurred in connection therewith shall be payable by Grantor under Section 19.
SECTION 16. STANDARD OF CARE. The powers conferred on
Secured Party hereunder are solely to protect its interest in the Collateral
and shall not impose any duty upon it to exercise any such powers. Except for
the exercise of reasonable care in the custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder,
Secured Party shall have no duty as to any Collateral or as to the taking of
any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which Secured Party accords its own property.
SECTION 17. REMEDIES.
(a) If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the Uniform Commercial Code as in effect in any relevant jurisdiction
(the "CODE") (whether or not the Code applies to the affected Collateral), and
also may (a) require Grantor to, and Grantor hereby agrees that it will at its
expense and upon request of Secured Party forthwith, assemble all or part of
the Collateral as directed by Secured Party and make it available to Secured
Party at a place or places to be designated by Secured Party that is reasonably
convenient to both parties, (b) enter onto the property where any Collateral is
located and take possession thereof with or without judicial process, (c) prior
to the disposition of the Collateral, store, process, repair or recondition the
Collateral or otherwise prepare the Collateral for disposition in any manner to
the extent Secured Party deems appropriate, (d) take possession of Grantor's
premises or place custodians in exclusive control thereof, remain on such
premises and use the same and any of Grantor's equipment for the purpose of
completing any work in process, taking any actions described in the preceding
clause (c) and collecting any Secured Obligation, and (e) without notice except
as specified below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any of Secured Party's offices or
elsewhere, for cash, on credit or for future delivery, at such time or times
and at such price or prices and upon such other terms as Secured Party may deem
commercially reasonable. Secured Party or any Lender may be the purchaser of
any or all of the Collateral at any such sale and Secured Party, as agent for
and representative of Lenders and Interest Rate Exchangers (but not any Lender
, Lenders, Interest Rate Exchanger or Interest Rate Exchangers in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing), shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Collateral
payable by Secured Party at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
Grantor, and Grantor
(Credit Agreement)
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hereby waives (to the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Grantor agrees that, to the extent notice of sale shall be required by law, at
least ten days' notice to Grantor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute reasonable
notification. Secured Party shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. Secured Party may
adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned. Grantor hereby waives
any claims against Secured Party arising by reason of the fact that the price
at which any Collateral may have been sold at such a private sale was less than
the price which might have been obtained at a public sale, even if Secured
Party accepts the first offer received and does not offer such Collateral to
more than one offeree; provided that such sale was conducted in a commercially
reasonable manner. If the proceeds of any sale or other disposition of the
Collateral are insufficient to pay all the Secured Obligations, Grantor shall
be liable for the deficiency and the fees of any attorneys employed by Secured
Party to collect such deficiency.
(b) Notwithstanding anything in this Agreement to the
contrary, Secured Party shall exercise, or shall refrain from exercising, any
remedy provided for in Section 17(a) in accordance with the instructions of
Requisite Lenders, and the Interest Rate Exchangers, by their acceptance of the
benefits of this Agreement and the other Loan Documents, hereby agree to be
bound by such instructions. The sole rights of the Interest Rate Exchangers
under this Agreement shall be to be secured by the Collateral and to receive
the payments provided for in Section 18.
SECTION 18. APPLICATION OF PROCEEDS. Except as expressly
provided elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any sale of, collection from, or other realization upon all or any
part of the Collateral may, in the discretion of Secured Party, be held by
Secured Party as Collateral for, and/or then, or at any other time thereafter,
applied in full or in part by Secured Party against, the Secured Obligations in
the following order of priority:
FIRST: To the payment of all reasonable costs and expenses of
such sale, collection or other realization, including reasonable
compensation to Secured Party and its agents and counsel, and all
other reasonable expenses, liabilities and advances made or incurred
by Secured Party in connection therewith, and all amounts for which
Secured Party is entitled to indemnification hereunder and all
reasonable advances made by Secured Party hereunder for the account of
Grantor, and to the payment of all reasonable costs and expenses paid
or incurred by Secured Party in connection with the exercise of any
right or remedy hereunder, all in accordance with Section 19;
SECOND: To the payment of all other Secured Obligations (for
the ratable benefit of the holders thereof) then due and payable; and
THIRD: To the payment to or upon the order of Grantor, or to
whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
(Credit Agreement)
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SECTION 19. INDEMNITY AND EXPENSES.
(a) Grantor agrees to indemnify Secured Party, each
Lender and each Interest Rate Exchanger from and against any and all claims,
losses and liabilities in any way relating to, growing out of or resulting from
this Agreement and the transactions contemplated hereby (including, without
limitation, enforcement of this Agreement), except to the extent such claims,
losses or liabilities result solely from Secured Party's, such Lender's or such
Interest Rate Exchanger's gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
(b) Grantor shall pay to Secured Party upon demand the
amount of any and all reasonable costs and expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that Secured
Party may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the
failure by Grantor to perform or observe any of the provisions hereof.
SECTION 20. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the Collateral
and shall (a) remain in full force and effect until (i) the indefeasible
payment in full of the Secured Obligations (other than Obligations which are
contingent and unliquidated and not due and owing on such date and which
pursuant to the provisions of the Credit Agreement, Interest Rate Agreements,
Letters of Credit or the Loan Documents survive the termination of the Credit
Agreement, the repayment of the Secured Obligations, the termination of the
Commitments, the expiration or cancellation of all Letters of Credit or the
termination, expiration or cancellation of all Interest Rate Agreements), the
cancellation or termination of the Commitments, the cancellation or expiration
of all outstanding Letters of Credit, and the termination, expiration or
cancellation of all Interest Rate Agreements, or (ii) the release of the Liens
on the Collateral by Secured Party in writing in accordance with the terms of
subsection 6.11 of the Credit Agreement, (b) be binding upon Grantor, its
successors and assigns, and (c) inure, together with the rights and remedies of
Secured Party hereunder, to the benefit of Secured Party and its successors,
transferees and assigns. Without limiting the generality of the foregoing
clause (c), but subject to the provisions of subsection 11.1 of the Credit
Agreement, any Lender may assign or otherwise transfer any Loans held by it to
any other Person, and such other Person shall thereupon become vested with all
the benefits in respect thereof granted to Lenders herein or otherwise and any
Interest Rate Exchanger may assign or otherwise transfer any Interest Rate
Obligations owing to it to another Lender or an Affiliate of such Lender or
another Lender, and such other Lender or Affiliate shall thereupon become
vested with all the benefits in respect thereof granted to such Interest Rate
Exchanger herein or otherwise. Upon (i) the indefeasible payment in full of
all Secured Obligations (other than Obligations which are contingent and
unliquidated and not due and owing on such date and which pursuant to the
provisions of the Credit Agreement, Interest Rate Agreements, Letters of Credit
or the Loan Documents survive the termination of the Credit Agreement, the
repayment of the Secured Obligations, the termination of the Commitments, the
expiration or cancellation of all Letters of Credit or the termination,
expiration or cancellation of all Interest Rate Agreements), the cancellation
or termination of the Commitments, the cancellation or expiration of all
outstanding Letters of Credit and the termination, expiration or cancellation
of all Interest Rate Agreements, or (ii) the release of the Liens on the
Collateral by Secured Party in writing in accordance with the terms of
subsection 6.11 of the Credit Agreement, the security interest granted hereby
shall terminate and all rights to the Collateral shall revert to Grantor. Upon
any such termination Secured
(Credit Agreement)
301
Party will, at Grantor's expense, execute and deliver to Grantor such documents
as Grantor shall reasonably request to evidence such termination.
SECTION 21. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders and, by their acceptance of the benefits of this
Agreement and the other Loan Documents, by each Interest Rate Exchanger.
Secured Party shall be obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from exercising any rights,
and to take or refrain from taking any action (including, without limitation,
the release or substitution of Collateral), solely in accordance with this
Agreement and the Credit Agreement and upon the instructions of Requisite
Lenders, and the Interest Rate Exchangers, by their acceptance of the benefits
of this Agreement and the other Loan Documents, hereby agree to be bound by
such instructions.
(b) Secured Party shall at all times be the same Person
that is Agent under the Credit Agreement. Written notice of resignation by
Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute notice of resignation as Secured Party under this Agreement; removal
of Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute removal as Secured Party under this Agreement; and appointment of a
successor Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute appointment of a successor Secured Party under this Agreement. Upon
the acceptance of any appointment as Agent under subsection 10.5A of the Credit
Agreement by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly (i) transfer to such
successor Secured Party all sums, securities and other items of Collateral held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Secured Party, the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it under this Agreement while it was Secured Party
hereunder.
SECTION 22. AMENDMENTS; ETC. No amendment or waiver of any
provision of this Agreement, or consent to any departure by Grantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by Secured Party (or, in the case of an amendment hereto, by Grantor and
Secured Party), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given; provided
that any amendment or waiver which adversely affects the interests of the
Interest Rate Exchangers but does not result in a similar adverse effect on the
interests of Lenders shall only be effective with the consent of the holders of
a majority of the Interest Rate Obligations given the benefit of the security
granted hereunder.
SECTION 23. NOTICES. Any notice or other communication
herein required or permitted to be given shall be in writing and may be
personally served, telexed or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile or telex,
(Credit Agreement)
302
or three Business Days after depositing it in the United States mail with
postage prepaid and properly addressed. For the purposes hereof, the address
of each party hereto shall be as set forth under such party's name on the
signature pages hereof or, as to either party, such other address as shall be
designated by such party in a written notice delivered to the other party
hereto.
SECTION 24. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
SECTION 25. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 26. HEADINGS. Section and subsection headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 27. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK AND EXCEPT AS SET FORTH IN THE IMMEDIATELY
FOLLOWING SENTENCE. NOTWITHSTANDING THE FOREGOING, ALL PROVISIONS OF THIS
AGREEMENT, TO THE EXTENT THEY RELATE TO DEPOSIT ACCOUNTS, SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. Unless otherwise defined
herein or in the Credit Agreement, terms used in Articles 8 and 9 of the
Uniform Commercial Code in the State of New York are used herein as therein
defined.
SECTION 28. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT GRANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
Grantor hereby agrees that service of all process in any such proceeding in any
such court may be made by registered or certified mail, return receipt
requested, to
(Credit Agreement)
303
Grantor at its address provided in Section 23, such service being hereby
acknowledged by Grantor to be sufficient for personal jurisdiction in any
action against Grantor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
Secured Party to bring proceedings against Grantor in the courts of any other
jurisdiction.
SECTION 29. WAIVER OF JURY TRIAL. GRANTOR AND SECURED PARTY
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Grantor and Secured
Party each acknowledge that this waiver is a material inducement for Grantor
and Secured Party to enter into a business relationship, that Grantor and
Secured Party have already relied on this waiver in entering into this
Agreement and that each will continue to rely on this waiver in their related
future dealings. Grantor and Secured Party further warrant and represent that
each has reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the
event of litigation, this Agreement may be filed as a written consent to a
trial by the court.
SECTION 30. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
[Remainder of page intentionally left blank]
(Credit Agreement)
304
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
DOMINICK'S FINER FOODS, INC., as Grantor
By: ____________________________________
Title:
Notice Address: Dominick's Finer Foods, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By: ___________________________________
Title:
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
(Credit Agreement)
305
SCHEDULE 1(A)
EXCLUDED EQUIPMENT
None.
(Credit Agreement)
306
SCHEDULE 1(B)
EXCLUDED INVENTORY
None.
(Credit Agreement)
307
SCHEDULE 1(D)
ASSIGNED AGREEMENTS
1. Stock Purchase Agreement
2. Tax Matters Agreement
3. Asset Transfer Agreement
4. Stock Exchange Agreement
Each of the agreements listed in this Schedule 1(d) shall have
the meanings assigned to such term in the Credit Agreement.
(Credit Agreement)
308
EXHIBIT XVI
[FORM OF COMPANY TRADEMARK SECURITY AGREEMENT]
TRADEMARK COLLATERAL SECURITY AGREEMENT
AND CONDITIONAL ASSIGNMENT
This TRADEMARK COLLATERAL SECURITY AGREEMENT AND CONDITIONAL
ASSIGNMENT (this "AGREEMENT") is dated as of November 1, 1996 and entered into
by and between DOMINICK'S FINER FOODS, INC., a Delaware corporation
("GRANTOR"), and BANKERS TRUST COMPANY, as agent for and representative of (in
such capacity herein called "SECURED PARTY") the financial institutions
("LENDERS") party to the Credit Agreement referred to below and the Interest
Rate Exchangers (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Lenders, Secured Party, Syndication Agent and
Arrangers have entered into a Credit Agreement dated as of November 1, 1996
(said Credit Agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined) with Dominick's Supermarkets, Inc., a Delaware
corporation, and Grantor, pursuant to which Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Grantor.
B. It is contemplated that Grantor may from time to time
enter into Interest Rate Agreements with one or more Lenders or their
Affiliates (collectively, the "INTEREST RATE EXCHANGERS") and Grantor desires
that its obligations under such agreements, including the obligation to make
payments in the event of early termination thereunder (all such obligations
being the "INTEREST RATE OBLIGATIONS"), be given the benefits of the security
interest created hereby.
C. Grantor owns and uses in its business, and will in
the future adopt and so use, various intangible assets, including trademarks,
service marks, designs, logos, indicia, tradenames, corporate names, company
names, business names, fictitious business names, trade styles and/or other
source and/or business identifiers and applications pertaining thereto
(collectively, the "TRADEMARKS").
D. Secured Party desires to become a secured creditor
with respect to and, under the circumstances described herein, an assignee of
all of the existing and future Trademarks, all registrations that have been or
may hereafter be issued or applied for thereon in the United States and any
state thereof (the "REGISTRATIONS"), all common law and other rights in and to
the Trademarks in the United States and any state thereof (the "TRADEMARK
RIGHTS"), all goodwill of Grantor's business symbolized by the Trademarks and
associated
309
therewith, including without limitation the documents and things described in
Section 1(b) (the "ASSOCIATED GOODWILL"), and all proceeds of the Trademarks,
the Registrations, the Trademark Rights and the Associated Goodwill, and
Grantor agrees to create a secured and protected interest in the Trademarks,
the Registrations, the Trademark Rights, the Associated Goodwill and all the
proceeds thereof as provided herein.
E. Pursuant to the Company Security Agreement, Grantor
has granted to Secured Party a lien on and security interest in, among other
assets, the machinery, equipment, inventory, accounts and contract rights
relating to the products and services sold or delivered under or in connection
with the Trademarks such that, upon the occurrence and during the continuation
of an Event of Default, Secured Party would be able to exercise its remedies
consistent with the Company Security Agreement, this Agreement and applicable
law to foreclose upon Grantor's business and use the Trademarks, the
Registrations and the Trademark Rights in conjunction with the continued
operation of such business, maintaining substantially the same product and
service specifications and quality as maintained by Grantor, and benefit from
the Associated Goodwill.
F. Upon the occurrence and during the continuation of an
Event of Default, and to permit Secured Party to operate Grantor's business
without interruption and to use the Trademarks, Registrations, Trademark Rights
and Associated Goodwill in conjunction therewith, Grantor is willing to grant
to Secured Party the conditional assignment of Grantor's entire right, title
and interest in and to the Collateral (as hereinafter defined) and to appoint
Secured Party as Grantor's attorney-in-law and attorney-in-fact to execute
documents and take actions to confirm said assignments.
G. It is a condition precedent to the initial extensions
of credit by Lenders under the Credit Agreement that Grantor shall have granted
the security interests and made the conditional assignment and undertaken the
obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises, in order to
induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Grantor hereby agrees with Secured
Party as follows:
SECTION 1. GRANT OF SECURITY. Grantor hereby grants to
Secured Party a security interest in, all of Grantor's right, title and
interest in and to the following, in each case whether now or hereafter
existing or in which Grantor now has or hereafter acquires an interest and
wherever the same may be located (the "COLLATERAL"):
(a) each of the Trademarks and rights and interests in
Trademarks which are presently, or in the future may be, owned, held (whether
pursuant to a license or otherwise) or used by Grantor, in whole or in part
(including, without limitation, the Trademarks specifically identified in
Schedule A annexed hereto, as the same may be amended pursuant hereto from time
to time), and including all Trademark Rights with respect thereto and all
federal and state Registrations therefor heretofore or hereafter granted or
applied for, the right
310
(but not the obligation) to register claims under any state or federal
trademark law and to apply for, renew and extend the Trademarks, Registrations
and Trademark Rights, the right (but not the obligation) to ▇▇▇ or bring
opposition or cancellation proceedings in the name of Grantor or in the name of
Secured Party or otherwise for past, present and future infringements of the
Trademarks, Registrations or Trademark Rights and all rights (but not
obligations) corresponding thereto in the United States, and the Associated
Goodwill, excluding, however, any of the foregoing which is not material to
Grantor pursuant to any license that expressly prohibits any such assignment,
transfer or conveyance; it being understood that the rights and interests
included herein shall include, without limitation, all rights and interests
pursuant to licensing or other contracts in favor of Grantor pertaining to the
Trademarks, Registrations or Trademark Rights presently or in the future owned
or used by third parties but, in the case of third parties which are not
Affiliates of Grantor, only to the extent permitted by such licensing or other
contracts and, if not so permitted, only with the consent of such third
parties;
(b) the following documents and things in Grantor's
possession, or subject to Grantor's right to possession, related to (Y) the
production, sale and delivery by Grantor, or by any Affiliate, licensee or
subcontractor of Grantor, of products or services sold or delivered by or under
the authority of Grantor in connection with the Trademarks, Registrations or
Trademark Rights (which products and services shall, for purposes of this
Agreement, be deemed to include, without limitation, products and services sold
or delivered pursuant to merchandising operations utilizing any Trademarks,
Registrations or Trademark Rights); or (Z) any retail or other merchandising
operations conducted under the name of or in connection with the Trademarks,
Registrations or Trademark Rights by Grantor or any Affiliate, licensee or
subcontractor of Grantor:
(i) all lists and ancillary documents that
identify and describe any of Grantor's customers, or those of its
Affiliates, licensees or subcontractors, for products sold and
services delivered under or in connection with the Trademarks or
Trademark Rights, including without limitation any lists and ancillary
documents that contain a customer's name and address, the name and
address of any of its warehouses, branches or other places of
business, the identity of the Person or Persons having the principal
responsibility on a customer's behalf for ordering products or
services of the kind supplied by Grantor, or the credit, payment,
discount, delivery or other sale terms applicable to such customer,
together with information setting forth the total purchases, by brand,
product, service, style, size or other criteria, and the patterns of
such purchases;
(ii) all product and service specification
documents and production and quality control manuals used in the
manufacture or delivery of products and services sold or delivered
under or in connection with the Trademarks or Trademark Rights;
(iii) all documents which reveal the name and
address of any sources of supply, and any terms of purchase and
delivery, for any and all materials, components and services used in
the production of products and services sold or delivered under or in
connection with the Trademarks or Trademark Rights; and
311
(iv) all documents constituting or concerning the
then current or proposed advertising and promotion by Grantor or its
Affiliates, licensees or subcontractors of products and services sold
or delivered under or in connection with the Trademarks or Trademark
Rights including, without limitation, all documents which reveal the
media used or to be used and the cost for all such advertising
conducted within the described period or planned for such products and
services;
(c) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related data processing
software that at any time evidence or contain information relating to any of
the Collateral or are otherwise necessary or helpful in the collection thereof
or realization thereupon; and
(d) all proceeds, products, rents and profits (including
without limitation license royalties and proceeds of infringement suits) of or
from any and all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is the
loss payee thereof), or any indemnity, warranty or guaranty, payable by reason
of loss or damage to or otherwise with respect to any of the foregoing
Collateral. For purposes of this Agreement, the term "PROCEEDS" includes
whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary.
SECTION 2. CONDITIONAL ASSIGNMENT. In addition to, and not
by way of limitation of, the granting of a security interest in the Collateral
pursuant to Section 1, Grantor hereby, effective upon the occurrence of an
Event of Default and upon written notice from Secured Party, grants, sells,
conveys, transfers, assigns and sets over to Secured Party, for its benefit and
the ratable benefit of Lenders and Interest Rate Exchangers, all of Grantor's
right, title and interest in and to the Collateral, including without
limitation Grantor's right, title and interest in and to the Trademarks
identified in Schedule A annexed hereto, the goodwill of the business
symbolized by said Trademarks and all Registrations relating to said
Trademarks, excluding, however, any of the Collateral which is not material to
Grantor that is held or used by Grantor pursuant to any license that expressly
prohibits any such assignment, transfer or conveyance.
SECTION 3. SECURITY FOR OBLIGATIONS. This Agreement secures,
and the Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of
all obligations and liabilities of every nature of Grantor now or hereafter
existing under or arising out of or in connection with the Credit Agreement,
the other Loan Documents and the Interest Rate Agreements entered into with any
Interest Rate Exchanger, and all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Grantor, would accrue on
such obligations), reimbursement of amounts drawn under Letters of Credit,
fees, expenses, indemnities or otherwise, whether voluntary or involuntary,
direct or indirect, absolute or contingent,
312
liquidated or unliquidated, whether or not jointly owed with others, and
whether or not from time to time decreased or extinguished and later increased,
created or incurred, and all or any portion of such obligations or liabilities
that are paid, to the extent all or any part of such payment is avoided or
recovered directly or indirectly from Secured Party, or any Lender or any
Interest Rate Exchanger as a preference, fraudulent transfer or otherwise (all
such obligations and liabilities being the "UNDERLYING DEBT"), and all
obligations of every nature of Grantor now or hereafter existing under this
Agreement (all such obligations of Grantor, together with the Underlying Debt,
being the "SECURED OBLIGATIONS").
SECTION 4. GRANTOR REMAINS LIABLE. Anything contained herein
to the contrary notwithstanding, (a) Grantor shall remain liable under any
contracts and agreements included in the Collateral, to the extent set forth
therein, to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by Secured
Party of any of its rights hereunder shall not release Grantor from any of its
duties or obligations under the contracts and agreements included in the
Collateral, and (c) Secured Party shall not have any obligation or liability
under any contracts and agreements included in the Collateral by reason of this
Agreement, nor shall Secured Party be obligated to perform any of the
obligations or duties of Grantor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
SECTION 5. REPRESENTATIONS AND WARRANTIES. Grantor
represents and warrants as follows:
(a) Description of Collateral. A true and complete list
of all Trademarks, Registrations and Trademark Rights owned, held (whether
pursuant to a license or otherwise) or used by Grantor, in whole or in part, as
of the date of this Agreement is set forth in Schedule A annexed hereto.
(b) Validity and Enforceability of Collateral. Each of
the Trademarks, Registrations and Trademark Rights that is material to the
financial condition or business of Grantor is valid, subsisting and enforceable
and, except as set forth in Schedule 5.17 to the Credit Agreement, Grantor is
not aware of any pending or threatened claim by any third party that any of
such Trademarks, Registrations or Trademark Rights is invalid or unenforceable
or that the use of any of the Trademarks, Registrations or Trademark Rights
violates the rights of any third person or of any basis for any such claim.
(c) Ownership of Collateral. Except for the security
interest and conditional assignment created by this Agreement, Permitted
Encumbrances and the licenses entered into in the ordinary course of business,
Grantor owns the Collateral free and clear of any Lien. Except such as may
have been filed in favor of Secured Party relating to this Agreement and
Permitted Encumbrances, (i) no effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any filing or recording office and (ii) no effective filing covering
all or any part of the Collateral is on file in the United States Patent and
Trademark Office.
313
(d) Office Locations; Other Names. As of the date
hereof, the chief place of business, the chief executive office and the office
where Grantor keeps its records regarding the Collateral is, and has been for
the four month period preceding the date hereof, located at the places
specified in Schedule B annexed hereto. As of the date hereof, Grantor has not
in the past five years done, and does not now do, business under any other name
(including any trade-name or fictitious business name) except under the names
specified in Schedule B annexed hereto.
(e) Governmental Authorizations. No authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for either (i) the grant by Grantor of
the security interest and conditional assignment granted hereby, (ii) the
execution, delivery or performance of this Agreement by Grantor, or (iii) the
perfection of or the exercise by Secured Party of its rights and remedies
hereunder in the United States (except as may have been taken by or at the
direction of Grantor).
(f) Perfection. This Agreement, together with the filing
of financing statements describing the Collateral with the Secretary of State
of the State of Illinois, and the recording of this Agreement with the United
States Patent and Trademark Office, which have been made or will be made
immediately following the Closing Date, creates a valid, perfected and, except
for Permitted Encumbrances, first priority security interest in the Collateral,
securing the payment of the Secured Obligations; provided that additional
actions may be required with respect to the perfection of proceeds of the
Collateral.
(g) Other Information. All information heretofore,
herein or hereafter supplied to Secured Party by or on behalf of Grantor with
respect to the Collateral is accurate and complete in all material respects.
SECTION 6. FURTHER ASSURANCES; NEW TRADEMARKS, REGISTRATIONS
AND TRADEMARK RIGHTS.
(a) Grantor agrees that from time to time, at the expense
of Grantor, Grantor will promptly execute and deliver all further instruments
and documents, and take all further action, that Secured Party may reasonably
deem to be necessary or desirable, or that Secured Party may reasonably
request, in order to perfect and protect any security interest or conditional
assignment granted or purported to be granted hereby or to enable Secured Party
to exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, Grantor will:
(i) at the reasonable request of Secured Party, ▇▇▇▇ conspicuously each of its
records pertaining to the Collateral with a legend, in form and substance
reasonably satisfactory to Secured Party, indicating that such Collateral is
subject to the security interest granted hereby, (ii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as Secured Party may reasonably deem to be necessary or
desirable, or as Secured Party may reasonably request, in order to perfect and
preserve the security interests granted or purported to be granted hereby,
(iii) at the reasonable request of Secured Party, use its reasonable best
efforts (other than the payment of money) to obtain any necessary consents of
third parties to
314
the grant and perfection of a security interest and assignment to Secured Party
with respect to any Collateral, (iv) at any reasonable time, upon reasonable
request by Secured Party, exhibit the Collateral to and allow inspection of the
Collateral by Secured Party, or persons designated by Secured Party, and (v) at
Secured Party's reasonable request, appear in and defend any action or
proceeding that may adversely affect Grantor's title to or Secured Party's
security interest in all or any material part of the Collateral.
(b) Grantor hereby authorizes Secured Party to file one
or more financing or continuation statements, and amendments thereto, relative
to all or any part of the Collateral without the signature of Grantor where
permitted by law. Grantor agrees that a carbon, photographic or other
reproduction of this Agreement or of a financing statement signed by Grantor
shall be sufficient as a financing statement and may be filed as a financing
statement in any and all jurisdictions.
(c) Grantor hereby authorizes Secured Party to modify
this Agreement without obtaining Grantor's approval of or signature to such
modification by amending Schedule A annexed hereto to include reference to any
right, title or interest in any existing Trademark, Registration or Trademark
Right or any Trademark, Registration or Trademark Right acquired or developed
by Grantor after the execution hereof (excluding, however, any of the foregoing
which is not material to Grantor and which is held or used by Grantor pursuant
to any license that expressly prohibits any such assignment, transfer or
conveyance) or to delete any reference to any right, title or interest in any
Trademark, Registration or Trademark Right in which Grantor no longer has or
claims any right, title or interest.
(d) Grantor will furnish to Secured Party from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail.
(e) If Grantor shall obtain rights to any new Trademarks,
Registrations or Trademark Rights, the provisions of this Agreement shall
automatically apply thereto. Grantor shall promptly notify Secured Party in
writing of any rights to any new Trademarks or Trademark Rights acquired by
Grantor after the date hereof and of any Registrations issued by the United
States or applications for Registration made in the United States after the
date hereof. Concurrently with the filing of an application for Registration in
the United States for any Trademark, Grantor shall execute, deliver and record
in all places where this Agreement is recorded an appropriate Trademark
Collateral Security Agreement and Conditional Assignment, substantially in the
form hereof, with appropriate insertions, or an amendment to this Agreement, in
form and substance reasonably satisfactory to Secured Party, pursuant to which
Grantor shall grant a security interest and conditional assignment to the
extent of its interest in such Registration as provided herein to Secured Party
unless so doing would, in the reasonable judgment of Grantor, after due
inquiry, result in the grant of a Registration in the name of Secured Party, in
which event Grantor shall give written notice to Secured Party as soon as
reasonably practicable and the filing shall instead be undertaken as soon as
practicable but in no case later than immediately following the grant of the
Registration.
315
SECTION 7. CERTAIN COVENANTS OF GRANTOR. Grantor shall:
(a) not use or permit any Collateral to be used
unlawfully or in violation of any provision of this Agreement or any applicable
statute, regulation or ordinance or any policy of insurance covering the
Collateral;
(b) notify Secured Party of any change in Grantor's name,
identity or corporate structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of
any change in Grantor's chief place of business or chief executive office or
the office where Grantor keeps its records regarding the Collateral;
(d) pay promptly when due all material property and other
taxes, assessments and governmental charges or levies imposed upon, and all
material claims (including claims for labor, materials and supplies) against,
the Collateral, except to the extent the validity thereof is being contested in
good faith; provided that Grantor shall in any event pay such taxes,
assessments, charges, levies or claims not later than five days prior to the
date of any proposed sale under any judgement, writ or warrant of attachment
entered or filed against Grantor or any of the Collateral as a result of the
failure to make such payment;
(e) not sell, assign (by operation of law or otherwise)
or otherwise dispose of any of the Collateral, except as permitted by the
Credit Agreement;
(f) except for the security interest and conditional
assignment created by this Agreement and Permitted Encumbrances, not create or
suffer to exist any Lien upon or with respect to any of the Collateral to
secure the indebtedness or other obligations of any Person;
(g) diligently keep reasonable records respecting the
Collateral and at all times keep at least one complete set of its records
concerning substantially all of the Trademarks, Registrations and Trademark
Rights at its chief executive office or principal place of business;
(h) not permit the inclusion in any contract to which it
becomes a party of any provision that could reasonably be expected to impair or
prevent the creation of a security interest in, or the assignment of, Grantor's
rights and interests in any property included within the definitions of any
Trademarks, Registrations, Trademark Rights and Associated Goodwill acquired
under such contracts;
(i) take all steps reasonably necessary to protect the
secrecy of all trade secrets relating to the products and services sold or
delivered under or in connection with the Trademarks and Trademark Rights,
including without limitation entering into confidentiality agreements with
employees and labeling and restricting access to secret information and
documents;
316
(j) use proper statutory notice in connection with its
use of each of the Trademarks, Registrations and Trademark Rights;
(k) use consistent standards of high quality (which may
be consistent with Grantor's past practices) in the manufacture, sale and
delivery of products and services sold or delivered under or in connection with
the Trademarks, Registrations and Trademark Rights, including, to the extent
applicable, in the operation and maintenance of its retail stores and other
merchandising operations; and
(l) upon any officer of Grantor obtaining knowledge
thereof, promptly notify Secured Party in writing of any event that may
materially and adversely affect the value of the Collateral or any material
portion thereof, the ability of Grantor or Secured Party to dispose of the
Collateral or any material portion thereof, or the rights and remedies of
Secured Party in relation thereto, including without limitation the levy of any
legal process against the Collateral or any material portion thereof.
SECTION 8. CERTAIN INSPECTION RIGHTS. Grantor hereby grants
to Secured Party and its employees, representatives and agents the right to
visit Grantor's and any of its Affiliate's or subcontractor's plants,
facilities and other places of business that are utilized in connection with
the manufacture, production, inspection, storage or sale of products and
services sold or delivered under any of the Trademarks, Registrations or
Trademark Rights, and to inspect the quality control and all other records
relating thereto upon reasonable notice to Grantor and as often as may be
reasonably requested; provided that, in the case of subcontractors' and
Affiliates' plants and facilities, Secured Party's rights granted under this
Section 8 shall exist only to the extent permitted by Grantor's subcontracting
agreements with each such subcontractor and Grantor's arrangements with each
such Affiliate; and provided further that Grantor will use its reasonable
efforts to secure such inspection and visitation rights for Secured Party in
all such subcontracting agreements to which Grantor hereafter becomes a party
and in all such arrangements with Affiliates.
SECTION 9. AMOUNTS PAYABLE IN RESPECT OF THE COLLATERAL.
Except as otherwise provided in this Section 9, Grantor shall continue to
collect, at its own expense, all amounts due or to become due to Grantor in
respect of the Collateral or any portion thereof. In connection with such
collections, Grantor may take (and, following the occurrence and continuation
of an Event of Default, at Secured Party's direction, shall take) such action
as Grantor or, following the occurrence and continuation of an Event of
Default, Secured Party may deem necessary or advisable to enforce collection of
such amounts; provided, however, that Secured Party shall have the right at any
time, upon the occurrence and during the continuation of an Event of Default or
a Potential Event of Default and upon written notice to Grantor of its
intention to do so, to notify the obligors with respect to any such amounts of
the existence of the security interest created, and the conditional assignment
effected hereby, and to direct such obligors to make payment of all such
amounts directly to Secured Party, and, upon such notification and at the
expense of Grantor, to enforce collection of any such amounts and to adjust,
settle or compromise the amount or payment thereof, in the same manner and to
the same extent as Grantor might have done. After receipt by Grantor of the
notice from
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Secured Party referred to in the proviso to the preceding sentence, (i) all
amounts and proceeds (including checks and other instruments) received by
Grantor in respect of amounts due to Grantor in respect of the Collateral or
any portion thereof shall be received in trust for the benefit of Secured Party
hereunder, shall be segregated from other funds of Grantor and shall be
forthwith paid over or delivered to Secured Party in the same form as so
received (with any necessary endorsement) to be held as cash Collateral and
applied as provided by Section 17, and (ii) Grantor shall not adjust, settle or
compromise the amount or payment of any such amount or release wholly or partly
any obligor with respect thereto or allow any credit or discount thereon.
SECTION 10. TRADEMARK APPLICATIONS AND LITIGATION.
(a) Grantor shall have the duty diligently, through
counsel reasonably acceptable to Secured Party, to prosecute any trademark
application relating to any of the Trademarks specifically identified in
Schedule A annexed hereto that is pending as of the date of this Agreement and
is material to Grantor's business, and to file and prosecute opposition and
cancellation proceedings, renew United States Registrations and do any and all
acts which are necessary or desirable to preserve and maintain all rights in
all Trademarks, Registrations and Trademark Rights that are material to
Grantor's business. Any expenses incurred in connection therewith shall be
borne solely by Grantor.
(b) Except as provided in Section 10(d) and
notwithstanding Section 2, Grantor shall have the right to commence and
prosecute in its own name, as real party in interest, for its own benefit and
at its own expense, such suits, proceedings or other actions for infringement,
unfair competition, dilution or other damage as are in its reasonable business
judgment necessary to protect the Collateral. Secured Party shall provide, at
Grantor's expense, all reasonable and necessary cooperation in connection with
any such suit, proceeding or action including, without limitation, joining as a
necessary party.
(c) Grantor shall promptly, following its becoming aware
thereof, notify Secured Party of the institution of, or of any adverse
determination in, any proceeding (whether in the United States Patent and
Trademark Office or any federal, state, local or foreign court) described in
Section 10(a) or 10(b) or regarding Grantor's claim of ownership in or right to
use any of the Trademarks, Registrations or Trademark Rights that are material
to Grantor's business, its right to register the same, or its right to keep and
maintain such Registration. Grantor shall provide to Secured Party any
information with respect thereto reasonably requested by Secured Party.
(d) Anything contained herein to the contrary
notwithstanding, upon the occurrence and during the continuation of an Event of
Default, Secured Party shall have the right (but not the obligation) to bring
suit, in the name of Grantor, Secured Party or otherwise, to enforce any
Trademark, Registration and/or Trademark Right that is material to Grantor's
business, Associated Goodwill and any material license thereunder, in which
event Grantor shall, at the reasonable request of Secured Party, do any and all
lawful acts and execute any and all documents reasonably required by Secured
Party in aid of such enforcement and
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Grantor shall promptly, upon demand, reimburse and indemnify Secured Party as
provided in Section 18 in connection with the exercise of its rights under this
Section 10. To the extent that Secured Party shall elect not to bring suit to
enforce any Trademark, Registration, Trademark Right, Associated Goodwill or
any license thereunder as provided in this Section 10(d), Grantor agrees to use
all reasonable measures, whether by action, suit, proceeding or otherwise, to
prevent the infringement of any of the Trademarks, Registrations, Trademark
Rights or Associated Goodwill that are material to Grantor's business by others
and for that purpose agrees to diligently maintain any action, suit or
proceeding against any Person so infringing necessary to prevent such
infringement.
SECTION 11. NON-DISTURBANCE AGREEMENTS, ETC. If and to the
extent that Grantor is permitted to license any Collateral which is material to
the business of Grantor, Secured Party shall enter into a non-disturbance
agreement or other similar arrangement, at Grantor's request and expense, with
Grantor and any licensee of any Collateral permitted hereunder in form and
substance satisfactory to Secured Party pursuant to which (a) Secured Party
shall agree not to disturb or interfere with such licensee's rights under its
license agreement with Grantor so long as such licensee is not in default
thereunder and (b) such licensee shall acknowledge and agree that the
Collateral licensed to it is subject to the security interest and conditional
assignment created in favor of Secured Party and the other terms of this
Agreement.
SECTION 12. REASSIGNMENT OF COLLATERAL. If (a) an Event of
Default shall have occurred and, by reason of cure, waiver, modification,
amendment or otherwise, no longer be continuing, (b) no other Event of Default
shall have occurred and be continuing, (c) an assignment to Secured Party of
any rights, title and interests in and to the Collateral shall have been
previously made and shall have become absolute and effective pursuant to
Section 2, Section 13(f) or Section 16(b), and (d) the Secured Obligations
shall not have become immediately due and payable, upon the written request of
Grantor and the written consent of Secured Party, Secured Party shall promptly
execute and deliver to Grantor such assignments as may be necessary to reassign
to Grantor any such rights, title and interests as may have been assigned to
Secured Party as aforesaid, subject to any disposition thereof that may have
been made by Secured Party pursuant hereto; provided that, after giving effect
to such reassignment, Secured Party's security interest and conditional
assignment granted pursuant to Section 1 and Section 2, as well as all other
rights and remedies of Secured Party granted hereunder, shall continue to be in
full force and effect; and provided, further that the rights, title and
interests so reassigned shall be free and clear of all Liens other than Liens
(if any) encumbering such rights, title and interest at the time of their
assignment to Secured Party and Permitted Encumbrances.
SECTION 13. SECURED PARTY APPOINTED ATTORNEY-IN-FACT.
Grantor hereby irrevocably appoints Secured Party as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Secured Party or otherwise, from time to time in Secured
Party's discretion to take any action and to execute any instrument that
Secured Party may deem necessary or advisable to accomplish the purposes of
this Agreement, including without limitation:
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(a) to endorse Grantor's name on all applications,
documents, papers and instruments necessary for Secured Party in the use or
maintenance of the Collateral;
(b) to ask for, demand, collect, ▇▇▇ for, recover,
compound, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral;
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (b) above;
(d) to file any claims or take any action or institute
any proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or placed upon
or threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Secured Party in
its sole discretion, any such payments made by Secured Party to become
obligations of Grantor to Secured Party, due and payable immediately without
demand; and
(f) (i) to execute and deliver any of the assignments or
documents requested by Secured Party pursuant to Section 16(b), (ii) to grant
or issue an exclusive or non-exclusive license to the Collateral or any portion
thereof to any Person, and (iii) otherwise generally to sell, transfer, pledge,
make any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though Secured Party were the absolute owner thereof
for all purposes, and to do, at Secured Party's option and Grantor's expense,
at any time or from time to time, all acts and things that Secured Party
reasonably deems necessary to protect, preserve or realize upon the Collateral
and Secured Party's security interest therein in order to effect the intent of
this Agreement, all as fully and effectively as Grantor might do.
Secured Party shall not exercise any powers granted pursuant
to this appointment as attorney-in-fact at any time (i) that Grantor is fully
performing its obligations hereunder and (ii) that no Event of Default has
occurred and is then continuing. This appointment as attorney-in-fact shall
terminate upon the termination of this Agreement pursuant to Section 19.
SECTION 14. SECURED PARTY MAY PERFORM. If Grantor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party
incurred in connection therewith shall be payable by Grantor under Section 18.
SECTION 15. STANDARD OF CARE. The powers conferred on
Secured Party hereunder are solely to protect its interest in the Collateral
and shall not impose any duty upon it to exercise any such powers. Except for
the exercise of reasonable care in the custody of any Collateral in its
possession and the accounting for moneys actually received by it
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hereunder, Secured Party shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral. Secured Party shall be deemed to
have exercised reasonable care in the custody and preservation of Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which Secured Party accords its own property.
SECTION 16. REMEDIES. If any Event of Default shall have
occurred and be continuing:
(a) Secured Party may exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the Uniform Commercial Code as in effect in any relevant
jurisdiction (the "CODE") (whether or not the Code applies to the affected
Collateral), and also may (i) require Grantor to, and Grantor hereby agrees
that it will at its expense and upon request of Secured Party forthwith,
assemble all or part of the Collateral as directed by Secured Party and make it
available to Secured Party at a place or places to be designated by Secured
Party that is reasonably convenient to both parties, (ii) enter onto the
property where any Collateral is located and take possession thereof with or
without judicial process, (iii) prior to the disposition of the Collateral,
store the Collateral or otherwise prepare the Collateral for disposition in any
manner to the extent Secured Party deems appropriate, (iv) take possession of
Grantor's premises or place custodians in exclusive control thereof, remain on
such premises and use the same for the purpose of taking any actions described
in the preceding clause (iii) and collecting any Secured Obligation, (v)
exercise any and all rights and remedies of Grantor under or in connection with
the contracts related to the Collateral or otherwise in respect of the
Collateral, including without limitation any and all rights of Grantor to
demand or otherwise require payment of any amount under, or performance of any
provision of, such contracts, and (vi) without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any of Secured Party's offices or elsewhere, for cash, on
credit or for future delivery, at such time or times and at such price or
prices and upon such other terms as Secured Party may deem commercially
reasonable. Secured Party or any Lender may be the purchaser of any or all of
the Collateral at any such sale and Secured Party, as agent for and
representative of Lenders and Interest Rate Exchangers (but not any Lender,
Lenders, Interest Rate Exchanger or Interest Rate Exchangers in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing), shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Collateral
payable by Secured Party at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
Grantor, and Grantor hereby waives (to the extent permitted by applicable law)
all rights of redemption, stay and/or appraisal which it now has or may at any
time in the future have under any rule of law or statute now existing or
hereafter enacted. Grantor agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to Grantor of the time and place of
any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. Secured Party shall not be obligated to
make any sale of Collateral regardless of notice of sale having been
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given. Secured Party may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. Grantor hereby waives any claims against Secured Party arising by
reason of the fact that the price at which any Collateral may have been sold at
such a private sale was less than the price which might have been obtained at a
public sale, even if Secured Party accepts the first offer received and does
not offer such Collateral to more than one offeree; provided that such sale was
conducted in a commercially reasonable manner. If the proceeds of any sale or
other disposition of the Collateral are insufficient to pay all the Secured
Obligations, Grantor shall be liable for the deficiency and the fees of any
attorneys employed by Secured Party to collect such deficiency.
(b) Upon written demand from Secured Party, Grantor shall
execute and deliver to Secured Party an assignment or assignments of the
Trademarks, Registrations, Trademark Rights and the Associated Goodwill and
such other documents as are necessary or appropriate to carry out the intent
and purposes of this Agreement; provided that the failure of Grantor to comply
with such demand will not impair or affect the validity of the conditional
assignment effected by Section 2 or its effectiveness upon notice by Secured
Party as specified in Section 2. Grantor agrees that such an assignment
(including without limitation the conditional assignment effected by Section 2)
and/or recording shall be applied to reduce the Secured Obligations outstanding
only to the extent that Secured Party (or any Lender or Interest Rate
Exchanger) receives cash proceeds in respect of the sale of, or other
realization upon, the Collateral.
(c) Within five Business Days after written notice from
Secured Party, Grantor shall make available to Secured Party, to the extent
within Grantor's power and authority, such personnel in Grantor's employ on the
date of such Event of Default as Secured Party may reasonably designate, by
name, title or job responsibility, to permit Grantor to continue, directly or
indirectly, to produce, advertise and sell the products and services sold or
delivered by Grantor under or in connection with the Trademarks, Registrations
and Trademark Rights, such persons to be available to perform their prior
functions on Secured Party's behalf and to be compensated by Secured Party at
Grantor's expense on a per diem, pro-rata basis consistent with the salary and
benefit structure applicable to each as of the date of such Event of Default.
(d) Notwithstanding anything in this Agreement to the
contrary, Secured Party shall exercise, or shall refrain from exercising, any
remedy provided for in Section 16(a) in accordance with the instructions of
Requisite Lenders, and the Interest Rate Exchangers, by their acceptance of the
benefits of this Agreement and the other Loan Documents, hereby agree to be
bound by such instructions. The sole rights of the Interest Rate Exchangers
under this Agreement shall be to be secured by the Collateral and to receive
the payments provided for in Section 17.
SECTION 17. APPLICATION OF PROCEEDS. Except as expressly
provided elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any sale of, collection from, or other realization upon all or any
part of the Collateral may, in the discretion
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of Secured Party, be held by Secured Party as Collateral for, and/or then, or
at any other time thereafter, applied in full or in part by Secured Party
against, the Secured Obligations in the following order of priority:
FIRST: To the payment of all reasonable costs and expenses of
such sale, collection or other realization, including reasonable
compensation to Secured Party and its agents and counsel, and all
other reasonable expenses, liabilities and advances made or incurred
by Secured Party in connection therewith, and all amounts for which
Secured Party is entitled to indemnification hereunder and all
reasonable advances made by Secured Party hereunder for the account of
Grantor, and to the payment of all reasonable costs and expenses paid
or incurred by Secured Party in connection with the exercise of any
right or remedy hereunder, all in accordance with Section 18;
SECOND: To the payment of all other Secured Obligations (for
the ratable benefit of the holders thereof) then due and payable; and
THIRD: To the payment to or upon the order of Grantor, or to
whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
SECTION 18. INDEMNITY AND EXPENSES.
(a) Grantor agrees to indemnify Secured Party, each
Lender and each Interest Rate Exchanger, from and against any and all claims,
losses and liabilities in any way relating to, growing out of or resulting from
this Agreement and the transactions contemplated hereby (including, without
limitation, enforcement of this Agreement), except to the extent such claims,
losses or liabilities result solely from Secured Party's, such Lender's or such
Interest Rate Exchanger's gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
(b) Grantor shall pay to Secured Party upon demand the
amount of any and all reasonable costs and expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that Secured
Party may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the
failure by Grantor to perform or observe any of the provisions hereof.
SECTION 19. CONTINUING SECURITY INTEREST AND CONDITIONAL
ASSIGNMENT; TRANSFER OF LOANS. This Agreement shall create a continuing
security interest in, and conditional assignment of, the Collateral and shall
(a) remain in full force and effect until (i) the indefeasible payment in full
of the Secured Obligations (other than Obligations which are contingent and
unliquidated and not due and owing on such date and which pursuant to the
provisions of the Credit Agreement, Interest Rate Agreements, Letters of Credit
or the Loan Documents survive the termination of the Credit Agreement, the
repayment of the Secured
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Obligations, the termination of the Commitments, the expiration or cancellation
of all Letters of Credit or the termination, expiration or cancellation of all
Interest Rate Agreements), the cancellation or termination of the Commitments,
the cancellation or expiration of all outstanding Letters of Credit and the
termination, expiration or cancellation of all Interest Rate Agreements, or
(ii) the release of the Liens on the Collateral by Secured Party in writing in
accordance with the terms of subsection 6.11 of the Credit Agreement, (b) be
binding upon Grantor, its successors and assigns, and (c) inure, together with
the rights and remedies of Secured Party hereunder, to the benefit of Secured
Party and its successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), but subject to the provisions of
subsection 11.1 of the Credit Agreement, any Lender may assign or otherwise
transfer any Loans held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
Lenders herein or otherwise and any Interest Rate Exchanger may assign or
otherwise transfer any Interest Rate Obligations owing to it to another Lender
or an Affiliate of such Lender or another Lender, and such other Lender or
Affiliate shall thereupon become vested with all the benefits in respect
thereof granted to such Interest Rate Exchanger herein or otherwise. Upon (i)
the indefeasible payment in full of all Secured Obligations (other than
Obligations which are contingent and unliquidated and not due and owing on such
date and which pursuant to the provisions of the Credit Agreement, Interest
Rate Agreements, Letters of Credit or the Loan Documents survive the
termination of the Credit Agreement, the repayment of the Secured Obligations,
the termination of the Commitments, the expiration or cancellation of all
Letters of Credit or the termination, expiration or cancellation of all
Interest Rate Agreements), the cancellation or termination of the Commitments,
the cancellation or expiration of all outstanding Letters of Credit and the
termination, expiration or cancellation of all Interest Rate Agreements, or
(ii) the release of the Liens on the Collateral by Secured Party in writing in
accordance with the terms of subsection 6.11 of the Credit Agreement, the
security interest and conditional assignment granted hereby shall terminate and
all rights to the Collateral shall revert to Grantor. Upon any such
termination Secured Party will, at Grantor's expense, execute and deliver to
Grantor such documents as Grantor shall reasonably request to evidence such
termination.
SECTION 20. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders and, by their acceptance of the benefits of this
Agreement and the other Loan Documents, by each Interest Rate Exchanger.
Secured Party shall be obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from exercising any rights,
and to take or refrain from taking any action (including, without limitation,
the release or substitution of Collateral), solely in accordance with this
Agreement and the Credit Agreement and upon the instructions of Requisite
Lenders, and the Interest Rate Exchangers, by their acceptance of the benefits
of this Agreement and the other Loan Documents, hereby agree to be bound by
such instructions.
(b) Secured Party shall at all times be the same Person
that is Agent under the Credit Agreement. Written notice of resignation by
Agent pursuant to subsection 10.5A
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of the Credit Agreement shall also constitute notice of resignation as Secured
Party under this Agreement; removal of Agent pursuant to subsection 10.5A of
the Credit Agreement shall also constitute removal as Secured Party under this
Agreement; and appointment of a successor Agent pursuant to subsection 10.5A of
the Credit Agreement shall also constitute appointment of a successor Secured
Party under this Agreement. Upon the acceptance of any appointment as Agent
under subsection 10.5A of the Credit Agreement by a successor Agent, that
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Secured Party
under this Agreement, and the retiring or removed Secured Party under this
Agreement shall promptly (i) transfer to such successor Secured Party all sums,
securities and other items of Collateral held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Agreement,
and (ii) execute and deliver to such successor Secured Party such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Secured Party
of the security interests created hereunder, whereupon such retiring or removed
Secured Party shall be discharged from its duties and obligations under this
Agreement. After any retiring or removed Agent's resignation or removal
hereunder as Secured Party, the provisions of this Agreement shall inure to its
benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Secured Party hereunder.
SECTION 21. AMENDMENTS; ETC. No amendment or waiver of any
provision of this Agreement, or consent to any departure by Grantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by Secured Party (or, in the case of an amendment hereto, by Grantor and
Secured Party), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given; provided
that any amendment or waiver which adversely affects the interests of the
Interest Rate Exchangers but does not result in a similar adverse effect on the
interests of Lenders shall only be effective with the consent of the holders of
a majority of the Interest Rate Obligations given the benefit of the security
granted hereunder.
SECTION 22. NOTICES. Any notice or other communication
herein required or permitted to be given shall be in writing and may be
personally served, telexed or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage
prepaid and properly addressed. For the purposes hereof, the address of each
party hereto shall be as set forth under such party's name on the signature
pages hereof or, as to either party, such other address as shall be designated
by such party in a written notice delivered to the other party hereto.
SECTION 23. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other power,
right or
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privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
SECTION 24. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 25. HEADINGS. Section and subsection headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 26. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein or in the
Credit Agreement, terms used in Articles 8 and 9 of the Uniform Commercial Code
in the State of New York are used herein as therein defined.
SECTION 27. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT GRANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
Grantor hereby agrees that service of all process in any such proceeding in any
such court may be made by registered or certified mail, return receipt
requested, to Grantor at its address provided in Section 22, such service being
hereby acknowledged by Grantor to be sufficient for personal jurisdiction in
any action against Grantor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
Secured Party to bring proceedings against Grantor in the courts of any other
jurisdiction.
SECTION 28. WAIVER OF JURY TRIAL. GRANTOR AND SECURED PARTY
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this
waiver is intended to be all-encompassing of any and all
326
disputes that may be filed in any court and that relate to the subject matter
of this transaction, including without limitation contract claims, tort claims,
breach of duty claims, and all other common law and statutory claims. Grantor
and Secured Party each acknowledge that this waiver is a material inducement
for Grantor and Secured Party to enter into a business relationship, that
Grantor and Secured Party have already relied on this waiver in entering into
this Agreement and that each will continue to rely on this waiver in their
related future dealings. Grantor and Secured Party further warrant and
represent that each has reviewed this waiver with its legal counsel, and that
each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
SECTION 29. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
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IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
DOMINICK'S FINER FOODS, INC., as
Grantor
By:
--------------------------------
Title:
-----------------------------
Notice Address: Dominick's Finer Foods, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By:
--------------------------------
Title:
-----------------------------
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
328
SCHEDULE A
TO
TRADEMARK COLLATERAL
SECURITY AGREEMENT AND
CONDITIONAL ASSIGNMENT
1.
