EXHIBIT 4.33
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CREDIT AGREEMENT
among
BIG V HOLDING CORP.,
BV HOLDINGS CORPORATION,
BIG V SUPERMARKETS, INC.,
VARIOUS LENDERS,
DLJ CAPITAL FUNDING, INC.,
as SYNDICATION AGENT,
FLEET NATIONAL BANK,
as ADMINISTRATIVE Agent,
and
SUMMIT BANK,
as DOCUMENTATION AGENT
ARRANGED BY:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
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Dated as of January 14, 1999
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TABLE OF CONTENTS
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Page
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SECTION 1. Amount and Terms of Credit............................................................................ 1
1.01 The Commitments.................................................................................... 1
1.02 Minimum Amount of Each Borrowing................................................................... 4
1.03 Notice of Borrowing................................................................................ 4
1.04 Disbursement of Funds.............................................................................. 5
1.05 Notes.............................................................................................. 6
1.06 Conversions........................................................................................ 7
1.07 Pro Rata Borrowings................................................................................ 8
1.08 Interest........................................................................................... 8
1.09 Interest Periods................................................................................... 9
1.10 Increased Costs, Illegality, etc................................................................... 10
1.11 Compensation....................................................................................... 12
1.12 Change of Lending Office........................................................................... 12
1.13 Replacement of Lenders............................................................................. 12
1.14 Limitation on Additional Amounts, etc.............................................................. 13
SECTION 2. Letters of Credit..................................................................................... 14
2.01 Letters of Credit.................................................................................. 14
2.02 Maximum Letter of Credit Outstandings; Final Maturities............................................ 14
2.03 Letter of Credit Requests; Minimum Stated Amount................................................... 15
2.04 Letter of Credit Participations.................................................................... 15
2.05 Agreement to Repay Letter of Credit Drawings....................................................... 17
2.06 Increased Costs.................................................................................... 18
SECTION 3. Commitment Commission; Fees; Reductions of Commitment................................................. 19
3.01 Fees............................................................................................... 19
3.02 Voluntary Termination of Commitments............................................................... 20
3.03 Mandatory Reduction of Commitments................................................................. 20
SECTION 4. Prepayments;Payments; Taxes........................................................................... 22
4.01 Voluntary Prepayments.............................................................................. 22
4.02 Mandatory Repayments and Commitment Reductions..................................................... 23
4.03 Method and Place of Payment........................................................................ 30
4.04 Net Payments....................................................................................... 30
SECTION 5. Conditions Precedent to Credit Events on the Initial Borrowing Date................................... 32
5.01 Execution of Agreement; Notes...................................................................... 32
5.02 Officer's Certificate............................................................................. 32
5.03 Opinions of Counsel............................................................................... 33
5.04 Corporate Documents; Proceedings; etc............................................................. 33
5.05 Shareholders' Agreements; Management Agreements; Tax Sharing Agreements; Existing
Indebtedness Agreements; Wakefern Documents.................................................... 33
5.06 Existing Credit Agreement......................................................................... 34
5.07 Adverse Change, Approvals, Consents, etc.......................................................... 35
5.08 Litigation........................................................................................ 35
5.09 Pledge Agreement.................................................................................. 35
5.10 Security Agreement................................................................................ 36
5.11 Financial Statements; Pro Forma Balance Sheet; Projections........................................ 36
5.12 Solvency Certificate; Insurance Certificates...................................................... 36
5.13 Fees, etc......................................................................................... 37
SECTION 6. Conditions Precedent to All Credit Events............................................................ 37
6.01 No Default; Representations and Warranties........................................................ 37
6.02 Notice of Borrowing; Letter of Credit Request..................................................... 37
SECTION 7. Representations,Warranties and Agreements............................................................ 37
7.01 Corporate Status.................................................................................. 38
7.02 Corporate and Other Power and Authority........................................................... 38
7.03 No Violation...................................................................................... 38
7.04 Approvals......................................................................................... 39
7.05 Financial Statements; Financial Condition; Undisclosed Liabilities; Projections; etc.............. 39
7.06 Litigation........................................................................................ 40
7.07 True and Complete Disclosure...................................................................... 40
7.08 Use of Proceeds; Margin Regulations............................................................... 41
7.09 Tax Returns and Payments.......................................................................... 41
7.10 Compliance with ERISA............................................................................. 42
7.11 The Security Documents............................................................................ 42
7.12 Properties........................................................................................ 43
7.13 Capitalization.................................................................................... 43
7.14 Subsidiaries...................................................................................... 44
7.15 Compliance with Statutes, etc..................................................................... 44
7.16 Investment Company Act............................................................................ 44
7.17 Public Utility Holding Company Act................................................................ 44
7.18 Environmental Matters............................................................................. 44
7.19 Labor Relations................................................................................... 45
7.20 Patents, Licenses, Franchises and Formulas........................................................ 46
7.21 Indebtedness...................................................................................... 46
7.22 Insurance......................................................................................... 46
7.23 Year 2000......................................................................................... 46
7.24 Senior Subordinated Notes, Junior Subordinated Notes and Replacement Junior Subordinated
Notes.......................................................................................... 46
7.25 Special Purpose Corporations...................................................................... 47
7.26 ▇▇▇▇▇▇ Documents............................................................................... 47
SECTION 8. Affirmative Covenants................................................................................ 48
8.01 Information Covenants............................................................................. 48
(a) Monthly Financial Statements.............................................................. 48
(b) Quarterly Financial Statements............................................................ 48
(c) Annual Financial Statements............................................................... 48
(d) Management Letters........................................................................ 49
(e) Budgets and Projections................................................................... 49
(f) Officer's Certificates.................................................................... 49
(g) Notice of Default or Litigation........................................................... 50
(h) Other Reports and Filings................................................................. 50
(i) Environmental Matters..................................................................... 50
(j) Other Information......................................................................... 51
(k) Wakefern Information...................................................................... 51
8.02 Books, Records and Inspections; Annual Meetings................................................... 51
8.03 Maintenance of Property; Insurance................................................................ 52
8.04 Corporate Franchises.............................................................................. 53
8.05 Compliance with Statutes, etc..................................................................... 53
8.06 Compliance with Environmental Laws................................................................ 53
8.07 ERISA............................................................................................. 54
8.08 End of Fiscal Years; Fiscal Quarters.............................................................. 55
8.09 Performance of Obligations........................................................................ 55
8.10 Payment of Taxes.................................................................................. 55
8.11 Additional Security; Further Assurances........................................................... 56
8.12 Information Systems and Equipment................................................................. 57
8.13 Contributions..................................................................................... 57
8.14 Corporate Separateness............................................................................ 57
SECTION 9. Negative Covenants................................................................................... 58
9.01 Liens............................................................................................. 58
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc............................................ 60
9.03 Dividends......................................................................................... 62
9.04 Indebtedness...................................................................................... 64
9.05 Advances, Investments and Loans................................................................... 66
9.06 Transactions with Affiliates...................................................................... 68
9.07 Capital Expenditures.............................................................................. 69
9.08 Consolidated Fixed Charge Coverage Ratio.......................................................... 70
9.09 Maximum Leverage Ratio............................................................................ 71
9.10 Consolidated Interest Coverage Ratio.............................................................. 72
9.11 Minimum Consolidated Net Worth.................................................................... 73
9.12 Limitations on Payments of Certain Indebtedness; Modifications of Certain Indebtedness;
Modifications of Certificate of Incorporation, By-Laws and Certain Other Agreements; etc........ 73
9.13 Limitation on Certain Restrictions on Subsidiaries................................................. 74
9.14 Limitation on Issuance of Capital Stock............................................................ 75
9.15 Business........................................................................................... 75
9.16 Subsidiaries....................................................................................... 76
9.17 Certain Contracts.................................................................................. 77
SECTION 10. Events of Default.................................................................................... 77
10.01 Payments.......................................................................................... 77
10.02 Representations, etc.............................................................................. 77
10.03 Covenants......................................................................................... 77
10.04 Default Under Other Agreements.................................................................... 78
10.05 Bankruptcy, etc................................................................................... 78
10.06 ERISA............................................................................................. 78
10.07 Security Documents................................................................................ 79
10.08 Guaranties........................................................................................ 79
10.09 Judgments......................................................................................... 79
10.10 Change of Control................................................................................. 80
10.11 Wakefern.......................................................................................... 80
SECTION 11. Definitions and Accounting Terms..................................................................... 80
11.01 Defined Terms..................................................................................... 80
SECTION 12. The Agents........................................................................................... 108
12.01 Appointment....................................................................................... 108
12.02 Nature of Duties.................................................................................. 108
12.03 Lack of Reliance on the Agents.................................................................... 108
12.04 Certain Rights of the Agents...................................................................... 109
12.05 Reliance.......................................................................................... 109
12.06 Indemnification................................................................................... 109
12.07 Each Agent in its Individual Capacity............................................................. 109
12.08 Holders........................................................................................... 110
12.09 Resignation by the Administrative Agent, the Syndication Agent; or the Documentation
Agent; Removal of the Administrative Agent...................................................... 110
SECTION 13. Miscellaneous........................................................................................ 111
13.01 Payment of Expenses, etc.......................................................................... 111
13.02 Right of Setoff................................................................................... 112
13.03 Notices........................................................................................... 112
13.04 Benefit of Agreement; Assignments; Participations................................................. 112
13.05 No Waiver; Remedies Cumulative.................................................................... 114
13.06 Payments Pro Rata............................................................................... 115
13.07 Calculations; Computations; Accounting Terms.................................................... 115
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL.......................... 116
13.09 Counterparts.................................................................................... 117
13.10 Effectiveness................................................................................... 117
13.11 Headings Descriptive............................................................................ 118
13.12 Amendment or Waiver; etc........................................................................ 118
13.13 Survival........................................................................................ 119
13.14 Domicile of Loans............................................................................... 119
13.15 Register........................................................................................ 120
13.16 Confidentiality................................................................................. 120
13.17 Certain Agreements with Respect to the Senior Subordinated Notes and the Junior
Subordinated Notes............................................................................ 121
13.18 Increases of Revolving Loan Commitments......................................................... 122
SECTION 14. Parents Guaranty................................................................................... 122
14.01 Guaranty........................................................................................ 122
14.02 Bankruptcy...................................................................................... 123
14.03 Nature of Liability............................................................................. 123
14.04 Independent Obligation.......................................................................... 123
14.05 Authorization................................................................................... 124
14.06 Reliance........................................................................................ 124
14.07 Subordination................................................................................... 125
14.08 Waiver.......................................................................................... 125
14.09 Nature of Liability............................................................................. 126
SCHEDULE I Commitments
SCHEDULE II Lender Addresses
SCHEDULE III Plans
SCHEDULE IV Real Property
SCHEDULE V Capitalization of Holdings
SCHEDULE VI Subsidiaries
SCHEDULE VII Existing Indebtedness
SCHEDULE VIII Insurance
SCHEDULE IX Existing Liens
SCHEDULE X Existing Investments
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Tranche A Term Note
EXHIBIT B-2 Tranche B Term Note
EXHIBIT B-3 Revolving Note
EXHIBIT B-4 Swingline Note
EXHIBIT C Letter of Credit Request
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E Opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
Special Counsel to the Credit Parties
EXHIBIT F Officers' Certificate
EXHIBIT G Pledge Agreement
EXHIBIT H Security Agreement
EXHIBIT I Solvency Certificate
EXHIBIT J Assignment and Assumption Agreement
EXHIBIT K Holdings Shareholder Subordinated Note
CREDIT AGREEMENT, dated as of January 14, 1999, among BIG V HOLDING
CORP., a Delaware corporation ("Holdings"), BV Holdings Corporation, a Delaware
corporation ("BV Holdings"), BIG V SUPERMARKETS, INC., a New York corporation
(the "Borrower"), the Lenders party hereto from time to time, DLJ CAPITAL
FUNDING, INC., as Syndication Agent (in such capacity, the "Syndication Agent"),
FLEET NATIONAL BANK, as Administrative Agent (in such capacity, the
"Administrative Agent"), and SUMMIT BANK, as Documentation Agent (in such
capacity, the "Documentation Agent") (all capitalized terms used herein and
defined in Section 11 are used herein as therein defined).
W I T N E S S E T H :
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WHEREAS, the proceeds of the Loans under this Agreement will be used,
in part, to refinance in full all of the Indebtedness under the Existing Credit
Agreement;
WHEREAS, the Existing Credit Agreement is currently (i) the Bank
Credit Agreement under, and as defined in, the Senior Subordinated Note
Indenture and (ii) the Credit Agreement under, and as defined in, the Junior
Subordinated Note Agreement;
WHEREAS, from and after the Initial Borrowing Date, this Agreement and
the other Credit Documents shall constitute (i) the Bank Credit Agreement under,
and as defined in, the Senior Subordinated Note Indenture and (ii) the Credit
Agreement under, and as defined in, the Junior Subordinated Note Agreement; and
WHEREAS, subject to and upon the terms and conditions set forth
herein, the Lenders are willing to make available to the Borrower the respective
credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
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1.01 The Commitments. (a) Subject to and upon the terms and conditions
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set forth herein, each Lender with a Tranche A Term Loan Commitment severally
agrees to make on the Initial Borrowing Date and on each Additional Tranche A
Term Loan Borrowing Date, a term loan or term loans (each a "Tranche A Term
Loan" and, collectively, the "Tranche A Term Loans") to the Borrower, which
Tranche A Term Loans (i) shall, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans,
provided that, except as otherwise specifically provided in Section 1.10(b), all
Tranche A Term Loans comprising the same Borrowing shall at all times be of the
same Type and (ii) shall be made by each such Lender in that aggregate principal
amount which does not exceed the Tranche A Term Loan Commitment of such Lender
on any such Tranche A Term Loan Borrowing Date; provided, however, (x) no more
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than $10,000,000 of Tranche A Term Loans may be incurred on the Initial
Borrowing Date and (y) Tranche A Term Loans may not be incurred on any
Additional
Tranche A Term Loan Borrowing Date in an amount that would exceed the scheduled
principal repayment due on each such Additional Tranche A Term Loan Borrowing
Date (or on the Business Day thereafter, as the case may be) in respect of the
Junior Subordinated Notes. Once repaid, Tranche A Term Loans incurred hereunder
may not be reborrowed.
(b) Subject to and upon the terms and conditions set forth herein,
each Lender with a Tranche B Term Loan Commitment severally agrees to make on
the Initial Borrowing Date, a term loan or term loans (each a "Tranche B Term
Loan" and, collectively, the "Tranche B Term Loans") to the Borrower, which
Tranche B Term Loans (i) shall, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans,
provided that, except as otherwise specifically provided in Section 1.10(b), all
Tranche B Term Loans comprising the same Borrowing shall at all times be of the
same Type and (ii) shall be made by each such Lender in that aggregate principal
amount which does not exceed the Tranche B Term Loan Commitment of such Lender
on the Initial Borrowing Date. Once repaid, Tranche B Term Loans incurred
hereunder may not be reborrowed.
(c) Subject to and upon the terms and conditions set forth herein,
each Lender with a Revolving Loan Commitment severally agrees to make, at any
time and from time to time on or after the Initial Borrowing Date and prior to
the Revolving Loan Maturity Date, a revolving loan or revolving loans (each a
"Revolving Loan" and, collectively, the "Revolving Loans") to the Borrower,
which Revolving Loans (i) shall, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans,
provided that, except as otherwise specifically provided in Section 1.10(b), all
Revolving Loans comprising the same Borrowing shall at all times be of the same
Type, (ii) may be repaid and reborrowed in accordance with the provisions
hereof, (iii) shall not exceed for any such Lender at any time outstanding that
aggregate principal amount which, when added to the product of (x) such Lender's
RL Percentage and (y) the sum of (I) the aggregate amount of all Letter of
Credit Outstandings (exclusive of Unpaid Drawings which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time and (II) the aggregate principal
amount of all Swingline Loans (exclusive of Swingline Loans which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding, equals the Revolving Loan
Commitment of such Lender at such time, and (iv) shall not exceed for all such
Lenders at any time outstanding that aggregate principal amount which, when
added to the sum of (I) the aggregate amount of all Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid with the proceeds
of, and simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) at such time and (II) the aggregate principal amount of all
Swingline Loans (exclusive of Swingline Loans which are repaid with the proceeds
of, and simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) then outstanding, equals the Total Revolving Loan Commitment at
such time.
(d) Subject to and upon the terms and conditions set forth herein,
the Swingline Lender agrees to make, at any time and from time to time on or
after the Initial Borrowing Date and prior to the Swingline Expiry Date, a
revolving loan or revolving loans (each a "Swingline Loan" and, collectively,
the "Swingline Loans") to the Borrower, which
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Swingline Loans (i) shall be made and maintained as Base Rate Loans, (ii) may be
repaid and reborrowed in accordance with the provisions hereof, (iii) shall not
exceed in aggregate principal amount at any time outstanding, when combined with
the aggregate principal amount of all Revolving Loans then outstanding and the
aggregate amount of all Letter of Credit Outstandings at such time, an amount
equal to the Total Revolving Loan Commitment and (iv) shall not exceed in
aggregate principal amount at any time outstanding the Maximum Swingline Amount.
Notwithstanding anything to the contrary contained in this Section 1.01(d), (i)
the Swingline Lender shall not be obligated to make any Swingline Loans at a
time when a Lender Default exists unless the Swingline Lender has entered into
arrangements satisfactory to it and the Borrower to eliminate the Swingline
Lender's risk with respect to the Defaulting Lender's or Lenders' participation
in such Swingline Loans, including by cash collateralizing such Defaulting
Lender's or Lenders' RL Percentage of the outstanding Swingline Loans and (ii)
the Swingline Lender shall not make any Swingline Loan after it has received
written notice from the Borrower or the Required Lenders stating that a Default
or an Event of Default exists and is continuing until such time as the Swingline
Lender shall have received written notice of (A) rescission of all such notices
from the party or parties originally delivering such notice or notices or (B)
the waiver of such Default or Event of Default by the Required Lenders.
(e) On any Business Day, the Swingline Lender may, in its sole
discretion, give notice to the RL Lenders that the Swingline Lender's
outstanding Swingline Loans shall be funded with one or more Borrowings of
Revolving Loans (provided that such notice shall be deemed to have been
automatically given upon the occurrence of a Default or an Event of Default
under Section 10.05 or upon the exercise of any of the remedies provided in the
last paragraph of Section 10), in which case one or more Borrowings of Revolving
Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory
Borrowing") shall be made on the immediately succeeding Business Day by all RL
Lenders pro rata based on each such RL Lender's RL Percentage (determined before
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giving effect to any termination of the Revolving Loan Commitments pursuant to
the last paragraph of Section 10) and the proceeds thereof shall be applied
directly by the Swingline Lender to repay the Swingline Lender for such
outstanding Swingline Loans. Each RL Lender hereby irrevocably agrees to make
Revolving Loans upon one Business Day's notice pursuant to each Mandatory
Borrowing in the amount and in the manner specified in the preceding sentence
and on the date specified in writing by the Swingline Lender notwithstanding (i)
the amount of the Mandatory Borrowing may not comply with the Minimum Borrowing
Amount otherwise required hereunder, (ii) whether any conditions specified in
Section 6 are then satisfied, (iii) whether a Default or an Event of Default
then exists, (iv) the date of such Mandatory Borrowing and (v) the amount of the
Total Revolving Loan Commitment. In the event that any Mandatory Borrowing
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower), then each RL Lender hereby agrees
that it shall forthwith purchase (as of the date the Mandatory Borrowing would
otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) from the Swingline
Lender such participations in the outstanding Swingline Loans as shall be
necessary to cause the RL Lenders to share in such Swingline Loans ratably based
upon their respective RL Percentages (determined before giving effect to any
termination of the Revolving Loan Commitments pursuant to the last paragraph of
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Section 10), provided that (x) all interest payable on the Swingline Loans shall
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be for the account of the Swingline Lender until the date as of which the
respective participation is required to be purchased and, to the extent
attributable to the purchased participation, shall be payable to the participant
from and after such date and (y) at the time any purchase of participations
pursuant to this sentence is actually made, the purchasing RL Lender shall be
required to pay the Swingline Lender interest on the principal amount of
participation purchased for each day from and including the day upon which the
Mandatory Borrowing would otherwise have occurred to but excluding the date of
payment for such participation, at the overnight Federal Funds Rate for the
first three days and at the rate otherwise applicable to Revolving Loans
maintained as Base Rate Loans hereunder for each day thereafter.
1.02 Minimum Amount of Each Borrowing. The aggregate principal amount
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of each Borrowing of Loans under a respective Tranche shall not be less than the
Minimum Borrowing Amount applicable to such Tranche. More than one Borrowing may
occur on the same date, but at no time shall there be outstanding more than
twelve Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to
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incur (x) Eurodollar Loans hereunder, the Borrower shall give the Administrative
Agent at the Notice Office at least three Business Days' prior notice of each
Eurodollar Loan to be incurred hereunder and (y) Base Rate Loans hereunder
(excluding Swingline Loans and Revolving Loans made pursuant to a Mandatory
Borrowing), the Borrower shall give the Administrative Agent at the Notice
Office at least one Business Day's prior notice of each Base Rate Loan to be
incurred hereunder, provided that (in each case) any such notice shall be deemed
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to have been given on a certain day only if given before 12:00 Noon (Boston,
Massachusetts time) on such day. Each such notice (each a "Notice of
Borrowing"), except as otherwise expressly provided in Section 1.10, shall be
irrevocable and shall be given by the Borrower in writing, or by telephone
promptly confirmed in writing, in the form of Exhibit A, appropriately completed
to specify the aggregate principal amount of the Loans to be incurred pursuant
to such Borrowing, the date of such Borrowing (which shall be a Business Day),
whether the Loans being incurred pursuant to such Borrowing shall constitute
Tranche A Term Loans, Tranche B Term Loans or Revolving Loans and whether the
Loans being incurred pursuant to such Borrowing are to be initially maintained
as Base Rate Loans or, to the extent permitted hereunder, Eurodollar Loans and,
if Eurodollar Loans, the initial Interest Period to be applicable thereto. The
Administrative Agent shall promptly give each Lender which is required to make
Loans of the Tranche specified in the respective Notice of Borrowing notice of
such proposed Borrowing, of such Lender's proportionate share thereof and of the
other matters required by the immediately preceding sentence to be specified in
the Notice of Borrowing.
(b) (i) Whenever the Borrower desires to incur Swingline Loans
hereunder, the Borrower shall give the Swingline Lender no later than 2:00 P.M.
(Boston, Massachusetts time) on the date that a Swingline Loan is to be
incurred, written notice or telephonic notice promptly confirmed in writing of
each Swingline Loan to be incurred hereunder. Each such notice shall be
irrevocable and specify in each case (A) the date of Borrowing (which shall be a
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Business Day) and (B) the aggregate principal amount of the Swingline Loans to
be incurred pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice
specified in Section 1.01(e), with the Borrower irrevocably agreeing, by its
incurrence of any Swingline Loan, to the making of the Mandatory Borrowings as
set forth in Section 1.01(e).
(c) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice of any Borrowing or prepayment of
Loans, the Administrative Agent or the Swingline Lender, as the case may be, may
act without liability upon the basis of telephonic notice of such Borrowing or
prepayment, as the case may be, believed by the Administrative Agent or the
Swingline Lender, as the case may be, in good faith to be from the Chairman of
the Board, the President, the Chief Financial Officer, the Treasurer, any
Assistant Treasurer or the Controller of the Borrower, or from any other
authorized officer of the Borrower designated in writing by the Borrower to the
Administrative Agent as being authorized to give such notices, prior to receipt
of written confirmation. In each such case, the Borrower hereby waives the right
to dispute the Administrative Agent's or Swingline Lender's record of the terms
of such telephonic notice of such Borrowing or prepayment of Loans, as the case
may be, absent manifest error.
1.04 Disbursement of Funds. No later than 1:00 P.M. (Boston,
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Massachusetts time) on the date specified in each Notice of Borrowing (or (x) in
the case of Swingline Loans, no later than 3:00 P.M. (Boston, Massachusetts
time) on the date specified pursuant to Section 1.03(b)(i) or (y) in the case of
Mandatory Borrowings, no later than 1:00 P.M. (Boston, Massachusetts time) on
the date specified in Section 1.01(e)), each Lender with a Commitment of the
respective Tranche will make available its pro rata portion (determined in
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accordance with Section 1.07) of each such Borrowing requested to be made on
such date (or in the case of Swingline Loans, the Swingline Lender will make
available the full amount thereof). All such amounts will be made available in
Dollars and in immediately available funds at the Payment Office, and the
Administrative Agent will, except in the case of Revolving Loans made pursuant
to a Mandatory Borrowing, make available to the Borrower at the Payment Office
the aggregate of the amounts so made available by the Lenders. Unless the
Administrative Agent shall have been notified by any Lender prior to the date of
Borrowing that such Lender does not intend to make available to the
Administrative Agent such Lender's portion of any Borrowing to be made on such
date, the Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on such date of Borrowing and the
Administrative Agent may (but shall not be obligated to), in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative Agent
by such Lender, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent shall promptly notify the Borrower and the
Borrower shall immediately pay such corresponding amount to the Administrative
Agent. The Administrative Agent also shall be entitled to recover on demand from
such Lender or the Borrower, as the case may be, interest on such corresponding
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amount in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrower until the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to (i) if recovered from such Lender, the overnight Federal Funds
Rate for the first three days and at the interest rate otherwise applicable to
such Loans for each day thereafter and (ii) if recovered from the Borrower, the
rate of interest applicable to the respective Borrowing, as determined pursuant
to Section 1.08. Nothing in this Section 1.04 shall be deemed to relieve any
Lender from its obligation to make Loans hereunder or to prejudice any rights
which the Borrower may have against any Lender as a result of any failure by
such Lender to make Loans hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of, and
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interest on, the Loans made by each Lender shall be evidenced in the Register
maintained by the Administrative Agent pursuant to Section 13.15 and shall, if
requested by such Lender, also be evidenced (i) if Tranche A Term Loans, by a
promissory note duly executed and delivered by the Borrower substantially in the
form of Exhibit B-1, with blanks appropriately completed in conformity herewith
(each a "Tranche A Term Note" and, collectively, the "Tranche A Term Notes"),
(ii) if Tranche B Term Loans, by a promissory note duly executed and delivered
by the Borrower substantially in the form of Exhibit B-2, with blanks
appropriately completed in conformity herewith (each a "Tranche B Term Note"
and, collectively, the "Tranche B Term Notes"), (iii) if Revolving Loans, by a
promissory note duly executed and delivered by the Borrower substantially in the
form of Exhibit B-3, with blanks appropriately completed in conformity herewith
(each a "Revolving Note" and, collectively, the "Revolving Notes") and (iv) if
Swingline Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form Exhibit B-4, with blanks appropriately
completed in conformity herewith (the "Swingline Note").
(b) The Tranche A Term Note issued to each Lender that has a Tranche A
Term Loan Commitment or outstanding Tranche A Term Loans shall (i) be executed
by the Borrower, (ii) be payable to such Lender or its registered assigns and be
dated the Initial Borrowing Date (or, if issued after the Initial Borrowing
Date, be dated the date of issuance thereof), (iii) be in a stated principal
amount equal to the Tranche A Term Loan Commitment of such Lender on the Initial
Borrowing Date (before giving effect to the making of any Tranche A Term Loans
on such date by such Lender) (or, if issued after the Initial Borrowing Date, be
in a stated principal amount equal to the outstanding Tranche A Term Loan
Commitment, if any, of such Lender at such time plus the outstanding principal
amount of Tranche A Term Loans of such Lender at such time) and be payable in
the outstanding principal amount of Tranche A Term Loans evidenced thereby, (iv)
mature on the Tranche A Term Loan Maturity Date, (v) bear interest as provided
in the appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01, and mandatory repayment as
provided in Section 4.02, and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents.
(c) The Tranche B Term Note issued to each Lender that has a Tranche B
Term Loan Commitment or outstanding Tranche B Term Loans shall (i) be executed
by the Borrower, (ii) be payable to such Lender or its registered assigns and be
dated the Initial Borrowing Date (or, if issued after the Initial Borrowing
Date, be dated the date of the issuance thereof), (iii)
-6-
be in a stated principal amount equal to the Tranche B Term Loans made by such
Lender on the Initial Borrowing Date (or, if issued after the Initial Borrowing
Date, be in a stated principal amount equal to the outstanding principal amount
of Tranche B Term Loans of such Lender at such time) and be payable in the
outstanding principal amount of Tranche B Term Loans evidenced thereby, (iv)
mature on the Tranche B Term Loan Maturity Date, (v) bear interest as provided
in the appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01, and mandatory repayment as
provided in Section 4.02, and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents.
(d) The Revolving Note issued to each Lender that has a Revolving Loan
Commitment or outstanding Revolving Loans shall (i) be executed by the Borrower,
(ii) be payable to such Lender or its registered assigns and be dated the
Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be dated
the date of the issuance thereof), (iii) be in a stated principal amount equal
to the Revolving Loan Commitment of such Lender (or, if issued after the
termination thereof, be in a stated principal amount equal to the outstanding
Revolving Loans of such Lender at such time) and be payable in the outstanding
principal amount of the Revolving Loans evidenced thereby, (iv) mature on the
Revolving Loan Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans,
as the case may be, evidenced thereby, (vi) be subject to voluntary prepayment
as provided in Section 4.01, and mandatory repayment as provided in Section
4.02, and (vii) be entitled to the benefits of this Agreement and the other
Credit Documents.
(e) The Swingline Note issued to the Swingline Lender shall (i) be
executed by the Borrower, (ii) be payable to the Swingline Lender or its
registered assigns and be dated the Initial Borrowing Date, (iii) be in a stated
principal amount equal to the Maximum Swingline Amount and be payable in the
outstanding principal amount of the Swingline Loans evidenced thereby from time
to time, (iv) mature on the Swingline Expiry Date, (v) bear interest as provided
in the appropriate clause of Section 1.08 in respect of the Base Rate Loans
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(f) Each Lender will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in such notation shall not affect the Borrower's obligations in
respect of such Loans.
1.06 Conversions. The Borrower shall have the option to convert, on
-----------
any Business Day occurring after the Initial Borrowing Date, all or a portion
equal to at least the Minimum Borrowing Amount of the outstanding principal
amount of Loans (other than Swingline Loans which may not be converted pursuant
to this Section 1.06) made pursuant to one or more Borrowings (so long as of the
same Tranche) of one or more Types of Loans into a Borrowing (of the same
Tranche) of another Type of Loan, provided that (i) except as otherwise
--------
-7-
provided in Section 1.10(b), Eurodollar Loans may be converted into Base Rate
Loans only on the last day of an Interest Period applicable to the Loans being
converted and no such partial conversion of Eurodollar Loans shall reduce the
outstanding principal amount of such Eurodollar Loans made pursuant to a single
Borrowing to less than the Minimum Borrowing Amount applicable thereto, (ii)
unless the Required Lenders otherwise agree, Base Rate Loans may only be
converted into Eurodollar Loans if no Default or Event of Default is in
existence on the date of the conversion and (iii) no conversion pursuant to this
Section 1.06 shall result in a greater number of Borrowings of Eurodollar Loans
than is permitted under Section 1.02. Each such conversion shall be effected by
the Borrower by giving the Administrative Agent at the Notice Office prior to
(x) in the case of a conversion of Base Rate Loans to Eurodollar Loans, 12:00
Noon (Boston, Massachusetts time) at least three Business Days' prior notice and
(y) in the case of a conversion of Eurodollar Loans to Base Rate Loans, 12:00
Noon (Boston, Massachusetts time) at least one Business Day's prior notice (each
a "Notice of Conversion") specifying the Loans to be so converted, the Borrowing
or Borrowings pursuant to which such Loans were made and, if to be converted
into Eurodollar Loans, the Interest Period to be initially applicable thereto.
The Administrative Agent shall give each Lender prompt notice of any such
proposed conversion affecting any of its Loans. Upon any such conversion the
proceeds thereof will be deemed to be applied directly on the day of such
conversion to prepay the outstanding principal amount of the Loans being
converted.
1.07 Pro Rata Borrowings. All Borrowings of Tranche A Term Loans,
-------------------
Tranche B Term Loans and Revolving Loans under this Agreement shall be incurred
from the Lenders pro rata on the basis of their Tranche A Term Loan Commitments,
--- ----
Tranche B Term Loan Commitments or Revolving Loan Commitments, as the case may
be. It is understood that no Lender shall be responsible for any default by any
other Lender of its obligation to make Loans hereunder and that each Lender
shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to make its Loans hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in respect of
--------
the unpaid principal amount of each Base Rate Loan from the date of Borrowing
thereof until the earlier of (i) the maturity thereof (whether by acceleration
or otherwise) and (ii) the conversion of such Base Rate Loan to a Eurodollar
Loan pursuant to Section 1.06 or 1.09, as applicable, at a rate per annum which
shall be equal to the sum of the Applicable Base Rate Margin plus the Base Rate,
each as in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date of Borrowing thereof
until the earlier of (i) the maturity thereof (whether by acceleration or
otherwise) and (ii) the conversion of such Eurodollar Loan to a Base Rate Loan
pursuant to Section 1.06, 1.09 or 1.10, as applicable, at a rate per annum which
shall, during each Interest Period applicable thereto, be equal to the sum of
the Applicable Eurodollar Rate Margin plus the Eurodollar Rate for such Interest
Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the greater of
(x) the rate which is 2% in excess of the rate
-8-
then borne by such Loans and (y) the rate which is 2% in excess of the rate
otherwise applicable to Base Rate Loans of such Tranche from time to time.
Interest which accrues under this Section 1.08(c) shall be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Date, (ii) in respect of each Eurodollar Loan, on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess of
three months, on each date occurring at three month intervals after the first
day of such Interest Period and (iii) in respect of each Loan, on any repayment
or prepayment (on the amount repaid or prepaid), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand; provided,
--------
however, that in the case of any voluntary repayment of Base Rate Loans pursuant
-------
to Section 4.01, interest thereon shall be payable on the next succeeding
Quarterly Payment Date applicable to such Base Rate Loans unless the respective
repayment is made in conjunction with a repayment in full of all outstanding
Loans.
(e) Upon each Interest Determination Date, the Administrative Agent
shall determine the Eurodollar Rate for each Interest Period applicable to the
respective Eurodollar Loans and shall promptly notify the Borrower and the
Lenders thereof. Each such determination shall, absent manifest error, be final
and conclusive and binding on all parties hereto.
1.09 Interest Periods. At the time the Borrower gives any Notice of
----------------
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, any Eurodollar Loan (in the case of the initial Interest Period applicable
thereto) or on the third Business Day prior to the expiration of an Interest
Period applicable to such Eurodollar Loan (in the case of any subsequent
Interest Period), the Borrower shall have the right to elect, by giving the
Administrative Agent notice thereof, the interest period (each an "Interest
Period") applicable to such Eurodollar Loan, which Interest Period shall, at the
option of the Borrower, be a one, two, three or six-month period, provided that
---------
(in each case):
(i) all Eurodollar Loans comprising a Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including the
date of any conversion thereto from a Base Rate Loan) and each Interest
Period occurring thereafter in respect of such Eurodollar Loan shall
commence on the day on which the next preceding Interest Period applicable
thereto expires;
(iii) if any Interest Period for a Eurodollar Loan begins on a day for
which there is no numerically corresponding day in the calendar month at
the end of such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iv) if any Interest Period for a Eurodollar Loan would otherwise
expire on a day which is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day; provided, however, that if any
-------- -------
Interest Period for a Eurodollar Loan would otherwise expire on a day which
is not a Business Day but is a day of the month after
-9-
which no further Business Day occurs in such month, such Interest Period
shall expire on the next preceding Business Day;
(v) unless the Required Lenders otherwise agree, no Interest Period
may be selected at any time when a Default or an Event of Default is then
in existence;
(vi) no Interest Period in respect of any Borrowing of any Tranche of
Loans shall be selected which extends beyond the respective Maturity Date
for such Tranche of Loans; and
(vii) no Interest Period in respect of any Borrowing of Tranche A Term
Loans or Tranche B Term Loans, as the case may be, shall be selected which
extends beyond any date upon which a mandatory repayment of such Tranche of
Term Loans will be required to be made under Section 4.02(b)(i) or (ii), as
the case may be, if the aggregate principal amount of Tranche A Term Loans
or Tranche B Term Loans, as the case may be, which have Interest Periods
which will expire after such date will be in excess of the aggregate
principal amount of Tranche A Term Loans or Tranche B Term Loans, as the
case may be, then outstanding less the aggregate amount of such required
repayment.
If upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans, the Borrower has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to such Eurodollar
Loans as provided above, the Borrower shall be deemed to have elected to convert
such Eurodollar Loans into Base Rate Loans effective as of the expiration date
of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any
---------------------------------
Lender shall have reasonably determined (which reasonable determination shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto but, with respect to clause (i) below, may be made only by the
Administrative Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of
Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any change since the Effective Date in
any applicable law or governmental rule, regulation, order, guideline or
request (whether or not having the force of law) or in the interpretation
or administration thereof and including the introduction of any new law or
governmental rule, regulation, order, guideline or request, such as, for
example, but not limited to: (A) a change in the basis of taxation of
payment to any Lender of the principal of or interest on the Loans or the
Notes or any other amounts payable hereunder (except for changes in the
rate of tax on, or determined by reference to, the net income or profits of
such Lender pursuant to the laws of the jurisdiction in which it is
organized or in which its principal office or applicable lending office is
located or any subdivision
-10-
thereof or therein) or (B) a change in official reserve requirements, but,
in all events, excluding reserves required under Regulation D to the extent
included in the computation of the Eurodollar Rate and/or (y) other
circumstances arising since the Effective Date affecting such Lender, the
interbank Eurodollar market or the position of such Lender in such market;
or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has been made (x) unlawful by any law or governmental rule, regulation
or order, (y) impossible by compliance by any Lender in good faith with any
governmental request (whether or not having force of law) or (z)
impracticable as a result of a contingency occurring after the Effective
Date which materially and adversely affects the interbank Eurodollar
market;
then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone promptly
confirmed in writing) to the Borrower and, except in the case of clause (i)
above, to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Lenders).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no longer
be available until such time as the Administrative Agent notifies the Borrower
and the Lenders that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the Borrower with respect to Eurodollar Loans which have not
yet been incurred (including by way of conversion) shall be deemed rescinded by
the Borrower, (y) in the case of clause (ii) above, the Borrower shall pay to
such Lender, upon such Lender's written request therefor, such additional
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 shall be required to compensate such Lender for such increased
costs or reductions in amounts received or receivable hereunder (a written
notice as to the additional amounts owed to such Lender, showing in reasonable
detail the basis for the calculation thereof, submitted to the Borrower by such
Lender shall, absent manifest error, be final and conclusive and binding on all
the parties hereto) and (z) in the case of clause (iii) above, the Borrower
shall take one of the actions specified in Section 1.10(b) as promptly as
possible and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, cancel such Borrowing by
giving the Administrative Agent telephonic notice (confirmed in writing) on the
same date that the Borrower was notified by the affected Lender or the
Administrative Agent pursuant to Section 1.10(a)(ii) or (iii) or (y) if the
affected Eurodollar Loan is then outstanding, upon at least one Business Days'
written notice to the Administrative Agent, require the affected Lender to
convert such Eurodollar Loan into a Base Rate Loan, provided that, if more than
one Lender is affected at such time, then all affected Lenders must be treated
the same pursuant to this Section 1.10(b).
-11-
(c) If any Lender determines that after the Effective Date the
introduction of or any change in any applicable law or governmental rule,
regulation, order, guideline, directive or request (whether or not having the
force of law) concerning capital adequacy, or any change in interpretation or
administration thereof by the NAIC or any governmental authority, central bank
or comparable agency, will have the effect of increasing the amount of capital
required or expected to be maintained by such Lender or any corporation
controlling such Lender based on the existence of such Lender's Commitments
hereunder or its obligations hereunder, then the Borrower shall pay to such
Lender, upon its written demand therefor, such additional amounts as shall be
required to compensate such Lender or such other corporation for the increased
cost to such Lender or such other corporation or the reduction in the rate of
return to such Lender or such other corporation as a result of such increase of
capital. In determining such additional amounts, each Lender will act reasonably
and in good faith and will use averaging and attribution methods which are
reasonable, provided that such Lender's determination of compensation owing
--------
under this Section 1.10(c) shall, absent manifest error, be final and conclusive
and binding on all the parties hereto. Each Lender, upon determining that any
additional amounts will be payable pursuant to this Section 1.10(c), will give
prompt written notice thereof to the Borrower, which notice shall show in
reasonable detail the basis for calculation of such additional amounts.
1.11 Compensation. The Borrower shall compensate each Lender, upon its
------------
written request (which request shall set forth in reasonable detail the basis
for requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Lender to fund its Eurodollar Loans but excluding loss of
anticipated profits) which such Lender may sustain: (i) if for any reason (other
than a default by such Lender or the Administrative Agent) a Borrowing of, or
conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii)
if any repayment (including any repayment made pursuant to Section 4.01, Section
4.02 or as a result of an acceleration of the Loans pursuant to Section 10) or
conversion of any of its Eurodollar Loans occurs on a date which is not the last
day of an Interest Period with respect thereto; (iii) if any prepayment of any
of its Eurodollar Loans is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay its loans when required by the terms of this
Agreement or any Note held by such Lender or (y) any election made pursuant to
Section 1.10(b).
1.12 Change of Lending Office. Each Lender agrees that on the
------------------------
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect to such
Lender, it will, if requested by the Borrower, use reasonable efforts (subject
to overall policy considerations of such Lender) to designate another lending
office for any Loans or Letters of Credit affected by such event, provided that
--------
such designation is made on such terms that such Lender and its lending office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of such
Section. Nothing in this Section 1.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Lender provided in Sections
1.10, 2.06 and 4.04.
-12-
1.13 Replacement of Lenders. (x) If any Lender becomes a Defaulting
----------------------
Lender or otherwise defaults in its obligations to make Loans, (y) upon the
occurrence of an event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect to any Lender
which results in such Lender charging to the Borrower increased costs in excess
of those being generally charged by the other Lenders or (z) in the case of a
refusal by a Lender to consent to certain proposed changes, waivers, discharges
or terminations with respect to this Agreement which have been approved by the
Required Lenders as (and to the extent) provided in Section 13.12(b), the
Borrower shall have the right, if no Default or Event of Default then exists
(or, in the case of preceding clause (z), no Default or Event of Default will
exist immediately after giving effect to such replacement), to replace such
Lender (the "Replaced Lender") with one or more other Eligible Transferees, none
of whom shall constitute a Defaulting Lender at the time of such replacement
(collectively, the "Replacement Lender") and each of whom shall be required to
be reasonably acceptable to the Syndication Agent and the Administrative Agent,
provided that (i) at the time of any replacement pursuant to this Section 1.13,
--------
the Replacement Lender shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 13.04(b) (and with all fees payable pursuant to
said Section 13.04(b) to be paid by the Replacement Lender) pursuant to which
the Replacement Lender shall acquire all of the Commitments and outstanding
Loans of, and in each case participations in Letters of Credit 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 (I) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans of the Replaced
Lender, (II) an amount equal to all Unpaid Drawings 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 (III) an amount equal to all
accrued, but theretofore unpaid, Fees owing to the Replaced Lender pursuant to
Section 3.01, (y) the Issuing Lender an amount equal to such Replaced Lender's
RL Percentage of any Unpaid Drawing (which at such time remains an Unpaid
Drawing) to the extent such amount was not theretofore funded by such Replaced
Lender to the Issuing Lender and (z) the Swingline Lender an amount equal to
such Replaced Lender's RL Percentage of any Mandatory Borrowing to the extent
such amount was not theretofore funded by such Replaced Lender to the Swingline
Lender and (ii) all obligations of the Borrower due and owing to the Replaced
Lender at such time (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 and Assumption
Agreement, the payment of amounts referred to in clauses (i) and (ii) above and,
if so requested by the Replacement Lender, delivery to the Replacement Lender of
the appropriate Note or Notes executed by the Borrower, 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 (including, without limitation, Sections 1.10, 1.11, 2.06,
4.04, 12.06 and 13.01), which shall survive as to such Replaced Lender.
1.14 Limitation on Additional Amounts, etc. Notwithstanding anything
--------------------------------------
to the contrary contained in Section 1.10, 1.11, 2.06 or 4.04, unless a Lender
gives notice to the Borrower that the Borrower is obligated to pay an amount
under any such Section within one year after the later of (x) the date such
Lender incurs the respective increased costs, Taxes, loss,
-13-
expense or liability, reduction in amounts received or receivable or reduction
in return on capital or (y) the date such Lender has actual knowledge of its
incurrence of the respective increased costs, Taxes, loss, expense or liability,
reductions in amounts received or receivable or reduction in return on capital,
then such Lender shall only be entitled to be compensated for such amount by the
Borrower pursuant to said Section 1.10, 1.11, 2.06 or 4.04, as the case may be,
to the extent the costs, Taxes, loss, expense or liability, reduction in amounts
received or receivable or reduction in return on capital are incurred or
suffered on or after the date which occurs one year prior to such Lender giving
notice to the Borrower that the Borrower is obligated to pay the respective
amounts pursuant to said Section 1.10, 1.11, 2.06 or 4.04, as the case may be.
This Section 1.14 shall have no applicability to any Section of this Agreement
or any other Credit Document other than said Sections 1.10, 1.11, 2.06 and 4.04.
SECTION 2. Letters of Credit.
-----------------
2.01 Letters of Credit. (a) Subject to and upon the terms and
-----------------
conditions set forth herein, the Borrower may request that any Issuing Lender
issue, at any time and from time to time on and after the Initial Borrowing Date
and prior to the Revolving Loan Maturity Date, for the account of the Borrower
and for the benefit of (x) any holder (or any trustee, agent or other similar
representative for any such holders) of L/C Supportable Obligations of the
Borrower or any of its Subsidiaries, an irrevocable standby letter of credit, in
a form customarily used by such Issuing Lender or in such other form as has been
approved by such Issuing Lender and (y) sellers of goods to the Borrower or any
of its Subsidiaries, an irrevocable trade letter of credit, in a form
customarily used by such Issuing Lender or in such other form as has been
approved by such Issuing Lender (each such letter of credit, a "Letter of
Credit" and, collectively, the "Letters of Credit"). All Letters of Credit shall
be denominated in Dollars and shall be issued on a sight basis only.
(b) Subject to and upon the terms and conditions set forth herein,
each Issuing Lender agrees that it will, at any time and from time to time on
and after the Initial Borrowing Date and prior to the Revolving Loan Maturity
Date, following its receipt of the respective Letter of Credit Request, issue
for the account of the Borrower, one or more Letters of Credit as are permitted
to remain outstanding hereunder without giving rise to a Default or an Event of
Default, provided that no Issuing Lender shall be under any obligation to issue
any Letter of Credit of the types described above if at the time of such
issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing
Lender from issuing such Letter of Credit or any requirement of law
applicable to such Issuing Lender or any request or directive (whether or
not having the force of law) from any governmental authority with
jurisdiction over such Issuing Lender shall prohibit, or request that such
Issuing Lender refrain from, the issuance of letters of credit generally or
such Letter of Credit in particular or shall impose upon such Issuing
Lender with respect to such Letter of Credit any restriction or reserve or
capital requirement (for which such Issuing Lender is not otherwise
compensated) not in effect with respect to such Issuing Lender on the date
hereof, or any unreimbursed loss, cost or expense which was not applicable
or in effect
-14-
with respect to such Issuing Lender as of the date hereof and which such
Issuing Lender reasonably and in good ▇▇▇▇▇ ▇▇▇▇▇ material to it; or
(ii) such Issuing Lender shall have received notice, from the Borrower
or the Required Lenders prior to the issuance of such Letter of Credit, of
the type described in the second sentence of Section 2.03(b).
2.02 Maximum Letter of Credit Outstandings; Final Maturities.
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Notwithstanding anything to the contrary contained in this Agreement, (i) no
Letter of Credit shall be issued the Stated Amount of which, when added to the
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid on
the date of, and prior to the issuance of, the respective Letter of Credit) at
such time would exceed either (x) $20,000,000 or (y) when added to the sum of
(I) the aggregate principal amount of all Revolving Loans then outstanding and
(II) the aggregate principal amount of all Swingline Loans then outstanding, an
amount equal to the Total Revolving Loan Commitment and (ii) each Letter of
Credit shall by its terms terminate on or before the earlier of (x) in the case
of standby Letters of Credit, (A) the date which occurs 12 months after the date
of the issuance thereof (although any such standby Letter of Credit may be
extendible for successive periods of up to 12 months, but, in each case, not
beyond the third Business Day prior to the Revolving Loan Maturity Date, on
terms acceptable to the respective Issuing Lender) and (B) the third Business
Day prior to the Revolving Loan Maturity Date and (y) in the case of trade
Letters of Credit, (A) the date which occurs 180 days after the date of issuance
thereof and (B) the 30th day prior to the Revolving Loan Maturity Date.
2.03 Letter of Credit Requests; Minimum Stated Amount. (a) Whenever
------------------------------------------------
the Borrower desires that a Letter of Credit be issued for its account, the
Borrower shall give the Administrative Agent and the respective Issuing Lender
at least five Business Days' (or such shorter period as is acceptable to such
Issuing Lender) written notice thereof. Each notice shall be in the form of
Exhibit C (each a "Letter of Credit Request"). (b) The making of each Letter of
Credit Request shall be deemed to be a representation and warranty by the
Borrower that such Letter of Credit may be issued in accordance with, and will
not violate the requirements of, Section 2.02. Unless the respective Issuing
Lender has received notice from the Borrower or the Required Lenders before it
issues a Letter of Credit that one or more of the conditions specified in
Section 5 or 6 are not then satisfied, or that the issuance of such Letter of
Credit would violate Section 2.02, then such Issuing Lender shall, subject to
the terms and conditions of this Agreement, issue the requested Letter of Credit
for the account of the Borrower in accordance with such Issuing Lender's usual
and customary practices. Upon the issuance of or modification or amendment to
any standby Letter of Credit, the respective Issuing Lender shall promptly
notify the Borrower, the Administrative Agent and each Participant of such
issuance, modification or amendment as the case may be. Notwithstanding anything
to the contrary contained in this Agreement, in the event that a Lender Default
exists, no Issuing Lender shall be required to issue any Letter of Credit unless
such Issuing Lender has entered into arrangements satisfactory to it and the
Borrower to eliminate such Issuing Lender's risk with respect to the
participation in Letters of Credit by the
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Defaulting Lender or Lenders, including by cash collateralizing such Defaulting
Lender's or Lenders' RL Percentage of the Letter of Credit Outstandings.
(c) The initial Stated Amount of each Letter of Credit shall not be
less than $15,000 or such lesser amount as is acceptable to the respective
Issuing Lender.
2.04 Letter of Credit Participations. (a) Immediately upon the
-------------------------------
issuance by the respective Issuing Lender of any Letter of Credit, such Issuing
Lender shall be deemed to have sold and transferred to each RL Lender, other
than such Issuing Lender (each such Lender, in its capacity under this Section
2.04, a "Participant"), and each such Participant shall be deemed irrevocably
and unconditionally to have purchased and received from such Issuing Lender,
without recourse or warranty, an undivided interest and participation, to the
extent of such Participant's RL Percentage, in such Letter of Credit, each
drawing or payment made thereunder and the obligations of the Borrower under
this Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto. Upon any change in the Revolving Loan Commitments or RL
Percentages of the Lenders pursuant to Section 1.13 or 13.04, it is hereby
agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings with respect thereto, there shall be an automatic adjustment to the
participations pursuant to this Section 2.04 to reflect the new RL Percentages
of the assignor and assignee Lender, as the case may be.
(b) In determining whether to pay under any Letter of Credit, the
respective Issuing Lender shall not have an obligation relative to the other
Lenders other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Lender under or
in connection with any Letter of Credit shall not create for such Issuing Lender
any resulting liability to the Borrower, any other Credit Party, any Lender or
any other Person unless such action is taken or omitted with gross negligence or
willful misconduct (as finally determined by a court of competent jurisdiction).
(c) In the event that an Issuing Lender makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to such Issuing Lender pursuant to Section 2.05(a), such Issuing Lender shall
promptly notify the Administrative Agent, which shall promptly notify each
Participant of such failure, and each Participant shall promptly and
unconditionally pay to such Issuing Lender the amount of such Participant's RL
Percentage of such unreimbursed payment in Dollars and in same day funds. If the
Administrative Agent so notifies, prior to 11:00 A.M. (Boston, Massachusetts
time) on any Business Day, any Participant required to fund a payment under a
Letter of Credit, such Participant shall make available to the respective
Issuing Lender in Dollars such Participant's RL Percentage of the amount of such
payment on such Business Day in same day funds. If and to the extent such
Participant shall not have so made its RL Percentage of the amount of such
payment available to the respective Issuing Lender, such Participant agrees to
pay to such Issuing Lender, forthwith on demand such amount, together with
interest thereon, for each day from such date until the date such amount is paid
to such Issuing Lender at the overnight Federal Funds Rate for the first three
days and at the interest rate applicable to Revolving Loans maintained as Base
Rate Loans for each day
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thereafter. The failure of any Participant to make available to any Issuing
Lender its RL Percentage of any payment under any Letter of Credit shall not
relieve any other Participant of its obligation hereunder to make available to
such Issuing Lender its RL Percentage of any payment under any Letter of Credit
on the date required, as specified above, but no Participant shall be
responsible for the failure of any other Participant to make available to such
Issuing Lender such other Participant's RL Percentage of any such payment.
(d) Whenever the respective Issuing Lender receives a payment of a
reimbursement obligation as to which it has received any payments from the
Participants pursuant to clause (c) above, such Issuing Lender shall pay to each
such Participant which has paid its RL Percentage thereof, in Dollars and in
same day funds, an amount equal to such Participant's share (based upon the
proportionate aggregate amount originally funded by such Participant to the
aggregate amount funded by all Participants) of the principal amount of such
reimbursement obligation and interest thereon accruing after the purchase of the
respective participations.
(e) Upon the request of any Participant, each Issuing Lender shall
furnish to such Participant copies of any Letter of Credit issued by it and such
other documentation as may reasonably be requested by such Participant.
(f) The obligations of the Participants to make payments to each
Issuing Lender with respect to Letters of Credit issued by such Issuing Lender
shall be irrevocable and not subject to any qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right which
Holdings or any of its Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, any Issuing Lender, any Participant, any other Lender
or any other Person, whether in connection with this Agreement, any Letter
of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between Holdings or any
Subsidiary of Holdings and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or any 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;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
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2.05 Agreement to Repay Letter of Credit Drawings. (a) The
--------------------------------------------
Borrower agrees to reimburse each Issuing Lender, by making payment to the
Administrative Agent in immediately available funds at the Payment Office, for
any payment or disbursement made by such Issuing Lender under any Letter of
Credit issued by it (each such amount, so paid until reimbursed, an "Unpaid
Drawing"), not later than one Business Day following receipt by the Borrower of
notice of such payment or disbursement (provided that no such notice shall be
required to be given if a Default or an Event of Default under Section 10.05
shall have occurred and be continuing, in which case the Unpaid Drawing shall be
due and payable immediately without presentment, demand, protest or notice of
any kind (all of which are hereby waived by the Borrower)), with interest on the
amount so paid or disbursed by such Issuing Lender, to the extent not reimbursed
prior to 1:00 P.M. (Boston, Massachusetts time) on the date of such payment or
disbursement, from and including the date paid or disbursed to but excluding the
date such Issuing Lender was reimbursed by the Borrower therefor at a rate per
annum equal to the Base Rate in effect from time to time plus the Applicable
Base Rate Margin for Revolving Loans; provided, however, to the extent such
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amounts are not reimbursed prior to 12:00 Noon (Boston, Massachusetts time) on
the third Business Day following the receipt by the Borrower of notice of such
payment or disbursement or following the occurrence of a Default or an Event of
Default under Section 10.05, interest shall thereafter accrue on the amounts so
paid or disbursed by such Issuing Lender (and until reimbursed by the Borrower)
at a rate per annum equal to the Base Rate in effect from time to time plus the
Applicable Base Rate Margin for Revolving Loans plus 2%, with interest to be
payable on demand. Each Issuing Lender shall give the Borrower prompt written
notice of each Drawing under any Letter of Credit issued by such Issuing Lender,
provided that the failure to give any such notice shall in no way affect, impair
or diminish the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 2.05 to
reimburse each Issuing Lender with respect to drawings under Letters of Credit
issued by such Issuing Lender (each a "Drawing") (including, in each case,
interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which Holdings or any Subsidiary of Holdings may have or have had against any
Lender (including in its capacity as the Issuing Lender or as a Participant),
including, without limitation, any defense based upon the failure of any drawing
under a Letter of Credit to conform to the terms of the Letter of Credit or any
nonapplication or misapplication by the beneficiary of the proceeds of such
Drawing; provided, however, that the Borrower shall not be obligated to
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reimburse any Issuing Lender for any wrongful payment made by such Issuing
Lender under a Letter of Credit as a result of (i) the failure of such Issuing
Lender to confirm that the documents required to be delivered under such Letter
of Credit appear to have been delivered and that they appear to substantially
comply on their face with the requirements of such Letter of Credit or (ii) acts
or omissions constituting willful misconduct or gross negligence on the part of
such Issuing Lender (as finally determined by court of competent jurisdiction).
2.06 Increased Costs. If at any time after the Effective Date,
---------------
the introduction of or any change in any applicable law, rule, regulation,
order, guideline or request or in the interpretation or administration thereof
by the NAIC or any governmental authority charged with the interpretation or
administration thereof, or compliance by any Issuing Lender or any
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Participant with any request or directive by the NAIC or by any such authority
(whether or not having the force of law), shall either (i) impose, modify or
make applicable any reserve, deposit, capital adequacy or similar requirement
against letters of credit issued by such Issuing Lender or participated in by
any Participant or (ii) impose on such Issuing Lender or any Participant any
other conditions relating, directly or indirectly, to this Agreement or any
Letter of Credit or such Participant's participation therein; and the result of
any of the foregoing is to increase the cost to such Issuing Lender or any
Participant of issuing, maintaining or participating in any Letter of Credit, or
reduce the amount of any sum received or receivable by such Issuing Lender or
any Participant hereunder or reduce the rate of return on its capital with
respect to Letters of Credit (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of such Issuing Lender or
such Participant pursuant to the laws of the jurisdiction in which it is
organized or in which its principal office or applicable lending office is
located or any subdivision thereof or therein and without duplication of any
amounts payable by the Borrower pursuant to Section 4.04(a)), then, upon the
delivery of the certificate referred to below to the Borrower by such Issuing
Lender or any Participant (a copy of which certificate shall be sent by such
Issuing Lender or such Participant to the Administrative Agent), the Borrower
shall pay to such Issuing Lender or such Participant such additional amount or
amounts as will compensate such Lender for such increased cost or reduction in
the amount receivable or reduction on the rate of return on its capital. Any
Issuing Lender or any Participant, upon determining that any additional amounts
will be payable pursuant to this Section 2.06, will give prompt written notice
thereof to the Borrower, which notice shall include a certificate submitted to
the Borrower by any Issuing Lender or such Participant (a copy of which
certificate shall be sent by such Issuing Lender or such Participant to the
Administrative Agent), setting forth in reasonable detail the basis for the
calculation of such additional amount or amounts necessary to compensate such
Issuing Lender or such Participant. The certificate required to be delivered
pursuant to this Section 2.06 shall, absent manifest error, be final and
conclusive and binding on the Borrower.
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.
-----------------------------------------------------
3.01 Fees. (a) The Borrower agrees to pay to the
----
Administrative Agent for distribution to each Non-Defaulting Lender with a
Tranche A Term Loan Commitment, a commitment commission (the "A TL Commitment
Commission") for the period from and including the Effective Date to but
excluding the Tranche A Term Loan Available Termination Date (or such earlier
date on which the Total Tranche A Term Loan Commitment shall have been
terminated), computed at a rate for each day equal to 1.50% per annum on the
daily Tranche A Term Loan Commitment of such Non-Defaulting Lender. Accrued A TL
Commitment Commission shall be due and payable quarterly in arrears on each
Quarterly Payment Date and on the date on which the Total Tranche A Term Loan
Commitment shall have been terminated.
(b) The Borrower agrees to pay to the Administrative Agent for
distribution to each Non-Defaulting RL Lender a commitment commission (the "RL
Commitment Commission") for the period from and including the Effective Date to
but excluding the Revolving Loan Maturity Date (or such earlier date on which
the Total Revolving Loan Commitment has been terminated) computed at a rate for
each day equal to 1/2 of 1% per annum on the daily average Unutilized Revolving
Loan Commitment of such Non-Defaulting Lender.
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Accrued RL Commitment Commission shall be due and payable quarterly in arrears
on each Quarterly Payment Date and on the date upon which the Total Revolving
Loan Commitment shall have been terminated.
(c) The Borrower agrees to pay to the Administrative Agent for
distribution to each RL Lender (based on each such RL Lender's respective RL
Percentage) a fee in respect of each Letter of Credit (the "Letter of Credit
Fee") for the period from and including the date of issuance of such Letter of
Credit to and including the date of termination or expiration of such Letter of
Credit, computed at a rate per annum equal to the Applicable Eurodollar Rate
Margin then in effect with respect to Revolving Loans on the daily Stated Amount
of each such Letter of Credit. Accrued Letter of Credit Fees shall be due and
payable quarterly in arrears on each Quarterly Payment Date and on the first day
on or after the termination of the Total Revolving Loan Commitment upon which no
Letters of Credit remain outstanding.
(d) The Borrower agrees to pay to the respective Issuing Lender, for
its own account, a facing fee in respect of each Letter of Credit issued by such
Issuing Lender (the "Facing Fee") for the period from and including the date of
issuance of such Letter of Credit to and including the termination or expiration
of such Letter of Credit, computed at a rate equal to 1/4 of 1% per annum on the
daily Stated Amount of such Letter of Credit. Accrued Facing Fees shall be due
and payable quarterly in arrears on each Quarterly Payment Date and upon the
first day on or after the termination of the Total Revolving Loan Commitment
upon which no Letters of Credit remain outstanding.
(e) The Borrower agrees to pay to the respective Issuing Lender, for
its own account, upon each payment under, issuance of, or amendment to, any
Letter of Credit, such amount as shall at the time of such event be the
administrative charge and the reasonable expenses which such Issuing Lender is
generally imposing in connection with such occurrence with respect to letters of
credit issued by it.
(f) The Borrower agrees to pay to the Arranger and each Agent, for its
respective account, such other fees as have been agreed to in writing by the
Borrower and the Arranger and/or such Agent.
3.02 Voluntary Termination of Commitments. (a) Upon at least one
------------------------------------
Business Day's prior written notice to the Administrative Agent at the Notice
Office (which notice the Administrative Agent shall promptly transmit to each of
the Lenders), the Borrower shall have the right, at any time or from time to
time, without premium or penalty, to terminate the Total Unutilized Revolving
Loan Commitment, in whole or in part, pursuant to this Section 3.02(a), in a
minimum amount of $1,000,000 or an integral multiple of $100,000 in excess
thereof in the case of partial reductions to the Total Unutilized Revolving Loan
Commitment, provided that each such reduction shall apply proportionately to
permanently reduce the Revolving Loan Commitment of each RL Lender.
(b) At any time after the Initial Borrowing Date and prior to
the termination of the Total Tranche A Term Loan Commitment, and upon at least
five Business Day's prior written notice to, and subject to obtaining the prior
written consent of, the Syndication Agent, the
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Administrative Agent and the Required Lenders, the Borrower shall have the
right, without premium or penalty, to terminate, in whole or in part, the
remaining Total Tranche A Term Loan Commitment, in a minimum amount of
$2,000,000 or an integral multiple of $1,000,000 in excess thereof in the case
of partial terminations of the Total Tranche A Term Loan Commitment; provided
that the consents of the Syndication Agent, the Administrative Agent and the
Required Lenders shall not be so required if either (x) the Total Tranche A Term
Loan Commitment is being terminated in full in conjunction with the prepayment
in full of all outstanding Loans and the termination of the Total Revolving Loan
Commitment or (y) the Junior Subordinated Notes have theretofore been repaid in
full. Any reduction to the Total Tranche A Term Loan Commitment pursuant to this
Section 3.02(b) shall be applied proportionately to permanently reduce the
Tranche A Term Loan Commitment of each Lender with such a Commitment.
3.03 Mandatory Reduction of Commitments. (a) The Total Commitment (and
----------------------------------
the Commitments of each Lender) shall terminate in its entirety at 5:00 P.M.
(Boston, Massachusetts time) on January 31, 1999 unless Initial Borrowing Date
has occurred on or before such date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Tranche A Term Loan Commitment shall
(i) be reduced on each Tranche A Term Loan Borrowing Date (after giving effect
to the making of Tranche A Term Loans on each such date) in an amount equal to
the aggregate principal amount of Tranche A Term Loans incurred on each such
date, (ii) terminate in its entirety (to the extent not theretofore terminated)
on the earliest of (x) the Tranche A Term Loan Available Termination Date (after
giving effect to the making of Tranche A Term Loans on such date), (y) 5:00 P.M.
(Boston, Massachusetts time) on the Tranche A Term Loan Available Termination
Date, whether or not any Tranche A Term Loans have been incurred on such date
and (z) unless the Required Lenders otherwise agree, the date on which a Change
of Control occurs, (iii) be reduced on each date on which, and in the amount by
which, the Borrower deposits cash and/or Cash Equivalents into the Junior
Subordinated Notes Escrow Account, provided that reductions to the Total Tranche
A Term Loan Commitment pursuant to this clause (iii) shall only be required
after the Borrower has deposited $10,000,000 into the Junior Subordinated Notes
Escrow Account (in which case such reductions shall only be in the amount by
which such deposits exceed the first $10,000,000 of such deposits), and (iv)
prior to the termination of the Total Tranche A Term Loan Commitment, be reduced
from time to time to the extent required by Section 4.02. Notwithstanding
anything to the contrary contained in clause (i) of the immediately preceding
sentence, in no event shall the Total Tranche A Term Loan Commitment exceed
$10,000,000 after giving effect to the incurrence of Tranche A Term Loans on the
Initial Borrowing Date and to the extent that the Total Tranche A Term Loan
Commitment on the Initial Borrowing Date (and after giving effect to the
incurrence of Tranche A Term Loans on such date) would exceed $10,000,000, the
Total Tranche A Term Loan Commitment shall be reduced on such date to
$10,000,000.
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Tranche B Term Loan Commitment shall
terminate in its entirety on
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the Initial Borrowing Date (after giving effect to the incurrence of the Tranche
B Term Loans on such date).
(d) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Revolving Loan Commitment shall terminate in its
entirety on the earlier of (i) the date on which a Change of Control occurs
unless the Required Lenders otherwise agree and (ii) the Revolving Loan Maturity
Date.
(e) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on each date after the Initial Borrowing Date upon which a
mandatory repayment of Term Loans and/or a mandatory reduction to the Total
Tranche A Term Loan Commitment pursuant to any of Sections 4.02(c) through (h),
inclusive, is required (and exceeds in amount the aggregate principal amount of
Term Loans then outstanding plus the Total Tranche A Term Loan Commitment then
in effect) or would be required if Term Loans were then outstanding and/or the
Total Tranche A Term Loan Commitment was then in effect, the Total Revolving
Loan Commitment shall be permanently reduced by the amount, if any, by which the
amount required to be applied pursuant to said Sections (determined as if an
unlimited amount of Term Loans were actually outstanding) exceeds the aggregate
principal amount of Term Loans then outstanding plus the Total Tranche A Term
Loan Commitment then in effect.
(f) Each reduction to, or termination of, the Total Tranche A Term
Loan Commitment, the Total Tranche B Term Loan Commitment and the Total
Revolving Loan Commitment shall be applied to proportionately reduce or
terminate the Tranche A Term Loan Commitment, the Tranche B Term Loan Commitment
and the Revolving Loan Commitment, as the case may be, of each Lender with such
a Commitment.
SECTION 4. Prepayments; Payments; Taxes.
-----------------------------
4.01 Voluntary Prepayments. The Borrower shall have the right to
---------------------
prepay the Loans, without premium (except as otherwise provided below) or
penalty, in whole or in part at any time and from time to time on the following
terms and conditions: (i) the Borrower shall give the Administrative Agent prior
to 1:00 P.M. (Boston, Massachusetts time) at the Notice Office (x) at least one
Business Day's prior written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay Base Rate Loans (or same day notice in the case
of a prepayment of Swingline Loans) and (y) at least three Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of its
intent to prepay Eurodollar Loans, which notice (in each case) shall specify
whether Tranche A Term Loans, Tranche B Term Loans, Revolving Loans or Swingline
Loans shall be prepaid, the amount of such prepayment and the Types of Loans to
be prepaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings pursuant to which made, and which notice the Administrative Agent
shall, except in the case of Swingline Loans, promptly transmit to each of the
Lenders; (ii) (x) each partial prepayment of Loans (other than Swingline Loans)
pursuant to this Section 4.01 shall be in an aggregate principal amount of at
least $250,000 or an integral multiple of $50,000 in excess thereof and (y) each
partial prepayment of Swingline Loans pursuant to this Section 4.01 shall be in
an aggregate principal amount of at least $50,000 or an integral multiple of
$10,000 in excess
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thereof, provided that if any partial prepayment of Eurodollar Loans made
--------
pursuant to any Borrowing shall reduce the outstanding principal amount of
Eurodollar Loans made pursuant to such Borrowing to an amount less than the
Minimum Borrowing Amount applicable thereto, then such Borrowing may not be
continued as a Borrowing of Eurodollar Loans and any election of an Interest
Period with respect thereto given by the Borrower shall have no force or effect;
(iii) each prepayment pursuant to this Section 4.01 in respect of any Loans made
pursuant to a Borrowing shall be applied pro rata among such Loans, provided
--- ---- --------
that at the Borrower's election in connection with any prepayment of Revolving
Loans pursuant to this Section 4.01, such prepayment shall not, so long as no
Default or Event of Default then exists, be applied to any Revolving Loan of a
Defaulting Lender; (iv) except to the extent that a B Lender has waived its pro
---
rata share of any such prepayment pursuant to Section 4.02(k), each voluntary
----
prepayment of Term Loans pursuant to this Section 4.01 shall be applied pro rata
--- ----
to each Tranche of outstanding Term Loans, with the Tranche A Term Loans to be
allocated the Tranche A Term Loan Percentage of the amount of such prepayment
and the Tranche B Term Loans to be allocated the Tranche B Term Loan Percentage
of the amount of such prepayment, provided, however, so long as any Tranche A
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Term Loans are then outstanding, the Borrower may elect (as specified in the
notice of prepayment given pursuant to this Section 4.01) to have such
prepayment applied solely to such then outstanding Tranche A Term Loans; (v)
each voluntary prepayment of any Tranche of Term Loans pursuant to this Section
4.01 shall be applied (x) in the case of Tranche A Term Loans, (1) first, to
reduce the then remaining Tranche A Term Loan Scheduled Repayments (other than
the final Tranche A Term Loan Scheduled Repayment) on a pro rata basis (based
--- ----
upon the remaining unpaid principal amounts of such Tranche A Term Loan
Scheduled Repayments after giving effect to all prior reductions thereto, but
determined without regard to the final Tranche A Term Loan Scheduled Repayment)
and (2) second, to the extent in excess thereof, to reduce the final Tranche A
Term Loan Scheduled Repayment, and (y) in the case of Tranche B Term Loans, to
reduce the then remaining Tranche B Term Loan Scheduled Repayments on a pro rata
--- ----
upon the then remaining unpaid principal amounts of such Tranche B Term Loan
Scheduled Repayments after giving effect to all prior reductions thereto); and
(vi) in the case of any voluntary prepayment of Tranche B Term Loans pursuant to
this Section 4.01 (x) made on or prior to December 30, 1999, such prepayment
shall be an amount equal to the product of (A) the principal amount specified
pursuant to clause (i) of this Section 4.01 to be allocated to such Tranche of
Term Loans multiplied by (B) 102% and (y) made on and after December 31, 1999
and on or before December 30, 2000, such prepayment shall be an amount equal to
the product of (A) the principal amount specified pursuant to clause (i) of this
Section 4.01 to be allocated to such Tranche of Term Loans multiplied by (B)
101%.
4.02 Mandatory Repayments and Commitment Reductions. (a) On any day on
----------------------------------------------
which the sum of (I) the aggregate outstanding principal amount of all Revolving
Loans (after giving effect to all other repayments thereof on such date), (II)
the aggregate outstanding principal amount of all Swingline Loans (after giving
effect to all other repayments thereof on such date) and (III) the aggregate
amount of all Letter of Credit Outstandings exceeds the Total Revolving Loan
Commitment at such time, the Borrower shall prepay on such day the principal of
Swingline Loans and, after all Swingline Loans have been repaid in full or if no
Swingline Loans are outstanding, Revolving Loans, in an aggregate amount equal
to such excess. If, after giving effect to the prepayment of all outstanding
Swingline Loans and Revolving Loans, the
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aggregate amount of the Letter of Credit Outstandings exceeds the Total
Revolving Loan Commitment at such time, the Borrower shall pay to the
Administrative Agent at the Payment Office on such day an amount of cash and/or
Cash Equivalents equal to the amount of such excess (up to a maximum amount
equal to the Letter of Credit Outstandings at such time), such cash and/or Cash
Equivalents to be held as security for all obligations of the Borrower to the
Issuing Lender and the Lenders hereunder in a cash collateral account to be
established by the Administrative Agent.