UNITED STATES
REGISTERED TRADEMARK REGISTRATION REGISTRATION
OWNER DESCRIPTION NUMBER DATE
---------- ------------- ------------ ------------
Dominick's Finer Foods, Inc. Dominick's 1,037,040 03/30/76
Dominick's Finer Foods, Inc. Dominick's Finer Foods 1,048,722 09/21/76
Dominick's Finer Foods, Inc. Dominick's 1,366,046 10/15/85
Dominick's Finer Foods, Inc. Neptune's Cove 1,452,601 08/11/87
Dominick's Finer Foods, Inc. Dominick's (Color) 1,545,838 06/27/89
Dominick's Finer Foods, Inc. Dominick's (Black & White) 1,543,099 06/06/89
Dominick's Finer Foods, Inc. Dominick's and Design 1,735,977 12/01/92
Dominick's Finer Foods, Inc. Omni Superstore Published
Dominick's Finer Foods, Inc. Lunch Combinations Pending
Dominick's Finer Foods, Inc. For People Who Know Their Food! Pending
Dominick's Finer Foods, Inc. Neptune's Cove & Design 1,451,443 08/04/87
Dominick's Finer Foods, Inc. Fresh Report Pending
329
2.
ILLINOIS
REGISTERED TRADEMARK REGISTRATION REGISTRATION
OWNER DESCRIPTION NUMBER DATE
---------- ------------- ------------ ------------
Dominick's Finer Foods, Inc. Dominick's 35492 11/20/61
Dominick's Finer Foods, Inc. ▇▇▇▇▇ ▇▇▇▇▇▇ 41520 12/28/71
Dominick's Finer Foods, Inc. Naturally Sweet 51712 07/23/82
Dominick's Finer Foods, Inc. Neptune's Cove 52281 12/14/82
Dominick's Finer Foods, Inc. Elite 55663 11/14/84
Dominick's Finer Foods, Inc. OMNI Superstore (Misc.) 63843 02/02/89
Dominick's Finer Foods, Inc. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (▇▇▇ & ▇▇▇) ▇▇▇▇▇ 02/02/89
Dominick's Finer Foods, Inc. Dominick's Drug (Ads & Bus) 64089 03/15/89
Dominick's Finer Foods, Inc. Dominick's Drug (Misc.) 64090 03/15/89
Dominick's Finer Foods, Inc. Sample Station (Misc.) 64334 04/18/89
Dominick's Finer Foods, Inc. Sample Station (Ads & Bus) 64338 04/18/89
Dominick's Finer Foods, Inc. Frozen Yogurt (Food) 66615 05/22/90
Dominick's Finer Foods, Inc. The Bookstop (Misc.) 67946 01/23/91
Dominick's Finer Foods, Inc. The Bookstop (Misc.) 67947 01/23/91
Dominick's Finer Foods, Inc. Lean Cut by Dominick's & Design 70119 03/23/91
(Ads & Bus)
Dominick's Finer Foods, Inc. Lean Cut by Dominick's & Design 70120 03/23/92
(Misc.)
Dominick's Finer Foods, Inc. Step Saver by Dominick's & Design 70116 03/23/92
(Misc.)
Dominick's Finer Foods, Inc. Step Saver by Dominick's & Design 70115 03/23/92
(Ads & Bus)
Dominick's Finer Foods, Inc. Traditional by Dominick's & Design 70114 03/23/92
(Misc.)
Dominick's Finer Foods, Inc. Traditional by Dominick's & Design 70113 03/23/92
(Ads & Bus)
Dominick's Finer Foods, Inc. Maximum Value Pricing Not 70122 03/23/92
for Members Only (Misc.)
Dominick's Finer Foods, Inc. Maximum Value Pricing Not 70123 03/23/92
for Members Only (Ads & Bus)
Dominick's Finer Foods, Inc. Custom Cut by Dominick's & Design 70118 03/23/92
(Misc.)
Dominick's Finer Foods, Inc. Custom Cut by Dominick's & 70117 03/23/92
Design (Ads & Bus)
Dominick's Finer Foods, Inc. Lower Prices Overall & Design 70372 04/24/92
(Misc.)
Dominick's Finer Foods, Inc. Lower Prices Overall & Design 70371 04/24/92
(Ads & Bus)
Dominick's Finer Foods, Inc. Dominick's Fit 'n Trim 74019 02/07/94
Skinless Fresh Chicken All Natural (Food)
Dominick's Finer Foods, Inc. Dominick's Fresh Store (Ads & Bus) 74194 03/14/94
Dominick's Finer Foods, Inc. Dominick's Fresh Store (Misc.) 74195 03/14/94
330
3. "Heritage House" trademark, licensed to Dominick's Finer Foods, Inc.
pursuant to that certain Trademark License Agreement, dated as of December 29,
1981, between Dominick's Finer Foods, Inc. and ▇▇▇▇▇▇ Foods, Inc., an Ohio
corporation (▇▇▇▇▇▇ Foods, Inc. subsequently assigned its rights in such
trademark to Kroger Company).
331
SCHEDULE B
TO
TRADEMARK COLLATERAL
SECURITY AGREEMENT AND
CONDITIONAL ASSIGNMENT
Office Locations: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(office for Omni Superstores operations)
Other Names: Dominick's Finer Foods
Omni Superstores
332
EXHIBIT XVII
[FORM OF SUBSIDIARY GUARANTY]
SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY (this "GUARANTY") is entered into as
of November 1, 1996 by the undersigned (each a "GUARANTOR" and collectively,
"GUARANTORS") in favor of and for the benefit of BANKERS TRUST COMPANY, as
agent for and representative of (in such capacity herein called "AGENT") the
financial institutions ("LENDERS") party to the Credit Agreement referred to
below and Interest Rate Exchangers (as hereinafter defined) (Lenders and
Interest Rate Exchangers are each referred to herein as a "GUARANTIED PARTY"
and collectively as "GUARANTIED PARTIES").
RECITALS
▇. ▇▇▇▇▇▇▇▇'▇ Supermarkets, Inc., a Delaware corporation,
and Dominick's Finer Foods, Inc., a Delaware corporation ("COMPANY"), have
entered into that certain Credit Agreement dated as of November 1, 1996 with
Lenders, Agent, Syndication Agent and Arrangers (said Credit Agreement, as it
may hereafter be amended, amended and restated, supplemented or otherwise
modified from time to time, being the "CREDIT AGREEMENT"; capitalized terms
defined therein and not otherwise defined herein being used herein as therein
defined).
B. It is contemplated that Company may from time to time
enter into one or more Interest Rate Agreements ("INTEREST RATE AGREEMENTS")
with one or more Lenders or their respective Affiliates (such Lender or Lenders
or their respective affiliates collectively being the "INTEREST RATE
EXCHANGERS"), as permitted under subsection 7.4(iii) of the Credit Agreement
and, the Interest Rate Obligations (as hereinafter defined) are being incurred
in part for and will inure to the benefit of Guarantors, and such Guarantors
desire to guaranty all of the Interest Rate Obligations.
C. A portion of the proceeds of the Loans may be advanced
to Guarantors and thus the Guarantied Obligations (as hereinafter defined) will
inure to the benefit of Guarantors (which benefits are hereby acknowledged).
D. It is a condition precedent to the making of the
initial Loans under the Credit Agreement that Guarantors shall have executed
and delivered this Guaranty.
E. Guarantors are willing irrevocably and unconditionally
to guarantee, in accordance with the provisions of this Guaranty, the Credit
Agreement Obligations and the Interest Rate Obligations of Company.
NOW, THEREFORE, based upon the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to induce Lenders, Agent, Syndication Agent and
Arrangers to enter into the Credit Agreement and to make the Loans thereunder,
Guarantors hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS. As used in this Guaranty, the following
terms shall have the following meanings unless the context otherwise requires:
"CREDIT AGREEMENT OBLIGATIONS" has the meaning assigned to that
term in subsection 2.1(a).
"GUARANTIED OBLIGATIONS" has the meaning assigned to that term
in subsection 2.1.
"GUARANTY" means this Guaranty dated as of November 1, 1996, as
it may be amended, supplemented or otherwise modified from time to
time.
"INTEREST RATE OBLIGATIONS" has the meaning assigned to that
term in subsection 2.1(b).
333
"PAYMENT IN FULL", "PAID IN FULL" or any similar term means
payment in full of the Guarantied Obligations including, without
limitation, all principal, interest, costs, fees and expenses
(including, without limitation, legal fees and expenses) of Guarantied
Parties and Agent as required under the Loan Documents and the Interest
Rate Agreements.
1.2 INTERPRETATION.
(a) References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Guaranty unless
otherwise specifically provided. All accounting terms not otherwise
defined herein shall have the meanings assigned to them under generally
accepted accounting principles.
(b) In the event of any conflict or inconsistency between the
terms, conditions and provisions of this Guaranty and the terms,
conditions and provisions of the Credit Agreement, the terms,
conditions and provisions of this Guaranty shall prevail.
SECTION 2. THE GUARANTY
2.1 GUARANTY OF THE GUARANTIED OBLIGATIONS. Subject to the
provisions of subsection 2.2(a), Guarantors jointly and severally hereby
irrevocably and unconditionally guaranty, as primary obligors and not merely as
sureties, the due and punctual payment in full of all Guarantied Obligations
when the same shall become due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including amounts
that would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)). The term
"GUARANTIED OBLIGATIONS" is used herein in its most comprehensive sense and
includes:
(a) any and all Obligations of Company now or hereafter made,
incurred or created, whether absolute or contingent, liquidated or
unliquidated, whether due or not due, and however arising under or in
connection with the Credit Agreement and the other Loan Documents,
including those arising under successive borrowing transactions under
the Credit Agreement which shall either continue the Obligations of
Company or from time to time renew them after they have been satisfied
(the "CREDIT AGREEMENT OBLIGATIONS");
(b) any and all obligations of Company owing to an Interest
Rate Exchanger now or hereafter made, incurred or created, whether
absolute or contingent, liquidated or unliquidated, whether due or not
due, and however arising under or in connection with any Interest Rate
Agreements permitted under subsection 7.4(iii) of the Credit Agreement,
including the obligation to make payments in the event of early
termination thereunder (the "INTEREST RATE OBLIGATIONS"); and
(c) those expenses required to be paid by the Guarantors
pursuant to the provisions of subsection 2.8 hereof.
2.2 LIMITATION ON AMOUNT GUARANTIED; CONTRIBUTION BY GUARANTORS.
(a) Anything contained in this Guaranty to the contrary notwithstanding, the
obligations of each Guarantor hereunder shall be limited to a maximum aggregate
amount equal to the largest amount that would not render its obligations
hereunder subject to avoidance as a fraudulent transfer or conveyance under
Section 548 of Title 11 of the United States Code or any applicable provisions
of comparable state law (collectively, the "FRAUDULENT TRANSFER LAWS"), in each
case after giving effect to all other liabilities of such Guarantor, contingent
or otherwise, that are relevant under the Fraudulent Transfer Laws
(specifically excluding, however, any liabilities of such Guarantor (x) in
respect of intercompany indebtedness to Company or other affiliates of Company
to the extent that such indebtedness would be discharged in an amount equal to
the amount paid by such Guarantor hereunder and (y) under any guaranty of
Subordinated Indebtedness which guaranty contains a limitation as to maximum
amount similar to that set forth in this subsection 2.2(a), pursuant to which
the liability of such Guarantor hereunder is included in the liabilities taken
into account in determining such maximum amount) and after giving effect as
assets to the value (as determined under the applicable provisions of the
Fraudulent Transfer Laws) of any rights to subrogation, reimbursement,
indemnification or contribution of such Guarantor pursuant to applicable law or
pursuant to the terms of any agreement (including without limitation any such
right of contribution under subsection 2.2(b)).
334
(b) Guarantors under this Guaranty together desire to allocate among
themselves in a fair and equitable manner their obligations arising under this
Guaranty. Accordingly, in the event any payment or distribution is made on any
date by any Guarantor under this Guaranty (a "FUNDING GUARANTOR") that exceeds
its Fair Share (as defined below) as of such date, that Funding Guarantor shall
be entitled to a contribution from each of the other Guarantors in the amount
of such other Guarantor's Fair Share Shortfall (as defined below) as of such
date, with the result that all such contributions will cause each Guarantor's
Aggregate Payments (as defined below) to equal its Fair Share as of such date.
"FAIR SHARE" means, with respect to a Guarantor as of any date of
determination, an amount equal to (i) the ratio of (x) the Adjusted Maximum
Amount (as defined below) with respect to such Guarantor to (y) the aggregate
of the Adjusted Maximum Amounts with respect to all Guarantors, multiplied by
(ii) the aggregate amount paid or distributed on or before such date by all
Funding Guarantors under this Guaranty in respect of the obligations
guarantied. "FAIR SHARE SHORTFALL" means, with respect to a Guarantor as of
any date of determination, the excess, if any, of the Fair Share of such
Guarantor over the Aggregate Payments of such Guarantor. "ADJUSTED MAXIMUM
AMOUNT" means, with respect to a Guarantor as of any date of determination, the
maximum aggregate amount of the obligations of such Guarantor under this
Guaranty, determined as of such date in accordance with subsection 2.2(a);
provided that, solely for purposes of calculating the "Adjusted Maximum Amount"
with respect to any Guarantor for purposes of this subsection 2.2(b), any
assets or liabilities of such Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations
of contribution hereunder shall not be considered as assets or liabilities of
such Guarantor. "AGGREGATE PAYMENTS" means, with respect to a Guarantor as of
any date of determination, an amount equal to (i) the aggregate amount of all
payments and distributions made on or before such date by such Guarantor in
respect of this Guaranty (including, without limitation, in respect of this
subsection 2.2(b)) minus (ii) the aggregate amount of all payments received on
or before such date by such Guarantor from the other Guarantors as
contributions under this subsection 2.2(b). The amounts payable as
contributions hereunder shall be determined as of the date on which the related
payment or distribution is made by the applicable Funding Guarantor. The
allocation among Guarantors of their obligations as set forth in this
subsection 2.2(b) shall not be construed in any way to limit the liability of
any Guarantor hereunder.
2.3 LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees that
its obligations hereunder are irrevocable, absolute, independent and
unconditional and shall not be affected by any circumstance which constitutes a
legal or equitable discharge of a guarantor or surety other than indefeasible
payment in full of the Guarantied Obligations. In furtherance of the foregoing
and without limiting the generality thereof, each Guarantor agrees as follows:
(a) This Guaranty is a guaranty of payment when due and not of
collectibility.
(b) Agent may enforce this Guaranty upon the occurrence of an
Event of Default under the Credit Agreement or an event of default
under any Interest Rate Agreement.
(c) The obligations of each Guarantor hereunder are independent
of the obligations of Company under the Loan Documents or under any
Interest Rate Agreements and the obligations of any other guarantor
(including any other Guarantor) of the obligations of Company under the
Loan Documents or the Interest Rate Agreements, and a separate action
or actions may be brought and prosecuted against such Guarantor whether
or not any action is brought against Company or any of such other
guarantors and whether or not Company is joined in any such action or
actions.
(d) Payment by any Guarantor of a portion, but not all, of the
Guarantied Obligations shall in no way limit, affect, modify or abridge
any Guarantor's liability for any portion of the Guarantied Obligations
which has not been paid. Without limiting the generality of the
foregoing, if Agent is awarded a judgment in any suit brought to
enforce any Guarantor's covenant to pay a portion of the Guarantied
Obligations, such judgment shall not be deemed to release such
Guarantor from its covenant to pay the portion of the Guarantied
Obligations that is not the subject of such suit, and such judgment
shall not, except to the extent satisfied by such Guarantor, limit,
affect, modify or abridge any other Guarantor's liability hereunder in
respect of the Guarantied Obligations.
(e) Agent or any Guarantied Party, upon such terms as it deems
appropriate, without notice or demand and without affecting the
validity or enforceability of this Guaranty or giving rise to any
reduction, limitation, impairment, discharge or termination of any
Guarantor's liability hereunder, from time to time may (i) renew,
extend, accelerate, increase the rate of interest on, or otherwise
change the time, place, manner or terms of payment
335
of the Guarantied Obligations, (ii) settle, compromise, release or
discharge, or accept or refuse any offer of performance with respect
to, or substitutions for, the Guarantied Obligations or any agreement
relating thereto and/or subordinate the payment of the same to the
payment of any other obligations; (iii) request and accept other
guaranties of the Guarantied Obligations and take and hold security for
the payment of this Guaranty or the Guarantied Obligations; (iv)
release, surrender, exchange, substitute, compromise, settle, rescind,
waive, alter, subordinate or modify, with or without consideration, any
security for payment of the Guarantied Obligations, any other
guaranties of the Guarantied Obligations, or any other obligation of
any Person (including any other Guarantor) with respect to the
Guarantied Obligations; (v) enforce and apply any security now or
hereafter held by or for the benefit of Agent or any Guarantied Party
in respect of this Guaranty or the Guarantied Obligations and direct
the order or manner of sale thereof, or exercise any other right or
remedy that Agent or Guarantied Parties, or any of them, may have
against any such security, as Agent in its discretion may determine
consistent with the Credit Agreement and any applicable security
agreement, including foreclosure on any such security pursuant to one
or more judicial or nonjudicial sales, whether or not every aspect of
any such sale is commercially reasonable, and even though such action
operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of any Guarantor against Company
or any security for the Guarantied Obligations; and (vi) exercise any
other rights available to it under the Loan Documents or the Interest
Rate Agreements.
(f) This Guaranty and the obligations of Guarantors hereunder
shall be valid and enforceable and shall not be subject to any
reduction, limitation, impairment, discharge or termination for any
reason (other than indefeasible payment in full of the Guarantied
Obligations), including without limitation the occurrence of any of the
following, whether or not any Guarantor shall have had notice or
knowledge of any of them: (i) any failure or omission to assert or
enforce or agreement or election not to assert or enforce, or the stay
or enjoining, by order of court, by operation of law or otherwise, of
the exercise or enforcement of, any claim or demand or any right, power
or remedy (whether arising under the Loan Documents or the Interest
Rate Agreements, at law, in equity or otherwise) with respect to the
Guarantied Obligations or any agreement relating thereto, or with
respect to any other guaranty of or security for the payment of the
Guarantied Obligations; (ii) any rescission, waiver, amendment or
modification of, or any consent to departure from, any of the terms or
provisions (including without limitation provisions relating to events
of default) of the Credit Agreement, any of the other Loan Documents or
the Interest Rate Agreements or any agreement or instrument executed
pursuant thereto, or of any other guaranty or security for the
Guarantied Obligations, in each case whether or not in accordance with
the terms of the Credit Agreement, such Loan Document or such Interest
Rate Agreement or any agreement relating to such other guaranty or
security; (iii) the Guarantied Obligations, or any agreement relating
thereto, at any time being found to be illegal, invalid or
unenforceable in any respect; (iv) the application of payments received
from any source (other than payments received pursuant to the other
Loan Documents or the Interest Rate Agreements or from the proceeds of
any security for the Guarantied Obligations, except to the extent such
security also serves as collateral for indebtedness other than the
Guarantied Obligations) to the payment of indebtedness other than the
Guarantied Obligations, even though Agent or Guarantied Parties, or any
of them, might have elected to apply such payment to any part or all of
the Guarantied Obligations; (v) any Guarantied Party's or Agent's
consent to the change, reorganization or termination of the corporate
structure or existence of Company or any of its Subsidiaries and to any
corresponding restructuring of the Guarantied Obligations; (vi) any
failure to perfect or continue perfection of a security interest in any
collateral which secures any of the Guarantied Obligations; (vii) any
defenses, set-offs or counterclaims which Company may allege or assert
against Agent or any Guarantied Party in respect of the Guarantied
Obligations, including but not limited to failure of consideration,
breach of warranty, payment, statute of frauds, statute of limitations,
accord and satisfaction and usury; and (viii) any other act or thing or
omission, or delay to do any other act or thing, which may or might in
any manner or to any extent vary the risk of any Guarantor as an
obligor in respect of the Guarantied Obligations.
2.4 WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the
benefit of Guarantied Parties and Agent:
(a) any right to require Agent or Guarantied Parties, as a
condition of payment or performance by such Guarantor, to (i) proceed
against Company, any other guarantor (including any other Guarantor) of
the Guarantied Obligations or any other Person, (ii) proceed against or
exhaust any security held from Company, any other guarantor (including
any other Guarantor) of the Guarantied Obligations or any other Person,
(iii) proceed against or have resort to any balance of any deposit
account or credit on the books of Agent or any Guarantied Party in
336
favor of Company or any other Person, or (iv) pursue any other remedy
in the power of Agent or any Guarantied Party whatsoever;
(b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Company including,
without limitation, any defense based on or arising out of the lack of
validity or the unenforceability of the Guarantied Obligations or any
agreement or instrument relating thereto or by reason of the cessation
of the liability of Company from any cause other than payment of the
Guarantied Obligations, to the extent and only to the extent of such
payment;
(c) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the
principal;
(d) any defense based upon Agent's or any Guarantied Party's
errors or omissions in the administration of the Guarantied
Obligations, except behavior which amounts to bad faith, gross
negligence or willful misconduct;
(e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms of this
Guaranty and any legal or equitable discharge of such Guarantor's
obligations hereunder, (ii) the benefit of any statute of limitations
affecting such Guarantor's liability hereunder or the enforcement
hereof, (iii) any rights to set-offs, recoupments and counterclaims,
and (iv) promptness, diligence and any requirement that Agent or any
Guarantied Party protect, secure, perfect or insure any security
interest or lien or any property subject thereto;
(f) notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or inaction,
including acceptance of this Guaranty, notices of default under the
Credit Agreement, any other Loan Document, the Interest Rate Agreements
or any agreement or instrument related thereto, notices of any renewal,
extension or modification of the Guarantied Obligations or any
agreement related thereto, notices of any extension of credit to
Company and notices of any of the matters referred to in subsection 2.3
and any right to consent to any thereof; and
(g) any defenses or benefits that may be derived from or
afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this Guaranty.
2.5 PAYMENT BY GUARANTORS; APPLICATION OF PAYMENTS. Subject to the
provisions of subsection 2.2(a), Guarantors hereby jointly and severally agree,
in furtherance of the foregoing and not in limitation of any other right which
Agent or any other Person may have at law or in equity against any Guarantor by
virtue hereof, that upon the failure of Company to pay any of the Guarantied
Obligations when and as the same shall become due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)),
any and all Guarantors will upon demand pay, or cause to be paid, in cash, to
Agent for the ratable benefit of the applicable Guarantied Parties, an amount
equal to the sum of the unpaid principal amount of all Guarantied Obligations
then due as aforesaid, accrued and unpaid interest on such Guarantied
Obligations and on all other Guarantied Obligations on which interest has
accrued pursuant to the terms of the Loan Documents (including, without
limitation, interest which, but for the filing of a petition in bankruptcy with
respect to Company, would have accrued on such Guarantied Obligations, whether
or not a claim is allowed against Company for such interest in any such
bankruptcy proceeding) and all other Guarantied Obligations then owed to Agent
and/or the applicable Guarantied Parties as aforesaid. All such payments shall
be applied promptly from time to time by Agent:
First, to the payment of the reasonable costs and expenses of
any collection or other realization under this Guaranty, including
reasonable compensation to Agent and its agents and counsel, and all
reasonable expenses, liabilities and advances made or incurred by Agent
in connection therewith;
Second, to the ratable payment of all other Guarantied
Obligations then due and payable in such order as Agent shall elect; and
337
Third, after payment in full of all Guarantied Obligations
(other than Obligations which are contingent and unliquidated and not
due and owing on such date and which pursuant to the provisions of the
Credit Agreement, Interest Rate Agreements, Letters of Credit or the
Loan Documents survive the termination of the Credit Agreement, the
repayment of the Guarantied Obligations, the termination of the
Commitments, the expiration or cancellation of all Letters of Credit or
the termination, expiration or cancellation of all Interest Rate
Agreements), to the payment to Guarantors, or their respective
successors or assigns, or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct, of
any surplus then remaining from such payments.
2.6 GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Until
the Guarantied Obligations shall have been indefeasibly paid in full (other
than Obligations which are contingent and unliquidated and not due and owing on
such date and which pursuant to the provisions of the Credit Agreement,
Interest Rate Agreements, Letters of Credit or the Loan Documents survive the
termination of the Credit Agreement, the repayment of the Guarantied
Obligations, the termination of the Commitments, the expiration or cancellation
of all Letters of Credit or the termination, expiration or cancellation of all
Interest Rate Agreements) and the Commitments shall have terminated, all
Letters of Credit shall have expired or been cancelled and all Interest Rate
Agreements shall have terminated, expired or been cancelled, each Guarantor
shall withhold exercise of (a) any claim, right or remedy, direct or indirect,
that such Guarantor now has or may hereafter have against Company or any of its
assets in connection with this Guaranty or the performance by such Guarantor of
its obligations hereunder, in each case whether such claim, right or remedy
arises in equity, under contract, by statute, under common law or otherwise and
including without limitation (i) any right of subrogation, reimbursement or
indemnification that such Guarantor now has or may hereafter have against
Company, (ii) any right to enforce, or to participate in, any claim, right or
remedy that Agent or any Guarantied Party now has or may hereafter have against
Company, and (iii) any benefit of, and any right to participate in, any
collateral or security now or hereafter held by Agent or any Guarantied Party,
and (b) any right of contribution such Guarantor may have against any other
guarantor (including any other Guarantor) of any of the Guarantied Obligations
(including without limitation any such right of contribution under subsection
2.2(b)). Each Guarantor further agrees that, to the extent the agreement to
withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification such Guarantor may have against
Company or against any collateral or security, and any rights of contribution
such Guarantor may have against any such other guarantor, shall be junior and
subordinate to any rights Agent or any Guarantied Party may have against
Company, to all right, title and interest Agent or any Guarantied Party may
have in any such collateral or security, and to any right Agent or any
Guarantied Party may have against such other guarantor. Agent, on behalf of
Guarantied Parties, may use, sell or dispose of any item of collateral or
security as it sees fit without regard to any subrogation rights any Guarantor
may have, and upon any such disposition or sale any rights of subrogation such
Guarantor may have with respect to such item of collateral or security shall
terminate. If any amount shall be paid to any Guarantor on account of any such
subrogation, reimbursement or indemnification or contribution rights at any
time when all Guarantied Obligations shall not have been paid in full (other
than Obligations which are contingent and unliquidated and not due and owing on
such date and which pursuant to the provisions of the Credit Agreement,
Interest Rate Agreements, Letters of Credit or the Loan Documents survive the
termination of the Credit Agreement, the repayment of the Guarantied
Obligations, the termination of the Commitments, the expiration or cancellation
of all Letters of Credit or the termination, expiration or cancellation of all
Interest Rate Agreements), such amount shall be held in trust for Agent on
behalf of Guarantied Parties and shall forthwith be paid over to Agent for the
benefit of Guarantied Parties to be credited and applied against the Guarantied
Obligations, whether matured or unmatured, in accordance with the terms hereof.
2.7 SUBORDINATION OF OTHER OBLIGATIONS. Any indebtedness of
Company now or hereafter held by any Guarantor is hereby subordinated in right
of payment to the Guarantied Obligations, and any such indebtedness of Company
to such Guarantor collected or received by such Guarantor after an Event of
Default has occurred and is continuing shall be held in trust for Agent on
behalf of Guarantied Parties and shall forthwith be paid over to Agent for the
benefit of Guarantied Parties to be credited and applied against the Guarantied
Obligations but without affecting, impairing or limiting in any manner the
liability of such Guarantor under any other provision of this Guaranty;
provided that any payment on such indebtedness received by any Guarantor prior
to the occurrence and continuance of an Event of Default and in accordance with
this Agreement or the Credit Agreement shall be permitted and need not be held
in trust for or paid over to Agent on behalf of Guarantied Parties.
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2.8 EXPENSES. Guarantors jointly and severally agree to pay, or cause
to be paid, on demand, and to save Agent and Guarantied Parties harmless
against liability for, any and all costs and expenses (including reasonable
fees and disbursements of counsel and of internal counsel) incurred or expended
by Agent or any Guarantied Party in connection with the enforcement of or
preservation of any rights under this Guaranty.
2.9 CONTINUING GUARANTY. This Guaranty is a continuing guaranty
and shall remain in effect until all of the Guarantied Obligations shall have
been indefeasibly paid in full and the Commitments shall have terminated, all
Letters of Credit shall have expired or been cancelled and all Interest Rate
Agreements shall have terminated, expired or been cancelled. Each Guarantor
hereby irrevocably waives any right to revoke this Guaranty as to future
transactions giving rise to any Guarantied Obligations.
2.10 AUTHORITY OF GUARANTORS OR COMPANY. It is not necessary for
Guarantied Parties or Agent to inquire into the capacity or powers of any
Guarantor or Company or the officers, directors or any agents acting or
purporting to act on behalf of any of them.
2.11 FINANCIAL CONDITION OF COMPANY. Any Loans may be granted to
Company or continued from time to time without notice to or authorization from
any Guarantor regardless of the financial or other condition of Company at the
time of any such grant or continuation. Guarantied Parties and Agent shall
have no obligation to disclose or discuss with any Guarantor their assessment,
or any Guarantor's assessment, of the financial condition of Company. Each
Guarantor has adequate means to obtain information from Company on a continuing
basis concerning the financial condition of Company and its ability to perform
its obligations under the Loan Documents and the Interest Rate Agreements, and
each Guarantor assumes the responsibility for being and keeping informed of the
financial condition of Company and of all circumstances bearing upon the risk
of nonpayment of the Guarantied Obligations. Each Guarantor hereby waives and
relinquishes any duty on the part of Agent or any Guarantied Party to disclose
any matter, fact or thing relating to the business, operations or conditions of
Company now known or hereafter known by Agent or any Guarantied Party.
2.12 RIGHTS CUMULATIVE. The rights, powers and remedies given to
Guarantied Parties and Agent by this Guaranty are cumulative and shall be in
addition to and independent of all rights, powers and remedies given to
Guarantied Parties and Agent by virtue of any statute or rule of law or in any
of the other Loan Documents or the Interest Rate Agreements or any agreement
between any Guarantor and Lenders, Interest Rate Exchangers and/or Agent or
between Company and Lenders, Interest Rate Exchangers and/or Agent. Any
forbearance or failure to exercise, and any delay by any Guarantied Party or
Agent in exercising, any right, power or remedy hereunder shall not impair any
such right, power or remedy or be construed to be a waiver thereof, nor shall
it preclude the further exercise of any such right, power or remedy.
2.13 BANKRUPTCY; POST-PETITION INTEREST; REINSTATEMENT OF GUARANTY.
(a) So long as any Guarantied Obligations remain outstanding, no Guarantor
shall, without the prior written consent of Agent in accordance with the terms
of the Credit Agreement, commence or join with any other Person in commencing
any bankruptcy, reorganization or insolvency proceedings of or against Company.
The obligations of Guarantors under this Guaranty shall not be reduced,
limited, impaired, discharged, deferred, suspended or terminated by any
proceeding, voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of Company or by any
defense which Company may have by reason of the order, decree or decision of
any court or administrative body resulting from any such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest
on any portion of the Guarantied Obligations which accrues after the
commencement of any proceeding referred to in clause (a) above (or, if interest
on any portion of the Guarantied Obligations ceases to accrue by operation of
law by reason of the commencement of said proceeding, such interest as would
have accrued on such portion of the Guarantied Obligations if said proceedings
had not been commenced) shall be included in the Guarantied Obligations because
it is the intention of Guarantors and Agent that the Guarantied Obligations
which are guarantied by Guarantors pursuant to this Guaranty should be
determined without regard to any rule of law or order which may relieve Company
of any portion of such Guarantied Obligations. Guarantors will permit any
trustee in bankruptcy, receiver, debtor in possession, assignee for the benefit
of creditors or similar person
339
to pay Agent, or allow the claim of Agent in respect of, any such interest
accruing after the date on which such proceeding is commenced.
(c) In the event that all or any portion of the Guarantied
Obligations are paid by Company, the obligations of Guarantors hereunder shall
continue and remain in full force and effect or be reinstated, as the case may
be, in the event that all or any part of such payment(s) are rescinded or
recovered directly or indirectly from Agent or any Guarantied Party as a
preference, fraudulent transfer or otherwise, and any such payments which are
so rescinded or recovered shall constitute Guarantied Obligations for all
purposes under this Guaranty.
2.14 SET OFF. In addition to any other rights any Guarantied Party
or Agent may have under law or in equity, if any amount shall at any time be
due and payable by any Guarantor to any Guarantied Party or Agent under this
Guaranty, such Guarantied Party or Agent is authorized at any time or from time
to time, without notice (any such notice being hereby expressly waived), to set
off and to appropriate and to apply any and all deposits (general or special,
including but not limited to indebtedness evidenced by certificates of deposit,
whether matured or unmatured) and any other indebtedness of any Guarantied
Party or Agent owing to such Guarantor and any other property of such Guarantor
held by any Guarantied Party or Agent to or for the credit or the account of
such Guarantor against and on account of the Guarantied Obligations and
liabilities of such Guarantor to any Guarantied Party or Agent under this
Guaranty.
2.15 DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR. If all of the
stock of any Guarantor or any of its successors in interest under this Guaranty
shall be sold or otherwise disposed of (including by merger or consolidation)
in an Asset Sale which is either (i) not prohibited by subsection 7.7 of the
Credit Agreement or (ii) otherwise consented to by Requisite Lenders, the
Guaranty of such Guarantor or such successor in interest, as the case may be,
hereunder shall automatically be discharged and released without any further
action by Agent or any Guarantied Party or any other Person effective as of the
time of such Asset Sale; provided that, as a condition precedent to such
discharge and release, Agent shall have received evidence reasonably
satisfactory to it that arrangements reasonably satisfactory to it have been
made for delivery to Agent of the Net Cash Proceeds of Asset Sale of such Asset
Sale if required under subsection 2.4B(iii)(a) of the Credit Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders and Agent to accept this Guaranty
and to enter into the Credit Agreement and to make the Loans thereunder and to
enter into Interest Rate Agreements, each Guarantor hereby represents and
warrants to Lenders that the following statements are true and correct:
3.1 CORPORATE EXISTENCE. Such Guarantor is duly organized, validly
existing and in good standing under the laws of the state of its incorporation,
has the corporate power to own its assets and to transact the business in which
it is now engaged and is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership or lease of
property or the conduct of its business requires such qualification, except for
failures to be so qualified, authorized or licensed that would not in the
aggregate have a material adverse effect on the business, operations, assets or
financial condition of such Guarantor and its Subsidiaries, taken as a whole.
3.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Such
Guarantor has the corporate power, authority and legal right to execute,
deliver and perform this Guaranty and all obligations required hereunder and
has taken all necessary corporate action to authorize its Guaranty hereunder on
the terms and conditions hereof and its execution, delivery and performance of
this Guaranty and all obligations required hereunder. No consent of any other
Person including, without limitation, stockholders and creditors of such
Guarantor, and no license, permit, approval or authorization of, exemption by,
notice or report to, or registration, filing or declaration with, any
governmental authority is required by such Guarantor in connection with this
Guaranty or the execution, delivery, performance, validity or enforceability of
this Guaranty and all obligations required hereunder. This Guaranty has been,
and each instrument or document required hereunder will be, executed and
delivered by a duly authorized officer of such Guarantor, and this Guaranty
constitutes, and each instrument or document required hereunder when executed
and delivered by such Guarantor hereunder will constitute, the legally valid
and binding obligation of such Guarantor, enforceable against such Guarantor in
accordance with its terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws or
equitable principles relating to or limiting creditors' rights generally.
340
3.3 NO LEGAL BAR TO THIS GUARANTY. The execution, delivery and
performance of this Guaranty and the documents or instruments required
hereunder, and the use of the proceeds of the borrowings under the Credit
Agreement, will not violate any provision of any existing law or regulation
binding on such Guarantor, or any order, judgment, award or decree of any
court, arbitrator or governmental authority binding on such Guarantor, or the
certificate of incorporation or bylaws of such Guarantor or any securities
issued by such Guarantor, or any material mortgage, indenture, lease, contract
or other agreement, instrument or undertaking to which such Guarantor is a
party or by which such Guarantor or any of its assets may be bound, the
violation of which could reasonably be expected to result in a Material Adverse
Effect, and will not result in, or require, the creation or imposition of any
Lien on any of its property, assets or revenues pursuant to the provisions of
any such mortgage, indenture, lease, contract or other agreement, instrument or
undertaking.
SECTION 4. AFFIRMATIVE COVENANTS
Each Guarantor covenants and agrees that, unless and until all
of the Guarantied Obligations shall have been indefeasibly paid in full (other
than Obligations which are contingent and unliquidated and not due and owing on
such date and which pursuant to the provisions of the Credit Agreement,
Interest Rate Agreements, Letters of Credit or the Loan Documents survive the
termination of the Credit Agreement, the repayment of the Guarantied
Obligations, the termination of the Commitments, the expiration or cancellation
of all Letters of Credit or the termination, expiration or cancellation of all
Interest Rate Agreements), the Commitments shall have terminated, all Letters
of Credit shall have expired or been cancelled and all Interest Rate Agreements
shall have terminated, expired or been cancelled, unless Requisite Lenders
shall otherwise consent in writing:
4.1 CORPORATE EXISTENCE, ETC. Except as permitted under subsection
7.7 or subsection 6.2 of the Credit Agreement, such Guarantor shall at all
times preserve and keep in full force and effect its corporate existence and
all rights and franchises material to its business.
4.2 COMPLIANCE WITH LAWS, ETC. Such Guarantor shall comply with
the requirements of all applicable laws, rules, regulations and orders of any
governmental authority, noncompliance with which could reasonably be expected
to cause a Material Adverse Effect.
4.3 BOOKS AND RECORDS. Such Guarantor shall keep and maintain
books of record and account with respect to its operations in accordance with
generally accepted accounting principles and shall permit Agent or any Lender
and their respective officers, employees and authorized agents, to the extent
Agent in good ▇▇▇▇▇ ▇▇▇▇▇ necessary for the proper administration of this
Guaranty, to examine, copy and make excerpts from the books and records of such
Guarantor and its Subsidiaries and to inspect the properties of such Guarantor
and its Subsidiaries, both real and personal, at such reasonable times as Agent
may request.
SECTION 5. MISCELLANEOUS
5.1 SURVIVAL OF WARRANTIES. All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Guaranty and the other Loan Documents and the Interest Rate Agreements, and any
increase in the Commitments under the Credit Agreement.
5.2 NOTICES. Any communications between Agent and any Guarantor
and any notices or requests provided herein to be given may be given by courier
service, personal service, mailing the same, postage prepaid, or by telex,
facsimile transmission or cable to each such party at its address set forth in
the Credit Agreement, on the signature pages hereof or to such other addresses
as each such party may in writing hereafter indicate, and such communication
shall be deemed to have been given when delivered in person or by courier
service, upon receipt of telefacsimile or telex, or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notice to Agent shall not be effective until received.
5.3 SEVERABILITY. In case any provision in or obligation under
this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
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5.4 AMENDMENTS AND WAIVERS. No amendment, modification,
termination or waiver of any provision of this Guaranty, or consent to any
departure by any Guarantor therefrom, shall in any event be effective without
the written concurrence of Requisite Lenders under the Credit Agreement;
provided that any amendment or waiver which adversely affects the interests of
the Interest Rate Exchangers but does not result in a similar adverse effect on
the interests of Lenders shall only be effective with the written consent of
the holders of a majority of the Interest Rate Obligations guarantied hereby.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given.
5.5 HEADINGS. Section and subsection headings in this Guaranty are
included herein for convenience of reference only and shall not constitute a
part of this Guaranty for any other purpose or be given any substantive effect.
5.6 APPLICABLE LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
5.7 SUCCESSORS AND ASSIGNS. This Guaranty is a continuing guaranty
and shall be binding upon each Guarantor and its respective successors and
assigns. This Guaranty shall inure to the benefit of Guarantied Parties, Agent
and their respective successors and assigns. No Guarantor shall assign this
Guaranty or any of the rights or obligations of such Guarantor hereunder (other
than assignments by operation of law pursuant to mergers permitted under
subsection 7.7 of the Credit Agreement) without the prior written consent of
all Lenders. Any Lender may, without notice or consent, assign its interest in
this Guaranty in whole or in part in connection with an assignment of Loans,
the Commitments, Letters of Credit or participation therein as permitted under
subsection 11.1 of the Credit Agreement. The terms and provisions of this
Guaranty shall inure to the benefit of any transferee or assignee of any Loan,
and in the event of such transfer or assignment the rights and privileges
herein conferred upon Lenders and Agent shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions
hereof.
5.8 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST ANY GUARANTOR ARISING OUT OF OR RELATING TO THIS
GUARANTY MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS GUARANTY EACH
GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY
AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND
BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS GUARANTY. Each
Guarantor hereby agrees that service of all process in any such proceeding in
any such court may be made by registered or certified mail, return receipt
requested, to such Guarantor at its address provided in subsection 5.2, such
service being hereby acknowledged by such Guarantor to be sufficient for
personal jurisdiction in any action against such Guarantor in any such court
and to be otherwise effective and binding service in every respect. Nothing
herein shall affect the right to serve process in any other manner permitted by
law or shall limit the right of Agent or any Lender to bring proceedings
against any Guarantor in the courts of any other jurisdiction.
5.9 WAIVER OF TRIAL BY JURY. EACH GUARANTOR AND, BY ITS ACCEPTANCE
OF THE BENEFITS HEREOF, AGENT EACH HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS GUARANTY. The scope of this waiver is intended to be all encompassing of
any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each Guarantor and, by its acceptance of the benefits
hereof, Agent, each (i) acknowledges that this waiver is a material inducement
for such Guarantor and Agent to enter into a business relationship, that such
Guarantor and Agent have already relied on this waiver in entering into this
Guaranty or accepting the benefits thereof, as the case may be, and that each
will continue to rely on this waiver in their related future dealings and (ii)
further warrants and represents that each has reviewed this waiver with its
legal counsel, and that each knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
342
MODIFICATIONS TO THIS GUARANTY. In the event of litigation, this Guaranty may
be filed as a written consent to a trial by the court.
5.10 NO OTHER WRITING. This writing is intended by Guarantors and
Agent as the final expression of this Guaranty and is also intended as a
complete and exclusive statement of the terms of their agreement with respect
to the matters covered hereby. No course of dealing, course of performance or
trade usage, and no parol evidence of any nature, shall be used to supplement
or modify any terms of this Guaranty. There are no conditions to the full
effectiveness of this Guaranty.
5.11 FURTHER ASSURANCES. At any time or from time to time, upon the
request of Agent or Requisite Lenders, Guarantors shall execute and deliver
such further documents and do such other acts and things as Agent or Requisite
Lenders may reasonably request in order to effect fully the purposes of this
Guaranty.
5.12 ADDITIONAL GUARANTORS. The initial Guarantors hereunder shall
be such of the Subsidiaries of Company as are signatories hereto on the date
hereof. From time to time subsequent to the date hereof, additional
Subsidiaries of Company may become parties hereto, as additional Guarantors
(each an "ADDITIONAL GUARANTOR"), by executing a counterpart of this Guaranty.
Upon delivery of any such counterpart to Agent, notice of which is hereby
waived by Guarantors, each such Additional Guarantor shall be a Guarantor and
shall be as fully a party hereto as if such Additional Guarantor were an
original signatory hereof. Each Guarantor expressly agrees that its
obligations arising hereunder shall not be affected or diminished by the
addition or release of any other Guarantor hereunder, nor by any election of
Agent not to cause any Subsidiary of Company to become an Additional Guarantor
hereunder. This Guaranty shall be fully effective as to any Guarantor that is
or becomes a party hereto regardless of whether any other Person becomes or
fails to become or ceases to be a Guarantor hereunder.
5.13 COUNTERPARTS; EFFECTIVENESS. This Guaranty may be executed in
any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original for all purposes; but all such counterparts together shall
constitute but one and the same instrument. This Guaranty shall become
effective as to each Guarantor upon the execution of a counterpart hereof by
such Guarantor (whether or not a counterpart hereof shall have been executed by
any other Guarantor) and receipt by Agent of written or telephonic notification
of such execution and authorization of delivery thereof.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, each of the undersigned Guarantors has
caused this Guaranty to be duly executed and delivered by its officer thereunto
duly authorized as of the date first written above.
DOMINICK'S FINER FOODS, INC. OF ILLINOIS
By
------------------------------------
Title
---------------------------------
Address: Dominick's Finer Foods, Inc. of Illinois
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and Chief Operating Officer
▇▇▇▇'▇ OF BLOOMINGDALE, INC.
By
-------------------------------------
Title
----------------------------------
Address: ▇▇▇▇'▇ of Bloomingdale, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and Chief Operating Officer
▇▇▇▇ HAZELCREST, INC.
By
-------------------------------------
Title
----------------------------------
Address: ▇▇▇▇ Hazelcrest, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and Chief Operating Officer
SAVE-IT DISCOUNT FOODS CORPORATION
By
-------------------------------------
Title
----------------------------------
Address: Save-It Discount Foods Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and Chief Operating Officer
344
DFF EQUIPMENT LEASING COMPANY,
(F/K/A JERRY'S DEEP DISCOUNT CENTERS, INC.)
By
-------------------------------------
Title
----------------------------------
Address: DFF Equipment Leasing Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and Chief Operating Officer
345
IN WITNESS WHEREOF, the undersigned Additional Guarantor has
caused this Guaranty to be duly executed and delivered by its officer thereunto
duly authorized as of ______________, ____.
-------------------------------------
(Name of Additional Guarantor)
By
-------------------------------------
Title
----------------------------------
346
EXHIBIT XVIII
[FORM OF SUBSIDIARY PLEDGE AGREEMENT]
SUBSIDIARY PLEDGE AGREEMENT
This SUBSIDIARY PLEDGE AGREEMENT (this "AGREEMENT") is dated as
of November 1, 1996 and entered into by and between [INSERT NAME OF PLEDGOR IN
CAPS], a Delaware corporation ("PLEDGOR"), and BANKERS TRUST COMPANY ("SECURED
PARTY"), as agent for and representative of (in such capacity herein called
"SECURED PARTY") the financial institutions ("LENDERS") party to the Credit
Agreement referred to below and the Interest Rate Exchangers (as hereinafter
defined).
PRELIMINARY STATEMENTS
A. Pledgor is the legal and beneficial owner of (i) the
shares of stock (the "PLEDGED SHARES") described in Part A of Schedule I
annexed hereto and issued by the corporations named therein and (ii) the
indebtedness (the "PLEDGED DEBT") described in Part B of said Schedule I and
issued by the obligors named therein.
B. Lenders, Secured Party, Syndication Agent and
Arrangers have entered into a Credit Agreement dated as of November 1, 1996
(said Credit Agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined) with Dominick's Supermarkets, Inc., a Delaware
corporation, and Dominick's Finer Foods, Inc., a Delaware corporation
("COMPANY"), pursuant to which Lenders have made certain commitments, subject
to the terms and conditions set forth in the Credit Agreement, to extend
certain credit facilities to Company.
C. It is contemplated that Company may from time to time
enter into Interest Rate Agreements with one or more Lenders or their
Affiliates collectively, the "INTEREST RATE EXCHANGERS") and Pledgor desires
that the obligations of Company under such agreements, including the obligation
to make payments in the event of early termination thereunder (all such
obligations being the "INTEREST RATE OBLIGATIONS"), be given the benefits of
the security interest created hereby.
D. Pledgor has executed and delivered a Subsidiary
Guaranty dated as of November 1, 1996 (said guaranty, as it may hereafter be
amended, supplemented or otherwise modified from time to time, being the
"GUARANTY") in favor of Secured Party for the benefit of Lenders and the
Interest Rate Exchangers which have executed and delivered an Acknowledgement
thereto, pursuant to which Pledgor has guarantied the prompt payment and
performance when due of all Obligations of Company under the Credit Agreement
and the other Loan Documents and all Interest Rate Obligations of Company in
respect of Interest Rate Agreements.
E. It is a requirement under the Credit Agreement that
Pledgor shall have granted the security interests and undertaken the
obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises, in order to
induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Pledgor hereby agrees with Secured
Party as follows:
SECTION 1. PLEDGE OF SECURITY. Pledgor hereby pledges and
grants to Secured Party a security interest in, all of Pledgor's right, title
and interest in and to the following (the "PLEDGED COLLATERAL"):
(a) the Pledged Shares and the certificates representing
the Pledged Shares and any interest of Pledgor in the entries on the books of
any financial intermediary pertaining to the Pledged Shares, and all dividends,
347
cash, warrants, rights, instruments and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of the Pledged Shares;
(b) the Pledged Debt and the instruments evidencing the
Pledged Debt, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Debt;
(c) all additional shares of, and all securities
convertible into and warrants, options and other rights to purchase or
otherwise acquire, stock of any issuer of the Pledged Shares from time to time
acquired by Pledgor in any manner (which shares shall be deemed to be part of
the Pledged Shares), the certificates or other instruments representing such
additional shares, securities, warrants, options or other rights and any
interest of Pledgor in the entries on the books of any financial intermediary
pertaining to such additional shares, and all dividends, cash, warrants,
rights, instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such additional shares, securities, warrants, options or other rights;
(d) all additional indebtedness from time to time owed to
Pledgor by any obligor on the Pledged Debt and the instruments evidencing such
indebtedness, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such indebtedness;
(e) all shares of, and all securities convertible into and
warrants, options and other rights to purchase or otherwise acquire, stock of
any Person that, after the date of this Agreement, becomes, as a result of any
occurrence, a direct Subsidiary of Pledgor (which shares shall be deemed to be
part of the Pledged Shares), the certificates or other instruments representing
such shares, securities, warrants, options or other rights and any interest of
Pledgor in the entries on the books of any financial intermediary pertaining to
such shares, and all dividends, cash, warrants, rights, instruments and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares,
securities, warrants, options or other rights;
(f) all indebtedness from time to time owed to Pledgor by
any Person that, after the date of this Agreement, becomes, as a result of any
occurrence, a direct or indirect Subsidiary of Pledgor, and all interest, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such indebtedness; and
(g) to the extent not covered by clauses (a) through (f)
above, all proceeds of any or all of the foregoing Pledged Collateral. For
purposes of this Agreement, the term "PROCEEDS" includes whatever is receivable
or received when Pledged Collateral or proceeds are sold, exchanged, collected
or otherwise disposed of, whether such disposition is voluntary or involuntary,
and includes, without limitation, proceeds of any indemnity or guaranty payable
to Pledgor or Secured Party from time to time with respect to any of the
Pledged Collateral.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures,
and the Pledged Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of
all obligations and liabilities of every nature of Pledgor now or hereafter
existing under or arising out of or in connection with the Guaranty and all
extensions or renewals thereof, whether for principal, interest (including
without limitation interest that, but for the filing of a petition in
bankruptcy with respect to Company, would accrue on such obligations),
reimbursement for amounts drawn under Letters of Credit, fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such
obligations or liabilities that are paid, to the extent all or any part of such
payment is avoided or recovered directly or indirectly from Secured Party or
any Lender or any Interest Rate Exchanger as a preference, fraudulent transfer
or otherwise (all such obligations and liabilities being the "UNDERLYING
DEBT"), and all obligations
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of every nature of Pledgor now or hereafter existing under this Agreement (all
such obligations of Pledgor, together with the Underlying Debt, being the
"SECURED OBLIGATIONS").
SECTION 3. DELIVERY OF PLEDGED COLLATERAL. All certificates
or instruments representing or evidencing the Pledged Collateral shall be
delivered to and held by or on behalf of Secured Party pursuant hereto and
shall be in suitable form for transfer by delivery or, as applicable, shall be
accompanied by Pledgor's endorsement, where necessary, or duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Secured Party. Secured Party shall have the right, at any time
in its discretion and without notice to Pledgor, to register in the name of
Secured Party or any of its nominees, as pledgee, any or all of the Pledged
Collateral. In addition, Secured Party shall have the right at any time to
exchange certificates or instruments representing or evidencing Pledged
Collateral for certificates or instruments of smaller or larger denominations.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Pledgor represents
and warrants as follows:
(a) Due Authorization, etc. of Pledged Collateral. All of
the Pledged Shares have been duly authorized and validly issued and are fully
paid and non-assessable. All of the Pledged Debt has been duly authorized,
authenticated or issued, and delivered and is the legal, valid and binding
obligation of the issuers thereof and is not in default.
(b) Description of Pledged Collateral. The Pledged Shares
constitute one hundred percent (100%) of the issued and outstanding shares of
stock of each of the direct Subsidiaries of Pledgor, and there are no
outstanding warrants, options or other rights to purchase, or other agreements
outstanding with respect to, or property that is now or hereafter convertible
into, or that requires the issuance or sale of, any Pledged Shares. The
Pledged Debt constitutes all of the issued and outstanding intercompany
indebtedness evidenced by a promissory note of the respective issuers thereof
owing to Pledgor.
(c) Ownership of Pledged Collateral. Pledgor is the
legal, record and beneficial owner of the Pledged Collateral free and clear of
any Lien except for the security interest created by this Agreement.
(d) Governmental Authorizations. No authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for either (i) the pledge by Pledgor
of the Pledged Collateral pursuant to this Agreement and the grant by Pledgor
of the security interest granted hereby, (ii) the execution, delivery or
performance of this Agreement by Pledgor, or (iii) the exercise by Secured
Party of the voting or other rights, or the remedies in respect of the Pledged
Collateral, provided for in this Agreement (except as may be required in
connection with a disposition of Pledged Collateral by laws affecting the
offering and sale of securities generally).
(e) Perfection. The pledge of the Pledged Shares and
Pledged Debt pursuant to this Agreement creates a valid and perfected first
priority security interest in such Pledged Shares and Pledged Debt, securing
the payment of the Secured Obligations; provided that Secured Party retains
physical possession of the Pledged Collateral.
(f) Margin Regulations. The pledge of the Pledged
Collateral pursuant to this Agreement does not violate Regulation G, T, U or X
of the Board of Governors of the Federal Reserve System.
(g) Other Information. All information heretofore, herein
or hereafter supplied to Secured Party by or on behalf of Pledgor with respect
to the Pledged Collateral is accurate and complete in all material respects.