(b) (i) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each date set forth below, the Borrower shall be required to
repay that principal amount of Tranche A Term Loans, to the extent then
outstanding, as is set forth opposite such date below (each such repayment, as
the same may be reduced as provided in Sections 4.01 and 4.02(i), a "Tranche A
Term Loan Scheduled Repayment"):
Tranche A Term Loan
Scheduled Repayment Date Amount
------------------------ ------
May 1, 1999 $500,000
August 1, 1999 $500,000
November 1, 1999 $500,000
February 1, 2000 $500,000
May 1, 2000 $500,000
August 1, 2000 $500,000
November 1, 2000 $500,000
February 1, 2001 $500,000
May 1, 2001 $750,000
August 1, 2001 $750,000
November 1, 2001 $750,000
February 1, 2002 $750,000
May 1, 2002 $1,000,000
August 1, 2002 $1,000,000
November 1, 2002 $1,000,000
Tranche A Term
Loan Maturity Date $10,000,000
(ii) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each date set forth below, the Borrower shall be required to
repay that principal amount of Tranche B Term Loans, to the extent then
outstanding, as is set forth opposite such date below (each such repayment, as
the same may be reduced as provided in Sections 4.01 and 4.02(i), a "Tranche B
Term Loan Scheduled Repayment," and the Tranche A Term Loan Scheduled
Repayments, together with the Tranche B Term Loan Scheduled Repayments, are
collectively referred to as the "Scheduled Repayments"):
-▇▇-
▇▇▇▇▇▇▇ ▇ Term Loan
Scheduled Repayment Date Amount
------------------------ ------
May 1, 1999 $125,000
August 1, 1999 $125,000
November 1, 1999 $125,000
February 1, 2000 $125,000
May 1, 2000 $125,000
August 1, 2000 $125,000
November 1, 2000 $125,000
February 1, 2001 $125,000
May 1, 2001 $125,000
August 1, 2001 $125,000
November 1, 2001 $125,000
February 1, 2002 $125,000
May 1, 2002 $125,000
August 1, 2002 $125,000
November 1, 2002 $125,000
February 1, 2003 $125,000
May 1, 2003 $125,000
Tranche B Term
Loan Maturity Date $47,875,000
(c) In addition to any other mandatory repayments pursuant to
this Section 4.02, within one Business Day following each date on or after the
Initial Borrowing Date upon which Holdings or any of its Subsidiaries receives
any cash proceeds from any capital contribution or any sale or issuance of its
equity (other than cash proceeds received (i) from the issuance by Holdings of
shares of its common stock (including as a result of the exercise of any options
with regard thereto), or options to purchase shares of its common stock, to
officers, directors and employees of Holdings or any of its Subsidiaries in an
aggregate amount not to exceed $500,000 in any fiscal year of Holdings, (ii)
from the issuance by Holdings of shares of its common stock or Qualified
Preferred Stock which are promptly used (A) to collateralize (with cash or Cash
Equivalents purchased therewith) letters of credit permitted to be issued for
the account of Holdings pursuant to Section 9.04(xii), (B) to the extent (but
only to the extent) necessary to bring Holdings and its Subsidiaries in
compliance with the terms of the Wakefern Letter, and with any amounts in excess
thereof to be subject to the other provisions of this Section 4.02(c), or (C) to
make interest and/or principal payments on the Junior Subordinated Notes
(including by depositing such amounts into the Junior Subordinated Notes Escrow
Account), provided that such payments are not otherwise prohibited by the terms
thereof or Section 9.12(a), 9.14(a) or 10.10, or (iii) from equity contributions
to any Subsidiary of Holdings
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to the extent made by Holdings or another Subsidiary of Holdings), an amount
equal to 100% of the Net Equity Proceeds of such capital contribution or sale or
issuance of equity shall be applied as a mandatory repayment of principal of
outstanding Term Loans (and/or, if the Total Tranche A Term Loan Commitment has
not yet been terminated, as a mandatory reduction to the Total Tranche A Term
Loan Commitment) in accordance with the requirements of Sections 4.02(i) and
(j).
(d) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each date on or after the Initial Borrowing Date upon which
Holdings or any of its Subsidiaries receives any cash proceeds from any
incurrence by Holdings or any of its Subsidiaries of Indebtedness for borrowed
money (other than Indebtedness for borrowed money permitted to be incurred
pursuant to Section 9.04 as such Section is in effect on the Effective Date), an
amount equal to 100% of the Net Debt Proceeds of the respective incurrence of
Indebtedness shall be applied as a mandatory repayment of principal of
outstanding Term Loans (and/or, if the Total Tranche A Term Loan Commitment has
not yet been terminated, as a mandatory reduction to the Total Tranche A Term
Loan Commitment) in accordance with the requirements of Sections 4.02(i) and
(j).
(e) In addition to any other mandatory repayments pursuant to
this Section 4.02, within one Business Day following each date on or after the
Initial Borrowing Date upon which Holdings or any of its Subsidiaries receives
any cash proceeds from any Asset Sale, an amount equal to 100% of the Net Sale
Proceeds therefrom shall be applied as a mandatory repayment of principal of
outstanding Term Loans (and/or, if the Total Tranche A Term Loan Commitment has
not yet been terminated, as a mandatory reduction to the Total Tranche A Term
Loan Commitment) in accordance with the requirements of Sections 4.02(i) and
(j); provided that with respect to no more than $2,000,000 in the aggregate of
--------
cash proceeds from Asset Sales in any fiscal year of Holdings, the Net Sale
Proceeds therefrom shall not be required to be so applied on such date so long
as no Default or Event of Default then exists and Holdings has delivered a
certificate to the Administrative Agent on or prior to such date stating that
such Net Sale Proceeds shall be used to purchase replacement assets within 180
days following the date of such Asset Sale or, in lieu thereof, Holdings or the
Borrower intends to commit to so reinvest such Net Sale Proceeds within 180 days
following the date of such Asset Sale and actually expend the funds pursuant to
such commitment within 270 days following the date of such Asset Sale (which
certificate shall set forth the estimates of the proceeds to be so expended),
and provided further, that if all or any portion of such Net Sale Proceeds not
----------------
required to be applied to the repayment of outstanding Term Loans (and/or, if
the Total Tranche A Term Loan Commitment has not yet been terminated, as a
mandatory reduction to the Total Tranche A Term Loan Commitment) are either (A)
not so reinvested (or committed to be so reinvested) in replacement assets
within such 180-day period (or such earlier date as Holdings or such Subsidiary
determines not to so reinvest such Net Sale Proceeds) or (B) if committed to be
reinvested within such 180-day period and not so reinvested within 270 days
following the date of such Asset Sale (or such earlier date, as the case may
be), then, in either case, such remaining portion not reinvested or committed to
be reinvested within such 180-day period (or such earlier date, as the case may
be) in the case of the preceding clause (A), and not reinvested within such
270-day period (or such earlier date, as the case may be) in the case of clause
(B) shall be applied
-26-
on the last day of such respective period (or such earlier date, as the case
may be) as a mandatory repayment of principal of outstanding Term Loans (and/or,
if the Total Tranche A Term Loan Commitment has not yet been terminated, as a
mandatory reduction to the Total Tranche A Term Loan Commitment) as provided
above in this Section 4.02(e) without regard to the preceding proviso.
(f) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each Excess Cash Payment Date, an amount equal to 75% of the
Excess Cash Flow for the relevant Excess Cash Payment Period shall be applied as
a mandatory repayment of principal of outstanding Term Loans (and/or, if the
Total Tranche A Term Loan Commitment has not yet been terminated, as a mandatory
reduction to the Total Tranche A Term Loan Commitment) in accordance with the
requirements of Sections 4.02(i) and (j).
(g) In addition to any other mandatory repayments pursuant to this
Section 4.02, within 15 days following each date on or after the Initial
Borrowing Date upon which Holdings or any of its Subsidiaries receives any cash
proceeds from any Recovery Event, an amount equal to 100% of the Net Insurance
Proceeds from such Recovery Event shall be applied as a mandatory repayment of
principal of outstanding Term Loans (and/or, if the Total Tranche A Term Loan
Commitment has not yet been terminated, as a mandatory reduction to the Total
Tranche A Term Loan Commitment) in accordance with the requirements of Sections
4.02(i) and (j); provided that so long as no Default or Event of Default then
--------
exists, such Net Insurance Proceeds shall not be required to be so applied on
such date to the extent that Holdings has delivered a certificate to the
Administrative Agent on or prior to such date stating that such Net Insurance
Proceeds shall be used to replace or restore any properties or assets in respect
of which such Net Insurance Proceeds were paid within 270 days following the
date of the receipt of such Net Insurance Proceeds (which certificate shall set
forth the estimates of the Net Insurance Proceeds to be so expended), and
provided further, that if all or any portion of such Net Insurance Proceeds not
----------------
required to be applied to the repayment of outstanding Term Loans (and/or, if
the Total Tranche A Term Loan Commitment has not yet been terminated, as a
mandatory reduction to the Total Tranche A Term Loan Commitment) pursuant to the
preceding proviso are not so used within 270 days after the date of the receipt
of such Net Insurance Proceeds (or such earlier date, if any, as Holdings or
such Subsidiary determines not to so reinvest such Net Insurance Proceeds), such
remaining portion shall be applied on the last day of such period (or such
earlier date, as the case may be) as a mandatory repayment of principal of
outstanding Term Loans (and/or, if the Total Tranche A Term Loan Commitment has
not yet been terminated, as a mandatory reduction to the Total Tranche A Term
Loan Commitment) as provided above in this Section 4.02(g) without regard to the
preceding proviso.
(f) In addition to any other mandatory repayments pursuant to this
Section 4.02, within one Business Day following each date on or after the
Initial Borrowing Date upon which Holdings or any of its Subsidiaries receives
any cash proceeds (including, without limitation, any proceeds from any
reimbursement of expenses previously paid by the ▇▇▇▇▇▇ Subsidiary) from (or
from the sale or foreclosure of capital stock of) the ▇▇▇▇▇▇ Subsidiary and/or
the ▇▇▇▇▇▇ Property (whether in accordance with the requirements of Annex I to
the Acquisition Agreement, the ▇▇▇▇▇▇ Agreement or otherwise, except to the
extent that the
-27-
Borrower is not entitled to retain such cash proceeds pursuant to such Annex I
or the ▇▇▇▇▇▇ Agreement and excluding (i) cash proceeds received by the Borrower
as the liquidation value of the ▇▇▇▇▇▇ Property in an aggregate amount not to
exceed $1,222,000 and (ii) cash proceeds in an aggregate amount not to exceed
$1,000,000 received by the Borrower in connection with the sale of the ▇▇▇▇▇▇
Property to pay for certain future environmental obligations described in the
Record of Decision), an amount equal to 100% of such cash proceeds shall be
applied as a mandatory repayment of principal of outstanding Term Loans (and/or,
if the Total Tranche A Term Loan Commitment has not yet been terminated, as a
mandatory reduction to the Total Tranche A Term Loan Commitment) in accordance
with Sections 4.02(i) and (j); provided that, with respect to any cash proceeds
--------
received by Holdings or any of its Subsidiaries consisting of reimbursement of
expenses previously paid by the ▇▇▇▇▇▇ Subsidiary, such cash proceeds shall not
be required to be so applied on such date so long as (I) no Default or Event of
Default then exists, (II) Holdings has delivered a certificate to the
Administrative Agent on or prior to such date stating that such reimbursement
proceeds shall be used to make Capital Expenditures in respect of new
supermarket construction within 180 days following the date of receipt of such
reimbursement proceeds or, in lieu thereof, Holdings or the Borrower intends to
commit to so invest such cash proceeds within 180 days following the date of
receipt of such reimbursement proceeds and actually expend the funds pursuant to
such commitment within 270 days following the date of receipt of such
reimbursement proceeds (which certificate shall set forth the estimates of the
proceeds to be so expended) and (III) such Capital Expenditures are permitted
under Section 9.07(a) or (b), and provided further, that if (A) all or any
----------------
portion of such reimbursement proceeds not required to be applied to the
repayment of outstanding Term Loans (and/or, if the Total Tranche A Term Loan
Commitment has not yet been terminated, as a mandatory reduction to the Total
Tranche A Term Loan Commitment) are either (x) not so used to make (or commited
to make) Capital Expenditures in respect of new supermarket construction within
such 180-day period (or such earlier date, if any, as Holdings or such
Subsidiary determines not to so make such Capital Expenditures with such cash
proceeds) or (y) if committed to be used to make Capital Expenditures within
such 180-day period and not so used within 270 days following the date of
receipt of such reimbursement proceeds (or such earlier date, as the case may
be) or (B) any amount of such Capital Expenditures are not permitted under
Section 9.07(a) or (b), then (1) in the case of preceding clause (A), such
remaining portion not used or committed to be used within such 180-day period
(or such earlier date, as the case may be) in the case of preceding clause
(A)(x), and not used within such 270-day period (or such earlier date, as the
case may be) in the case of preceding clause (A)(y) and (2) in the case of
preceding clause (B), such portion not permitted to be so used shall (in any
such case) be applied on the last day of such respective period (or such earlier
date, as the case may be) as a mandatory repayment of principal of outstanding
Term Loans (and/or, if the Total Tranche A Term Loan Commitment has not yet been
terminated, as a mandatory reduction to the Total Tranche A Term Loan
Commitment) as provided above in this Section 4.02(h) without regard to the
preceding proviso.
(i) Any amount required to be applied to outstanding Term Loans and/or
to the Total Tranche A Term Loan Commitment pursuant to Sections 4.02(c), (d),
(e), (f), (g) and (h) shall be applied (i) first, to repay the outstanding
principal amount of Term Loans of the respective Tranche in accordance with the
immediately succeeding sentence and (ii) second, to the extent in excess
thereof, to reduce the Total Tranche A Term Loan Commitment. Each
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amount required to be applied to outstanding Term Loans pursuant to Sections
4.02(c), (d), (e), (f), (g) and (h) shall be applied pro rata to each Tranche of
--- ----
Term Loans, with the Tranche A Term Loans to be allocated the Tranche A Term
Loan Percentage of the amount of such repayment and the Tranche B Term Loans to
be allocated the Tranche B Term Loan Percentage of the amount of such repayment.
The amount of each principal repayment of each Tranche of Term Loans made as
required by said Sections 4.02(c), (d), (e), (f), (g) and (h) shall be applied
(x) in the case of Tranche A Term Loans, (1) first, to reduce the then remaining
Tranche A Term Loan Scheduled Repayments (other than the final Tranche A Term
Loan Scheduled Repayment) on a pro rata basis (based upon the remaining unpaid
--- ----
principal amounts of such Tranche A Term Loan Scheduled Repayments after giving
effect to all prior reductions thereto, but determined without regard to the
final Tranche A Term Loan Scheduled Repayment) and (2) second, to the extent in
excess thereof, to reduce the final Tranche A Term Loan Scheduled Repayment, and
(y) in the case of Tranche B Term Loans, to reduce the then remaining Tranche B
Term Loan Scheduled Repayments on a pro rata basis (based upon the then
--- -----
remaining unpaid principal amounts of such Tranche B Term Loan Scheduled
Repayments after giving effect to all prior reductions thereto).
(j) With respect to each repayment of Loans required by this Section
4.02, the Borrower may designate the Types of Loans of the respective Tranche
which are to be repaid and, in the case of Eurodollar Loans, the specific
Borrowing or Borrowings of the respective Tranche pursuant to which made,
provided that: (i) repayments of Eurodollar Loans pursuant to this Section 4.02
--------
may only be made on the last day of an Interest Period applicable thereto unless
all Eurodollar Loans of the respective Tranche with Interest Periods ending on
such date of required repayment and all Base Rate Loans of the respective
Tranche have been paid in full; (ii) if any repayment of Eurodollar Loans made
pursuant to a single Borrowing shall reduce the outstanding Eurodollar Loans
made pursuant to such Borrowing to an amount less than the Minimum Borrowing
Amount applicable thereto, such Borrowing shall be converted at the end of the
then current Interest Period into a Borrowing of Base Rate Loans; and (iii) each
repayment of any Loans made pursuant to a Borrowing shall be applied pro rata
--- ----
among such Loans. In the absence of a designation by the Borrower as described
in the preceding sentence, the Administrative Agent shall, subject to the above,
make such designation in its sole discretion.
(k) Notwithstanding anything to the contrary contained in this Section
4.01, 4.02 or elsewhere in this Agreement (including, without limitation, in
Section 13.12), at any time that Tranche A Term Loans are outstanding or the
Total Tranche A Term Loan Commitment remains in effect, the Borrower shall have
the option, in its sole discretion, to give the Lenders with outstanding Tranche
B Term Loans (the "B Lenders") the option to waive their pro rata share of a
--- ----
voluntary prepayment or mandatory repayment of Tranche B Term Loans which is to
be made pursuant to Section 4.01 or Sections 4.02(c), (d), (e), (f), (g) and/or
(h), as the case may be (each such prepayment or repayment, a "Waivable
Repayment"), in each case upon the terms and provisions set forth in this
Section 4.02(k). If the Borrower elects to exercise the option referred to in
the immediately preceding sentence, the Borrower shall give to the
Administrative Agent written notice of the Borrower's intention to give the B
Lenders the right to waive a Waivable Repayment (including in such notice, the
aggregate amount of such proposed prepayment or repayment, as the case may be)
at least five Business Days prior to the date of the
-29-
proposed prepayment or repayment, as the case may be, which notice the
Administrative Agent shall promptly forward to all B Lenders (indicating in such
notice the amount of such prepayment or repayment, as the case may be, to be
applied to each such B Lender's outstanding Tranche B Term Loans). The
Borrower's offer to permit the B Lenders to waive any such Waivable Repayment
may apply to all or part of such prepayment or repayment, as the case may be,
provided that any offer to waive part of such prepayment or repayment, as the
--------
case may be, must be made ratably to the B Lenders on the basis of their
outstanding Tranche B Term Loans. In the event that any such B Lender desires to
waive its pro rata share of such Lender's right to receive any such Waivable
--- ----
Repayment in whole or in part, such Lender shall so advise the Administrative
Agent no later than 5:00 P.M. (Boston, Massachusetts time) on the date which is
two Business Days after the date of such notice from the Administrative Agent,
which notice shall also include the amount such Lender desires to receive in
respect of such prepayment or repayment, as the case may be. If any B Lender
does not reply to the Administrative Agent within such two Business Day period,
such Lender will be deemed not to have waived any part of such prepayment or
repayment, as the case may be. If any B Lender does not specify an amount it
wishes to receive, such B Lender will be deemed to have accepted 100% of its
share of such prepayment or repayment, as the case may be. In the event that any
such B Lender waives all or part of its share of any such Waivable Repayment
(determined without regard to any premium that such B Lender might otherwise be
entitled to), the Administrative Agent shall apply 100% of the amount so waived
by such Lender to the outstanding Tranche A Term Loans and/or the Total Tranche
A Term Loan Commitment in accordance with Section 4.01 or Sections 4.02(i) and
(j), as the case may be.
(l) Notwithstanding anything to the contrary contained in this
Agreement or in any other Credit Document, (i) all then outstanding Loans of any
Tranche shall be repaid in full on the respective Maturity Date for such Tranche
of Loans and (ii) unless the Required Lenders otherwise agree, all then
outstanding Loans shall be repaid in full on the date on which a Change of
Control occurs.
4.03 Method and Place of Payment. Except as otherwise specifically
---------------------------
provided herein, all payments under this Agreement or under any Note shall be
made to the Administrative Agent for the account of the Lender or Lenders
entitled thereto not later than 12:00 Noon (Boston, Massachusetts time) on the
date when due and shall be made in Dollars in immediately available funds at the
Payment Office. Whenever any payment to be made hereunder or under any Note
shall be stated to be due on a day which is not a Business Day, the due date
thereof shall be extended to the next succeeding Business Day and, with respect
to payments of principal, interest shall be payable at the applicable rate
during such extension.
4.04 Net Payments. (a) All payments made by the Borrower hereunder or
------------
under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income
-30-
or net profits of a Lender pursuant to the laws of the jurisdiction in which it
is organized or the jurisdiction in which the principal office or applicable
lending office of such Lender is located or any subdivision thereof or therein)
and all interest, penalties or similar liabilities with respect to such non-
excluded taxes, levies, imposts, duties, fees, assessments or other charges (all
such non-excluded taxes, levies, imposts, duties, fees, assessments or other
charges being referred to collectively as "Taxes"). If any Taxes are so levied
or imposed, the Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement or under any Note, after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for herein or in
such Note. If any amounts are payable in respect of Taxes pursuant to the
preceding sentence, the Borrower agrees to reimburse each Lender, upon the
written request of such Lender, for taxes imposed on or measured by the net
income or net profits of such Lender pursuant to the laws of the jurisdiction in
which such Lender is organized or in which the principal office or applicable
lending office of such Lender is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction in which such Lender is
organized or in which the principal office or applicable lending office of such
Lender is located and for any withholding of taxes as such Lender shall
determine are payable by, or withheld from, such Lender, in respect of such
amounts so paid to or on behalf of such Lender pursuant to the preceding
sentence and in respect of any amounts paid to or on behalf of such Lender
pursuant to this sentence. The Borrower will furnish to the Administrative Agent
within 45 days after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by the
Borrower. The Borrower agrees to indemnify and hold harmless each Lender, and
reimburse such Lender upon its written request, for the amount of any Taxes so
levied or imposed and paid by such Lender, other than penalties, additions to
tax, interest and expenses to the extent arising as a result of the willful
misconduct or gross negligence of such Lender (as finally determined by a court
of competent jurisdiction).
(b) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
agrees to deliver to the Borrower and the Administrative Agent on or prior to
the Effective Date or, in the case of a Lender that is an assignee or transferee
of an interest under this Agreement pursuant to Section 1.13 or 13.04(b) (unless
the respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Lender, (i) two accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms) certifying to such Lender's
entitlement as of such date to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, or (ii) if the Lender is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form 1001 or 4224 pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit D (any such certificate, a "Section
4.04(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8 (or successor form) certifying to
such Lender's entitlement as of such date to a complete exemption from United
States withholding tax with respect to payments of interest to be made under
this Agreement and under any Note. In addition, each Lender agrees that from
time to time after the Effective Date, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in any
material
-31-
respect, such Lender will deliver to the Borrower and the Administrative Agent
two new accurate and complete original signed copies of Internal Revenue Service
Form 4224 or 1001 (or successor forms), or Form W-8 (or successor form) and a
Section 4.04(b)(ii) Certificate, as the case may be, and such other forms as may
be required in order to confirm or establish the entitlement of such Lender to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or such Lender shall
immediately notify the Borrower and the Administrative Agent of its inability to
deliver any such Form or Certificate, in which case such Lender shall not be
required to deliver any such Form or Certificate pursuant to this Section
4.04(b). Notwithstanding anything to the contrary contained in Section 4.04(a),
but subject to Section 13.04(b) and the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
Fees or other amounts payable hereunder for the account of any Lender which is
not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes to the extent that such Lender
has not provided to the Borrower U.S. Internal Revenue Service Forms that
establish a complete exemption from such deduction or withholding and (y) the
Borrower shall not be obligated pursuant to Section 4.04(a) to gross-up payments
to be made to a Lender in respect of income or similar taxes imposed by the
United States if (I) such Lender has not provided to the Borrower the Internal
Revenue Service Forms required to be provided to the Borrower pursuant to this
Section 4.04(b) or (II) in the case of a payment, other than interest, to a
Lender described in clause (ii) above, to the extent that such Forms do not
establish a complete exemption from withholding of such taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 4.04 and except as set forth in Section 13.04(b), the Borrower
agrees to pay any additional amounts and to indemnify each Lender in the manner
set forth in Section 4.04(a) (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any Taxes deducted or
withheld by it as described in the immediately preceding sentence as a result of
any changes that are effective after the Effective Date in any applicable law,
treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of such Taxes.
(c) If any Taxes imposed on any Lender are paid or indemnified against
by the Borrower under this Section 4.04, and such Lender (i) receives a cash
refund of any amount of such Taxes paid or reimbursed by the Borrower or (ii)
actually realizes a net Tax reduction (whether by means of a credit, deduction
or otherwise) in the Taxes due and payable by such Lender by reason of the
payment or accrual of such Taxes paid or reimbursed by the Borrower that it
would not have then enjoyed but for such Taxes, such Lender shall pay to the
Borrower an amount equal to such net reduction in Taxes actually realized by
such Lender or the amount of such refund; provided, however, that (i) no Event
-------- -------
of Default shall have occurred and be continuing, (ii) no Lender shall be under
any obligation to seek a refund of such Taxes, (iii) all computations of the
amount of any credit, deduction or other reduction actually realized will be
made at the sole discretion of such Lender, (iv) the sum of all payments by a
Lender to the Borrower under this sentence shall never exceed the sum of the
indemnity payments theretofore received by such Lender from the Borrower
pursuant to this Section 4.04, (v) any subsequent disallowance, elimination,
reduction, deferral, disqualification or recapture of all or any part of a
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refund of a Lender for which a payment by such Lender to the Borrower has been
made (or is due) pursuant to this Section 4.04(c) shall be treated as a Tax
subject to indemnification under this Section 4.04 and (vi) nothing in this
sentence shall require a Lender to disclose any information regarding its
calculation of Taxes (including, without limitation, any Tax return).
SECTION 5. Conditions Precedent to Credit Events on the Initial
----------------------------------------------------
Borrowing Date. The obligation of each Lender to make Loans, and the obligation
--------------
of the Issuing Lender to issue Letters of Credit, on the Initial Borrowing Date,
is subject at the time of the making of such Loans or the issuance of such
Letters of Credit to the satisfaction of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Initial
-----------------------------
Borrowing Date, (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Administrative Agent for the account of each of the
Lenders that has requested same the appropriate Tranche A Term Note, Tranche B
Term Note and/or Revolving Note executed by the Borrower and to the extent
requested by the Swingline Lender, the Swingline Note executed by the Borrower,
in each case in the amount, maturity and as otherwise provided herein.
5.02 Officer's Certificate. On the Initial Borrowing Date, the
---------------------
Administrative Agent shall have received a certificate, dated the Initial
Borrowing Date and signed on behalf of the Borrower by the Chairman of the
Board, the Vice Chairman of the Board, the President or any Vice President of
the Borrower, certifying on behalf of the Borrower that all of the conditions in
Sections 5.06, 5.07, 5.08 and 6.01 have been satisfied on such date.
5.03 Opinions of Counsel. On the Initial Borrowing Date, the
-------------------
Administrative Agent shall have received from ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, A
Professional Corporation, special counsel to the Credit Parties, an opinion
addressed to the Agents, the Collateral Agent and each of the Lenders and dated
the Initial Borrowing Date covering the matters set forth in Exhibit E and such
other matters incident to the transactions contemplated herein as the
Syndication Agent and the Administrative Agent may reasonably request.
5.04 Corporate Documents; Proceedings; etc. (a) On the Initial
-------------------------------------
Borrowing Date, the Administrative Agent shall have received a certificate from
each Credit Party, dated the Initial Borrowing Date, signed by the Chairman of
the Board, the Vice Chairman of the Board, the President or any Vice President
of each such Credit Party, and attested to by the Secretary or any Assistant
Secretary of each such Credit Party, in the form of Exhibit F with appropriate
insertions, together with copies of the certificate of incorporation (or
equivalent organizational document) and by-laws of such Credit Party and the
resolutions of such Credit Party referred to in such certificate, and each of
the foregoing shall be in form and substance reasonably acceptable to the
Syndication Agent and the Administrative Agent.
(b) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Credit Documents shall be reasonably satisfactory in form and
substance to the Syndication Agent, the Administrative Agent and the Required
Lenders, and the Administrative Agent shall have received all information and
copies of all documents and papers, including records of corporate proceedings,
governmental approvals, good standing certificates and bring-down telegrams or
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facsimiles, if any, which either the Syndication Agent or the Administrative
Agent reasonably may have requested in connection therewith, such documents and
papers where appropriate to be certified by proper corporate or governmental
authorities.
(c) On the Initial Borrowing Date, the corporate, ownership and
capital structure (including, without limitation, the terms of any capital
stock, options, warrants or other securities issued by Holdings or any of its
Subsidiaries) of Holdings and its Subsidiaries shall be in form and substance
reasonably satisfactory to the Syndication Agent, the Administrative Agent and
the Required Lenders.
5.05 Shareholders' Agreements; Management Agreements; Tax Sharing
------------------------------------------------------------
Agreements; Existing Indebtedness Agreements; Wakefern Documents. On or prior to
----------------------------------------------------------------
the Initial Borrowing Date, there shall have been delivered to the
Administrative Agent true and correct copies of the following documents:
(i) all agreements entered into by Holdings or any of its
Subsidiaries governing the terms and relative rights of its capital stock
and any agreements entered into by shareholders relating to any such entity
with respect to its capital stock (collectively, the "Shareholders'
Agreements");
(ii) all material agreements with members of, or with respect to, the
management of Holdings or any of its Subsidiaries (collectively, the
"Management Agreements");
(iii) all tax sharing, tax allocation and other similar agreements
entered into by Holdings or any of its Subsidiaries (collectively, the "Tax
Sharing Agreements");
(iv) all agreements evidencing or relating to Indebtedness of
Holdings or any of its Subsidiaries which is to remain outstanding after
giving effect to the incurrence of Loans on the Initial Borrowing Date
(collectively, the "Existing Indebtedness Agreements"); and
(v) all Wakefern Documents and any other agreements with Wakefern
entered into by Holdings or any of its Subsidiaries;
all of which Shareholders' Agreements, Management Agreements, Tax Sharing
Agreements, Existing Indebtedness Agreements and Wakefern Documents shall be in
form and substance reasonably satisfactory to the Syndication Agent, the
Administrative Agent and the Required Lenders and shall be in full force and
effect on the Initial Borrowing Date.
5.06 Existing Credit Agreement. (a) On the Initial Borrowing Date, the
-------------------------
total commitments in respect of the Existing Credit Agreement shall have been
terminated, and all loans and notes with respect thereto shall have been repaid
in full (together with interest thereon), all letters of credit issued
thereunder shall have been terminated (or fully supported with Letters of Credit
issued hereunder) and all other amounts (including premiums) owing pursuant to
the Existing Credit Agreement shall have been repaid in full and all documents
in respect of the
-34-
Existing Credit Agreement and all guarantees with respect thereto shall have
been terminated (except as to indemnification and similar provisions, which may
survive to the extent provided therein) and be of no further force and effect.
(b) On the Initial Borrowing Date, the creditors in respect of the
Existing Credit Agreement shall have terminated and released all security
interests and Liens on the assets owned by Holdings and its Subsidiaries. The
Administrative Agent shall have received such releases of security interests in,
and Liens on, the assets owned by Holdings and its Subsidiaries as may have been
requested by the Syndication Agent and the Administrative Agent, which releases
shall be in form and substance reasonably satisfactory to the Syndication Agent
and the Administrative Agent. Without limiting the foregoing, there shall have
been delivered (i) proper termination statements (Form UCC-3 or the appropriate
equivalent) for filing under the UCC of each jurisdiction where a financing
statement (Form UCC-1 or the appropriate equivalent) was filed with respect to
Holdings or any of its Subsidiaries in connection with the security interests
created with respect to the Existing Credit Agreement and the documentation
related thereto, (ii) termination or reassignment of any security interest in,
or Lien on, any patents, trademarks, copyrights, or similar interests of
Holdings or any of is Subsidiaries on which filings have been made, and (iii)
all collateral owned by Holdings or any of its Subsidiaries in the possession of
any of the creditors in respect of the Existing Credit Agreement or any
collateral agent or trustee under any related security document shall have been
returned to Holdings or such Subsidiary, as the case may be.
(c) The Administrative Agent shall have received evidence, in form
and substance reasonably satisfactory to the Syndication Agent and the
Administrative Agent, that the matters set forth in Sections 5.06(a) and (b)
have been satisfied as of the Initial Borrowing Date.
5.07 Adverse Change, Approvals, Consents, etc. (a) Since December 27,
----------------------------------------
1997, nothing shall have occurred (and neither the Syndication Agent, the
Administrative Agent nor any Lender shall have become aware of any facts or
conditions not previously known) which either the Syndication Agent, the
Administrative Agent or the Required Lenders shall reasonably determine (i) has
had, or could reasonably be expected to have, a material adverse effect on the
rights or remedies of the Lenders, the Syndication Agent or the Administrative
Agent, or on the ability of any Credit Party to perform its obligations to them
hereunder or under any other Credit Document or (ii) has had, or could
reasonably be expected to have, a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower or of Holdings and its Subsidiaries taken as a whole.
(b) On or prior to the Initial Borrowing Date, all necessary
governmental (domestic and foreign) and third party approvals and/or consents in
connection with the transactions contemplated by the Credit Documents and
otherwise referred to herein or therein shall have been obtained and remain in
effect, and all applicable waiting periods with respect thereto shall have
expired without any action being taken by any competent authority which
restrains, prevents or imposes materially adverse conditions upon the
consummation of the transactions contemplated by the Credit Documents or
otherwise referred to herein or therein. Additionally, there shall not exist any
judgment, order, injunction or other restraint issued or filed or a hearing
-35-
seeking injunctive relief or other restraint pending or notified prohibiting or
imposing materially adverse conditions upon the transactions contemplated by the
Credit Documents or otherwise referred to herein or therein.
5.08 Litigation. On the Initial Borrowing Date, there shall be no
----------
actions, suits or proceedings pending or threatened (i) with respect to this
Agreement or any other Credit Document or (ii) which the Syndication Agent, the
Administrative Agent or the Required Lenders shall reasonably determine could
reasonably be expected to have a material adverse effect on (a) the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Wakefern, the Borrower or Holdings and its Subsidiaries taken as a
whole, (b) the rights or remedies of the Lenders, the Syndication Agent or the
Administrative Agent hereunder or under any other Credit Document or (c) the
ability of any Credit Party to perform its respective obligations to the
Lenders, the Syndication Agent or the Administrative Agent hereunder or under
any other Credit Document.
5.09 Pledge Agreement. On the Initial Borrowing Date, each Credit
----------------
Party shall have duly authorized, executed and delivered the Pledge Agreement in
the form of Exhibit G (as amended, modified or supplemented from time to time,
the "Pledge Agreement") and shall have delivered to the Collateral Agent, as
Pledgee thereunder, all of the Certificated Securities, if any, referred to
therein and owned by such Credit Party, (x) endorsed in blank in the case of
promissory notes constituting Certificated Securities and (y) together with
executed and undated stock powers in the case of capital stock constituting
Certificated Securities.
5.10 Security Agreement. On the Initial Borrowing Date, each Credit
------------------
Party (other than Big V Investment) shall have duly authorized, executed and
delivered the Security Agreement in the form of Exhibit H (as modified,
supplemented or amended from time to time, the "Security Agreement") covering
all of such Credit Party's present and future Security Agreement Collateral,
together with:
(i) proper Financing Statements (Form UCC-1 or the equivalent) fully
executed for filing under the UCC or other appropriate filing offices of
each jurisdiction as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect the security interests purported to
be created by the Security Agreement;
(ii) certified copies of Requests for Information or Copies (Form UCC-
11), or equivalent reports, listing all effective financing statements that
name any Credit Party or any of its Subsidiaries as debtor and that are
filed in the jurisdictions referred to in clause (i) above, together with
copies of such other financing statements that name any Credit Party or any
of its Subsidiaries as debtor (none of which shall cover any of the
Collateral except to the extent evidencing Permitted Liens or in respect of
which the Collateral Agent shall have received termination statements (Form
UCC-3) or such other termination statements as shall be required by local
law fully executed for filing);
(iii) evidence of the completion of all other recordings and filings of,
or with respect to, the Security Agreement as may be necessary or, in the
reasonable opinion of the
-36-
Collateral Agent, desirable to perfect the security interests intended to
be created by the Security Agreement; and
(iv) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect the
security interests purported to be created by the Security Agreement have
been taken.
5.11 Financial Statements; Pro Forma Balance Sheet; Projections. On or
----------------------------------------------------------
prior to the Initial Borrowing Date, each Lender shall have received true and
correct copies of the historical financial statements, the pro forma balance
sheet and the Projections referred to in Sections 7.05(a) and (d), which
historical financial statements, pro forma balance sheet and Projections shall
--- -----
be in form and substance reasonably satisfactory to the Administrative Agent,
the Syndication Agent and the Required Lenders.
5.12 Solvency Certificate; Insurance Certificates. On the Initial
--------------------------------------------
Borrowing Date, Holdings shall have delivered to the Administrative Agent:
(i) a solvency certificate from the Executive Vice President-Finance of
Holdings in the form of Exhibit I; and
(ii) certificates of insurance complying with the requirements of Section
8.03 for the business and properties of Holdings and its Subsidiaries, in
form and substance reasonably satisfactory to the Administrative Agent and
the Syndication Agent and naming the Collateral Agent as an additional
insured and as loss payee, and stating that such insurance shall not be
canceled without at least 30 days prior written notice by the insurer to
the Collateral Agent (or such shorter period of time as a particular
insurance company generally provides).
5.13 Fees, etc. On the Initial Borrowing Date, the Borrower shall have
---------
paid to the Arranger, the Syndication Agent and the Administrative Agent all
costs, fees and expenses (including, without limitation, legal fees and
expenses) payable to the Arranger and each such Agent to the extent then due.
SECTION 6. Conditions Precedent to All Credit Events. The obligation
-----------------------------------------
of each Lender to make Loans (including Loans made on the Initial Borrowing
Date), and the obligation of the Issuing Lender to issue Letters of Credit, is
subject, at the time of each such Credit Event (except as hereinafter
indicated), to the satisfaction of the following conditions:
6.01 No Default; Representations and Warranties. At the time
------------------------------------------
of each such Credit Event and also after giving effect thereto (i) there shall
exist no Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).
-37-
6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to the
---------------------------------------------
making of each Loan (other than a Swingline Loan or a Revolving Loan made
pursuant to a Mandatory Borrowing), the Administrative Agent shall have received
a Notice of Borrowing meeting the requirements of Section 1.03(a). Prior to the
making of each Swingline Loan, the Swingline Lender shall have received the
notice referred to in Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the respective Issuing Lender shall have received a
Letter of Credit Request meeting the requirements of Section 2.03(a).
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by each Credit Agreement Party to the Administrative
Agent and each of the Lenders that all the conditions specified in Section 5
(with respect to Credit Events on the Initial Borrowing Date) and in this
Section 6 (with respect to Credit Events on or after the Initial Borrowing Date)
and applicable to such Credit Event exist as of that time. All of the Notes,
certificates, legal opinions and other documents and papers referred to in
Section 5 and in this Section 6, unless otherwise specified, shall be delivered
to the Administrative Agent at the Notice Office for the account of each of the
Lenders and, except for the Notes, in sufficient counterparts or copies for each
of the Lenders and shall be in form and substance reasonably satisfactory to the
Syndication Agent, the Administrative Agent and the Required Lenders.
SECTION 7. Representations, Warranties and Agreements. In order to
------------------------------------------
induce the Lenders to enter into this Agreement and to make the Loans, and issue
(or participate in) the Letters of Credit as provided herein, each Credit
Agreement Party makes the following representations, warranties and agreements,
all of which shall survive the execution and delivery of this Agreement and the
Notes and the making of the Loans and issuance of the Letters of Credit, with
the occurrence of each Credit Event on or after the Initial Borrowing Date being
deemed to constitute a representation and warranty that the matters specified in
this Section 7 are true and correct in all material respects on and as of the
Initial Borrowing Date and on the date of each such Credit Event (it being
understood and agreed that any representation or warranty which by its terms is
made as of a specified date shall be required to be true and correct in all
material respects only as of such specified date).
7.01 Corporate Status. Each Credit Party and each of its Subsidiaries
----------------
(i) is a duly organized and validly existing corporation, partnership or limited
liability company, as the case may be, in good standing under the laws of the
jurisdiction of its organization, (ii) has the corporate, partnership or limited
liability company power and authority, as the case may be, to own its property
and assets and to transact the business in which it is engaged and presently
proposes to engage and (iii) is duly qualified and is authorized to do business
and is in good standing in each jurisdiction where the ownership, leasing or
operation of its property or the conduct of its business requires such
qualifications except for failures to be so qualified which, either individually
or in the aggregate, could not reasonably be expected to have a material adverse
effect on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower or of Holdings and its
Subsidiaries taken as a whole.
-38-
7.02 Corporate and Other Power and Authority. Each Credit Party has
---------------------------------------
the corporate, partnership or limited liability company power and authority, as
the case may be, to execute, deliver and perform the terms and provisions of
each of the Credit Documents to which it is party and has taken all necessary
corporate, partnership or limited liability company action, as the case may be,
to authorize the execution, delivery and performance by it of each of such
Credit Documents. Each Credit Party has duly executed and delivered each of the
Credit Documents to which it is party, and each of such Credit Documents
constitutes its legal, valid and binding obligation enforceable in accordance
with its terms, except to the extent that the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).
7.03 No Violation. Neither the execution, delivery or performance by
------------
any Credit Party of the Credit Documents to which it is a party, nor compliance
by it with the terms and provisions thereof, (i) will contravene any provision
of any law, statute, rule or regulation or any order, writ, injunction or decree
of any court or governmental instrumentality, (ii) will conflict with or result
in any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Security
Documents) upon any of the property or assets of Holdings or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement or loan agreement, or any other material agreement, contract or
instrument, in each case to which Holdings or any of its Subsidiaries is a party
or by which it or any of its property or assets is bound or to which it may be
subject or (iii) will violate any provision of the certificate or articles of
incorporation or by-laws (or equivalent organizational documents) of Holdings or
any of its Subsidiaries.
7.04 Approvals. No order, consent, approval, license, authorization
---------
or validation of, or filing, recording or registration with (except for those
that have otherwise been obtained or made on or prior to the Initial Borrowing
Date and which remain in full force and effect on the Initial Borrowing Date),
or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the execution, delivery and performance of any Credit Document or (ii)
the legality, validity, binding effect or enforceability of any such Credit
Document.
7.05 Financial Statements; Financial Condition; Undisclosed
------------------------------------------------------
Liabilities; Projections; etc. (a) The consolidated balance sheet of Holdings
-----------------------------
and its Subsidiaries for its fiscal years and twelve Fiscal Month period ended
on December 30, 1995, December 28, 1996, December 27, 1997 and November 28,
1998, respectively, and the related consolidated statements of income, cash
flows and shareholders' equity of Holdings and its Subsidiaries for the fiscal
year or twelve Fiscal Month period, as the case may be, ended on such dates,
copies of which have been furnished to the Lenders prior to the Initial
Borrowing Date, present fairly in all material respects the financial position
of Holdings and its Subsidiaries at the dates of such balance sheets and the
consolidated results of the operations of Holdings and its Subsidiaries for the
periods covered thereby. All of the foregoing financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied (except, in the case of the
-39-
aforementioned twelve Fiscal Month interim financial statements, for normal
year-end audit adjustment and the absence of footnotes). The pro forma
consolidated balance sheet of Holdings and its Subsidiaries as of the Initial
Borrowing Date (after giving effect to the transactions contemplated herein), a
copy of which has been furnished to the Lenders prior to the Initial Borrowing
Date, presents fairly in all material respects the pro forma financial position
of Holdings and its Subsidiaries as of the Initial Borrowing Date. After giving
effect to the transactions contemplated herein and in the other Credit Documents
(but for this purpose assuming that such transactions and the related financing
had occurred prior to December 27, 1997), since December 27, 1997, there has
been no material adverse change in the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower or
of Holdings and its Subsidiaries taken as a whole.
(b) On and as of the Initial Borrowing Date and after giving effect
to the transactions contemplated herein and in the other Credit Documents and to
all Indebtedness (including the Loans) being incurred or assumed and Liens
created by the Credit Parties in connection therewith (i) the sum of the assets,
at a fair valuation, of each of the Borrower on a stand-alone basis and of
Holdings and its Subsidiaries taken as a whole will exceed its debts; (ii) each
of the Borrower on a stand-alone basis and Holdings and its Subsidiaries taken
as a whole has not incurred, does not intend to incur, and does not believe that
it will incur, debts beyond its ability to pay such debts as such debts mature;
and (iii) each of the Borrower on a stand-alone basis and Holdings and its
Subsidiaries taken as a whole will have sufficient capital with which to conduct
its business. For purposes of this Section 7.05(b), "debt" means any liability
on a claim, and "claim" means (a) right to payment, whether or not such a right
is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (b)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. The amount of contingent and/or unliquidated liabilities at any
time shall be computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
(c) Except as (i) set forth in the Wakefern Letter and in the New
Wakefern Agreement and (ii) fully disclosed in the financial statements
delivered pursuant to Section 7.05(a), there were as of the Initial Borrowing
Date no liabilities or obligations with respect to Holdings or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in aggregate,
could reasonably be expected to be material to Holdings and its Subsidiaries
taken as a whole. As of the Initial Borrowing Date, no Credit Agreement Party
knows of any basis for the assertion against it or any of its Subsidiaries of
any liability or obligation of any nature whatsoever that is not fully disclosed
in the financial statements delivered pursuant to Section 7.05(a) which, either
individually or in the aggregate, could reasonably be expected to be material to
the Borrower or to Holdings and its Subsidiaries taken as a whole.
-40-
(d) The Projections delivered to the Agents and the Lenders prior to
the Initial Borrowing Date have been prepared in good faith and are based on
reasonable assumptions, and there are no statements or conclusions in the
Projections which are based upon or include information known to any Credit
Agreement Party to be misleading in any material respect or which fail to take
into account material information known to any Credit Agreement Party regarding
the matters reported therein. On the Initial Borrowing Date, each Credit
Agreement Party believes that the Projections are reasonable and attainable, it
being recognized by the Lenders, however, that projections as to future events
are not to be viewed as facts and that the actual results during the period or
periods covered by the Projections may differ from the projected results and
that the differences may be material.
7.06 Litigation. There are no actions, suits or proceedings pending
----------
or, to the best knowledge of each Credit Agreement Party, threatened (i) with
any Credit Document, (ii) with respect to any material Indebtedness of Holdings
or any of its Subsidiaries or (iii) that are reasonably likely to materially and
adversely affect the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrower or of Holdings
and its Subsidiaries taken as a whole.
7.07 True and Complete Disclosure. All factual information (taken as
----------------------------
a whole) furnished by or on behalf of any Credit Party in writing to any Agent
or any Lender (including, without limitation, all information contained in the
Credit Documents) for purposes of or in connection with this Agreement, the
other Credit Documents or any transaction contemplated herein or therein is, and
all other such factual information (taken as a whole) hereafter furnished by or
on behalf of any Credit Party in writing to any Agent or any Lender will be,
true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
fact necessary to make such information (taken as a whole) not misleading in any
material respect at such time in light of the circumstances under which such
information was provided; it being understood and agreed that (i) with respect
to the Projections delivered pursuant to Section 5.11, each Credit Agreement
Party makes only the representations set forth in Section 7.05(d) and (ii) with
respect to the budgets delivered pursuant to Section 8.01(e), the representation
and warranty made by each Credit Agreement Party pursuant to this Section 7.07
shall be qualified on the same basis as the Projections are qualified in Section
7.05(d).
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the
-----------------------------------
Tranche A Term Loans will be used by the Borrower (i) on the Initial Borrowing
Date, to refinance the Existing Credit Agreement and to pay fees and expenses in
connection therewith and (ii) on each Additional Term Loan Borrowing Date, to
finance all or part of the scheduled payment due on each such Additional Term
Loan Borrowing Date (or on the Business Day thereafter, as the case may be) in
respect of the Junior Subordinated Notes (but otherwise subject to the
limitations set forth in the second proviso in Section 1.01(a)).
(b) All proceeds of the Tranche B Term Loans will be used by the
Borrower to refinance, in part, the Existing Credit Agreement and to pay fees
and expenses in connection therewith.
-41-
(c) All proceeds of the Revolving Loans and the Swingline Loans shall
be used for the working capital and general corporate purposes of the Borrower
and its Subsidiaries; provided that up to, but no more than, $5,000,000 of
Revolving Loans and Swingline Loans in the aggregate may be used to refinance
the Existing Credit Agreement and pay any fees or expenses in connection
therewith.
(d) No part of any Credit Event (or the proceeds thereof) will be
used to purchase or carry any Margin Stock or to extend credit for the purpose
of purchasing or carrying any Margin Stock. Neither the making of any Loan nor
the use of the proceeds thereof nor the occurrence of any other Credit Event
will violate or be inconsistent with the provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve System.
7.09 Tax Returns and Payments. Each of Holdings and each of its
------------------------
Subsidiaries has filed all federal and state income tax returns and all other
material tax returns, domestic and foreign, required to be filed by it and has
paid all taxes and assessments payable by it which have become due, except for
those contested in good faith and adequately disclosed and fully provided for on
the financial statements of Holdings and its Subsidiaries in accordance with
generally accepted accounting principles. Each of Holdings and each of its
Subsidiaries has at all times paid, or have provided adequate reserves (in the
good faith judgment of the management of Holdings) for the payment of, all
federal, state, local and foreign income taxes applicable for all prior fiscal
years and for the current fiscal year to date. There is no material action,
suit, proceeding, investigation, audit, or claim now pending or, to the best
knowledge of Holdings or the Borrower threatened, by any authority regarding any
taxes relating to Holdings or any of its Subsidiaries. As of the Initial
Borrowing Date, neither Holdings nor any of its Subsidiaries has entered into an
agreement or waiver or been requested to enter into an agreement or waiver
extending any statute of limitations relating to the payment or collection of
taxes of Holdings or any of its Subsidiaries, or is aware of any circumstances
that would cause the taxable years or other taxable periods of Holdings or any
of its Subsidiaries not to be subject to the normally applicable statute of
limitations.
7.10 Compliance with ERISA. (i) Schedule III sets forth, as of the
---------------------
Initial Borrowing Date, each Plan. Each Plan (and each related trust, insurance
contract or fund) is in material compliance with its terms and with all
applicable laws, including, without limitation, ERISA and the Code; each Plan
(and each related trust, if any) which is intended to be qualified under Section
401(a) of the Code has received a determination letter from the Internal Revenue
Service to the effect that it meets the requirements of Sections 401(a) and
501(a) of the Code; no Reportable Event has occurred; no Plan which is a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA) is insolvent or
in reorganization; no Plan has an Unfunded Current Liability; no Plan which is
subject to Section 412 of the Code or Section 302 of ERISA has an accumulated
funding deficiency, within the meaning of such sections of the Code or ERISA, or
has applied for or received a waiver of an accumulated funding deficiency or an
extension of any amortization period, within the meaning of Section 412 of the
Code or Section 303 or 304 of ERISA; all contributions required to be made with
respect to a Plan have been timely made except to the extent that the failure to
make any such contribution on a timely basis would not result in a material
liability to Holdings, any Subsidiary of Holdings or any ERISA Affiliate;
-42-
neither Holdings nor any Subsidiary of Holdings nor any ERISA Affiliate has
incurred any material liability (including any indirect, contingent or secondary
liability) to or on account of a Plan pursuant to Section 409, 502(i), 502(l),
515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29),
4971 or 4975 of the Code or expects to incur any such material liability under
any of the foregoing sections with respect to any Plan; no condition exists
which presents a material risk to Holdings or any Subsidiary of Holdings or any
ERISA Affiliate of incurring a material liability to or on account of a Plan
pursuant to the foregoing provisions of ERISA and the Code; no proceedings have
been instituted to terminate or appoint a trustee to administer any Plan which
is subject to Title IV of ERISA; no action, suit, proceeding, hearing, audit or
investigation with respect to the administration, operation or the investment of
assets of any Plan (other than routine claims for benefits) is pending or, to
the best knowledge of Holdings, any Subsidiary of Holdings or any ERISA
Affiliate, expected or threatened; using actuarial assumptions and computation
methods consistent with Part 1 of subtitle E of Title IV of ERISA, the aggregate
liabilities of Holdings and its Subsidiaries and its ERISA Affiliates to all
Plans which are multiemployer plans (as defined in Section 4001(a)(3) of ERISA)
in the event of a complete withdrawal therefrom, as of the close of the most
recent fiscal year of each such Plan ended prior to the date of the most recent
Credit Event, would not exceed $500,000; each group health plan (as defined in
Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or has
covered employees or former employees of Holdings, any Subsidiary of Holdings,
or any ERISA Affiliate has at all times been operated in material compliance
with the provisions of Part 6 of subtitle B of Title I of ERISA and Section
4980B of the Code; no lien imposed under the Code or ERISA on the assets of
Holdings or any Subsidiary of Holdings or any ERISA Affiliate exists or is
likely to arise on account of any Plan; and Holdings and its Subsidiaries may
cease contributions to or terminate any employee benefit plan maintained by any
of them without incurring any material liability.
(ii) No Plan is a Foreign Pension Plan.
7.11 The Security Documents. (a) The provisions of the Security
----------------------
Agreement are effective to create in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the Credit Parties in the Security
Agreement Collateral described therein, and the Collateral Agent, for the
benefit of the Secured Creditors, shall, at all times on and after the tenth day
following the Initial Borrowing Date, have a fully perfected first lien on, and
security interest in, all right, title and interest in all of the Security
Agreement Collateral described therein (other than with respect to liens on, and
security interests in, immaterial assets of Holdings and its Subsidiaries, which
security interests and liens cannot be perfected by the filing of a financing
statement), subject to no other Liens other than Permitted Liens. The
recordation of (x) the Grant of Security Interest in U.S. Patents and (y) the
Grant of Security Interest in U.S. Trademarks in the respective form attached to
the Security Agreement, in each case in the United States Patent and Trademark
Office, together with filings on Form UCC-1 made pursuant to the Security
Agreement, will create, as may be perfected by such filings and recordation, a
perfected security interest in the United States trademarks and patents covered
by the Security Agreement, and the recordation of the Grant of Security Interest
in U.S. Copyrights in the form attached to the Security Agreement with the
United States Copyright Office, together with filings on Form UCC-1 made
pursuant to the
-43-
Security Agreement, will create, as may be perfected by such filings and
recordation, a perfected security interest in the United States copyrights
covered by the Security Agreement.
(b) The security interests created in favor of the Collateral Agent,
as Pledgee, for the benefit of the Secured Creditors, under the Pledge Agreement
constitute first priority perfected security interests in the Pledge Agreement
Collateral, subject to no security interests of any other Person. No filings or
recordings are required in order to perfect (or maintain the perfection or
priority of) the security interests created in the Pledge Agreement Collateral.
7.12 Properties. All Real Property owned or leased by Holdings or any
----------
of its Subsidiaries as of the Initial Borrowing Date, and the nature of the
interest therein, is correctly set forth in Schedule IV. Each of Holdings and
each of its Subsidiaries has good and marketable title to, or a valid leasehold
interest in, all material properties owned or leased by them, as the case may
be, including all property reflected in Schedule IV and in the balance sheets
referred to in Section 7.05(a) (except as sold or otherwise disposed of since
the date of such balance sheet in the ordinary course of business or as
permitted by the terms of this Agreement), free and clear of all Liens, other
than Permitted Liens.
7.13 Capitalization. (a) On the Initial Borrowing Date, the authorized
--------------
capital stock of Holdings shall consist of (i) 2,150,000 shares of Class A
common stock, $.01 par value per share, of which 687,701.5 shares shall be
issued and outstanding and held by the Persons and in the amounts as set forth
in Schedule V, (ii) 350,000 shares of Class B common stock, $.01 par value per
share, of which no shares are issued and outstanding and (iii) 200,000 shares of
preferred stock, $.01 par value per share, of which no shares are issued and
outstanding. All outstanding shares of the capital stock of Holdings have been
duly and validly issued and are fully paid and non-assessable. Holdings does not
have outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreement providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock, except (i) as set forth in any Shareholders' Agreement as in
effect on the Initial Borrowing Date and (ii) for options and warrants to
purchase shares of Holdings' common stock which may be issued from time to time.
(b) On the Initial Borrowing Date, the authorized capital stock of BV
Holdings shall consist of 1,072,468 shares of common stock, $.01 par value per
share, of which 100 shares shall be issued and outstanding and owned by
Holdings. All outstanding shares of the capital stock of BV Holdings have been
duly and validly issued and are fully paid and non-assessable. BV Holdings does
not have outstanding any securities convertible into or exchangeable for its
capital stock or outstanding any rights to subscribe for or to purchase, or any
options for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its capital stock.
(c) On the Initial Borrowing Date, the authorized capital stock of
the Borrower shall consist of 1,000 shares of common stock, $1.00 par value per
share, all of which shares shall be issued and outstanding and owned by BV
Holdings. All outstanding shares of the
-44-
capital stock of the Borrower have been duly and validly issued and are fully
paid and non-assessable. The Borrower does not have outstanding any securities
convertible into or exchangeable for its capital stock or outstanding any rights
to subscribe for or to purchase, or any options for the purchase of, or any
agreement providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, its capital stock.
7.14 Subsidiaries. As of the Initial Borrowing Date, the
------------
corporations, partnerships and limited liability companies listed on Schedule VI
are all of the Subsidiaries of Holdings. Schedule VI correctly sets forth, as of
the Initial Borrowing Date, the percentage ownership (direct or indirect) of
Holdings in each class of capital stock or other equity of each of its
Subsidiaries and also identifies the direct owner thereof.
7.15 Compliance with Statutes, etc. Each of Holdings and each of its
-----------------------------
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including, without limitation, applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as could not, either individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower or of Holdings and its Subsidiaries
taken as a whole.
7.16 Investment Company Act. Neither Holdings nor any of its
----------------------
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.17 Public Utility Holding Company Act. Neither Holdings nor
----------------------------------
any of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
7.18 Environmental Matters. (a) Each of Holdings and each of
---------------------
its Subsidiaries has complied with, and on the date of each Credit Event is in
compliance with, all applicable Environmental Laws and the requirements of any
permits issued under such Environmental Laws. There are no pending or, to the
best knowledge of each Credit Agreement Party, threatened Environmental Claims
against Holdings or any of its Subsidiaries (including any such claim arising
out of the ownership, lease or operation by Holdings or any of its Subsidiaries
of any Real Property no longer owned, leased or operated by Holdings or any of
its Subsidiaries) or any Real Property owned, leased or operated by Holdings or
any of its Subsidiaries. There are no facts, circumstances, conditions or
occurrences with respect to the business or operations of Holdings or any of its
Subsidiaries, or any Real Property owned, leased or operated by Holdings or any
of its Subsidiaries (including, to the best knowledge of each Credit Agreement
Party, any Real Property formerly owned, leased or operated by Holdings or any
of its Subsidiaries but no longer owned, leased or operated by Holdings or any
of its Subsidiaries) or, to the best knowledge of each Credit Agreement Party,
any property adjoining or adjacent to any such Real
-45-
Property that (in any such case) could be reasonably expected (i) to form the
basis of an Environmental Claim against Holdings or any of its Subsidiaries or
any Real Property owned, leased or operated by Holdings or any of its
Subsidiaries or (ii) to cause any Real Property owned, leased or operated by
Holdings or any of its Subsidiaries to be subject to any restrictions on the
ownership, lease, occupancy or transferability of such Real Property by Holdings
or any of its Subsidiaries under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned, leased
or operated by Holdings or any of its Subsidiaries where such generation, use,
treatment, storage or transportation has violated or could reasonably be
expected to violate any Environmental Law or give rise to an Environmental
Claim. Hazardous Materials have not at any time been Released on or from any
Real Property owned, leased or operated by Holdings or any of its Subsidiaries
where such Release has violated or could reasonably be expected to violate any
applicable Environmental Law.
(c) Notwithstanding anything to the contrary in this Section 7.18,
the representations and warranties made in this Section 7.18 shall not be untrue
unless the effect of any or all conditions, violations, claims, restrictions,
failures and noncompliances of the types described above could, either
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrower or of Holdings
and its Subsidiaries taken as a whole.
7.19 Labor Relations. Neither Holdings nor any of its Subsidiaries is
---------------
engaged in any unfair labor practice that could reasonably be expected to have a
material adverse effect on the Borrower or on Holdings and its Subsidiaries
taken as a whole. There is (i) no unfair labor practice complaint pending
against Holdings or any of its Subsidiaries or, to the best knowledge of each
Credit Agreement Party, threatened against any of them, before the National
Labor Relations Board, and no grievance or arbitration proceeding arising out of
or under any collective bargaining agreement is so pending against Holdings or
any of its Subsidiaries or, to the best knowledge of each Credit Agreement
Party, threatened against any of them, (ii) no strike, labor dispute, slowdown
or stoppage pending against Holdings or any of its Subsidiaries or, to the best
knowledge of each Credit Agreement Party, threatened against Holdings or any of
its Subsidiaries and (iii) to the best knowledge of each Credit Agreement Party,
no union representation question exists with respect to the employees of
Holdings or any of its Subsidiaries, except (with respect to any matter
specified in clause (i), (ii) or (iii) above, either individually or in the
aggregate) such as could not reasonably be expected to have a material adverse
effect on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower or of Holdings and its
Subsidiaries taken as a whole.
7.20 Patents, Licenses, Franchises and Formulas. Each of Holdings and
------------------------------------------
each of its Subsidiaries owns or has the right to use all the patents,
trademarks, permits, service marks, trade names, copyrights, licenses,
franchises, proprietary information (including but not limited to rights in
computer programs and databases) and formulas, or rights with respect to the
-46-
foregoing, and has obtained assignments of all leases and other rights of
whatever nature, necessary for the present conduct of its business, without any
known conflict with the rights of others which, or the failure to obtain which,
as the case may be, either individually or in the aggregate, could reasonably be
expected to result in a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of the Borrower or of Holdings and its Subsidiaries taken as a whole.
7.21 Indebtedness. Schedule VII sets forth a true and complete list of
------------
all Indebtedness (including Contingent Obligations) of Holdings and its
Subsidiaries as of the Initial Borrowing Date and which is to remain outstanding
after the Initial Borrowing Date (excluding the Loans, the Letters of Credit,
the Senior Subordinated Notes, the Junior Subordinated Notes and the
Indebtedness permitted under Sections 9.04(xi) and (xii), the "Existing
Indebtedness"), in each case showing the aggregate principal amount thereof and
the name of the respective borrower and any Credit Party or any of its
Subsidiaries which directly or indirectly guarantees such debt.
7.22 Insurance. Schedule VIII sets forth a true and complete listing
---------
of all insurance maintained by Holdings and its Subsidiaries as of the Initial
Borrowing Date, with the amounts insured (and any deductibles) set forth
therein.
7.23 Year 2000. All of Holdings' and its Subsidiaries' Information
---------
Systems and Equipment are either Year 2000 Compliant, or any reprogramming,
remediation or any other corrective action, including the internal testing of
all such Information Systems and Equipment, will be completed by October 1,
1999. Further, to the extent that any such reprogramming, remediation or other
corrective action is required, the cost thereof (as well as the cost of the
reasonably foreseeable consequences of the failure to become Year 2000
Compliant) to Holdings and its Subsidiaries (including, without limitation,
reprogramming errors and the failure of other systems or equipment) will not
have a material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower or
of Holdings and its Subsidiaries taken as a whole.
7.24 Senior Subordinated Notes, Junior Subordinated Notes and
--------------------------------------------------------
Replacement Junior Subordinated Notes. (a) The subordination provisions
-------------------------------------
contained in each of the Senior Subordinated Notes, the Senior Subordinated Note
Documents, the Junior Subordinated Notes and the Junior Subordinated Note
Documents are enforceable against the respective Credit Parties party thereto
and the respective holders of the Senior Subordinated Notes and the Junior
Subordinated Notes, as the case may be, and all Obligations and Guaranteed
Obligations are within the definition of "Senior Debt" (in the case of Senior
Subordinated Notes) and the definition of "Superior Indebtedness" (in the case
of Junior Subordinated Notes) included in such subordination provisions.
(b) From and after the issuance thereof, the subordination provisions
contained in each of the Replacement Junior Subordinated Notes and the other
Replacement Junior Subordinated Note Documents will be enforceable against the
respective Credit Parties party thereto and the respective holders of the
Replacement Junior Subordinated Notes, and all
-47-
Obligations and Guaranteed Obligations will be within the definition of "senior
indebtedness" included in such subordination provisions.
7.25 Special Purpose Corporations. (a) Holdings has no significant
----------------------------
assets (other than the capital stock of BV Holdings) or liabilities (other than
those liabilities (x) under this Agreement and the other Credit Documents to
which it is a party and (y) permitted to be incurred by it under this
Agreement).
(b) BV Holdings has no significant assets (other than the capital
stock of the Borrower) or liabilities (other than those liabilities (x) under
this Agreement and the other Credit Documents to which it is a party and (y)
permitted to be incurred by it under this Agreement).
(c) The ▇▇▇▇▇▇ Subsidiary has no significant assets (other than (x)
the ▇▇▇▇▇▇ Property and (y) certain rights with respect to the ▇▇▇▇▇▇ Documents)
or liabilities (other than (x) obligations in respect of the ▇▇▇▇▇▇ Documents
and (y) those liabilities permitted to be incurred by it under this Agreement).
(d) Dixx Mart engages in no business activities whatsoever and has no
significant assets or liabilities.
(e) Big V Investment has no significant assets (other than the BV
Holdings Intercompany Note) or liabilities.
7.26 ▇▇▇▇▇▇ Documents. (a) The obligations of the ▇▇▇▇▇▇ Subsidiary to
----------------
pay principal and interest in respect of the ▇▇▇▇▇▇ Note are non-recourse to
each of Holdings, BV Holdings and the Borrower, except to the extent that any
such Credit Agreement Party receives any proceeds from the sale, development or
other disposition of the ▇▇▇▇▇▇ Property from which the ▇▇▇▇▇▇ Note is payable
pursuant to the terms of Annex I to the Acquisition Agreement and the ▇▇▇▇▇▇
Agreement.
(b) Except to the extent set forth in the ▇▇▇▇▇▇ Agreement, the
obligations of (i) the ▇▇▇▇▇▇ Subsidiary in respect of the ▇▇▇▇▇▇ Security
Agreement, (ii) the Borrower in respect of the Big V ▇▇▇▇▇▇ Security Agreement
and (iii) the Borrower in respect of the ▇▇▇▇▇▇ Pledge Agreement, in each case
are non-recourse to each of Holdings, BV Holdings and the Borrower. The ▇▇▇▇▇▇
Note is non-recourse to each of Holdings, BV Holdings and the Borrower and is
payable solely out of the sale, foreclosure or other disposition of the
collateral (and the proceeds thereof) pledged or otherwise assigned to the
respective collateral agent pursuant to the respective ▇▇▇▇▇▇ Documents.
SECTION 8. Affirmative Covenants. Each Credit Agreement Party hereby
---------------------
covenants and agrees that on and after the Effective Date and until the Total
Commitment and all Letters of Credit have terminated and the Loans, Notes and
Unpaid Drawings (in each case together with interest thereon), Fees and all
other Obligations (other than indemnities described in Section 13.13 which are
not then due and payable) incurred hereunder and thereunder, are paid in full:
-48-
8.01 Information Covenants. The Credit Agreement Parties will furnish
---------------------
to each Lender:
(a) Monthly Financial Statements. Within 30 days after the end of
----------------------------
each Fiscal Month of Holdings (commencing with its Fiscal Month ended on
December 26, 1998), the consolidated balance sheet of Holdings and its
Subsidiaries for such Fiscal Month and the related consolidated statement of
income for such Fiscal Month and for the elapsed portion of the fiscal year
ended with the last day of such Fiscal Month, in each case setting forth
comparative figures for the corresponding Fiscal Month in the prior fiscal year
and the budgeted figures for such Fiscal Month as set forth in the respective
budget delivered pursuant to 8.01(e).
(b) Quarterly Financial Statements. Within 45 days after the close of
------------------------------
the first three quarterly accounting periods in each fiscal year of Holdings,
(i) the consolidated balance sheet of Holdings and its Subsidiaries, as well as
a stand-alone balance sheet for the Borrower, in each case as at the end of such
quarterly accounting period, (ii) the related consolidated statements of income
and retained earnings and statement of cash flows for such quarterly accounting
period and for the elapsed portion of the fiscal year ended with the last day of
such quarterly accounting period, (iii) a schedule containing a summary of store
sales and store sales growth (expressed as a percentage) for all supermarkets
operating for a period of at least thirteen Fiscal Months, in each case for all
such supermarkets taken as a whole, for such quarterly accounting period and for
the elapsed portion of the fiscal year ended with the last day of such quarterly
accounting period, in each case in respect of preceding clauses (i), (ii) and
(iii) setting forth comparative figures for the related periods in the prior
fiscal year and comparable budgeted figures for such period, as set forth in the
respective budget delivered pursuant to Section 8.01(e) all of which shall be
certified by the chief financial officer of Holdings, subject to normal year-end
audit adjustments and the absence of footnotes, and (iv) management's discussion
and analysis of the material operational and financial developments during such
quarterly accounting period (it being understood that, to the extent such
management's discussion and analysis is included in any report on Form 10-Q that
is filed with the SEC in respect of such quarterly accounting period and such
report is delivered to the Lenders pursuant to this Agreement, no separate
management discussion and analysis shall be required to be delivered in respect
of such quarterly accounting period).
(c) Annual Financial Statements. Within 90 days after the close of
---------------------------
each fiscal year of Holdings (commencing with its fiscal year ended on December
26, 1998), (i) the consolidated balance sheet of Holdings and its Subsidiaries,
as well as a stand-alone balance sheet for the Borrower, in each case as at the
end of such fiscal year and the related consolidated and stand-alone statements
of income and retained earnings and statement of cash flows for such fiscal year
and setting forth comparative figures for the preceding fiscal year and
certified by Deloitte & Touche LLP or such other independent certified public
accountants of recognized national standing reasonably acceptable to the
Syndication Agent and the Administrative Agent, together with a report of such
accounting firm stating that in the course of its regular audit of the financial
statements of Holdings and its Subsidiaries, which audit was conducted in
accordance with generally accepted auditing standards, such accounting firm
obtained no knowledge of any Default or an Event of Default which has occurred
and is continuing or, if in the opinion of such
-49-
accounting firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof, (ii) a schedule containing a
summary of store sales growth (expressed as a percentage) for each supermarket
operating for a period of at least thirteen Fiscal Months, in each case on a
supermarket by supermarket basis for such fiscal year and setting forth
comparative figures for the preceding fiscal year, and (iii) management's
discussion and analysis of the material operational and financial developments
during such fiscal year (it being understood that, to the extent such
management's discussion and analysis is included in any report on Form 10-K that
is filed with the SEC in respect of such fiscal year and such report is
delivered to the Lenders pursuant to this Agreement, no separate management
discussion and analysis shall be required to be delivered in respect of such
fiscal year).
(d) Management Letters. Promptly after Holdings' or any of its
------------------
Subsidiaries' receipt thereof, a copy of any "management letter" received from
its certified public accountants and management's response thereto.
(e) Budgets and Projections. No later than 60 days following the
-----------------------
first day of each fiscal year of Holdings (commencing with its fiscal year ended
on December 26, 1998), a budget in form reasonably satisfactory to the
Syndication Agent and the Administrative Agent (including (A) in the case of
clause (i) below, budgeted statements of income and (B) in the case of clause
(ii) below, budgeted statements of income, sources and uses of cash and balance
sheets) prepared by Holdings (i) for each of the thirteen Fiscal Months of such
fiscal year prepared in detail and (ii) for such fiscal year and each of the
immediately three succeeding fiscal years prepared in summary form, in each case
setting forth, with appropriate discussion, the principal assumptions upon which
such budgets are based.
(f) Officer's Certificates. At the time of the delivery of the
----------------------
financial statements provided for in Sections 8.01(b) and (c), a certificate of
the chief financial officer of Holdings certifying on behalf of Holdings that,
to the best of such officer's knowledge, no Default or Event of Default has
occurred and is continuing or, if any Default or Event of Default has occurred
and is continuing, specifying the nature and extent thereof, which certificate
shall (I) set forth in reasonable detail the calculations required to establish
(A) whether Holdings and its Subsidiaries were in compliance with the provisions
of Sections 4.02(c), 4.02(e), 4.02(f) (to the extent delivered with the
financial statements required by Section 8.01(c)), 4.02(g), 9.02(ii), (vi) and
(xi), 9.03(ii) and (vi) and 9.04 through 9.11, inclusive, at the end of such
fiscal quarter or year, as the case may be, and (B) commencing with the
financial statements delivered for Holdings' fiscal quarter ending on the last
day of Holdings' sixth Fiscal Month in 1999, the Applicable Base Rate Margin and
the Applicable Eurodollar Rate Margin for the Applicable Margin Period
commencing with the delivery of such financial statements, and (II) if delivered
with the financial statements required by Section 8.01(c), set forth in
reasonable detail the amount of (and the calculations required to establish the
amount of) Excess Cash Flow for the respective Excess Cash Payment Period.
(g) Notice of Default or Litigation. Promptly, and in any event
-------------------------------
within five Business Days' after any officer of any Credit Party obtains
knowledge thereof, notice of (i) the occurrence of any event which constitutes a
Default or an Event of Default, (ii) any litigation or
-50-
governmental investigation or proceeding pending (x) against Wakefern or
Holdings or any of its Subsidiaries which could reasonably be expected to
materially and adversely affect the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of Wakefern, the
Borrower or Holdings and its Subsidiaries taken as a whole, (y) with respect to
any material Indebtedness of Holdings or any of its Subsidiaries or (z) with
respect to any Credit Document, (iii) any payment made by the Borrower to
Wakefern which could reasonably be expected to result in the Borrower failing to
obtain a discount on any of its payables to Wakefern otherwise available to the
Borrower or which could reasonably be expected to result in a penalty amount
being imposed on such payables and (iv) any other event which could materially
and adversely affect the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of Wakefern, the Borrower,
Holdings and its Subsidiaries taken as a whole or the Borrower's relationship
with Wakefern.
(h) Other Reports and Filings. Promptly after the filing or
-------------------------
delivery thereof, copies of all financial information, proxy materials and
reports, if any, which Holdings or any of its Subsidiaries shall publicly file
with the Securities and Exchange Commission or any successor thereto (the "SEC")
or deliver to holders (or any trustee, agent or other representative therefor)
of its material Indebtedness pursuant to the terms of the documentation
governing such Indebtedness.
(i) Environmental Matters. Promptly after any officer of any
---------------------
Credit Party obtains knowledge thereof, notice of one or more of the following
environmental matters, unless such environmental matters could not, either
individually or when aggregated with all other such environmental matters, be
reasonably expected to materially and adversely affect the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of the Borrower or of Holdings and its Subsidiaries taken as a whole:
(i) any pending or threatened Environmental Claim against
Holdings or any of its Subsidiaries or any Real Property owned, leased
or operated by Holdings or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any Real
Property owned, leased or operated by Holdings or any of its
Subsidiaries that (a) results in noncompliance by Holdings or any of
its Subsidiaries with any applicable Environmental Law or (b) could
reasonably be expected to form the basis of an Environmental Claim
against Holdings or any of its Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property owned,
leased or operated by Holdings or any of its Subsidiaries that could
reasonably be expected to cause such Real Property to be subject to any
restrictions on the ownership, lease, occupancy, use or transferability
by Holdings or any of its Subsidiaries of such Real Property under any
Environmental Law; and
(iv) the taking of any removal or remedial action in response
to the actual or alleged presence of any Hazardous Material on any Real
Property owned, leased or operated by Holdings or any of its
Subsidiaries as required by any Environmental Law or any govern-
-51-
mental or other administrative agency; provided that in any event
Holdings shall deliver to each Lender all notices received by Holdings
or any of its Subsidiaries from any government or governmental agency
under, or pursuant to, CERCLA which identify Holdings or any of its
Subsidiaries as potentially responsible parties for remediation costs
or which otherwise notify Holdings or any of its Subsidiaries of
potential liability under CERCLA.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and Holdings
or such Subsidiary's response thereto.
(j) Other Information. From time to time, such other
-----------------
information or documents (financial or otherwise) with respect to Wakefern,
Holdings or any of its Subsidiaries as any Agent or any Lender (through the
Administrative Agent) may reasonably request.