SECTION 5. TRANSFERS AND OTHER LIENS; ADDITIONAL PLEDGED
COLLATERAL; ETC. Pledgor shall:
(a) not, except as expressly permitted by the Credit
Agreement, (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Pledged Collateral,
(ii) create or suffer to exist any Lien upon or with respect to any of the
Pledged Collateral, except for the security interest under this Agreement, or
(iii) permit any issuer of Pledged Shares to merge or consolidate unless all
the outstanding capital stock of the surviving or resulting corporation is,
upon such merger or consolidation, pledged hereunder and no cash,
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securities or other property is distributed in respect of the outstanding
shares of any other constituent corporation; provided that in the event Pledgor
makes an Asset Sale permitted by the Credit Agreement and the assets subject to
such Asset Sale are Pledged Shares, Secured Party shall release the Pledged
Shares that are the subject of such Asset Sale to Pledgor free and clear of the
lien and security interest under this Agreement concurrently with the
consummation of such Asset Sale; provided, further that, as a condition
precedent to such release, Secured Party shall have received evidence
reasonably satisfactory to it that arrangements reasonably satisfactory to it
have been made for delivery to Secured Party of the Net Cash Proceeds of Asset
Sale of such Asset Sale if required under subsection 2.4B(iii)(a) of the Credit
Agreement;
(b) (i) cause each issuer of Pledged Shares not to issue
any stock or other securities in addition to or in substitution for the Pledged
Shares issued by such issuer, except to Pledgor, (ii) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and all
additional shares of stock or other securities of each issuer of Pledged
Shares, and (iii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all shares of stock of any Person that, after
the date of this Agreement, becomes, as a result of any occurrence, a direct
Subsidiary of Pledgor;
(c) (i) pledge hereunder, immediately upon their issuance,
any and all instruments or other evidences of additional indebtedness from time
to time owed to Pledgor by any obligor on the Pledged Debt, and (ii) pledge
hereunder, immediately upon their issuance, any and all instruments or other
evidences of indebtedness from time to time owed to Pledgor by any Person that
after the date of this Agreement becomes, as a result of any occurrence, a
direct or indirect Subsidiary of Pledgor;
(d) promptly deliver to Secured Party all material written
notices received by it with respect to the Pledged Collateral; and
(e) pay promptly when due all material taxes, assessments
and governmental charges or levies imposed upon, and all claims against, the
Pledged Collateral, except to the extent the validity thereof is being
contested in good faith; provided that Pledgor shall in any event pay such
taxes, assessments, charges, levies or claims not later than five days prior to
the date of any proposed sale under any judgement, writ or warrant of
attachment entered or filed against Pledgor or any of the Pledged Collateral as
a result of the failure to make such payment.
SECTION 6. FURTHER ASSURANCES; PLEDGE AMENDMENTS.
(a) Pledgor agrees that from time to time, at the expense
of Pledgor, Pledgor will promptly execute and deliver all further instruments
and documents, and take all further action, that Secured Party may reasonably
deem to be necessary or desirable, or that Secured Party may reasonably
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any Pledged
Collateral. Without limiting the generality of the foregoing, Pledgor will:
(i) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as Secured Party may reasonably
deem to be necessary or desirable, or as Secured Party may reasonably request,
in order to perfect and preserve the security interests granted or purported to
be granted hereby and (ii) at Secured Party's reasonable request, appear in and
defend any action or proceeding that may adversely affect Pledgor's title to or
Secured Party's security interest in all or any part of the Pledged Collateral.
(b) Pledgor further agrees that it will, upon obtaining
any additional shares of stock or other securities or instruments required to
be pledged hereunder as provided in Section 5(b) or (c), promptly (and in any
event within five Business Days) deliver to Secured Party a Pledge Amendment,
duly executed by Pledgor, in substantially the form of Schedule II annexed
hereto (a "PLEDGE AMENDMENT"), in respect of the additional Pledged Shares or
Pledged Debt to be pledged pursuant to this Agreement. Pledgor hereby
authorizes Secured Party to attach each Pledge Amendment to this Agreement and
agrees that all Pledged Shares or Pledged Debt listed on any Pledge Amendment
delivered to Secured Party shall for all purposes hereunder be considered
Pledged Collateral; provided that the failure of Pledgor to execute a Pledge
Amendment with respect to any additional Pledged Shares or Pledged Debt pledged
pursuant to this Agreement shall not impair the security interest of Secured
Party therein or otherwise adversely affect the rights and remedies of Secured
Party hereunder with respect thereto.
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SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged Collateral
or any part thereof for any purpose not inconsistent with the terms of
this Agreement or the Credit Agreement; provided, however, that Pledgor
shall not exercise or refrain from exercising any such right if Secured
Party shall have notified Pledgor that, in Secured Party's judgment,
such action would have a material adverse effect on the value of the
Pledged Collateral or any part thereof; and provided, further, that
Pledgor shall give Secured Party at least five Business Days' prior
written notice of the manner in which it intends to exercise, or the
reasons for refraining from exercising, any such right. It is
understood, however, that neither (A) the voting by Pledgor of any
Pledged Shares for or Pledgor's consent to the election of directors at
a regularly scheduled annual or other meeting of stockholders or with
respect to incidental matters at any such meeting nor (B) Pledgor's
consent to or approval of any action otherwise permitted under this
Agreement and the Credit Agreement shall be deemed inconsistent with
the terms of this Agreement or the Credit Agreement within the meaning
of this Section 7(a)(i), and no notice of any such voting or consent
need be given to Secured Party;
(ii) Pledgor shall be entitled to receive and retain, and
to utilize free and clear of the lien of this Agreement, any and all
dividends and interest paid in respect of the Pledged Collateral;
provided, however, that any and all
(A) dividends and interest paid or payable other
than in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of, or
in exchange for, any Pledged Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Pledged Collateral in
connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus
or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in
respect of principal or in redemption of or in exchange for any
Pledged Collateral,
shall be, and shall (1) forthwith be delivered to Secured Party to hold
as, Pledged Collateral and shall, if received by Pledgor, be received
in trust for the benefit of Secured Party, be segregated from the other
property or funds of Pledgor and be forthwith delivered to Secured
Party as Pledged Collateral in the same form as so received (with all
necessary endorsements) or (2) in the case of any such cash payment, at
the option of Pledgor (with the consent of Secured Party, which consent
shall not be unreasonably withheld), forthwith be delivered to Secured
Party to be immediately applied to prepay the Loans in accordance with
subsection 2.4B(iii)(a) of the Credit Agreement as if such cash
payments were Net Cash Proceeds of Asset Sale that are required to be
used to prepay the Loans pursuant to the terms of the Credit Agreement;
and
(iii) Secured Party shall promptly execute and deliver (or
cause to be executed and delivered) to Pledgor all such proxies,
dividend payment orders and other instruments as Pledgor may from time
to time reasonably request for the purpose of enabling Pledgor to
exercise the voting and other consensual rights which it is entitled to
exercise pursuant to paragraph (i) above and to receive the dividends,
principal or interest payments which it is authorized to receive and
retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuation of an
Event of Default:
(i) upon written notice from Secured Party to Pledgor, all
rights of Pledgor to exercise the voting and other consensual rights
which it would otherwise be entitled to exercise pursuant to Section
7(a)(i) shall cease, and all such rights shall thereupon become vested
in Secured Party who shall thereupon have the sole right to exercise
such voting and other consensual rights;
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(ii) all rights of Pledgor to receive the dividends and
interest payments which it would otherwise be authorized to receive and
retain pursuant to Section 7(a)(ii) shall cease, and all such rights
shall thereupon become vested in Secured Party who shall thereupon have
the sole right to receive and hold as Pledged Collateral such dividends
and interest payments; and
(iii) all dividends, principal and interest payments which
are received by Pledgor contrary to the provisions of paragraph (ii) of
this Section 7(b) shall be received in trust for the benefit of Secured
Party, shall be segregated from other funds of Pledgor and shall
forthwith be paid over to Secured Party as Pledged Collateral in the
same form as so received (with any necessary endorsements).
(c) In order to permit Secured Party to exercise the
voting and other consensual rights which it may be entitled to exercise
pursuant to Section 7(b)(i) and to receive all dividends and other
distributions which it may be entitled to receive under Section 7(a)(ii) or
Section 7(b)(ii), (i) Pledgor shall promptly execute and deliver (or cause to
be executed and delivered) to Secured Party all such proxies, dividend payment
orders and other instruments as Secured Party may from time to time reasonably
request and (ii) without limiting the effect of the immediately preceding
clause (i), Pledgor hereby grants to Secured Party an irrevocable proxy to vote
the Pledged Shares and to exercise all other rights, powers, privileges and
remedies to which a holder of the Pledged Shares would be entitled (including,
without limitation, giving or withholding written consents of shareholders,
calling special meetings of shareholders and voting at such meetings), which
proxy shall be effective, automatically and without the necessity of any action
(including any transfer of any Pledged Shares on the record books of the issuer
thereof) by any other Person (including the issuer of the Pledged Shares or any
officer or agent thereof), upon the occurrence of an Event of Default and which
proxy shall only terminate upon the indefeasible payment in full of the Secured
Obligations.
SECTION 8. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Pledgor
hereby irrevocably appoints Secured Party as Pledgor's attorney- in-fact, with
full authority in the place and stead of Pledgor and in the name of Pledgor,
Secured Party or otherwise, from time to time in Secured Party's discretion to
take any action and to execute any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement, including
without limitation:
(a) to file one or more financing or continuation
statements, or amendments thereto, relative to all or any part of the Pledged
Collateral without the signature of Pledgor;
(b) to ask, demand, collect, ▇▇▇ for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Pledged Collateral;
(c) to receive, endorse and collect any instruments made
payable to Pledgor representing any dividend, principal or interest payment or
other distribution in respect of the Pledged Collateral or any part thereof and
to give full discharge for the same; and
(d) to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Pledged Collateral or otherwise to enforce the rights
of Secured Party with respect to any of the Pledged Collateral.
Secured Party shall not exercise any powers granted pursuant to
this appointment as attorney-in-fact (other than with respect to clause (a)
above) until the occurrence of and only during the continuation of an Event of
Default. This appointment as attorney-in-fact shall terminate upon the
termination of this Agreement pursuant to Section 14.
SECTION 9. SECURED PARTY MAY PERFORM. If Pledgor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party
incurred in connection therewith shall be payable by Pledgor under Section
13(b).
SECTION 10. STANDARD OF CARE. The powers conferred on Secured
Party hereunder are solely to protect its interest in the Pledged Collateral
and shall not impose any duty upon it to exercise any such powers. Except
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for the exercise of reasonable care in the custody of any Pledged Collateral in
its possession and the accounting for moneys actually received by it hereunder,
Secured Party shall have no duty as to any Pledged Collateral, it being
understood that Secured Party shall have no responsibility for (a) ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relating to any Pledged Collateral, whether or not
Secured Party has or is deemed to have knowledge of such matters, (b) taking
any necessary steps (other than steps taken in accordance with the standard of
care set forth above to maintain possession of the Pledged Collateral) to
preserve rights against any parties with respect to any Pledged Collateral, (c)
taking any necessary steps to collect or realize upon the Secured Obligations
or any guarantee therefor, or any part thereof, or any of the Pledged
Collateral, or (d) initiating any action to protect the Pledged Collateral
against the possibility of a decline in market value. Secured Party shall be
deemed to have exercised reasonable care in the custody and preservation of
Pledged Collateral in its possession if such Pledged Collateral is accorded
treatment substantially equal to that which Secured Party accords its own
property consisting of negotiable securities.
SECTION 11. REMEDIES.
(a) If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Pledged Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the Uniform Commercial Code as in effect in any relevant jurisdiction
(the "CODE") (whether or not the Code applies to the affected Pledged
Collateral), and Secured Party may also in its sole discretion, without notice
except as specified below, sell the Pledged Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange or broker's
board or at any of Secured Party's offices or elsewhere, for cash, on credit or
for future delivery, at such time or times and at such price or prices and upon
such other terms as Secured Party may deem commercially reasonable,
irrespective of the impact of any such sales on the market price of the Pledged
Collateral. Secured Party or any Lender may be the purchaser of any or all of
the Pledged Collateral at any such sale and Secured Party, as agent for and
representative of Lenders and Interest Rate Exchangers (but not any Lender,
Lenders, Interest Rate Exchanger or Interest Rate Exchangers in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing), shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Pledged Collateral sold at any such public sale, to use and apply any of the
Secured Obligations as a credit on account of the purchase price for any
Pledged Collateral payable by Secured Party at such sale. Each purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of Pledgor, and Pledgor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Pledgor agrees that, to the extent
notice of sale shall be required by law, at least ten days' written notice to
Pledgor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. Secured
Party shall not be obligated to make any sale of Pledged Collateral regardless
of notice of sale having been given. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Pledgor hereby waives any claims against
Secured Party arising by reason of the fact that the price at which any Pledged
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Secured Party accepts
the first offer received and does not offer such Pledged Collateral to more
than one offeree; provided, that such sale was conducted in a commercially
reasonable manner. If the proceeds of any sale or other disposition of the
Pledged Collateral are insufficient to pay all the Secured Obligations, Pledgor
shall be liable for the deficiency and the fees of any attorneys employed by
Secured Party to collect such deficiency.
(b) Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933 and applicable state
securities laws, Secured Party may be compelled, with respect to any sale of
all or any part of the Pledged Collateral conducted without prior registration
or qualification of such Pledged Collateral under the Securities Act and/or
such state securities laws, to limit purchasers to those who will agree, among
other things, to acquire the Pledged Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. Pledgor
acknowledges that any such private sales may be at prices and on terms less
favorable than those obtainable through a public sale without such restrictions
(including, without limitation, a public offering made pursuant to a
registration statement under the Securities Act) and, notwithstanding such
circumstances, Pledgor agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner and that Secured
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Party shall have no obligation to engage in public sales and no obligation to
delay the sale of any Pledged Collateral for the period of time necessary to
permit the issuer thereof to register it for a form of public sale requiring
registration under the Securities Act or under applicable state securities
laws, even if such issuer would, or should, agree to so register it.
(c) If Secured Party determines to exercise its right to
sell any or all of the Pledged Collateral, upon written request, Pledgor shall
and shall cause each issuer of any Pledged Shares to be sold hereunder from
time to time to furnish to Secured Party all such information as Secured Party
may reasonably request in order to determine the number of shares and other
instruments included in the Pledged Collateral which may be sold by Secured
Party in exempt transactions under the Securities Act and the rules and
regulations of the Securities and Exchange Commission thereunder, as the same
are from time to time in effect.
(d) Notwithstanding anything in this Agreement to the
contrary, Secured Party shall exercise, or shall refrain from exercising, any
remedy provided for in Section 11(a) in accordance with the instructions of
Requisite Lenders, and the Interest Rate Exchangers, by their acceptance of the
benefits of this Agreement and the other Loan Documents, hereby agree to be
bound by such instructions. The sole rights of the Interest Rate Exchangers
under this Agreement shall be to be secured by the Pledged Collateral and to
receive the payments provided for in Section 12.
SECTION 12. APPLICATION OF PROCEEDS. Except as expressly
provided elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any sale of, collection from, or other realization upon all or any
part of the Pledged Collateral may, in the discretion of Secured Party, be held
by Secured Party as Pledged Collateral for, and/or then, or at any time
thereafter, applied in full or in part by Secured Party against, the Secured
Obligations in the following order of priority:
FIRST: To the payment of all reasonable costs and expenses of
such sale, collection or other realization, including reasonable
compensation to Secured Party and its agents and counsel, and all other
reasonable expenses, liabilities and advances made or incurred by
Secured Party in connection therewith, and all amounts for which
Secured Party is entitled to indemnification hereunder and all
reasonable advances made by Secured Party hereunder for the account of
Pledgor, and to the payment of all reasonable costs and expenses paid
or incurred by Secured Party in connection with the exercise of any
right or remedy hereunder, all in accordance with Section 13;
SECOND: To the payment of all other Secured Obligations (for
the ratable benefit of the holders thereof) then due and payable; and
THIRD: To the payment to or upon the order of Pledgor, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
SECTION 13. INDEMNITY AND EXPENSES.
(a) Pledgor agrees to indemnify Secured Party, each Lender
and each Interest Rate Exchanger which executes and delivers an Acknowledgement
hereto from and against any and all claims, losses and liabilities in any way
relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including, without limitation, enforcement of
this Agreement), except to the extent such claims, losses or liabilities result
solely from Secured Party's, such Lender's or such Interest Rate Exchanger's
gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction.
(b) Pledgor shall pay to Secured Party upon demand the
amount of any and all reasonable costs and expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that Secured
Party may incur in connection with (i) the administration of this Agreement,
(ii) the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the
failure by Pledgor to perform or observe any of the provisions hereof.
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SECTION 14. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the Pledged
Collateral and shall (a) remain in full force and effect until (i) the
indefeasible payment in full of all Secured Obligations (other than Obligations
which are contingent and unliquidated and not due and owing on such date and
which pursuant to the provisions of the Credit Agreement, Interest Rate
Agreements, Letters of Credit or the Loan Documents survive the termination of
the Credit Agreement, the repayment of the Secured Obligations, the termination
of the Commitments, the expiration or cancellation of all Letters of Credit or
the termination, expiration or cancellation of all Interest Rate Agreements),
the cancellation or termination of the Commitments and the cancellation or
expiration of all outstanding Letters of Credit and the termination, expiration
or cancellation of all Interest Rate Agreements, or (ii) the release of the
Liens on the Pledged Collateral by Secured Party in writing in accordance with
the terms of subsection 6.11 of the Credit Agreement, (b) be binding upon
Pledgor, its successors and assigns, and (c) inure, together with the rights
and remedies of Secured Party hereunder, to the benefit of Secured Party and
its successors, transferees and assigns. Without limiting the generality of
the foregoing clause (c), but subject to the provisions of subsection 11.1 of
the Credit Agreement, any Lender may assign or otherwise transfer any Loans
held by any of them to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to Lenders
herein or otherwise and any Interest Rate Exchanger may assign or otherwise
transfer any Interest Rate Obligations owing to it to another Lender or an
Affiliate of such Lender or another Lender, and such other Lender or Affiliate
shall thereupon become vested with all the benefits in respect thereof granted
to such Interest Rate Exchanger herein or otherwise. Upon (i) the indefeasible
payment in full of all Secured Obligations (other than Obligations which are
contingent and unliquidated and not due and owing on such date and which
pursuant to the provisions of the Credit Agreement, Interest Rate Agreements,
Letters of Credit or the Loan Documents survive the termination of the Credit
Agreement, the repayment of the Secured Obligations, the termination of the
Commitments, the expiration or cancellation of all Letters of Credit or the
termination, expiration or cancellation of all Interest Rate Agreements), the
cancellation or termination of the Commitments, the cancellation or expiration
of all outstanding Letters of Credit and the termination, expiration or
cancellation of all Interest Rate Agreements, or (ii) the release of the Liens
on the Pledged Collateral by Secured Party in writing in accordance with the
terms of subsection 6.11 of the Credit Agreement, the security interest granted
hereby shall terminate and all rights to the Pledged Collateral shall revert to
Pledgor. Upon any such termination Secured Party will, at Pledgor's expense,
execute and deliver to Pledgor such documents as Pledgor shall reasonably
request to evidence such termination and Pledgor shall be entitled to the
return, upon its request and at its expense, against receipt and without
recourse to Secured Party, of such of the Pledged Collateral as shall not have
been sold or otherwise applied pursuant to the terms hereof.
SECTION 15. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders and, by their acceptance of the benefits of this
Agreement and the other Loan Documents, by each Interest Rate Exchanger.
Secured Party shall be obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from exercising any rights,
and to take or refrain from taking any action (including, without limitation,
the release or substitution of Pledged Collateral), solely in accordance with
this Agreement and the Credit Agreement and upon the instructions of Requisite
Lenders, and the Interest Rate Exchangers, by their acceptance of the benefits
of this Agreement and other Loan Documents, hereby agree to be bound by such
instructions.
(b) Secured Party shall at all times be the same Person
that is Agent under the Credit Agreement. Written notice of resignation by
Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute notice of resignation as Secured Party under this Agreement; removal
of Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute removal as Secured Party under this Agreement; and appointment of a
successor Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute appointment of a successor Secured Party under this Agreement. Upon
the acceptance of any appointment as Agent under subsection 10.5A of the Credit
Agreement by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly (i) transfer to such
successor Secured Party all sums, securities and other items of Collateral held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other
355
actions, as may be necessary or appropriate in connection with the assignment
to such successor Secured Party of the security interests created hereunder,
whereupon such retiring or removed Secured Party shall be discharged from its
duties and obligations under this Agreement. After any retiring or removed
Agent's resignation or removal hereunder as Secured Party, the provisions of
this Agreement shall inure to its benefit as to any actions taken or omitted to
be taken by it under this Agreement while it was Secured Party hereunder.
SECTION 16. AMENDMENTS; ETC. No amendment or waiver of any
provision of this Agreement, or consent to any departure by Pledgor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by Secured Party (or, in the case of an amendment hereto, by Pledgor and
Secured Party), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given; provided
that any amendment or waiver which adversely affects the interests of the
Interest Rate Exchangers but does not result in a similar adverse effect on the
interests of Lenders shall only be effective with the consent of the holders of
a majority of the Interest Rate Obligations given the benefit of the security
hereunder.
SECTION 17. NOTICES. Any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telexed or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile or telex, or three Business Days
after depositing it in the United States mail with postage prepaid and properly
addressed. For the purposes hereof, the address of each party hereto shall be
as set forth under such party's name on the signature pages hereof or, as to
either party, such other address as shall be designated by such party in a
written notice delivered to the other party hereto.
SECTION 18. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
SECTION 19. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 20. HEADINGS. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 21. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Credit Agreement, terms used in Articles 8 and 9 of the Uniform
Commercial Code in the State of New York are used herein as therein defined.
SECTION 22. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES
356
TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
Pledgor hereby agrees that service of all process in any such proceeding in any
such court may be made by registered or certified mail, return receipt
requested, to Pledgor at its address provided in Section 17, such service being
hereby acknowledged by Pledgor to be sufficient for personal jurisdiction in
any action against Pledgor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
Secured Party to bring proceedings against Pledgor in the courts of any other
jurisdiction.
SECTION 23. WAIVER OF JURY TRIAL. PLEDGOR AND SECURED PARTY
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Pledgor and Secured
Party each acknowledge that this waiver is a material inducement for Pledgor
and Secured Party to enter into a business relationship, that Pledgor and
Secured Party have already relied on this waiver in entering into this
Agreement and that each will continue to rely on this waiver in their related
future dealings. Pledgor and Secured Party further warrant and represent that
each has reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the
event of litigation, this Agreement may be filed as a written consent to a
trial by the court.
SECTION 24. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
[Remainder of page intentionally left blank]
357
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
DOMINICK'S FINER FOODS, INC. OF ILLINOIS,
as Pledgor
By:
--------------------------------
Title:
-----------------------------
Notice Address: Dominick's Finer Foods,
Inc. of Illinois
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By:
--------------------------------
Title:
-----------------------------
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
358
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
▇▇▇▇'▇ OF BLOOMINGDALE, INC., as Pledgor
By:
--------------------------------
Title:
-----------------------------
Notice Address: ▇▇▇▇'▇ of Bloomingdale, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By:
--------------------------------
Title:
-----------------------------
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
359
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
▇▇▇▇ HAZELCREST, INC., as Pledgor
By:
--------------------------------
Title:
-----------------------------
Notice Address: ▇▇▇▇ Hazelcrest, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By:
--------------------------------
Title:
-----------------------------
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
360
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
DFF EQUIPMENT LEASING COMPANY
(f/k/a Jerry's Deep Discount
Centers, Inc.), as Pledgor
By:
--------------------------------
Title:
-----------------------------
Notice Address: DFF Equipment Leasing
Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By:
--------------------------------
Title:
-----------------------------
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
361
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BLACKHAWK DEVELOPMENTS, INC., as Pledgor
By:
--------------------------------
Title:
-----------------------------
Notice Address: Blackhawk Developments, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By:
--------------------------------
Title:
-----------------------------
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
362
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BLACKHAWK PROPERTIES, INC., as Pledgor
By:
--------------------------------
Title:
-----------------------------
Notice Address: Blackhawk Properties, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By:
--------------------------------
Title:
-----------------------------
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
363
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
SAVE-IT DISCOUNT FOODS CORPORATION, as Pledgor
By:
--------------------------------
Title:
-----------------------------
Notice Address: Save-It Discount Foods Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By:
--------------------------------
Title:
-----------------------------
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
364
SCHEDULE I
Attached to and forming a part of the Subsidiary Pledge
Agreement dated as of November 1, 1996 between ___________________, as Pledgor,
and Bankers Trust Company, as Secured Party.
Part A
Class of Stock Certi- Par Number of
Stock Issuer Stock ficate Nos. Value Shares
------------ -------- ------------ ----- -----------
[Save-It Discount Foods Corporation Common 1 No Par
1,000]1
[None.]2
Part B
Debt Issuer Amount of Indebtedness
----------- ----------------------
Dominick's Finer Foods, Inc. Amounts outstanding from time to time
------------------------------
1 For Dominick's Finer Foods, Inc. of Illinois only.
2 For all others.
365
SCHEDULE II
PLEDGE AMENDMENT
This Pledge Amendment, dated ____________, [19/20]__, is
delivered pursuant to Section 6(b) of the Subsidiary Pledge Agreement referred
to below. The undersigned hereby agrees that this Pledge Amendment may be
attached to the Subsidiary Pledge Agreement dated November 1, 1996, between the
undersigned and Bankers Trust Company, as Secured Party (the "SUBSIDIARY PLEDGE
AGREEMENT," capitalized terms defined therein being used herein as therein
defined), and that the [Pledged Shares] [Pledged Debt] listed on this Pledge
Amendment shall be deemed to be part of the [Pledged Shares] [Pledged Debt] and
shall become part of the Pledged Collateral and shall secure all Secured
Obligations.
[NAME OF PLEDGOR]
By: _________________________
Title:
Class of Stock Certi- Par Number of
Stock Issuer Stock ficate Nos. Value Shares
------------ -------- ------------ ----- ---------
Debt Issuer Amount of Indebtedness
----------- ----------------------
366
EXHIBIT XIX
[FORM OF SUBSIDIARY SECURITY AGREEMENT]
SUBSIDIARY SECURITY AGREEMENT
This SUBSIDIARY SECURITY AGREEMENT (this "AGREEMENT") is dated
as of November 1, 1996 and entered into by and between [INSERT NAME OF GRANTOR
IN CAPS], a _____________________ corporation ("GRANTOR"), and BANKERS TRUST
COMPANY, as agent for and representative of (in such capacity herein called
"SECURED PARTY") the financial institutions ("LENDERS") party to the Credit
Agreement referred to below and any Interest Rate Exchangers (as hereinafter
defined).
PRELIMINARY STATEMENTS
A. Lenders, Secured Party, Syndication Agent and
Arrangers have entered into a Credit Agreement dated as of November 1, 1996
(said Credit Agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined) with Dominick's Supermarkets, Inc., a Delaware
corporation, and Dominick's Finer Foods, Inc., a Delaware corporation
("COMPANY"), pursuant to which Lenders have made certain commitments, subject
to the terms and conditions set forth in the Credit Agreement, to extend
certain credit facilities to Company.
B. It is contemplated that Company may from time to time
enter into Interest Rate Agreements with one or more Lenders or their
Affiliates (collectively, the "INTEREST RATE EXCHANGERS") and Grantor desires
that the obligations of Company under such agreements, including the obligation
to make payments in the event of early termination thereunder (all such
obligations being the "INTEREST RATE OBLIGATIONS"), be given the benefits of
the security interest created hereby.
C. Grantor has executed and delivered a Subsidiary
Guaranty dated as of November 1, 1996 (said guaranty, as it may hereafter be
amended, supplemented or otherwise modified from time to time, being the
"GUARANTY") in favor of Secured Party for the benefit of Lenders and the
Interest Rate Exchangers which have executed and delivered an Acknowledgment
thereto, pursuant to which Grantor has guarantied the prompt payment and
performance when due of all Obligations of Company under the Credit Agreement
and the other Loan Documents and all Interest Rate Obligations of Company.
D. It is a requirement under the Credit Agreement that
Grantor shall have granted the security interests and undertaken the
obligations contemplated by this Agreement.
367
NOW, THEREFORE, in consideration of the premises, in order to
induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Grantor hereby agrees with Secured
Party as follows:
SECTION 1. GRANT OF SECURITY. Grantor hereby grants to
Secured Party a security interest in, all of Grantor's right, title and
interest in and to the following, in each case whether now or hereafter
existing or in which Grantor now has or hereafter acquires an interest and
wherever the same may be located (the "COLLATERAL"):
(a) all equipment in all of its forms (including but not
limited to, all distribution, retailing, data processing, office and motor
vehicle equipment in all of its forms), all parts thereof and all accessions
thereto; excluding, however, any such equipment, parts or accessions listed on
Schedule 1(a) annexed hereto located as of the Closing Date (or as of the date
such Schedule 1(a) is supplemented pursuant to Section 5(c) hereof) at
Grantor's stores listed on Schedule 1(a) annexed hereto (any and all such
equipment, parts and accessions not so excluded pursuant to the preceding
clause being the "EQUIPMENT");
(b) all inventory in all of its forms (including, but not
limited to, (i) all goods held by Grantor for sale or lease or to be furnished
under contracts of service or so leased or furnished, (ii) all raw materials,
work in process, finished goods, and materials used or consumed in the
manufacture, packing, shipping, advertising, selling, leasing, furnishing or
production of such inventory or otherwise used or consumed in Grantor's
business, (iii) all goods in which Grantor has an interest in mass or a joint
or other interest or right of any kind, and (iv) all goods which are returned
to or repossessed by Grantor and all accessions thereto and products thereof;
excluding, however, any such inventory listed on Schedule 1(b) annexed hereto
located (as of the date such Schedule 1(b) is delivered pursuant to Section
5(c) hereof) at Grantor's stores listed on Schedule 1(b) annexed hereto (all
such inventory, accessions and products not so excluded pursuant to the
preceding clause being the "INVENTORY") and all negotiable documents of title
(including without limitation warehouse receipts, dock receipts and bills of
lading) issued by any Person covering any Inventory (any such negotiable
documents of title being a "NEGOTIABLE DOCUMENT OF TITLE");
(c) all accounts, contract rights, chattel paper,
documents, instruments, general intangibles and other rights and obligations of
any kind and all rights in, to and under all security agreements, leases and
other contracts securing or otherwise relating to any such accounts, contract
rights, chattel paper, documents, instruments, general intangibles or other
obligations (any and all such accounts, contract rights, chattel paper,
documents, instruments, general intangibles and other obligations being the
"ACCOUNTS", and any and all such security agreements, leases and other
contracts being the "RELATED CONTRACTS");
(d) the agreements listed in Schedule 1(d) annexed hereto
and all other agreements, contracts, and assignments whereby Grantor obtains
goods or services that
368
are useful or necessary to the business of such Grantor, as each such agreement
may be amended, supplemented or otherwise modified from time to time (said
agreements, as so amended, supplemented or otherwise modified, being referred
to herein individually as an "ASSIGNED AGREEMENT" and collectively as the
"ASSIGNED AGREEMENTS"), including without limitation (i) all rights of Grantor
to receive moneys due or to become due under or pursuant to the Assigned
Agreements, (ii) all rights of Grantor to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect to the Assigned Agreements, (iii)
all claims of Grantor for damages arising out of any breach of or default under
the Assigned Agreements, and (iv) all rights of Grantor to terminate, amend,
supplement, modify or exercise rights or options under the Assigned Agreements,
to perform thereunder and to compel performance and otherwise exercise all
remedies thereunder;
(e) all deposit accounts, including without limitation the
deposit accounts specified on Schedule 1(e) annexed hereto and all other
deposit accounts maintained with Secured Party (the "DEPOSIT ACCOUNTS");
(f) all trademarks, tradenames, tradesecrets, business
names, patents, patent applications, licenses, copyrights, registrations and
franchise rights, and all goodwill associated with any of the foregoing;
(g) to the extent not included in any other paragraph of
this Section 1, all other general intangibles (including, without limitation,
tax refunds, rights to payment or performance, choses in action and judgments
taken on any rights or claims included in the Collateral);
(h) all plant fixtures, business fixtures and other
fixtures and storage and office facilities, and all accessions thereto and
products thereof; excluding, however, any such fixtures, facilities, additions,
accession, replacements and products listed on Schedule 1(h) annexed hereto
located as of the Closing Date (or as of the date such Schedule 1(h) is
supplemented pursuant to Section 5(c) hereof) at Grantor's stores listed on
Schedule 1(h) annexed hereto.
(i) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related data processing
software that at any time evidence or contain information relating to any of
the Collateral or are otherwise necessary or helpful in the collection thereof
or realization thereupon; and
(j) all proceeds, products, rents and profits of or from
any and all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is the
loss payee thereof), or any indemnity, warranty or guaranty, payable by reason
of loss or damage to or otherwise with respect to any of the foregoing
Collateral. For purposes of this Agreement, the term "PROCEEDS" includes
whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary.
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Notwithstanding the foregoing provisions of this Section 1, the
Collateral shall not include, and Grantor shall not hereby be deemed to grant a
security interest in, any rights of Grantor under any license, lease, agreement
or contract existing as of the Closing Date that expressly prohibits any such
security interest; provided, however, that in the event that any such
prohibition may be waived or avoided upon Grantor's obtaining a consent to such
security interest or through the satisfaction of any other condition precedent
and such consent is obtained or such condition precedent is satisfied, the
foregoing provisions of this sentence shall not be effective with respect to
such license, lease, agreement or contract.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures,
and the Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of
all obligations and liabilities of every nature of Grantor now or hereafter
existing under or arising out of or in connection with the Guaranty and all
extensions or renewals thereof, whether for principal, interest (including
without limitation interest that, but for the filing of a petition in
bankruptcy with respect to Company, would accrue on such obligations),
reimbursement of amounts drawn under Letters of Credit, fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such
obligations or liabilities that are paid, to the extent all or any part of such
payment is avoided or recovered directly or indirectly from Secured Party or
any Lender or any Interest Rate Exchanger as a preference, fraudulent transfer
or otherwise (all such obligations and liabilities being the "UNDERLYING
DEBT"), and all obligations of every nature of Grantor now or hereafter
existing under this Agreement (all such obligations of Grantor, together with
the Underlying Debt, being the "SECURED OBLIGATIONS").
SECTION 3. GRANTOR REMAINS LIABLE. Anything contained herein
to the contrary notwithstanding, (a) Grantor shall remain liable under any
contracts and agreements included in the Collateral, to the extent set forth
therein, to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by Secured
Party of any of its rights hereunder shall not release Grantor from any of its
duties or obligations under the contracts and agreements included in the
Collateral, and (c) Secured Party shall not have any obligation or liability
under any contracts and agreements included in the Collateral by reason of this
Agreement, nor shall Secured Party be obligated to perform any of the
obligations or duties of Grantor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
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SECTION 4. REPRESENTATIONS AND WARRANTIES. Grantor represents
and warrants as follows:
(a) Ownership of Collateral. Except for Permitted
Encumbrances and the security interest created by this Agreement, Grantor owns
the Collateral free and clear of any Lien. Except such as may have been filed
in favor of Secured Party relating to this Agreement and any Permitted
Encumbrances, no effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office.
(b) Location of Equipment and Inventory. All of the
Equipment (other than any motor vehicles included in Equipment) and Inventory
(other than Equipment or Inventory in transit to Illinois) is, as of the date
hereof, located at the places specified in Schedule 4(b) annexed hereto.
(c) Office Locations; Other Names. As of the date hereof, the
chief place of business, the chief executive office and the office where
Grantor keeps its records regarding the Accounts and all originals of all
chattel paper that evidence Accounts is, and has been for the four month period
preceding the date hereof, located at the places specified in Schedule 4(c)
annexed hereto. As of the date hereof, Grantor has not in the past five years
done, and does not now do, business under any other name (including any
trade-name or fictitious business name) other than those specified in Schedule
4(c) annexed hereto.
(d) Delivery of Certain Collateral. All notes and other
instruments (excluding checks) and, to the extent required to be delivered
pursuant to Section 5(a), chattel paper comprising any and all items of
Collateral have been delivered to Secured Party duly endorsed and accompanied
by duly executed instruments of transfer or assignment in blank.
(e) Governmental Authorizations. Except for the filing or
recording of Uniform Commercial Code financing statements necessary to perfect
the security interest created hereunder and the indication of the security
interest created hereunder on the certificate of title issued with respect to
any item of Equipment under a statute of any jurisdiction requiring such
indication of such security interest as a condition of perfection thereof, all
of which have been made or done (other than with respect to the motor vehicles
of Grantor), as the case may be, no authorization, approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for either (i) the grant by Grantor of the security interest
granted hereby, (ii) the execution, delivery or performance of this Agreement
by Grantor, or (iii) the perfection of or the exercise by Secured Party of its
rights and remedies hereunder (except as may have been taken by or at the
direction of Grantor).
(f) Perfection. This Agreement, together with the filing
of financing statements containing the description of the Collateral with the
Secretary of State of the State of Illinois, and with the applicable county
offices, which will be made immediately following the Closing Date, creates a
valid, perfected and, except for Permitted
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Encumbrances, first priority security interest in the Collateral (excluding the
security interest in the Deposit Accounts) securing the payment of the Secured
Obligations; provided that Secured Party retains physical possession of any
Collateral, the possession of which is required for perfection; further
provided that additional actions may be required with respect to the perfection
of proceeds of the Collateral; provided still further that the security
interest granted to Secured Party in the motor vehicles of Grantor will not be
perfected.
(g) Other Information. All information heretofore, herein
or hereafter supplied to Secured Party by or on behalf of Grantor with respect
to the Collateral is accurate and complete in all material respects.
SECTION 5. FURTHER ASSURANCES.
(a) Grantor agrees that from time to time, at the expense of
Grantor, Grantor will promptly execute and deliver all further instruments and
documents, and take all further action, that Secured Party may reasonably deem
to be necessary or desirable, or that Secured Party may reasonably request, in
order to perfect and protect any security interest granted or purported to be
granted hereby or to enable Secured Party to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, Grantor will: (i) at the request of Secured
Party, ▇▇▇▇ conspicuously each item of chattel paper included in the Accounts,
each Related Contract and, at the request of Secured Party, each of its records
pertaining to the Collateral, with a legend, in form and substance reasonably
satisfactory to Secured Party, indicating that such Collateral is subject to
the security interest granted hereby, (ii) if any Account shall be evidenced by
a promissory note or other instrument (excluding checks) or chattel paper,
deliver and pledge to Secured Party hereunder such note or instrument and, at
the request of Secured Party, the original counterpart of such chattel paper,
duly endorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance reasonably satisfactory to Secured Party,
(iii) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as Secured Party may reasonably
deem to be necessary or desirable, or as Secured Party may reasonably request,
in order to perfect and preserve the security interests granted or purported to
be granted hereby, (iv) upon the request of Secured Party, promptly after the
acquisition by Grantor of any item of Equipment which is covered by a
certificate of title under a statute of any jurisdiction under the law of which
indication of a security interest on such certificate is required as a
condition of perfection thereof, execute and file with the registrar of motor
vehicles or other appropriate authority in such jurisdiction an application or
other document requesting the notation or other indication of the security
interest created hereunder on such certificate of title, (v) upon the request
of Secured Party, within 30 days after the end of each calendar quarter,
deliver to Agent copies of all such applications or other documents filed
during such calendar quarter and copies of all such certificates of title
issued during such calendar quarter indicating the security interest created
hereunder in the items of Equipment covered thereby, (vi) at any reasonable
time, upon request by Secured Party, exhibit the Collateral to and allow
inspection of the Collateral by Secured Party, or persons designated by Secured
Party, and (vii) at Secured Party's reasonable
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request, appear in and defend any action or proceeding that may adversely
affect Grantor's title to or Secured Party's security interest in all or any
material part of the Collateral.
(b) Grantor hereby authorizes Secured Party to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Collateral without the signature of Grantor. Grantor
agrees that a carbon, photographic or other reproduction of this Agreement or
of a financing statement signed by Grantor shall be sufficient as a financing
statement and may be filed as a financing statement in any and all
jurisdictions.
(c) Grantor will furnish to Secured Party from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail. Without limiting the generality
of the foregoing, Grantor shall deliver a supplement to Schedule 1(a), Schedule
1(b) and Schedule 1(h) annexed hereto, which supplement shall set forth the
excluded equipment, parts and accessions described in Section 1(a) hereof,
excluded inventory described in Section 1(b) hereof or excluded fixtures and
products described in Section 1(h) hereof, as the case may be, to the extent,
and only to the extent, that Liens on such equipment, parts and accessions or
fixtures and products, as the case may be, are permitted under subsection
7.2A(iv) of the Credit Agreement, as soon as practicable but in no event later
than 5 days of the creation or incurrence of such Lien.
SECTION 6. CERTAIN COVENANTS OF GRANTOR. Grantor shall:
(a) not use or permit any Collateral to be used unlawfully
or in violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering any such
Collateral;
(b) notify Secured Party of any change in Grantor's name,
identity or corporate structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of
any change in Grantor's chief place of business, chief executive office or
residence or the office where Grantor keeps its records regarding any Accounts
and all originals of all chattel paper that evidence any Accounts;
(d) if Secured Party gives value to enable Grantor to
acquire rights in or the use of any Collateral, use such value for such
purposes; and
(e) pay promptly when due all material property and other
taxes, assessments and governmental charges or levies imposed upon, and all
material claims (including claims for labor, materials and supplies) against,
the Collateral, except to the extent the validity thereof is being contested in
good faith; provided that, notwithstanding any other provision in the Loan
Documents, Grantor shall in any event pay such taxes, assessments, charges,
levies or claims not later than five days prior to
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the date of any proposed sale under any judgement, writ or warrant of
attachment entered or filed against Grantor or any of the Collateral as a
result of the failure to make such payment.
SECTION 7. SPECIAL COVENANTS WITH RESPECT TO EQUIPMENT AND
INVENTORY. Grantor shall:
(a) keep the Equipment and Inventory (other than Equipment
or Inventory in transit to Indiana or Illinois) at the places therefor
specified on Schedule 4(b) annexed hereto or, upon 30 days' prior written
notice to Secured Party, at such other places in jurisdictions where all action
that Secured Party may reasonably deem to be necessary or desirable, or that
Secured Party may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby, or to enable
Secured Party to exercise and enforce its rights and remedies hereunder, with
respect to such Equipment and Inventory shall have been taken;
(b) cause the Equipment to be maintained and preserved in
the same condition, repair and working order as when new, ordinary wear and
tear excepted, and in accordance with Grantor's past practices, and shall
forthwith, or, in the case of any loss or damage to any of the Equipment when
subsection (c) of Section 8 is not applicable, as quickly as practicable after
the occurrence thereof, make or cause to be made all repairs, replacements and
other improvements in connection therewith that are necessary or desirable to
such end. Grantor shall promptly furnish to Secured Party a statement
respecting any material loss or damage to any of the Equipment which involves
loss or damage exceeding $1,000,000 in the aggregate during any Fiscal Year for
Grantor;
(c) keep correct and accurate records of the Inventory,
itemizing and describing the kind, type and quantity of Inventory, Grantor's
cost therefor and (where applicable) the current list prices for the Inventory,
provided that nothing in this Section 7 with respect to Inventory being sold in
the ordinary course in Grantor's retail stores shall require Grantor to
maintain records in any manner different from those being maintained by Grantor
as of the date hereof;
(d) if any Inventory is in possession or control of any of
Grantor's agents or processors upon the occurrence of an Event of Default,
instruct such agent or processor to hold all such Inventory for the account of
Secured Party and subject to the instructions of Secured Party; and
(e) promptly upon the issuance and delivery to Grantor of
any Negotiable Document of Title, upon the request of Secured Party after the
occurrence of an Event of Default or Potential Event of Default, deliver such
Negotiable Document of Title to Secured Party.
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SECTION 8. INSURANCE.
(a) Grantor shall, at its own expense, maintain insurance
with respect to the Equipment and Inventory in such amounts, against such
risks, in such form and with such insurers as shall be satisfactory to Secured
Party from time to time as provided in subsection 6.4 of the Credit Agreement.
Such insurance shall include, without limitation, property damage insurance and
liability insurance. Each policy for (i) liability insurance shall name
Secured Party as additional insured and (ii) property damage insurance shall be
subject to a loss payee endorsement, naming Secured Party, as additional
insured, as loss payee, subject in the case of any insurance referred to in
clause (ii) to normal and customary rights granted in the ordinary course of
business to (A) any landlord (with respect to the property covered by any
lease), (B) in the case of any equipment financing, to any equipment lessor or
lender (with respect to the equipment covered thereby), or (C) mortgagees of
any Real Property Asset. All proceeds of insurance that are (i) payable during
the existence of an Event of Default or (ii) payable at any time resulting in
aggregate insurance proceeds in excess of $1,000,000 (a "MAJOR LOSS"), shall be
payable to Secured Party. Grantor hereby authorizes and directs any affected
insurance company to make payment of such proceeds directly to Secured Party.
If Grantor receives or shall be holding any proceeds of insurance during the
existence of an Event of Default or at any time resulting from a Major Loss,
Grantor shall promptly pay over such proceeds to Secured Party. Grantor shall
not settle, adjust or compromise any claims for loss, damage or destruction of
its property or any party thereof under any policy or policies of insurance as
a result of a Major Loss without the prior written consent of Secured Party to
such settlement, adjustment or compromise; and during the existence of an Event
of Default hereunder Secured party shall have the sole and exclusive right, and
Grantor hereby authorizes and empowers Secured Party to settle, adjust or
compromise any insurance claims, and any such action taken by Grantor without
Secured Party's written consent shall be null and void. Each policy shall (i)
contain an agreement by the insurer that any loss thereunder shall be payable
to Secured Party notwithstanding any action, inaction or breach of
representation or warranty by Grantor, (ii) provide that there shall be no
recourse against Secured Party for payment of premiums or other amounts with
respect thereto, and (iii) provide that at least 30 days' prior written notice
of cancellation, material amendment, reduction in scope or limits of coverage
or of lapse shall be given to Secured Party by the insurer. Grantor shall, if
so requested by Secured Party, deliver to Secured Party original or duplicate
policies of such insurance and, as often as Secured Party may reasonably
request, a report of a reputable insurance broker with respect to such
insurance. Further, Grantor shall, at the request of Secured Party, duly
execute and deliver instruments of assignment of such insurance policies to
comply with the requirements of Section 5(a) and cause the respective insurers
to acknowledge notice of such assignment.
(b) Reimbursement under any liability insurance maintained
by Grantor pursuant to this Section 8 may be paid directly to the Person who
shall have incurred liability covered by such insurance. In case of any loss
involving damage to Equipment or Inventory when subsection (c) of this Section
8 is not applicable, Grantor shall make or cause to be made the necessary
repairs to or replacements of such Equipment or
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Inventory, and any proceeds of insurance maintained by Grantor pursuant to this
Section 8 shall be paid to Grantor as reimbursement for the costs of such
repairs or replacements.
(c) So long as no Event of Default has occurred and is
then continuing, after deducting therefrom all costs and expenses (regardless
of the particular nature thereof and whether incurred with or without suit),
including reasonable attorneys' fees, incurred by Secured Party in connection
with such Major Loss or the collection of insurance proceeds, Secured Party
shall disburse the insurance proceeds held by it in connection with any loss,
damage or destruction of any Collateral to Grantor, in accordance with and
subject to such customary terms, conditions and procedures as Secured Party may
require, for the sole purpose of paying the cost of restoration or replacement
of such Collateral. If an Event of Default has occurred and is continuing,
Secured Party may elect, in its sole and absolute discretion, (i) to apply all
or any portion of such insurance proceeds to the restoration or replacement of
the Collateral, subject to conditions determined by Secured Party, (ii) to
disburse any such proceeds to Grantor for the purposes set forth in the
preceding sentence, (iii) to hold such insurance proceeds as additional
Collateral hereunder or (iv) to apply such insurance proceeds as specified in
Section 18.
SECTION 9. SPECIAL COVENANTS WITH RESPECT TO ACCOUNTS AND
RELATED CONTRACTS.
(a) Grantor shall keep its chief place of business and
chief executive office and the office where it keeps its records concerning the
Accounts and Related Contracts, and all originals of all chattel paper that
evidence Accounts, at the location therefor specified in Section 4 or, upon 10
days' prior written notice to Secured Party, at such other location in a
jurisdiction where all action that Secured Party may reasonably deem to be
necessary or desirable, or that Secured Party may reasonably request, in order
to perfect and protect any security interest granted or purported to be granted
hereby, or to enable Secured Party to exercise and enforce its rights and
remedies hereunder, with respect to such Accounts and Related Contracts shall
have been taken. Grantor will hold and preserve such records and chattel paper
and will permit representatives of Secured Party at any time during normal
business hours to inspect and make abstracts from such records and chattel
paper, and Grantor agrees to render to Secured Party, at Grantor's cost and
expense, such clerical and other assistance as may be reasonably requested with
regard thereto. Promptly upon the reasonable request of Secured Party, Grantor
shall deliver to Secured Party complete and correct copies of each Related
Contract.
(b) Except as otherwise provided in this subsection (c),
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to Grantor under the Accounts and Related Contracts. In connection
with such collections, Grantor may take (and, after the occurrence and during
the continuance of an Event of Default, at Secured Party's direction, shall
take) such action as Grantor or after the occurrence and during the continuance
of an Event of Default, Secured Party may reasonably deem necessary or
advisable to enforce collection of amounts due or to become due under the
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Accounts; provided, however, that Secured Party shall have the right at any
time, upon the occurrence and during the continuation of an Event of Default
and upon written notice to Grantor of its intention to do so, to notify the
account debtors or obligors under any Accounts of the assignment of such
Accounts to Secured Party and to direct such account debtors or obligors to
make payment of all amounts due or to become due to Grantor thereunder directly
to Secured Party, to notify each Person maintaining a lockbox or similar
arrangement to which account debtors or obligors under any Accounts have been
directed to make payment to remit all amounts representing collections on
checks and other payment items from time to time sent to or deposited in such
lockbox or other arrangement directly to Secured Party and, upon such
notification and at the expense of Grantor, to enforce collection of any such
Accounts and to adjust, settle or compromise the amount or payment thereof, in
the same manner and to the same extent as Grantor might have done. After
receipt by Grantor of the notice from Secured Party referred to in the proviso
to the preceding sentence, (i) all amounts and proceeds (including checks and
other instruments) received by Grantor in respect of the Accounts and Related
Contracts shall be received in trust for the benefit of Secured Party
hereunder, shall be segregated from other funds of Grantor and shall be
forthwith paid over or delivered to Secured Party in the same form as so
received (with any necessary endorsement) to be held as cash Collateral and
applied as provided by Section 18, and (ii) Grantor shall not adjust, settle or
compromise the amount or payment of any such Account, or release wholly or
partly any account debtor or obligor thereof, or allow any credit or discount
thereon.
SECTION 10. SPECIAL PROVISIONS WITH RESPECT TO THE ASSIGNED
AGREEMENTS.
Grantor shall at its expense:
(i) perform and observe all material terms and
provisions of the Assigned Agreements to be performed or observed by
it, maintain the Assigned Agreements in full force and effect, enforce
the Assigned Agreements in accordance with their terms, except in each
case as any Assigned Agreement is amended, modified or terminated in
Grantor's business judgment as necessary or desirable or terminated in
accordance with its own terms (unless such amendment or modification or
termination is prohibited or otherwise restricted by subsection 7.15 of
the Credit Agreement), and take all such action to such end as may be
from time to time reasonably requested by Secured Party; and
(ii) from time to time (A) furnish to Secured Party
such information and reports regarding the Assigned Agreements as
Secured Party may reasonably request and (B) upon the reasonable
request of Secured Party make to each other party to any Assigned
Agreement such demands and requests for information and reports or for
action as Grantor is entitled to make under such Assigned Agreement.
Solely for purposes of this Section 10, the real property
leases as to which Grantor is a lessee thereunder shall not be deemed to be
"Assigned Agreements."
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SECTION 11. DEPOSIT ACCOUNTS. Upon the occurrence and during
the continuation of an Event of Default, Secured Party may exercise dominion
and control over, and refuse to permit further withdrawals (whether of money,
securities, instruments or other property) from any deposit accounts maintained
with Secured Party constituting part of the Collateral.
SECTION 12. LICENSE OF PATENTS, TRADEMARKS, COPYRIGHTS, ETC.
Effective upon the occurrence of any Event of Default and upon written notice
from Secured Party, Grantor hereby assigns, transfers and conveys to Secured
Party, the nonexclusive right and license to use all trademarks, tradenames,
copyrights, patents or technical processes owned or used by Grantor that relate
to the Collateral and any other collateral granted by Grantor as security for
the Secured Obligations, together with any goodwill associated therewith
(excluding, however, any of the foregoing which is not material to Grantor
which is held or used by Grantor pursuant to any license that expressly
prohibits any such assignment, transfer or conveyance which is not material to
Grantor), all to the extent necessary to enable Secured Party to use, possess
and realize on the Collateral and to enable any successor or assign to enjoy
the benefits of the Collateral. This right and license shall inure to the
benefit of all successors, assigns and transferees of Secured Party and its
successors, assigns and transferees, whether by voluntary conveyance, operation
of law, assignment, transfer, foreclosure, deed in lieu of foreclosure or
otherwise. Such right and license is granted free of charge, without
requirement that any monetary payment whatsoever be made to Grantor.
SECTION 13. TRANSFERS AND OTHER LIENS. Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, except as permitted by the Credit
Agreement; or
(b) except for the security interest created by this
Agreement and Permitted Encumbrances, create or suffer to exist any Lien upon
or with respect to any of the Collateral to secure the indebtedness or other
obligations of any Person.