(k) Wakefern Information. Notwithstanding anything to the
--------------------
contrary contained in this Section 8.01, no Credit Agreement Party shall be
required to deliver to any Lender any notices, reports or other information
(financial or otherwise) with respect to Wakefern which are obtained by such
Credit Agreement Party or any of its Subsidiaries solely as a result of any
officer or director of such Credit Agreement Party or any of its Subsidiaries
serving as a director or officer of Wakefern. Any notices, reports or other
information (financial or otherwise) with respect to Wakefern (other than as it
relates to any Credit Agreement Party except in its capacity as a shareholder of
Wakefern) obtained by any Lender pursuant to this Section 8.01 shall be subject
to the confidentiality requirements of Section 13.16.
8.02 Books, Records and Inspections; Annual Meetings. (a) Each
-----------------------------------------------
Credit Agreement Party will, and will cause each of its Subsidiaries to, keep
proper books of record and accounts in which full, true and correct entries in
conformity with generally accepted accounting principles and all requirements of
law shall be made of all dealings and transactions in relation to its business
and activities. Each Credit Agreement Party will, and will cause each of its
Subsidiaries to, permit officers and designated representatives of any Agent or
any Lender to visit and inspect, under guidance of officers of Holdings or such
Subsidiary, any of the properties of Holdings or such Subsidiary, and to examine
the books of account of Holdings or such Subsidiary and discuss the affairs,
finances and accounts of Holdings or such Subsidiary with, and be advised as to
the same by, its and their officers and independent accountants, all upon
reasonable prior notice and at such reasonable times and intervals and to such
reasonable extent as such Agent or such Lender may reasonably request.
(b) At a date to be mutually agreed upon among the
Syndication Agent, the Administrative Agent and Holdings occurring on or prior
to the 120th day after the close of each fiscal year of Holdings, Holdings
shall, at the request of the Syndication Agent and the Administrative Agent,
hold a meeting with all of the Lenders at which meeting shall be reviewed the
financial results of Holdings and its Subsidiaries for the previous fiscal year
and the budgets presented for the current fiscal year of Holdings.
-52-
8.03 Maintenance of Property; Insurance. (a) Each Credit
----------------------------------
Agreement Party will, and will cause each of its Subsidiaries to, (i) keep all
property necessary to the business of Holdings and its Subsidiaries in
reasonably good working order and condition, ordinary wear and tear excepted,
(ii) maintain with financially sound and reputable insurance companies insurance
on all such property in at least such amounts and against at least such risks as
is consistent and in accordance with industry practice for companies similarly
situated owning similar properties in the same general areas in which Holdings
or any of its Subsidiaries operates, and (iii) furnish to the Administrative
Agent, together with each set of financial statements delivered pursuant to
Section 8.01(c), full information as to the insurance carried. At any time that
insurance at or above the levels described on Schedule VIII is not being
maintained by Holdings or any Subsidiary of Holdings, Holdings will, or will
cause one of its Subsidiaries to, promptly notify the Syndication Agent and the
Administrative Agent in writing and, if thereafter reasonably requested by the
Syndication Agent, the Administrative Agent or the Required Lenders to do so,
Holdings or any such Subsidiary, as the case may be, shall obtain such insurance
at such levels and coverage which are at least as great as those described in
Schedule VIII to the extent such insurance is reasonably available at a
reasonable expense.
(b) Each Credit Agreement Party will, and will cause each of
its Subsidiaries to, at all times keep its property insured in favor of the
Collateral Agent, and all policies or certificates (or certified copies thereof)
with respect to such insurance (and any other insurance maintained by Holdings
and/or such Subsidiaries) (i) shall be endorsed to the Collateral Agent's
satisfaction for the benefit of the Collateral Agent (including, without
limitation, by naming the Collateral Agent as loss payee and/or additional
insured), (ii) shall state that such insurance policies shall not be canceled
without at least 30 days' prior written notice thereof by the respective insurer
to the Collateral Agent (or such shorter period of time as a particular
insurance company policy generally provides), (iii) shall provide that the
respective insurers irrevocably waive any and all rights of subrogation with
respect to the Collateral Agent and the Secured Creditors, (iv) shall contain
the standard non-contributing mortgage clause endorsement in favor of the
Collateral Agent with respect to hazard liability insurance, (v) shall, except
in the case of public liability insurance, provide that any losses shall be
payable notwithstanding (A) any act or neglect of Holdings or any of its
Subsidiaries, (B) the occupation or use of the properties for purposes more
hazardous than those permitted by the terms of the respective policy if such
coverage is obtainable at commercially reasonable rates and is of the kind from
time to time customarily insured against by Persons owning or using similar
property and in such amounts as are customary, (C) any foreclosure or other
proceeding relating to the insured properties or (D) any change in the title to
or ownership or possession of the insured properties and (vi) shall be deposited
with the Collateral Agent.
(c) If Holdings or any of its Subsidiaries shall fail to
insure its property in accordance with this Section 8.03, or if Holdings or any
of its Subsidiaries shall fail to so endorse and deposit all policies or
certificates with respect thereto, the Collateral Agent shall have the right
(but shall be under no obligation) to procure such insurance and Holdings and
the Borrower agree to reimburse the Collateral Agent for all reasonable costs
and expenses of procuring such insurance.
-53-
8.04 Corporate Franchises. Each Credit Agreement Party will,
--------------------
and will cause each of its Subsidiaries to, do or cause to be done, all things
necessary to preserve and keep in full force and effect its existence and its
material rights, franchises, licenses and patents; provided, however, that
nothing in this Section 8.04 shall prevent (i) sales of assets and other
transactions by Holdings or any of its Subsidiaries in accordance with Section
9.02 or (ii) the withdrawal by Holdings or any of its Subsidiaries of its
qualification as a foreign corporation in any jurisdiction where such withdrawal
could not, either individually or in the aggregate, reasonably be expected to
have a material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower or
of Holdings and its Subsidiaries taken as a whole.
8.05 Compliance with Statutes, etc. Each Credit Agreement
-----------------------------
Party will, and will cause each of its Subsidiaries to, comply with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property (including applicable
statutes, regulations, orders and restrictions relating to environmental
standards and controls), except such noncompliances as could not, either
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrower or of Holdings
and its Subsidiaries taken as a whole.
8.06 Compliance with Environmental Laws. (a) Each Credit
----------------------------------
Agreement Party will comply, and will cause each of its Subsidiaries to comply,
in all material respects with all Environmental Laws and permits applicable to,
or required by, the ownership, lease or use of its Real Property now or
hereafter owned, leased or operated by Holdings or any of its Subsidiaries, will
promptly pay or cause to be paid all costs and expenses incurred in connection
with such compliance, and will keep or cause to be kept all such Real Property
free and clear of any Liens imposed pursuant to such Environmental Laws. No
Credit Agreement Party nor any of its Subsidiaries will generate, use, treat,
store, Release or dispose of, or permit the generation, use, treatment, storage,
Release or disposal of Hazardous Materials on any Real Property now or hereafter
owned, leased or operated by Holdings or any of its Subsidiaries, or transport
or permit the transportation of Hazardous Materials to or from any such Real
Property, except for Hazardous Materials generated, used, treated, stored,
Released or disposed of at any such Real Properties in compliance in all
material respects with all applicable Environmental Laws and as required in
connection with the normal operation, use and maintenance of the business or
operations of Holdings or any of its Subsidiaries.
(b) At the reasonable written request of the Syndication
Agent, the Administrative Agent or the Required Lenders, which request shall
specify in reasonable detail the basis therefor, at any time and from time to
time, the Credit Agreement Parties will provide, at their sole expense, an
environmental site assessment report concerning any Real Property owned, leased
or operated by Holdings or any of its Subsidiaries, prepared by an environmental
consulting firm reasonably approved by the Syndication Agent and the
Administrative Agent, indicating the presence or absence of Hazardous Materials
and the potential cost of any removal or remedial action in connection with such
Hazardous Materials on such Real Property, provided
--------
-54-
that (x) unless the Lenders, the Syndication Agent or the Administrative Agent
has received any notice of the type described in Section 8.01(i) or (y) the
Lenders have exercised any of the remedies pursuant to the last paragraph of
Section 10, such request may not be made more than once every two years in
respect of any parcel of Real Property. If any Credit Agreement Party fails to
provide same within 90 days after such request was made, the Syndication Agent
or the Administrative Agent may order the same, the cost of which shall be borne
by the Credit Agreement Parties and the Credit Agreement Parties shall grant and
hereby grant to the Syndication Agent, the Administrative Agent and the Lenders
and their respective agents access to such Real Property and specifically grant
the Syndication Agent, the Administrative Agent and the Lenders an irrevocable
non-exclusive license, subject to the rights of tenants, to undertake such an
assessment at any reasonable time upon reasonable notice to any Credit Agreement
Party, all at the sole and reasonable expense of the Credit Agreement Parties.
8.07 ERISA As soon as possible and, in any event, within ten
-----
(10) days after Holdings, any Subsidiary of Holdings or any ERISA Affiliate
knows or has reason to know of the occurrence of any of the following, Holdings
will deliver to each of the Lenders a certificate of the chief financial officer
of Holdings setting forth in reasonable detail information as to such occurrence
and the action, if any, that Holdings, such Subsidiary or such ERISA Affiliate
is required or proposes to take, together with any notices required or proposed
to be given to or filed with or by Holdings, the Subsidiary, the ERISA
Affiliate, the PBGC or any other governmental agency, a Plan participant or the
Plan administrator with respect thereto: that a Reportable Event has occurred
(except to the extent that Holdings has previously delivered to the Lenders a
certificate and notices (if any) concerning such event pursuant to the next
clause hereof); that a contributing sponsor (as defined in Section 4001(a)(13)
of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance
reporting requirement of PBGC Regulation Section 4043.61 (without regard to
subparagraph (b)(1) thereof), and an event described in subsection .62, .63,
.64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected
to occur with respect to such Plan within the following 30 days; that an
accumulated funding deficiency, within the meaning of Section 412 of the Code or
Section 302 of ERISA, has been incurred or an application may be or has been
made for a waiver or modification of the minimum funding standard (including any
required installment payments) or an extension of any amortization period under
Section 412 of the Code or Section 303 or 304 of ERISA with respect to a Plan;
that any contribution required to be made with respect to a Plan or Foreign
Pension Plan has not been timely made; that a Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan has an Unfunded Current Liability; that proceedings may be or
have been instituted to terminate or appoint a trustee to administer a Plan
which is subject to Title IV of ERISA; that a proceeding has been instituted
pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan;
that Holdings, any Subsidiary of Holdings or any ERISA Affiliate will or may
incur any material liability (including any indirect, contingent, or secondary
liability) to or on account of the termination of or withdrawal from a Plan
under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with
respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or
Section 409 or 502(i) or 502(l) of ERISA or with respect to a group health plan
(as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under
Section 4980B of the Code; or that Holdings or any Subsidiary of Holdings may
incur any material liability
-55-
pursuant to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) that provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) or any Plan or any Foreign
Pension Plan. Holdings will deliver to each of the Lenders copies of any
records, documents or other information that must be furnished to the PBGC with
respect to any Plan pursuant to Section 4010 of ERISA. Holdings will also
deliver to each of the Lenders a complete copy of the annual report (on Internal
Revenue Service Form 5500-series) of each Plan (including, to the extent
required, the related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information) required to be
filed with the Internal Revenue Service. In addition to any certificates or
notices delivered to the Lenders pursuant to the first sentence hereof, copies
of annual reports and any records, documents or other information required to be
furnished to the PBGC or any other governmental agency, and any material notices
received by Holdings, any Subsidiary of Holdings or any ERISA Affiliate with
respect to any Plan or Foreign Pension Plan shall be delivered to the Lenders no
later than ten (10) days after the date such annual report has been filed with
the Internal Revenue Service or such records, documents and/or information has
been furnished to the PBGC or any other governmental agency or such notice has
been received by Holdings, the respective Subsidiary or the ERISA Affiliate, as
applicable. Holdings and each of its applicable Subsidiaries shall insure that
all Foreign Pension Plans administered by it or into which it makes payments
obtains or retains (as applicable) registered status under and as required by
applicable law and is administered in a timely manner in all respects in
compliance with all applicable laws except where the failure to do any of the
foregoing could not, either individually or in the aggregate, reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of the Borrower or of Holdings and its Subsidiaries taken as whole.
8.08 End of Fiscal Years; Fiscal Quarters. Each Credit
------------------------------------
Agreement Party will cause (i) each of its, and each of its Subsidiaries',
fiscal years to end on the last Saturday in December of each year and (ii) each
of its, and each of its Subsidiaries' first, second, third and fourth fiscal
quarters to end on the last day of the third, sixth, tenth and thirteenth Fiscal
Month of Holdings, respectively.
8.09 Performance of Obligations. Each Credit Agreement Party
--------------------------
will, and will cause each of its Subsidiaries to, perform all of its obligations
under the terms of each mortgage, indenture, security agreement, loan agreement
or credit agreement and each other material agreement, contract or instrument by
which it is bound (including, without limitation, all of the Wakefern
Documents), except such non-performances as could not, either individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower or of Holdings and its Subsidiaries
taken as a whole.
8.10 Payment of Taxes. Each Credit Agreement Party will pay
----------------
and discharge, and will cause each of its Subsidiaries to pay and discharge, all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits, or upon any properties belonging to it, prior to the date
on which penalties attach thereto, and all lawful claims for sums that have
become due and payable which, if unpaid, might become a Lien not
-56-
otherwise permitted under Section 9.01(i); provided that no Credit Agreement
Party nor any of its Subsidiaries shall be required to pay any such tax,
assessment, charge, levy or claim which is being contested in good faith and by
proper proceedings if it has maintained adequate reserves with respect thereto
in accordance with generally accepted accounting principles.
8.11 Additional Security; Further Assurances. (a) Each Credit
---------------------------------------
Agreement Party will, and will cause each of its Subsidiaries (other than the
▇▇▇▇▇▇ Subsidiary) to, grant to the Collateral Agent security interests and
mortgages in such assets and properties of Holdings and its Subsidiaries (except
(i) the capital stock of the ▇▇▇▇▇▇ Subsidiary so long as same is prohibited
from being pledged pursuant to a Lien permitted under this Agreement and (ii)
those assets and property specifically excluded from the Security Agreement
Collateral and the other Pledge Agreement Collateral) as are not covered by the
original Security Documents, and as may be reasonably requested from time to
time by the Syndication Agent, the Administrative Agent or the Required Lenders
(collectively, the "Additional Security Documents"). All such security interests
and mortgages shall be granted pursuant to documentation reasonably satisfactory
in form and substance to the Syndication Agent and the Administrative Agent and
shall constitute valid and enforceable perfected security interests and
mortgages superior to and prior to the rights of all third Persons and subject
to no other Liens except for Permitted Liens. The Additional Security Documents
or instruments related thereto shall have been duly recorded or filed in such
manner and in such places as are required by law to establish, perfect, preserve
and protect the Liens in favor of the Collateral Agent required to be granted
pursuant to the Additional Security Documents and all taxes, fees and other
charges payable in connection therewith shall have been paid in full.
(b) Each Credit Agreement Party will, and will cause each of
its Subsidiaries to, at the expense of the Credit Agreement Parties, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, real property surveys, reports and other assurances or instruments
and take such further steps relating to the Collateral covered by any of the
Security Documents as the Collateral Agent may reasonably require. Furthermore,
the Credit Agreement Parties will use their reasonable best efforts to cause to
be delivered to the Collateral Agent such opinions of counsel, title insurance
and other related documents as may be reasonably requested by the Syndication
Agent or the Administrative Agent to assure itself that this Section 8.11 has
been complied with.
(c) If the Syndication Agent, the Administrative Agent or the
Required Lenders reasonably determine that they are required by law or
regulation to have appraisals prepared in respect of the Real Property of
Holdings and its Subsidiaries constituting Collateral, the Credit Agreement
Parties will, at their own expense, provide to the Administrative Agent
appraisals which satisfy the applicable requirements of the Real Estate
Appraisal Reform Amendments of the Financial Institution Reform, Recovery and
Enforcement Act of 1989, as amended, and which shall otherwise be in form and
substance reasonably satisfactory to the Syndication Agent and the
Administrative Agent.
-57-
(d) On or prior to the 60th day following the Initial
Borrowing Date, the Borrower shall use its best efforts to deliver to the
Administrative Agent subordination agreements (or assignments of existing
subordination agreements given under the Existing Credit Agreement), in each
case in form and substance reasonably satisfactory to the Syndication Agent and
the Administrative Agent, from each lender of purchase money financing as
identified on Schedule VII allowing the Collateral Agent to retain a second
priority security interest in the assets or property subject to such purchase
money financing.
(e) The Credit Agreement Parties agree that each action
required above by this Section 8.11 shall be completed as soon as possible, but,
unless expressly provided otherwise, in no event later than 90 days after such
action is either requested to be taken by the respective Agent or the Required
Lenders or required to be taken by Holdings or its Subsidiaries pursuant to the
terms of this Section 8.11; provided that, in no event will Holdings or any of
its Subsidiaries be required to take any action, other than using its best
efforts, to obtain consents from third parties with respect to its compliance
with this Section 8.11.
8.12 Information Systems and Equipment. Each Credit Agreement
---------------------------------
Party will, and will cause each of its Subsidiaries to, (i) ensure that its
Information Systems and Equipment are at all times after October 1, 1999 Year
2000 Compliant, except insofar as the failure to do so either (x) could not,
either individually or in the aggregate, reasonably be expected to have a
material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower or
of Holdings and its Subsidiaries taken as a whole or (y) results from a third
Person's (other than Wakefern's) failure to cause its Information Systems and
Equipment to be Year 2000 Compliant, and (ii) from and after October 1, 1999,
notify each Agent and each Lender promptly upon detecting any failure of its
Information Systems and Equipment to be Year 2000 Compliant in any material
respect. In addition, each Credit Agreement Party will, and will cause each its
Subsidiaries to, provide the Syndication Agent, the Administrative Agent and any
Lender with such information about Holdings' or such Subsidiaries' year 2000
computer readiness (including, without limitation, information as to contingency
plans, budgets and testing results) as the Syndication Agent, the Administrative
Agent or any Lender shall reasonably request.
8.13 Contributions. Except as expressly provided otherwise in
-------------
Section 4.02, Holdings will contribute as a common equity contribution to the
capital of BV Holdings upon receipt by Holdings (and BV Holdings shall, in turn,
immediately contribute same as a common equity contribution to the capital of
the Borrower) of any cash proceeds received by Holdings on or after the Initial
Borrowing Date from any asset sale, any incurrence of Indebtedness, any Recovery
Event, any sale or issuance of its equity, any cash capital contributions or any
tax refunds.
8.14 Corporate Separateness. Each Credit Agreement Party
----------------------
covenants and agrees that it shall take, and shall cause each of its
Subsidiaries to take, all such action as is necessary to keep its operations
separate and apart from those of the ▇▇▇▇▇▇ Subsidiary, including, without
limitation, ensuring that all customary formalities regarding its corporate
existence, including holding regular meetings and maintenance of current minute
books, are followed, all financial
-58-
statements of Holdings and its Subsidiaries provided to creditors clearly
evidence the separateness of the ▇▇▇▇▇▇ Subsidiary from each other Subsidiary of
Holdings, and the ▇▇▇▇▇▇ Subsidiary maintains its own payroll and separate
accounts from Holdings and any other of its Subsidiaries. Holdings and each
Subsidiary of Holdings pays, and will continue to pay, its respective
liabilities, including all administrative expenses, from its own separate
assets, and assets of the ▇▇▇▇▇▇ Subsidiary will be separately identified and
segregated.
SECTION 9. Negative Covenants. Each Credit Agreement Party
------------------
hereby covenants and agrees that on and after the Effective Date and until the
Total Commitment and all Letters of Credit have terminated and the Loans, Notes
and Unpaid Drawings (in each case, together with interest thereon), Fees and all
other Obligations (other than any indemnities described in Section 13.13 which
are not then due and payable) incurred hereunder and thereunder, are paid in
full:
9.01 Liens. No Credit Agreement Party will, nor will it permit
-----
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon or with respect to any property or assets (real or personal, tangible or
intangible) of Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable with recourse to Holdings or
any of its Subsidiaries), or assign any right to receive income or permit the
filing of any financing statement under the UCC or any other similar notice of
Lien under any similar recording or notice statute; provided that the provisions
of this Section 9.01 shall not prevent the creation, incurrence, assumption or
existence of the following (Liens described below are herein referred to as
"Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been
established in accordance with generally accepted accounting
principles;
(ii) Liens in respect of property or assets of Holdings or any
of its Subsidiaries imposed by law, which were incurred in the ordinary
course of business and do not secure Indebtedness for borrowed money,
such as carriers', warehousemen's, materialmen's and mechanics' liens
and other similar Liens arising in the ordinary course of business, and
(x) which do not in the aggregate materially detract from the value of
Holdings or such Subsidiary's property or assets or materially impair
the use thereof in the operation of the business of Holdings or such
Subsidiary or (y) which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to
any such Lien;
(iii) Liens in existence on the Initial Borrowing Date which are
listed, and the property subject thereto described, in Schedule IX, but
only to the respective date, if any, set forth in such Schedule IX for
the removal, replacement and termination of any such Liens, plus
renewals, replacements and extensions of such Liens to the extent set
forth on Schedule IX, provided that (x) the aggregate principal amount
--------
of the Indebtedness, if any,
-59-
secured by such Liens does not increase from that amount outstanding at
the time of any such renewal, replacement or extension and (y) any such
renewal, replacement or extension does not encumber any additional
assets or properties of Holdings or any of its Subsidiaries;
(iv) Liens created pursuant to the Security Documents;
(v) licenses, sublicenses, leases or subleases granted to
other Persons not materially interfering with the conduct of the
business of Holdings or any of its Subsidiaries;
(vi) Liens upon assets of the Borrower or any of its
Subsidiaries subject to Capitalized Lease Obligations to the extent
such Capitalized Lease Obligations are permitted by Section 9.04(iv),
provided that (x) such Liens only serve to secure the payment of
--------
Indebtedness arising under such Capitalized Lease Obligation and (y)
the Lien encumbering the asset giving rise to the Capitalized Lease
Obligation does not encumber any other asset of the Borrower or any
Subsidiary of the Borrower;
(vii) Liens placed upon equipment or machinery acquired after
the Initial Borrowing Date and used in the ordinary course of business
of the Borrower or any of its Subsidiaries at the time of the
acquisition thereof by the Borrower or any such Subsidiary or within
180 days thereafter to secure Indebtedness incurred to pay all or a
portion of the purchase price thereof or to secure Indebtedness
incurred solely for the purpose of financing the acquisition of any
such equipment or machinery or extensions, renewals or replacements of
any of the foregoing for the same or a lesser amount, provided that (x)
--------
the Indebtedness secured thereby is permitted to be incurred under
Section 9.04(iv), (y) in all events, the Lien encumbering the equipment
or machinery so acquired does not encumber any other asset of the
Borrower or such Subsidiary and (z) all of the terms and conditions of,
and the documentation therefor, shall be in form and substance
reasonably satisfactory to the Syndication Agent and the Administrative
Agent;
(viii) easements, rights-of-way, restrictions, encroachments and
other similar charges or encumbrances, and minor title deficiencies, in
each case not securing Indebtedness and not materially interfering with
the conduct of the business of Holdings or any of its Subsidiaries;
(ix) Liens arising from precautionary UCC financing statement
filings regarding operating leases;
(x) statutory and common law landlords' liens under leases to
which Holdings or any of its Subsidiaries is a party;
(xi) Liens (other than Liens imposed under ERISA) incurred in
the ordinary course of business in connection with workers compensation
claims, unemployment insurance and social security benefits and Liens
securing the performance of bids, tenders, leases and contracts in the
ordinary course of business, statutory obligations, surety bonds,
-60-
performance bonds and other obligations of a like nature incurred in
the ordinary course of business (exclusive of obligations in respect of
the payment for borrowed money);
(xii) Liens created on the capital stock of Holdings in favor of
Wakefern and in accordance with the terms of the Wakefern Documents;
(xiii) Liens on cash collateral provided by Holdings securing
letters of credit permitted under Section 9.04(xii), provided that the
--------
cash collateral must have been received by Holdings from the sources
described in said Section 9.04(xii);
(xiv) Liens which may be deemed to exist as a result of the
consummation of one or more sale-leaseback transactions effected in
accordance with the requirements of Section 9.02(ix) or (xi), as the
case may be, which Liens shall relate only to the assets subject to the
respective sale-leaseback transaction; and
(xv) additional Liens incurred by the Borrower and its
Subsidiaries so long as (i) such Liens do not secure Indebtedness for
borrowed money, (ii) the value of the property subject to such Liens,
and the Indebtedness and other obligations secured thereby, do not
exceed $250,000 at any time and (iii) such Liens do not attach to any
Collateral or any inventory of the Borrower.
In connection with the granting of Liens of the type described in clauses (vi)
and (vii) of this Section 9.01 by Holdings or any of its Subsidiaries, the
Administrative Agent and the Collateral Agent shall be authorized to take any
actions deemed appropriate by it in connection therewith (including, without
limitation, by executing appropriate lien releases or lien subordination
agreements in favor of the holder or holders of such Liens, in either case
solely with respect to the item or items of equipment or other assets subject to
such Liens).
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc.
------------------------------------------------------
No Credit Agreement Party will, nor will it permit any of its Subsidiaries to,
wind up, liquidate or dissolve its affairs or enter into any transaction of
merger or consolidation, or convey, sell, lease or otherwise dispose of all or
any part of its property or assets, or enter into any sale-leaseback
transactions, or purchase or otherwise acquire (in one or a series of related
transactions) any part of the property or assets (other than purchases or other
acquisitions of inventory, materials and equipment in the ordinary course of
business) of any Person (or agree to do any of the foregoing at any future
time), except that:
(i) Capital Expenditures by the Borrower and its Subsidiaries
shall be permitted to the extent not in violation of Section 9.07;
(ii) each of the Borrower and its Subsidiaries may sell assets
(other than the capital stock of any Subsidiary of the Borrower), so
long as (v) no Default or Event of Default then exists or would result
therefrom, (w) each such sale is in an arm's-length transaction and the
Borrower or the respective Subsidiary receives at least fair market
value (as determined in good faith by the Borrower or such Subsidiary,
as the case may be), (x) the total consideration received by the
Borrower or such Subsidiary is cash and is paid at the time
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of the closing of such sale, (y) the Net Sale Proceeds therefrom are
applied and/or reinvested as (and to the extent) required by Section
4.02(e) and (z) the aggregate amount of the proceeds received from all
assets sold pursuant to this clause (ii) shall not exceed $2,000,000 in
any fiscal year of Holdings;
(iii) Investments may be made to the extent permitted by Section
9.05;
(iv) each of the Borrower and its Subsidiaries may lease (as
lessee) real or personal property (so long as any such lease does not
create a Capitalized Lease Obligation except to the extent permitted by
Section 9.04(iv));
(v) each of the Borrower and its Subsidiaries may make sales
of inventory in the ordinary course of business;
(vi) each of the Borrower and its Subsidiaries may sell
obsolete, uneconomic or worn-out equipment or materials in the ordinary
course of business, provided that the aggregate amount of the proceeds
--------
received from all assets sold pursuant to this clause (vi) shall not
exceed $500,000 in any fiscal year of Holdings;
(vii) each of the Borrower and its Subsidiaries may sell or
discount, in each case without recourse and in the ordinary course of
business, accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection
thereof and not as part of any financing transaction;
(viii) each of the Borrower and its Subsidiaries may grant leases
or subleases to other Persons not materially interfering with the
conduct of the business of the Borrower or any of its Subsidiaries;
(ix) (A) the ▇▇▇▇▇▇ Subsidiary may sell the ▇▇▇▇▇▇ Property (i)
in accordance with the terms of the ▇▇▇▇▇▇ Documents, Annex I to the
Acquisition Agreement and the ▇▇▇▇▇▇ Agreement or (ii) pursuant to a
sale-leaseback transaction, so long as, in the case of preceding clause
(ii), (w) no Default or Event of Default then exists or would result
therefrom, (x) such sale-leaseback transaction is in an arm's-length
transaction and the Borrower receives at least fair market value (as
determined in good faith by the Borrower), (y) the total consideration
received by the Borrower is cash and is paid at the time of the closing
of such sale, and (z) to the extent that such sale-leaseback
transaction results in a Capitalized Lease Obligation, such Capitalized
Lease Obligation is permitted under Section 9.04(iv), and (B) the
capital stock of the ▇▇▇▇▇▇ Subsidiary may be sold in accordance with
Annex I to the Acquisition Agreement and the ▇▇▇▇▇▇ Agreement,
provided, however, the cash proceeds received from any transaction
-------- -------
pursuant to this clause (ix) shall be applied and/or reinvested as (and
to the extent) required by Section 4.02(h);
(x) the Borrower shall be permitted to sell to Wakefern the
shares of Wakefern's Common C stock held by the Borrower in accordance
with Section 4 of Article IX of the
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By-Laws of Wakefern but only to the extent the Borrower's investment in
Wakefern exceeds the minimum investment required under the Wakefern
Investment Policy; and
(xi) the Borrower may enter into sale-leaseback transactions
solely with respect to new buildings for supermarkets opened by the
Borrower after the Initial Borrowing Date, so long as (u) no Default or
Event of Default then exists or would result therefrom, (v) each such
sale-leaseback transaction is in an arm's-length transaction and the
Borrower receives at least fair market value (as determined in good
faith by the Borrower), (w) the total consideration received by the
Borrower is cash and is paid at the time of the closing of such sale,
(x) the Net Sale Proceeds therefrom are applied and/or reinvested as
(and to the extent) required by Section 4.02(e), (y) the aggregate
amount of proceeds received from all sale-leaseback transactions
pursuant to this clause (xi) shall not exceed $10,000,000 in any fiscal
year of Holdings and (z) to the extent that any such sale-leaseback
transaction results in a Capitalized Lease Obligation, such Capitalized
Lease Obligation is permitted under Section 9.04(iv).
To the extent the Required Lenders waive the provisions of this Section 9.02
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 9.02 (other than to Holdings or a Subsidiary thereof),
such Collateral shall be sold free and clear of the Liens created by the
Security Documents, and the Administrative Agent and the Collateral Agent shall
be authorized to take any actions deemed appropriate in order to effect the
foregoing.
9.03 Dividends. No Credit Agreement Party will, nor will it
---------
permit any of its Subsidiaries to, authorize, declare or pay any Dividends with
respect to Holdings or any of its Subsidiaries, except that:
(i) any Subsidiary of the Borrower may pay cash Dividends to
the Borrower or to any Wholly-Owned Subsidiary of the Borrower;
(ii) so long as there shall exist no Default or Event of
Default (in each case both before and after giving effect to the
payment thereof), Holdings may, pursuant to Section 2.4 or 2.5 of the
Holdings Stockholders Agreement, purchase or redeem shares of its
common stock held by any Management Investor, their estates or certain
other related Persons, provided that the total consideration paid to
--------
such Persons or their respective estates for such purchase or
redemption shall be evidenced by a Holdings Shareholder Subordinated
Note issued by Holdings, provided, however, in any fiscal year of
-------- -------
Holdings, Holdings may expend up to $250,000 in cash in the aggregate
to effect such purchases or redemptions;
(iii) so long as no Default or Event of Default then exists or
would result therefrom, Holdings may from time to time redeem shares of
its capital stock so long as all proceeds from the issuance thereof
were used as described in clause (ii)(A), (B) or (C) of the first
parenthetical contained in Section 4.02(c), provided that (x) the
--------
purchase price in respect of any such redemption shall be paid solely
through the issuance by Holdings of shares of its Qualified Preferred
Stock, provided, however, such redemptions may be effected with cash
-------- -------
payments in an amount equal to (x) the net cash proceeds originally
received by
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Holdings from the issuance of such common stock or Qualified Preferred
Stock plus (or minus in the case of a net loss) (y) an amount equal to
the net investment income (in each case less the costs of any related
letter of credit issued as permitted by Section 9.04(xii)) received by
Holdings in connection with any investment in cash and/or Cash
Equivalents of the proceeds of such equity issuance (or the allocable
share of such net income (or loss) in the case of a partial redemption)
so long as such cash payments are made with proceeds from investments
in cash and/or Cash Equivalents held by Holdings as described in the
immediately preceding proviso, provided further, that (I) in no event
----------------
shall any redemption pursuant to this clause (iii) be permitted if
Holdings has transferred the cash or Cash Equivalents maintained with
the proceeds of the respective equity issuance to any other Person
(including, without limitation, any transfer to Wakefern or the issuer
of the respective letter of credit issued for the benefit of Wakefern
as described in Section 9.04(xii) or any transfer to one or more
Subsidiaries of Holdings), and (II) no cash Dividend shall be permitted
to be paid pursuant to this clause (iii) to redeem shares the proceeds
from the issuance thereof were used for the purposes described in
clause (ii)(A) or (B) of the first parenthetical contained in Section
4.02(c), except to the extent the cash being used to pay such Dividend
is no longer required for such purposes;
(iv) so long as there shall exist no Default or Event of
Default (in each case both before and after giving effect to the
payment thereof), Holdings may pay regularly scheduled Dividends on its
Qualified Preferred Stock through the issuance of additional shares of
Qualified Preferred Stock rather than in cash;
(v) so long as no Default or Event of Default then exists or
would result therefrom, BV Holdings may pay cash Dividends to Holdings
with proceeds of Dividends received by it from the Borrower so long as
Holdings promptly uses such proceeds for the purposes described in
clause (ii) of this Section 9.03;
(vi) BV Holdings may pay cash Dividends to Holdings with
proceeds of Dividends received by it from the Borrower so long as the
proceeds thereof are promptly used by Holdings to pay operating
expenses in the ordinary course of business (including, without
limitation, professional fees and expenses) and other similar corporate
overhead costs and expenses, provided that the aggregate amount of cash
--------
Dividends paid pursuant to this clause (vi) during any fiscal year of
the Borrower shall not exceed $50,000;
(vii) BV Holdings may pay cash Dividends to Holdings with
proceeds of Dividends received by it from the Borrower in the amounts
and at the times of any payment by Holdings in respect of taxes,
provided that (x) the amount of cash Dividends paid pursuant to this
--------
clause (vii) to enable Holdings to pay Federal and state income taxes
at any time shall not exceed the amount of such Federal and state
income taxes actually owing by Holdings at such time for the respective
period and (y) any refunds received by Holdings shall promptly be
returned by Holdings to BV Holdings and, in turn, to the Borrower;
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(viii) so long as no Default or Event of Default then exist or
would result therefrom, the Borrower may pay cash Dividends to BV
Holdings so long as (i) BV Holdings uses the proceeds thereof to pay a
cash Dividend to Holdings in a like amount and (ii) Holdings uses such
proceeds for the purposes described in clause (ii), (vi) or (vii) of
this Section by 9.03; and
(ix) the ▇▇▇▇▇▇ Subsidiary may pay Dividends in accordance with
the ▇▇▇▇▇▇ Documents, Annex I of the Acquisition Agreement and the
▇▇▇▇▇▇ Agreement.
9.04 Indebtedness. No Credit Agreement Party will, nor will it
------------
permit any of its Subsidiaries to, contract, create, incur, assume or suffer to
exist any Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(ii) Existing Indebtedness outstanding on the Initial Borrowing
Date and listed on Schedule VII (as reduced by any permanent repayment
of principal thereof), without giving effect to any subsequent
extension, renewal or refinancing thereof, except to the extent set
forth on Schedule VII, provided that the aggregate principal amount of
the Indebtedness to be extended, renewed or refinanced does not
increase from that amount outstanding at the time of any such
extension, renewal or refinancing;
(iii) Indebtedness under Interest Rate Protection Agreements
entered into with respect to other Indebtedness permitted under this
Section 9.04 so long as all of the terms and conditions of such
Interest Rate Protection Agreements are reasonably satisfactory to the
Syndication Agent and the Administrative Agent;
(iv) Indebtedness of the Borrower and its Subsidiaries
evidenced by Capitalized Lease Obligations and Indebtedness incurred
pursuant to purchase money Liens permitted by Section 9.01(vii),
provided that in no event shall the aggregate principal amount of
--------
Capitalized Lease Obligations plus the aggregate principal amount of
such purchase money Indebtedness (x) incurred in any fiscal year of
Holdings exceed $5,000,000 or (y) exceed $15,000,000 at any time
outstanding;
(v) Indebtedness of the Borrower under the Senior Subordinated
Notes and the other Senior Subordinated Note Documents in an aggregate
principal amount not to exceed $80,000,000 (as reduced by any
repayments of principal thereof);
(vi) Indebtedness of the Credit Agreement Parties under the
Junior Subordinated Notes and the other Junior Subordinated Note
Documents in an aggregate principal amount not to exceed $20,000,000
(as reduced by any repayments of principal thereof);
(vii) Indebtedness of the Borrower to Wakefern in respect of the
Borrower's Investments in Wakefern in accordance with, and as required
by, the Wakefern Investment Policy, which is assessed against the
Borrower by Wakefern on a per supermarket basis, provided that the
aggregate outstanding principal amount of such
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Indebtedness shall not exceed (x) with respect to supermarkets owned by
the Borrower on the Effective Date, the amount of Indebtedness
outstanding on the Effective Date with respect to such supermarket as
shown on Schedule VII plus additional amounts not to exceed $200,000
per supermarket and (y) with respect to new supermarkets acquired or
leased by the Borrower after the Effective Date, an amount not to
exceed $750,000 per supermarket;
(viii) Indebtedness of BV Holdings under the BV Holdings
Intercompany Note;
(ix) Indebtedness of Holdings under the Holdings Shareholders
Subordinated Notes to the extent issued to purchase or redeem shares of
its common stock held by Management Investors as permitted under
Section 9.03(ii);
(x) Indebtedness of the Borrower evidenced by a promissory
note issued to Insure-Rite, provided that the aggregate principal
amount of such Indebtedness, when added to the amount of Investments
made by the Borrower in Insure-Rite pursuant to Section 9.05(xi), shall
not exceed $1,000,000;
(xi) to the extent Investments permitted by Section 9.05(ix)
are permitted or required to be made by the issuance of promissory
notes to Wakefern and/or Insure-Rite, as the case may be, the Borrower
may issue promissory notes in such form as may be required by, or
acceptable to, Wakefern and/or Insure-Rite, as the case may be, in
principal amounts not to exceed the amounts permitted as Investments
pursuant to Section 9.05(ix);
(xii) Indebtedness of Holdings representing reimbursement
obligations in respect of letters of credit issued for the account of
Holdings and for the benefit of Wakefern as required by the Wakefern
Letter, provided that (i) such Indebtedness may only be secured by
--------
Liens on cash and Cash Equivalents permitted under Section 9.01(xiii),
(ii) the cash and Cash Equivalents subject to such Liens must have been
obtained by Holdings as a contribution from, or sale of equity to, any
of its shareholders as described in clause (ii)(A) of the first
parenthetical contained in Section 4.02(c), excluding any such funds
returned to shareholders as a result of Dividends paid pursuant to
Section 9.03(iii), (iii) such Indebtedness is without recourse to any
Subsidiary of Holdings and (iv) all terms and conditions of such
Indebtedness, and the documentation therefor, shall be satisfactory in
all respects to the Syndication Agent and the Administrative Agent;
(xiii) Replacement Junior Subordinated Notes of the Credit
Agreement Parties so long as (i) no Default or Event of Default then
exists or would occur as a result of the issuance thereof, (ii) the
covenants and events of default contained in any such Replacement
Junior Subordinated Notes are not more restrictive on Holdings and its
Subsidiaries, and are no less favorable to the Lenders, than those set
forth in the Junior Subordinated Note Agreement (provided that, in no
event, shall such issue of Replacement Junior Subordinated Notes have
any financial maintenance or capital expenditure restrictions (whether
formulated as a covenant, event of default or otherwise)), (iii) the
terms and conditions of any such Replacement Junior Subordinated Notes
do not have any mandatory repayment, prepayment, redemption, sinking
fund, amortization or maturity
-66-
prior to the date that is one year after the Tranche B Term Loan
Maturity Date (other than an option of the holders to require the
Borrower to repurchase such Replacement Junior Subordinated Notes upon
a change of control thereunder, provided that the terms of such change
of control put are no less favorable to the Lenders than those set
forth in the Senior Subordinated Note Indenture) and (iv) all such
terms and conditions of (including the subordination provisions), and
the documentation therefor, shall be satisfactory to the Syndication
Agent and the Administrative Agent; and
(xiv) subject to Section 13.17, additional unsecured
Indebtedness incurred by the Borrower and its Subsidiaries in an
aggregate principal amount not to exceed $1,000,000 at any one time
outstanding.
9.05 Advances, Investments and Loans. No Credit Agreement
-------------------------------
Party will, nor will it permit any of its Subsidiaries to, directly or
indirectly, lend money or credit or make advances to any Person, or purchase or
acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, any other Person, or purchase or own a futures
contract or otherwise become liable for the purchase or sale of currency or
other commodities at a future date in the nature of a futures contract, or hold
any cash or Cash Equivalents (each of the foregoing an "Investment" and,
collectively, "Investments"), except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold
accounts receivables owing to any of them, if created or acquired in
the ordinary course of business and payable or dischargeable in
accordance with customary trade terms of the Borrower or such
Subsidiary;
(ii) the Borrower and its Subsidiaries may acquire and hold
cash and Cash Equivalents, provided that during any time when Revolving
--------
Loans or Swingline Loans are outstanding, the aggregate amount of cash
and Cash Equivalents permitted to be held by the Borrower and its
Subsidiaries shall not exceed $17,000,000 for any period of five
consecutive Business Days;
(iii) the Borrower and its Subsidiaries may hold the Investments
held by them on the Initial Borrowing Date and described on Schedule X,
provided that any additional Investments made with respect thereto
shall be permitted only if independently justified under the other
provisions of this Section 9.05;
(iv) the Borrower and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers and in good
faith settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(v) the Borrower and its Subsidiaries may make loans and
advances in the ordinary course of business to their respective
employees so long as the aggregate principal amount thereof at any time
outstanding (determined without regard to any write-downs or write-offs
of such loans and advances) shall not exceed $1,000,000;
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(vi) the Borrower may, in lieu of paying cash Dividends to BV
Holdings pursuant to Section 9.03(viii), make advances to Holdings so
long as (i) no Default or Event of Default then exists or would result
therefrom and (ii) a like amount of proceeds thereof are promptly used
by Holdings for the same purpose for which Dividends by the Borrower
pursuant to such Section could then be used;
(vii) the Borrower may make and hold Investments (including,
without limitation, the principal amount of all promissory notes issued
by any Credit Agreement Party or any of its Subsidiaries to Wakefern
pursuant to Section 9.04(vii)) in Wakefern as required by the Wakefern
Investment Policy, which Investments are assessed against the Borrower
by Wakefern on a per supermarket basis, provided that the aggregate
amount of Investments permitted to this clause (vii) shall not exceed
(x) with respect to supermarkets owned by the Borrower on the Effective
Date, the amount of any existing investment represented by Indebtedness
owed to Wakefern on the Effective Date with respect to such supermarket
as shown on Schedule VII plus additional amounts not to exceed $200,000
per supermarket and (y) with respect to new supermarkets acquired or
leased by the Borrower after the Effective Date, an amount not to
exceed $750,000 per supermarket;
(viii) Big V Investment may hold the BV Holdings Intercompany
Note;
(ix) the Borrower may make and/or maintain (to the extent made
prior to the Effective Date) Investments (including, without
limitation, the principal amount of all promissory notes issued by the
Borrower or any of its Subsidiaries to Wakefern and/or Insure-Rite, as
the case may be, pursuant to Section 9.04(xi)) in Wakefern and/or
Insure-Rite in addition to those permitted under Section 9.05(vii) or
9.05(xi), as the case may be, provided that such Investments shall (i)
--------
be approved by the Board of Directors and the requisite stockholders of
Wakefern, (ii) be assessed on a basis other than a per store basis and
(iii) not to exceed $1,000,000 in any fiscal year of Holdings or
$2,500,000 in the aggregate;
(x) Holdings may acquire and hold obligations of one or more
officers or other employees of Holdings or any of its Subsidiaries in
connection with such officers' or employees' acquisition of shares of
common stock of Holdings so long as no cash is paid by Holdings or any
of its Subsidiaries to such officers or employees in connection with
the acquisition of any such obligations;
(xi) the Borrower may make and/or maintain (to the extent made
prior to the Effective Date) Investments in Insure-Rite (including,
without limitation, the principal amount of all promissory notes issued
by the Borrower to Insure-Rite as contemplated by Section 9.04(x)) in
an aggregate amount not to exceed $1,000,000;
(xii) Holdings may acquire and hold cash and Cash Equivalents
solely from proceeds received by it as a result of equity issuances of
the types described in clauses (ii)(A) and (B) of the first
parenthetical contained in Section 4.02(c) and with investment income
therefrom, in each case until such time as such funds are paid by way
of Dividend as permitted under Section 9.03(iii) or are otherwise
applied to reimbursement obligations
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under one or more letters of credit issued as permitted by Section
9.04(xii) or applied to other obligations of Holdings, or invested by
Holdings in any of its Subsidiaries;
(xiii) the Borrower may enter into Interest Rate Protection
Agreements to the extent permitted by Section 9.04(iii);
(xiv) (x) Holdings may make cash common equity contributions to
the capital of BV Holdings and (y) BV Holdings may make cash common
equity contributions to the capital of the Borrower; and
(xv) the Borrower may make additional Investments not otherwise
permitted under this Section 9.05 in an aggregate amount not to exceed
$1,000,000 at any time outstanding (determined without regard to any
write-down or write-offs thereof).
9.06 Transactions with Affiliates. No Credit Agreement Party
----------------------------
will, nor will it permit any of its Subsidiaries to, enter into any transaction
or series of related transactions, whether or not in the ordinary course of
business, with any Affiliate of Holdings or any of its Subsidiaries, other than
in the ordinary course of business and on terms and conditions substantially as
favorable to Holdings or such Subsidiary as would reasonably be obtained by
Holdings or such Subsidiary at that time in a comparable arm's-length
transaction with a Person other than an Affiliate, except that the following in
any event shall be permitted:
(i) Dividends may be paid to the extent provided in Section
9.03;
(ii) loans may be made and other transactions may be entered
into by Holdings and its Subsidiaries to the extent permitted by
Sections 9.02, 9.04 and 9.05;
(iii) customary fees may be paid to non-officer directors of
Holdings and its Subsidiaries in an aggregate amount not to exceed
$50,000 in any fiscal year of Holdings;
(iv) so long as no Default or Event of Default then exists, the
Borrower may pay regularly accruing management fees to THL and
Frelinghuysen in accordance with the terms of the THL Management
Agreement or the Frelinghuysen Management Agreement, as the case may be
(in each case as the same is in effect on the Initial Borrowing Date)
in an aggregate amount for all such Persons not to exceed $250,000 in
any fiscal year of Holdings;
(v) the Borrower may reimburse THL and Frelinghuysen for their
respective reasonable out-of-pocket expenses incurred in connection
with their providing management services to Holdings and its
Subsidiaries pursuant to, and in accordance with, the terms of the THL
Management Agreement or the Frelinghuysen Management Agreement, as the
case may be (in each case as the same is in effect on the Initial
Borrowing Date), provided that the aggregate amount of all such
--------
reimbursements for all such Persons shall not exceed $100,000 in any
fiscal year of Holdings;
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(vi) the Borrower may pay regularly accruing management fees to
BV Holdings, pursuant to, and in accordance with, the terms of the BV
Holdings Management Agreement so long as the proceeds of such fees are
simultaneously used by BV Holdings for the purposes described therein;
and
(vii) Holdings and its Subsidiaries may enter into and perform
their respective obligations under the Tax Sharing Agreement.
Notwithstanding anything to the contrary contained above in
this Section 9.06 or elsewhere in this Agreement, (x) (A) no investment banking,
advisory or similar fees shall be payable by Holdings or any of its Subsidiaries
to any of their respective Affiliates and (B) no management or similar fees
shall be payable by Holdings or any of its Subsidiaries to any of their
respective Affiliates, in either case except as expressly provided by clauses
(iii), (iv), (v) and (vi) of the immediately proceeding sentence and (y) the
aggregate amount of all fees and expenses paid in any fiscal year of Holdings
pursuant to preceding clauses (iii), (iv) and (v) shall not exceed $400,000.
9.07 Capital Expenditures. (a) No Credit Agreement Party will,
--------------------
nor will it permit any of its Subsidiaries to, make any Capital Expenditures
(excluding any payments made in respect of (i) New Supermarket Capital Lease
Obligations and (ii) leasehold improvements to the extent that the Borrower has
actually received cash reimbursement therefor from the respective landlord),
except that during any fiscal year of Holdings set forth below (taken as one
accounting period), the Borrower and its Subsidiaries may make Capital
Expenditures so long as the aggregate amount of all such Capital Expenditures
does not exceed in any fiscal year of Holdings set forth below the amount set
forth opposite such fiscal year below:
Fiscal Year Ending on the last Amount
------------------------------ ------
Saturday In
-----------
December, 1999 $15,000,000
December, 2000 $15,000,000
December, 2001 $14,000,000
December, 2002 $14,000,000
December, 2003 $ 7,000,000;
provided, however, in the event that the Consolidated Fixed Charge Coverage
-------- -------
Ratio of Holdings for its fiscal year then most recently ended (as shown in the
certificate of Holdings' chief financial officer delivered in respect of such
fiscal year pursuant to Section 8.01(f) and commencing with the chief financial
officer's certificate delivered in respect of Holdings' fiscal year ending on
the last Saturday in December, 1999) is less than 1.00:1.00, then the scheduled
amount of permitted Capital Expenditures for Holdings' immediately succeeding
fiscal year shall be reduced by an amount equal to the Capital Expenditure
Reduction Amount.
(b) In addition to the foregoing, in the event that the amount
of Capital Expenditures permitted to be made by the Borrower and its
Subsidiaries pursuant to clause (a) above in any fiscal year of Holdings (before
giving effect to any increase in such permitted
-▇▇-
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ amount pursuant to this clause (b) but after giving effect
to any decrease in such permitted Capital Expenditure amount pursuant to Section
9.07(a)) is greater than the amount of Capital Expenditures actually made by the
Borrower and its Subsidiaries during such fiscal year, the lesser of (x) such
excess and (y) $2,000,000 (or $3,000,000 in the case of any carry-forward of
amounts from the fiscal year of Holdings ending on the last Saturday in
December, 1999 to the immediately succeeding fiscal year) may be carried forward
and utilized to make Capital Expenditures in the immediately succeeding fiscal
year of Holdings, provided that (i) no amounts once carried forward pursuant to
this Section 9.07(b) may be carried forward to any fiscal year of Holdings
thereafter, (ii) no amounts may be carried forward pursuant to this Section
9.07(b) unless such amounts were committed to be utilized during the respective
fiscal year of Holdings in which such amounts were initially permitted to be
used under Section 9.07(a) and (iii) any amounts carried forward pursuant to
this Section 9.07(b) may only be utilized on or prior to the 60th day (or the
90th day in the case of any carry-forward of amounts from Holdings' fiscal year
ending on the last Saturday in December, 1999) following the commencement of
such immediately succeeding fiscal year.
(c) In addition to the foregoing, the Borrower and its
Subsidiaries may make Capital Expenditures with the amount of Net Sale Proceeds
received by Holdings or any of its Subsidiaries from any Asset Sale so long as
such Net Sale Proceeds are reinvested in replacement assets within 270 days
following the date of such Asset Sale to the extent such Net Sale Proceeds are
not otherwise required to be applied to repay outstanding Term Loans (and/or, if
the Total Tranche A Term Loan Commitment has not yet been terminated, as a
mandatory reduction to Total Tranche A Term Loan Commitment) pursuant to Section
4.02(e) or reduce the Total Revolving Loan Commitment pursuant to Section
3.03(e), as the case may be.
(d) In addition to the foregoing, the Borrower and its
Subsidiaries may make Capital Expenditures with the amount of Net Insurance
Proceeds received by Holdings or any of its Subsidiaries from any Recovery Event
so long as such Net Insurance Proceeds are used to replace or restore any
properties or assets in respect of which such Net Insurance Proceeds were paid
within 270 days following the date of receipt of such Net Insurance Proceeds
from such Recovery Event to the extent such Net Insurance Proceeds are not
otherwise required to be applied to repay outstanding Term Loans (and/or, if the
Total Tranche A Term Loan Commitment has not yet been terminated, as a mandatory
reduction to Total Trance A Term Loan Commitment) pursuant to Section 4.02(g) or
reduce the Total Revolving Loan Commitment pursuant to Section 3.03(e), as the
case may be.
9.08 Consolidated Fixed Charge Coverage Ratio. No Credit
----------------------------------------
Agreement Party will permit the Consolidated Fixed Charge Coverage Ratio for any
Test Period ending on the last day of a fiscal quarter of Holdings set forth
below to be less than the ratio set forth opposite such fiscal quarter below:
Fiscal Quarter Ending On Ratio
------------------------ -----
The last day of Holdings' third Fiscal 0.85:1.00
-▇▇-
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ Ratio
------------------------ -----
Month in 1999
The last day of Holdings' sixth Fiscal 0.85:1.00
Month in 1999
The last day of Holdings' tenth Fiscal 0.85:1.00
Month in 1999
The last day of Holdings' thirteenth Fiscal 0.85:1.00
Month in 1999
The last day of Holdings' third Fiscal 0.85:1.00
Month in 2000
The last day of Holdings' sixth Fiscal 0.90:1.00
Month in 2000
The last day of the Holdings' tenth Fiscal 0.90:1.00
Month in 2000
The last day of Holdings' thirteenth Fiscal 0.90:1.00
Month in 2000
The last day of Holdings' third Fiscal 0.90:1.00
Month in 2001
The last day of Holdings' sixth Fiscal 0.90:1.00
Month in 2001
The last day of Holdings' tenth Fiscal 0.90:1.00
Month in 2001
The last day of Holdings' thirteenth Fiscal 0.90:1.00
Month in 2001
The last day of Holdings' third Fiscal 0.90:1.00
Month in 2002
The last day of Holdings' sixth Fiscal 0.90:1.00
Month 2002
The last day of Holdings' tenth Fiscal 0.90:1.00
Month in 2002
Thereafter 0.95:1.00
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9.09 Maximum Leverage Ratio. No Credit Agreement Party will
----------------------
permit the Leverage Ratio at any time during a period set forth below to be
greater than the ratio set forth opposite such period below:
Period Ratio
------ -----
The last day of Holdings' third Fiscal
Month in 1999 to but not
including the last day of Holdings'
tenth Fiscal Month in 1999 5.25:1.00
Thereafter to but not including the last
day of Holdings' third Fiscal Month in 2000 4.75:1.00
Thereafter to but not including the last
day of Holdings' third Fiscal Month in 2001 4.40:1.00
Thereafter to but not including the last
day of Holdings' tenth Fiscal Month in 2002 4.00:1.00
Thereafter 3.50:1.00
9.10 Consolidated Interest Coverage Ratio. No Credit Agreement
------------------------------------
Party will permit the Consolidated Interest Coverage Ratio for any Test Period
ending on the last day of a fiscal quarter of Holdings set forth below to be
less than the amount set forth opposite such fiscal quarter below:
Fiscal Quarter Ending On Ratio
------------------------ -----
The last day of Holdings' third Fiscal 1.75:1.00
Month in 1999
The last day of Holdings' sixth Fiscal 1.75:1.00
Month in 1999
The last day of Holdings' tenth Fiscal 1.75:1.00
Month in 1999
The last day of Holdings' thirteenth 1.80:1.00
Fiscal Month in 1999
The last day of Holdings' third Fiscal 1.80: 1.00
Month in 2000
The last day of Holdings' sixth Fiscal 1.80:1.00
-▇▇-
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ Ratio
------------------------ -----
Month in 2000
The last day of Holdings' tenth Fiscal 1.80:1.00
Month in 2000
The last day of Holdings' thirteenth Fiscal 2.00:1.00
Month in 2000
The last day of Holdings' third Fiscal 2.00:1.00
Month in 2001
The last day of Holdings' sixth Fiscal 2.00:1.00
Month in 2001
The last day of Holdings' tenth Fiscal 2.00:1.00
Month in 2001
The last day of Holdings' thirteenth Fiscal 2.25:1.00
Month in 2001
The last day of Holdings' third Fiscal 2.25:1.00
Month in 2002
The last day of Holdings' sixth Fiscal 2.25:1.00
Month in 2002
The last day of Holdings' tenth Fiscal 2.25:1.00
Month in 2002
Thereafter 2.75:1.00
9.11 Minimum Consolidated Net Worth. No Credit Agreement Party
------------------------------
will permit Consolidated Net Worth at any time to be less than the Minimum
Consolidated Net Worth at such time.
9.12 Limitations on Payments of Certain Indebtedness;
------------------------------------------------
Modifications of Certain Indebtedness; Modifications of Certificate of
----------------------------------------------------------------------
Incorporation, By-Laws and Certain Other Agreements; etc. (a) No Credit
---------------------------------------------------------
Agreement Party will, nor will it permit any of its Subsidiaries to, (i) make
(or give any notice in respect of) any voluntary or optional payment or
prepayment on or redemption or acquisition for value of, or any prepayment or
redemption as a result of any asset sale, change of control or similar event of
(including in each case, without limitation, by way of depositing with the
trustee with respect thereto or any other Person money or securities before due
for the purpose of paying when due), any Senior Subordinated Notes, Junior
Subordinated Notes or Replacement Junior Subordinated Notes, provided that, so
long as no Default or Event of Default then exists or would result therefrom,
the Borrower may (A) redeem, repurchase or otherwise retire the Junior
Subordinated Notes with the proceeds received from equity issuances by Holdings
to the extent permitted under Section 9.14(a) and/or Replacement
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Junior Subordinated Notes issued pursuant to Section 9.04(xiii) and (B) deposit
up to $20,000,000 in the aggregate into the Junior Notes Escrow Account to make
(and for the purpose of making) regularly scheduled principal repayments in
respect of the Junior Subordinated Notes, (ii) make (or give any notice in
respect of) any payment, prepayment, redemption or acquisition for value of
(including, without limitation, by way of depositing with the trustee with
respect thereto or any other Person money or securities before due for the
purpose of paying when due) any Holdings Shareholder Subordinated Notes (whether
in respect of principal, interest or otherwise), (iii) amend or modify, or
permit the amendment or modification of, any provision of (A) the Senior
Subordinated Notes or any other Senior Subordinated Note Document, (B) the
Junior Subordinated Notes or any other Junior Subordinated Note Document, (C)
after the issuance thereof, the Replacement Junior Subordinated Notes or any
other Replacement Junior Subordinated Note Document or (D) the Holdings
Shareholder Subordinated Notes, (iv) amend, modify or change its certificate or
articles of incorporation (including, without limitation, by the filing or
modification of any certificate or articles of designation) or by-laws (or
equivalent organizational documents) or any agreement entered into by it with
respect to its capital stock (including any Shareholders' Agreement), or enter
into any new agreement with respect to its capital stock, except (A) for
amendments to Holdings' Certificate of Incorporation to increase the authorized
common stock or preferred stock of Holdings (provided, in any event, that the
terms of any such preferred stock shall comply with the requirements of Section
9.14(a)), (B) the adoption of one or more certificates of designation for
Holdings which provide the terms of Qualified Preferred Stock to be issued in
accordance with (and which certificate of designation and preferred stock meet
the requirements of) Section 9.14(a), and (C) for amendments, modifications, or
changes to the By-Laws of Holdings or any of its Subsidiaries which could not
reasonably be expected to be adverse to the interest of the Lenders in any
material respect, (v) amend, modify or change any provision of any Wakefern
Documents, unless such amendment, modification or change could not reasonably be
expected to be adverse to the interests of the Lenders in any material respect,
or enter into any new or similar agreement without the prior written consent of
the Syndication Agent and the Administrative Agent, (vi) amend, modify or change
any provision of (A) the ▇▇▇▇▇▇ Documents, unless such amendment, modification
or change could not reasonably be expected to be adverse to the interests of the
Lenders in any material respect, or enter into any new joint venture agreement
or similar agreement without the prior written consent of the Syndication Agent
and the Administrative Agent or (B) any Tax Sharing Agreement or enter into any
new tax sharing agreement, tax allocation agreement or similar agreement without
the prior written consent of the Syndication Agent and the Administrative Agent.
(b) No Credit Agreement Party will, nor will it permit any of
its Subsidiaries to, designate any Indebtedness other than the Obligations, as
(i) "Designated Senior Debt" for the purposes of the Senior Subordinated Notes
and the other Senior Subordinated Note Documents or (ii) "Designated Superior
Indebtedness" for the purposes of the Junior Subordinated Notes and the other
Junior Subordinated Note Documents and, after the issuance thereof, the
Replacement Junior Subordinated Notes and the other Replacement Junior
Subordinated Note Documents.
9.13 Limitation on Certain Restrictions on Subsidiaries. No
--------------------------------------------------
Credit Agreement Party will, nor will it permit any of its Subsidiaries to,
directly or indirectly, create or otherwise
-75-
cause or suffer to exist or become effective any encumbrance or restriction on
the ability of any such Subsidiary to (a) pay dividends or make any other
distributions on its capital stock or any other interest or participation in its
profits owned by Holdings or any Subsidiary of Holdings, or pay any Indebtedness
owed to Holdings or any Subsidiary of Holdings, (b) make loans or advances to
Holdings or any Subsidiary of Holdings or (c) transfer any of its properties or
assets to Holdings or any Subsidiary of Holdings, except for such encumbrances
or restrictions existing under or by reason of (i) applicable law, (ii) this
Agreement and the other Credit Documents, (iii) customary provisions restricting
subletting or assignment of any lease governing a leasehold interest of Holdings
or any Subsidiary of Holdings, (iv) customary provisions restricting assignment
of any licensing agreement or other contract entered into by Holdings or any
Subsidiary of Holdings in the ordinary course of business, (v) restrictions
existing in the Senior Subordinated Note Documents as in effect on the Initial
Borrowing Date, (vi) restrictions existing in the Junior Subordinated Note
Documents as in effect on the Initial Borrowing Date, (vii) restrictions
existing in the Replacement Junior Subordinated Note Documents approved by the
Syndication Agent and the Administrative Agent pursuant to Section 9.04(xiii),
(viii) restrictions existing in the Wakefern Documents as in effect on the
Initial Borrowing Date, (ix) restrictions on the ▇▇▇▇▇▇ Subsidiary pursuant to
the ▇▇▇▇▇▇ Documents, and (x) restrictions on the transfer of any asset subject
to a Lien permitted by Sections 9.01(iii), (vi) and (vii).
9.14 Limitation on Issuance of Capital Stock. (a) Holdings
---------------------------------------
will not issue any capital stock (including by way of sales of treasury stock)
or any options or warrants to purchase, or securities convertible into, capital
stock except for (i) options and warrants to purchase shares of Holdings' common
stock which may be issued from time to time, (ii) additional shares of its
common stock so long as such issuance does not give rise to an Event of Default
under Section 10.10 and (iii) shares of Qualified Preferred Stock issued as
contemplated by the first parenthetical contained in Section 4.02(c) or as
permitted under Section 9.03(iii) or (iv), as the case may be, in each case so
long as such issuance does not give rise to an Event of Default under Section
10.10.
(b) Holdings will not permit any of its Subsidiaries to issue
any capital stock (including by way of sales of treasury stock) or any options
or warrants to purchase, or securities convertible into, capital stock, except
(i) for transfers and replacements of then outstanding shares of capital stock,
(ii) for stock splits, stock dividends and issuances which do not decrease the
percentage ownership of Holdings or any of its Subsidiaries in any class of the
capital stock of such Subsidiary, (iii) to qualify directors to the extent
required by applicable law or (iv) for issuances by newly created or acquired
Subsidiaries in accordance with, and to the extent expressly permitted by, the
terms of this Agreement.
9.15 Business. (a) Holdings and its Subsidiaries (other than
--------
Big V Investment, the ▇▇▇▇▇▇ Subsidiary and Dixx Mart) will not engage in any
business other than the business engaged in by Holdings and such Subsidiaries as
of the Initial Borrowing Date and reasonable extensions thereof; it being
understood and agreed, however, that neither Holdings nor any of its
Subsidiaries (other than the ▇▇▇▇▇▇ Subsidiary) will at any time engage in any
business engaged in by the ▇▇▇▇▇▇ Subsidiary.
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(b) Notwithstanding the foregoing, (i) Holdings will not
engage in any business and will not own any significant assets or have any
material liabilities other than its ownership of the capital stock of BV
Holdings and (ii) BV Holdings will not engage in any business and will not own
any significant assets or have any material liabilities other than its ownership
of the capital stock of the Borrower and, in each case having those liabilities
which such Credit Agreement Party is responsible for under this Agreement and
the other Credit Documents to which it is a party, provided that each of
--------
Holdings and BV Holdings may (A) engage in those activities that are incidental
to (x) the maintenance of its corporate existence in compliance with applicable
law, (y) legal, tax and accounting matters in connection with any of the
foregoing activities and (z) the entering into, and performing its obligations
under, this Agreement and the other Credit Documents to which it is a party and
(B) incur those liabilities permitted to be incurred by it under this Agreement.
(c) The ▇▇▇▇▇▇ Subsidiary shall engage in no business other
than its lease and/or ownership of the ▇▇▇▇▇▇ Property, the development and
operation of a new "Shop-Rite" shopping center on such ▇▇▇▇▇▇ Property and in
performing its respective obligations under, and carrying out the transactions
contemplated by, the ▇▇▇▇▇▇ Documents.
(d) Big V Investment shall engage in no business other than
its ownership of the BV Holdings Intercompany Note.
(e) Dixx Mart shall engage in no business.
9.16 Subsidiaries. (a) Holdings will have no Subsidiaries
------------
other than BV Holdings and its Subsidiaries.
(b) BV Holdings will have no Subsidiaries other than the
Borrower and its Subsidiaries.
(c) The Borrower will have no Subsidiaries other than the
Subsidiaries listed on Schedule IV; provided that upon the written consent of
--------
the Required Lenders the Borrower and its Wholly-Owned Subsidiaries shall be
permitted to establish or create Wholly-Owned Subsidiaries so long as (i) the
capital stock of each such new Wholly-Owned Subsidiary is pledged pursuant to,
and to the extent required by, the Pledge Agreement and the certificates
representing such stock, together with stock powers duly executed in blank, are
delivered to the Collateral Agent for the benefit of the Secured Creditors, (ii)
the partnership or limited liability company interests of each such new
Wholly-Owned Subsidiary (to the extent that same is a partnership or a limited
liability company, as the case may be) are pledged and assigned pursuant to, and
to the extent required by, the Pledge Agreement and the Security Agreement,
(iii) each such new Wholly-Owned Subsidiary executes a counterpart of a
guarantee in form and substance satisfactory to the Administrative Agent and the
Syndication Agent (the "Subsidiaries Guaranty"), the Pledge Agreement and the
Security Agreement, (iv) each such new Wholly-Owned Subsidiary, to the extent
requested by the Administrative Agent, the Syndication Agent or the Required
Lenders, takes all actions required pursuant to Section 8.11, (v) the execution
and delivery by such Subsidiary of the Subsidiaries Guaranty, the Pledge
Agreement and Security Agreement is permitted under the terms of the Senior
Subordinated Note Documents,
-77-
the Junior Subordinated Note Documents and, to the extent entered into, the
Replacement Junior Subordinated Note Documents and (vi) prior to the creation of
such Subsidiary, the Borrower shall have delivered to the Administrative Agent
and the Syndication Agent an opinion of counsel satisfactory to the
Administrative Agent and the Syndication Agent to the effect that, inter alia, a
guaranty by such Subsidiary of all of the Obligations and the execution by such
Subsidiary of the Subsidiaries Guaranty, the Pledge Agreement and the Security
Agreement is permitted under the Senior Subordinated Note Documents, the Junior
Subordinated Note Documents and, to the extent entered into, the Replacement
Junior Subordinated Note Documents. In addition, each new Wholly-Owned
Subsidiary shall execute and deliver, or cause to be executed and delivered, all
other relevant documentation of the type described in Section 5 as such new
Wholly-Owned Subsidiary would have had to deliver if such new Wholly-Owned
Subsidiary were a Credit Party on the Initial Borrowing Date.
9.17 Certain Contracts. Except as provided in the Wakefern
-----------------
Documents, no Credit Agreement Party will, nor will it permit any of its
Subsidiaries to, enter into or be a party to:
(a) any contract for the purchase of any materials, supplies
or other property or services if such contract (or any related
document) requires that payment for such materials, supplies or other
property or services shall be made regardless of whether or not
delivery of such materials, supplies or other property or services is
ever made or tendered; or
(b) any contract to rent or lease (as lessee) any real or
personal property if such contract (or any related document) provides
that the obligation to make payments thereunder is absolute and
unconditional under conditions not customarily found in commercial
leases then in general use or requires that the lessee purchase or
otherwise acquire securities or obligations of the lessor; or
(c) any obligation under any contract for the sale or use of
materials, supplies or other property or services if such contract (or
any related document) requires that payment for such materials,
supplies or other property or services, or the use thereof, shall be
subordinated to any indebtedness (of the purchaser or user of such
materials, supplies or other property or the Person entitled to the
benefit of such services) owed or to be owed to any Person; or
(d) any other contract which, in economic effect, is
substantially equivalent to a guarantee except as permitted under
Section 9.04.
SECTION 10. Events of Default. Upon the occurrence of any of
-----------------
the following specified events (each an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment
--------
when due of any principal of any Loan or any Note or (ii) default, and such
default shall continue unremedied for three or more Business Days, in the
payment when due of any interest on any Loan or Note, any Unpaid Drawing or any
Fees or any other amounts owing hereunder or thereunder; or
-78-
10.02 Representations, etc. Any representation, warranty or
--------------------
statement made or deemed made by any Credit Party herein or in any other Credit
Document or in any certificate delivered to any Agent or any Lender pursuant
hereto or thereto shall prove to be untrue in any material respect on the date
as of which made or deemed made; or
10.03 Covenants. Any Credit Party shall (i) default in the due
---------
performance or observance by it of any term, covenant or agreement contained in
Section 8.01(g)(i), 8.08 or Section 9 or (ii) default in the due performance or
observance by it of any other term, covenant or agreement contained in this
Agreement or any other Credit Document (other than those set forth in Sections
10.01 and 10.02) and such default shall continue unremedied for a period of 30
days after written notice thereof to the defaulting party by any Agent or the
Required Lenders; or
10.04 Default Under Other Agreements. (i) Holdings or any of
------------------------------
its Subsidiaries shall (x) default in any payment of any Indebtedness (other
than the Obligations and the ▇▇▇▇▇▇ Note) beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created or (y) default in the observance or performance of any agreement or
condition relating to any Indebtedness (other than the Obligations and the
▇▇▇▇▇▇ Note) or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness (or a trustee or agent on behalf of such
holder or holders) to cause (determined without regard to whether any notice is
required), any such Indebtedness to become due prior to its stated maturity, or
(ii) any Indebtedness (other than the Obligations and the ▇▇▇▇▇▇ Note) of
Holdings or any of its Subsidiaries shall be declared to be (or shall become)
due and payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof, provided that it
shall not be a Default or an Event of Default under this Section 10.04 unless
the aggregate principal amount of all Indebtedness as described in preceding
clauses (i) and (ii) is at least $500,000; or
-79-
10.05 Bankruptcy, etc. Holdings, any of its Subsidiaries or
---------------
Wakefern shall commence a voluntary case concerning itself under Title 11 of the
United States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against Holdings, any of its Subsidiaries or Wakefern, and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
Holdings, any of its Subsidiaries or Wakefern, or Holdings, any of its
Subsidiaries or Wakefern commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to Holdings, any of its Subsidiaries or Wakefern,
or there is commenced against Holdings, any of its Subsidiaries or Wakefern any
such proceeding which remains undismissed for a period of 60 days, or Holdings,
any of its Subsidiaries or Wakefern is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is entered;
or Holdings, any of its Subsidiaries or Wakefern suffers any appointment of any
custodian or the like for it or any substantial part of its property to continue
undischarged or unstayed for a period of 60 days; or Holdings, any of its
Subsidiaries or Wakefern makes a general assignment for the benefit of
creditors; or any corporate action is taken by Holdings or any of its
Subsidiaries or Wakefern for the purpose of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
-----
funding standard required for any plan year or part thereof under Section 412 of
the Code or Section 302 of ERISA or a waiver of such standard or extension of
any amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan or a
Foreign Pension Plan has not been timely made, Holdings or any Subsidiary of
Holdings or any ERISA Affiliate has incurred or is likely to incur any liability
to or on account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of
the Code or on account of a group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code, or
Holdings or any Subsidiary of Holdings has incurred or is likely to incur
liabilities pursuant to one or more employee welfare benefit plans (as defined
in Section 3(1) of ERISA) that provide benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or Plans or
Foreign Pension Plans, a "default" within the meaning of Section 4219(c)(5) of
ERISA shall occur with respect to any Plan, any applicable law, rule or
regulation is adopted, changed or interpreted, or the interpretation or
administration thereof is changed, in each case after the date hereof, by any
governmental authority or agency or by any court (a "Change of
-80-
Law"), or, as a result of a Change in Law, an event occurs following a Change in
Law, with respect to or otherwise affecting any Plan; (b) there shall result
from any such event or events the imposition of a lien, the granting of a
security interest, or a liability or a material risk of incurring a liability;
and (c) such lien, security interest or liability, individually and/or in the
aggregate, in the reasonable opinion of the Required Lenders, has had, or could
reasonably be expected to have, a material adverse effect on the business,
operations, properties, assets, liabilities, condition (financial or otherwise)
or prospects of the Borrower or of Holdings and its Subsidiaries taken as a
whole; or
10.07 Security Documents. At any time after the execution and
------------------
delivery thereof, any of the Security Documents shall cease to be in full force
and effect, or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby (including, without limitation, a perfected security interest
in, and Lien on, all of the Collateral, in favor of the Collateral Agent,
superior to and prior to the rights of all third Persons (except as permitted by
Section 9.01), and subject to no other Liens (except as permitted by Section
9.01); or
10.08 Guaranties. After the execution and delivery thereof,
----------
any Guaranty or any provision thereof shall cease to be in full force or effect
as to any Guarantor, or any Guarantor or any Person acting by or on behalf of
such Guarantor shall deny or disaffirm such Guarantor's obligations under its
Guaranty or any Guarantor shall default, beyond the applicable grace period
expressly provided therein, if any, in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed pursuant to
its Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be
---------
entered against Holdings or any Subsidiary of Holdings involving in the
aggregate for Holdings and its Subsidiaries a liability (to the extent not paid
or fully covered by a reputable and solvent insurance company) and such
judgments and decrees either shall be final and non-appealable or shall not be
vacated, discharged or stayed or bonded pending appeal for any period of 30
consecutive days, and the aggregate amount of all such judgments equals or
exceeds $500,000; or
10.10 Change of Control. A Change of Control shall occur; or
-----------------
10.11 Wakefern. (i) Wakefern or the Borrower shall be in
--------
default in respect of any of its material obligations to the other such Person
under the Wakefern Documents or in respect of any other material contracts or
commitments between Wakefern and the Borrower, (ii) any of the Wakefern
Documents are amended, supplemented or otherwise modified so as to materially
and adversely affect any Credit Agreement Party's rights or obligations
thereunder, (iii) a material adverse change shall occur with respect to the
Borrower's status as a shareholder of Wakefern or as a member of the wholesale
food cooperative operated by Wakefern, (iv) the Board of Directors of Wakefern
shall determine that "good cause" exists under and as defined in Section 3 of
Article IX of the By-Laws of Wakefern, (v) any of the events which constitute
"good cause" (as described in preceding clause (iv)) exist or (vi) any event
which constitutes a "Withdrawal" (as defined in Section 2.2 of the Wakefern
Stockholders' Agreement) exists with respect to any Credit Agreement Party or
any arrangement is entered into by any Credit
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Agreement Party which would have the effect of causing a notice of such
"Withdrawal" to be given to Wakefern by any such Credit Agreement Party;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Lenders, shall by written notice to the Borrower, take any or all
of the following actions, without prejudice to the rights of any Agent, any
Lender or the holder of any Note to enforce its claims against any Credit Party
(provided that, if an Event of Default specified in Section 10.05 shall occur
with respect to the Borrower, the result which would occur upon the giving of
written notice by the Administrative Agent as specified in clauses (i) and (ii)
below shall occur automatically without the giving of any such notice): (i)
declare the Total Commitment terminated, whereupon all Commitments of each
Lender shall forthwith terminate immediately and any A TL Commitment Commission
and RL Commitment Commission shall forthwith become due and payable without any
other notice of any kind; (ii) declare the principal of and any accrued interest
in respect of all Loans and the Notes and all Obligations owing hereunder and
thereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each Credit Party; (iii) terminate any Letter of Credit
which may be terminated in accordance with its terms; (iv) direct the Borrower
to pay (and the Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default specified in Section 10.05 with respect to the
Borrower, it will pay) to the Collateral Agent at the Payment Office such
additional amount of cash or Cash Equivalents, to be held as security by the
Collateral Agent, as is equal to the aggregate Stated Amount of all Letters of
Credit issued for the account of the Borrower and then outstanding; (v) enforce,
as Collateral Agent, all of the Liens and security interests created pursuant to
the Security Documents; and (vi) apply any cash collateral held by the
Administrative Agent pursuant to Section 4.02 to the repayment of the
Obligations.