As long as no Event of Default has occurred and is then
continuing, in the event Grantor sells or transfers for value any portion of
the Collateral as permitted under subsection 7.7 of the Credit Agreement,
Secured Party shall release the Collateral that is the subject of such asset
sale to Grantor free and clear of the Lien under this Agreement concurrently
with the consummation of such asset sale, and Secured Party shall, upon the
reasonable request of and at the expense of Grantor, execute an amendment with
respect to the applicable financing statement filed under this Agreement to
effect such release.
SECTION 14. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Grantor
hereby irrevocably appoints Secured Party as Grantor's attorney-in-fact, with
full authority in the place and stead of Grantor and in the name of Grantor,
Secured Party or otherwise, from time to time in Secured Party's discretion to
take any action and to execute any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement, including
without limitation:
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(a) to obtain and adjust insurance required to be
maintained by Grantor or paid to Secured Party pursuant to Section 8;
(b) to ask for, demand, collect, ▇▇▇ for, recover,
compound, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral;
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clauses (a) and (b)
above;
(d) to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or placed upon
or threatened against any of the Collateral, the legality or validity thereof
and the amounts necessary to discharge the same to be determined by Secured
Party in its sole discretion, any such payments made by Secured Party to become
obligations of Grantor to Secured Party, due and payable immediately without
demand;
(f) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with the Accounts and
other documents relating to the Collateral; and
(g) generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though Secured Party were the absolute owner thereof for all
purposes, and to do, at Secured Party's option and Grantor's expense, at any
time or from time to time, all acts and things that Secured Party reasonably
deems necessary to protect, preserve or realize upon the Collateral and Secured
Party's security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as Grantor might do.
Secured Party shall not exercise any powers granted pursuant to
this appointment as attorney-in-fact at any time (i) that Grantor is fully
performing its obligations hereunder and (ii) that no Event of Default has
occurred and is then continuing. This appointment as attorney-in-fact shall
terminate upon the termination of this Agreement pursuant to Section 20.
SECTION 15. SECURED PARTY MAY PERFORM. If Grantor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party
incurred in connection therewith shall be payable by Grantor under Section 19.
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SECTION 16. STANDARD OF CARE. The powers conferred on Secured
Party hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the
exercise of reasonable care in the custody of any Collateral in its possession
and the accounting for moneys actually received by it hereunder, Secured Party
shall have no duty as to any Collateral or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights pertaining
to any Collateral. Secured Party shall be deemed to have exercised reasonable
care in the custody and preservation of Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which Secured
Party accords its own property.
SECTION 17. REMEDIES.
(a) If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the Uniform Commercial Code as in effect in any relevant jurisdiction
(the "CODE") (whether or not the Code applies to the affected Collateral), and
also may (a) require Grantor to, and Grantor hereby agrees that it will at its
expense and upon request of Secured Party forthwith, assemble all or part of
the Collateral as directed by Secured Party and make it available to Secured
Party at a place or places to be designated by Secured Party that is reasonably
convenient to both parties, (b) enter onto the property where any Collateral is
located and take possession thereof with or without judicial process, (c) prior
to the disposition of the Collateral, store, process, repair or recondition the
Collateral or otherwise prepare the Collateral for disposition in any manner to
the extent Secured Party deems appropriate, (d) take possession of Grantor's
premises or place custodians in exclusive control thereof, remain on such
premises and use the same and any of Grantor's equipment for the purpose of
completing any work in process, taking any actions described in the preceding
clause (c) and collecting any Secured Obligation, and (e) without notice except
as specified below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any of Secured Party's offices or
elsewhere, for cash, on credit or for future delivery, at such time or times
and at such price or prices and upon such other terms as Secured Party may deem
commercially reasonable. Secured Party or any Lender may be the purchaser of
any or all of the Collateral at any such sale and Secured Party, as agent for
and representative of Lenders and Interest Rate Exchangers (but not any Lender,
Lenders, Interest Rate Exchanger or Interest Rate Exchangers in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing), shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Collateral
payable by Secured Party at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
Grantor, and Grantor hereby waives (to the extent permitted by applicable law)
all rights of redemption, stay and/or appraisal which it now has or may at any
time in the future have under any rule of law or statute now existing or
hereafter enacted. Grantor agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to
380
Grantor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. Secured
Party shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Grantor hereby waives any claims against
Secured Party arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Secured Party accepts
the first offer received and does not offer such Collateral to more than one
offeree; provided that such sale was conducted in a commercially reasonable
manner. If the proceeds of any sale or other disposition of the Collateral are
insufficient to pay all the Secured Obligations, Grantor shall be liable for
the deficiency and the fees of any attorneys employed by Secured Party to
collect such deficiency.
(b) Notwithstanding anything in this Agreement to the
contrary, Secured Party shall exercise, or shall refrain from exercising, any
remedy provided for in Section 17(a) in accordance with the instructions of
Requisite Lenders, and the Interest Rate Exchangers, by their acceptance of the
benefits of this Agreement and the other Loan Documents, hereby agree to be
bound by such instructions. The sole rights of the Interest Rate Exchangers
under this Agreement shall be to be secured by the Collateral and to receive
the payments provided for in Section 18.
SECTION 18. APPLICATION OF PROCEEDS. Except as expressly
provided elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any sale of, collection from, or other realization upon all or any
part of the Collateral may, in the discretion of Secured Party, be held by
Secured Party as Collateral for, and/or then, or at any other time thereafter,
applied in full or in part by Secured Party against, the Secured Obligations in
the following order of priority:
FIRST: To the payment of all reasonable costs and expenses of
such sale, collection or other realization, including reasonable
compensation to Secured Party and its agents and counsel, and all other
reasonable expenses, liabilities and reasonable advances made or
incurred by Secured Party in connection therewith, and all amounts for
which Secured Party is entitled to indemnification hereunder and all
advances made by Secured Party hereunder for the account of Grantor,
and to the payment of all reasonable costs and expenses paid or
incurred by Secured Party in connection with the exercise of any right
or remedy hereunder, all in accordance with Section 19;
SECOND: To the payment of all other Secured Obligations (for
the ratable benefit of the holders thereof) then due and payable; and
THIRD: To the payment to or upon the order of Grantor, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
381
SECTION 19. INDEMNITY AND EXPENSES.
(a) Grantor agrees to indemnify Secured Party, each Lender
and each Interest Rate Exchanger from and against any and all claims, losses
and liabilities in any way relating to, growing out of or resulting from this
Agreement and the transactions contemplated hereby (including, without
limitation, enforcement of this Agreement), except to the extent such claims,
losses or liabilities result solely from Secured Party's, such Lender's or such
Interest Rate Exchanger's gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
(b) Grantor shall pay to Secured Party upon demand the
amount of any and all reasonable costs and expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that Secured
Party may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the
failure by Grantor to perform or observe any of the provisions hereof.
SECTION 20. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the Collateral
and shall (a) remain in full force and effect until (i) the indefeasible
payment in full of the Secured Obligations (other than Obligations which are
contingent and unliquidated and not due and owing on such date and which
pursuant to the provisions of the Credit Agreement, Interest Rate Agreements,
Letters of Credit or the Loan Documents survive the termination of the Credit
Agreement, the repayment of the Secured Obligations, the termination of the
Commitments, the expiration or cancellation of all Letters of Credit or the
termination, expiration or cancellation of all Interest Rate Agreements), the
cancellation or termination of the Commitments, the cancellation or expiration
of all outstanding Letters of Credit and the termination, expiration or
cancellation of all Interest Rate Agreements, or (ii) the release of the Liens
on the Collateral by Secured Party in writing in accordance with the terms of
subsection 6.11 of the Credit Agreement, (b) be binding upon Grantor, its
successors and assigns, and (c) inure, together with the rights and remedies of
Secured Party hereunder, to the benefit of Secured Party and its successors,
transferees and assigns. Without limiting the generality of the foregoing
clause (c), but subject to the provisions of subsection 11.1 of the Credit
Agreement, any Lender may assign or otherwise transfer any Loans held by it to
any other Person, and such other Person shall thereupon become vested with all
the benefits in respect thereof granted to Lenders herein or otherwise and any
Interest Rate Exchanger may assign or otherwise transfer any Interest Rate
Obligations owing to it to another Lender or an Affiliate of such Lender or
another Lender, and such other Lender or Affiliate shall thereupon become
vested with all the benefits in respect thereof granted to such Interest Rate
Exchanger herein or otherwise. Upon (i) the indefeasible payment in full of
all Secured Obligations (other than Obligations which are contingent and
unliquidated and not due and owing on such date and which pursuant to the
provisions of the Credit Agreement, Interest Rate Agreements, Letters of Credit
or the Loan Documents survive the termination of the Credit Agreement, the
repayment of the Secured Obligations, the termination of the Commitments, the
expiration or cancellation
382
of all Letters of Credit or the termination, expiration or cancellation of all
Interest Rate Agreements), the cancellation or termination of the Commitments,
the cancellation or expiration of all outstanding Letters of Credit and the
termination, expiration or cancellation of all Interest Rate Agreement, or (ii)
the release of the Liens on the Collateral by Secured Party in writing in
accordance with the terms of subsection 6.11 of the Credit Agreement, the
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to Grantor. Upon any such termination Secured Party
will, at Grantor's expense, execute and deliver to Grantor such documents as
Grantor shall reasonably request to evidence such termination.
SECTION 21. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders and, by their acceptance of the benefits of this
Agreement and the other Loan Documents, by each Interest Rate Exchanger.
Secured Party shall be obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from exercising any rights,
and to take or refrain from taking any action (including, without limitation,
the release or substitution of Collateral), solely in accordance with this
Agreement and the Credit Agreement and upon the instructions of Requisite
Lenders, and the Interest Rate Exchangers, by their acceptance of the benefits
of this Agreement and the other Loan Documents, hereby agree to be bound by
such instructions.
(b) Secured Party shall at all times be the same Person
that is Agent under the Credit Agreement. Written notice of resignation by
Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute notice of resignation as Secured Party under this Agreement; removal
of Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute removal as Secured Party under this Agreement; and appointment of a
successor Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute appointment of a successor Secured Party under this Agreement. Upon
the acceptance of any appointment as Agent under subsection 10.5A of the Credit
Agreement by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly (i) transfer to such
successor Secured Party all sums, securities and other items of Collateral held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Secured Party, the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it under this Agreement while it was Secured Party
hereunder.
383
SECTION 22. AMENDMENTS; ETC. No amendment or waiver of any
provision of this Agreement, or consent to any departure by Grantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by Secured Party (or, in the case of an amendment hereto, by Grantor and
Secured Party), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given; provided
that any amendment or waiver which adversely affects the interests of the
Interest Rate Exchangers but does not result in a similar adverse effect on the
interests of Lenders shall only be effective with the consent of the holders of
a majority of the Interest Rate Obligations given the benefit of the security
granted hereunder.
SECTION 23. NOTICES. Any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telexed or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile or telex, or three Business Days
after depositing it in the United States mail with postage prepaid and properly
addressed. For the purposes hereof, the address of each party hereto shall be
as set forth under such party's name on the signature pages hereof or, as to
either party, such other address as shall be designated by such party in a
written notice delivered to the other party hereto.
SECTION 24. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
SECTION 25. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 26. HEADINGS. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 27. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR
384
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK AND EXCEPT AS SET FORTH IN THE IMMEDIATELY FOLLOWING SENTENCE.
NOTWITHSTANDING THE FOREGOING, ALL PROVISIONS OF THIS AGREEMENT, TO THE EXTENT
THEY RELATE TO DEPOSIT ACCOUNTS, SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES. Unless otherwise defined herein or in the Credit
Agreement, terms used in Articles 8 and 9 of the Uniform Commercial Code in the
State of New York are used herein as therein defined.
SECTION 28. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT GRANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
Grantor hereby agrees that service of all process in any such proceeding in any
such court may be made by registered or certified mail, return receipt
requested, to Grantor at its address provided in Section 23, such service being
hereby acknowledged by Grantor to be sufficient for personal jurisdiction in
any action against Grantor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
Secured Party to bring proceedings against Grantor in the courts of any other
jurisdiction.
SECTION 29. WAIVER OF JURY TRIAL. GRANTOR AND SECURED PARTY
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Grantor and Secured
Party each acknowledge that this waiver is a material inducement for Grantor
and Secured Party to enter into a business relationship, that Grantor and
Secured Party have already relied on this waiver in entering into this
Agreement and that each will continue to rely on this waiver in their related
future dealings. Grantor and Secured Party further warrant and represent that
each has reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
385
In the event of litigation, this Agreement may be filed as a written consent to
a trial by the court.
SECTION 30. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
[Remainder of page intentionally left blank]
386
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BLACKHAWK PROPERTIES, INC., as Grantor
By:
--------------------------------
Title:
-----------------------------
Notice Address: Blackhawk Properties, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By:
--------------------------------
Title:
-----------------------------
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
387
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
DOMINICK'S FINER FOODS, INC. OF ILLINOIS,
as Grantor
By: ___________________________________
Title:
Notice Address: Dominick's Finer Foods,
Inc. of Illinois
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By: ___________________________________
Title:
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
388
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
▇▇▇▇'▇ OF BLOOMINGDALE, INC., as Grantor
By: ___________________________________
Title:
Notice Address: ▇▇▇▇'▇ of Bloomingdale,
Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By: ___________________________________
Title:
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
389
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
▇▇▇▇ HAZELCREST, INC., as Grantor
By: __________________________________
Title:
Notice Address: ▇▇▇▇ Hazelcrest, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By: ___________________________________
Title:
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
390
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
DFF EQUIPMENT LEASING COMPANY
(f/k/a Jerry's Deep Discount Centers, Inc.),
as Grantor
By: ___________________________________
Title:
Notice Address: DFF Equpment Leasing
Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By: ___________________________________
Title:
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
391
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BLACKHAWK DEVELOPMENTS, INC., as Grantor
By: ___________________________________
Title:
Notice Address: Blackhawk Developments,
Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By: ___________________________________
Title:
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
392
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
SAVE-IT DISCOUNT FOODS CORPORATION,
as Grantor
By: ___________________________________
Title:
Notice Address: Save-It Discount Foods
Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By: ___________________________________
Title:
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
393
SCHEDULE 1(A)
EXCLUDED EQUIPMENT
None.
394
SCHEDULE 1(B)
EXCLUDED INVENTORY
None.
395
SCHEDULE 1(D)
ASSIGNED AGREEMENTS
[1. Tax Matters Agreement
2. Asset Transfer Agreement
Each of the agreements listed in this Schedule 1(d) shall have
the meanings assigned to such term in the Credit Agreement.]1
[1. Tax Matters Agreement
The agreement listed in this Schedule 1(d) shall have the
meaning assigned to such term in the Credit Agreement.]2
------------------------
1 For Blackhawk Developments, Inc. and Blackhawk Properties, Inc. only.
2 For all others.
396
SCHEDULE 1(E)
DEPOSIT ACCOUNTS
[None]1
[Name of
Financial Institution Account Number Account Type
--------------------- -------------- ------------
[The Northern Trust Company 431-7475 ▇▇▇▇ Hazelcrest
Agency for Property Location]2
------------------------------------
1 For all subsidiaries except for ▇▇▇▇ Hazelcrest, Inc.
2 For ▇▇▇▇ Hazelcrest, Inc. only.
397
SCHEDULE 1(H)
EXCLUDED FIXTURES
None.
398
SCHEDULE 4(B)
TO SECURITY AGREEMENT
Locations of Equipment: Illinois
Indiana
Locations of Inventory: Illinois
Indiana
399
SCHEDULE 4(C)
TO SECURITY AGREEMENT
Office Locations: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(office for DFF Equipment Leasing Company)
Other Names:
[▇▇▇▇▇▇ Dairy Corporation]1
[▇▇▇▇ Developments, Inc.]2
[▇▇▇▇ Properties, Inc.]3
[NONE]4
----------------------------------
1 For Dominick's Finer Foods, Inc. of Illinois only.
2 For Blackhawk Developments, Inc. only.
3 For Blackhawk Properties, Inc. only.
4 For all others.
400
EXHIBIT XX
[FORM OF SUBSIDIARY TRADEMARK SECURITY AGREEMENT]
SUBSIDIARY TRADEMARK COLLATERAL SECURITY AGREEMENT
AND CONDITIONAL ASSIGNMENT
This SUBSIDIARY TRADEMARK COLLATERAL SECURITY AGREEMENT AND
CONDITIONAL ASSIGNMENT (this "AGREEMENT") is dated as of November 1, 1996 and
entered into by and between [INSERT NAME OF GRANTOR IN CAPS], a
_____________________ corporation ("GRANTOR"), and BANKERS TRUST COMPANY, as
agent for and representative of (in such capacity herein called "SECURED
PARTY") the financial institutions ("LENDERS") party to the Credit Agreement
referred to below and any Interest Rate Exchangers (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Lenders, Secured Party, Syndication Agent and
Arrangers have entered into a Credit Agreement dated as of November 1, 1996
(said Credit Agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined) with Dominick's Supermarkets, Inc., a Delaware
corporation, and Dominick's Finer Foods, Inc., a Delaware corporation
("COMPANY"), pursuant to which Lenders have made certain commitments, subject
to the terms and conditions set forth in the Credit Agreement, to extend
certain credit facilities to Company.
B. It is contemplated that Company may from time to time
enter into Interest Rate Agreements with one or more Lenders or their
Affiliates (collectively, the "INTEREST RATE EXCHANGERS") and Grantor desires
that the obligations of Company under such agreements, including the obligation
to make payments in the event of early termination thereunder (all such
obligations being the "INTEREST RATE OBLIGATIONS"), be given the benefits of
the security interest created hereby.
C. Grantor has executed and delivered a Subsidiary
Guaranty dated as of November 1, 1996 (said guaranty, as it may hereafter be
amended, supplemented or otherwise modified from time to time, being the
"GUARANTY") in favor of Secured Party for the benefit of Lenders and the
Interest Rate Exchangers, pursuant to which Grantor has guarantied the prompt
payment and performance when due of all Obligations of Company under the Credit
Agreement, other Loan Documents and the Interest Rate Agreements.
D. Grantor owns and uses in its business, and will in the
future adopt and so use, various intangible assets, including trademarks,
service marks, designs, logos, indicia, tradenames, corporate names, company
names, business names, fictitious
401
business names, trade styles and/or other source and/or business identifiers
and applications pertaining thereto (collectively, the "TRADEMARKS").
E. Secured Party desires to become a secured creditor
with respect to and, under the circumstances described herein, an assignee of
all of the existing and future Trademarks, all registrations that have been or
may hereafter be issued or applied for thereon in the United States and any
state thereof (the "REGISTRATIONS"), all common law and other rights in and to
the Trademarks in the United States and any state thereof (the "TRADEMARK
RIGHTS"), all goodwill of Grantor's business symbolized by the Trademarks and
associated therewith, including without limitation the documents and things
described in Section 1(b) (the "ASSOCIATED GOODWILL"), and all proceeds of the
Trademarks, the Registrations, the Trademark Rights and the Associated
Goodwill, and Grantor agrees to create a secured and protected interest in the
Trademarks, the Registrations, the Trademark Rights, the Associated Goodwill
and all the proceeds thereof as provided herein.
F. Pursuant to the Security Agreement, Grantor has
granted to Secured Party a lien on and security interest in, among other
assets, the machinery, equipment, inventory, accounts and contract rights
relating to the products and services sold or delivered under or in connection
with the Trademarks such that, upon the occurrence and during the continuation
of an Event of Default, Secured Party would be able to exercise its remedies
consistent with the Security Agreement, this Agreement and applicable law to
foreclose upon Grantor's business and use the Trademarks, the Registrations and
the Trademark Rights in conjunction with the continued operation of such
business, maintaining substantially the same product and service specifications
and quality as maintained by Grantor, and benefit from the Associated Goodwill.
G. Upon the occurrence and during the continuation of an
Event of Default, and to permit Secured Party to operate Grantor's business
without interruption and to use the Trademarks, Registrations, Trademark Rights
and Associated Goodwill in conjunction therewith, Grantor is willing to grant
to Secured Party the conditional assignment of Grantor's entire right, title
and interest in and to the Collateral (as hereinafter defined) and to appoint
Secured Party as Grantor's attorney-in-law and attorney-in-fact to execute
documents and take actions to confirm said assignments.
H. It is a requirement under the Credit Agreement that
Grantor shall have granted the security interests and made the conditional
assignment and undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises, in order to
induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Grantor hereby agrees with Secured
Party as follows:
SECTION 1. GRANT OF SECURITY. Grantor hereby grants to
Secured Party a security interest in, all of Grantor's right, title and
interest in and to the following, in
402
each case whether now or hereafter existing or in which Grantor now has or
hereafter acquires an interest and wherever the same may be located (the
"COLLATERAL"):
(a) each of the Trademarks and rights and interests in
Trademarks which are presently, or in the future may be, owned, held (whether
pursuant to a license or otherwise) or used by Grantor, in whole or in part
(including, without limitation, the Trademarks specifically identified in
Schedule A annexed hereto, as the same may be amended pursuant hereto from time
to time), and including all Trademark Rights with respect thereto and all
federal and state Registrations therefor heretofore or hereafter granted or
applied for, the right (but not the obligation) to register claims under any
state or federal trademark law and to apply for, renew and extend the
Trademarks, Registrations and Trademark Rights, the right (but not the
obligation) to ▇▇▇ or bring opposition or cancellation proceedings in the name
of Grantor or in the name of Secured Party or otherwise for past, present and
future infringements of the Trademarks, Registrations or Trademark Rights and
all rights (but not obligations) corresponding thereto in the United States,
and the Associated Goodwill, excluding, however, any of the foregoing which is
not material to Grantor pursuant to any license that expressly prohibits any
such assignment, transfer or conveyance; it being understood that the rights
and interests included herein shall include, without limitation, all rights and
interests pursuant to licensing or other contracts in favor of Grantor
pertaining to the Trademarks, Registrations or Trademark Rights presently or in
the future owned or used by third parties but, in the case of third parties
which are not Affiliates of Grantor, only to the extent permitted by such
licensing or other contracts and, if not so permitted, only with the consent of
such third parties;
(b) the following documents and things in Grantor's
possession, or subject to Grantor's right to possession, related to (Y) the
production, sale and delivery by Grantor, or by any Affiliate, licensee or
subcontractor of Grantor, of products or services sold or delivered by or under
the authority of Grantor in connection with the Trademarks, Registrations or
Trademark Rights (which products and services shall, for purposes of this
Agreement, be deemed to include, without limitation, products and services sold
or delivered pursuant to merchandising operations utilizing any Trademarks,
Registrations or Trademark Rights); or (Z) any retail or other merchandising
operations conducted under the name of or in connection with the Trademarks,
Registrations or Trademark Rights by Grantor or any Affiliate, licensee or
subcontractor of Grantor:
(i) all lists and ancillary documents that
identify and describe any of Grantor's customers, or those of its
Affiliates, licensees or subcontractors, for products sold and services
delivered under or in connection with the Trademarks or Trademark
Rights, including without limitation any lists and ancillary documents
that contain a customer's name and address, the name and address of any
of its warehouses, branches or other places of business, the identity
of the Person or Persons having the principal responsibility on a
customer's behalf for ordering products or services of the kind
supplied by Grantor, or the credit, payment, discount, delivery or
other sale terms applicable to such customer, together with information
setting forth the total purchases, by
403
brand, product, service, style, size or other criteria, and the
patterns of such purchases;
(ii) all product and service specification
documents and production and quality control manuals used in the
manufacture or delivery of products and services sold or delivered
under or in connection with the Trademarks or Trademark Rights;
(iii) all documents which reveal the name and
address of any sources of supply, and any terms of purchase and
delivery, for any and all materials, components and services used in
the production of products and services sold or delivered under or in
connection with the Trademarks or Trademark Rights; and
(iv) all documents constituting or concerning the
then current or proposed advertising and promotion by Grantor or its
Affiliates, licensees or subcontractors of products and services sold
or delivered under or in connection with the Trademarks or Trademark
Rights including, without limitation, all documents which reveal the
media used or to be used and the cost for all such advertising
conducted within the described period or planned for such products and
services;
(c) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related data processing
software that at any time evidence or contain information relating to any of
the Collateral or are otherwise necessary or helpful in the collection thereof
or realization thereupon; and
(d) all proceeds, products, rents and profits (including
without limitation license royalties and proceeds of infringement suits) of or
from any and all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is the
loss payee thereof), or any indemnity, warranty or guaranty, payable by reason
of loss or damage to or otherwise with respect to any of the foregoing
Collateral. For purposes of this Agreement, the term "PROCEEDS" includes
whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary.
SECTION 2. CONDITIONAL ASSIGNMENT. In addition to, and not by
way of limitation of, the granting of a security interest in the Collateral
pursuant to Section 1, Grantor hereby, effective upon the occurrence of an
Event of Default and upon written notice from Secured Party, grants, sells,
conveys, transfers, assigns and sets over to Secured Party, for its benefit and
the ratable benefit of Lenders and Interest Rate Exchangers, all of Grantor's
right, title and interest in and to the Collateral, including without
limitation Grantor's right, title and interest in and to the Trademarks
identified in Schedule A annexed hereto, the goodwill of the business
symbolized by said Trademarks and all Registrations relating to said
Trademarks, excluding, however, any of the Collateral which is not material to
Grantor that is held or used by Grantor
404
pursuant to any license that expressly prohibits any such assignment, transfer
or conveyance.
SECTION 3. SECURITY FOR OBLIGATIONS. This Agreement secures,
and the Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of
all obligations and liabilities of every nature of Grantor now or hereafter
existing under or arising out of or in connection with the Guaranty and all
extensions or renewals thereof, whether for principal, interest (including
without limitation interest that, but for the filing of a petition in
bankruptcy with respect to Company, would accrue on such obligations),
reimbursement of amounts drawn under Letters of Credit, fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such
obligations or liabilities that are paid, to the extent all or any part of such
payment is avoided or recovered directly or indirectly from Secured Party, or
any Lender or any Interest Rate Exchanger as a preference, fraudulent transfer
or otherwise (all such obligations and liabilities being the "UNDERLYING
DEBT"), and all obligations of every nature of Grantor now or hereafter
existing under this Agreement (all such obligations of Grantor, together with
the Underlying Debt, being the "SECURED OBLIGATIONS").
SECTION 4. GRANTOR REMAINS LIABLE. Anything contained herein
to the contrary notwithstanding, (a) Grantor shall remain liable under any
contracts and agreements included in the Collateral, to the extent set forth
therein, to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by Secured
Party of any of its rights hereunder shall not release Grantor from any of its
duties or obligations under the contracts and agreements included in the
Collateral, and (c) Secured Party shall not have any obligation or liability
under any contracts and agreements included in the Collateral by reason of this
Agreement, nor shall Secured Party be obligated to perform any of the
obligations or duties of Grantor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
SECTION 5. REPRESENTATIONS AND WARRANTIES. Grantor represents
and warrants as follows:
(a) Description of Collateral. A true and complete list
of all Trademarks, Registrations and Trademark Rights owned, held (whether
pursuant to a license or otherwise) or used by Grantor, in whole or in part, as
of the date of this Agreement is set forth in Schedule A annexed hereto.
(b) Validity and Enforceability of Collateral. Each of
the Trademarks, Registrations and Trademark Rights that is material to the
financial condition or business of Grantor is valid, subsisting and enforceable
and, except as set forth in Schedule 5.17
405
to the Credit Agreement, Grantor is not aware of any pending or threatened
claim by any third party that any of such Trademarks, Registrations or
Trademark Rights is invalid or unenforceable or that the use of any of the
Trademarks, Registrations or Trademark Rights violates the rights of any third
person or of any basis for any such claim.
(c) Ownership of Collateral. Except for the security
interest and conditional assignment created by this Agreement and Permitted
Encumbrances and the licenses entered into in the ordinary course of business,
Grantor owns the Collateral free and clear of any Lien. Except such as may
have been filed in favor of Secured Party relating to this Agreement and
Permitted Encumbrances, (i) no effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any filing or recording office and (ii) no effective filing covering
all or any part of the Collateral is on file in the United States Patent and
Trademark Office.
(d) Office Locations; Other Names. As of the date hereof,
the chief place of business, the chief executive office and the office where
Grantor keeps its records regarding the Collateral is, and has been for the
four month period preceding the date hereof, located at the places specified in
Schedule B annexed hereto. As of the date hereof, Grantor has not in the past
five years done, and does not now do, business under any other name (including
any trade-name or fictitious business name) except under the names specified in
Schedule B annexed hereto.
(e) Governmental Authorizations. No authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for either (i) the grant by Grantor of
the security interest and conditional assignment granted hereby, (ii) the
execution, delivery or performance of this Agreement by Grantor, or (iii) the
perfection of or the exercise by Secured Party of its rights and remedies
hereunder in the United States (except as may have been taken by or at the
direction of Grantor).
(f) Perfection. This Agreement, together with the filing
of financing statements describing the Collateral with the Secretary of State
of the State of Illinois, and the recording of this Agreement with the United
States Patent and Trademark Office, which have been made or will be made
immediately following the Closing Date, creates a valid, perfected and, except
for Permitted Encumbrances, first priority security interest in the Collateral,
securing the payment of the Secured Obligations; provided that additional
actions may be required with respect to the perfection of proceeds of the
Collateral.
(g) Other Information. All information heretofore, herein
or hereafter supplied to Secured Party by or on behalf of Grantor with respect
to the Collateral is accurate and complete in all material respects.
406
SECTION 6. FURTHER ASSURANCES; NEW TRADEMARKS, REGISTRATIONS AND TRADEMARK
RIGHTS.
(a) Grantor agrees that from time to time, at the expense
of Grantor, Grantor will promptly execute and deliver all further instruments
and documents, and take all further action, that Secured Party may reasonably
deem to be necessary or desirable, or that Secured Party may reasonably
request, in order to perfect and protect any security interest or conditional
assignment granted or purported to be granted hereby or to enable Secured Party
to exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, Grantor will:
(i) at the reasonable request of Secured Party, ▇▇▇▇ conspicuously each of its
records pertaining to the Collateral with a legend, in form and substance
reasonably satisfactory to Secured Party, indicating that such Collateral is
subject to the security interest granted hereby, (ii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as Secured Party may reasonably deem to be necessary or
desirable, or as Secured Party may reasonably request, in order to perfect and
preserve the security interests granted or purported to be granted hereby,
(iii) at the reasonable request of Secured Party use its reasonable best
efforts (other than the payment of money) to obtain any necessary consents of
third parties to the grant and perfection of a security interest and assignment
to Secured Party with respect to any Collateral, (iv) at any reasonable time,
upon reasonable request by Secured Party, exhibit the Collateral to and allow
inspection of the Collateral by Secured Party, or persons designated by Secured
Party, and (v) at Secured Party's reasonable request, appear in and defend any
action or proceeding that may adversely affect Grantor's title to or Secured
Party's security interest in all or any material part of the Collateral.
(b) Grantor hereby authorizes Secured Party to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Collateral without the signature of Grantor where
permitted by law. Grantor agrees that a carbon, photographic or other
reproduction of this Agreement or of a financing statement signed by Grantor
shall be sufficient as a financing statement and may be filed as a financing
statement in any and all jurisdictions.
(c) Grantor hereby authorizes Secured Party to modify this
Agreement without obtaining Grantor's approval of or signature to such
modification by amending Schedule A annexed hereto to include reference to any
right, title or interest in any existing Trademark, Registration or Trademark
Right or any Trademark, Registration or Trademark Right acquired or developed
by Grantor after the execution hereof (excluding, however, any of the foregoing
which is not material to Grantor and which is held or used by Grantor pursuant
to any license that expressly prohibits any such assignment, transfer or
conveyance which is not material to Grantor) or to delete any reference to any
right, title or interest in any Trademark, Registration or Trademark Right in
which Grantor no longer has or claims any right, title or interest.
(d) Grantor will furnish to Secured Party from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in
407
connection with the Collateral as Secured Party may reasonably request, all in
reasonable detail.
(e) If Grantor shall obtain rights to any new Trademarks,
Registrations or Trademark Rights, the provisions of this Agreement shall
automatically apply thereto. Grantor shall promptly notify Secured Party in
writing of any rights to any new Trademarks or Trademark Rights acquired by
Grantor after the date hereof and of any Registrations issued by the United
States or applications for Registration made in the United States after the
date hereof. Concurrently with the filing of an application for Registration in
the United States for any Trademark, Grantor shall execute, deliver and record
in all places where this Agreement is recorded an appropriate Trademark
Collateral Security Agreement and Conditional Assignment, substantially in the
form hereof, with appropriate insertions, or an amendment to this Agreement, in
form and substance reasonably satisfactory to Secured Party, pursuant to which
Grantor shall grant a security interest and conditional assignment to the
extent of its interest in such Registration as provided herein to Secured Party
unless so doing would, in the reasonable judgment of Grantor, after due
inquiry, result in the grant of a Registration in the name of Secured Party, in
which event Grantor shall give written notice to Secured Party as soon as
reasonably practicable and the filing shall instead be undertaken as soon as
practicable but in no case later than immediately following the grant of the
Registration.
SECTION 7. CERTAIN COVENANTS OF GRANTOR. Grantor shall:
(a) not use or permit any Collateral to be used unlawfully
or in violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral;
(b) notify Secured Party of any change in Grantor's name,
identity or corporate structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of
any change in Grantor's chief place of business or chief executive office or
the office where Grantor keeps its records regarding the Collateral;
(d) pay promptly when due all material property and other
taxes, assessments and governmental charges or levies imposed upon, and all
material claims (including claims for labor, materials and supplies) against,
the Collateral, except to the extent the validity thereof is being contested in
good faith; provided that Grantor shall in any event pay such taxes,
assessments, charges, levies or claims not later than five days prior to the
date of any proposed sale under any judgment, writ or warrant of attachment
entered or filed against Grantor or any of the Collateral as a result of the
failure to make such payment;
(e) not sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, except as permitted by the Credit
Agreement;
408
(f) except for the security interest and conditional
assignment created by this Agreement and Permitted Encumbrances, not create or
suffer to exist any Lien upon or with respect to any of the Collateral to
secure the indebtedness or other obligations of any Person;
(g) diligently keep reasonable records respecting the
Collateral and at all times keep at least one complete set of its records
concerning substantially all of the Trademarks, Registrations and Trademark
Rights at its chief executive office or principal place of business;
(h) not permit the inclusion in any contract to which it
becomes a party of any provision that could reasonably be expected to impair or
prevent the creation of a security interest in, or the assignment of, Grantor's
rights and interests in any property included within the definitions of any
Trademarks, Registrations, Trademark Rights and Associated Goodwill acquired
under such contracts;
(i) take all steps reasonably necessary to protect the
secrecy of all trade secrets relating to the products and services sold or
delivered under or in connection with the Trademarks and Trademark Rights,
including without limitation entering into confidentiality agreements with
employees and labeling and restricting access to secret information and
documents;
(j) use proper statutory notice in connection with its use
of each of the Trademarks, Registrations and Trademark Rights;
(k) use consistent standards of high quality (which may be
consistent with Grantor's past practices) in the manufacture, sale and delivery
of products and services sold or delivered under or in connection with the
Trademarks, Registrations and Trademark Rights, including, to the extent
applicable, in the operation and maintenance of its retail stores and other
merchandising operations; and
(l) upon any officer of Grantor obtaining knowledge
thereof, promptly notify Secured Party in writing of any event that may
materially and adversely affect the value of the Collateral or any material
portion thereof, the ability of Grantor or Secured Party to dispose of the
Collateral or any material portion thereof, or the rights and remedies of
Secured Party in relation thereto, including without limitation the levy of any
legal process against the Collateral or any material portion thereof.
SECTION 8. CERTAIN INSPECTION RIGHTS. Grantor hereby grants
to Secured Party and its employees, representatives and agents the right to
visit Grantor's and any of its Affiliate's or subcontractor's plants,
facilities and other places of business that are utilized in connection with
the manufacture, production, inspection, storage or sale of products and
services sold or delivered under any of the Trademarks, Registrations or
Trademark Rights, and to inspect the quality control and all other records
relating thereto upon reasonable notice to Grantor and as often as may be
reasonably requested; provided that, in the case of subcontractors' and
Affiliates' plants and facilities, Secured Party's rights granted under this
Section 8 shall exist only to the
409
extent permitted by Grantor's subcontracting agreements with each such
subcontractor and Grantor's arrangements with each such Affiliate; and provided
further that Grantor will use its reasonable efforts to secure such inspection
and visitation rights for Secured Party in all such subcontracting agreements
to which Grantor hereafter becomes a party and in all such arrangements with
Affiliates.
SECTION 9. AMOUNTS PAYABLE IN RESPECT OF THE COLLATERAL.
Except as otherwise provided in this Section 9, Grantor shall continue to
collect, at its own expense, all amounts due or to become due to Grantor in
respect of the Collateral or any portion thereof. In connection with such
collections, Grantor may take (and, following the occurrence and continuation
of an Event of Default, at Secured Party's direction, shall take) such action
as Grantor or, following the occurrence and continuation of an Event of
Default, Secured Party may deem necessary or advisable to enforce collection of
such amounts; provided, however, that Secured Party shall have the right at any
time, upon the occurrence and during the continuation of an Event of Default or
a Potential Event of Default and upon written notice to Grantor of its
intention to do so, to notify the obligors with respect to any such amounts of
the existence of the security interest created, and the conditional assignment
effected hereby, and to direct such obligors to make payment of all such
amounts directly to Secured Party, and, upon such notification and at the
expense of Grantor, to enforce collection of any such amounts and to adjust,
settle or compromise the amount or payment thereof, in the same manner and to
the same extent as Grantor might have done. After receipt by Grantor of the
notice from Secured Party referred to in the proviso to the preceding sentence,
(i) all amounts and proceeds (including checks and other instruments) received
by Grantor in respect of amounts due to Grantor in respect of the Collateral or
any portion thereof shall be received in trust for the benefit of Secured Party
hereunder, shall be segregated from other funds of Grantor and shall be
forthwith paid over or delivered to Secured Party in the same form as so
received (with any necessary endorsement) to be held as cash Collateral and
applied as provided by Section 17, and (ii) Grantor shall not adjust, settle or
compromise the amount or payment of any such amount or release wholly or partly
any obligor with respect thereto or allow any credit or discount thereon.
SECTION 10. TRADEMARK APPLICATIONS AND LITIGATION.
(a) Grantor shall have the duty diligently, through
counsel reasonably acceptable to Secured Party, to prosecute any trademark
application relating to any of the Trademarks specifically identified in
Schedule A annexed hereto that is pending as of the date of this Agreement and
is material to Grantor's business, and to file and prosecute opposition and
cancellation proceedings, renew United States Registrations and do any and all
acts which are necessary or desirable to preserve and maintain all rights in
all Trademarks, Registrations and Trademark Rights that are material to
Grantor's business. Any expenses incurred in connection therewith shall be
borne solely by Grantor.
(b) Except as provided in Section 10(d) and
notwithstanding Section 2, Grantor shall have the right to commence and
prosecute in its own name, as real party in interest, for its own benefit and
at its own expense, such suits, proceedings or other
410
actions for infringement, unfair competition, dilution or other damage as are
in its reasonable business judgment necessary to protect the Collateral.
Secured Party shall provide, at Grantor's expense, all reasonable and necessary
cooperation in connection with any such suit, proceeding or action including,
without limitation, joining as a necessary party.
(c) Grantor shall promptly, following its becoming aware
thereof, notify Secured Party of the institution of, or of any adverse
determination in, any proceeding (whether in the United States Patent and
Trademark Office or any federal, state, local or foreign court) described in
Section 10(a) or 10(b) or regarding Grantor's claim of ownership in or right to
use any of the Trademarks, Registrations or Trademark Rights that are material
to Grantor's business, its right to register the same, or its right to keep and
maintain such Registration. Grantor shall provide to Secured Party any
information with respect thereto reasonably requested by Secured Party.
(d) Anything contained herein to the contrary
notwithstanding, upon the occurrence and during the continuation of an Event of
Default, Secured Party shall have the right (but not the obligation) to bring
suit, in the name of Grantor, Secured Party or otherwise, to enforce any
Trademark, Registration and/or Trademark Right that is material to Grantor's
business, Associated Goodwill and any material license thereunder, in which
event Grantor shall, at the reasonable request of Secured Party, do any and all
lawful acts and execute any and all documents reasonably required by Secured
Party in aid of such enforcement and Grantor shall promptly, upon demand,
reimburse and indemnify Secured Party as provided in Section 18 in connection
with the exercise of its rights under this Section 10. To the extent that
Secured Party shall elect not to bring suit to enforce any Trademark,
Registration, Trademark Right, Associated Goodwill or any license thereunder as
provided in this Section 10(d), Grantor agrees to use all reasonable measures,
whether by action, suit, proceeding or otherwise, to prevent the infringement
of any of the Trademarks, Registrations, Trademark Rights or Associated
Goodwill that are material to Grantor's business by others and for that purpose
agrees to diligently maintain any action, suit or proceeding against any Person
so infringing necessary to prevent such infringement.
SECTION 11. NON-DISTURBANCE AGREEMENTS, ETC. If and to the
extent that Grantor is permitted to license any Collateral which is material to
the business of Grantor, Secured Party shall enter into a non-disturbance
agreement or other similar arrangement, at Grantor's request and expense, with
Grantor and any licensee of any Collateral permitted hereunder in form and
substance satisfactory to Secured Party pursuant to which (a) Secured Party
shall agree not to disturb or interfere with such licensee's rights under its
license agreement with Grantor so long as such licensee is not in default
thereunder and (b) such licensee shall acknowledge and agree that the
Collateral licensed to it is subject to the security interest and conditional
assignment created in favor of Secured Party and the other terms of this
Agreement.
SECTION 12. REASSIGNMENT OF COLLATERAL. If (a) an Event of
Default shall have occurred and, by reason of cure, waiver, modification,
amendment or otherwise, no longer be continuing, (b) no other Event of Default
shall have occurred
411
and be continuing, (c) an assignment to Secured Party of any rights, title and
interests in and to the Collateral shall have been previously made and shall
have become absolute and effective pursuant to Section 2, Section 13(f) or
Section 16(b), and (d) the Secured Obligations shall not have become
immediately due and payable, upon the written request of Grantor and the
written consent of Secured Party, Secured Party shall promptly execute and
deliver to Grantor such assignments as may be necessary to reassign to Grantor
any such rights, title and interests as may have been assigned to Secured Party
as aforesaid, subject to any disposition thereof that may have been made by
Secured Party pursuant hereto; provided that, after giving effect to such
reassignment, Secured Party's security interest and conditional assignment
granted pursuant to Section 1 and Section 2, as well as all other rights and
remedies of Secured Party granted hereunder, shall continue to be in full force
and effect; and provided, further that the rights, title and interests so
reassigned shall be free and clear of all Liens other than Liens (if any)
encumbering such rights, title and interest at the time of their assignment to
Secured Party and Permitted Encumbrances.
SECTION 13. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Grantor
hereby irrevocably appoints Secured Party as Grantor's attorney-in-fact, with
full authority in the place and stead of Grantor and in the name of Grantor,
Secured Party or otherwise, from time to time in Secured Party's discretion to
take any action and to execute any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement, including
without limitation:
(a) to endorse Grantor's name on all applications,
documents, papers and instruments necessary for Secured Party in the use or
maintenance of the Collateral;
(b) to ask for, demand, collect, ▇▇▇ for, recover,
compound, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral;
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (b) above;
(d) to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or placed upon
or threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Secured Party in
its sole discretion, any such payments made by Secured Party to become
obligations of Grantor to Secured Party, due and payable immediately without
demand; and
(f) (i) to execute and deliver any of the assignments or
documents requested by Secured Party pursuant to Section 16(b), (ii) to grant
or issue an exclusive
412
or non-exclusive license to the Collateral or any portion thereof to any
Person, and (iii) otherwise generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though Secured Party were the absolute owner thereof for all
purposes, and to do, at Secured Party's option and Grantor's expense, at any
time or from time to time, all acts and things that Secured Party reasonably
deems necessary to protect, preserve or realize upon the Collateral and Secured
Party's security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as Grantor might do.
Secured Party shall not exercise any powers granted pursuant to
this appointment as attorney-in-fact at any time (i) that Grantor is fully
performing its obligations hereunder and (ii) that no Event of Default has
occurred and is then continuing. This appointment as attorney-in-fact shall
terminate upon the termination of this Agreement pursuant to Section 19.
SECTION 14. SECURED PARTY MAY PERFORM. If Grantor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party
incurred in connection therewith shall be payable by Grantor under Section 18.
SECTION 15. STANDARD OF CARE. The powers conferred on Secured
Party hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the
exercise of reasonable care in the custody of any Collateral in its possession
and the accounting for moneys actually received by it hereunder, Secured Party
shall have no duty as to any Collateral or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights pertaining
to any Collateral. Secured Party shall be deemed to have exercised reasonable
care in the custody and preservation of Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which Secured
Party accords its own property.
SECTION 16. REMEDIES. If any Event of Default shall have
occurred and be continuing:
(a) Secured Party may exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the Uniform Commercial Code as in effect in any relevant
jurisdiction (the "CODE") (whether or not the Code applies to the affected
Collateral), and also may (i) require Grantor to, and Grantor hereby agrees
that it will at its expense and upon request of Secured Party forthwith,
assemble all or part of the Collateral as directed by Secured Party and make it
available to Secured Party at a place or places to be designated by Secured
Party that is reasonably convenient to both parties, (ii) enter onto the
property where any Collateral is located and take possession thereof with or
without judicial process, (iii) prior to the disposition of the Collateral,
store the Collateral or otherwise prepare the Collateral for disposition in any
manner to the extent Secured Party deems appropriate, (iv) take possession of
Grantor's premises or place custodians in exclusive control thereof, remain on
such
413
premises and use the same for the purpose of taking any actions described in
the preceding clause (iii) and collecting any Secured Obligation, (v) exercise
any and all rights and remedies of Grantor under or in connection with the
contracts related to the Collateral or otherwise in respect of the Collateral,
including without limitation any and all rights of Grantor to demand or
otherwise require payment of any amount under, or performance of any provision
of, such contracts, and (vi) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private
sale, at any of Secured Party's offices or elsewhere, for cash, on credit or
for future delivery, at such time or times and at such price or prices and upon
such other terms as Secured Party may deem commercially reasonable. Secured
Party or any Lender may be the purchaser of any or all of the Collateral at any
such sale and Secured Party, as agent for and representative of Lenders and
Interest Rate Exchangers (but not any Lender, Lenders, Interest Rate Exchanger
or Interest Rate Exchangers in its or their respective individual capacities
unless Requisite Lenders shall otherwise agree in writing), shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale, to
use and apply any of the Secured Obligations as a credit on account of the
purchase price for any Collateral payable by Secured Party at such sale. Each
purchaser at any such sale shall hold the property sold absolutely free from
any claim or right on the part of Grantor, and Grantor hereby waives (to the
extent permitted by applicable law) all rights of redemption, stay and/or
appraisal which it now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted. Grantor agrees that, to
the extent notice of sale shall be required by law, at least ten days' notice
to Grantor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. Secured
Party shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Grantor hereby waives any claims against
Secured Party arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Secured Party accepts
the first offer received and does not offer such Collateral to more than one
offeree; provided that such sale was conducted in a commercially reasonable
manner. If the proceeds of any sale or other disposition of the Collateral are
insufficient to pay all the Secured Obligations, Grantor shall be liable for
the deficiency and the fees of any attorneys employed by Secured Party to
collect such deficiency.
(b) Upon written demand from Secured Party, Grantor shall
execute and deliver to Secured Party an assignment or assignments of the
Trademarks, Registrations, Trademark Rights and the Associated Goodwill and
such other documents as are necessary or appropriate to carry out the intent
and purposes of this Agreement; provided that the failure of Grantor to comply
with such demand will not impair or affect the validity of the conditional
assignment effected by Section 2 or its effectiveness upon notice by Secured
Party as specified in Section 2. Grantor agrees that such an assignment
(including without limitation the conditional assignment effected by Section 2)
and/or recording shall be applied to reduce the Secured Obligations
414
outstanding only to the extent that Secured Party (or any Lender or Interest
Rate Exchanger) receives cash proceeds in respect of the sale of, or other
realization upon, the Collateral.
(c) Within five Business Days after written notice from
Secured Party, Grantor shall make available to Secured Party, to the extent
within Grantor's power and authority, such personnel in Grantor's employ on the
date of such Event of Default as Secured Party may reasonably designate, by
name, title or job responsibility, to permit Grantor to continue, directly or
indirectly, to produce, advertise and sell the products and services sold or
delivered by Grantor under or in connection with the Trademarks, Registrations
and Trademark Rights, such persons to be available to perform their prior
functions on Secured Party's behalf and to be compensated by Secured Party at
Grantor's expense on a per diem, pro-rata basis consistent with the salary and
benefit structure applicable to each as of the date of such Event of Default.
(d) Notwithstanding anything in this Agreement to the
contrary, Secured Party shall exercise, or shall refrain from exercising, any
remedy provided for in Section 16(a) in accordance with the instructions of
Requisite Lenders, and the Interest Rate Exchangers, by their acceptance of the
benefits of this Agreement and the other Loan Documents, hereby agree to be
bound by such instructions. The sole rights of the Interest Rate Exchangers
under this Agreement shall be to be secured by the Collateral and to receive
the payments provided for in Section 17.
SECTION 17. APPLICATION OF PROCEEDS. Except as expressly
provided elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any sale of, collection from, or other realization upon all or any
part of the Collateral may, in the discretion of Secured Party, be held by
Secured Party as Collateral for, and/or then, or at any other time thereafter,
applied in full or in part by Secured Party against, the Secured Obligations in
the following order of priority:
FIRST: To the payment of all reasonable costs and expenses of
such sale, collection or other realization, including reasonable
compensation to Secured Party and its agents and counsel, and all other
reasonable expenses, liabilities and advances made or incurred by
Secured Party in connection therewith, and all amounts for which
Secured Party is entitled to indemnification hereunder and all
reasonable advances made by Secured Party hereunder for the account of
Grantor, and to the payment of all reasonable costs and expenses paid
or incurred by Secured Party in connection with the exercise of any
right or remedy hereunder, all in accordance with Section 18;
SECOND: To the payment of all other Secured Obligations (for
the ratable benefit of the holders thereof) then due and payable; and
THIRD: To the payment to or upon the order of Grantor, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
415
SECTION 18. INDEMNITY AND EXPENSES.
(a) Grantor agrees to indemnify Secured Party, each Lender
and each Interest Rate Exchanger from and against any and all claims, losses
and liabilities in any way relating to, growing out of or resulting from this
Agreement and the transactions contemplated hereby (including, without
limitation, enforcement of this Agreement), except to the extent such claims,
losses or liabilities result solely from Secured Party's, such Lender's or such
Interest Rate Exchanger's gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
(b) Grantor shall pay to Secured Party upon demand the
amount of any and all reasonable costs and expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that Secured
Party may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the
failure by Grantor to perform or observe any of the provisions hereof.
SECTION 19. CONTINUING SECURITY INTEREST AND CONDITIONAL
ASSIGNMENT; TRANSFER OF LOANS. This Agreement shall create a continuing
security interest in, and conditional assignment of, the Collateral and shall
(a) remain in full force and effect until (i) the indefeasible payment in full
of the Secured Obligations (other than Obligations which are contingent and
unliquidated and not due and owing on such date and which pursuant to the
provisions of the Credit Agreement, Interest Rate Agreements, Letters of Credit
or the Loan Documents survive the termination of the Credit Agreement, the
repayment of the Secured Obligations, the termination of the Commitments, the
expiration or cancellation of all Letters of Credit or the termination,
expiration or cancellation of all Interest Rate Agreements), the cancellation
or termination of the Commitments, the cancellation or expiration of all
outstanding Letters of Credit and the termination, expiration or cancellation
of all Interest Rate Agreements, or (ii) the release of the Liens on the
Collateral by Secured Party in writing in accordance with the terms of
subsection 6.11 of the Credit Agreement, (b) be binding upon Grantor, its
successors and assigns, and (c) inure, together with the rights and remedies of
Secured Party hereunder, to the benefit of Secured Party and its successors,
transferees and assigns. Without limiting the generality of the foregoing
clause (c), but subject to the provisions of subsection 11.1 of the Credit
Agreement, any Lender may assign or otherwise transfer any Loans held by it to
any other Person, and such other Person shall thereupon become vested with all
the benefits in respect thereof granted to Lenders herein or otherwise and any
Interest Rate Exchanger may assign or otherwise transfer any Interest Rate
Obligations owing to it to another Lender or an Affiliate of such Lender or
another Lender, and such other Lender or Affiliate shall thereupon become
vested with all the benefits in respect thereof granted to such Interest Rate
Exchanger herein or otherwise. Upon (i) the indefeasible payment in full of
all Secured Obligations (other than Obligations which are contingent and
unliquidated and not due and owing on such date and which pursuant to the
provisions of the Credit Agreement, Interest Rate Agreements, Letters of Credit
or the Loan Documents survive the termination of the Credit Agreement, the
repayment of the Secured Obligations, the
416
termination of the Commitments, the expiration or cancellation of all Letters
of Credit or the termination, expiration or cancellation of all Interest Rate
Agreements), the cancellation or termination of the Commitments, the
cancellation or expiration of all outstanding Letters of Credit and the
termination, expiration or cancellation of all Interest Rate Agreements, or
(ii) the release of the Liens on the Collateral by Secured Party in writing in
accordance with the terms of subsection 6.11 of the Credit Agreement, the
security interest and conditional assignment granted hereby shall terminate and
all rights to the Collateral shall revert to Grantor. Upon any such
termination Secured Party will, at Grantor's expense, execute and deliver to
Grantor such documents as Grantor shall reasonably request to evidence such
termination.
SECTION 20. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders and, by their acceptance of the benefits of this
Agreement and the other Loan Documents, by each Interest Rate Exchanger.