SECTION 11. Definitions and Accounting Terms.
11.01 Defined Terms. As used in this Agreement, the following
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terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"A TL Commitment Commission" shall have the meaning provided
in Section 3.01(a).
"Acquisition Agreement" shall mean the Agreement and Plan of
Merger, dated as of October 10, 1990, among Holdings, BV Holdings and Big V
Acquisition Corp.
"Additional Security Documents" shall have the meaning
provided in Section 8.11.
"Additional Tranche A Term Loan Borrowing Date" shall mean
each of June 15, 2000, December 15, 2000 and March 15, 2001, or the Business Day
immediately preceding each such date; it being understood and agreed, however,
that any such Tranche A Term Loans incurred on any such preceding Business Day
shall, in any event, be used in accordance with
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Section 7.08(a)(ii) on such June 15, 2000, December 15, 2000 or March 15, 2001,
as the case may be.
"Adjusted Consolidated Net Income" shall mean, for any period,
Consolidated Net Income for such period plus, without duplication, the sum of
the amount of all net non-cash charges (including, without limitation,
depreciation, amortization, deferred tax expense and non-cash interest expense)
and net non-cash losses which were included in arriving at Consolidated Net
Income for such period, less the amount of all net non-cash gains which were
included in arriving at Consolidated Net Income for such period, and determined
without giving effect to (i) any cash proceeds received by Holdings or any of
its Subsidiaries from the ▇▇▇▇▇▇ Subsidiary or (ii) any gains in connection with
the sale of the ▇▇▇▇▇▇ Subsidiary or the ▇▇▇▇▇▇ Property, in each case to the
extent that the proceeds so received from the ▇▇▇▇▇▇ Subsidiary or from such
sale are used to repay Term Loans (and/or, if the Total Tranche A Term Loan
Commitment has not yet been terminated, reduce the Total Tranche A Term Loan
Commitment) pursuant to Section 4.02(h). Notwithstanding anything to the
contrary contained above in this definition, at the time of each required
repayment pursuant to Section 4.02(f), to the extent that the amount of
Patronage Dividends payable to Holdings and its Subsidiaries in respect of the
immediately preceding fiscal year is determinable, the amount of such Patronage
Dividends shall be added to Adjusted Consolidated Net Income for the period
ended on the last day of the immediately preceding fiscal year (unless already
included therein, and not deducted therefrom as non-cash income). If for any
reason the amount of such Patronage Dividends is not determinable as
contemplated in the immediately preceding sentence at the time of a mandatory
repayment pursuant to Section 4.02(f), then the amount of Patronage Dividends
for the respective fiscal year (to the extent later determined) shall increase
Adjusted Consolidated Net Income for the period in which such determination is
made.
"Administrative Agent" shall mean Fleet Bank, in its capacity
as Administrative Agent for the Lenders hereunder, and shall include any
successor to the Administrative Agent appointed pursuant to Section 12.09.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person. A Person shall be deemed to control
another Person if such Person possesses, directly or indirectly, the power (i)
to vote 5% or more of the securities having ordinary voting power for the
election of directors of such corporation or (ii) to direct or cause the
direction of the management and policies of such other Person, whether through
the ownership of voting securities, by contract or otherwise.
"Agent" shall mean and include each of the Administrative
Agent, the Syndication Agent and the Documentation Agent.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated (including any amendment and restatement
hereof), extended, renewed, refinanced or replaced from time to time.
"Applicable Base Rate Margin" shall mean:
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(a) in the case of Tranche A Term Loans, Revolving Loans and
Swingline Loans maintained as Base Rate Loans, (i) for the period from
the Initial Borrowing Date through but not including the first Start
Date after the Initial Borrowing Date, 2.00%, and (ii) from and after
any Start Date to and including the corresponding End Date, the
respective percentage per annum set forth in clause (A), (B), (C) or
(D) below if, but only if, as of the Test Date for such Start Date the
applicable condition set forth in clause (A), (B), (C), or (D) below,
as the case may be, is met:
(A) 2.00% if, but only if, as of the Test Date for
such Start Date the Leverage Ratio for the Test Period ended
on such Test Date shall be greater than 3.75:1.00;
(B) 1.50% if, but only if, as of the Test Date for
such Start Date the Leverage Ratio for the Test Period ended
on such Test Date shall be equal to or less than 3.75:1.00 and
greater than 3.25:1.00;
(C) 1.25% if, but only if, as of the Test Date for
such Start Date the Leverage Ratio for the Test Period ended
on such Test Date shall be equal to or less than 3.25:1.00 and
greater than 2.50:1.00; or
(D) 1.00% if, but only if, as of the Test Date for
such Start Date the Leverage Ratio for the Test Period ended
on such Test Date shall be equal to or less than 2.50:1.00.
Notwithstanding anything to the contrary contained above in this clause (a), the
Applicable Base Rate Margin for Tranche A Term Loans, Revolving Loans and
Swingline Loans shall be 2.00% at all times when a Default or an Event of
Default shall exist; and
(b) in the case of Tranche B Term Loans maintained as Base
Rate Loans, 2.50%.
"Applicable Eurodollar Rate Margin" shall mean:
(a) in the case of Tranche A Term Loans and Revolving Loans
maintained as Eurodollar Loans, (i) for the period from the Initial
Borrowing Date through but not including the first Start Date after the
Initial Borrowing Date, 3.00%, and (ii) from and after any Start Date
to and including the corresponding End Date, the respective percentage
per annum set forth in clause (A), (B), (C) or (D) below if, but only
if, as of the Test Date for such Start Date the applicable condition
set forth in clause ((A), (B), (C) or (D)) below, as the case may be,
is met:
(A) 3.00% if, but only if, as of the Test Date for
such Start Date the Leverage Ratio for the Test Period ended
on such Test Date shall be greater than 3.75:1.00;
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(B) 2.50% if, but only if, as of the Test Date for
such Start Date the Leverage Ratio for the Test Period ended
on such Test Date shall be equal to or less than 3.75:1.00 and
greater than to 3.25:1.00;
(C) 2.25% if, but only if, as of the Test Date for
such Start Date the Leverage Ratio for the Test Period ended
on such Test Date shall be equal to or less than 3.25:1.00 and
greater than to 2.50:1.00; or
(D) 2.00% if, but only if, as of the Test Date for
such Start Date the Leverage Ratio for the Test Period ended
on such Test Date shall be equal to or less than 2.50:1.00.
Notwithstanding anything to the contrary contained above in this clause (a), the
Applicable Eurodollar Rate Margin for Tranche A Term Loans and Revolving Loans
maintained as Eurodollar Loans shall be 3.00% at all times when a Default or an
Event of Default shall exist; and
(b) in the case of Tranche B Term Loans maintained as
Eurodollar Loans, 3.50%
"Applicable Margin Period" shall mean each period which shall
commence on a date on which the financial statements are delivered pursuant to
Section 8.01(b) or (c), as the case may be, and which shall end on the earlier
of (i) the date of actual delivery of the next financial statements pursuant to
Section 8.01(b) or (c), as the case may be, and (ii) the latest date on which
the next financial statements are required to be delivered pursuant to Section
8.01(b) or (c), as the case may be, provided that the first Applicable Margin
Period shall commence with the delivery of the financial statements in respect
of the Test Period ending on the last day of Holdings' sixth Fiscal Month in
1999.
"Arranger" shall mean ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation.
"Asset Sale" shall mean any sale, transfer or other
disposition by Holdings or any of its Subsidiaries to any Person (including by
way of redemption by such Person) other than to Holdings or a Wholly-Owned
Subsidiary of Holdings of any asset (including, without limitation, any capital
stock or other securities of, or equity interests in, another Person) other than
sales of assets pursuant to Sections 9.02(v), (vi), (vii), (viii) and (ix).
"Assignment and Assumption Agreement" shall mean an Assignment
and Assumption Agreement substantially in the form of Exhibit J (appropriately
completed).
"B Lenders" shall have the meaning provided in Section
4.02(k).
"Bankruptcy Code" shall have the meaning provided in Section
10.05.
"Base Rate" shall mean, at any time, the higher of (i) the
Prime Lending Rate and (ii) 1/2 of 1% in excess of the Federal Funds Rate.
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"Base Rate Loan" shall mean (i) each Swingline Loan and (ii) each
other Loan designated or deemed designated as such by the Borrower at the time
of the incurrence thereof or conversion thereto.
"Big V Investment" shall mean Big V Investment Corp., a Delaware
corporation.
"Big V ▇▇▇▇▇▇ Security Agreement" shall mean the Security Agreement,
dated as of December 28, 1990, between the Borrower and Merchant GP, Inc., as
collateral agent, pursuant to which the Borrower has assigned any residual
▇▇▇▇▇▇ Joint Venture Rights that it has retained to secure the ▇▇▇▇▇▇ Note.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean the borrowing of one Type of Loan of a single
Tranche from all the Lenders having Commitments of the respective Tranche (or
from the Swingline Lender in the case of Swingline Loans) on a given date (or
resulting from a conversion or conversions on such date) having in the case of
Eurodollar Loans the same Interest Period, provided that Base Rate Loans
incurred pursuant to Section 1.10(b) shall be considered part of the related
Borrowing of Eurodollar Loans.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall be
in New York, New York and Boston, Massachusetts a legal holiday or a day on
which banking institutions are authorized or required by law or other government
action to close and (ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Loans,
any day which is a Business Day described in clause (i) above and which is also
a day for trading by and between banks in the London interbank Eurodollar
market.
"BV Holdings" shall have the meaning provided in the first paragraph
of this Agreement.
"BV Holdings Intercompany Note" shall mean the $41,354,103 promissory
note issued by BV Holdings to Big V Investment and pledged by Big V Investment
pursuant to Pledge Agreement.
"BV Holdings Management Agreement" shall mean the Management
Agreement, dated as of December 28, 1990, between BV Holdings and the Borrower.
"Capital Expenditure Reduction Amount" shall mean, in respect of any
fiscal year of Holdings, that amount which would be required to be added back to
Consolidated EBITDA of Holdings for the immediately preceding fiscal year in
order for Holdings to achieve a Consolidated Fixed Charge Coverage Ratio for
such immediately preceding fiscal year of at least 1.00:1.00; it being
understood and agreed, however, that in no event shall the Capital Expenditure
Reduction Amount for Holdings' fiscal year ending on the last Saturday in (x)
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December, 2000, exceed $5,000,000, (y) December, 2001 and December, 2002, exceed
(in each case) $4,000,000 and (z) December, 2003, exceed $2,000,000.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures (other than any New Supermarket Capitalized Lease Obligations) by
such Person which should be capitalized in accordance with generally accepted
accounting principles and, without duplication, the amount of Capitalized Lease
Obligations incurred by such Person.
"Capitalized Lease Obligations" shall mean, with respect to any
Person, all rental obligations (other than any New Supermarket Capitalized Lease
Obligations) of such Person which, under generally accepted accounting
principles, are or will be required to be capitalized on the books of such
Person, in each case taken at the amount thereof accounted for as indebtedness
in accordance with such principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided that the full faith and credit of the
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United States is pledged in support thereof) having maturities of not more than
one year from the date of acquisition, (ii) marketable direct obligations issued
by any state of the United States or any political subdivision of any such state
or any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard & Poor's Ratings Services or
▇▇▇▇▇'▇ Investors Service, Inc., (iii) Dollar denominated time deposits and
certificates of deposit of any commercial bank having, or which is the principal
banking subsidiary of a bank holding company having, a long-term unsecured debt
rating of at least "A" or the equivalent thereof from Standard & Poor's Ratings
Services or "A2" or the equivalent thereof from ▇▇▇▇▇'▇ Investors Service, Inc.
with maturities of not more than one year from the date of acquisition by such
Person, (iv) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (iii) above, (v)
commercial paper issued by any Person incorporated in the United States rated at
least A-1 or the equivalent thereof by Standard & Poor's Ratings Services or at
least P-1 or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc. and in
each case maturing not more than one year after the date of acquisition by such
Person and (vi) investments in money market funds substantially all of whose
assets are comprised of securities of the types described in clauses (i) through
(v) above.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability of 1980, as the same may be amended from time to
time, 42 U.S.C. (S) 9601 et seq.
-- ---
"Certificated Securities" shall have the meaning provided in the
Pledge Agreement.
"Change of Control" shall mean (i) THL and/or the THL Funds shall at
any time cease to jointly own and control at least 35% of the economic and
voting interest in Holdings' capital stock, (ii) THL and/or the THL Funds
together with the Management Investors existing on the Effective Date shall
cease to own at least 51% of the economic and voting interest in
-▇▇-
▇▇▇▇▇▇▇▇' ▇▇▇▇▇▇▇ ▇▇▇▇▇, (▇▇▇) THL and/or THL Funds shall at any time not
control, directly or indirectly, a majority of the Board of Directors of any
Credit Agreement Party, (iv) Holdings shall cease to own 100% of the economic
and voting interest in BV Holdings' capital stock, (v) BV Holdings shall cease
to own 100% of the economic and voting interest in the Borrower's capital stock
or (vi) any "change of control" or similar event shall occur under the Senior
Subordinated Note Indenture, the Junior Subordinated Note Documents or the
Replacement Junior Subordinated Note Documents;
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purported to be
granted) pursuant to any Security Document, including, without limitation, all
Pledge Agreement Collateral, all Security Agreement Collateral and all cash and
Cash Equivalents delivered as collateral pursuant to Section 4.02 or 10.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Security Documents.
"Commitment" shall mean any of the commitments of any Lender, i.e.,
whether the Tranche A Term Loan Commitment, the Tranche B Term Loan Commitment
or the Revolving Loan Commitment.
"Consolidated EBIT" shall mean, for any period, Consolidated Net
Income for such period before consolidated interest expense of Holdings and its
Subsidiaries and provision for taxes for such period and without giving effect
to (x) any extraordinary gains or losses and (y) any gains or losses from sales
of assets other than from sales of inventory sold in the ordinary course of
business.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT
for such period, adjusted by (x) adding thereto (i) the amount of all
amortization of intangibles and depreciation that were deducted in arriving at
Consolidated EBIT for such period, (ii) the amount of all non-cash contributions
to deferred profit sharing plans and deferred compensation plans, (iii) the
amount of all non-cash write-offs and non-cash rental expenses with respect to
the Borrower's supermarkets for such period and (iv) the amount of all deferred
financing, legal and accounting costs and other charges incurred in connection
with the preparation, execution and delivery of this Agreement, in each case to
the extent that same were deducted in arriving at Consolidated EBIT for such
period and (y) subtracting therefrom (i) the amount of any non-cash income for
such period to the extent that same was included in arriving at Consolidated
EBIT for such period and is not reasonably expected to be later recognized as
cash income in a later period (it being understood and agreed that the receipt
by Holdings or any of its Subsidiaries of such cash in a later period shall not
be included in arriving at Consolidated EBIT for such period) and (ii) the
amount of all cash expenses, cash charges or cash payments made in such period
to the
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extent that same relate to a non-cash write-off and/or non-cash rental expense
that was deducted in arriving at Consolidated EBIT in a previous period pursuant
to preceding clause (x)(iii) or to a non-cash charge that was deducted in
arriving at Consolidated EBIT in a previous period pursuant to the last sentence
of this definition. In addition to the foregoing and consistent with the
provisions of Section 13.07(b), the amount of all non-cash charges associated
with LIFO (i.e., last in-first out) accounting shall be ignored.
"Consolidated Fixed Charge Coverage Ratio" shall mean, for any period,
the ratio of Consolidated EBITDA to Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges" shall mean, for any period, the sum,
without duplication, of (i) Consolidated Interest Expense for such period, (ii)
the amount of all Capital Expenditures made by Holdings and its Subsidiaries for
such period (other than Capital Expenditures to the extent financed with equity
proceeds, insurance proceeds, Asset Sale proceeds or Indebtedness), (iii) the
scheduled principal amount of all amortization payments on all Indebtedness
(including, without limitation, the principal component of all Capitalized Lease
Obligations but excluding (x) the repayment of the Existing Credit Agreement and
(y) scheduled repayments of the Junior Subordinated Notes to the extent financed
with (I) proceeds of Tranche A Term Loans or (II) proceeds from the Junior
Subordinated Notes Escrow Account) of Holdings and its Subsidiaries for such
period (as determined on the first day of such period) and (iv) the amount of
all cash payments made by Holdings and its Subsidiaries in respect of income
taxes or income tax liabilities for such period.
"Consolidated Indebtedness" shall mean, at any time, the principal
amount of all Indebtedness of Holdings and its Subsidiaries at such time
(excluding the outstanding principal amount of all Holdings Shareholder
Subordinated Notes).
"Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio of Consolidated EBITDA to Consolidated Interest Expense for such period.
"Consolidated Interest Expense" shall mean, for any period, the total
consolidated interest expense of Holdings and its Subsidiaries for such period
(calculated without regard to any limitations on the payment thereof) plus,
without duplication, that portion of Capitalized Lease Obligations of Holdings
and its Subsidiaries representing the interest factor for such period; provided
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that (i) the amortization of deferred financing, legal and accounting costs with
respect to this Agreement shall be excluded from Consolidated Interest Expense
to the extent same would otherwise have been included therein and (ii) the
interest expense on any outstanding Holdings Shareholder Subordinated Notes
shall be excluded from Consolidated Interest Expense to the extent that same
would otherwise have been included therein.
"Consolidated Net Income" shall mean, for any period, the net income
(or loss) of Holdings and its Subsidiaries for such period, determined on a
consolidated basis (after any deduction for minority interests), provided that
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(i) in determining Consolidated Net Income, the net income of any other Person
which is not a Subsidiary of Holdings or is accounted for by Holdings by the
equity method of accounting (including the ▇▇▇▇▇▇ Subsidiary and its
Subsidiaries) shall be included only to the extent of the payment of cash
dividends or cash
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distributions by such other Person to Holdings or a Subsidiary thereof during
such period, (ii) the net income of any Subsidiary of the Borrower shall be
excluded to the extent that the declaration or payment of cash dividends or
similar distributions by that Subsidiary of that net income is not at the date
of determination permitted by operation of its charter or any agreement,
instrument or law applicable to such Subsidiary and (iii) the net income (or
loss) of any other Person acquired by such specified Person or a Subsidiary of
such Person in a pooling of interests transaction for any period prior to the
date of such acquisition shall be excluded.
"Consolidated Net Worth" shall mean, at any time, the net worth of
Holdings and its Subsidiaries determined on a consolidated basis at such time.
"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person as a result of such Person being a general partner of the other
Person, unless the underlying obligation is expressly made non-recourse as to
such general partner, and any obligation of such Person guaranteeing or intended
to guarantee any Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the holder of such primary obligation against loss in
respect thereof; provided, however, that the term Contingent Obligation shall
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not include (x) endorsements of instruments for deposit or collection in the
ordinary course of business or (y) Holdings' own obligation to obtain a letter
of credit for the benefit of Wakefern as contemplated by Section 9.04(xii). The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
probable liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.
"Credit Agreement Party" shall mean each of Holdings, BV Holdings and
the Borrower.
"Credit Documents" shall mean this Agreement and, after the execution
and delivery thereof pursuant to the terms of this Agreement, each Note, each
Security Document and the Subsidiaries Guaranty.
"Credit Event" shall mean the making of any Loan or the issuance of
any Letter of Credit.
"Credit Party" shall mean each of Holdings, BV Holdings, the Borrower
and any Subsidiary of the Borrower which has executed and delivered any Credit
Document.
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"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to which a
Lender Default is in effect.
"Dividend" shall mean, with respect to any Person, that such Person
has declared or paid a dividend or returned any equity capital to its
stockholders, partners or members authorized or made any other distribution,
payment or delivery of property (other than common stock or other common equity
interests of such Person) or cash to its stockholders, partners or members as
such, or redeemed, retired, purchased or otherwise acquired, directly or
indirectly, for a consideration any shares of any class of its capital stock or
any partnership or membership interests outstanding on or after the Effective
Date (or any options or warrants issued by such Person with respect to its
capital stock or other equity interests), or set aside any funds for any of the
foregoing purposes, or shall have permitted any of its Subsidiaries to purchase
or otherwise acquire for a consideration any shares of any class of the capital
stock or any partnership interests of such Person outstanding on or after the
Effective Date (or any options or warrants issued by such Person with respect to
its capital stock or other equity interests). Without limiting the foregoing,
"Dividends" with respect to any Person shall also include all payments made or
required to be made by such Person with respect to any stock appreciation
rights, plans, equity incentive or achievement plans or any similar plans or
setting aside of any funds for the foregoing purposes.
"Dixx Mart" shall mean Dixx Mart, Inc., a Delaware corporation.
"DLJ" shall mean DLJ Capital Funding, Inc., in its individual
capacity, and any successor corporation thereto by merger, consolidation or
otherwise.
"Documentation Agent" shall mean Summit, as Documentation Agent for
the Lenders hereunder.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Effective Date" shall have the meaning provided in Section 13.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution, any fund that invests in loans or any other "accredited
investor" (as defined in Regulation D of the Securities Act), but in any event
excluding Holdings and its Subsidiaries.
"End Date" shall mean, for any Applicable Margin Period, the last day
of such Applicable Margin Period.
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"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment due
to the presence of Hazardous Materials.
"Environmental Law" shall mean any Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, guideline, written policy and
rule of common law now or hereafter in effect and in each case as amended, and
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C. (S)
1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. (S) 2601 et seq.; the
-- --- -- ---
Clean Air Act, 42 U.S.C. (S) 7401 et seq.; the Safe Drinking Water Act, 42
-- ---
U.S.C. (S) 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. (S) 2701 et
-- --- --
seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42
---
U.S.C. (S) 11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.C.
-- ---
(S) 1801 et seq. and the Occupational Safety and Health Act, 29 U.S.C. (S) 651
-- ---
et seq.; and any state and local or foreign counterparts or equivalents, in each
-- ---
case as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with Holdings or a Subsidiary of Holdings would be
deemed to be a "single employer" (i) within the meaning of Section 414(b), (c),
(m) or (o) of the Code or (ii) as a result of Holdings or a Subsidiary of
Holdings being or having been a general partner of such person.
"Eurodollar Loan" shall mean each Loan (other than any Swingline Loan)
designated as such by the Borrower at the time of the incurrence thereof or
conversion thereto.
"Eurodollar Rate" shall mean for the Interest Period for each
Eurodollar Loan comprising part of the same Borrowing, a per annum interest rate
determined pursuant to the following formula:
Eurodollar Rate = LIBO Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
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"Eurodollar Reserve Percentage" shall mean, for any day relative to
any Interest Period for Eurodollar Loans, the percentage (expressed as a
decimal, rounded upward to the next 1/16/th/ of 1%) in effect on such day
(whether or not applicable to any Lender) under regulations issued from time to
time by the Board of Governors of the Federal Reserve System for determining the
maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board of
Governors of the Federal Reserve System.)
"Event of Default" shall have the meaning provided in Section 10.
"Excess Cash Flow" shall mean, for any period, the remainder of (a)
Adjusted Consolidated Net Income for such period minus (b) the sum of (i) the
amount of all Capital Expenditures made and paid for in cash by Holdings and its
Subsidiaries during such period (other than Capital Expenditures to the extent
financed with equity proceeds, Asset Sale proceeds (other than cash proceeds
received by the Borrower from the sale of the ▇▇▇▇▇▇ Subsidiary or the ▇▇▇▇▇▇
Property), insurance proceeds or Indebtedness), (ii) the amount of all cash
proceeds deposited into the Junior Subordinated Notes Escrow Account (except to
the extent financed with equity proceeds, Asset Sale proceeds, insurance
proceeds or Indebtedness) and (iii) the aggregate amount of permanent principal
payments of Indebtedness for borrowed money of Holdings and its Subsidiaries
during such period (other than (A) repayments to the extent made with Asset Sale
proceeds, equity proceeds, insurance proceeds, proceeds from the Junior
Subordinated Notes Escrow Account or Indebtedness (including, without
limitation, any Loans) and (B) repayments of Loans, provided that repayments of
--------
Loans shall be deducted in determining Excess Cash Flow if such repayments were
(x) required as a result of a Scheduled Repayment under Section 4.02(b)(i) or
(ii) or (y) made as a voluntary prepayment with internally generated funds (but
in the case of a voluntary prepayment of Revolving Loans or Swingline Loans,
only to the extent accompanied by a voluntary reduction to the Total Revolving
Loan Commitment).
"Excess Cash Payment Date" shall mean the date occurring 90 days after
the last day of each fiscal year of Holdings (beginning with its fiscal year
ended on December 26, 1998).
"Excess Cash Payment Period" shall mean, with respect to the repayment
required on each Excess Cash Payment Date, the immediately preceding fiscal year
of Holdings.
"Existing Credit Agreement" shall mean the Credit Agreement, dated as
of December 28, 1990, amended and restated as of November 1, 1993, and further
amended and restated as of December 17, 1993, among Holdings, BV Holdings, the
Borrower, the lenders party thereto, and Bankers Trust Company, as agent, as
same is in effect on the Initial Borrowing Date.
"Existing Indebtedness" shall have the meaning provided in Section
7.21.
"Existing Indebtedness Agreements" shall have the meaning provided in
Section 5.05.
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"Facing Fee" shall have the meaning provided in Section 3.01(d).
"Federal Funds Rate" shall mean, 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 the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 3.01.
"Fiscal Month" shall mean each period of four consecutive weeks then
last ended on the last Saturday of such four-week period, commencing on December
27, 1998, and with thirteen such periods occurring in each fiscal year of
Holdings.
"Fleet Bank" shall mean Fleet National Bank, in its individual
capacity, and any successor corporation thereto by merger, consolidation or
otherwise.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States by Holdings or any one or more of its
Subsidiaries primarily for the benefit of employees of Holdings or such
Subsidiaries residing outside the United States, which plan, fund or other
similar program provides, or results in, retirement income, a deferral of income
in contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.
"Frelinghuysen" shall mean U.S. Frelinghuysen & Company, Inc., a
Delaware corporation.
"Frelinghuysen Equity" shall mean Frelinghuysen Equity Corporation, a
Delaware corporation.
"Frelinghuysen Management Agreement" shall mean the Management
Agreement, dated as of December 28, 1990, by and among Frelinghuysen, Holdings,
BV Holdings and the Borrower.
"Guaranteed Creditors" shall mean and include each Agent, the
Collateral Agent, each Issuing Lender, the Lenders and each party (other than
any Credit Party) party to an Interest Rate Protection Agreement or Other
Hedging Agreement to the extent such party constitutes a Secured Creditor under
the Security Documents.
"Guaranteed Obligations" shall mean (i) the full and prompt payment
when due (whether at the stated maturity by acceleration or otherwise) of the
principal and interest on each Note issued by, and Loans made to, the Borrower
under this Agreement and all reimbursement
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obligations and Unpaid Drawings with respect to Letters of Credit, together with
all the other obligations (including obligations which, but for the automatic
stay under Section 362(a) of the Bankruptcy Code, would become due) and
liabilities (including, without limitation, indemnities, fees and interest
thereon) of the Borrower to the Lenders, each Agent, each Issuing Lender and the
Collateral Agent now existing or hereafter incurred under, arising out of or in
connection with this Agreement and each other Credit Document to which the
Borrower is a party and the due performance and compliance by the Borrower with
all the terms, conditions and agreements contained in this Agreement and all
such other Credit Documents and (ii) the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) of the Borrower owing
under any Interest Rate Protection Agreement or Other Hedging Agreement entered
into by the Borrower with any Lender or any affiliate thereof (even if such
Lender subsequently ceases to be a Lender under this Agreement for any reason)
so long as such Lender or affiliate participates in such Interest Rate
Protection Agreement or Other Hedging Agreement, and their subsequent assigns,
if any, whether now in existence or hereafter arising, and the due performance
and compliance with all terms, conditions and agreements contained herein.
"Guarantor" shall mean and include each Parent Guarantor and each
Subsidiary of the Borrower that has executed and delivered a counterpart of the
Subsidiaries Guaranty.
"Guaranty" shall mean and include each of the Parents Guaranty and,
after the execution and delivery thereof, the Subsidiaries Guaranty.
"Hazardous Materials" shall mean (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is friable, urea
formaldehyde foam insulation, transformers or other equipment that contains
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous substances," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," or "pollutants," or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, the Release of which is prohibited, limited or
regulated by any governmental authority.
"Holdings" shall have the meaning provided in the first paragraph of
this Agreement.
"Holdings Shareholder Subordinated Note" shall mean an unsecured
junior subordinated note issued by Holdings and not guaranteed by any Subsidiary
of Holdings in the form of Exhibit K, as the same may be modified, amended or
supplemented from time to time pursuant to the terms hereof and thereof.
"Holdings Stockholders Agreement" shall mean the Stockholders
Agreement, dated as of December 28, 1990, among Holdings and the investors named
therein.
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"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (ii) the maximum amount available to be drawn under all letters of
credit issued for the account of such Person and all unpaid drawings in respect
of such letters of credit, (iii) all Indebtedness of the types described in
clause (i), (ii), (iv), (v), (vi) or (vii) of this definition secured by any
Lien on any property owned by such Person, whether or not such Indebtedness has
been assumed by such Person (provided that, if the Person has not assumed or
--------
otherwise become liable in respect of such Indebtedness, such Indebtedness shall
be deemed to be in an amount equal to the fair market value of the property to
which such Lien relates as determined in good faith by such Person), (iv) the
aggregate amount required to be capitalized under leases under which such Person
is the lessee (other than in respect of any New Supermarket Capitalized Lease
Obligations), (v) all obligations of such person to pay a specified purchase
price for goods or services, whether or not delivered or accepted, i.e., take-
---
or-pay and similar obligations, (vi) all Contingent Obligations of such Person
and (vii) all obligations under any Interest Rate Protection Agreement, any
Other Hedging Agreement or under any similar type of agreement. Notwithstanding
the foregoing, Indebtedness shall not include trade payables and accrued
expenses incurred by any Person in accordance with customary practices and in
the ordinary course of business of such Person.
"Information Systems and Equipment" of any Person shall mean all
computer hardware, firmware and software, as well as other information
processing systems, or any equipment containing embedded microchips, whether
directly owned, licensed, leased, operated or otherwise controlled by such
Person, including through third-party service providers, and which, in whole or
in part, are used, operated, relied upon, or integral to, such Person's conduct
of its business.
"Initial Borrowing Date" shall mean the date occurring on or after the
Effective Date on which the initial Borrowing of Term Loans occurs.
"Insure-Rite" shall mean Insure-Rite, Ltd., a Bermuda mutual insurance
company.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement or other similar agreement or arrangement.
"Investments" shall have the meaning provided in Section 9.05.
"Issuing Lender" shall mean (i) Fleet Bank and (ii) with the consent
of the Syndication Agent and the Administrative Agent, any other Lender to the
extent such Lender
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agrees, in its sole discretion, to become an Issuing Lender for the purpose of
issuing Letters of Credit pursuant to Section 2.
"Junior Subordinated Note Agreement" shall mean, collectively, each
Note and Stock Purchase Agreement, dated as of December 28, 1990, among
Holdings, BV Holdings, the Borrower and each of the Purchasers named therein.
"Junior Subordinated Note Documents" shall mean and include each of
the Junior Subordinated Notes, the Junior Subordinated Note Agreement and each
other document or agreement relating to the issuance of the Junior Subordinated
Notes.
"Junior Subordinated Notes" shall mean the Borrower's 14.14% Senior
Subordinated Notes due March 15, 2001 issued pursuant to the Junior Subordinated
Note Agreement.
"Junior Subordinated Notes Escrow Account" shall mean an escrow
account satisfactory to the Syndication Agent and the Administrative Agent into
which the Borrower may from time to time deposit funds in an aggregate amount
not to exceed $20,000,000 solely for the purposes of making regularly scheduled
repayments in respect of the Junior Subordinated Notes, it being understood and
agreed, however, that (i) such escrow account shall be maintained with, and
shall be under the sole dominion and control of, the Collateral Agent and in
which the Collateral Agent shall have a first priority perfected security
interest for the benefit of the Secured Creditors, (ii) funds deposited into
such escrow account may only be used to make regularly scheduled principal
payments in respect of the Junior Subordinated Notes, provided that, so long as
--------
no Default or Event of Default then exists, interest on any amounts deposited
into such escrow account may, upon its request, be returned to the Borrower,
provided, however that, in any event, from and after an Event of Default, such
-------- -------
funds may be applied to the Obligations at the direction of the Administrative
Agent or the Required Lenders and (iii) so long as no Default or Event of
Default exists at such time, after the Junior Subordinated Notes have been paid
in full, any funds remaining in such escrow account shall be returned to the
Borrower.
"L/C Supportable Obligations" shall mean (i) obligations of the
Borrower or any of its Subsidiaries with respect to workers compensation, surety
bonds and other similar statutory obligations, and (ii) such other obligations
of the Borrower or any of its Subsidiaries as are reasonably acceptable to the
respective Issuing Lender and otherwise permitted to exist pursuant to the terms
of this Agreement (other than obligations in respect of the Senior Subordinated
Notes, the Junior Subordinated Notes, any Replacement Junior Subordinated Notes
or any other Indebtedness for borrowed money).
"Leaseholds" of any Person shall mean all the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Lender" shall mean each financial institution listed on Schedule I,
as well as any Person that becomes a "Lender" hereunder pursuant to Section 1.13
or 13.04(b).
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"Lender Default" shall mean (i) the refusal (which has not been
retracted) or the failure of a Lender to make available its portion of any
Borrowing (including any Mandatory Borrowing) or to fund its portion of any
unreimbursed payment under Section 2.04(c) or (ii) a Lender having notified in
writing the Borrower and/or the Administrative Agent that such Lender does not
intend to comply with its obligations under Section 1.01(a), 1.01(b), 1.01(c),
1.01(e) or 2.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(c).
"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the Stated Amount of all outstanding Letters of Credit and (ii) the
aggregate amount of all Unpaid Drawings in respect of all Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in Section
2.03(a).
"Leverage Ratio" shall mean, at any time, the ratio of Consolidated
Indebtedness at such time to Consolidated EBITDA for the Test Period then most
recently ended.
"LIBO Rate" shall mean, relative to any Interest Period for a
Eurodollar Loan, the interest rate per annum for deposits in Dollars, if any,
for a period equal to the relevant Interest Period which appears on Telerate
Page 3750 at approximately 11:00 A.M., London time, two Business Days prior to
the commencement of such Interest Period. If such a rate does not appear on
Telerate Page 3750, the LIBO Rate shall be the rate of interest per annum
determined by the Administrative Agent to be the arithmetic mean (rounded upward
to the next 1/16 th of 1%) of the rates of interest per annum at which Dollar
deposits in the approximate amount of the Loan to be made or continued as, or
converted into, a Eurodollar Loan by the Administrative Agent and having a
maturity comparable to such Interest Period would be offered to the
Administrative Agent in the London interbank market at its request at
approximately 11:00 A.M., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall mean each Tranche A Term Loan, each Tranche B Term Loan,
each Revolving Loan and each Swingline Loan.
"Majority Lenders" of any Tranche shall mean those Non-Defaulting
Lenders which would constitute the Required Lenders under, and as defined in,
this Agreement if all outstanding Obligations of the other Tranches under this
Agreement were repaid in full and all Commitments with respect thereto were
terminated.
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"Management Agreements" shall have the meaning provided in Section
5.05.