Secured Party shall be obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from exercising any rights,
and to take or refrain from taking any action (including, without limitation,
the release or substitution of Collateral), solely in accordance with this
Agreement and the Credit Agreement and upon the instructions of Requisite
Lenders, and the Interest Rate Exchangers, by their acceptance of the benefits
of this Agreement, and the other Loan Documents, hereby agree to be bound by
such instructions.
(b) Secured Party shall at all times be the same Person
that is Agent under the Credit Agreement. Written notice of resignation by
Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute notice of resignation as Secured Party under this Agreement; removal
of Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute removal as Secured Party under this Agreement; and appointment of a
successor Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute appointment of a successor Secured Party under this Agreement. Upon
the acceptance of any appointment as Agent under subsection 10.5A of the Credit
Agreement by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly (i) transfer to such
successor Secured Party all sums, securities and other items of Collateral held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Secured Party, the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it under this Agreement while it was Secured Party
hereunder.
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SECTION 21. AMENDMENTS; ETC. No amendment or waiver of any
provision of this Agreement, or consent to any departure by Grantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by Secured Party (or, in the case of an amendment hereto, by Grantor and
Secured Party), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given; provided
that any amendment or waiver which adversely affects the interests of the
Interest Rate Exchangers but does not result in a similar adverse effect on the
interests of Lenders shall only be effective with the consent of the holders of
a majority of the Interest Rate Obligations given the benefit of the security
granted hereunder.
SECTION 22. NOTICES. Any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telexed or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile or telex, or three Business Days
after depositing it in the United States mail with postage prepaid and properly
addressed. For the purposes hereof, the address of each party hereto shall be
as set forth under such party's name on the signature pages hereof or, as to
either party, such other address as shall be designated by such party in a
written notice delivered to the other party hereto.
SECTION 23. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
SECTION 24. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 25. HEADINGS. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 26. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR
418
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK. Unless otherwise defined herein or in the Credit Agreement, terms
used in Articles 8 and 9 of the Uniform Commercial Code in the State of New
York are used herein as therein defined.
SECTION 27. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT GRANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
Grantor hereby agrees that service of all process in any such proceeding in any
such court may be made by registered or certified mail, return receipt
requested, to Grantor at its address provided in Section 22, such service being
hereby acknowledged by Grantor to be sufficient for personal jurisdiction in
any action against Grantor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
Secured Party to bring proceedings against Grantor in the courts of any other
jurisdiction.
SECTION 28. WAIVER OF JURY TRIAL. GRANTOR AND SECURED PARTY
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Grantor and Secured
Party each acknowledge that this waiver is a material inducement for Grantor
and Secured Party to enter into a business relationship, that Grantor and
Secured Party have already relied on this waiver in entering into this
Agreement and that each will continue to rely on this waiver in their related
future dealings. Grantor and Secured Party further warrant and represent that
each has reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the
event of litigation, this Agreement may be filed as a written consent to a
trial by the court.
SECTION 29. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such
419
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
DOMINICK'S FINER FOODS, INC. OF ILLINOIS,
as Grantor
By: ___________________________________
Title:
Notice Address: Dominick's Finer Foods, Inc.
of Illinois
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By: ___________________________________
Title:
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
421
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
KOHL'S OF BLOOMINDALE, INC., as Grantor
By: ___________________________________
Title:
Notice Address: ▇▇▇▇'▇ of Bloomingdale, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By: ___________________________________
Title:
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
422
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
▇▇▇▇ HAZELCREST, INC., as Grantor
By: ___________________________________
Title:
Notice Address: ▇▇▇▇ Hazelcrest, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By: ___________________________________
Title:
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to: Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
423
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
DFF EQUIPMENT LEASING COMPANY
(f/k/a Jerry's Deep Discount Centers, Inc.),
as Grantor
By: ___________________________________
Title:
Notice Address: DFF Equipment Leasing
Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By: ___________________________________
Title:
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
424
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BLACKHAWK DEVELOPMENTS, INC., as Grantor
By: ___________________________________
Title:
Notice Address: Blackhawk Developments, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By: ___________________________________
Title:
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
425
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BLACKHAWK PROPERTIES, INC., as Grantor
By: ___________________________________
Title:
Notice Address: Blackhawk Properties, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By: ___________________________________
Title:
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
426
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
SAVE-IT DISCOUNT FOODS CORPORATION,
as Grantor
By: ___________________________________
Title:
Notice Address: Save-It Discount Foods
Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By: ___________________________________
Title:
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
427
SCHEDULE A
TO
TRADEMARK COLLATERAL
SECURITY AGREEMENT AND
CONDITIONAL ASSIGNMENT
UNITED STATES
REGISTERED TRADEMARK REGISTRATION REGISTRATION
OWNER DESCRIPTION NUMBER DATE
---------- ------------- ------------ ------------
None.
ILLINOIS
REGISTERED TRADEMARK REGISTRATION REGISTRATION
OWNER DESCRIPTION NUMBER DATE
---------- ------------- ------------ ------------
None.
428
SCHEDULE B
TO
TRADEMARK COLLATERAL
SECURITY AGREEMENT AND
CONDITIONAL ASSIGNMENT
Office Locations: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(office for DFF Equipment Leasing Company)
Other Names:
-----------------------------
[▇▇▇▇▇▇ Dairy Corporation]5
[▇▇▇▇ Developments, Inc.]6
[▇▇▇▇ Properties, Inc.]7
[NONE]8
-----------------------------
5 For Dominick's Finer Foods, Inc. of Illinois only.
6 For Blackhawk Developments, Inc. only.
7 For Blackhawk Properties, Inc. only.
8 For all others.
429
EXHIBIT XXI
[FORM OF MORTGAGE]
THIS INSTRUMENT PREPARED BY,
RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:
O'MELVENY & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: K. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
(045,710-571)
MORTGAGE, ASSIGNMENT OF RENTS, SECURITY AGREEMENT
AND FIXTURE FILING
(FOR MORTGAGE ON THE LAND TRUST PROPERTIES OWNED BY HAZELCREST AND DOMINICK'S):
(ILLINOIS)
THIS MORTGAGE, ASSIGNMENT, SECURITY AGREEMENT AND FIXTURE
FILING (this "MORTGAGE"), dated as of November 1, 1996, is intended to create
and be a separate Mortgage by and from each of the following Mortgagors (as
hereinafter defined):
(1) LASALLE NATIONAL TRUST, N.A., a national banking association having an
office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, not
personally but as Trustee under the provisions of a deed or deeds in
trust duly recorded and delivered to said bank in pursuance of a Trust
Agreement dated JUNE 3, 1982 and known as TRUST NO. 104987
("MORTGAGOR"),
(2) LASALLE NATIONAL TRUST, N.A., a national banking association having an
office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, not
personally but as Trustee under the provisions of a deed or deeds in
trust duly recorded and
430
delivered to said bank in pursuance of a Trust Agreement dated FEBRUARY
15, 1983, and known as TRUST NO. 105958 ("MORTGAGOR"),
(3) LASALLE NATIONAL TRUST, N.A., a national banking association, having an
office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, not
personally but as Trustee under the provisions of a deed or deeds in
trust duly recorded and delivered to said bank in pursuance of a Trust
Agreement dated FEBRUARY 1, 1985 and known as TRUST NO. 108982
("MORTGAGOR"),
(4) LASALLE NATIONAL TRUST, N.A., a national banking association, having an
office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, not
personally but as Trustee under the provisions of a deed or deeds in
trust duly recorded and delivered to said bank in pursuance of a Trust
Agreement dated DECEMBER 5, 1984 and known as TRUST NO. 109248
("MORTGAGOR"),
(5) LASALLE NATIONAL TRUST, N.A., a national banking association, having an
office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, not
personally but as Trustee under the provisions of a deed or deeds in
trust duly recorded and delivered to said bank in pursuance of a Trust
Agreement dated MARCH 6, 1986 and known as TRUST NO. 110897
("MORTGAGOR"),
(6) LASALLE NATIONAL TRUST, N.A., a national banking association, having an
office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, not
personally but as Trustee under the provisions of a deed or deeds in
trust duly recorded and delivered to said bank in pursuance of a Trust
Agreement dated FEBRUARY 15, 1985 and known as TRUST NO. 109453
("MORTGAGOR"),
(7) ▇▇▇▇ HAZELCREST, INC., a Delaware corporation having an office at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("MORTGAGOR"), and
(8) DOMINICK'S FINER FOODS, INC., a Delaware corporation having an office
at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("MORTGAGOR")
(FOR MORTGAGE ON THE ILLINOIS NON-LAND TRUST PROPERTIES):
(ILLINOIS)
THIS MORTGAGE, ASSIGNMENT, SECURITY AGREEMENT AND FIXTURE
FILING (this "MORTGAGE"), dated as of November 1, 1996, is intended to create
and be a separate Mortgage by and from each of the following Mortgagors (as
hereinafter defined):
(1) DOMINICK'S FINER FOODS, INC. OF ILLINOIS, an Illinois corporation
having an office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and
431
(2) DOMINICK'S FINER FOODS, INC., a Delaware corporation having an office
at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("MORTGAGOR")
(FOR ALL MORTGAGES EXCEPT INDIANA MORTGAGE):
to BANKERS TRUST COMPANY, a New York banking corporation having an address at
One Bankers Trust Plaza, 130 Liberty Street, 14th Floor, New York, New York
10006 (Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇), as administrative agent for and
representative of (I) the financial institutions party to the Credit Agreement
(hereinafter defined) and their successors and permitted assigns, and (II) the
Secured Interest Rate Exchangers (hereinafter defined) and their successors and
permitted assigns (in such capacity, "MORTGAGEE"), with respect to those
portions of the Mortgage Estate (hereinafter defined), Rents (hereinafter
defined), and Personal Property (hereinafter defined) (collectively,
"COLLATERAL") now owned or hereafter acquired (whether directly or through a
trust) by such individual Mortgagor, each such Mortgage being separately and
severally enforceable (whether concurrently or otherwise) against the Mortgagor
to which it relates, its successors and assigns and successors-in- interest in
and to the Collateral of such Mortgagor, in the same manner and to the same
extent as if each of said Mortgagors had executed a separate writing as to that
Mortgagor's respective share of the Collateral, on the terms hereinafter set
forth with respect to such Mortgagor and Collateral. References herein to
"MORTGAGOR" shall refer singularly and separately to each Mortgagor,
respectively, and shall not refer jointly or collectively to more than one of
the Mortgagors, this writing being, with respect to each Mortgagor, a separate
and distinct Mortgage, applying to and affecting only said Mortgagor and the
Collateral now owned or hereafter acquired (whether directly or through a
trust) by such individual Mortgagor.
(FOR MORTGAGE ON INDIANA PROPERTY ONLY):
(INDIANA)
THIS MORTGAGE, ASSIGNMENT, SECURITY AGREEMENT AND FIXTURE
FILING (this "MORTGAGE"), dated as of November 1, 1996, is made by DOMINICK'S
FINER FOODS, INC., a Delaware corporation having an office at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("MORTGAGOR") to BANKERS TRUST COMPANY, a New
York banking corporation having an address at One Bankers Trust Plaza, 130
Liberty Street, 14th Floor, New York, New York 10006 (Attention: ▇▇▇▇▇▇▇▇
▇▇▇▇), as administrative agent for and representative of (I) the financial
institutions party to the Credit Agreement (hereinafter defined) and their
successors and permitted assigns, and (II) the Secured Interest Rate Exchangers
(hereinafter defined) and their successors and permitted assigns (in such
capacity, "MORTGAGEE"). Terms defined in the Credit Agreement and not
otherwise defined in this Mortgage have the meaning given to such terms in the
Credit Agreement.
432
PRELIMINARY STATEMENTS
A. Mortgagee, Lenders, Syndication Agent and Arrangers
have entered into a Credit Agreement dated as of November 1, 1996 (said Credit
Agreement, as it may hereafter be amended, amended and restated, supplemented
or otherwise modified from time to time, being the "CREDIT AGREEMENT") with
Dominick's Supermarkets, Inc., a Delaware corporation, DFF Supermarkets, Inc.,
a Delaware corporation, and Dominick's Finer Foods, Inc. a Delaware corporation
("COMPANY"), pursuant to which Lenders have made certain commitments, subject
to the terms and conditions set forth in the Credit Agreement, to extend
certain credit facilities to Company, up to an aggregate amount not exceeding
Three Hundred Twenty-Five Million Dollars ($325,000,000), with maturity dates
not later than twenty (20) years from the date hereof.
B. It is contemplated that Company may from time to time
enter into Interest Rate Agreements with one or more of the Lenders or their
Affiliates (collectively, in such capacity, "SECURED INTEREST RATE
EXCHANGERS"), and the obligations under any Interest Rate Agreement, or under
any guaranty of the obligations under any such Interest Rate Agreement
(including, in either case, the obligation to make payments in the event of
early termination of an Interest Rate Agreement), are to be given the benefit
of the lien of this Mortgage with Mortgagor's consent.
C. The Credit Agreement and other Loan Documents, and
any and all Interest Rate Agreements at any time entered into by Company and
one or more Secured Interest Rate Exchangers, are hereinafter sometimes
collectively referred to as the "SECURED CREDIT DOCUMENTS".
D. It is a condition precedent to the initial extensions
of credit by the Lenders under the Credit Agreement that Mortgagor execute and
deliver this Mortgage to Mortgagee.
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, including
the indebtedness herein recited and the trust herein created, the receipt and
sufficiency of which are hereby acknowledged, Mortgagor hereby irrevocably
mortgages, grants, transfers, conveys and assigns to Mortgagee, for the benefit
and security of Mortgagee, under and subject to the terms and conditions
hereinafter set forth, all right, title and interest now owned or hereafter
acquired by Mortgagor in and to the following property (collectively, the
"MORTGAGE ESTATE" (all of the following property being collectively referred to
herein as the "MORTGAGE ESTATE," and those portions of the Mortgage Estate
located on or directly relating to the Land designated by a particular
"Location Number" in the exhibits attached hereto being collectively referred
to herein as a "MORTGAGED PROPERTY")):
(1) The real property described in EXHIBIT A attached
hereto (the "FEE LAND").
(2) All leasehold estate, right, title and interest in,
to and under any and all leases described or referred to in EXHIBIT B
attached hereto, and any
433
amendments, modifications, extensions, renewals or substitutions for
any of such leases (each such lease, together with any amendments,
modifications, extensions, renewals or substitutions therefor being
referred to herein as a "LEASE"), affecting all or portions of the
real property described in said EXHIBIT B or described in the recorded
documents referred to in said EXHIBIT B (which property descriptions
are incorporated herein by this reference) (collectively, the "LEASED
LAND"; the Fee Land and the Leased Land being sometimes collectively
referred to as the "LAND") or affecting any of the Improvements (as
hereinafter defined), including any and all rights to security
deposits, advance rentals, and other deposits under any Lease
(collectively, "DEPOSITS"); together with any greater estate in the
Leased Land or the Improvements now owned or hereafter acquired by
Mortgagor, whether pursuant to the terms of any Lease or otherwise.
(3) Any and all buildings and improvements now or
hereafter erected in or on the Land, including all fixtures,
attachments, appliances, equipment, machinery and other articles
attached to the Land or to such buildings and improvements
(collectively, the "IMPROVEMENTS"), all of which shall be deemed and
construed to be a part of the realty (the Land and the Improvements
being sometimes collectively referred to as the "PROPERTY");
(4) All rents, issues, profits, royalties, income and
other benefits (collectively, the "RENTS") derived from the Property
or the ownership, use, management, operation, leasing or occupancy of
the Property, subject to the terms of ARTICLE III below;
(5) All tenements, hereditaments, appurtenances,
privileges and other rights and interests now or in the future arising
in respect of, benefiting or otherwise relating to the Property,
including easements, rights-of-way, development rights, mineral
rights, water rights and water stock, including all right, title and
interest now owned or hereafter acquired by Mortgagor in and to any
land lying within the right of way of any street, open or proposed,
adjoining the Property, and any and all sidewalks, alleys, driveways,
and strips and gores of land adjacent to or used in connection with
the Property;
(6) All the estate, interest, right, title, or other
claim or demand, both in law and in equity, with respect to, or
relating to the ownership, use, management, operation, leasing, or
occupancy of the Property, including claims for damages with respect
thereto, claims or demands with respect to insurance proceeds, and any
and all awards made for the taking of all or any part of the Property
by eminent domain, or by any proceeding or purchase in lieu thereof,
including without limitation any awards resulting from a change of
grade of streets and awards for severance damages (collectively,
"PROCEEDS");
(7) All governmental approvals, authorizations, permits,
rights, and entitlements now or hereafter owned by Mortgagor which
have been or will be issued with respect to the Property, which are
necessary or useful in connection
434
with the development, construction or operation of the Property or any
portion thereof;
FOR THE PURPOSE OF SECURING the prompt payment or performance
in full when due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including the payment of
amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of all
obligations and liabilities of every nature of Mortgagor or, if Mortgagor is a
trustee under a land trust, the owner of the beneficial interests in said trust
(in either case, "DEBTOR") now or hereafter existing under or arising out of or
in connection with the Secured Credit Documents, or any of them, and all
extensions and renewals thereof, whether for principal, interest (including
interest that, but for the filing of a petition in bankruptcy with respect to
Debtor, would accrue on such obligations), reimbursement of amounts drawn under
Letters of Credit, fees, expenses, indemnities or otherwise, whether voluntary
or involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or
incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from Mortgagee or any Lender or Secured Interest Rate
Exchanger as a preference, fraudulent transfer or otherwise (all such
obligations and liabilities of Debtor under, arising out of or in connection
with the Secured Credit Documents being referred to herein as the "SECURED
OBLIGATIONS").
TO PROTECT THE SECURITY OF THIS MORTGAGE, MORTGAGOR HEREBY
COVENANTS AND AGREES AS FOLLOWS:
ARTICLE I
CERTAIN OBLIGATIONS OF MORTGAGOR
1.01. PAYMENT OF SECURED OBLIGATIONS. Mortgagor shall duly
and punctually pay and perform all Secured Obligations in accordance with their
terms.
1.02. MAINTENANCE, REPAIRS, ALTERATIONS, USE. Mortgagor
shall: (A) keep the Mortgage Estate in good condition and repair; (B) complete
or cause to be completed promptly and in a good and workmanlike manner any
Improvements which may be now or hereafter constructed on the Property, and pay
when due (subject to Mortgagor's right to contest claims in accordance with
SECTION 1.08 hereof) all claims for labor performed and materials furnished
therefor, other than, so long as no Event of Default exists, any such claims
the nonpayment of which would not have a material adverse effect on the value,
operation or ownership of any Mortgaged Property, or on Mortgagee's lien
thereon or security therein; (C) not commit or permit any waste of the Mortgage
Estate; (D) secure and maintain in full force and effect all permits necessary
for the use, occupancy and operation of the Mortgage Estate; and (E) except as
otherwise prohibited or restricted by this Mortgage, do any and all other acts
which may be
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reasonably necessary to protect or preserve the value of the Mortgage Estate
and the rights of Mortgagee with respect thereto.
1.03. INSURANCE.
(A) TYPES AND AMOUNTS REQUIRED. Mortgagor shall at all
times provide, maintain and keep in force, at no expense to Mortgagee, fire and
other insurance with respect to the Property as required by the Credit
Agreement.
(B) POLICY REQUIREMENTS. All policies of insurance
maintained with respect to the Property (I) shall name Mortgagee as an
additional insured as its interests may appear; (II) shall contain a standard
Lender's Loss Payable endorsement and other non-contributory standard mortgagee
protection clauses; and (III) shall contain an agreement by the insurer that
such policy shall not be amended or canceled without at least thirty (30) days'
prior written notice to Mortgagee. Any policies containing a coinsurance
clause shall include a replacement cost endorsement adequate to ensure that the
coinsurance clause is rendered inoperative. Mortgagor may provide any of the
required insurance through blanket policies carried by Mortgagor and covering
more than one location, or by policies procured by a tenant or other party
holding under Mortgagor.
(C) EVIDENCE OF INSURANCE. Mortgagor shall furnish
Mortgagee with an original of all policies of insurance required under this
Section or a certificate of insurance for each required policy setting forth
the coverage, the limits of liability, the deductibles, if any, the name of the
carrier, the policy number, and the period of coverage, which certificates
shall be executed by authorized officials of the companies issuing such
insurance, or by agents or attorneys-in-fact authorized to issue said
certificates. Mortgagor shall furnish to Mortgagee from time to time, within
ten (10) days after each request therefor by Mortgagee, a certificate of
Mortgagor specifying all insurance policies with respect to the Mortgage Estate
and all other policies required hereby then outstanding and in force, and
stating whether or not such insurance complies with the requirements of this
Section and, if it does not, the manner in which it does not comply.
(D) PROCUREMENT BY MORTGAGEE. If Mortgagor fails to
provide, maintain, keep in force or deliver to Mortgagee the policies of
insurance required by this Mortgage (or certificates evidencing same),
Mortgagee may (but shall have no obligation to) procure such insurance, or
single interest insurance for such risks covering Mortgagee's interests, and
Mortgagor shall pay all premiums therefor promptly upon demand by Mortgagee;
and until such payment is made by Mortgagor, the amount of all such premiums,
together with interest thereon at the Agreed Rate (defined in SECTION 2.01
hereof), shall be secured by this Mortgage.
(E) ASSIGNMENT OF POLICIES UPON FORECLOSURE. In the
event of foreclosure of this Mortgage or other transfer of title or assignment
of the Mortgage Estate in extinguishment, in whole or in part, of the debt
secured hereby, all right, title and interest of Mortgagor in and to all
policies of insurance required by this Section and
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any unearned premiums paid thereon shall, without further act, be assigned to
and shall inure to the benefit of and pass to the successor in interest to
Mortgagor or the purchaser or grantee of the Mortgage Estate, and Mortgagor
hereby appoints Mortgagee its lawful attorney-in-fact to execute an assignment
thereof and any other document necessary to effect such transfer.
1.04. CASUALTIES; INSURANCE PROCEEDS.
(A) NOTICE OF CASUALTIES. Mortgagor shall give prompt
written notice thereof to Mortgagee after the happening of any casualty to the
Mortgage Estate resulting or reasonably expected to result in aggregate losses
to the Mortgage Estate in excess of $500,000, whether or not such casualty is
covered by insurance.
(B) PROCEEDS TO MORTGAGEE. All proceeds of insurance
that are (I) payable during the existence of an Event of Default in connection
with any casualty affecting the Mortgage Estate, or (II) payable at any time in
connection with any casualty affecting the Mortgage Estate resulting in
aggregate insurance proceeds in excess of $1,000,000 (a "MAJOR CASUALTY"),
shall be payable to Mortgagee. Mortgagor hereby authorizes and directs any
affected insurance company to make payment of such proceeds directly to
Mortgagee. If Mortgagor receives or shall be holding any proceeds of insurance
during the existence of an Event of Default or at any time resulting from a
Major Casualty, Mortgagor shall promptly pay over such proceeds to Mortgagee.
Mortgagor shall not settle, adjust or compromise any claims for loss, damage or
destruction of the Mortgage Estate or any part thereof under any policy or
policies of insurance as a result of a Major Casualty without the prior written
consent of Mortgagee to such settlement, adjustment or compromise; and during
the existence of an Event of Default hereunder Mortgagee shall have the sole
and exclusive right, and Mortgagor hereby authorizes and empowers Mortgagee, to
settle, adjust or compromise any insurance claims, and any such action taken by
Mortgagor without Mortgagee's written consent shall be null and void.
(C) USE IN RESTORATION. After deducting therefrom all
costs and expenses (regardless of the particular nature thereof and whether
incurred with or without suit), including reasonable attorneys' fees, incurred
by Mortgagee in connection with such Major Casualty or the collection of
Proceeds, Mortgagee shall disburse the insurance proceeds held by it to
Mortgagor, in accordance with and subject to such customary terms, conditions,
and procedures as Mortgagee may require, for the sole purpose of paying the
cost of restoration of the Mortgage Estate, so long as no Event of Default then
exists.
(D) APPLICATION BY MORTGAGEE. If at any time an Event of
Default has occurred and is continuing, Mortgagee has the option, in its sole
and absolute discretion, (I) to apply all or any portion of such proceeds to
the Secured Obligations secured hereby, in such order and priority as Mortgagee
may determine, or (II) to apply all or any portion of such proceeds to the
restoration of the Mortgage Estate, subject to conditions determined by
Mortgagee, or (III) to deliver all or any portion of such proceeds to
Mortgagor, subject to conditions determined by Mortgagee.
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(E) DUTY TO RESTORE. Mortgagor shall promptly restore in
a good and workmanlike manner any Improvements which may be damaged or
destroyed from any cause whatsoever, regardless of whether or not insurance
proceeds are available for restoration, whether or not any such proceeds are
sufficient in amount, or whether or not the Mortgage Estate can be restored to
the same condition and character as existed prior to such damage or
destruction.
1.05. WAIVER OF SUBROGATION. Mortgagor waives any and all
right to claim or recover against Mortgagee, its officers, employees, agents
and representatives, for loss of or damage to Mortgagor, the Mortgage Estate,
Mortgagor's property or the property of others under Mortgagor's control from
any cause insured against or required to be insured against; provided, however,
that this waiver of subrogation shall not be effective with respect to any
policy of insurance permitted or required by this Mortgage if such policy
prohibits, or if coverage thereunder would be reduced as a result of, such
waiver of subrogation, and Mortgagor is unable to obtain from a carrier issuing
such insurance a policy that, by special endorsement or otherwise, permits such
a waiver of subrogation.
1.06. TAXES AND IMPOSITIONS.
(A) PAYMENT BY MORTGAGOR. Notwithstanding SECTION 1.08
hereof or any provision of the Credit Agreement to the contrary, but subject to
Mortgagor's contest rights under SECTION 1.06(B) hereof, Mortgagor shall pay,
or cause to be paid, prior to delinquency, all real property taxes and
assessments, general and special, and all other taxes and assessments of any
kind or nature whatsoever, including, without limitation, non-governmental
levies or charges resulting from covenants, conditions or restrictions
affecting the Mortgage Estate, which are assessed or imposed upon the Mortgage
Estate, or become due and payable, and which create, may create or appear to
create a lien upon the Mortgage Estate, or any part thereof, other than, so
long as no Event of Default exists, any such taxes, assessments or charges the
nonpayment of which would not have a material adverse effect on the value,
operation, or ownership of any Mortgaged Property, or on Mortgagee's lien
thereon or security therein (all of which taxes, assessments and charges,
together with any and all other taxes, assessments and charges of a similar
kind or nature are collectively referred to as "IMPOSITIONS"); provided,
however, that if, by law, any such Imposition is payable, or may at the option
of the taxpayer be paid, in installments, Mortgagor may pay the same or cause
it to be paid, together with any accrued interest on the unpaid balance of such
Imposition, in installments as the same become due and before any fine,
penalty, interest or cost may be added thereto for the nonpayment of any such
installment and interest.
(B) CONTEST OF ASSESSMENTS. Mortgagor shall have the
right to contest or object in good faith to the amount or validity of any such
Imposition by appropriate proceedings commenced before any delinquency occurs,
but this shall not be deemed or construed in any way as relieving, modifying or
extending Mortgagor's covenant to pay any such Imposition at the time and in
the manner provided in this SECTION 1.06 unless (I) with respect to any
Imposition in excess of $100,000, Mortgagor has given prior written notice to
Mortgagee, and (II) with respect to any Imposition (A) the proceedings
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operate to prevent the sale of the Mortgage Estate, or any part thereof, to
satisfy such Imposition prior to final determination of such proceedings; or
(B) Mortgagor furnishes a good and sufficient bond or surety satisfactory to
Mortgagee; or (C) Mortgagor provides a good and sufficient undertaking as
required or permitted by law to accomplish a stay of any such sale.
(C) JOINT ASSESSMENT. Mortgagor shall not initiate, and,
to the maximum extent permitted by law, shall not suffer or permit the joint
assessment of any real and personal property any part of which constitutes all
or a portion of the Mortgage Estate, or any other procedure whereby the lien of
real property taxes and the lien of personal property taxes shall be assessed,
levied or charged to the Mortgage Estate as a single lien.
1.07. UTILITIES. Mortgagor shall pay or shall cause to be
paid when due all utility charges which are or may become a charge or lien
against the Mortgage Estate, for gas, electricity, water or sewer services
furnished to the Mortgage Estate, and all other assessments or charges of a
similar nature, whether public or private, affecting or related to the Mortgage
Estate or any portion thereof, whether or not such assessments or charges are
or may become liens thereon, other than, so long as no Event of Default exists,
any such utility charges or other assessments or charges the nonpayment of
which would not have a material adverse effect on the value, operation, or
ownership of any Mortgaged Property, or on Mortgagee's lien thereon or security
therein.
1.08. LIENS. Mortgagor shall pay and promptly discharge,
at Mortgagor's cost and expense, all liens, encumbrances and charges upon the
Mortgage Estate, or any part thereof or interest therein which are, appear or
are alleged to be prior to the lien of this Mortgage, other than (A) any such
matters constituting Permitted Encumbrances or otherwise approved by Mortgagee
in writing, and (B) any such matters to which this Mortgage is hereafter
subordinated; provided, however, that Mortgagor may contest or object in good
faith to the amount or validity of any such charges by appropriate proceedings,
subject to any applicable provisions of SECTION 1.08 below. Mortgagor shall
have the right to contest in good faith by appropriate proceedings the validity
of any such lien, encumbrance or charge, provided that Mortgagor shall promptly
notify Mortgagee of any such contest, and shall diligently proceed to cause
such lien, encumbrance or charge to be removed and discharged but this shall
not be deemed or construed in any way as relieving, modifying or extending
Mortgagor's covenant to pay and promptly discharge any such lien, encumbrance
or charge unless (I) the proceedings operate to prevent the sale of the
Mortgage Estate, or any part thereof, to satisfy such lien, encumbrance or
charge prior to final determination of such proceedings, or (II) Mortgagor
furnishes a good and sufficient bond or surety satisfactory to Mortgagee, or
(III) Mortgagor provides a good and sufficient undertaking as required or
permitted by law to accomplish a stay of any such sale. If Mortgagor fails to
discharge any such lien, encumbrance or charge, then, in addition to any other
right or remedy of Mortgagee, Mortgagee may, but shall not be obligated to,
discharge the same, without inquiring into the validity of such lien,
encumbrance or charge nor into the existence of any defense or offset thereto,
by paying the amount claimed to be due, or by procuring the discharge
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thereof by depositing in a court a bond or the amount claimed or otherwise
giving security for such claim, or by procuring such discharge in such other
manner as is or may be prescribed by law. Immediately upon demand therefor by
Mortgagee, Mortgagor shall pay to Mortgagee an amount equal to all costs and
expenses incurred by Mortgagee in connection with the exercise by Mortgagee of
the foregoing right to discharge any such lien, encumbrance or charge, together
with interest thereon from date of expenditure at the Agreed Rate; and, until
paid, such sums shall be secured hereby.
1.09. ACTIONS AFFECTING MORTGAGE ESTATE OR PARTIES.
Mortgagor, at no cost or expense to Mortgagee, shall appear in and contest any
action or proceeding purporting to affect the security hereof or the rights or
powers of Mortgagee hereunder. Mortgagor shall indemnify, defend and hold
Mortgagee harmless from all liability, damage, cost and expense incurred by
Mortgagee by reason of any action or proceeding, of whatever kind or nature,
concerning the Mortgage Estate or any part thereof or interest therein, or the
occupancy thereof, (including, without limitation, the reasonable fees of
attorneys for Mortgagee, and other expenses, of whatever kind or nature,
incurred by Mortgagee as a result of such action or proceeding), whether or not
such action or proceeding is prosecuted to judgment or decision, except those
arising solely from the gross negligence or wilful misconduct of Mortgagee as
determined by a final judgment of a court of competent jurisdiction.
Immediately upon demand therefor by Mortgagee, Mortgagor shall pay thereto an
amount equal to Mortgagor's liability to Mortgagee under this Section, together
with interest thereon from date of expenditure at the Agreed Rate; and, until
paid, such sums shall be secured hereby.
1.10. EMINENT DOMAIN.
(A) NOTICE TO MORTGAGEE. If any proceeding or action is
commenced for the taking of the Mortgage Estate, or any part thereof or
interest therein, for public or quasi-public use under the power of eminent
domain, condemnation or otherwise, or if the same is taken or damaged by reason
of any public improvement or condemnation proceeding, or in any other manner,
or if Mortgagor receives any notice or other information regarding such a
proceeding, action, taking or damage (including any proposal to purchase any
portion of the Mortgage Estate in lieu of condemnation), (limited to
information received in writing, except in the case of a pending action or
proceeding) Mortgagor shall give prompt written notice thereof to Mortgagee.
(B) AWARD TO MORTGAGEE. Mortgagee shall be entitled, at
its option, without regard to the adequacy of its security, to investigate and
negotiate with the condemnor concerning the proposed taking, to commence,
appear in and prosecute in its own name any such action or proceeding (but will
not exercise such option unless an Event of Default exists or unless Mortgagee
shall have determined, in its sole judgment, that Mortgagor was not diligently
proceeding to protect Mortgagee's interests), and, if an Event of Default
exists hereunder, to make any compromise or settlement in connection with such
taking or damage. Mortgagor shall not compromise or settle any such action or
proceeding or agree to any sale in lieu of condemnation during the existence of
an Event of Default without the prior written consent of Mortgagee, and any
such action by Mortgagor taken without Mortgagee's written consent shall, at
the option of Mortgagee,
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be null and void. All compensation, awards, damages, rights of action and
proceeds (the "AWARD") awarded to Mortgagor by reason of any such taking,
transfer or damage (a "TAKING") are hereby assigned to Mortgagee and Mortgagor
agrees to execute such further assignments of the Award as Mortgagee may
require. Notwithstanding the foregoing, Mortgagor shall be entitled to receive
the entire Award so long as (I) no Event of Default exists, (II) the voluntary
sale by Mortgagor of the Real Property Assets would be permitted by SUBSECTION
7.7 of the Credit Agreement, (III) Mortgagor elects to treat such taking as
such a permitted sale in accordance with SUBSECTION 7.7 of the Credit
Agreement, and (IV) such Award is used and applied in accordance with
SUBSECTION 2.4B(III)(A) of the Credit Agreement.
(C) USE IN RESTORATION. If Mortgagor is not entitled to
receive the Award by virtue of its election to treat the taking as a permitted
sale in accordance with the last sentence of SECTION 1.10(B) above, then so
long as no Event of Default exists and so long as Mortgagor shall not have
determined, in accordance with SECTION 1.10(E) below, not to use the Award for
restoration of the affected Mortgaged Property, Mortgagee shall disburse the
Award to Mortgagor, in accordance with and subject to such customary terms,
conditions, and procedures as Mortgagee may reasonably require, for the sole
purpose of paying the cost of restoration of the Mortgage Estate, after
deducting therefrom all costs and expenses (regardless of the particular nature
thereof and whether incurred with or without suit), including reasonable
attorneys' fees, incurred by Mortgagee in connection with any such
negotiations, action or proceeding (whether or not prosecuted to judgment).
(D) APPLICATION BY MORTGAGEE. If, at any time, an Event
of Default has occurred and is continuing, Mortgagee shall have the option, in
its sole and absolute discretion, (1) to apply all or any portion of the Award
to the Secured Obligations in such order as Mortgagee may determine, whether or
not then due and payable, or (2) to apply all or any portion of the Award to
the restoration of the Mortgage Estate, subject to such conditions as Mortgagee
may determine in its sole discretion, or (3) to deliver all or any portion of
the Award, after such deductions, to Mortgagor, subject to such conditions as
Mortgagee may determine in its sole discretion. If (I) no Event of Default has
occurred and is continuing, and (II) Mortgagor is not entitled to receive the
Award by virtue of its election to treat the taking as a permitted sale in
accordance with the last sentence of SECTION 1.10(B) above, and (III) Mortgagor
determines, in accordance with SECTION 1.10(E) below, not to use the Award for
restoration of the affected Mortgaged Property, Mortgagee shall have the
option, in its sole and absolute discretion, (A) to apply all or any portion of
the Award to the Secured Obligations in such order as Mortgagee may determine,
whether or not then due and payable, or (B) to deliver all or any portion of
the Award, after such deductions, to Mortgagor, subject to such conditions as
Mortgagee may determine in its sole discretion.
(E) DUTY TO RESTORE. Mortgagor shall promptly repair, to
the maximum extent practicable, any damage to the Mortgaged Property in
question caused by any taking other than one described in the last sentence of
SECTION 1.10(B) above, regardless of whether or not the Award is available for
restoration, whether or not any such Award is sufficient in amount, or whether
or not such Mortgaged Property can be
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restored to the same condition and character as existed prior to such taking
unless (I) no Event of Default exists, and (II) Mortgagor, in the exercise of
its good faith business judgment, consistent with past practices, determines
that such Mortgaged Property is no longer necessary for the proper conduct of
its business and that restoration of such Mortgaged Property in such manner
would not be prudent.
1.11. SURVIVAL OF WARRANTIES; FULL PERFORMANCE REQUIRED.
All representations, warranties and covenants of Mortgagor made to Mortgagee in
connection with the indebtedness secured hereby shall survive the execution and
delivery of this Mortgage and shall remain continuing obligations, warranties
and representations of Mortgagor so long as any portion of the obligations
secured by this Mortgage remain outstanding; and Mortgagor shall fully and
faithfully satisfy and perform all such obligations, representations,
warranties and covenants.
1.12. OTHER INSTRUMENTS. Mortgagor shall punctually pay
all amounts due and payable under, and shall promptly and faithfully perform or
observe each and every other obligation or condition to be performed or
observed under, each deed of trust, mortgage or other lien or encumbrance,
lease, sublease, declaration, covenant, condition, restriction, license, order
or other instrument or agreement affecting the Mortgage Estate, in law or in
equity, if the failure to perform or observe such obligation or condition could
have (I) a material adverse effect on the operation, condition, or value of any
of the Designated Properties, or Mortgagee's lien thereon, or (II) a Material
Adverse Effect.
1.13. FURTHER ACTS. Mortgagor shall do and perform all
acts necessary to keep valid and effective the charges and lien hereof, to
carry into effect its object and purposes, and shall execute and deliver to
Mortgagee at any time, upon request of Mortgagee, all other and further
instruments in writing necessary to vest in and secure to Mortgagee each and
every part of the Mortgage Estate and the Rents and the rights and interest of
Mortgagee therein or with respect thereto; and, upon request by Mortgagee,
shall supply evidence of fulfillment of each of the covenants herein contained
concerning which a request for such evidence has been made.
1.14. COVENANTS REGARDING THE LEASES. Mortgagor hereby
covenants, represents and warrants to Mortgagee as follows with respect to each
Lease:
(A) NO DEFAULT. As of the date hereof, the Lease is a
valid and subsisting lease and is in full force and effect in accordance with
its terms. Mortgagor is the owner of the entire lessee's interest in and under
the Lease. To Mortgagor's knowledge, as of the date hereof, no default has
occurred and is continuing under the Lease. This Mortgage is lawfully executed
and delivered in conformity with the terms of the Lease and is and will be kept
a valid lien on the interests of Mortgagor therein.
(B) ENCUMBRANCES. Mortgagor shall not, without the prior
written consent of Mortgagee, (I) except as may be expressly permitted under
the Credit Agreement, further encumber its leasehold estate, the Land, or any
other portion of the Mortgage Estate, or (II) except as required by the Lease
as of the date hereof,
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subordinate or consent to the subordination of the Lease to any underlying
lease, mortgage or deed of trust on the lessor's interest in the premises
demised by the Lease unless the lessor under such underlying lease or the
mortgagee or beneficiary under such mortgage or deed of trust concurrently
executes and acknowledges a non-disturbance agreement for the benefit of
Mortgagor in form and substance reasonably acceptable to Mortgagee.
(C) NOTICES OF DEFAULT. Mortgagor shall notify Mortgagee
promptly in writing of (I) any material default by Mortgagor or the lessor
under the Lease and (II) the receipt by Mortgagor of any written notice of
default from the lessor under the Lease. Mortgagor shall promptly deliver to
Mortgagee a copy of any such written notice of default under the Lease.
(D) COOPERATION WITH MORTGAGEE'S EFFORTS TO CURE. If any
material default under the Lease shall have occurred and be continuing, upon
the written request of Mortgagee, Mortgagor shall promptly execute, acknowledge
and deliver to Mortgagee such instruments as may reasonably be required to
permit Mortgagee to cure such default or to permit Mortgagee to take such other
action required to enable Mortgagee to cure or remedy the matter in default and
to preserve the security interest of Mortgagee under this Mortgage with respect
to the Lease. Mortgagor hereby irrevocably appoints Mortgagee, during the
existence of an Event of Default as its true and lawful attorney-in-fact to do,
in its name or otherwise, any and all acts and to execute any and all documents
which are necessary to preserve any rights of Mortgagor under or with respect
to the Lease, including, without limitation, the right to effectuate any
extension or renewal of the Lease, or to preserve any rights of Mortgagor
whatsoever in respect of any part of the Lease (and the above powers granted to
Mortgagor are coupled with an interest and shall be irrevocable).
(E) FEE MORTGAGE. Unless Mortgagee otherwise consents,
the acquisition of any fee title or other interest in the Leased Land or the
Improvements by Mortgagor, whether pursuant to an option in the Lease or
otherwise, shall not result in a merger of the leasehold estate with such fee
title or other interest. In the event that Mortgagor acquires any such fee
title or other interest, such fee title or other interest shall be subject to
the terms of this Mortgage.
(G) RIGHTS IN BANKRUPTCY; CLAIMS AGAINST LESSOR.
(I) Mortgagor shall notify Mortgagee of any
filing by or against any lessor under the Lease of a petition under
any bankruptcy, insolvency, reorganization, moratorium or similar law
(any such law being herein referred to as a "BANKRUPTCY LAW"),
promptly after learning thereof, setting forth any information
available to Mortgagor as to the date of such filing, the court in
which the petition was filed, and the relief sought. Mortgagor shall
promptly deliver to Mortgagee any and all notices, summonses,
pleadings, applications and other documents received by Mortgagor in
connection with any such petition and any proceedings relating
thereto.
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(II) If the Lease is rejected or disaffirmed by
the lessor thereunder (or by any receiver, trustee, custodian or other
party who succeeds to the rights of such lessor) pursuant to any
Bankruptcy Law, (A) Mortgagor shall not elect to treat the Lease as
terminated under 11 U.S.C. Section 365(h) or any similar or successor
law or right, (B) Mortgagor shall remain in possession of the leased
premises to the extent it is then legally entitled to do so and shall
perform all acts necessary for Mortgagor to retain its right to remain
in such possession for the unexpired term of the Lease (including all
renewal and extension options), whether such acts are required under
the then-existing terms and provisions of the Lease or otherwise, and
(C) all of the terms and provisions of this Mortgage and the lien
created hereby shall remain in full force and effect and shall be
extended automatically to such possession, occupancy and interest of
Mortgagor.
(III) Mortgagor hereby assigns to Mortgagee the
proceeds of any claim that Mortgagor may have against the lessor under
the Lease (or any receiver, trustee, custodian or other party who
succeeds to the rights of such lessor) by reason of any breach or any
inability of such lessor (or any such successor) to perform the terms
and provisions of the Lease (including by reason of a rejection or
disaffirmance of the Lease pursuant to any Bankruptcy Law). If an
Event of Default has occurred and is continuing, Mortgagee has the
sole right to elect either (A) to proceed against such lessor (or such
receiver, trustee, custodian or other party) as if Mortgagee were the
named lessee under the Lease, in Mortgagor's name, or in Mortgagee's
name as agent for Mortgagor, and Mortgagor agrees to cooperate with
Mortgagee in such action and shall execute any and all documents
required in furtherance of such action, or (B) to have Mortgagor
proceed in Mortgagor's and Mortgagee's behalf in which event Mortgagee
may participate in any such proceedings, and Mortgagor from time to
time will deliver to Mortgagee all instruments requested by Mortgagee
or as may be required to permit such participation. So long as no
Event of Default has occurred and is continuing, Mortgagor shall, at
its expense, have the right to prosecute any such proceedings in its
own behalf.
(H) ATTORNMENT AGREEMENTS. Mortgagor shall use its best
efforts to cause all leases and subleases hereafter entered into by Mortgagor
as lessor or sublessor (and all existing leases and subleases hereafter
modified or amended by Mortgagor as lessor or sublessor thereunder) (each such
lease or sublease being a "TENANT LEASE", and the lessee or sublessee
thereunder being a "TENANT") to provide that if Mortgagee forecloses under this
Mortgage or, in the case of a Tenant Lease which is a sublease, enters into a
new lease with any lessor under the applicable Lease, whether pursuant to any
provisions for such a new lease contained in the applicable Lease or otherwise,
then the Tenant shall attorn to Mortgagee or its assignee and the Tenant Lease
will remain in full force and effect in accordance with its terms
notwithstanding such foreclosure or the termination of the applicable Lease.
(I) STATUS OF THE LEASE; MODIFICATIONS. With respect to
each Lease described in EXHIBIT B, Mortgagor hereby represents and warrants
that Mortgagor is the current lessee under the Lease since March 22, 1995, the
Lease has not been amended,
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modified, extended, renewed, substituted or assigned except as disclosed to
Mortgagee in writing, and that Mortgagor has delivered to Mortgagee a true,
accurate and complete copy of the Lease. Mortgagor hereby represents that
EXHIBIT B accurately sets forth all recording data with respect to the filing
or recordation of the Lease or a legally valid memorandum thereof, if the Lease
or such a memorandum has been recorded. From time to time, within ten business
days following the receipt of a request therefor from Mortgagee, Mortgagor
shall deliver to Mortgagee true and correct copies of any and all amendments to
the Lease executed after the date hereof.
The generality of the provisions of this SECTION 1.14 relating to the Lease
shall not be limited by other provisions of this Mortgage setting forth
particular obligations of Mortgagor which are also required of Mortgagor with
respect to the Lease, the Improvements, or the Leased Land.
1.15 ADDITIONAL COVENANTS REGARDING DESIGNATED PROPERTIES.
Without limiting Mortgagor's obligations hereunder and under the other Loan
Documents with respect to any other portion of the Mortgage Estate, Mortgagor
hereby makes the following covenants with respect to the portions of the
Mortgage Estate identified on EXHIBIT C, attached hereto (being the "DESIGNATED
PROPERTIES," and those portions of the Designated Properties located on or
directly relating to the Land designated by a particular "Location Number" in
the exhibits attached hereto being collectively referred to herein as a
particular "DESIGNATED PROPERTY"):
(A) Mortgagor shall not remove or demolish the
Improvements on any Designated Property, except as may be required by law or as
may be necessary in order to comply with law, without the prior written consent
of Mortgagee, and if Trustor is required by law to remove or demolish
Improvements comprising a portion of a Designated Property, Trustor shall, to
the extent practicable, promptly replace such Improvements with Improvements of
comparable value and utility (it being understood that the foregoing shall not
be construed as requiring Mortgagee's consent for Mortgagor to undertake a
renovation of the Improvements on a Designated Property, unless such renovation
would involve the demolition or removal of Improvements representing more than
half of the replacement cost of the Improvements currently located on such
Designated Property);
(B) Mortgagor shall comply with all laws, statutes,
ordinances, rules, regulations, orders, covenants, conditions and restrictions
now or hereafter affecting the Designated Properties or any part thereof or
requiring any alterations or improvements;
(C) Mortgagor shall not abandon the Designated Properties
or any portion thereof or leave the Designated Properties unprotected,
unguarded, vacant or deserted;
(D) Mortgagor shall not sell, assign, exchange, transfer,
abandon, release, relinquish, otherwise encumber or otherwise dispose of any of
Mortgagor's right, title or interest in and to any of the Designated Properties
without the prior written consent of Mortgagee except as may be expressly
permitted by the Credit Agreement.
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PARAGRAPHS (E) THROUGH (L) AND SECTION 1.16 ARE NOT TO BE INCLUDED IN ANY OF
THE MORTGAGES TO BE RECORDED ON THE CLOSING DATE (THERE ARE CURRENTLY NO
"DESIGNATED LEASES"), BUT MAY BE ADDED BY AMENDMENT IN THE FUTURE IF AGENT
DETERMINES THAT A FUTURE LEASE ENTERED INTO OR ACQUIRED BY COMPANY OR ANY
SUBSIDIARY (OTHER THAN A LEASE OF PROPERTY USED SOLELY FOR OPERATION OF A
GROCERY STORE) IS OF SUFFICIENT VALUE OR IMPORTANCE TO CONSTITUTE A "DESIGNATED
LEASE"
(E) Mortgagor shall promptly and timely perform and
observe all the material terms covenants and conditions required to be
performed and observed by Mortgagor as lessee under any Lease relating to any
of the Designated Properties (each, a "DESIGNATED LEASE") and do all things
necessary to preserve and to keep unimpaired its rights under any Designated
Lease;
(F) Mortgagor shall promptly upon demand by Mortgagee
from time to time, use reasonable efforts (other than payment to the lessor) to
obtain from the lessor under any Designated Lease and furnish to Mortgagee the
estoppel certificate of such lessor stating the date through which rent has
been paid and whether or not there are any defaults under such Designated Lease
and specifying the nature of such defaults, if any;
(G) Mortgagor shall not, without Mortgagee's prior
written consent, surrender, terminate, forfeit, or suffer or permit the
surrender, termination or forfeiture of, or change, modify or amend in any
material adverse manner, any Designated Lease;
(H) Mortgagor shall enforce the material obligations of
the lessor under each Designated Lease to the end that Mortgagor may enjoy all
of the material rights granted to it as lessee under any Designated Lease and
not waive, excuse, condone or in any way release or discharge the lessor under
any Designated Lease of or from such lessor's material obligations, covenants
and/or conditions under any Designated Lease, without the prior written consent
of Mortgagee, except as required by the provisions of such Designated Lease
(e.g., upon sale of the property by the lessor).
(I) Mortgagor shall promptly notify Mortgagee of any
request made by either party to any Designated Lease for arbitration
proceedings pursuant to the Lease and of the institution of any such
arbitration proceedings, and promptly deliver to Mortgagee a copy of the
determination of the arbitrators in each such arbitration proceeding;
(J) Mortgagor shall notify Mortgagee at least 120 days
prior to the last date provided for the exercise of any purchase option
contained in the any Designated Lease (each, a "PURCHASE OPTION");
(K) Mortgagor shall observe and perform all of the
obligations required to maintain each Purchase Option in full force and effect;
and
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(L) Mortgagor shall exercise each Purchase Option at
least 30 days prior to the last date provided therefor in the applicable
Designated Lease unless otherwise agreed by Mortgagee in writing.
1.16. ATTORNEY-IN-FACT RE PURCHASE OPTION. Mortgagor
hereby appoints Mortgagee as Mortgagor's attorney-in-fact, with full authority
in the place of Mortgagor and in the name of Mortgagor or Mortgagee, to take
such action and to execute such documents, agreements, approvals or other
instruments as Mortgagee may reasonably deem necessary or advisable to exercise
any Purchase Option in the event Mortgagor fails to exercise the same if and
when required by SECTION 1.15, or in the event that an Event of Default shall
have occurred and be continuing.
ARTICLE II
OTHER COVENANTS AND AGREEMENTS
2.01. ACTIONS BY MORTGAGEE TO PRESERVE MORTGAGE ESTATE. If
Mortgagor fails to make any payment or to do any act as and in the manner
provided in this Mortgage or any other Secured Credit Document, Mortgagee, in
its own discretion, without obligation so to do, without notice to or demand
upon Mortgagor and without releasing Mortgagor from any obligation, may, upon
the occurrence and during the continuation of an Event of Default, make or do
the same in such manner and to such extent as it may deem necessary to protect
the security hereof. Without limiting the generality of foregoing, Mortgagee
shall have the option to cure any default and to perform any or all of
Mortgagor's obligations under any Lease. In exercising such powers (without
limiting their general and other powers, whether conferred herein, in the
Credit Agreement, or in any other Secured Credit Document), Mortgagee shall
have and is hereby given the right, but not the obligation,
(A) to enter upon and take possession of the Mortgage Estate,
or any portion thereof;
(B) to make additions, alterations, repairs and improvements
to the Mortgage Estate which it may consider necessary or proper to keep the
Mortgage Estate in good condition and repair;
(C) to appear and participate in any action or proceeding
affecting or which may affect the security hereof or the rights or powers of
Mortgagee;
(D) to pay, purchase, contest or compromise any encumbrance,
claim, charge, lien or debt which in the judgment of Mortgagee may affect or
appears to affect the security of this Mortgage or to be prior or superior
hereto; and
(E) in exercising such powers, to pay necessary expenses,
including employment of counsel and other necessary or desirable consultants.
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Immediately upon demand therefor by Mortgagee, Mortgagor shall pay to Mortgagee
an amount equal to all costs and expenses incurred by Mortgagee in connection
with the exercise of the foregoing rights, including, without limitation, costs
of evidence of title, court costs, appraisals, surveys, and receiver's, and
reasonable attorneys' fees, costs and expenses, whether or not an action is
actually commenced in connection therewith, together with interest thereon,
from date of expenditure until Mortgagee has been repaid such amount, at the
rate (the "AGREED RATE") which is the lesser of: (X) the Base Rate plus two
percent (2%) per annum, or (Y) the maximum interest rate that can lawfully be
charged by Mortgagee to Mortgagor on such funds on the date such funds are
expended by Mortgagee (interest on each such expenditure being calculated
separately at the particular Agreed Rate applicable to such expenditure); and,
until paid, Mortgagor's obligation to repay said sums shall be secured hereby.
2.02. INSPECTIONS. Mortgagee is authorized to enter upon
or in any part of the Mortgage Estate (which entry shall be at reasonable times
and upon reasonable notice to Mortgagor, unless an Event of Default shall have
occurred and be continuing) to inspect the same or to perform any of the acts
authorized hereunder or under the terms of any of the Secured Credit Documents.
2.03. LIMITED EFFECT OF INDULGENCES.
(A) Without affecting the liability of any other person
liable for the payment of any obligation under any of the Secured Credit
Documents, and without affecting the lien or charge of this Mortgage upon any
portion of the Mortgage Estate not then or theretofore released as security for
the full amount of all unpaid obligations, Mortgagee may, from time to time and
without notice, (I) release any person so liable, (II) extend the maturity or
alter any of the terms of any such obligation, (III) grant other indulgences,
(IV) release or reconvey, or cause to be released or reconveyed, at any time,
at Mortgagee's option, any parcel, portion or all of the Mortgage Estate, (V)
take or release any other or additional security for any obligation herein
mentioned, or (VI) make compositions or other arrangements with debtors in
relation thereto.
(B) By accepting payment or performance of any obligation
secured by this Mortgage after the payment or performance is due or after the
filing of a notice of default and election to sell, Mortgagee shall not have
thereby waived its right to require prompt payment or performance, when due, of
all other obligations secured hereby, or to declare a default for failure so to
pay or perform, or to proceed with the sale under any notice of default and
election to sell theretofore given by Mortgagee, or to any unpaid balance of
the indebtedness secured hereby. The acceptance by Mortgagee of any sum in an
amount less than the entire sum then due is not a waiver of the obligation of
Mortgagor to pay said sum. Mortgagor's failure to pay the entire sum then due
shall be and continue to be a default, notwithstanding the acceptance of
partial payment, and, until the entire sum then due shall have been paid,
Mortgagee shall at all times be entitled to exercise all the remedies herein
conferred, whether or not such amounts are received prior or subsequent to such
notice. No delay or omission of Mortgagee in the exercising of any right or
power hereunder shall impair such right or power or any other
448
right or power nor shall the same be construed to be a waiver of any default or
any acquiescence therein.
2.04. ADDITIONAL SECURITY. Neither other security now
existing or hereafter taken to secure the obligations secured hereby, nor the
liability of any maker, surety or endorser with respect to such obligations, or
any of them, shall be impaired or affected by the execution of this Mortgage or
by any of the acts referred to in SECTION 2.03. All additional security shall
be taken, considered and held as cumulative. If Mortgagee at any time holds
additional security for any of the obligations secured hereby, it may enforce
the sale thereof or otherwise realize upon the same, at its option, either
before, concurrently, or after a sale is made hereunder.
2.05. EXECUTION OF INSTRUMENTS BY MORTGAGEE. At any time,
and from time to time, without liability therefor and without notice, and
without affecting the personal liability of any person for payment of the
indebtedness or the performance of any other obligation secured hereby or the
effect of this Mortgage upon the remainder of said Mortgage Estate, Mortgagee
may (I) release the lien of this Mortgage with respect to any part of said
Mortgage Estate, (II) consent in writing to the making of any map or plat
thereof or join in granting any easement, right of way, restrictive covenant or
other dedication thereon, or (III) join in any extension agreement, agreement
subordinating the lien or charge hereof, or other agreement or instrument
relating hereto or to the Mortgage Estate or any portion thereof.
2.06. INVALIDITY OF LIEN. If the lien of this Mortgage is
invalid or unenforceable as to any part of the Secured Obligations, or if the
lien is invalid or unenforceable as to any part of the Mortgage Estate, the
unsecured or partially secured portion of the Secured Obligations shall be
completely paid prior to the payment of the remaining and secured or partially
secured portion of the debt, and all payments made on the Secured Obligations,
whether voluntary or under foreclosure or other enforcement action or
procedure, shall be considered to have been first paid on and applied to the
full payment of that portion of the Secured Obligations which is not secured or
is not fully secured by the lien of this Mortgage.
2.07. MORTGAGOR WAIVER OF RIGHTS.
(A) Mortgagor waives, to the fullest extent permitted by
law, (I) the benefit of all laws now existing or hereafter enacted providing
for any appraisement before sale of any portion of the Mortgage Estate; and,
(II) whether now existing or hereafter arising or created, (A) all rights to
direct the order in which the Mortgage Estate may be sold and all rights of
valuation, appraisement, stay of execution, notice of election to mature or
declare due the whole of the secured indebtedness and marshaling in the event
of foreclosure of the liens hereby created, (B) all rights and remedies which
Mortgagor may have or be able to assert by reason of the laws of any state
pertaining to the rights and remedies of sureties, (C) any and all rights of
redemption before, at, or after sale under any order or decree of foreclosure
of this Mortgage on behalf of Mortgagor and each and every person acquiring any
interest or title to the Mortgage Estate subsequent to the date of this
Mortgage, (D) except as otherwise herein provided,
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all rights and remedies which Mortgagor may have or be able to assert to
insurance proceeds, to the proceeds of any action or proceeding in eminent
domain affecting the Mortgage Estate or any portion thereof, and to proceeds of
a sale in lieu of such taking, and (E) all present and future statutes of
limitations as a defense to any action to foreclose this Mortgage.
(B) Unless otherwise expressly provided, all sums secured
by this Mortgage shall be paid without notice, demand, counterclaim, setoff,
deduction or defense and without abatement, suspension, deferment, diminution
or reduction, and the obligations and liabilities of Mortgagor to pay such
sums, and to perform all other obligations of Mortgagor hereunder or under the
Secured Credit Documents shall in no way be released, discharged or otherwise
affected by reason of: (I) any damage to or destruction of or any condemnation
or similar taking of the Mortgage Estate or any part thereof; (II) any
restriction or prevention of or interference by Mortgagee, or any third party
with any use of the Mortgage Estate or any part thereof; (III) any title defect
or encumbrance or any eviction from the Mortgage Estate or any part thereof by
title paramount or otherwise; (IV) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to Mortgagee, or any action taken with respect to this Mortgage by any
trustee or receiver thereof, or by any court in any such proceeding; (V) any
claim which Mortgagor has or might have against Mortgagee; (VI) any default or
failure on the part of Mortgagee to perform or comply with any of the terms
hereof or of any other agreement with Mortgagor; or (VII) any other occurrence
whatsoever, whether similar or dissimilar to the foregoing; whether or not
Mortgagor shall have notice or knowledge of any of the foregoing.
2.08. RELEASE; DEFEASANCE. If (i) Mortgagee pays all sums
due under the Secured Credit Documents in accordance with the terms thereof, or
(ii) the Collateral Release Date (as defined in the Credit Agreement) shall
have occurred, then this Mortgage and the estate and rights hereby created
shall cease, terminate, and become void, and thereupon Mortgagee, upon the
written request and at the expense of Mortgagee, shall execute and deliver to
Mortgagee such instruments as shall be required to evidence of record the
satisfaction of this Mortgage and the lien thereof.
ARTICLE III
ASSIGNMENT OF RENTS, ISSUES AND PROFITS
3.01. ASSIGNMENT OF RENTS, ISSUES AND PROFITS. Mortgagor
hereby assigns and transfers all of the Rents to Mortgagee, and hereby gives to
and confers upon Mortgagee the right, power and authority to collect the Rents.
Mortgagor irrevocably appoints Mortgagee its true and lawful attorney-in-fact,
at the option of Mortgagee at any time and from time to time while this
Mortgage remains in effect, to demand, receive and enforce payment; to give
receipts, releases and satisfactions; to ▇▇▇, in the name of Mortgagor or
Mortgagee, for all Rents; and to apply the same to the indebtedness secured
hereby; provided, however, that so long as no Event of Default exists,
Mortgagor shall have the right to collect the Rents, (but not more than ninety
days in advance unless the written approval of Mortgagee has first been
obtained). The
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assignment of the Rents in this Article III is intended to be an absolute
assignment from Mortgagor to Mortgagee and not merely the passing of a security
interest. Upon request by Mortgagee, Mortgagor shall, from time to time
hereafter, execute and deliver to Mortgagee recordable assignments in form
satisfactory to Mortgagee of any or all leases, subleases, licenses, and
concession or other agreements with respect to the use or occupancy of the
Mortgage Estate or any portion thereof by any person other than Mortgagor now
or hereafter affecting any portion of the Mortgage Estate.
3.02. COLLECTION UPON DEFAULT. Upon the occurrence of an
Event of Default hereunder, Mortgagee may, at any time without notice, either
in person, by agent or by a receiver appointed by a court, and without regard
to the adequacy of any security for Secured Obligations, enter upon and take
possession of the Mortgage Estate, or any part thereof, and, with or without
taking possession of the Mortgage Estate or any part thereof, in its own name
▇▇▇ for or otherwise collect the Rents, including those past due and unpaid;
and all prepaid Rents and all other moneys which may have been or may hereafter
be deposited with Mortgagor by any lessee or tenant of Mortgagor to secure the
payment of any rent or for any services thereafter to be rendered by Mortgagor
or for any other obligation of any tenant to Mortgagor arising under any Lease.
Upon the occurrence of any Event of Default, Mortgagor shall promptly deliver
all such Rents and other moneys to Mortgagee, and Mortgagee may apply the same,
less costs and expenses of operation and collection (including reasonable
attorneys' fees and costs, whether or not suit is brought or prosecuted to
judgment), upon any of the Secured Obligations, in such order as Mortgagee may
determine, notwithstanding that said indebtedness or the performance of said
obligation may not then be due and payable. The collection of the Rents, or
the entering upon and taking possession of the Mortgage Estate, or the
application thereof as aforesaid, shall not cure or waive any default or notice
of default hereunder, or invalidate any act done in response to such default or
pursuant to such notice of default, or be deemed or construed to make Mortgagee
a mortgagee-in-possession of the Mortgage Estate or any portion thereof.
ARTICLE IV
REMEDIES UPON DEFAULT
4.01. EVENTS OF DEFAULT. The occurrence of any event
specified in SECTION 8 of the Credit Agreement shall constitute an event of
default ("EVENT OF DEFAULT") hereunder.
4.02. ACCELERATION UPON DEFAULT; ADDITIONAL REMEDIES. Upon
the occurrence and during the continuation of an Event of Default, whether or
not the Secured Obligations are accelerated in accordance with the terms of the
Secured Credit Documents, Mortgagee may:
(A) Either in person or by agent, with or without
bringing any action or proceeding, or by a receiver appointed by a court and
without regard to the adequacy of its security, enter upon and take possession
of the Mortgage Estate, or any part thereof, in its own name, and do any acts
which it deems necessary or desirable to preserve the
451
value, marketability or rentability of the Mortgage Estate, or part thereof or
interest therein, to increase the income therefrom or to protect the security
hereof and, with or without taking possession of the Mortgage Estate or any
part thereof, ▇▇▇ for or otherwise collect the Rents, including those past due
and unpaid, and apply the same, less costs and expenses of operation and
collection, including reasonable attorneys' fees, upon any indebtedness secured
hereby, all in such order as Mortgagee may determine. The entering upon and
taking possession of the Mortgage Estate, the collection of such rents, issues
and profits and the application thereof as aforesaid shall not cure or waive
any default or notice of default hereunder or invalidate any act done in
response to such default or pursuant to such notice of default; and,
notwithstanding the continuance in possession by Mortgagee or a receiver of all
or any portion of the Mortgage Estate or the collection, receipt and
application of rents, issues or profits thereby, Mortgagee shall be entitled to
exercise every right provided for herein or in any other Secured Credit
Document or by law upon occurrence of any Event of Default;
(B) Commence an action to foreclose this Mortgage,
appoint a receiver, or specifically enforce any of the covenants hereof;
(C) Exercise all other rights and remedies provided
herein, in any other Secured Credit Document, or in any other document or
agreement now or hereafter securing all or any portion of the obligations
secured hereby, or provided by law.
4.03. APPOINTMENT OF RECEIVER. If an Event of Default in
this Mortgage shall have occurred and be continuing, Mortgagee, as a matter of
right and without notice to Mortgagor or anyone claiming under Mortgagor, and
without regard to the then value of the Mortgage Estate or the interest of
Mortgagor therein, shall have the right to apply to any court having
jurisdiction to appoint a receiver or receivers of the Mortgage Estate, and
Mortgagor hereby irrevocably consents to such appointment and waives notice of
any application therefor. Any such receiver or receivers shall have all the
usual powers and duties of receivers in like or similar cases and all the
powers and duties of Mortgagee in case of entry as provided herein and shall
continue as such and any such receiver shall exercise all such powers until the
date of confirmation of sale of the Mortgage Estate unless such receivership is
sooner terminated.
4.04. APPLICATION OF FUNDS AFTER DEFAULT. Except as
otherwise herein provided, upon the occurrence and during the continuation of
an Event of Default hereunder, Mortgagee may, at any time without notice, apply
any or all sums or amounts received and held by Mortgagee to pay insurance
premiums, Impositions, or either of them, or as rents or income of the Mortgage
Estate, or as insurance or condemnation proceeds, and all other sums or amounts
received by Mortgagee from or on account of Mortgagor or the Mortgage Estate,
or otherwise, upon any indebtedness or obligation of the Mortgagor secured
hereby, in such manner and order as Mortgagee may elect, notwithstanding that
said indebtedness or the performance of said obligation may not yet be due
according to the terms thereof. The receipt, use or application of any such
sums or amounts shall not be construed to affect the maturity of any
indebtedness secured by this Mortgage, or any of the rights or powers of
Mortgagee under the terms of this Mortgage or any other Secured Credit
Document, or any obligations of Mortgagor or
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any other obligor under any of the other Secured Credit Documents, or to cure
or waive any default or notice of default; or to invalidate any act of
Mortgagee.
4.05. COSTS OF ENFORCEMENT. Upon the occurrence of any
Event of Default, Mortgagee may employ an attorney or attorneys to protect
their rights hereunder. Mortgagor promises to pay to Mortgagee, on demand, the
reasonable fees and expenses of such attorneys and all other costs of enforcing
the obligations secured hereby, including but not limited to, recording fees,
receivers' fees and expenses, and all other expenses, of whatever kind or
nature, incurred by Mortgagee in connection with the enforcement of the
obligations secured hereby, whether or not such enforcement includes the filing
of a lawsuit. Until paid, such sums shall be secured hereby and shall bear
interest, from date of expenditure, at the Agreed Rate.
4.06. REMEDIES NOT EXCLUSIVE. Mortgagee shall be entitled
to enforce payment of any indebtedness and performance of any other obligations
secured hereby and to exercise all rights and powers under this Mortgage or
under any other Secured Credit Document or other agreement or any laws now or
hereafter in force, notwithstanding some or all of the said indebtedness and
obligations secured hereby may now or hereafter be otherwise secured, whether
by mortgage, deed of trust, pledge, lien, assignment or otherwise. Neither the
acceptance of this Mortgage nor its enforcement, whether by court action or
pursuant to other powers herein contained, shall prejudice or in any manner
affect Mortgagee's right to realize upon or enforce any other security now or
hereafter held by Mortgagee, it being agreed that Mortgagee shall be entitled
to enforce this Mortgage and any other security now or hereafter held by
Mortgagee in such order and manner as it may in its absolute discretion
determine. All rights and remedies existing under this Mortgage are cumulative
to, and not exclusive of, any rights or remedies otherwise available. Every
power or remedy given by this Mortgage or any other Secured Credit Document to
Mortgagee or to which it may be otherwise entitled, may be exercised,
concurrently or independently, from time to time and as often as may be deemed
expedient by Mortgagee. This Mortgage may be foreclosed at any time against
all or successively against any part or parts of the Mortgage Estate as
Mortgagee may elect, and this Mortgage and the right of foreclosure hereunder
shall not be impaired or exhausted by one or any foreclosure or by one or any
sale and may be foreclosed successively and in parts until all of the Mortgage
Estate shall have been foreclosed and sold.
4.07. REQUEST FOR NOTICE. Mortgagor hereby requests that a
copy of any notice of default hereunder be mailed to Mortgagor at the address
of Mortgagor set forth in the first paragraph of this Mortgage.
ARTICLE V
SECURITY AGREEMENT
5.01. CREATION OF SECURITY INTEREST. Mortgagor hereby
grants to Mortgagee a security interest in all of Mortgagor's estate, right,
title and interest, now owned or hereafter acquired, in and to the all of the
following property (collectively, the
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"PERSONAL PROPERTY"), whether now or hereafter existing, as security for the
Secured Obligations, upon and subject to all of the terms and conditions set
forth in the Company Security Agreement and the Subsidiary Security Agreement
(in each case, the "SECURITY AGREEMENT") (which terms are incorporated herein
by this reference):
(A) all Rents, Deposits and Proceeds, as hereinabove
defined;
(B) all plans, specifications, maps, surveys, studies,
reports, permits, licenses, architectural, engineering and construction
contracts, books of account, insurance policies and other documents, of
whatever kind or character, relating to use, construction upon, occupancy,
leasing, sale or operation of the Property, together with the proceeds,
including insurance proceeds, thereof; and
(C) all other personal property and fixtures (including,
without limiting the generality of the foregoing, goods, equipment, inventory,
proceeds and general intangibles, as those terms are defined in the Uniform
Commercial Code in effect in the State in which the Land is situated (the
"UCC")) now or at any time hereafter located on or at the Property or used in
connection therewith, together with the proceeds, including insurance proceeds,
thereof.
This Mortgage constitutes a security agreement as that term is used in the UCC
and any other state in which any of the Personal Property is located; Mortgagee
shall have all the rights and remedies of a secured party under the UCC as in
effect from time to time (including, without limitation, the rights and
remedies under Section 9501 of the UCC) as well as all other rights and
remedies available hereunder or under the Security Agreement or at law or in
equity.
5.02. FIXTURE FILING. Some of the above goods are or are
to become fixtures on the Land. This Mortgage shall be effective as a
financing statement filed as a fixture filing with respect to all fixtures
included in the Personal Property, executed by Mortgagor (as "debtor") in favor
of Mortgagee (as "secured party"). The name of a record owner of any portion
the Leased Land in which Mortgagee does not have an interest of record is
listed in EXHIBIT B. Information concerning the security interest created
hereby may be obtained from Mortgagee, the secured party hereunder, at the
address of Mortgagee set forth above.
5.03. OTHER SECURITY AGREEMENT. The rights and obligations
of Mortgagor and Mortgagee with respect to all Personal Property described in
the Security Agreement shall be controlled by the terms and provisions of the
Security Agreement to the extent, if any, that the provisions of this Mortgage
are inconsistent therewith. To the extent not inconsistent, the respective
rights and obligations of Mortgagor and Mortgagee hereunder and under the
Security Agreement shall be cumulative.
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ARTICLE VI
ENVIRONMENTAL INDEMNITY
6.01 DEFINED TERMS. As used in this Article, the
following terms have the following meanings:
"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. Section Section
9601 et seq.), as heretofore or hereafter amended from time to time.
"COVERED PERIOD" means the period from the date hereof to and
including the Transfer Date, but excluding the period, if any, prior
to the Transfer Date, during which (A) Mortgagee or its Affiliate has
obtained and then remains in possession and control of the Property,
and (B) Mortgagor is neither in possession or control of the Property
nor engaging in any Hazardous Materials Activity on or at the
Property.
"ENVIRONMENTAL LOSSES" means Losses suffered or incurred by
any Indemnitee, arising out of or as a result of: (I) any Hazardous
Materials Activity that occurs or is alleged to have occurred in whole
or in part on or prior to the date hereof or during the Covered
Period; (II) any violation on or prior to the date hereof or during
the Covered Period of any applicable Environmental Laws relating to
the Property or to the ownership, use, occupancy or operation thereof;
(III) any investigation, inquiry, order, hearing, action, or other
proceeding by or before any governmental agency in connection with any
Hazardous Materials Activity that occurs or is alleged to have
occurred in whole or in part on or prior to the date hereof or during
the Covered Period; or (IV) any claim, demand or cause of action, or
any action or other proceeding, whether meritorious or not, brought or
asserted against any Indemnitee (hereinafter defined) which directly
or indirectly relates to, arises from or is based on any of the
matters described in CLAUSES (I), (II), or (III), or any allegation of
any such matters.
"HAZARDOUS MATERIALS ACTIVITY" means any use, storage,
holding, existence, release (including any spilling, leaking, pumping,
pouring, emitting, emptying, dumping, disposing into the environment,
and the continuing migration into or through soil, surface water, or
groundwater), emission, discharge, generation, processing, abatement,
removal, disposition, handling or transportation to or from the
Property of any Hazardous Materials from, under, in, into or on the
Property or surrounding property, including, without limitation, the
movement or migration of any Hazardous Materials from surrounding
property or groundwater in, into or onto the Property and any residual
Hazardous Materials contamination on or under the Property.
"LOSSES" means any and all losses, liabilities, damages
(whether actual, consequential, punitive, or otherwise denominated),
demands, claims, actions, judgements, causes of action, assessments,
penalties, costs and expenses (including, without limitation,
reasonable attorneys' fees and disbursements), of
455
any and every kind or character, foreseeable and unforeseeable,
liquidated and contingent, proximate and remote.
"TRANSFER DATE" means the date on which Mortgagee (or its
Affiliate) acquires that title previously held by Mortgagor to the
Property pursuant to foreclosure of the lien of this Mortgage, or by
receipt of a deed in lieu of such foreclosure, and any and all
redemption rights of Mortgagor have expired, unless within a period of
ninety-one (91) days after the date on which such title vests in
Mortgagee (or its Affiliate) a bankruptcy or other insolvency
proceeding is filed by or against Mortgagor. If Mortgagor should
remain in or reacquire possession of the Property after the Transfer
Date, or if Mortgagor should engage in any Hazardous Materials
Activity on or at the Property after the Transfer Date, the Transfer
Date shall be deemed to be the date after which Mortgagor is no longer
in possession of the Property and has ceased to engage in any
Hazardous Materials Activity on or at the Property.
6.02. INDEMNITY.
(A) Mortgagor hereby agrees to indemnify, defend, and
hold harmless Mortgagee, Lenders, the Secured Interest Rate Exchangers, and
each of their respective successors, assigns and participants, and their
respective parent, subsidiary and affiliated corporations, and the respective
directors, officers, agents, attorneys, and employees of each of the foregoing
(each of which is referred to herein individually as an "INDEMNITEE" and
collectively as the "INDEMNITEES"), and each of them, from and against any and
all Environmental Losses except those arising solely from the gross negligence
or wilful misconduct of the Indemnitee as determined by a final judgment of a
court of competent jurisdiction.
(B) If any Indemnitee notifies Mortgagor of any claim or
notice of the commencement of any action, administrative or legal proceeding,
or investigation as to which the indemnity provided for in this SECTION 6.02
(the "INDEMNITY") applies, Mortgagor shall assume on behalf of such Indemnitee
and conduct with due diligence and in good faith the investigation and defense
thereof and the response thereto with counsel reasonably satisfactory to such
Indemnitee; provided, however, that the Indemnitee, at its own expense, shall
have the right to be represented by advisory counsel of its own selection and
advised by such experts and consultants as such Indemnitee reasonably believes
may be necessary; and provided, further, that if any such claim, action,
proceeding, or investigation involves both Mortgagor and an Indemnitee and such
Indemnitee shall have reasonably concluded that there may be legal defenses
available to it which are inconsistent with those available to Mortgagor, or
otherwise shall have concluded in good faith that separate counsel is necessary
in order to protect Mortgagee's interests, then such Indemnitee shall have the
right to select separate counsel to participate in the investigation and
defense of and response to such claim, action, proceeding or investigation on
its own behalf at Mortgagor's expense.
(C) If any claim, action, proceeding, or investigation
arises as to which the Indemnity applies, and Mortgagor fails to assume
promptly (and in any event within
456
ten (10) days after being notified of the claim, action, proceeding, or
investigation) the defense of an Indemnitee, then such Indemnitee may contest
and settle the claim, action, proceeding, or investigation at Mortgagor's
expense using counsel and experts selected by such Indemnitee; provided,
however, that after any such failure by Mortgagor no such contest need be made
by such Indemnitee and settlement or full payment of any claim may be made by
such Indemnitee without Mortgagor's consent and without releasing Mortgagor
from any obligations to such Indemnitee hereunder.
(D) The obligations of Mortgagor under this Article are
independent of, and shall not be measured or affected by (I) any amounts at any
time owing under the Loans or any Interest Rate Agreement, (II) the sufficiency
or insufficiency of any collateral (including, without limitation, the
Property) given to secure repayment of the Loans and payment of Mortgagor's
obligations under Interest Rate Agreements, (III) the consideration given by
Mortgagee or any other party in order to acquire the Property, or any portion
thereof, (IV) the modification, expiration, foreclosure, release, or
termination of this Mortgage or any other document or instrument relating to
the Loans or the Interest Rate Agreements, or (V) the discharge or repayment in
full of the Loans or Mortgagor's obligations under any Interest Rate Agreement
(including, without limitation, by amounts paid or credit bid at a foreclosure
sale or by discharge in connection with a deed in lieu of foreclosure).
(E) Mortgagor's obligations under this Article shall
survive the sale or other transfer of the Property by Mortgagor prior to the
Transfer Date as well as the foreclosure, release, or termination of this
Mortgage. The rights of each Indemnitee under this Indemnity shall be in
addition to any other rights and remedies of such Indemnitee against Mortgagor
under any other document or instrument now or hereafter executed by Mortgagor,
or at law or in equity (including, without limitation, any right of
reimbursement or contribution pursuant to CERCLA or other similar Environmental
Laws), and shall not in any way be deemed a waiver of any of such rights.
Mortgagor agrees that it shall withhold the exercise of any right of
contribution (including, without limitation, any right of contribution under
CERCLA or other similar Environmental Laws) or subrogation against any other
Loan Party in connection with any Environmental Losses, unless and until all
obligations of Mortgagor under this Article have been satisfied.
(F) All obligations of Mortgagor under this Article shall
be payable on demand, and any amount due and payable under this Article to any
Indemnitee by Mortgagor which is not paid within thirty (30) days after written
demand therefor from an Indemnitee with an explanation of the amounts demanded
shall bear interest from the date of such demand at the Agreed Rate.
(G) Mortgagor agrees to pay to each Indemnitee all costs
and expenses (including, without limitation, Indemnitee's reasonable attorneys'
fees and disbursements) incurred by such Indemnitee in connection with the
Indemnity or the enforcement hereof.
457
ARTICLE VII
MISCELLANEOUS
7.01. AMENDMENTS. This instrument cannot be waived,
changed, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of any waiver, change, discharge
or termination is sought.
7.02. GOVERNING LAW. IN ACCORDANCE WITH THE TERMS OF THE
SECURED CREDIT DOCUMENTS, THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
MORTGAGE AND UNDER THE OTHER SECURED CREDIT DOCUMENTS SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAW OF THE STATE OF
NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICTS-OF-LAW RULES AND PRINCIPLES OF
SUCH STATE. MORTGAGOR AND MORTGAGEE FURTHER ACKNOWLEDGE, AGREE, AND STIPULATE
THAT THE STATE OF NEW YORK HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES
INVOLVED IN THIS TRANSACTION AND TO THE UNDERLYING TRANSACTIONS SECURED BY THIS
MORTGAGE. NOTWITHSTANDING THE FOREGOING, THE PARTIES AGREE THAT:
(A) THE PROCEDURES GOVERNING THE ENFORCEMENT BY MORTGAGEE OF
PROVISIONAL REMEDIES AGAINST MORTGAGOR DIRECTLY RELATING TO THE REAL PROPERTY
ENCUMBERED HEREBY, INCLUDING, BY WAY OF ILLUSTRATION BUT NOT LIMITATION, ANY
SUCH ACTIONS FOR REPLEVIN, FOR CLAIM OF DELIVERY OF PROPERTY, OR FOR THE
APPOINTMENT OF A RECEIVER, SHALL BE GOVERNED BY THE LAWS OF THE STATE IN WHICH
THE PROPERTY IS SITUATED (THE "SITUS STATE");
(B) THE LAW OF THE SITUS STATE SHALL APPLY TO THE EXTENT, BUT
ONLY TO THE EXTENT, NECESSARY IN ORDER TO CREATE, TO PERFECT, AND TO FORECLOSE
THE SECURITY INTERESTS AND LIENS CREATED HEREBY; PROVIDED, HOWEVER, THAT
NOTHING IN THIS SECTION SHALL IN ANY EVENT BE CONSTRUED TO PROVIDE THAT THE
SUBSTANTIVE LAW OF THE SITUS STATE SHALL APPLY TO THE OBLIGATIONS AND
INDEBTEDNESS SECURED BY THIS MORTGAGE OR EVIDENCED BY THE OTHER SECURED CREDIT
DOCUMENTS, WHICH ARE AND SHALL CONTINUE TO BE GOVERNED BY THE SUBSTANTIVE LAW
OF THE STATE OF NEW YORK. IN SUCH CONNECTION, THE PARTIES FURTHER AGREE THAT
MORTGAGEE MAY ENFORCE ITS RIGHTS UNDER THE SECURED CREDIT DOCUMENTS, INCLUDING
ITS RIGHT TO ▇▇▇ MORTGAGOR, TO COLLECT ANY OUTSTANDING INDEBTEDNESS, OR TO
OBTAIN A JUDGMENT AGAINST MORTGAGOR IN ILLINOIS, NEW YORK, OR OTHER STATES FOR
ANY DEFICIENCY PRIOR TO OR FOLLOWING FORECLOSURE, IN ACCORDANCE WITH NEW YORK
LAW, AND IF MORTGAGEE OBTAINS A DEFICIENCY JUDGMENT IN A STATE OTHER THAN THE
SITUS STATE, THEN MORTGAGEE SHALL HAVE THE RIGHT TO
458
ENFORCE SUCH JUDGMENT IN THE SITUS STATE, AS WELL AS IN OTHER STATES.
7.03. INTERPRETATION. In this Mortgage the singular shall
include the plural and the masculine shall include the feminine and neuter and
vice versa, if the context so requires; and the word "PERSON" shall include
corporation, partnership or other form of association or entity. The captions
or headings at the beginning of Articles, Sections and Subsections hereof are
for the convenience of the parties, are not a part of this Mortgage, and shall
not be used in construing it. The terms "INCLUDING" and "INCLUDES" shall be
construed as though followed by the words "without limitation." All exhibits
attached to this Mortgage are incorporated herein by this reference and made a
part hereof.
7.04. SEVERABILITY. In case any provision in or obligation
under this Mortgage shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
7.05. SUCCESSORS AND ASSIGNS. This Mortgage applies to and
shall be binding on and inure to the benefit of all parties hereto and their
respective successors and assigns.
7.06. MORTGAGEE STATEMENTS. For any statement or
accounting regarding the Secured Obligations requested by Mortgagor, Mortgagee
may charge the maximum amount permitted by law at the time of the request for
such statement, or if there is no such maximum, then an amount consistent with
Mortgagee's customary charges therefor or the actual cost to Mortgagee thereof,
whichever is greater.
7.07. NOTICES. Any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telexed or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile or telex, or three Business Days
after depositing it in the United States mail with postage prepaid and properly
addressed. For the purposes hereof, the address of each party hereto shall be
as hereinabove set forth following such party's name (provided that a copy of
any notice or other communication to Mortgagee shall also be delivered to
Bankers Trust Company, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇▇▇▇▇), or, as to any party, such other address as shall be
designated by such party in a written notice delivered to the other parties
hereto.
7.08. NONFOREIGN ENTITY. Section 1445 of the Internal
Revenue Code of 1986, as amended (the "INTERNAL REVENUE CODE") provides that a
transferee of a U.S. real property interest must withhold tax if the transferor
is a foreign person. To inform Mortgagee that the withholding of tax will not
be required in the event of the disposition of the Mortgage Estate pursuant to
the terms of this Mortgage, Mortgagor hereby certifies, under penalty of
perjury, that: (A) Mortgagor is not a foreign corporation,
459
foreign partnership, foreign trust or foreign estate, as those terms are
defined in the Internal Revenue Code and the regulations promulgated
thereunder; (B) Mortgagor's U.S. employer identification number (EIN) is as set
forth on the signature page of this Mortgage following Mortgagor's name; (C)
Mortgagor's principal place of business is at the address set forth on the
first page of this Mortgage following Mortgagor's name; and (D) Mortgagor is
duly qualified to do business in the state in which the Property is situated.
It is understood that Mortgagee may disclose the contents of this certification
to the Internal Revenue Service and that any false statement contained herein
could be punished by fine, imprisonment or both. Mortgagor covenants and
agrees to execute such further certificates, which shall be signed under
penalty of perjury, as Mortgagee shall reasonably require. The covenant set
forth herein shall survive the foreclosure of the lien of this Mortgage or
acceptance of a deed in lieu thereof.
7.09 REVOLVING CREDIT; MAXIMUM AMOUNT SECURED; MATURITY
DATE.
(A) This Mortgage is given to secure a "Revolving Credit"
loan as defined in 205 Illinois Compiled Statutes 5/5d and secures not only the
indebtedness from Debtor to Mortgagee existing on the date hereof but all such
future advances, whether such advances are obligatory or to be made at the
option of Mortgagee, or otherwise, as are made within twenty years from the
date of this Mortgage, to the same extent as if such future advances were made
on the date of the execution of this Mortgage, although there may be no advance
made at the time of execution of this Mortgage, and although there may be no
indebtedness outstanding at the time any advance is made. The total amount of
indebtedness secured by this Mortgage may increase or decrease from time to
time, but the total unpaid balance so secured at any one time shall not exceed
a maximum principal amount of One Billion Dollars ($1,000,000,000), plus
interest thereon, and any disbursements made by Mortgagee for the payment of
taxes, special assessment, or insurance on the Property, with interest on such
disbursements.
(B) The maximum aggregate amount secured by this Mortgage at
any one time shall not exceed One Billion Two Hundred Million Dollars
($1,200,000,000). The Secured Obligations mature no later than twenty years
from the date of this Mortgage.
(FOR MORTGAGE ON LAND TRUST AND NON-LAND TRUST PROPERTIES IN ILLINOIS:)
7.10. EXHIBITS; RECORDING OF COUNTERPARTS. This Mortgage
is being executed in several counterparts, all of which are identical;
provided, however, that if the Property is located in more than one county, to
facilitate recordation, in certain counterparts only the portions of EXHIBIT A
and EXHIBIT B that contain descriptions of the Land and the Leases located in
the county in which the particular counterpart is to be recorded have been
included and other portions of said exhibits are included by reference only.
All of such counterparts together shall constitute one and the same instrument.
Complete copies of this Mortgage containing the entire EXHIBIT A and EXHIBIT B
have been retained by Mortgagor and Mortgagee and recorded in ▇▇▇▇ County,
Illinois.
460
(FOR MORTGAGE ON LAND TRUST PROPERTIES IN ILLINOIS):
7.11 TRUSTEE EXCULPATION. This Mortgage is executed by
LaSalle National Trust, N.A., not personally but as Trustee as aforesaid in the
exercise of the power and authority conferred upon and vested in it as such
Trustee (and said LaSalle National Trust, N.A. hereby warrants that it
possesses full power and authority to execute this instrument), and it is
expressly understood and agreed that nothing herein or in the Secured Credit
Documents contained shall be construed as creating any liability on LaSalle
National Trust, N.A. personally to pay any amount due or to become due under
any of the Secured Credit Documents, or to perform any covenant either express
or implied therein or herein contained, all such personal liability, if any,
being expressly waived by Mortgagee and by every person now or hereafter
claiming any right or security hereunder, and that so far as LaSalle National
Trust, N.A. personally is concerned, Mortgagee and the owner or owners of any
indebtedness accruing hereunder or under the Secured Credit Documents shall
look solely to the Collateral (including the Mortgage Estate, Rents and
Personal Property described herein) and to other Persons liable for such
indebtedness.
[Remainder of page intentionally left blank.]
461
EXECUTED as of the day and year first above written.
LASALLE NATIONAL TRUST, N.A., a national
banking association, not personally but (1)
as Trustee under the provisions of a deed or
deeds in trust duly recorded and delivered to
said bank in pursuance of a Trust Agreement
dated JUNE 3, 1982 and known as TRUST NO.
104987, (2) as Trustee under the provisions
of a deed or deeds in trust duly recorded and
delivered to said bank in pursuance of a
Trust Agreement dated FEBRUARY 15, 1983, and
known as TRUST NO. 105958, (3) as Trustee
under the provisions of a deed or deeds in
trust duly recorded and delivered to said
bank in pursuance of a Trust Agreement dated
FEBRUARY 1, 1985 and known as TRUST NO.
108982, (4) as Trustee under the provisions
of a deed or deeds in trust duly recorded and
delivered to said bank in pursuance of a
Trust Agreement dated DECEMBER 5, 1984 and
known as TRUST NO. 109248, (5) as Trustee
under the provisions of a deed or deeds in
trust duly recorded and delivered to said
bank in pursuance of a Trust Agreement dated
MARCH 6, 1986 and known as TRUST NO. 110897,
and (6) as Trustee under the provisions of a
deed or deeds in trust duly recorded and
delivered to said bank in pursuance of a
Trust Agreement dated FEBRUARY 15, 1985 and
known as TRUST NO. 109453
By: _________________________________
Name: _______________________________
Title: _____________________________
By: _________________________________
Name: _______________________________
Title: _____________________________
462
▇▇▇▇ HAZELCREST, INC.
a Delaware corporation
(EIN # ▇▇-▇▇▇▇▇▇▇),
By: __________________________________
Name: ________________________________
Title: _______________________________
DOMINICK'S FINER FOODS, INC.
a Delaware corporation
(EIN # ▇▇-▇▇▇▇▇▇▇)
By: __________________________________
Name: ________________________________
Title: _______________________________
463
ILLINOIS LAND TRUSTEE ACKNOWLEDGEMENT
(LASALLE NATIONAL TRUST, N.A.)
STATE OF ILLINOIS )
) SS.
COUNTY OF ▇▇▇▇ )
I, the undersigned, a Notary Public, in and for said County,
in the State aforesaid, DO HEREBY CERTIFY that _______________________________
________________________________, ___________________________ of LASALLE
NATIONAL TRUST, N.A., and ____________________________________________________,
____________________________ of said Bank, who are personally known to me to be
the same persons whose names are subscribed to the foregoing instrument as such
____________________________ and ______________________________, respectively
appeared before me this day in person and acknowledged that they signed and
delivered said instrument as their own free and voluntary act and as the free
and voluntary act of said Bank as Trustee aforesaid, for the uses and purposes
therein set forth; and said ____________________________ then and there
acknowledged that _he, as custodian of the corporate seal of said Bank, did
affix the corporate seal of said Bank to said instrument as his/her own free
and voluntary act and as the free and voluntary act of said Bank, as Trustee as
aforesaid, for the uses and purposes therein set forth.
Given under my hand and official seal, this ________ day of
November, 1996.
_______________________________
Notary Public
[SEAL]
My Commission Expires:
________________________________
464
ILLINOIS CORPORATE ACKNOWLEDGEMENT
(▇▇▇▇ HAZELCREST, INC.)
STATE OF ILLINOIS )
) SS.
COUNTY OF ▇▇▇▇ )
I, the undersigned, a Notary Public in and for said County,
in the State aforesaid, DO HEREBY CERTIFY that ______________________________
________________________________, ________________________________ of ▇▇▇▇
HAZELCREST, INC., a Delaware corporation, personally known to me to be the same
person whose name is subscribed to the foregoing instrument, appeared before me
this day in person and severally acknowledged that as such ____________________
________________________________, he/she signed, sealed and delivered said
instrument and caused the corporate seal of said corporation to be affixed
thereto, pursuant to authority given by the Board of Directors of said
corporation, as his/her free and voluntary act, and as the free and voluntary
act and deed of said corporation, for the uses and purposes therein set forth.
Given under my hand and official seal, this ________ day of
November, 1996.
_______________________________
Notary Public
[SEAL]
My Commission Expires:
________________________________
465
ILLINOIS CORPORATE ACKNOWLEDGEMENT
(DOMINICK'S FINER FOODS, INC.)
STATE OF ILLINOIS )
) SS.
COUNTY OF ▇▇▇▇ )
I, the undersigned, a Notary Public in and for said County,
in the State aforesaid, DO HEREBY CERTIFY that _______________________________
________________________________, ________________________________ of
DOMINICK'S FINER FOODS, INC., a Delaware corporation, personally known to me to
be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person and severally acknowledged that as such
________________________________, he/she signed, sealed and delivered said
instrument and caused the corporate seal of said corporation to be affixed
thereto, pursuant to authority given by the Board of Directors of said
corporation, as his/her free and voluntary act, and as the free and voluntary
act and deed of said corporation, for the uses and purposes therein set forth.
Given under my hand and official seal, this ________ day of
November, 1996.
_______________________________
Notary Public
[SEAL]
My Commission Expires:
________________________________
466
FOR ILLINOIS NON-LAND TRUST MORTGAGE
EXECUTED as of the day and year first above written.
DOMINICK'S FINER FOODS, INC. OF ILLINOIS,
an Illinois corporation
(EIN # ▇▇-▇▇▇▇▇▇▇)
By: __________________________________
Name: ________________________________
Title: _______________________________
DOMINICK'S FINER FOODS, INC.
a Delaware corporation
(EIN # ▇▇-▇▇▇▇▇▇▇)
By: __________________________________
Name: ________________________________
Title: _______________________________
467
ILLINOIS CORPORATE ACKNOWLEDGEMENT
(DOMINICK'S FINER FOODS, INC. OF ILLINOIS)
STATE OF ILLINOIS )
) SS.
COUNTY OF ▇▇▇▇ )
I, the undersigned, a Notary Public in and for said County,
in the State aforesaid, DO HEREBY CERTIFY that ______________________________
________________________________, ________________________________ of
DOMINICK'S FINER FOODS, INC. OF ILLINOIS, an Illinois corporation, personally
known to me to be the same person whose name is subscribed to the foregoing
instrument, appeared before me this day in person and severally acknowledged
that as such ________________________________, he/she signed, sealed and
delivered said instrument and caused the corporate seal of said corporation to
be affixed thereto, pursuant to authority given by the Board of Directors of
said corporation, as his/her free and voluntary act, and as the free and
voluntary act and deed of said corporation, for the uses and purposes therein
set forth.
Given under my hand and official seal, this ________ day of
November, 1996.
_______________________________
Notary Public
[SEAL]
My Commission Expires:
________________________________
468
ILLINOIS CORPORATE ACKNOWLEDGEMENT
(DOMINICK'S FINER FOODS, INC.)
STATE OF ILLINOIS )
) SS.
COUNTY OF ▇▇▇▇ )
I, the undersigned, a Notary Public in and for said County,
in the State aforesaid, DO HEREBY CERTIFY that ______________________________
________________________________, ________________________________ of
DOMINICK'S FINER FOODS, INC., a Delaware corporation, personally known to me to
be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person and severally acknowledged that as such
________________________________, he/she signed, sealed and delivered said
instrument and caused the corporate seal of said corporation to be affixed
thereto, pursuant to authority given by the Board of Directors of said
corporation, as his/her free and voluntary act, and as the free and voluntary
act and deed of said corporation, for the uses and purposes therein set forth.
Given under my hand and official seal, this ________ day of
November, 1996.
_______________________________
Notary Public
[SEAL]
My Commission Expires:
________________________________
469
FOR INDIANA MORTGAGE
EXECUTED as of the day and year first above written.
DOMINICK'S FINER FOODS, INC.
a Delaware corporation
(EIN # ▇▇-▇▇▇▇▇▇▇)
By: __________________________________
Name: ________________________________
Title: _______________________________
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ )
) SS.
COUNTY OF ▇▇▇▇ )
I, the undersigned, a Notary Public in and for said County,
in the State aforesaid, DO HEREBY CERTIFY that _____________________________
________________________________, ________________________________ of
DOMINICK'S FINER FOODS, INC., a Delaware corporation, personally known to me to
be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person and severally acknowledged that as such
________________________________, he/she signed, sealed and delivered said
instrument and caused the corporate seal of said corporation to be affixed
thereto, pursuant to authority given by the Board of Directors of said
corporation, as his/her free and voluntary act, and as the free and voluntary
act and deed of said corporation, for the uses and purposes therein set forth.
Given under my hand and official seal, this ________ day of
November, 1996.
_______________________________
Notary Public
[SEAL]
My Commission Expires:
_______________________________
471
EXHIBIT A
DESCRIPTION OF FEE LAND
472
EXHIBIT B
DESCRIPTION OF LEASES AND LEASED LAND
INCLUDING NAME OF A RECORD OWNER, AS TO ANY PORTION OF LEASED LAND IN WHICH
MORTGAGOR DOES NOT HAVE AN INTEREST OF RECORD
473
EXHIBIT C
DESIGNATED PROPERTIES
As used herein, the "Designated Properties" means (A) the Fee
Land (excluding (i) the outlot next to ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
and (ii) the Mortgaged Properties, if any, designated in Exhibit A as Location
Numbers 606, 625, and 851) and (B) all portions of the Mortgage Estate located
thereon or relating thereto.
SEE NOTE FOLLOWING SECTION 1.15(D)
474
EXHIBIT XXII
[FORM OF HOLDINGS PLEDGE AGREEMENT]
HOLDINGS PLEDGE AGREEMENT
This HOLDINGS PLEDGE AGREEMENT (this "AGREEMENT") is dated as
of November 1, 1996 and entered into by and between DOMINICK'S SUPERMARKETS,
INC., a Delaware corporation ("PLEDGOR"), and BANKERS TRUST COMPANY ("SECURED
PARTY"), as agent for and representative of (in such capacity herein called
"SECURED PARTY") the financial institutions ("LENDERS") party to the Credit
Agreement referred to below and the Interest Rate Exchangers (as hereinafter
defined).
PRELIMINARY STATEMENTS
A. Pledgor is or will be the legal and beneficial owner
of (i) the shares of stock (the "PLEDGED SHARES") described in Part A of
Schedule I annexed hereto and issued by the corporations named therein and (ii)
the indebtedness (the "PLEDGED DEBT") described in Part B of said Schedule I
and issued by the obligors named therein.
B. Lenders, Secured Party, Syndication Agent and
Arrangers have entered into a Credit Agreement dated as of November 1, 1996
(said Credit Agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined) with Pledgor, and Dominick's Finer Foods, Inc.,
a Delaware corporation ("COMPANY"), pursuant to which Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Company.
C. It is contemplated that Company may from time to time
enter into Interest Rate Agreements with one or more Lenders or their
Affiliates (collectively, the "INTEREST RATE EXCHANGERS") and Pledgor desires
that the obligations of Company under such agreements, including the obligation
to make payments in the event of early termination thereunder (all such
obligations being the "INTEREST RATE OBLIGATIONS"), be given the benefits of
the security interest created hereby.
D. Under the Credit Agreement, Pledgor has guarantied
the prompt payment and performance when due of all Obligations of Company under
the Credit Agreement and the other Loan Documents and all Interest Rate
Obligations of Company in respect of Interest Rate Agreements (said guaranty,
as it may hereafter be amended, supplemented or otherwise modified from time to
time, being the "GUARANTY") in favor of Secured Party for the benefit of
Guarantied Parties (as defined therein).
475
E. It is a condition precedent to the initial extensions
of credit by Lenders under the Credit Agreement that Pledgor shall have granted
the security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises, in order to
induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Pledgor hereby agrees with Secured
Party as follows:
SECTION 1. PLEDGE OF SECURITY. Pledgor hereby pledges and
grants to Secured Party a security interest in, all of Pledgor's right, title
and interest in and to the following (the "PLEDGED COLLATERAL"):
(a) the Pledged Shares and the certificates representing
the Pledged Shares and any interest of Pledgor in the entries on the books of
any financial intermediary pertaining to the Pledged Shares, and all dividends,
cash, warrants, rights, instruments and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of the Pledged Shares;
(b) the Pledged Debt and the instruments evidencing the
Pledged Debt, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Debt;
(c) all additional shares of, and all securities
convertible into and warrants, options and other rights to purchase or
otherwise acquire, stock of any issuer of the Pledged Shares from time to time
acquired by Pledgor in any manner (which shares shall be deemed to be part of
the Pledged Shares), the certificates or other instruments representing such
additional shares, securities, warrants, options or other rights and any
interest of Pledgor in the entries on the books of any financial intermediary
pertaining to such additional shares, and all dividends, cash, warrants,
rights, instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such additional shares, securities, warrants, options or other rights;
(d) all additional indebtedness from time to time owed to
Pledgor by any obligor on the Pledged Debt and the instruments evidencing such
indebtedness, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such indebtedness;
(e) all shares of, and all securities convertible into
and warrants, options and other rights to purchase or otherwise acquire, stock
of any Person that, after the date of this Agreement, becomes, as a result of
any occurrence, a direct Subsidiary of Pledgor (which shares shall be deemed to
be part of the Pledged Shares), the certificates or other instruments
representing such shares, securities, warrants, options or other rights and any
interest of Pledgor in the entries on the books of any financial intermediary
pertaining to such shares, and all dividends, cash, warrants, rights,
instruments and other property or
476
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares, securities, warrants,
options or other rights;
(f) all indebtedness from time to time owed to Pledgor by
any Person that, after the date of this Agreement, becomes, as a result of any
occurrence, a direct or indirect Subsidiary of Pledgor, and all interest, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such indebtedness; and
(g) to the extent not covered by clauses (a) through (f)
above, all proceeds of any or all of the foregoing Pledged Collateral. For
purposes of this Agreement, the term "PROCEEDS" includes whatever is receivable
or received when Pledged Collateral or proceeds are sold, exchanged, collected
or otherwise disposed of, whether such disposition is voluntary or involuntary,
and includes, without limitation, proceeds of any indemnity or guaranty payable
to Pledgor or Secured Party from time to time with respect to any of the
Pledged Collateral.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures,
and the Pledged Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of
all obligations and liabilities of every nature of Pledgor now or hereafter
existing under or arising out of or in connection with the Guaranty and all
extensions or renewals thereof, whether for principal, interest (including
without limitation interest that, but for the filing of a petition in
bankruptcy with respect to Company, would accrue on such obligations),
reimbursement of amounts drawn under Letters of Credit, fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such
obligations or liabilities that are paid, to the extent all or any part of such
payment is avoided or recovered directly or indirectly from Secured Party or
any Lender or any Interest Rate Exchanger as a preference, fraudulent transfer
or otherwise (all such obligations and liabilities being the "UNDERLYING
DEBT"), and all obligations of every nature of Pledgor now or hereafter
existing under this Agreement (all such obligations of Pledgor, together with
the Underlying Debt, being the "SECURED OBLIGATIONS").
SECTION 3. DELIVERY OF PLEDGED COLLATERAL. All certificates
or instruments representing or evidencing the Pledged Collateral shall be
delivered to and held by or on behalf of Secured Party pursuant hereto and
shall be in suitable form for transfer by delivery or, as applicable, shall be
accompanied by Pledgor's endorsement, where necessary, or duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Secured Party. Secured Party shall have the right, at any time
in its discretion and without notice to Pledgor, to register in the name of
Secured Party or any of its nominees, as pledgee, any or all of the Pledged
Collateral. In addition, Secured Party shall have the right at any time to
exchange certificates or instruments representing or
477
evidencing Pledged Collateral for certificates or instruments of smaller or
larger denominations.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Pledgor
represents and warrants as follows:
(a) Due Authorization, etc. of Pledged Collateral. All
of the Pledged Shares have been duly authorized and validly issued and are
fully paid and non-assessable. All of the Pledged Debt has been duly
authorized, authenticated or issued, and delivered and is the legal, valid and
binding obligation of the issuers thereof and is not in default.
(b) Description of Pledged Collateral. The Pledged
Shares constitute one hundred percent (100%) of the issued and outstanding
shares of stock of each of the direct Subsidiaries of Pledgor, and there are no
outstanding warrants, options or other rights to purchase, or other agreements
outstanding with respect to, or property that is now or hereafter convertible
into, or that requires the issuance or sale of, any Pledged Shares. The
Pledged Debt constitutes all of the issued and outstanding intercompany
indebtedness evidenced by a promissory note of the respective issuers thereof
owing to Pledgor.
(c) Ownership of Pledged Collateral. Pledgor is the
legal, record and beneficial owner of the Pledged Collateral free and clear of
any Lien except for the security interest created by this Agreement.
(d) Governmental Authorizations. No authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for either (i) the pledge by Pledgor
of the Pledged Collateral pursuant to this Agreement and the grant by Pledgor
of the security interest granted hereby, (ii) the execution, delivery or
performance of this Agreement by Pledgor, or (iii) the exercise by Secured
Party of the voting or other rights, or the remedies in respect of the Pledged
Collateral, provided for in this Agreement (except as may be required in
connection with a disposition of Pledged Collateral by laws affecting the
offering and sale of securities generally).
(e) Perfection. The pledge of the Pledged Shares and
Pledged Debt pursuant to this Agreement creates a valid and perfected first
priority security interest in such Pledged Shares and Pledged Debt, securing
the payment of the Secured Obligations; provided that Secured Party retains
physical possession of the Pledged Collateral.
(f) Margin Regulations. The pledge of the Pledged
Collateral pursuant to this Agreement does not violate Regulation G, T, U or X
of the Board of Governors of the Federal Reserve System.
(g) Other Information. All information heretofore,
herein or hereafter supplied to Secured Party by or on behalf of Pledgor with
respect to the Pledged Collateral is accurate and complete in all material
respects.
478
SECTION 5. TRANSFERS AND OTHER LIENS; ADDITIONAL PLEDGED
COLLATERAL; ETC. Pledgor shall:
(a) not, except as expressly permitted by the Credit
Agreement, (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Pledged Collateral,
(ii) create or suffer to exist any Lien upon or with respect to any of the
Pledged Collateral, except for the security interest under this Agreement, or
(iii) permit any issuer of Pledged Shares to merge or consolidate unless all
the outstanding capital stock of the surviving or resulting corporation is,
upon such merger or consolidation, pledged hereunder and no cash, securities or
other property is distributed in respect of the outstanding shares of any other
constituent corporation; provided that in the event Pledgor makes an Asset Sale
permitted by the Credit Agreement and the assets subject to such Asset Sale are
Pledged Shares, Secured Party shall release the Pledged Shares that are the
subject of such Asset Sale to Pledgor free and clear of the lien and security
interest under this Agreement concurrently with the consummation of such Asset
Sale; provided, further that, as a condition precedent to such release, Secured
Party shall have received evidence reasonably satisfactory to it that
arrangements reasonably satisfactory to it have been made for delivery to
Secured Party of the Net Cash Proceeds of Asset Sale of such Asset Sale if
required under subsection 2.4B(iii)(a) of the Credit Agreement;
(b) (i) cause each issuer of Pledged Shares not to issue
any stock or other securities in addition to or in substitution for the Pledged
Shares issued by such issuer, except to Pledgor, (ii) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and all
additional shares of stock or other securities of each issuer of Pledged
Shares, and (iii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all shares of stock of any Person that, after
the date of this Agreement, becomes, as a result of any occurrence, a direct
Subsidiary of Pledgor;
(c) (i) pledge hereunder, immediately upon their
issuance, any and all instruments or other evidences of additional indebtedness
from time to time owed to Pledgor by any obligor on the Pledged Debt, and (ii)
pledge hereunder, immediately upon their issuance, any and all instruments or
other evidences of indebtedness from time to time owed to Pledgor by any Person
that after the date of this Agreement becomes, as a result of any occurrence, a
direct or indirect Subsidiary of Pledgor;
(d) promptly deliver to Secured Party all material
written notices received by it with respect to the Pledged Collateral; and
(e) pay promptly when due all material taxes, assessments
and governmental charges or levies imposed upon, and all claims against, the
Pledged Collateral, except to the extent the validity thereof is being
contested in good faith; provided that Pledgor shall in any event pay such
taxes, assessments, charges, levies or claims not later than five days prior to
the date of any proposed sale under any judgement, writ or warrant of
attachment entered or filed against Pledgor or any of the Pledged Collateral as
a result of the failure to make such payment.
479
SECTION 6. FURTHER ASSURANCES; PLEDGE AMENDMENTS.
(a) Pledgor agrees that from time to time, at the expense
of Pledgor, Pledgor will promptly execute and deliver all further instruments
and documents, and take all further action, that Secured Party may reasonably
deem to be necessary or desirable, or that Secured Party may reasonably
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any Pledged
Collateral. Without limiting the generality of the foregoing, Pledgor will:
(i) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as Secured Party may reasonably
deem to be necessary or desirable, or as Secured Party may reasonably request,
in order to perfect and preserve the security interests granted or purported to
be granted hereby and (ii) at Secured Party's reasonable request, appear in and
defend any action or proceeding that may adversely affect Pledgor's title to or
Secured Party's security interest in all or any part of the Pledged Collateral.
(b) Pledgor further agrees that it will, upon obtaining
any additional shares of stock or other securities or instruments required to
be pledged hereunder as provided in Section 5(b) or (c), promptly (and in any
event within five Business Days) deliver to Secured Party a Pledge Amendment,
duly executed by Pledgor, in substantially the form of Schedule II annexed
hereto (a "PLEDGE AMENDMENT"), in respect of the additional Pledged Shares or
Pledged Debt to be pledged pursuant to this Agreement. Pledgor hereby
authorizes Secured Party to attach each Pledge Amendment to this Agreement and
agrees that all Pledged Shares or Pledged Debt listed on any Pledge Amendment
delivered to Secured Party shall for all purposes hereunder be considered
Pledged Collateral; provided that the failure of Pledgor to execute a Pledge
Amendment with respect to any additional Pledged Shares or Pledged Debt pledged
pursuant to this Agreement shall not impair the security interest of Secured
Party therein or otherwise adversely affect the rights and remedies of Secured
Party hereunder with respect thereto.
SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.
(a) So long as no Event of Default shall have occurred
and be continuing:
(i) Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged
Collateral or any part thereof for any purpose not inconsistent with
the terms of this Agreement or the Credit Agreement; provided,
however, that Pledgor shall not exercise or refrain from exercising
any such right if Secured Party shall have notified Pledgor that, in
Secured Party's judgment, such action would have a material adverse
effect on the value of the Pledged Collateral or any part thereof; and
provided, further, that Pledgor shall give Secured Party at least five
Business Days' prior written notice of the manner in which it intends
to exercise, or the reasons for refraining from exercising, any such
right. It is understood, however, that neither (A) the voting by
Pledgor of any Pledged Shares for or Pledgor's consent to the election
of directors at a regularly scheduled annual or other meeting of
stockholders or with respect to incidental matters at any such meeting
nor (B) Pledgor's consent to or approval of any action
480
otherwise permitted under this Agreement and the Credit Agreement
shall be deemed inconsistent with the terms of this Agreement or the
Credit Agreement within the meaning of this Section 7(a)(i), and no
notice of any such voting or consent need be given to Secured Party;
(ii) Pledgor shall be entitled to receive and retain, and
to utilize free and clear of the lien of this Agreement, any and all
dividends and interest paid in respect of the Pledged Collateral;
provided, however, that any and all
(A) dividends and interest paid or payable other
than in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of,
or in exchange for, any Pledged Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Pledged Collateral in
connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus
or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed
in respect of principal or in redemption of or in exchange for
any Pledged Collateral,
shall be, and shall forthwith be delivered to Secured Party to hold
as, Pledged Collateral and shall, if received by Pledgor, be received
in trust for the benefit of Secured Party, be segregated from the
other property or funds of Pledgor and be forthwith delivered to
Secured Party as Pledged Collateral in the same form as so received
(with all necessary endorsements); and
(iii) Secured Party shall promptly execute and deliver (or
cause to be executed and delivered) to Pledgor all such proxies,
dividend payment orders and other instruments as Pledgor may from time
to time reasonably request for the purpose of enabling Pledgor to
exercise the voting and other consensual rights which it is entitled
to exercise pursuant to paragraph (i) above and to receive the
dividends, principal or interest payments which it is authorized to
receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuation of an
Event of Default:
(i) upon written notice from Secured Party to Pledgor,
all rights of Pledgor to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise pursuant to
Section 7(a)(i) shall cease, and all such rights shall thereupon
become vested in Secured Party who shall thereupon have the sole right
to exercise such voting and other consensual rights;
(ii) all rights of Pledgor to receive the dividends and
interest payments which it would otherwise be authorized to receive
and retain pursuant to Section 7(a)(ii) shall cease, and all such
rights shall thereupon become vested in Secured
481
Party who shall thereupon have the sole right to receive and hold as
Pledged Collateral such dividends and interest payments; and
(iii) all dividends, principal and interest payments which
are received by Pledgor contrary to the provisions of paragraph (ii)
of this Section 7(b) shall be received in trust for the benefit of
Secured Party, shall be segregated from other funds of Pledgor and
shall forthwith be paid over to Secured Party as Pledged Collateral in
the same form as so received (with any necessary endorsements).
(c) In order to permit Secured Party to exercise the
voting and other consensual rights which it may be entitled to exercise
pursuant to Section 7(b)(i) and to receive all dividends and other
distributions which it may be entitled to receive under Section 7(a)(ii) or
Section 7(b)(ii), (i) Pledgor shall promptly execute and deliver (or cause to
be executed and delivered) to Secured Party all such proxies, dividend payment
orders and other instruments as Secured Party may from time to time reasonably
request and (ii) without limiting the effect of the immediately preceding
clause (i), Pledgor hereby grants to Secured Party an irrevocable proxy to vote
the Pledged Shares and to exercise all other rights, powers, privileges and
remedies to which a holder of the Pledged Shares would be entitled (including,
without limitation, giving or withholding written consents of shareholders,
calling special meetings of shareholders and voting at such meetings), which
proxy shall be effective, automatically and without the necessity of any action
(including any transfer of any Pledged Shares on the record books of the issuer
thereof) by any other Person (including the issuer of the Pledged Shares or any
officer or agent thereof), upon the occurrence of an Event of Default and which
proxy shall only terminate upon the indefeasible payment in full of the Secured
Obligations.
SECTION 8. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Pledgor
hereby irrevocably appoints Secured Party as Pledgor's attorney-in-fact, with
full authority in the place and stead of Pledgor and in the name of Pledgor,
Secured Party or otherwise, from time to time in Secured Party's discretion to
take any action and to execute any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement, including
without limitation:
(a) to file one or more financing or continuation
statements, or amendments thereto, relative to all or any part of the Pledged
Collateral without the signature of Pledgor;
(b) to ask, demand, collect, ▇▇▇ for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Pledged Collateral;
(c) to receive, endorse and collect any instruments made
payable to Pledgor representing any dividend, principal or interest payment or
other distribution in respect of the Pledged Collateral or any part thereof and
to give full discharge for the same; and
482
(d) to file any claims or take any action or institute
any proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Pledged Collateral or otherwise to enforce the rights
of Secured Party with respect to any of the Pledged Collateral.
Secured Party shall not exercise any powers granted pursuant
to this appointment as attorney-in-fact (other than with respect to clause (a)
above) until the occurrence of and only during the continuation of an Event of
Default. This appointment as attorney-in-fact shall terminate upon the
termination of this Agreement pursuant to Section 14.
SECTION 9. SECURED PARTY MAY PERFORM. If Pledgor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party
incurred in connection therewith shall be payable by Pledgor under Section
13(b).
SECTION 10. STANDARD OF CARE. The powers conferred on
Secured Party hereunder are solely to protect its interest in the Pledged
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the exercise of reasonable care in the custody of any Pledged
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Secured Party shall have no duty as to any Pledged Collateral, it
being understood that Secured Party shall have no responsibility for (a)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Pledged Collateral,
whether or not Secured Party has or is deemed to have knowledge of such
matters, (b) taking any necessary steps (other than steps taken in accordance
with the standard of care set forth above to maintain possession of the Pledged
Collateral) to preserve rights against any parties with respect to any Pledged
Collateral, (c) taking any necessary steps to collect or realize upon the
Secured Obligations or any guarantee therefor, or any part thereof, or any of
the Pledged Collateral, or (d) initiating any action to protect the Pledged
Collateral against the possibility of a decline in market value. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of Pledged Collateral in its possession if such Pledged Collateral
is accorded treatment substantially equal to that which Secured Party accords
its own property consisting of negotiable securities.
SECTION 11. REMEDIES.
(a) If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Pledged Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the Uniform Commercial Code as in effect in any relevant jurisdiction
(the "CODE") (whether or not the Code applies to the affected Pledged
Collateral), and Secured Party may also in its sole discretion, without notice
except as specified below, sell the Pledged Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange or broker's
board or at any of Secured Party's offices or elsewhere, for cash, on credit or
for future delivery, at such time or times and at such price or prices and upon
such other terms as Secured Party may deem commercially
483
reasonable, irrespective of the impact of any such sales on the market price of
the Pledged Collateral. Secured Party or any Lender may be the purchaser of
any or all of the Pledged Collateral at any such sale and Secured Party, as
agent for and representative of Lenders and Interest Rate Exchangers (but not
any Lender, Lenders, Interest Rate Exchanger or Interest Rate Exchangers in its
or their respective individual capacities unless Requisite Lenders shall
otherwise agree in writing), shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of
the Pledged Collateral sold at any such public sale, to use and apply any of
the Secured Obligations as a credit on account of the purchase price for any
Pledged Collateral payable by Secured Party at such sale. Each purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of Pledgor, and Pledgor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Pledgor agrees that, to the extent
notice of sale shall be required by law, at least ten days' written notice to
Pledgor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. Secured
Party shall not be obligated to make any sale of Pledged Collateral regardless
of notice of sale having been given. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Pledgor hereby waives any claims against
Secured Party arising by reason of the fact that the price at which any Pledged
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Secured Party accepts
the first offer received and does not offer such Pledged Collateral to more
than one offeree; provided that such sale was conducted in a commercially
reasonable manner. If the proceeds of any sale or other disposition of the
Pledged Collateral are insufficient to pay all the Secured Obligations, Pledgor
shall be liable for the deficiency and the fees of any attorneys employed by
Secured Party to collect such deficiency.
(b) Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws, Secured Party may be compelled, with respect to any sale of all or any
part of the Pledged Collateral conducted without prior registration or
qualification of such Pledged Collateral under the Securities Act and/or such
state securities laws, to limit purchasers to those who will agree, among other
things, to acquire the Pledged Collateral for their own account, for investment
and not with a view to the distribution or resale thereof. Pledgor
acknowledges that any such private sales may be at prices and on terms less
favorable than those obtainable through a public sale without such restrictions
(including, without limitation, a public offering made pursuant to a
registration statement under the Securities Act) and, notwithstanding such
circumstances, Pledgor agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner and that Secured Party shall
have no obligation to engage in public sales and no obligation to delay the
sale of any Pledged Collateral for the period of time necessary to permit the
issuer thereof to register it for a form of public sale requiring registration
under the Securities Act or under applicable state securities laws, even if
such issuer would, or should, agree to so register it.
484
(c) If Secured Party determines to exercise its right to
sell any or all of the Pledged Collateral, upon written request, Pledgor shall
and shall cause each issuer of any Pledged Shares to be sold hereunder from
time to time to furnish to Secured Party all such information as Secured Party
may reasonably request in order to determine the number of shares and other
instruments included in the Pledged Collateral which may be sold by Secured
Party in exempt transactions under the Securities Act and the rules and
regulations of the Securities and Exchange Commission thereunder, as the same
are from time to time in effect.
(d) Notwithstanding anything in this Agreement to the
contrary, Secured Party shall exercise, or shall refrain from exercising, any
remedy provided for in Section 11(a) in accordance with the instructions of
Requisite Lenders, and the Interest Rate Exchangers, by their acceptance of the
benefits of this Agreement and the other Loan Documents, hereby agree to be
bound by such instructions. The sole rights of the Interest Rate Exchangers
under this Agreement shall be to be secured by the Pledged Collateral and to
receive the payments provided for in Section 12.
SECTION 12. APPLICATION OF PROCEEDS. Except as expressly
provided elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any sale of, collection from, or other realization upon all or any
part of the Pledged Collateral may, in the discretion of Secured Party, be held
by Secured Party as Pledged Collateral for, and/or then, or at any time
thereafter, applied in full or in part by Secured Party against, the Secured
Obligations in the following order of priority:
FIRST: To the payment of all reasonable costs and expenses of
such sale, collection or other realization, including reasonable
compensation to Secured Party and its agents and counsel, and all
other reasonable expenses, liabilities and advances made or incurred
by Secured Party in connection therewith, and all amounts for which
Secured Party is entitled to indemnification hereunder and all
reasonable advances made by Secured Party hereunder for the account of
Pledgor, and to the payment of all reasonable costs and expenses paid
or incurred by Secured Party in connection with the exercise of any
right or remedy hereunder, all in accordance with Section 13;
SECOND: To the payment of all other Secured Obligations (for
the ratable benefit of the holders thereof) then due and payable; and
THIRD: To the payment to or upon the order of Pledgor, or to
whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
SECTION 13. INDEMNITY AND EXPENSES.
(a) Pledgor agrees to indemnify Secured Party, each
Lender and each Interest Rate Exchanger from and against any and all claims,
losses and liabilities in any way relating to, growing out of or resulting from
this Agreement and the transactions contemplated hereby (including, without
limitation, enforcement of this Agreement), except
485
to the extent such claims, losses or liabilities result solely from Secured
Party's, such Lender's or such Interest Rate Exchanger's gross negligence or
willful misconduct as finally determined by a court of competent jurisdiction.
(b) Pledgor shall pay to Secured Party upon demand the
amount of any and all reasonable costs and expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that Secured
Party may incur in connection with (i) the administration of this Agreement,
(ii) the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the
failure by Pledgor to perform or observe any of the provisions hereof.
SECTION 14. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the Pledged
Collateral and shall (a) remain in full force and effect until (i) the
indefeasible payment in full of all Secured Obligations (other than Obligations
which are contingent and unliquidated and not due and owing on such date and
which pursuant to the provisions of the Credit Agreement, Interest Rate
Agreements, Letters of Credit or the Loan Documents survive the termination of
the Credit Agreement, the repayment of the Secured Obligations, the termination
of the Commitments, the expiration or cancellation of all Letters of Credit or
the termination, expiration or cancellation of all Interest Rate Agreements),
the cancellation or termination of the Commitments and the cancellation or
expiration of all outstanding Letters of Credit and the termination, expiration
or cancellation of all Interest Rate Agreements, or (ii) the release of the
Liens on the Pledged Collateral by Secured Party in writing in accordance with
the terms of subsection 6.11 of the Credit Agreement, (b) be binding upon
Pledgor, its successors and assigns, and (c) inure, together with the rights
and remedies of Secured Party hereunder, to the benefit of Secured Party and
its successors, transferees and assigns. Without limiting the generality of
the foregoing clause (c), but subject to the provisions of subsection 11.1 of
the Credit Agreement, any Lender may assign or otherwise transfer any Loans
held by any of them to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to Lenders
herein or otherwise and any Interest Rate Exchanger may assign or otherwise
transfer any Interest Rate Obligations owing to it to another Lender or an
Affiliate of such Lender or another Lender, and such other Lender or Affiliate
shall thereupon become vested with all the benefits in respect thereof granted
to such Interest Rate Exchanger herein or otherwise. Upon (i) the indefeasible
payment in full of all Secured Obligations (other than Obligations which are
contingent and unliquidated and not due and owing on such date and which
pursuant to the provisions of the Credit Agreement, Interest Rate Agreements,
Letters of Credit or the Loan Documents survive the termination of the Credit
Agreement, the repayment of the Secured Obligations, the termination of the
Commitments, the expiration or cancellation of all Letters of Credit or the
termination, expiration or cancellation of all Interest Rate Agreements), the
cancellation or termination of the Commitments, the cancellation or expiration
of all outstanding Letters of Credit and the termination, expiration or
cancellation of all Interest Rate Agreements, or (ii) the release of the Liens
on the Pledged Collateral by Secured Party in writing in accordance with the
terms of subsection 6.11 of the Credit Agreement, the security interest granted
hereby shall terminate and all rights to the Pledged Collateral shall revert to
Pledgor. Upon any such termination Secured
486
Party will, at Pledgor's expense, execute and deliver to Pledgor such documents
as Pledgor shall reasonably request to evidence such termination and Pledgor
shall be entitled to the return, upon its request and at its expense, against
receipt and without recourse to Secured Party, of such of the Pledged
Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof.
SECTION 15. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders and, by their acceptance of the benefits of this
Agreement and the other Loan Documents, by each Interest Rate Exchanger.
Secured Party shall be obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from exercising any rights,
and to take or refrain from taking any action (including, without limitation,
the release or substitution of Pledged Collateral), solely in accordance with
this Agreement and the Credit Agreement and upon the instructions of Requisite
Lenders, and the Interest Rate Exchangers, by their acceptance of the benefits
of this Agreement and other Loan Documents, hereby agree to be bound by such
instructions.
(b) Secured Party shall at all times be the same Person
that is Agent under the Credit Agreement. Written notice of resignation by
Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute notice of resignation as Secured Party under this Agreement; removal
of Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute removal as Secured Party under this Agreement; and appointment of a
successor Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute appointment of a successor Secured Party under this Agreement. Upon
the acceptance of any appointment as Agent under subsection 10.5A of the Credit
Agreement by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly (i) transfer to such
successor Secured Party all sums, securities and other items of Collateral held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Secured Party, the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it under this Agreement while it was Secured Party
hereunder.
SECTION 16. AMENDMENTS; ETC. No amendment or waiver of any
provision of this Agreement, or consent to any departure by Pledgor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by Secured Party (or, in the case of an amendment hereto, by Pledgor and
Secured Party), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given; provided
that any amendment or waiver which adversely affects the
487
interests of the Interest Rate Exchangers but does not result in a similar
adverse effect on the interests of Lenders shall only be effective with the
consent of the holders of a majority of the Interest Rate Obligations given the
benefit of the security hereunder.
SECTION 17. NOTICES. Any notice or other communication
herein required or permitted to be given shall be in writing and may be
personally served, telexed or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage
prepaid and properly addressed. For the purposes hereof, the address of each
party hereto shall be as set forth under such party's name on the signature
pages hereof or, as to either party, such other address as shall be designated
by such party in a written notice delivered to the other party hereto.
SECTION 18. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
SECTION 19. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 20. HEADINGS. Section and subsection headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 21. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Credit Agreement, terms used in Articles 8 and 9 of the Uniform
Commercial Code in the State of New York are used herein as therein defined.
SECTION 22. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW
488
YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT PLEDGOR ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. Pledgor hereby agrees that
service of all process in any such proceeding in any such court may be made by
registered or certified mail, return receipt requested, to Pledgor at its
address provided in Section 17, such service being hereby acknowledged by
Pledgor to be sufficient for personal jurisdiction in any action against
Pledgor in any such court and to be otherwise effective and binding service in
every respect. Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of Secured Party to
bring proceedings against Pledgor in the courts of any other jurisdiction.
SECTION 23. WAIVER OF JURY TRIAL. PLEDGOR AND SECURED PARTY
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Pledgor and Secured
Party each acknowledge that this waiver is a material inducement for Pledgor
and Secured Party to enter into a business relationship, that Pledgor and
Secured Party have already relied on this waiver in entering into this
Agreement and that each will continue to rely on this waiver in their related
future dealings. Pledgor and Secured Party further warrant and represent that
each has reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the
event of litigation, this Agreement may be filed as a written consent to a
trial by the court.
SECTION 24. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
[Remainder of page intentionally left blank]
489
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
DOMINICK'S SUPERMARKETS, INC., as
Pledgor
By: _____________________________________
Title:
Notice Address: Dominick's Supermarkets, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By: _____________________________________
Title:
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
490
SCHEDULE I
Attached to and forming a part of the Holdings Pledge Agreement
dated as of November 1, 1996 between Dominick's Supermarkets, Inc., as Pledgor,
and Bankers Trust Company, as Secured Party.
Part A
Class of Stock Certi- Par Number of
Stock Issuer Stock ficate Nos. Value Shares
------------ -------- ------------ ----- ---------
Dominick's Finer Common No. 2 $0.01 1,000
Foods, Inc.
Part B
Debt Issuer Amount of Indebtedness
----------- ----------------------
None.
491
SCHEDULE II
PLEDGE AMENDMENT
This Pledge Amendment, dated ____________, [19/20]__, is
delivered pursuant to Section 6(b) of the Holdings Pledge Agreement referred to
below. The undersigned hereby agrees that this Pledge Amendment may be
attached to the Holdings Pledge Agreement dated November 1, 1996, between the
undersigned and Bankers Trust Company, as Secured Party (the "HOLDINGS PLEDGE
AGREEMENT," capitalized terms defined therein being used herein as therein
defined), and that the [Pledged Shares] [Pledged Debt] listed on this Pledge
Amendment shall be deemed to be part of the [Pledged Shares] [Pledged Debt] and
shall become part of the Pledged Collateral and shall secure all Secured
Obligations.
DOMINICK'S SUPERMARKETS, INC.
By: ___________________________
Title:
Class of Stock Certi- Par Number of
Stock Issuer Stock ficate Nos. Value Shares
------------ -------- ------------ ----- ---------
Debt Issuer Amount of Indebtedness
----------- ----------------------
492
EXHIBIT XXIII
[FORM OF HOLDINGS SECURITY AGREEMENT]
HOLDINGS SECURITY AGREEMENT
This HOLDINGS SECURITY AGREEMENT (this "AGREEMENT") is dated as
of November 1, 1996 and entered into by and between DOMINICK'S SUPERMARKETS,
INC., a Delaware corporation ("GRANTOR"), and BANKERS TRUST COMPANY, as agent
for and representative of (in such capacity herein called "SECURED PARTY") the
financial institutions ("LENDERS") party to the Credit Agreement referred to
below and the Interest Rate Exchangers (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Lenders, Secured Party, Syndication Agent and
Arrangers have entered into a Credit Agreement dated as of November 1, 1996
(said Credit Agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined) with Grantor, and Dominick's Finer Foods, Inc.,
a Delaware corporation ("COMPANY"), pursuant to which Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Company.
B. It is contemplated that Company may from time to time
enter into Interest Rate Agreements with one or more Lenders or their
Affiliates (collectively, the "INTEREST RATE EXCHANGERS") and Grantor desires
that the obligations of Company under such agreements, including the obligation
to make payments in the event of early termination thereunder (all such
obligations being the "INTEREST RATE OBLIGATIONS"), be given the benefits of
the security interest created hereby.
C. Pursuant to the Credit Agreement, Grantor has
guarantied the prompt payment and performance when due of all obligations of
Company under the Credit Agreement and the other Loan Documents and all
obligations of Company under the Interest Rate Agreements, including, without
limitation, the obligation of Company to make payments thereunder in the event
of early termination thereof (said guaranty, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the "GUARANTY") in
favor of Secured Party for the benefit of Guarantied Parties (as defined
therein).
D. It is a condition precedent to the initial extensions
of credit by Lenders under the Credit Agreement that Grantor shall have granted
the security interests and undertaken the obligations contemplated by this
Agreement.
493
NOW, THEREFORE, in consideration of the premises, in order to
induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Grantor hereby agrees with Secured
Party as follows:
SECTION 1. GRANT OF SECURITY. Grantor hereby grants to
Secured Party a security interest in, all of Grantor's right, title and
interest in and to the following, in each case whether now or hereafter
existing or in which Grantor now has or hereafter acquires an interest and
wherever the same may be located (the "COLLATERAL"):
(a) all equipment in all of its forms (including but not
limited to, all distribution, retailing, data processing, office and motor
vehicle equipment in all of its forms), all parts thereof and all accessions
thereto; excluding, however, any such equipment, parts or accessions listed on
Schedule 1(a) annexed hereto located as of the Closing Date (or as of the date
such Schedule 1(a) is supplemented pursuant to Section 5(c) hereof) at
Grantor's stores listed on Schedule 1(a) annexed hereto (any and all such
equipment, parts and accessions not so excluded pursuant to the preceding
clause being the "EQUIPMENT");
(b) all inventory in all of its forms (including, but not
limited to, (i) all goods held by Grantor for sale or lease or to be furnished
under contracts of service or so leased or furnished, (ii) all raw materials,
work in process, finished goods, and materials used or consumed in the
manufacture, packing, shipping, advertising, selling, leasing, furnishing or
production of such inventory or otherwise used or consumed in Grantor's
business, (iii) all goods in which Grantor has an interest in mass or a joint
or other interest or right of any kind, and (iv) all goods which are returned
to or repossessed by Grantor and all accessions thereto and products thereof;
excluding, however, any such inventory listed on Schedule 1(b) annexed hereto
located (as of the date such Schedule 1(b) is delivered pursuant to Section
5(c) hereof) at Grantor's stores listed on Schedule 1(b) annexed hereto (all
such inventory, accessions and products not so excluded pursuant to the
preceding clause being the "INVENTORY") and all negotiable documents of title
(including without limitation warehouse receipts, dock receipts and bills of
lading) issued by any Person covering any Inventory (any such negotiable
documents of title being a "NEGOTIABLE DOCUMENT OF TITLE");
(c) all accounts, contract rights, chattel paper,
documents, instruments, general intangibles and other rights and obligations of
any kind and all rights in, to and under all security agreements, leases and
other contracts securing or otherwise relating to any such accounts, contract
rights, chattel paper, documents, instruments, general intangibles or other
obligations (any and all such accounts, contract rights, chattel paper,
documents, instruments, general intangibles and other obligations being the
"ACCOUNTS", and any and all such security agreements, leases and other
contracts being the "RELATED CONTRACTS");
(d) the agreements listed in Schedule 1(d) annexed hereto
and all other agreements, contracts, and assignments whereby Grantor obtains
goods or services that are
494
useful or necessary to the business of such Grantor, as each such agreement may
be amended, supplemented or otherwise modified from time to time (said
agreements, as so amended, supplemented or otherwise modified, being referred
to herein individually as an "ASSIGNED AGREEMENT" and collectively as the
"ASSIGNED AGREEMENTS"), including without limitation (i) all rights of Grantor
to receive moneys due or to become due under or pursuant to the Assigned
Agreements, (ii) all rights of Grantor to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect to the Assigned Agreements, (iii)
all claims of Grantor for damages arising out of any breach of or default under
the Assigned Agreements, and (iv) all rights of Grantor to terminate, amend,
supplement, modify or exercise rights or options under the Assigned Agreements,
to perform thereunder and to compel performance and otherwise exercise all
remedies thereunder;
(e) all deposit accounts, including without limitation the
deposit accounts specified on Schedule 1(e) annexed hereto and all other
deposit accounts maintained with Secured Party (the "DEPOSIT ACCOUNTS");
(f) all trademarks, tradenames, tradesecrets, business
names, patents, patent applications, licenses, copyrights, registrations and
franchise rights, and all goodwill associated with any of the foregoing;
(g) to the extent not included in any other paragraph of
this Section 1, all other general intangibles (including, without limitation,
tax refunds, rights to payment or performance, choses in action and judgments
taken on any rights or claims included in the Collateral);
(h) all plant fixtures, business fixtures and other
fixtures and storage and office facilities, and all accessions thereto and
products thereof; excluding, however, any such fixtures, facilities, additions,
accession, replacements and products listed on Schedule 1(h) annexed hereto
located as of the Closing Date (or as of the date such Schedule 1(h) is
supplemented pursuant to Section 5(c) hereof) at Grantor's stores listed on
Schedule 1(h) annexed hereto;
(i) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related data processing
software that at any time evidence or contain information relating to any of
the Collateral or are otherwise necessary or helpful in the collection thereof
or realization thereupon; and
(j) all proceeds, products, rents and profits of or from
any and all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is the
loss payee thereof), or any indemnity, warranty or guaranty, payable by reason
of loss or damage to or otherwise with respect to any of the foregoing
Collateral. For purposes of this Agreement, the term "PROCEEDS" includes
whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary.
Notwithstanding the foregoing provisions of this Section 1, the
Collateral shall not include, and Grantor shall not hereby be deemed to grant a
security interest in, any
495
rights of Grantor under any license, lease, agreement or contract existing as
of the Closing Date that expressly prohibits any such security interest;
provided, however, that in the event that any such prohibition may be waived or
avoided upon Grantor's obtaining a consent to such security interest or through
the satisfaction of any other condition precedent and such consent is obtained
or such condition precedent is satisfied, the foregoing provisions of this
sentence shall not be effective with respect to such license, lease, agreement
or contract.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures,
and the Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of
all obligations and liabilities of every nature of Grantor now or hereafter
existing under or arising out of or in connection with the Guaranty and all
extensions or renewals thereof, whether for principal, interest (including
without limitation interest that, but for the filing of a petition in
bankruptcy with respect to Company, would accrue on such obligations),
reimbursement of amounts drawn under Letters of Credit, fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such
obligations or liabilities that are paid, to the extent all or any part of such
payment is avoided or recovered directly or indirectly from Secured Party or
any Lender or any Interest Rate Exchanger as a preference, fraudulent transfer
or otherwise (all such obligations and liabilities being the "UNDERLYING
DEBT"), and all obligations of every nature of Grantor now or hereafter
existing under this Agreement (all such obligations of Grantor, together with
the Underlying Debt, being the "SECURED OBLIGATIONS").
SECTION 3. GRANTOR REMAINS LIABLE. Anything contained herein
to the contrary notwithstanding, (a) Grantor shall remain liable under any
contracts and agreements included in the Collateral, to the extent set forth
therein, to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by Secured
Party of any of its rights hereunder shall not release Grantor from any of its
duties or obligations under the contracts and agreements included in the
Collateral, and (c) Secured Party shall not have any obligation or liability
under any contracts and agreements included in the Collateral by reason of this
Agreement, nor shall Secured Party be obligated to perform any of the
obligations or duties of Grantor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Grantor represents
and warrants as follows:
(a) Ownership of Collateral. Except for Permitted
Encumbrances and the security interest created by this Agreement, Grantor owns
the Collateral free and clear of any Lien. Except such as may have been filed
in favor of Secured Party relating to this Agreement and any Permitted
Encumbrances, no effective financing statement or other
496
instrument similar in effect covering all or any part of the Collateral is on
file in any filing or recording office.
(b) Location of Equipment and Inventory. All of the
Equipment (other than any motor vehicles included in Equipment) and Inventory
(other than Equipment or Inventory in transit to Illinois) is, as of the date
hereof, located at the places specified in Schedule 4(b) annexed hereto.
(c) Office Locations; Other Names. As of the date hereof,
the chief place of business, the chief executive office and the office where
Grantor keeps its records regarding the Accounts and all originals of all
chattel paper that evidence Accounts is, and has been for the four month period
preceding the date hereof, located at the places specified in Schedule 4(c)
annexed hereto. As of the date hereof, Grantor has not in the past five years
done, and does not now do, business under any other name (including any
trade-name or fictitious business name) other than those specified in Schedule
4(c) annexed hereto.
(d) Delivery of Certain Collateral. All notes and other
instruments (excluding checks) and, to the extent required to be delivered
pursuant to Section 5(a), chattel paper comprising any and all items of
Collateral have been delivered to Secured Party duly endorsed and accompanied
by duly executed instruments of transfer or assignment in blank.
(e) Governmental Authorizations. Except for the filing or
recording of Uniform Commercial Code financing statements necessary to perfect
the security interest created hereunder and the indication of the security
interest created hereunder on the certificate of title issued with respect to
any item of Equipment under a statute of any jurisdiction requiring such
indication of such security interest as a condition of perfection thereof, all
of which have been made or done (other than with respect to the motor vehicles
of Grantor), as the case may be, no authorization, approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for either (i) the grant by Grantor of the security interest
granted hereby, (ii) the execution, delivery or performance of this Agreement
by Grantor, or (iii) the perfection of or the exercise by Secured Party of its
rights and remedies hereunder (except as may have been taken by or at the
direction of Grantor).
(f) Perfection. This Agreement, together with the filing
of financing statements containing the description of the Collateral with the
Secretary of State of the State of Illinois, and with the applicable county
offices, which will be made immediately following the Closing Date, creates a
valid, perfected and, except for Permitted Encumbrances, first priority
security interest in the Collateral (excluding the security interest in the
Deposit Accounts), securing the payment of the Secured Obligations; provided
that Secured Party retains physical possession of any Collateral, the
possession of which is required for perfection; further provided that
additional actions may be required with respect to the perfection of proceeds
of the Collateral; provided still further that the security interest granted to
Secured Party in the motor vehicles of Grantor will not be perfected.
497
(g) Other Information. All information heretofore, herein
or hereafter supplied to Secured Party by or on behalf of Grantor with respect
to the Collateral is accurate and complete in all material respects.
SECTION 5. FURTHER ASSURANCES.
(a) Grantor agrees that from time to time, at the expense
of Grantor, Grantor will promptly execute and deliver all further instruments
and documents, and take all further action, that Secured Party may reasonably
deem to be necessary or desirable, or that Secured Party may reasonably
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, Grantor will: (i) at the
request of Secured Party, ▇▇▇▇ conspicuously each item of chattel paper
included in the Accounts, each Related Contract and, at the request of Secured
Party, each of its records pertaining to the Collateral, with a legend, in form
and substance reasonably satisfactory to Secured Party, indicating that such
Collateral is subject to the security interest granted hereby, (ii) if any
Account shall be evidenced by a promissory note or other instrument (excluding
checks) or chattel paper, deliver and pledge to Secured Party hereunder such
note or instrument and, at the request of Secured Party, the original
counterpart of such chattel paper, duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
reasonably satisfactory to Secured Party, (iii) execute and file such financing
or continuation statements, or amendments thereto, and such other instruments
or notices, as Secured Party may reasonably deem to be necessary or desirable,
or as Secured Party may reasonably request, in order to perfect and preserve
the security interests granted or purported to be granted hereby, (iv) upon the
request of Secured Party, promptly after the acquisition by Grantor of any item
of Equipment which is covered by a certificate of title under a statute of any
jurisdiction under the law of which indication of a security interest on such
certificate is required as a condition of perfection thereof, execute and file
with the registrar of motor vehicles or other appropriate authority in such
jurisdiction an application or other document requesting the notation or other
indication of the security interest created hereunder on such certificate of
title, (v) upon the request of Secured Party, within 30 days after the end of
each calendar quarter, deliver to Agent copies of all such applications or
other documents filed during such calendar quarter and copies of all such
certificates of title issued during such calendar quarter indicating the
security interest created hereunder in the items of Equipment covered thereby,
(vi) at any reasonable time, upon request by Secured Party, exhibit the
Collateral to and allow inspection of the Collateral by Secured Party, or
persons designated by Secured Party, and (vii) at Secured Party's reasonable
request, appear in and defend any action or proceeding that may adversely
affect Grantor's title to or Secured Party's security interest in all or any
material part of the Collateral.
(b) Grantor hereby authorizes Secured Party to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Collateral without the signature of Grantor. Grantor
agrees that a carbon, photographic or other reproduction of this Agreement or
of a financing statement signed by Grantor shall be sufficient as a financing
statement and may be filed as a financing statement in any and all
jurisdictions.
498
(c) Grantor will furnish to Secured Party from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail. Without limiting the generality
of the foregoing, Grantor shall deliver a supplement to Schedule 1(a), Schedule
1(b) and Schedule 1(h) annexed hereto, which supplement shall set forth the
excluded equipment, parts and accessions described in Section 1(a) hereof,
excluded inventory described in Section 1(b) hereof or excluded fixtures and
products described in Section 1(h) hereof, as the case may be, to the extent,
and only to the extent, that Liens on such equipment, parts and accessions or
fixtures and products, as the case may be, are permitted under subsection
7.2A(iv) of the Credit Agreement, as soon as practicable but in no event later
than 5 days of the creation or incurrence of such Lien.
SECTION 6. CERTAIN COVENANTS OF GRANTOR. Grantor shall:
(a) not use or permit any Collateral to be used unlawfully
or in violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering any such
Collateral;
(b) notify Secured Party of any change in Grantor's name,
identity or corporate structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of
any change in Grantor's chief place of business, chief executive office or
residence or the office where Grantor keeps its records regarding any Accounts
and all originals of all chattel paper that evidence any Accounts;
(d) if Secured Party gives value to enable Grantor to
acquire rights in or the use of any Collateral, use such value for such
purposes; and
(e) pay promptly when due all material property and other
taxes, assessments and governmental charges or levies imposed upon, and all
material claims (including claims for labor, materials and supplies) against,
the Collateral, except to the extent the validity thereof is being contested in
good faith; provided that, notwithstanding any other provision in the Loan
Documents, Grantor shall in any event pay such taxes, assessments, charges,
levies or claims not later than five days prior to the date of any proposed
sale under any judgement, writ or warrant of attachment entered or filed
against Grantor or any of the Collateral as a result of the failure to make
such payment.
SECTION 7. SPECIAL COVENANTS WITH RESPECT TO EQUIPMENT AND
INVENTORY. Grantor shall:
(a) keep the Equipment and Inventory (other than Equipment
or Inventory in transit to Illinois) at the places therefor specified on
Schedule 4(b) annexed hereto or, upon 30 days' prior written notice to Secured
Party, at such other places in jurisdictions where all action that Secured
Party may reasonably deem to be necessary or desirable, or that Secured Party
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby, or to enable Secured Party to
exercise
499
and enforce its rights and remedies hereunder, with respect to such Equipment
and Inventory shall have been taken;
(b) cause the Equipment to be maintained and preserved in
the same condition, repair and working order as when new, ordinary wear and
tear excepted, and in accordance with Grantor's past practices and shall
forthwith, or, in the case of any loss or damage to any of the Equipment when
subsection (c) of Section 8 is not applicable, as quickly as practicable after
the occurrence thereof, make or cause to be made all repairs, replacements and
other improvements in connection therewith that are necessary or desirable to
such end. Grantor shall promptly furnish to Secured Party a statement
respecting any material loss or damage to any of the Equipment which involves
loss or damage exceeding $1,000,000 in the aggregate during any Fiscal Year for
Grantor;
(c) keep correct and accurate records of the Inventory,
itemizing and describing the kind, type and quantity of Inventory, Grantor's
cost therefor and (where applicable) the current list prices for the Inventory;
provided that nothing in this Section 7 with respect to Inventory being sold in
the ordinary course in Grantor's retail stores shall require Grantor to
maintain records in any manner different from those being maintained by Grantor
as of the date hereof;
(d) if any Inventory is in possession or control of any of
Grantor's agents or processors, upon the occurrence of an Event of Default
instruct such agent or processor to hold all such Inventory for the account of
Secured Party and subject to the instructions of Secured Party; and
(e) promptly upon the issuance and delivery to Grantor of
any Negotiable Document of Title, upon the request of Secured Party after the
occurrence of an Event of Default or Potential Event of Default, deliver such
Negotiable Document of Title to Secured Party.
SECTION 8. INSURANCE.
(a) Grantor shall, at its own expense, maintain insurance
with respect to the Equipment and Inventory in such amounts, against such
risks, in such form and with such insurers as shall be satisfactory to Secured
Party from time to time as provided in subsection 614 of the Credit Agreement.
Such insurance shall include, without limitation, property damage insurance and
liability insurance. Each policy for (i) liability insurance shall name
Secured Party as additional insured and (ii) property damage insurance shall be
subject to a loss payee endorsement, naming Secured Party, as additional
insured, as loss payee, subject in the case of any insurance referred to in
clause (ii) to normal and customary rights granted in the ordinary course of
business to (A) any landlord (with respect to the property covered by any
lease), (B) in the case of any equipment financing, to any equipment lessor or
lender (with respect to the equipment covered thereby), or (C) mortgagees of
any Real Property Asset. All proceeds of insurance that are (i) payable during
the existence of an Event of Default or (ii) payable at any time resulting in
aggregate insurance proceeds in excess of $1,000,000 (a "MAJOR LOSS"), shall be
payable to Secured Party. Grantor hereby authorizes and directs any affected
insurance company to
500
make payment of such proceeds directly to Secured Party. If Grantor receives
or shall be holding any proceeds of insurance during the existence of an Event
of Default or at any time resulting from a Major Loss, Grantor shall promptly
pay over such proceeds to Secured Party. Grantor shall not settle, adjust or
compromise any claims for loss, damage or destruction of its property or any
party thereof under any policy or policies of insurance as a result of a Major
Loss without the prior written consent of Secured Party to such settlement,
adjustment or compromise; and during the existence of an Event of Default
hereunder Secured party shall have the sole and exclusive right, and Grantor
hereby authorizes and empowers Secured Party to settle, adjust or compromise
any insurance claims, and any such action taken by Grantor without Secured
Party's written consent shall be null and void. Each policy shall (i) contain
an agreement by the insurer that any loss thereunder shall be payable to
Secured Party notwithstanding any action, inaction or breach of representation
or warranty by Grantor, (ii) provide that there shall be no recourse against
Secured Party for payment of premiums or other amounts with respect thereto,
and (iii) provide that at least 30 days' prior written notice of cancellation,
material amendment, reduction in scope or limits of coverage or of lapse shall
be given to Secured Party by the insurer. Grantor shall, if so requested by
Secured Party, deliver to Secured Party original or duplicate policies of such
insurance and, as often as Secured Party may reasonably request, a report of a
reputable insurance broker with respect to such insurance. Further, Grantor
shall, at the request of Secured Party, duly execute and deliver instruments of
assignment of such insurance policies to comply with the requirements of
Section 5(a) and cause the respective insurers to acknowledge notice of such
assignment.
(b) Reimbursement under any liability insurance maintained
by Grantor pursuant to this Section 8 may be paid directly to the Person who
shall have incurred liability covered by such insurance. In case of any loss
involving damage to Equipment or Inventory when subsection (c) of this Section
8 is not applicable, Grantor shall make or cause to be made the necessary
repairs to or replacements of such Equipment or Inventory, and any proceeds of
insurance maintained by Grantor pursuant to this Section 8 shall be paid to
Grantor as reimbursement for the costs of such repairs or replacements.
(c) So long as no Event of Default has occurred and is
then continuing, after deducting therefrom all costs and expenses (regardless
of the particular nature thereof and whether incurred with or without suit),
including reasonable attorneys' fees, incurred by Secured Party in connection
with such Major Loss or the collection of insurance proceeds, Secured Party
shall disburse the insurance proceeds held by it in connection with any loss,
damage or destruction of any Collateral to Grantor, in accordance with and
subject to such customary terms, conditions and procedures as Secured Party may
require, for the sole purpose of paying the cost of restoration or replacement
of such Collateral. If an Event of Default has occurred and is continuing,
Secured Party may elect, in its sole and absolute discretion, (i) to apply all
or any portion of such insurance proceeds to the restoration or replacement of
the Collateral, subject to conditions determined by Secured Party, (ii) to
disburse any such proceeds to Grantor for the purposes set forth in the
preceding sentence, (iii) to hold such insurance proceeds as additional
Collateral hereunder or (iv) to apply such insurance proceeds as specified in
Section 18.
501
SECTION 9. SPECIAL COVENANTS WITH RESPECT TO ACCOUNTS AND
RELATED CONTRACTS.
(a) Grantor shall keep its chief place of business and
chief executive office and the office where it keeps its records concerning the
Accounts and Related Contracts, and all originals of all chattel paper that
evidence Accounts, at the location therefor specified in Section 4 or, upon 10
days' prior written notice to Secured Party, at such other location in a
jurisdiction where all action that Secured Party may reasonably deem to be
necessary or desirable, or that Secured Party may reasonably request, in order
to perfect and protect any security interest granted or purported to be granted
hereby, or to enable Secured Party to exercise and enforce its rights and
remedies hereunder, with respect to such Accounts and Related Contracts shall
have been taken. Grantor will hold and preserve such records and chattel paper
and will permit representatives of Secured Party at any time during normal
business hours to inspect and make abstracts from such records and chattel
paper, and Grantor agrees to render to Secured Party, at Grantor's cost and
expense, such clerical and other assistance as may be reasonably requested with
regard thereto. Promptly upon the reasonable request of Secured Party, Grantor
shall deliver to Secured Party complete and correct copies of each Related
Contract.
(b) Except as otherwise provided in this subsection (c),
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to Grantor under the Accounts and Related Contracts. In connection
with such collections, Grantor may take (and, after the occurrence and during
the continuance of an Event of Default, at Secured Party's direction, shall
take) such action as Grantor or, after the occurrence and during the
continuance of an Event of Default, Secured Party may reasonably deem necessary
or advisable to enforce collection of amounts due or to become due under the
Accounts; provided, however, that Secured Party shall have the right at any
time, upon the occurrence and during the continuation of an Event of Default
and upon written notice to Grantor of its intention to do so, to notify the
account debtors or obligors under any Accounts of the assignment of such
Accounts to Secured Party and to direct such account debtors or obligors to
make payment of all amounts due or to become due to Grantor thereunder directly
to Secured Party, to notify each Person maintaining a lockbox or similar
arrangement to which account debtors or obligors under any Accounts have been
directed to make payment to remit all amounts representing collections on
checks and other payment items from time to time sent to or deposited in such
lockbox or other arrangement directly to Secured Party and, upon such
notification and at the expense of Grantor, to enforce collection of any such
Accounts and to adjust, settle or compromise the amount or payment thereof, in
the same manner and to the same extent as Grantor might have done. After
receipt by Grantor of the notice from Secured Party referred to in the proviso
to the preceding sentence, (i) all amounts and proceeds (including checks and
other instruments) received by Grantor in respect of the Accounts and Related
Contracts shall be received in trust for the benefit of Secured Party
hereunder, shall be segregated from other funds of Grantor and shall be
forthwith paid over or delivered to Secured Party in the same form as so
received (with any necessary endorsement) to be held as cash Collateral and
applied as provided by Section 18, and (ii) Grantor shall not adjust, settle or
compromise the amount or payment of any such Account, or release wholly or
partly any account debtor or obligor thereof, or allow any credit or discount
thereon.
502
SECTION 10. SPECIAL PROVISIONS WITH RESPECT TO THE ASSIGNED AGREEMENTS.
Grantor shall at its expense:
(i) perform and observe all material terms and
provisions of the Assigned Agreements to be performed or observed by
it, maintain the Assigned Agreements in full force and effect, enforce
the Assigned Agreements in accordance with their terms, except in each
case as any Assigned Agreement is amended, modified or terminated in
Grantor's business judgment as necessary or desirable or terminated in
accordance with its own terms (unless such amendment, modification or
termination is prohibited or otherwise restricted by subsection 7.15 of
the Credit Agreement), and take all such action to such end as may be
from time to time reasonably requested by Secured Party; and
(ii) from time to time (A) furnish to Secured Party
such information and reports regarding the Assigned Agreements as
Secured Party may reasonably request and (B) upon the reasonable
request of Secured Party make to each other party to any Assigned
Agreement such demands and requests for information and reports or for
action as Grantor is entitled to make under such Assigned Agreement.
Solely for purposes of this Section 10, the real property
leases as to which Grantor is a lessee thereunder shall not be deemed to be
"Assigned Agreements."
SECTION 11. DEPOSIT ACCOUNTS. Upon the occurrence and during
the continuation of an Event of Default, Secured Party may exercise dominion
and control over, and refuse to permit further withdrawals (whether of money,
securities, instruments or other property) from any deposit accounts maintained
with Secured Party constituting part of the Collateral.
SECTION 12. LICENSE OF PATENTS, TRADEMARKS, COPYRIGHTS, ETC.
Effective upon the occurrence of any Event of Default and upon written notice
from Secured Party, Grantor hereby assigns, transfers and conveys to Secured
Party, the nonexclusive right and license to use all trademarks, tradenames,
copyrights, patents or technical processes owned or used by Grantor that relate
to the Collateral and any other collateral granted by Grantor as security for
the Secured Obligations, together with any goodwill associated therewith
(excluding, however, any of the foregoing which is not material to Grantor
which is held or used by Grantor pursuant to any license that expressly
prohibits any such assignment, transfer or conveyance which is not material to
Grantor), all to the extent necessary to enable Secured Party to use, possess
and realize on the Collateral and to enable any successor or assign to enjoy
the benefits of the Collateral. This right and license shall inure to the
benefit of all successors, assigns and transferees of Secured Party and its
successors, assigns and transferees, whether by voluntary conveyance, operation
of law, assignment, transfer, foreclosure, deed in lieu of foreclosure or
otherwise. Such right and license is granted free of charge, without
requirement that any monetary payment whatsoever be made to Grantor.
503
SECTION 13. TRANSFERS AND OTHER LIENS. Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, except as permitted by the Credit
Agreement; or
(b) except for the security interest created by this
Agreement and Permitted Encumbrances, create or suffer to exist any Lien upon
or with respect to any of the Collateral to secure the indebtedness or other
obligations of any Person.
As long as no Event of Default has occurred and is then
continuing, in the event Grantor sells or transfers for value any portion of
the Collateral as permitted under subsection 7.7 of the Credit Agreement,
Secured Party shall release the Collateral that is the subject of such asset
sale to Grantor free and clear of the Lien under this Agreement concurrently
with the consummation of such asset sale, and Secured Party shall, upon the
reasonable request of and at the expense of Grantor, execute an amendment with
respect to the applicable financing statement filed under this Agreement to
effect such release.
SECTION 14. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Grantor
hereby irrevocably appoints Secured Party as Grantor's attorney-in-fact, with
full authority in the place and stead of Grantor and in the name of Grantor,
Secured Party or otherwise, from time to time in Secured Party's discretion to
take any action and to execute any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement, including
without limitation:
(a) to obtain and adjust insurance required to be
maintained by Grantor or paid to Secured Party pursuant to Section 8;
(b) to ask for, demand, collect, ▇▇▇ for, recover,
compound, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral;
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clauses (a) and (b)
above;
(d) to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or placed upon
or threatened against any of the Collateral, the legality or validity thereof
and the amounts necessary to discharge the same to be determined by Secured
Party in its sole discretion, any such payments made by Secured Party to become
obligations of Grantor to Secured Party, due and payable immediately without
demand;
504
(f) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with the Accounts and
other documents relating to the Collateral; and
(g) generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though Secured Party were the absolute owner thereof for all
purposes, and to do, at Secured Party's option and Grantor's expense, at any
time or from time to time, all acts and things that Secured Party reasonably
deems necessary to protect, preserve or realize upon the Collateral and Secured
Party's security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as Grantor might do.
Secured Party shall not exercise any powers granted pursuant to
this appointment as attorney-in-fact at any time (i) that Grantor is fully
performing its obligations hereunder and (ii) that no Event of Default has
occurred and is then continuing. This appointment as attorney-in-fact shall
terminate upon the termination of this Agreement pursuant to Section 20.
SECTION 15. SECURED PARTY MAY PERFORM. If Grantor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party
incurred in connection therewith shall be payable by Grantor under Section 19.
SECTION 16. STANDARD OF CARE. The powers conferred on Secured
Party hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the
exercise of reasonable care in the custody of any Collateral in its possession
and the accounting for moneys actually received by it hereunder, Secured Party
shall have no duty as to any Collateral or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights pertaining
to any Collateral. Secured Party shall be deemed to have exercised reasonable
care in the custody and preservation of Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which Secured
Party accords its own property.
SECTION 17. REMEDIES.
(a) If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the Uniform Commercial Code as in effect in any relevant jurisdiction
(the "CODE") (whether or not the Code applies to the affected Collateral), and
also may (a) require Grantor to, and Grantor hereby agrees that it will at its
expense and upon request of Secured Party forthwith, assemble all or part of
the Collateral as directed by Secured Party and make it available to Secured
Party at a place or places to be designated by Secured Party that is reasonably
convenient to both parties, (b) enter onto the property where any Collateral is
located and take possession thereof with or without judicial process, (c) prior
to the disposition of the Collateral, store, process, repair or recondition the
Collateral or otherwise prepare the Collateral for disposition in any manner to
the extent
505
Secured Party deems appropriate, (d) take possession of Grantor's premises or
place custodians in exclusive control thereof, remain on such premises and use
the same and any of Grantor's equipment for the purpose of completing any work
in process, taking any actions described in the preceding clause (c) and
collecting any Secured Obligation, and (e) without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any of Secured Party's offices or elsewhere, for cash, on
credit or for future delivery, at such time or times and at such price or
prices and upon such other terms as Secured Party may deem commercially
reasonable. Secured Party or any Lender may be the purchaser of any or all of
the Collateral at any such sale and Secured Party, as agent for and
representative of Lenders and Interest Rate Exchangers (but not any Lender,
Lenders, Interest Rate Exchanger or Interest Rate Exchangers in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing), shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Collateral
payable by Secured Party at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
Grantor, and Grantor hereby waives (to the extent permitted by applicable law)
all rights of redemption, stay and/or appraisal which it now has or may at any
time in the future have under any rule of law or statute now existing or
hereafter enacted. Grantor agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to Grantor of the time and place of
any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. Secured Party shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given.
Secured Party may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
Grantor hereby waives any claims against Secured Party arising by reason of the
fact that the price at which any Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a public
sale, even if Secured Party accepts the first offer received and does not offer
such Collateral to more than one offeree; provided that such sale was conducted
in a commercially reasonable manner. If the proceeds of any sale or other
disposition of the Collateral are insufficient to pay all the Secured
Obligations, Grantor shall be liable for the deficiency and the fees of any
attorneys employed by Secured Party to collect such deficiency.
(b) Notwithstanding anything in this Agreement to the
contrary, Secured Party shall exercise, or shall refrain from exercising, any
remedy provided for in Section 17(a) in accordance with the instructions of
Requisite Lenders, and the Interest Rate Exchangers, by their acceptance of the
benefits of this Agreement and other Loan Documents, hereby agree to be bound
by such instructions. The sole rights of the Interest Rate Exchangers under
this Agreement shall be to be secured by the Collateral and to receive the
payments provided for in Section 18.
(c) Notwithstanding anything in this Agreement to the
contrary, neither Secured Party nor any Lender may exercise any rights or
remedies contained herein, or any other rights or remedies Secured Party or any
Lender may have, in respect of the Collateral consisting of the Redemption
Account and the funds contained therein unless an Event of
506
Default described in subsection 8.6 or 8.7 of the Credit Agreement shall have
occurred and be continuing.
SECTION 18. APPLICATION OF PROCEEDS. Except as expressly
provided elsewhere in this Agreement, all proceeds received by Secured Party in
respect of any sale of, collection from, or other realization upon all or any
part of the Collateral may, in the discretion of Secured Party, be held by
Secured Party as Collateral for, and/or then, or at any other time thereafter,
applied in full or in part by Secured Party against, the Secured Obligations in
the following order of priority:
FIRST: To the payment of all reasonable costs and expenses of
such sale, collection or other realization, including reasonable
compensation to Secured Party and its agents and counsel, and all other
reasonable expenses, liabilities and advances made or incurred by
Secured Party in connection therewith, and all amounts for which
Secured Party is entitled to indemnification hereunder and all
reasonable advances made by Secured Party hereunder for the account of
Grantor, and to the payment of all reasonable costs and expenses paid
or incurred by Secured Party in connection with the exercise of any
right or remedy hereunder, all in accordance with Section 19;
SECOND: To the payment of all other Secured Obligations (for
the ratable benefit of the holders thereof) then due and payable; and
THIRD: To the payment to or upon the order of Grantor, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
SECTION 19. INDEMNITY AND EXPENSES.
(a) Grantor agrees to indemnify Secured Party, each Lender
and each Interest Rate Exchanger from and against any and all claims, losses
and liabilities in any way relating to, growing out of or resulting from this
Agreement and the transactions contemplated hereby (including, without
limitation, enforcement of this Agreement), except to the extent such claims,
losses or liabilities result solely from Secured Party's, such Lender's or such
Interest Rate Exchanger's gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
(b) Grantor shall pay to Secured Party upon demand the
amount of any and all reasonable costs and expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that Secured
Party may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the
failure by Grantor to perform or observe any of the provisions hereof.
SECTION 20. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the Collateral
and shall (a) remain
507
in full force and effect until (i) the indefeasible payment in full of the
Secured Obligations (other than Obligations which are contingent and
unliquidated and not due and owing on such date and which pursuant to the
provisions of the Credit Agreement, Interest Rate Agreements, Letters of Credit
or the Loan Documents survive the termination of the Credit Agreement, the
repayment of the Secured Obligations, the termination of the Commitments, the
expiration or cancellation of all Letters of Credit or the termination,
expiration or cancellation of all Interest Rate Agreements), the cancellation
or termination of the Commitments, the cancellation or expiration of all
outstanding Letters of Credit and the termination, expiration or cancellation
of all Interest Rate Agreements, or (ii) the release of the Liens on the
Collateral by Secured Party in writing in accordance with the terms of
subsection 6.11 of the Credit Agreement, (b) be binding upon Grantor, its
successors and assigns, and (c) inure, together with the rights and remedies of
Secured Party hereunder, to the benefit of Secured Party and its successors,
transferees and assigns. Without limiting the generality of the foregoing
clause (c), but subject to the provisions of subsection 11.1 of the Credit
Agreement, any Lender may assign or otherwise transfer any Loans held by it to
any other Person, and such other Person shall thereupon become vested with all
the benefits in respect thereof granted to Lenders herein or otherwise and any
Interest Rate Exchanger may assign or otherwise transfer any Interest Rate
Obligations owing to it to another Lender or an Affiliate of such Lender or
another Lender, and such other Lender or Affiliate shall thereupon become
vested with all the benefits in respect thereof granted to such Interest Rate
Exchanger herein or otherwise. Upon (i) the indefeasible payment in full of
all Secured Obligations (other than Obligations which are contingent and
unliquidated and not due and owing on such date and which pursuant to the
provisions of the Credit Agreement, Interest Rate Agreements, Letters of Credit
or the Loan Documents survive the termination of the Credit Agreement, the
repayment of the Secured Obligations, the termination of the Commitments, the
expiration or cancellation of all Letters of Credit or the termination,
expiration or cancellation of all Interest Rate Agreements), the cancellation
or termination of the Commitments, the cancellation or expiration of all
outstanding Letters of Credit and the termination, expiration or cancellation
of all Interest Rate Agreements, or (ii) the release of the Liens on the
Collateral by Secured Party in writing in accordance with the terms of
subsection 6.11 of the Credit Agreement, the security interest granted hereby
shall terminate and all rights to the Collateral shall revert to Grantor. Upon
any such termination Secured Party will, at Grantor's expense, execute and
deliver to Grantor such documents as Grantor shall reasonably request to
evidence such termination.
SECTION 21. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders and, by their acceptance of the benefits of this
Agreement and the other Loan Documents, by each Interest Rate Exchanger.
Secured Party shall be obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from exercising any rights,
and to take or refrain from taking any action (including, without limitation,
the release or substitution of Collateral), solely in accordance with this
Agreement and the Credit Agreement and upon the instructions of Requisite
Lenders, and the Interest Rate Exchangers, by their acceptance of the benefits
of this Agreement and other Loan Documents, hereby agree to be bound by such
instructions.
508
(b) Secured Party shall at all times be the same Person
that is Agent under the Credit Agreement. Written notice of resignation by
Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute notice of resignation as Secured Party under this Agreement; removal
of Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute removal as Secured Party under this Agreement; and appointment of a
successor Agent pursuant to subsection 10.5A of the Credit Agreement shall also
constitute appointment of a successor Secured Party under this Agreement. Upon
the acceptance of any appointment as Agent under subsection 10.5A of the Credit
Agreement by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly (i) transfer to such
successor Secured Party all sums, securities and other items of Collateral held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Secured Party, the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it under this Agreement while it was Secured Party
hereunder.
SECTION 22. AMENDMENTS; ETC. No amendment or waiver of any
provision of this Agreement, or consent to any departure by Grantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by Secured Party (or, in the case of an amendment hereto, by Grantor and
Secured Party), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given; provided
that any amendment or waiver which adversely affects the interests of the
Interest Rate Exchangers but does not result in a similar adverse effect on the
interests of Lenders shall only be effective with the consent of the holders of
a majority of the Interest Rate Obligations given the benefit of the security
granted hereunder.
SECTION 23. NOTICES. Any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telexed or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile or telex, or three Business Days
after depositing it in the United States mail with postage prepaid and properly
addressed. For the purposes hereof, the address of each party hereto shall be
as set forth under such party's name on the signature pages hereof or, as to
either party, such other address as shall be designated by such party in a
written notice delivered to the other party hereto.
SECTION 24. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any
509
such power, right or privilege preclude any other or further exercise thereof
or of any other power, right or privilege. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
SECTION 25. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 26. HEADINGS. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 27. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK AND EXCEPT AS SET FORTH IN THE IMMEDIATELY
FOLLOWING SENTENCE. NOTWITHSTANDING THE FOREGOING, ALL PROVISIONS OF THIS
AGREEMENT, TO THE EXTENT THEY RELATE TO DEPOSIT ACCOUNTS, SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. Unless otherwise defined
herein or in the Credit Agreement, terms used in Articles 8 and 9 of the
Uniform Commercial Code in the State of New York are used herein as therein
defined.
SECTION 28. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT GRANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
Grantor hereby agrees that service of all process in any such proceeding in any
such court may be made by registered or certified mail, return receipt
requested, to Grantor at its address provided in Section 23, such service being
hereby acknowledged by Grantor to be sufficient for personal jurisdiction in
any action against Grantor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit
510
the right of Secured Party to bring proceedings against Grantor in the courts
of any other jurisdiction.
SECTION 29. WAIVER OF JURY TRIAL. GRANTOR AND SECURED PARTY
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Grantor and Secured
Party each acknowledge that this waiver is a material inducement for Grantor
and Secured Party to enter into a business relationship, that Grantor and
Secured Party have already relied on this waiver in entering into this
Agreement and that each will continue to rely on this waiver in their related
future dealings. Grantor and Secured Party further warrant and represent that
each has reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the
event of litigation, this Agreement may be filed as a written consent to a
trial by the court.
SECTION 30. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
511
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
DOMINICK'S SUPERMARKETS, INC., as Grantor
By: _____________________________________
Title:
Notice Address: Dominick's Supermarkets, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and
Chief Operating Officer
BANKERS TRUST COMPANY, as Secured Party
By: _____________________________________
Title:
Notice Address: Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
512
SCHEDULE 1(a)
EXCLUDED EQUIPMENT
None.
513
SCHEDULE 1(b)
EXCLUDED INVENTORY
None.
514
SCHEDULE 1(d)
ASSIGNED AGREEMENTS
1. Stock Purchase Agreement
2. Tax Matters Agreement
3. Asset Transfer Agreement
4. Stock Exchange Agreement
5. Preferred Stock Redemption Agreement
Each of the agreements listed in this Schedule 1(d) shall have
the meanings assigned to such term in the Credit Agreement.
515
SCHEDULE 1(e)
DEPOSIT ACCOUNTS
Name of
Financial Institution Account Number Name of Account
--------------------- -------------- ---------------
The Northern Trust Company 57339
The Northern Trust Company 5674492 Dominick's Supermarkets,
Inc. Preferred Stock Repurchase
Account
516
SCHEDULE 1(h)
EXCLUDED FIXTURES
None.
517
SCHEDULE 4(b)
TO SECURITY AGREEMENT
Locations of Equipment: N/A
Locations of Inventory: N/A
518
SCHEDULE 4(c)
TO SECURITY AGREEMENT
Office Locations: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Other Names: DFF Holdings, Inc.
519
EXHIBIT XXIV
[FORM OF FINANCIAL CONDITION CERTIFICATE]
FINANCIAL CONDITION CERTIFICATE
This FINANCIAL CONDITION CERTIFICATE (this "CERTIFICATE") is
delivered by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, solely in his capacity as chief financial officer
of Dominick's Finer Foods, Inc., a Delaware corporation ("Company"), in
connection with that certain Credit Agreement dated as of November 1, 1996 (the
"CREDIT AGREEMENT") by and among Dominick's Supermarkets, Inc., a Delaware
corporation ("HOLDINGS"), Company, the financial institutions referred to
therein as Lenders ("LENDERS"), Bankers Trust Company, as administrative agent
("AGENT"), The Chase Manhattan Bank, as Syndication Agent, and Arrangers.
Capitalized terms used herein without definition have the same meanings as in
the Credit Agreement.
A. I am, and at all pertinent times mentioned herein have
been, the duly qualified and acting Chief Financial Officer of Holdings and its
Subsidiaries. In such capacity I have participated actively in the management
of their financial affairs and am familiar with their financial statements. I
have, together with other persons who are officers of Holdings and Company,
acted on behalf of Holdings and Company in connection with the negotiation of
the Credit Agreement, and I am familiar with the terms and conditions thereof.
B. I have carefully reviewed the contents of this
Certificate, and I have conferred with counsel for Holdings and its
Subsidiaries for the purpose of discussing the meaning of its contents.
C. In connection with preparing for the consummation of
the transactions and financings contemplated by the Credit Agreement (the
"PROPOSED TRANSACTIONS"), I have participated in the preparation of, and I have
reviewed, pro forma projections of net income and cash flows for Company and
its Subsidiaries for the seven consecutive twelve-month periods commencing on
the Closing Date (the "PROJECTED FINANCIAL STATEMENTS"). The Projected
Financial Statements, attached hereto as Exhibit A, give effect to the
consummation of the Proposed Transactions and assume that the debt obligations
of Company will be paid from the cash flow generated by the operations of
Company and its Subsidiaries and other cash resources. The Projected Financial
Statements were prepared on the basis of information available on October 1,
1996. I know of no facts that have occurred since such date that would lead me
to believe that the Projected Financial Statements are inaccurate in any
material respect. The Projected Financial Statements do not reflect (i) any
potential changes in interest rates from those assumed in the Projected
Financial Statements, (ii) any potential material, adverse changes in general
business conditions, or (iii) any potential changes in income tax laws.
D. I have also participated in the preparation of, and I
have reviewed, a pro forma summary balance sheet of Company and its
Subsidiaries (the "FAIR VALUE
520
SUMMARY BALANCE SHEET") as of November 1, 1996, the expected Closing Date,
giving effect to the Proposed Transactions. The Fair Value Summary Balance
Sheet was prepared on the basis of information available at August 3, 1996, as
adjusted to give effect to the Proposed Transactions. The Fair Value Summary
Balance Sheet is attached hereto as Exhibit B and has been prepared as
described in paragraphs F and G below and not in accordance with GAAP.
E. In connection with the preparation of the Projected
Financial Statements, I have made such investigations and inquiries as I have
deemed necessary and prudent therefor and, specifically, have relied on
historical information with respect to revenues, expenses and other relevant
items supplied by the supervisory personnel of Company and its Subsidiaries
directly responsible for the various operations involved. The assumptions upon
which the Projected Financial Statements are based are stated therein.
Although any assumptions and any projections by necessity involve uncertainties
and approximations, I believe, based on my discussions with other members of
management, that the assumptions on which the Projected Financial Statements
are based are reasonable. Based thereon, I believe that the projections for
Company and its Subsidiaries, taken as a whole, reflected in the Projected
Financial Statements provide reasonable estimations of future performance,
subject, as stated above, to the uncertainties and approximations inherent in
any projections.
F. The Fair Value Summary Balance Sheet has been prepared
in a manner which I believe reflects a reasonable estimate of the fair value of
the assets of Company and its Subsidiaries on a consolidated basis and the
probable liability on all of their debts, contingent or otherwise. For
purposes of this Certificate, I understand "fair value" of any assets to mean
the amount which may be realized within a reasonable time, either through
collection of such assets or through sale of such assets at the regular market
value thereof, conceiving of the latter as the amount which could be obtained
for the property in question within such period by a capable and diligent
businessman from an interested buyer who is willing to purchase under ordinary
selling conditions. The specific methodology used by management for valuing
Company and its Subsidiaries is set forth in paragraph G below.
G. For purposes of constructing the Fair Value Summary
Balance Sheet, I have utilized the following procedures:
With respect to the asset values reflected in the Fair Value
Summary Balance Sheet, I have included the value of current assets reported by
Company and each of its Subsidiaries in their August 3, 1996 financial
statements and I have relied on the capitalization of earnings methodology --
whereby earnings before interest, taxes, depreciation and amortization (EBITDA)
are capitalized at a specified EBITDA multiple -- to arrive at the estimated
fair value of the long-term assets of Company and its Subsidiaries. For these
purposes I have utilized an EBITDA multiplier of 7.0, which reflects a
reasonable estimate of the EBITDA multiplier reflected in acquisition prices
paid for total ownership positions in companies whose lines of business are
similar to those of Company and its Subsidiaries.
521
With respect to liabilities reflected in the Fair Value Summary
Balance Sheet, I have included the current liabilities and long-term
liabilities reported by Company and each of its Subsidiaries in their August 3,
1996 financial statements and debts to be incurred or assumed by Company and
each of its Subsidiaries under the Credit Agreement and the Proposed
Transactions. I have adjusted those long-term liabilities to reflect
prepayments of the Existing Credit Agreement made on the Closing Date. In
addition, with respect to contingent liabilities (such as litigation,
guaranties and pension plan liabilities), I have consulted with legal,
financial and other personnel of Company and each of its Subsidiaries and have
reflected as liabilities our best judgment as to the maximum exposure that can
reasonably be expected to result therefrom in light of all the facts and
circumstances existing at this time, recognizing that any such estimation is
inherently subject to uncertainties.
Based on the foregoing, I have reached the following
conclusions:
1. Company is not now, nor will the incurrence of the
Obligations under the Credit Agreement and the incurrence of the other
obligations contemplated by the Proposed Transactions render Company,
"insolvent" as defined in this paragraph 1. The recipients of this
Certificate and I have agreed that, in this context, "insolvent" means
that the present fair value of assets is less than the amount that will
be required to pay the probable liability on existing debts as they
become absolute and matured. We have also agreed that the term "debts"
includes any legal liability, whether matured or unmatured, liquidated
or unliquidated, absolute, fixed or contingent. My conclusion
expressed above is supported by the Fair Value Summary Balance Sheet.
Valuation of Company on the basis thereof would reflect the net value
of Company as $234.5 million representing the difference between asset
values of $1,127.2 million and liabilities of $892.7 million.
2. By the incurrence of the Obligations under the Credit
Agreement and the incurrence of the other obligations contemplated by
the Proposed Transactions, Company will not incur debts beyond its
ability to pay as such debts mature. I have based my conclusion in
part on the Projected Financial Statements, which demonstrate that
Company will have positive cash flow after paying all of its scheduled
anticipated indebtedness (including scheduled payments under the Credit
Agreement, the other obligations contemplated by the Proposed
Transactions and other permitted indebtedness). I have concluded that
the realization of current assets in the ordinary course of business
will be sufficient to pay recurring current debt and short-term and
long-term debt service as such debts mature, and that the cash flow
(including earnings plus non-cash charges to earnings) will be
sufficient to provide cash necessary to repay the Loans and other
Obligations under the Credit Agreement, the other obligations
contemplated by the Proposed Transactions and other long-term
indebtedness as such debt matures.
3. The incurrence of the Obligations under the Credit
Agreement and the incurrence of the other obligations contemplated by
the Proposed Transactions will not leave Company with property
remaining in its hands constituting "unreasonably small capital". In
reaching this conclusion, I understand that "unreasonably small
522
capital" depends upon the nature of the particular business or
businesses conducted or to be conducted, and I have reached my
conclusion based on the needs and anticipated needs for capital of the
businesses conducted or anticipated to be conducted by Company and its
Subsidiaries in light of the Projected Financial Statements and
available credit capacity.
4. To the best of my knowledge, Company has not executed
the Credit Agreement or any documents mentioned therein, or made any
transfer or incurred any obligations thereunder, with actual intent to
hinder, delay or defraud either present or future creditors.
I understand that Agent, Syndication Agent, Arrangers and
Lenders are relying on the truth and accuracy of the foregoing in connection
with the extension of credit pursuant to the Credit Agreement.
523
Solely in my capacity as chief financial officer of Company, I
represent the foregoing information to be, to the best of my knowledge and
belief, true and correct and execute this Certificate this 1st day of November,
1996.
DOMINICK'S FINER FOODS, INC.
By:____________________________
Name:__________________________
Title:_________________________
524
EXHIBIT A
PROJECTED FINANCIAL STATEMENTS
525
EXHIBIT B
FAIR VALUE SUMMARY BALANCE SHEET
526
SCHEDULE 2.1
LENDERS' COMMITMENTS AND PRO RATA SHARE
====================================================================================================================================
Pro Rata
Share (for
purposes of
clause (iv)
Pro Rata of the
Pro Rata Share definition
Share Pro Rata Share Revolving (RE: of
Term Loan (RE: Term Revolving Term (RE: Revolving Loan Revolving "Pro Rata Total
Lender Commitment Loans) Loan Commitment Term Loans) Commitment Loans) Share") Commitment
====================================================================================================================================
Bankers Trust
Company $12,692,307.72 12.6923077% $13,326,923.08 12.6923077% $15,230,769.20 12.6923077% 12.6923077% $41,250,000.00
------------------------------------------------------------------------------------------------------------------------------------
The Chase
Manhattan Bank 8,076,923.10 8.0769231 8,480,769.25 8.0769231 9,692,307.66 8.0769231 8.0769231 26,250,000.00
------------------------------------------------------------------------------------------------------------------------------------
Bank of America
Illinois 5,230,769.23 5.2307692 5,492,307.69 5.2307692 6,276,923.08 5.2307692 5.2307692 17,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
The First National
Bank of Chicago 5,230,769.23 5.2307692 5,492,307.69 5.2307692 6,276,923.08 5.2307692 5.2307692 17,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
Marine Midland
Bank 5,230,769.23 5.2307692 5,492,307.69 5.2307692 6,276,923.08 5.2307692 5.2307692 17,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
The Mitsubishi Trust
& Banking
Corporation 5,230,769.23 5.2307692 5,492,307.69 5.2307692 6,276,923.08 5.2307692 5.2307692 17,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
Union Bank of
California, N.A. 5,230,769.23 5.2307692 5,492,307.69 5.2307692 6,276,923.08 5.2307692 5.2307692 17,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
ABN AMRO Bank N.V.,
Chicago Branch 2,307,692.31 2.3076923 2,423,076.92 2.3076923 2,769,230.77 2.3076923 2.3076923 7,500,000.00
------------------------------------------------------------------------------------------------------------------------------------
LaSalle National
Bank 2,307,692.31 2.3076923 2,423,076.92 2.3076923 2,769,230.77 2.3076923 2.3076923 7,500,000.00
------------------------------------------------------------------------------------------------------------------------------------
Banque Paribas 4,615,384.62 4.6153846 4,846,153.84 4.6153846 5,538,461.54 4.6153846 4.6153846 15,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
Compagnie Financiere
De CIC Et De
L'Union
Europeenne 4,615,384.62 4.6153846 4,846,153.84 4.6153846 5,538,461.54 4.6153846 4.6153846 15,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
The Northern Trust
Company 4,615,384.62 4.6153846 4,846,153.84 4.6153846 5,538,461.54 4.6153846 4.6153846 15,000,000.00
------------------------------------------------------------------------------------------------------------------------------------
527
====================================================================================================================================
Pro Rata
Share (for
purposes of
clause (iv)
Pro Rata of the
Pro Rata Share definition
Share Pro Rata Share Revolving (RE: of
Term Loan (RE: Term Revolving Term (RE: Revolving Loan Revolving "Pro Rata Total
Lender Commitment Loans) Loan Commitment Term Loans) Commitment Loans) Share") Commitment
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇ 3,846,153.84 3.8461538 4,038,461.54 3.8461538 4,615,384.62 3.8461539 3.8461538 12,500,000.00
------------------------------------------------------------------------------------------------------------------------------------
Caisse National
de Credit
Agricole 3,846,153.84 3.8461538 4,038,461.54 3.8461538 4,615,384.62 3.8461539 3.8461538 12,500,000.00
------------------------------------------------------------------------------------------------------------------------------------
Credit Lyonnais
Chicago Branch 3,846,153.84 3.8461538 4,038,461.54 3.8461538 4,615,384.62 3.8461539 3.8461538 12,500,000.00
------------------------------------------------------------------------------------------------------------------------------------
The Dai-Ichi Kangyo
Bank, Ltd. 3,846,153.84 3.8461538 4,038,461.54 3.8461538 4,615,384.62 3.8461539 3.8461538 12,500,000.00
------------------------------------------------------------------------------------------------------------------------------------
The Fuji Bank,
Limited
Chicago Branch 3,846,153.84 3.8461538 4,038,461.54 3.8461538 4,615,384.62 3.8461539 3.8461538 12,500,000.00
-----------------------------------------------------------------------------------------------------------------------------------
Mitsui Leasing
(U.S.A.) Inc. 3,846,153.84 3.8461538 4,038,461.54 3.8461538 4,615,384.62 3.8461539 3.8461538 12,500,000.00
------------------------------------------------------------------------------------------------------------------------------------
The Royal Bank of
Scotland plc 3,846,153.84 3.8461538 4,038,461.54 3.8461538 4,615,384.62 3.8461539 3.8461538 12,500,000.00
------------------------------------------------------------------------------------------------------------------------------------
The Sakura Bank,
Limited 3,846,153.84 3.8461538 4,038,461.54 3.8461538 4,615,384.62 3.8461539 3.8461538 12,500,000.00
------------------------------------------------------------------------------------------------------------------------------------
The Sumitomo Trust
& Banking Co., 3,846,153.84 3.8461538 4,038,461.54 3.8461538 4,615,384.62 3.8461539 3.8461538 12,500,000.00
Ltd., New York
Branch
------------------------------------------------------------------------------------------------------------------------------------
$100,000,000.00 100.0000000% $105,000,000.00 100.0000000% $120,000,000.00 100.0000000% 100.0000000% $325,000,000.00
====================================================================================================================================
528
SCHEDULE 4.1B TO CREDIT AGREEMENT
REAL PROPERTY ASSETS
The "MORTGAGED PROPERTIES" are all of the properties listed in this SCHEDULE
4.1B, except (i) those properties designated as "NOT TO BE MORTGAGED ON
CLOSING DATE"; and (ii) those designated as "Leased Closed Store Locations"
(Part Three). Company represents that title to all of the Real Property Assets
is held by Dominick's, except as otherwise indicated below.
PART ONE: OWNED REAL PROPERTY
STAND ALONE RETAIL STORE LOCATIONS:
DOMINICK'S LOCATIONS:
▇▇▇▇ County:
#12 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Title Ins. = $4,350,000
#93 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Title Ins. = $4,250,000
#95 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Title Ins. = $3,250,000
#123 4014 ▇. ▇▇▇▇▇▇▇ Title held by LaSalle National
4000 ▇. ▇▇▇▇▇▇▇▇ Trust, N.A. ("LASALLE"), as Trustee
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ under Trust Agreement dated 3/6/86
Title Ins. = $4,400,000 (Trust #110897) (Beneficial interest
owned by Dominick's)
#124 ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ Title held by LaSalle as Trustee
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ under Trust Agreement dated 2/15/85
Title Ins. = $4,010,000 (Trust #109453) (Beneficial interest
owned by Dominick's)
529
#128 6618, 6666, 6740 N. Ridge
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Title Ins. = $5,000,000
OMNI SUPERSTORES LOCATION:
▇▇▇▇ County:
#315 ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(outlot not included)
Title Ins. = $8,000,000
SHOPPING CENTERS: Except for property #43, the following shopping centers
include Dominick's store locations. Dominick's owns property #43, but no
longer operates a store at that location.
▇▇▇▇ County:
-----------
#32 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Title Ins. = $7,000,000
#▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Title Ins. = $4,550,000
#73 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ SUBJECT TO SENIOR LIEN (CONSENT OBTAINED)
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Title Ins. = $5,400,000
#92 ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ Title held by LaSalle as Trustee under
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Trust Agreement dated 6/3/82 (Trust
Title Ins. = $5,500,000 #104987) (Beneficial interest owned by
Hazelcrest) (Leased to Dominick's)
#98 5829 ▇. ▇▇▇▇▇▇ Title held by LaSalle as Trustee under
(▇▇▇▇▇▇ & Central) Trust Agreement dated 2/15/83 (Trust
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ #105958) (Beneficial interest owned by
Title Ins. = $6,500,000 Hazelcrest) (Leased to Dominick's)
530
#113 ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ Title held by LaSalle as Trustee under
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Trust Agreement dated 2/1/85 (Trust
Title Ins. = $9,000,000 #108982) (Beneficial Interest owned by
Dominick's)
#114 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Title held by LaSalle as Trustee under
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Trust Agreement dated 12/5/84 (Trust
Title Ins. = $5,670,000 #109248) (Beneficial interest owned by
Dominick's)
SUBJECT TO SENIOR LIEN (CONSENT OBTAINED)
HEADQUARTERS, WAREHOUSE AND PLANT LOCATIONS:
-------------------------------------------
▇▇▇▇ County:
-----------
#333 ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Title Ins. = $4,000,000
#851 7445 Franklin NOT TO BE MORTGAGED ON
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ CLOSING DATE
#968 ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Title Ins. = $6,500,000
#555 ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Title Ins. = $21,400,000
#▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Title Ins. = $6,100,000
#625 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Title Ins. = $900,000
▇▇▇ County:
----------
#606 620 Lincoln owned by Dominick's Finer Foods, Inc.
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ of Illinois
Title Ins. = $600,000
531
OUTLOT
Next to
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ NOT TO BE MORTGAGED ON
(87th and Kedzie) CLOSING DATE
Chicago, IL
(adjacent to OMNI SUPERSTORES #314)
532
PART TWO: LEASED REAL PROPERTY
DOMINICK'S LOCATIONS:
▇▇▇▇ County:
-----------
#2 ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#8 ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
#9 ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#14 ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#18 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#21 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
#28 ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#33 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#40 ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ LESSOR'S CONSENT REQUIRED FOR MORTGAGE
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ NOT TO BE MORTGAGED ON CLOSING DATE
#44 No. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#51 ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#52 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
533
#53 ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#56 ▇▇▇▇-▇▇ ▇▇▇▇▇▇ ▇▇▇▇ LESSOR'S CONSENT OBTAINED FOR MORTGAGE
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#62 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ and
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#68 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#71 ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#72 ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ LESSOR'S CONSENT REQUIRED FOR MORTGAGE
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ NOT TO BE MORTGAGED ON CLOSING DATE
#74 ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#75 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ LESSOR'S CONSENT REQUESTED FOR MORTGAGE
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ NOT TO BE MORTGAGED ON CLOSING DATE
#76 3300 W. Belmont LESSOR'S CONSENT OBTAINED FOR MORTGAGE
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#80 ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#81 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#83 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#84 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
534
#86 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#89 ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#90 ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#91 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ LESSOR'S CONSENT REQUIRED FOR MORTGAGE
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ NOT TO BE MORTGAGED ON CLOSING DATE
#92 ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ Leased from ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#98 5829 ▇. ▇▇▇▇▇▇ Leased from Hazelcrest Land Trust
(▇▇▇▇▇▇ & Central)
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#100 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#101 ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#102 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
#105 ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
#107 ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#111 ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#119 ▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#122 ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
535
#130 ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#131 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#132 ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#133 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#135 ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#137 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#143 ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
DuPage County:
-------------
#▇▇ ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#54 ▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#67 17 W. ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#78 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ LESSOR'S CONSENT REQUIRED FOR MORTGAGE
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ NOT TO BE MORTGAGED ON CLOSING DATE
#88 ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
536
#94 ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#115 ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#116 ▇▇▇ ▇. ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#121 ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#126 ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#134 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#141 ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ County:
--------------
#59 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Will County:
-----------
#70 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#103 ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#142 ▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇:
-----------
#77 ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LESSOR'S CONSENT OBTAINED FOR MORTGAGE
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#109 ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#112 ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#129 ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#140 ▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇:
-----------
#104 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#110 ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#146 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ County:
--------------
#106 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
OMNI SUPERSTORES LOCATIONS:
--------------------------
▇▇▇▇ County:
-----------
#301 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
#303 ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
538
#304 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#306 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#308 ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
#310 ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#311 ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#312 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#314 ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
DuPage County:
-------------
#302 ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#309 ▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇:
--------------
#305 ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇:
-----------
#307 ▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇:
-----------
#▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
539
#318 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇:
--------------------
#313 ▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Title Insurance: $500,000
OTHER
-----
▇▇▇▇ County
-----------
Parking Lot at Parking lot lease (treated as
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ a "closed store lease" for
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ purposes of subsections 4.1B
(location #969) and 6.10 of the Credit Agreement)
NOT TO BE MORTGAGED ON THE CLOSING DATE
540
PART THREE: LEASED CLOSED STORE LOCATIONS
#5 ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#7 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#22 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#27 ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#35 ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#▇▇ ▇▇ ▇. ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#58 ▇▇▇▇-▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#108 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
#117 ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#404* ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
#405* ▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
#949 ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇
#▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇
541
#962 ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
#963 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇
*Save-It Discount Foods Corporation subleases a portion of location nos. 404
and 405 from Dominick's, but has sub-subleased such subleased space to a third
party.
542
SCHEDULE 5.1
POST-CLOSING SUBSIDIARIES OF HOLDINGS
Shares Juris.
Authorized/ of
Entity Ownership Outstanding Incorp.
------ --------- ----------- -------
Dominick's Supermarkets, N/A Before giving effect Delaware
Inc. (formerly known as to transactions:
DFF Holdings, Inc.)
Common:
50,000,000/7,024,654
Class B Common:
10,000,000/8,434,381
15% Preferred:
40,000/40,000
Other Preferred:
3,960,000/0
After giving effect to
transactions:
Common:
50,000,000/13,404,009
Class B Common:
10,000,000/7,955,026
15% Preferred: 0/0
Other Preferred:
4,000,000/0
Dominick's Finer 100% by Dominick's Supermarkets, Inc. Common: 1,000/1,000 Delaware
Foods, Inc.
*Blackhawk 100% by Dominick's Finer Foods, Inc. Common: 10,000/10,000 Delaware
Developments, Inc.
*Blackhawk 100% by Dominick's Finer Foods, Inc. Common: 1,000/1,000 Delaware
Properties,Inc.
▇▇▇▇ Hazelcrest, 100% by Dominick's Finer Foods, Inc. Common: 10,000/10,000 Delaware
Inc.
*Kohl's of 100% by Dominick's Finer Foods, Inc. Common: 1,000/1,000 Illinois
Bloomingdale, Inc.
DFF Equipment 100% by Dominick's Finer Foods, Inc. Common: 1,000/1,000 Illinois
Leasing Company
(formerly known as
Jerry's Deep
Discount Centers,
Inc.
Dominick's Finer 100% by Dominick's Finer Foods, Inc. Common: 1,000/15 Illinois
Foods, Inc. of
Illinois
*Save-It 100% by Dominick's Finer Foods, Inc. Common: 1,000/1,000 Illinois
Discount Foods of Illinois
Corporation
* Indicates inactive Subsidiary.
543
SCHEDULE 5.2C
GOVERNMENTAL CONSENTS
1. Notices required under liquor licenses.
2. Disclosure statements pursuant to the Illinois Responsible Property
Transfer Act of 1988 for certain of the Mortgaged Properties.
544
SCHEDULE 5.3
CERTAIN ACCOUNTING MATTERS
Any capital lease entered into after September 28, 1996, all of which are
listed on Schedule 7.1.
545
SCHEDULE 5.13
ENVIRONMENTAL MATTERS
1.
ADDRESS CONTAMINATION AND PROPOSED REMEDIATION
(a) 555 Warehouse o BETX and PNAs contamination was detected on the site soil and groundwater.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇., The approximate extent of contamination has been established. The project site
Northlake, IL has been entered into the Illinois Pre-Notice (Voluntary) Site Cleanup Program.
PROPOSED SITE REMEDIATION includes:
o Site Soil and Groundwater: installation of a cutoff system and excavation of
contaminated solids for off-site disposal as special waste or treated on site by
a low temperature thermal desorption unit then backfilled with treated soils.
(b) Donna's Meat Garage o Petroleum product contamination was detected in most of the Garage area. Will
7445 Franklin submit a remediation work plan to IEPA for approval per the requirements of UST
Forest Park, IL reimbursement program.
PROPOSED REMEDIATION includes:
o Conduct an additional site investigation to collect site specific data for the
development of Tier 2 soil cleanup objectives. Conduct site remediation by
excavation for off-site disposal of LTTD treatment for the portion of soil
contamination caused by the former USTs at the project site. A free product
recovery system will be installed to recover diesel fuel free product. Company
may negotiate with Farmington Foods, Inc. to conduct the diesel fuel free
product remediation and/or share remediation costs
(c) DFF Store #12 o Chlorinated hydrocarbons were detected in two of the monitoring ▇▇▇▇▇ at
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ concentrations exceeding the Class II groundwater standards. One soil sample
Chicago, IL collected above the water level also detected elevated level of chlorinated
hydrocarbons. An additional groundwater investigation which consists of
installing three monitoring ▇▇▇▇▇ and conducting additional groundwater
monitoring, will be implemented to assess the possible source of the groundwater
contamination. For budgetary purposes, localized pump-and-treat method or air
sparging method may be used to remediate the groundwater contamination.
546
(d) DAFF Store #32 o Elevated PCE contamination was detected in the site soil and perched
1900 S. Cumberland groundwater at the northwest corner of the project site including the areas
Park Ridge, IL underneath the dry cleaners, former Hallmark store, part of the current Walgreen
store, and former print shop. The approximate vertical extent of contamination
has been established. The project site has been entered into the Illinois Pre-
Notice (Voluntary) Site Cleanup Program.
PROPOSED REMEDIATION includes:
o In-situ low temperature thermal desorption
o A combined SVE and LTTD remediation
o In-situ hot air/steam stripping.
Dames & ▇▇▇▇▇ is in the process of evaluating various site remediation
alternatives.
(f) DFF Store #98 o BETX contamination was detected within the site soil to an approximate depth
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇. of 8 to 10 feet. The approximate extent of contamination has been established.
Chicago, IL The project site has been entered into the Illinois Pre-Notice (Voluntary) Site
Cleanup Program.
PROPOSED REMEDIATION includes:
o Excavation for off-site disposal as special waste.
(g) DFF Store #114 o Low level of PCE was detected in one soil sample, however, PCE was not
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. encountered in the groundwater.
Calumet City, IL
PROPOSED ADDITIONAL ACTION includes:
o An additional groundwater investigation was recommended by ▇▇▇▇▇▇▇▇▇ Deerie to
verify that there is no extensive PCE contamination. The additional groundwater
investigation will include advancing two geoprobe borings for soil and
groundwater sampling and sampling the existing monitoring well for TCL-VOCs
analysis.
(h) DFF Store #124 o Elevated BETX contamination was detected in the site soils at the northwest
▇▇▇ ▇. ▇▇▇▇ ▇▇. corner of the parking lot. Groundwater was not impacted. The site has been
Oak Park, IL entered into the Illinois Pre-Notice (Voluntary) Site Cleanup Program.
PROPOSED REMEDIATION includes:
o Excavation for off-site disposal as special waste.
547
(i) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ #▇▇ o Elevated concentrations of PCE, TCE, cis-1, 2-DCE and vinyl chloride were
30th & Halsted detected in the site soils in a narrow area between the dry cleaners and
Chicago, IL southwest property line. Groundwater was not encountered during drilling. Due
to the concern for interrupting the operation of the shopping center and the
existence of difficult site conditions for site remediation, Dames & ▇▇▇▇▇
recommends a limited risk assessment be conducted to provide supporting
information for requesting No Further Action from IEPA. If site remediation is
required, the chlorinated hydrocarbon contamination may be remediated by soil
vapor extraction. However, it would be difficult to achieve the cleanup
objectives in the silt layer.
PROPOSED ACTION includes:
o Conduct a risk assessment to provide supporting information for requesting No
Further Action from IEPA.
(j) Donna's Distribution o Petroleum soil contamination was identified near an old dispenser. A limited
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ site soil remediation will be conducted by excavation for off-site disposal as
Chicago, IL special waste. The project site has been entered into the Illinois Pre-Notice
(Voluntary) Site Cleanup Program.
There is an existing underground storage tank on site and Company intends to
close this UST.
(k) Leasehold Stores #'s 2, 16, 22, With respect to Section 5.13(x) hereof only, evidence of underground storage
70 and 72 tanks formerly used at the premises, believed to be for petroleum products, has
been found.
2. Consent agreement and consent order resolving the Administrative
Complaint of U.S. Environmental Protection Agency, Docket No. EPCRA
007-95, against Dominick's Finer Foods, Inc. alleging violations of
various environmental laws, arising out of a release of anhydrous
ammonia1.
548
SCHEDULE 5.6
LITIGATION
Class action lawsuit alleging gender and racial discrimination filed on March
16, 1995 in the United States District court for the Northern District of
Illinois against Dominick's Finer Foods, Inc.
549
SCHEDULE 5.11
CERTAIN EMPLOYEE BENEFIT PLANS
Insurance premiums for approximately 12 former employees are paid pursuant to
Dominick's 1991 Early Retirement Plan.
550
SCHEDULE 5.12
BROKER'S OR FINDER'S FEES
None.
551
SCHEDULE 5.17
INTELLECTUAL PROPERTY MATTERS
1. "Intellectual Property as of the Closing Date":
a.
U.S. Registered Trademarks Trademark No. Date
-------------------------- ------------- ----
Dominick's 1,037,040 03/30/76
Dominick's Finer Foods 1,048,722 09/21/76
Dominick's 1,366,046 10/15/85
Dominick's (Color) 1,545,838 06/27/89
Dominick's (Black and White) 1,543,099 06/06/89
Dominick's and design 1,735,977 12/01/92
Dominick's Neptune's Cove 1,452,601 08/11/87
Dominick's Neptune's Cove and Design 1,451,443 08/4/87
Illinois Registered Trademarks Trademark No. Date
------------------------------ ------------- ----
Dominick's 35492 11/20/61
OMNI Superstore (Misc.) 63843 02/02/89
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (▇▇▇ & ▇▇▇) ▇▇▇▇▇ 02/02/89
Dominick's Fresh Store (Ads & Business) 74194 03/14/94
Dominick's Fresh Store (Misc.) 74195 03/14/94
b. Pursuant to Section 1.4.1 of the Settlement Agreement dated as
of October 2, 1995 between Dominick's Finer Foods, Inc.
("Dominick's"), Supermarket Training Systems ("STS"),
Strategic Systems Associates, Inc., ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Dominick's has been irrevocably granted a
fully paid up perpetual right and license to use, free of any
additional charge, certain computer based training programs
developed pursuant to that Custom Computer Program Development
Agreement dated as of July 13, 1993, between Dominick's and
STS.
c. Licenses for the following software:
Computer Associates Raps - Contract #045147-001
Computer Associates Sort - Contract #045149-001
Computer Associates UFO - Contract #304027-001
Software 2000 Payroll
552
SCHEDULE 5.17 (CONT'D)
IBM ACF/NCP V5 - S/N 00EG735
IBM Assembler H V2R1 - S/N 00BP656 & S/N 00DF065
IBM VM/ESA - S/N 0038979
IBM VTAM V3 - S/N 0030146
IBM DOS/VS RPGII - S/N 0022625
IBM Partial Function - S/N 0095304
IBM 4680 Supermarket Application
IBM 4680 Operating Systems Version 2.0
IBM 4690 OS/V1 Operating System
IBM DOS Version 5.0
IBM 5654 VM/ESA Version 2 - 030 0019167
IBM 5665 DBASE 2 V.2 - DB2 00EB529
IBM 5665 MVS/DFP - XA3 00EN202
IBM 5665 DFDSS - 327 00EG049
IBM 5665 GDDM/MVS - 356 00EG048
IBM 5665 DITTO - 370 00EB526
IBM 5665 ISPF/PDF V3 (MVS) - 402 00EN710
IBM 5668 ACF/NCP 3745 & 3720 V5 - 738 00EG735
IBM 5668 SMP/E for OS/VS2 (MVS) & OS/VS1 - 949 00DF063
IBM 5668 VS COBOL II COMP/LIB/DBUG V1 - 958 00DF064
IBM 5668 Network Routing Facility - 963 00EJ785
IBM 5685 Network DM for MVS - 016 0058276
IBM 5685 TSO/E V2 - 025 0013746
IBM 5685 RMF V.4 - 029 0013747
IBM 5685 ISPF V3 for MVS - 054 0013940
IBM 5685 CICS/ESA V3 - 083 0030148
IBM 5685 Netview V2 MVS/ESA - 111 0030147
IBM 5695 CICSVR MVS/ESA V2 - 010 00A08DO
IBM 5695 JES2 MVS/ESA V4.3 - 047 00A02LW
IBM 5706 QMF/MVS V3 - 254 00CO837
IBM 5735 SPPS II DOX/VS OS/VS - D16 0003992
IBM 5735 Advanced Data Comm/Stores - XR2 0003708
IBM 5735 Emulation Program - XXB 0088826
IBM 5735 ACF/NCP Version 2 - XX9 0077612
IBM 5735 OS/VS Sort/Merge - ▇▇▇ ▇▇▇▇▇▇▇
IBM 5740 Resource Access Control Fac - XXH 00BY532
Telxon DFF Custom Order Entry Application
MSI Order Entry Application
▇▇▇▇ SCO UNIX
Renlar Pharmacy License
Norand DSD Application
553
SCHEDULE 5.17 (CONT'D)
Redbrick - License #1996-001869
Information Advantage
Platinum - License #96031021
2. "Material claims":
None.
554
SCHEDULE 5.18
AMENDMENTS TO SPECIFIED EXISTING DOCUMENTS
1. Stock Purchase Agreement: amended as of March 21, 1995; and
2. Yucaipa Warrant: amended as of November 1, 1996.
555
SCHEDULE 5.20
CERTAIN MATTERS RELATING TO PERMITS
1. Store #83 is subject to a moratorium on the issuance of new liquor licenses
and currently holds no such license.
2. Various properties may conflict with the Americans with Disabilities Act.
Neither of items #1 and #2 above, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
3. Various properties may conflict with certain environmental laws, as
disclosed on Schedule 5.13.
556
SCHEDULE 6.13
EXCLUDED REAL PROPERTY ASSETS
1. Store #76
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. Store #▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
3. Store #90
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
4. Store #103
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇
5. Store #105
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
6. Store #106
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇
7. Store #111
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
8. Store #318
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
557
SCHEDULE 7.1
CERTAIN EXISTING INDEBTEDNESS
PART I
Promissory Note, dated as of December 31, 1984, by LaSalle National Bank as
Trustee under that certain Trust Agreement, dated as of December 5,
1984, and known as Trust No. 109248, and Dominick's, payable to the
order of Corus Bank, f/k/a River Forest State Bank and Trust Company,
as Trustee, in the original principal amount of $5.0 million, with an
outstanding principal balance as of August 3, 1996 of $2,181,035.66.
1. Promissory Note, dated April 24, 1978, by Dominick's Finer Foods, Inc.
of Illinois (subsequently assumed by Dominick's), payable to the order
of ▇.▇. ▇▇▇▇▇ & Co., in the original principal amount of $2.7 million
(such indebtedness was assigned by ▇.▇. ▇▇▇▇▇ & Co. to Kansas City
Life Insurance Company by that certain Assignment dated April 24, 1978
and recorded May 24, 1978 as Document No. 24461044), with an
outstanding principal balance as of August 3, 1996 of $1,597,973.16.
2. Financing Agreement, dated June 1, 1991, between Dominick's and the
City of Northlake, Illinois ("Northlake"), evidencing a loan from
Northlake to Dominick's in the original principal amount of
$4.6 million, such loan being made from the proceeds of the issuance
and sale of Northlake's Economic Development Revenue Bonds, Series 1991
(Dominick's Finer Foods, Inc. Project), with an outstanding principal
balance as of August 3, 1996 of $2,400,000.00.
3. Principal Note (Unsecured), dated June 22, 1987, by Dominick's to
Taxman Corporation in the original principal amount of $61,445.67,
with an outstanding principal balance as of August 3, 1996 of
$9,090.92.
4. Note payable to ▇▇▇▇▇ ▇▇▇▇▇ (former stockholder) for $106,981.06
(payable in the amount of $53,390.52 on April 17, 1997, and $53,590.54
on April 17, 1998.)
558
SCHEDULE 7.1 (CONT'D)
5. Capital Leases of the following properties:
a.
STORE NUMBER
2 74 103 129 306
5 75 104 130 307
8 76 105 131 310
9 77 106 132 311
14 78 107 133 312
44 80 108 134 314
48 81 109 136 316
51 83 110 137
52 86 111 139
88 112 301
67 90 115 302
68 100 121 303
71 101 122 304
72 102 126 305
b. Bensenville - print shop
c. Capital Leases of the following automobiles:
YEAR-MAKE-MODEL VIN
--------------- ---
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Aerostar ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Aerostar ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇-▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇-▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
559
YEAR-MAKE-MODEL VIN
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96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-Taurus ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-E350 Econ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-E350 Econ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-E350 Econ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-E350 Econ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
96-Ford-E350 Econ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇-▇▇▇▇-▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
d. Copiers located at the Company's office facilities
e. Store equipment leases at the following stores: 8, 9, 62, 70,
74, 78, 102, 104, 107, 109, 112, 122, 135, 140, 141, 143 and
144.
f. Trucks & tractors
The foregoing are all existing Capital Leases of the Loan Parties as
of the Closing Date.
PART II
Note dated August 31, 1978, by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
payable to the order of The Federal Land Bank of St. Louis, in the original
principal amount of $1,325,000, which Note has been assumed by ▇▇▇▇
Properties, Inc.
560
SCHEDULE 7.2
CERTAIN EXISTING LIENS
1. Mortgage, dated as of December 31, 1984, executed by LaSalle National
Bank as Trustee under that certain Trust Agreement, dated as of
December 5, 1984, and known as Trust No. 109248, and Dominick's in
favor of Corus Bank, f/k/a River Forest State Bank and Trust Company,
as Trustee, securing the Promissory Note listed as item 1 of Schedule
7.1. [1968 ▇▇▇▇▇▇ Blvd., Calumet City, Illinois]
2. Mortgage, dated as of April 24, 1978, executed by Dominick's Finer
Foods, Inc. of Illinois (subsequently assumed by Dominick's) in favor
of ▇.▇. ▇▇▇▇▇ & Co., a Delaware corporation, securing the Promissory
Note listed as item 2 of Schedule 7.1 (such indebtedness was assigned
by ▇.▇. ▇▇▇▇▇ & Co. to Kansas City Life Insurance Company by that
certain Assignment dated April 24, 1978 and recorded May 24, 1978 as
Document No. 24461044). [7050 South Pulaski Road, Chicago, Illinois]
3. Mortgage and Loan Agreement, dated as of December 1, 1981, executed by
Northlake I, an Illinois limited partnership (subsequently assumed by
Dominick's) in favor of the City of Northlake, Illinois. [505
Railroad Avenue, Northlake, Illinois]
4. See schedule of liens attached hereto as Exhibit A.
561
SCHEDULE 7.3
CERTAIN EXISTING INVESTMENTS
1. Dominick's is a limited partner in Perry Associates. The general partner
is ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, and the remaining limited partners are ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (who holds both a general
and limited partnership interest). Dominick's holds a 20% interest in
Perry Associates. The partnership was formed to acquire, develop,
own and operate the real estate upon which Dominick's operates Store
#111.
2. Dominick's holds 600 shares in Topco Associates, Inc. ("Topco"), a buying
cooperative. Dominick's participates in Topco's procurement program as a
Full Member.
3. Investments in Land Trusts for the sole purpose of holding real estate.
4. Dominick's has an equity sharing interest in the shopping center located at
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇. (Store #76 is located in this shopping center.)
562
SCHEDULE 7.4
CERTAIN EXISTING CONTINGENT OBLIGATIONS
I. Existing Letters of Credit:
1. $2,445,000 Transferable Irrevocable Direct Pay Letter of Credit #S-10485,
issued by Bankers Trust for the benefit of the City of Northlake,
expiring May 1, 1997.
2. $5,700,000 Irrevocable Standby Letter of Credit #S258619, issued by the
Northern Trust Company for the benefit of the Illinois Industrial
Commission, expiring May 18,1997.
3. $7,775,000 Irrevocable Standby Letter of Credit #S260541, issued by the
Northern Trust Company for the benefit of the Illinois Industrial
Commission, in care of the Illinois Self Insurers Advisory,
expiring December 30, 1996.
4. $500,000 Irrevocable Standby Letter of Credit #S-10433, issued by Bankers
Trust for the benefit of River Forest State Bank, expiring March 22,
1997.
5. $500,000 Irrevocable Standby Letter of Credit #S-10432, issued by Bankers
Trust for the benefit of Lincoln National Bank, expiring March 22,
1997.
6. $500,000 Irrevocable Standby Letter of Credit #S-10431, issued by Bankers
Trust for the benefit of SuperValu Inc., expiring March 22, 1997.
II. Interest Rate Agreements:
1. Interest Rate Agreement with First National Bank of Chicago, effective as
of June 22,1995 (terminating as of June 22, 1997) in the notional
amount of $82,500,00, capping interest rate at 8.5%.
2. Interest Rate Agreement with Chase Manhattan Bank, effective as of June 22,
1995 (terminating as of June 22, 1997) in the notional amount of
$82,500,000, capping interest rate at 8.5%.
563
SCHEDULE 7.7
CERTAIN ASSETS TO BE SOLD
PART (A)
1. "warehouse": that building commonly known as ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
2. "office building": that building commonly known as ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
PART (B)
1. "Equipment":
a. All equipment, fixtures, parts and accessories related to the following
stores:
Store Number
28 124 144
51 131 145
81 132 146
83 135 301
101 140 302
102 141 303
115 142 306
122 143 310
b. Tractors and trailers comprising the primary delivery fleet of
the Company and its Subsidiaries.
c. All equipment used in the manufacturing processes at the
▇▇▇▇▇▇ Dairy.
d. All PC and LAN network equipment located at the Company's
offices.
e. Pharmacy system upgrades in the Company's stores.
f. Two spotters located in the Company's Warehouse.