"Management Investors" shall have the meaning provided in the Holdings
Stockholders Agreement.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(e).
"Margin Stock" shall have the meaning provided in Regulation U.
"Maturity Date" shall mean, with respect to any Tranche of Loans, the
Tranche A Term Loan Maturity Date, the Tranche B Term Loan Maturity Date, the
Revolving Loan Maturity Date or the Swingline Expiry Date, as the case may be.
"Maximum Swingline Amount" shall mean $5,000,000.
"Minimum Borrowing Amount" shall mean (i) for Term Loans and Revolving
Loans, $500,000 and (ii) for Swingline Loans, $250,000.
"Minimum Consolidated Net Worth" shall mean, at any time, the sum of
(i) ($29,500,000) plus (ii) 50% of Consolidated Net Income of Holdings, if
positive, for each quarterly accounting period of Holdings (commencing with its
quarterly accounting period ended on December 26, 1998) ended prior to the date
of determination, it being understood that any increase to Minimum Consolidated
Net Worth shall be effective as of the last day of each quarterly accounting
period of Holdings.
"▇▇-▇▇▇ Fund" shall mean, collectively, ▇▇-▇▇▇ Acquisition Fund II,
L.P., a Delaware limited partnership and ▇▇-▇▇▇ Acquisition Fund (Retirement
Accounts) II, L.P., a Delaware limited partnership.
"NAIC" shall mean the National Association of Insurance Commissioners.
"Net Debt Proceeds" shall mean, with respect to any incurrence of
Indebtedness for borrowed money, the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith)
received by the respective Person from the respective incurrence of such
Indebtedness for borrowed money.
"Net Equity Proceeds" shall mean, with respect to each issuance or
sale of any equity by any Person or any capital contribution to such Person, the
cash proceeds (net of underwriting discounts and commissions and other
reasonable costs associated therewith) received by such Person from the
respective sale or issuance of its equity or from the respective capital
contribution.
"Net Insurance Proceeds" shall mean, with respect to any Recovery
Event, the cash proceeds (net of reasonable costs and taxes incurred in
connection with such Recovery Event) received by the respective Person in
connection with such Recovery Event.
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"Net Sale Proceeds" shall mean, for any Asset Sale, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from such sale of assets, net of the reasonable costs of such sale
(including fees and commissions, payments of unassumed liabilities relating to
the assets sold and required payments of any Indebtedness (other than
Indebtedness secured pursuant to the Security Documents) which is secured by the
respective assets which were sold), and the incremental taxes paid or payable as
a result of such Asset Sale.
"New Supermarket Capital Lease Obligations" shall mean all rental
obligations of the Borrower or any of its Subsidiaries arising solely in
connection with capitalized leases entered into by the Borrower or such
Subsidiary, as the case may be, after the Initial Borrowing Date solely in
respect of buildings for supermarkets opened by the Borrower after the Initial
Borrowing Date.
"New Wakefern Agreement" shall mean the Letter Agreement, dated as of
November 23, 1993, among Wakefern, ▇▇▇▇▇▇ ▇. ▇▇▇ Company and Holdings.
"Non-Defaulting Lender" shall mean and include each Lender other than
a Defaulting Lender.
"Note" shall mean each Tranche A Term Note, each Tranche B Term Note,
each Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇ or such other office as the Administrative Agent may
hereafter designate in writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to any Agent, the
Collateral Agent, any Issuing Lender or any Lender pursuant to the terms of this
Agreement or any other Credit Document.
"Other Hedging Agreement" shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency values.
"Parent Guarantor" shall mean and include each of Holdings and BV
Holdings.
"Parents Guaranty" shall mean the guaranty of each Parent Guarantor
pursuant to Section 14.
"Participant" shall have the meaning provided in Section 2.04(a).
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"Patronage Dividends" shall mean "patronage" or similar payments made
to Holdings or any of its Subsidiaries by Wakefern, which payments are currently
provided for in Article XIX of the Wakefern By-Laws, entitled "Cooperative
Patronage Dividends".
"Payment Office" shall mean the office of the Administrative Agent
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or
such other office as the Administrative Agent may hereafter designate in writing
as such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Liens" shall have the meaning provided in Section 9.01.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) Holdings or a Subsidiary of Holdings or an ERISA
Affiliate, and each such plan for the five year period immediately following the
latest date on which Holdings, or a Subsidiary of Holdings or an ERISA Affiliate
maintained, contributed to or had an obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section 5.09.
"Pledge Agreement Collateral" shall mean all "Collateral" as defined
in the Pledge Agreement.
"Pledgee" shall have the meaning provided in the Pledge Agreement.
"Prime Lending Rate" shall mean the rate of interest in effect for
such day as most recently publicly announced or established by the
Administrative Agent in Boston, Massachusetts, as its "prime rate." The "prime
rate" is a rate set by the Administrative Agent based upon various factors,
including the Administrative Agent's costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above or below such announced rate. Any change in
the reference rate established or announced by the Administrative Agent shall
take effect at the opening of business on the day of such establishment or
announcement.
"Projections" shall mean the projections, dated December 3, 1998,
which were prepared by or on behalf of Holdings in connection with this
Agreement and delivered to each Agent and the Lenders prior to the Initial
Borrowing Date.
"Qualified Preferred Stock" shall mean any preferred stock of Holdings
so long as the terms of any such preferred stock (v) do not contain any
mandatory put, redemption, repayment, sinking fund or other similar provision,
(w) do not require the cash payment of
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dividends, (x) do not contain any covenants, (y) do not grant the holders
thereof any voting rights except for (I) voting rights required to be granted to
such holders under applicable law and (II) limited customary voting rights on
fundamental matters such as mergers, consolidations, sales of all or
substantially all of the assets of Holdings, or liquidations involving Holdings,
and (z) are otherwise reasonably satisfactory to the Administrative Agent and
the Syndication Agent.
"Quarterly Payment Date" shall mean the 1st day of each May, August,
November and February occurring after the Initial Borrowing Date, commencing on
May 1, 1999.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 ▇.▇.▇.▇▇. 6901 et seq.
-- ----
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Record of Decision" shall mean that certain Declaration Statement -
Record of Decision, dated November 15, 1995, and issued by the New York State
Department of Environmental Conservation in respect of the ▇▇▇▇▇▇ Property.
"Recovery Event" shall mean the receipt by Holdings or any of its
Subsidiaries of any cash insurance proceeds or condemnation awards payable (i)
by reason of theft, loss, physical destruction, damage, taking or any other
similar event with respect to any property or assets of Holdings or any of its
Subsidiaries and (ii) under any policy of insurance required to be maintained
under Section 8.03.
"Register" shall have the meaning provided in Section 13.15.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Release" shall mean the disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying, pouring or
migrating, into or upon any land or water or air, or otherwise entering into the
environment.
"Replaced Lender" shall have the meaning provided in Section 1.13.
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"Replacement Junior Subordinated Note Documents" shall mean the
Replacement Junior Subordinated Notes and each other document or agreement
relating to the issuance of the Replacement Junior Subordinated Notes.
"Replacement Junior Subordinated Notes" shall mean an issue of
unsecured subordinated notes issued by the Borrower pursuant to Section
9.04(xiii) to refinance in full the Junior Subordinated Notes.
"Replacement Lender" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Lenders" shall mean Non-Defaulting Lenders the sum of whose
outstanding Term Loans (and, if prior to the termination thereof, Tranche A Term
Loan Commitments) and Revolving Loan Commitments (or after the termination
thereof, outstanding Revolving Loans and RL Percentages of (x) outstanding
Swingline Loans and (y) Letter of Credit Outstandings) represent at least 50.1%
of the sum of (i) all outstanding Term Loans (and, if prior to the termination
thereof, Tranche A Term Loan Commitments) of Non-Defaulting Lenders and (ii) the
Total Revolving Loan Commitment less the Revolving Loan Commitments of all
Defaulting Lenders (or after the termination thereof, the sum of the then total
outstanding Revolving Loans of Non-Defaulting Lenders and the aggregate RL
Percentages of all Non-Defaulting Lenders of the total (x) outstanding Swingline
Loans and (y) Letter of Credit Outstandings at such time).
"Revolving Loan" shall have the meaning provided in Section 1.01(c).
"Revolving Loan Commitment" shall mean, for each Lender, the amount
set forth opposite such Lender's name in Schedule I directly below the column
entitled "Revolving Loan Commitment," as same may be (x) reduced from time to
time pursuant to Sections 3.02, 3.03 and/or 10, (y) increased from time to time
pursuant to Section 13.18 or (z) adjusted from time to time as a result of
assignments to or from such Lender pursuant to Section 1.13 or 13.04(b).
"Revolving Loan Maturity Date" shall mean February 10, 2003.
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"RL Commitment Commission" shall have the meaning provided in Section
3.01(b).
"RL Lender" shall mean each Lender with a Revolving Loan Commitment or
with outstanding Revolving Loans.
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"RL Percentage" of any RL Lender at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such RL Lender at such time and the denominator of which is the
Total Revolving Loan Commitment at such time, provided that if the RL Percentage
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of any Lender is to be determined after the Total Revolving Loan Commitment has
been terminated, then the RL Percentages of such RL Lender shall be determined
immediately prior (and without giving effect) to such termination.
"Scheduled Repayments" shall have the meaning provided in Section
4.02(b)(ii).
"SEC" shall have the meaning provided in Section 8.01(h).
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning assigned that term in the
respective Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning provided in Section 5.10.
"Security Agreement Collateral" shall mean all "Collateral" as defined
in the Security Agreement.
"Security Document" shall mean and include each of the Security
Agreement, the Pledge Agreement and, after the execution and delivery thereof,
each Additional Security Document.
"Senior Subordinated Note Documents" shall mean the Senior
Subordinated Note Indenture, the Senior Subordinated Notes and each other
document or agreement relating to the issuance of the Senior Subordinated Notes.
"Senior Subordinated Note Indenture" shall mean the Indenture, dated
as of December 17, ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust Company of
New York, as Trustee thereunder.
"Senior Subordinated Notes" shall mean the Borrower's 11% Senior
Subordinated Notes due 2004 issued pursuant to Senior Subordinated Note
Indenture.
"Shareholders' Agreements" shall have the meaning provided in Section
5.05.
"▇▇▇▇▇▇ Agreement" shall mean the Agreement, dated as of December 28,
1990, among BV Holdings, the Borrower, the ▇▇▇▇▇▇ Subsidiary and the Noteholders
party thereto.
"▇▇▇▇▇▇ Documents" shall mean the Joint Venture Documents as defined
in Annex I to the Acquisition Agreement, as well as Annex I to the Acquisition
Agreement, the
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▇▇▇▇▇▇ Agreement, the ▇▇▇▇▇▇ Note, the ▇▇▇▇▇▇ Security Agreement, the Big V
▇▇▇▇▇▇ Security Agreement, the ▇▇▇▇▇▇ Pledge Agreement, the Record of Decision
and any other documentation entered into with respect to the ▇▇▇▇▇▇ Subsidiary.
"▇▇▇▇▇▇ Joint Venture Rights" shall mean the joint venture rights as
defined in Annex I to the Acquisition Agreement and the ▇▇▇▇▇▇ Agreement.
"▇▇▇▇▇▇ Note" shall mean the $4,984,234 non-recourse promissory note
issued by the ▇▇▇▇▇▇ Subsidiary to the Sellers referred to in the Acquisition
Agreement pursuant to Section 2 of Annex I to the Acquisition Agreement.
"▇▇▇▇▇▇ Pledge Agreement" shall mean the Pledge Agreement, dated as of
December 28, 1990, between the Borrower and Merchant GP, Inc., as collateral
agent thereunder, pursuant to which the Borrower pledged the capital stock of
the ▇▇▇▇▇▇ Subsidiary as security for its obligations under the ▇▇▇▇▇▇ Note.
"▇▇▇▇▇▇ Property" shall mean the Real Property owned by the ▇▇▇▇▇▇
Subsidiary and located at the ▇▇▇▇▇▇▇ Place Shopping Mall in ▇▇▇▇▇▇, New York.
"▇▇▇▇▇▇ Security Agreement" shall mean the security agreement, dated
as of December 28, 1990, between the ▇▇▇▇▇▇ Subsidiary and Merchant GP, Inc., as
collateral agent, pursuant to which the ▇▇▇▇▇▇ Subsidiary has assigned its
▇▇▇▇▇▇ Joint Venture Rights as security for its obligations under the ▇▇▇▇▇▇
Note.
"▇▇▇▇▇▇ Subsidiary" shall mean ▇▇▇▇▇▇ Development Corp., a Delaware
corporation.
"Start Date" shall mean, with respect to any Applicable Margin Period,
the first day of such Applicable Margin Period.
"Stated Amount" of each Letter of Credit shall mean, at any time, the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met).
"Subsidiaries Guaranty" shall have the meaning provided in Section
9.16(c).
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, limited liability
company, association, joint venture or other entity in which such Person and/or
one or more Subsidiaries of such Person has more than a 50% equity interest at
the time.
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"Summit" shall mean Summit Bank, in its individual capacity, and any
successor corporation thereto by merger, consolidation or otherwise.
"Supermajority Lenders" of any Tranche shall mean those Non-Defaulting
Lenders which would constitute the Required Lenders under, and as defined in,
this Agreement if (x) all outstanding Obligations of the other Tranches under
this Agreement were repaid in full and all Commitments with respect thereto were
terminated and (y) the percentage "50.1%" contained therein were changed to "66-
2/3%".
"Swingline Expiry Date" shall mean that date which is five Business
Days prior to the Revolving Loan Maturity Date.
"Swingline Lender" shall mean the Administrative Agent in its
individual capacity.
"Swingline Loan" shall have the meaning provided in Section 1.01(d).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Agent" shall mean DLJ, as Syndication Agent for the
Lenders hereunder.
"Tax Sharing Agreements" shall have the meaning provided in Section
5.05.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Term Loan" shall mean each Tranche A Term Loan and each Tranche B
Term Loan.
"Test Date" shall mean, with respect to any Start Date, the last day
of the most recent fiscal quarter of Holdings ended immediately prior to such
Start Date.
"Test Period" shall mean each period of four consecutive fiscal
quarters of Holdings then last ended (in each case taken as one accounting
period).
"THL" shall mean, collectively, (i) the ▇▇▇▇▇▇ ▇. ▇▇▇ Company, a
Massachusetts sole proprietorship, (ii) the officers and employees of ▇▇▇▇▇▇ ▇.
▇▇▇ Company, (iii) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ so long as they are
consultants of ▇▇▇▇▇▇ ▇. ▇▇▇ Company, (iv) any corporations or partnerships
wholly-owned by any of such Persons described in clauses (i), (ii) and (iii)
above and (v) any trusts over which such Person has sole control (voting or
otherwise) and which name as beneficiaries only such Person or such Person's
spouse or children.
"THL Equity Partners" shall mean ▇▇▇▇▇▇ ▇. ▇▇▇ Equity Partners, L.P.,
a Delaware limited partnership and one of the THL Funds.
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"THL Fund" shall mean THL-EP Equity Corp., a Massachusetts corporation
(and a wholly-owned corporation of THL and THL Equity Partners) and each
investment fund organized by THL, provided that THL shall have voting control
over any capital stock of Holdings held by any such investment fund.
"THL Management Agreement" shall mean the Management Agreement, dated
as of December 28, 1990, by and among the ▇▇▇▇▇▇ ▇. ▇▇▇ Company, Holdings, BV
Holdings and the Borrower.
"Total Commitment" shall mean, at any time, the sum of the Commitments
of each of the Lenders.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of
the Revolving Loan Commitments of each of the Lenders.
"Total Tranche A Term Loan Commitment" shall mean, at any time, the
sum of the Tranche A Term Loan Commitments of each of the Lenders.
"Total Tranche B Term Loan Commitment" shall mean, at any time, the
sum of the Tranche B Term Loan Commitments of each of the Lenders.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
an amount equal to the remainder of (x) the Total Revolving Loan Commitment then
in effect less (y) the sum of the aggregate principal amount of all Revolving
Loans and Swingline Loans then outstanding plus the then aggregate amount of all
Letter of Credit Outstandings.
"Tranche" shall mean the respective facility and commitments utilized
in making Loans hereunder, with there being four separate Tranches, i.e.,
Tranche A Term Loans, Tranche B Term Loans, Revolving Loans and Swingline Loans.
"Tranche A Term Loan" shall have the meaning provided in Section
1.01(a).
"Tranche A Term Loan Available Termination Date" shall mean March 15,
2001.
"Tranche A Term Loan Borrowing Date" shall mean each of the Initial
Borrowing Date and each Additional Tranche A Term Loan Borrowing Date.
"Tranche A Term Loan Commitment" shall mean, for each Lender, the
amount set forth opposite such Lender's name in Schedule I directly below the
column entitled "Tranche A Term Loan Commitment," as same may be (i) reduced
from time to time pursuant to Sections 3.02, 3.03, 4.02 and/or 10 or (ii)
adjusted from time to time as a result of assignments to or from such Lender
pursuant to Section 1.13 or 13.04(b).
"Tranche A Term Loan Maturity Date" shall mean February 10, 2003.
"Tranche A Term Loan Percentage" shall mean, at any time, a fraction
(expressed as a percentage) the numerator of which is equal to the sum of (x)
the aggregate principal amount
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of all Tranche A Term Loans outstanding at such time and (y) the Total Tranche A
Term Loan Commitment then in effect and the denominator of which is equal to the
sum of (x) the aggregate principal amount of all Term Loans outstanding at such
time and (y) the Total Tranche A Term Loan Commitment then in effect.
"Tranche A Term Loan Scheduled Repayment" shall have the meaning
provided in Section 4.02(b)(i).
"Tranche A Term Note" shall have the meaning provided in Section
1.05(a).
"Tranche B Term Loan" shall have the meaning provided in Section
1.01(b).
"Tranche B Term Loan Commitment" shall mean, for each Lender, the
amount set forth opposite such Lender's name in Schedule I directly below the
column entitled "Tranche B Term Loan Commitment," as same may be terminated
pursuant to Sections 3.03 and/or 10.
"Tranche B Term Loan Maturity Date" shall mean August 10, 2003.
"Tranche B Term Loan Percentage" shall mean, at any time, a fraction
(expressed as a percentage) the numerator of which is equal to the aggregate
principal amount of all Tranche B Term Loans outstanding at such time and the
denominator of which is equal to the sum of (x) the aggregate principal amount
of all Term Loans outstanding at such time and (y) the Total Tranche A Term Loan
Commitment then in effect.
"Tranche B Term Loan Scheduled Repayment" shall have the meaning
provided in Section 4.02(b)(ii).
"Tranche B Term Note" shall have the meaning provided in Section
1.05(a).
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the value of the accumulated plan benefits under the Plan
determined on a plan termination basis in accordance with actuarial assumptions
at such time consistent with those prescribed by the PBGC for purposes of
Section 4044 of ERISA, exceeds the fair market value of all plan assets
allocable to such liabilities under Title IV of ERISA (excluding any accrued but
unpaid contribution).
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section
2.05(a).
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"Unutilized Revolving Loan Commitment" shall mean, with respect to any
Lender at any time, such Lender's Revolving Loan Commitment at such time less
the sum of (i) the aggregate outstanding principal amount of all Revolving Loans
made by such Lender at such time and (ii) such Lender's RL Percentage of the
Letter of Credit Outstandings at such time.
"Waivable Repayment" shall have the meaning provided in Section
4.02(k).
"Wakefern" shall mean Wakefern Food Corp., a New Jersey corporation.
"Wakefern Documents" shall mean each of the Certificate of
Incorporation and By-Laws of Wakefern, the Wakefern Stockholders' Agreement, the
Wakefern Trademark License Agreement, the Wakefern Investment Policy, Wakefern's
Standards of Business Conduct, the Wakefern Letter and the New Wakefern
Agreement.
"Wakefern Investment Policy" shall mean the investment policy of
Wakefern.
"Wakefern Letter" shall mean the letter agreement, dated December 28,
1990, among Wakefern, the Borrower, Holdings, BV Holdings, Big V Acquisition
Corp., ▇▇▇▇▇▇ ▇. ▇▇▇ Company, THL Equity Partners, the ▇▇-▇▇▇ Fund, ▇▇▇▇▇▇ ▇.
▇▇▇ Advisors II, L.P., a Delaware limited partnership, THL Equity Advisors
Limited Partnership, a Massachusetts limited partnership, Frelinghuysen Equity,
THL-EP Equity Corp., a Massachusetts corporation, Frelinghuysen, Mr. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇, ▇▇. (as in effect
on the Initial Borrowing Date).
"Wakefern Stockholders' Agreement" shall mean the Stockholders'
Agreement, dated as of August 20, 1987, among Wakefern and each of the member-
stockholders of Wakefern listed on Schedule 1 thereto.
"Wakefern Trademark License Agreement" shall mean, collectively, each
of the Trademark License Agreements between Wakefern and the Borrower each in
the form delivered to the Lender pursuant to Section 5.05(v).
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, limited liability company,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
"Year 2000 Compliant" shall mean that all of Holdings' and its
Subsidiaries' Information Systems and Equipment accurately process date data
(including, but not limited to, calculating, comparing and sequencing) before,
during and after the year 2000, as well as same and multi-century dates, or
between the years 1999 and 2000, taking into account all leap years, including
the fact that the year 2000 is a leap year, and further, that when used in
combination with, or interfacing with, Information Systems and Equipment of any
other Person, shall accurately accept, release and exchange date data, and shall
in all material respects continue to
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function in the same manner as it performs today and shall not otherwise impair
the accuracy or functionality of Holdings' or any of its Subsidiaries'
Information Systems and Equipment.
SECTION 12. The Agents.
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12.01 Appointment. The Lenders hereby irrevocably (except as otherwise
-----------
provided in Section 12.09(b)) designate Fleet Bank as Administrative Agent (for
purposes of this Section 12, the term "Administrative Agent" also shall include
Fleet Bank in its capacity as Collateral Agent pursuant to the Security
Documents) to act as specified herein and in the other Credit Documents. The
Lenders hereby irrevocably designate DLJ as Syndication Agent to act as
specified herein and in the other Credit Documents. The Lenders hereby
irrevocably designate Summit as Documentation Agent to act as specified herein
and in the other Credit Documents. Each Lender hereby irrevocably authorizes,
and each holder of any Note by the acceptance of such Note shall be deemed
irrevocably (except, in the case of the Administrative Agent only, as otherwise
provided in Section 12.09(b)) to authorize, the Administrative Agent, the
Syndication Agent and the Documentation Agent to take such action on their
behalf under the provisions of this Agreement, the other Credit Documents and
any other instruments and agreements referred to herein or therein and to
exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the such Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. Each may
perform any of their respective duties hereunder by or through its officers,
directors, agents, employees or affiliates.
12.02 Nature of Duties. No Agent shall have any duties or
----------------
responsibilities except those expressly set forth in this Agreement and in the
other Credit Documents. No Agent nor any of its officers, directors, agents,
employees or affiliates shall be liable for any action taken or omitted by them
hereunder or under any other Credit Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful misconduct
(as finally determined by a court of competent jurisdiction). The duties of each
Agent shall be mechanical and administrative in nature; no Agent shall have by
reason of this Agreement or any other Credit Document a fiduciary relationship
in respect of any Lender or the holder of any Note; and nothing in this
Agreement or any other Credit Document, expressed or implied, is intended to or
shall be so construed as to impose upon any Agent any obligations in respect of
this Agreement or any other Credit Document except as expressly set forth herein
or therein.
12.03 Lack of Reliance on the Agents. Independently and without
------------------------------
reliance upon any Agent, each Lender and the holder of each Note, to the extent
it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of Holdings and
its Subsidiaries in connection with the making and the continuance of the Loans
and the taking or not taking of any action in connection herewith and (ii) its
own appraisal of the creditworthiness of Holdings and its Subsidiaries and,
except as expressly provided in this Agreement, no Agent shall have any duty or
responsibility, either initially or on a continuing basis, to provide any Lender
or the holder of any Note 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. No Agent shall be responsible to any Lender or the
holder of any Note for
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any recitals, statements, information, representations or warranties herein or
in any document, certificate or other writing delivered in connection herewith
or for the execution, effectiveness, genuineness, validity, enforceability,
perfection, collectibility, priority or sufficiency of this Agreement or any
other Credit Document or the financial condition of Holdings or any of its
Subsidiaries or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Credit Document, or the financial condition of Holdings
or any of its Subsidiaries or the existence or possible existence of any Default
or Event of Default.
12.04 Certain Rights of the Agents. If any Agent shall request
----------------------------
instructions from the Required Lenders with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, such Agent shall be entitled to refrain from such act or taking such
action unless and until such Agent shall have received instructions from the
Required Lenders; and such Agent shall not incur liability to any Lender by
reason of so refraining. Without limiting the foregoing, no Lender or the holder
of any Note shall have any right of action whatsoever against any Agent as a
result of such Agent acting or refraining from acting hereunder or under any
other Credit Document in accordance with the instructions of the Required
Lenders.
12.05 Reliance. Each Agent shall be entitled to rely, and shall be
--------
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
any Person that such Agent believed to be the proper Person, and, with respect
to all legal matters pertaining to this Agreement and any other Credit Document
and its duties hereunder and thereunder, upon advice of counsel selected by such
Agent.
12.06 Indemnification. To the extent any Agent is not reimbursed and
---------------
indemnified by Holdings or any of its Subsidiaries, the Lenders will reimburse
and indemnify such Agent in proportion to their respective "percentage" as used
in determining the Required Lenders (determined as if there were no Defaulting
Lenders) for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, costs, expenses or disbursements of
whatsoever kind or nature which may be imposed on, asserted against or incurred
by such Agent in performing its duties hereunder or under any other Credit
Document or in any way relating to or arising out of this Agreement or any other
Credit Document; 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 any Agent's gross negligence or
willful misconduct (as finally determined by a court of competent jurisdiction).
12.07 Each Agent in its Individual Capacity. With respect to its
-------------------------------------
obligation to make Loans, or issue or participate in Letters of Credit, under
this Agreement, each Agent shall have the rights and powers specified herein for
a "Lender" and may exercise the same rights and powers as though it were not
performing the duties specified herein; and the term "Lender," "Required
Lenders," "Majority Lenders," "Supermajority Lenders," "holders of Notes" or any
similar terms shall, unless the context clearly otherwise indicates, include
such Agent in its respective individual capacities. Each Agent and its
affiliates may accept deposits from, lend
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money to, and generally engage in any kind of banking, investment banking, trust
or other business with, or provide debt financing, equity capital or other
services (including financial advisory services) to, any Credit Party or any
Affiliate of any Credit Party (or any Person engaged in a similar business with
any Credit Party or any Affiliate thereof) as if they were not performing the
duties specified herein, and may accept fees and other consideration from any
Credit Party or any Affiliate of any Credit Party for services in connection
with this Agreement and otherwise without having to account for the same to the
Lenders.
12.08 Holders. Each Agent may deem and treat the payee of any Note as
-------
the owner thereof for all purposes hereof unless and until a written notice of
the assignment, transfer or endorsement thereof, as the case may be, shall have
been filed with the Administrative Agent. Any request, authority or consent of
any Person who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee, assignee or indorsee, as the case may be, of such
Note or of any Note or Notes issued in exchange therefor.
12.09 Resignation by the Administrative Agent, the Syndication Agent;
---------------------------------------------------------------
or the Documentation Agent; Removal of the Administrative Agent. (a) The
---------------------------------------------------------------
Administrative Agent may resign from the performance of all its respective
functions and duties hereunder and/or under the other Credit Documents at any
time by giving 20 Business Days' prior written notice to the Lenders. Such
resignation shall take effect upon the appointment of a successor Administrative
Agent pursuant to clauses (c) and (d) below or as otherwise provided below. The
Syndication Agent and the Documentation Agent may resign from the performance of
their respective functions and duties hereunder at any time by giving the
Administrative Agent notice thereof. Either such resignation shall take effect
upon the giving of such notice.
(b) The Required Lenders may remove the Administrative Agent from the
performance of all its respective functions and duties hereunder and/or under
the other Credit Documents at any time by giving the Administrative Agent notice
of such removal.
(c) Upon any such notice of resignation by the Administrative Agent or
such removal of the Administrative Agent by the Required Lenders, the Required
Lenders shall appoint a successor Administrative Agent hereunder or thereunder
who shall be a commercial bank or trust company reasonably acceptable to the
Borrower and the Syndication Agent.
(d) If a successor Administrative Agent shall not have been so
appointed within such 20 Business Day period or upon the effectiveness of the
removal of the Administrative Agent, the Syndication Agent with the consent of
the Borrower (which consent shall not be unreasonably withheld or delayed
(although no such consent shall be required if a Default or an Event of Default
exists)), shall then appoint a successor Administrative Agent who shall serve as
Administrative Agent hereunder or thereunder until such time, if any, as the
Required Lenders appoint a successor Administrative Agent as provided above.
(e) If no successor Administrative Agent has been appointed pursuant
to clause (c) or (d) above by the 30th Business Day after the date such notice
of resignation was given by the Administrative Agent or the effectiveness of the
removal of the Administrative
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Agent, the Administrative Agent's resignation or removal, as the case may be,
shall become effective and the Syndication Agent, or if the Syndication Agent
refuses, the Required Lenders, shall thereafter perform all the duties of the
Administrative Agent hereunder and/or under any other Credit Document until such
time, if any, as the Required Lenders appoint a successor Administrative Agent
as provided above.
SECTION 13. Miscellaneous.
-------------
13.01 Payment of Expenses, etc. The Borrower shall: (i) whether or not
-------------------------
the transactions herein contemplated are consummated, pay all reasonable out-of-
pocket costs and expenses of the Syndication Agent and the Administrative Agent
(including, without limitation, the reasonable fees and disbursements of White &
Case LLP and of such Agents' consultants in connection with the preparation,
execution and delivery of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein and any amendment,
waiver or consent relating hereto or thereto, of the Syndication Agent in
connection with its syndication efforts with respect to this Agreement and of
each of the Syndication Agent and the Administrative Agent and, after the
occurrence of an Event of Default, each of the Lenders in connection with the
enforcement of this Agreement and the other Credit Documents and the documents
and instruments referred to herein and therein 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 (including, in each case without limitation, the
reasonable fees and disbursements of (x) one counsel for the Syndication Agent
and the Administrative Agent (unless any such Agent has at any time been advised
by counsel that a conflict of interest is likely to result if the same counsel
were to represent each such Agent) and (y) after the occurrence of an Event of
Default, separate counsel for each of the Lenders); (ii) pay and hold each of
the Lenders harmless from and against any and all present and future stamp,
excise and other similar documentary taxes with respect to the foregoing matters
and save each of the Lenders harmless from and against any and all liabilities
with respect to or resulting from any delay or omission (other than to the
extent attributable to such Lender) to pay such taxes; and (iii) indemnify each
Agent and each Lender, and each of their respective officers, directors,
employees, representatives, agents, affiliates, trustees and investment advisors
from and hold each of them harmless against any and all liabilities, obligations
(including removal or remedial actions), losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses and disbursements (including
reasonable attorneys' and consultants' fees and disbursements) incurred by,
imposed on or assessed against any of them as a result of, or arising out of, or
in any way related to, or by reason of, (a) any investigation, litigation or
other proceeding (whether or not any Agent or any Lender is a party thereto and
whether or not such investigation, litigation or other proceeding is brought by
or on behalf of any Credit Party) related to the entering into and/or
performance of this Agreement or any other Credit Document or the use of any
Letter of Credit or the proceeds of any Loans hereunder or any transactions
contemplated herein or in any other Credit Document or the exercise of any of
their rights or remedies provided herein or in the other Credit Documents, or
(b) the actual or alleged presence of Hazardous Materials in the air, surface
water or groundwater or on the surface or subsurface of any Real Property owned,
leased or at any time operated by Holdings or any of its Subsidiaries, the
generation, storage, transportation, handling or disposal of Hazardous
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Materials by Holdings or any of its Subsidiaries at any location, whether or not
owned, leased or operated by Holdings or any of its Subsidiaries, the non-
compliance of any Real Property with foreign, federal, state and local laws,
regulations, and ordinances (including applicable permits thereunder) applicable
to any Real Property, or any Environmental Claim asserted against Holdings, any
of its Subsidiaries or any Real Property owned, leased or at any time operated
by Holdings or any of its Subsidiaries, including, in each case, without
limitation, the reasonable fees and disbursements of counsel and other
consultants incurred in connection with any such investigation, litigation or
other proceeding (but excluding any losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified (as finally determined by a court
competent jurisdiction)). To the extent that the undertaking to indemnify, pay
or hold harmless each Agent or any Lender set forth in the preceding sentence
may be unenforceable because it is violative of any law or public policy, the
Borrower shall make the maximum contribution to the payment and satisfaction of
each of the indemnified liabilities which is permissible under applicable law.
13.02 Right of Setoff. In addition to any rights now or hereafter
---------------
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Agent and each Lender is hereby authorized at any time or from
time to time, without presentment, demand, protest or other notice of any kind
to any Credit Party or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and apply any and all deposits
(general or special) and any other Indebtedness at any time held or owing by
such Agent or such Lender (including, without limitation, by branches and
agencies of such Lender wherever located) to or for the credit or the account of
any Credit Party against and on account of the Obligations and liabilities of
the Credit Parties to such Agent or such Lender under this Agreement or under
any of the other Credit Documents, including, without limitation, all interests
in Obligations purchased by such Lender pursuant to Section 13.06(b), and all
other claims of any nature or description arising out of or connected with this
Agreement or any other Credit Document, irrespective of whether or not such
Agent or such Lender shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
13.03 Notices. Except as otherwise expressly provided herein, all
-------
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents; if to any Lender, at its address specified on Schedule II; and
if to the Administrative Agent, at the Notice Office; or, as to any Credit Party
or the Administrative Agent, at such other address as shall be designated by
such party in a written notice to the other parties hereto and, as to each
Lender, at such other address as shall be designated by such Lender in a written
notice to the Borrower and the Administrative Agent. All such notices and
communications shall, when mailed, telegraphed, telexed, telecopied, or cabled
or sent by overnight courier, be effective when deposited in the mails,
delivered to the telegraph company, cable company or overnight courier, as the
case may be, or sent by telex or telecopier, except that notices and
communications to the Administrative Agent and the Borrower shall not be
effective until received by the Administrative Agent or the Borrower, as the
case may be.
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13.04 Benefit of Agreement; Assignments; Participations. (a) This
-------------------------------------------------
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto; provided,
--------
however, the Borrower may not assign or transfer any of its rights, obligations
-------
or interest hereunder without the prior written consent of the Lenders and,
provided further, that, although any Lender may transfer, assign or grant
----------------
participations in its rights hereunder, such Lender shall remain a "Lender" for
all purposes hereunder (and may not transfer or assign all or any portion of its
Commitments hereunder except as provided in Sections 1.13 and 13.04(b)) and the
transferee, assignee or participant, as the case may be, shall not constitute a
"Lender" hereunder and, provided further, that no Lender shall transfer or grant
----------------
any participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is
not extended beyond the Revolving Loan Maturity Date) in which such participant
is participating, or reduce the rate or extend the time of payment of interest
or Fees thereon (except in connection with a waiver of applicability of any post
default increase in interest rates) or reduce the principal amount thereof (it
being understood that any amendment or modification to the financial definitions
in this Agreement or to Section 13.07(a) or (b) shall not constitute a reduction
in the rate of interest or Fees for purposes of this clause (i)), or increase
the amount of the participant's participation over the amount thereof then in
effect (it being understood that a waiver of any Default or Event of Default or
of a mandatory reduction in the Total Commitment shall not constitute a change
in the terms of such participation, and that an increase in any Commitment or
Loan shall be permitted without the consent of any participant if the
participant's participation is not increased as a result thereof), (ii) consent
to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement or (iii) release all or substantially all of
the Collateral under all of the Security Documents (except as expressly provided
in the Credit Documents) supporting the Loans or Letters of Credit hereunder in
which such participant is participating. In the case of any such participation,
the participant shall not have any rights under this Agreement or any of the
other Credit Documents (the participant's rights against such Lender in respect
of such participation to be those set forth in the agreement executed by such
Lender in favor of the participant relating thereto) and all amounts payable by
the Borrower hereunder shall be determined as if such Lender had not sold such
participation.
(b) Notwithstanding the foregoing, any Lender (or any Lender together
with one or more other Lenders) may (x) assign all or a portion of its
Commitments and related outstanding Obligations (or, if the Commitments with
respect to the relevant Tranche have terminated, outstanding Obligations)
hereunder to (i) its parent company and/or any affiliate of such Lender which is
at least 50% owned by such Lender or its parent company or to one or more
Lenders or (ii) in the case of any Lender that is a fund that invests in loans,
any other fund that invests in loans and is managed or advised by the same
investment advisor of such Lender or by an Affiliate of such investment advisor
or (y) assign all, or if less than all, a portion equal to at least $1,000,000
in the aggregate for the assigning Lender or assigning Lenders, of such
Commitments and related outstanding Obligations (or, if the Commitments with
respect to the relevant Tranche have terminated, outstanding Obligations)
hereunder to one or more Eligible Transferees (treating any fund that invests in
loans and any other fund that invests in loans and is
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managed or advised by the same investment advisor of such fund or by an
Affiliate of such investment advisor as a single Eligible Transferee), each of
which assignees shall become a party to this Agreement as a Lender by execution
of an Assignment and Assumption Agreement, provided that, (i) at such time
Schedule I shall be deemed modified to reflect the Commitments and/or
outstanding Loans, as the case may be, of such new Lender and of the existing
Lenders, (ii) upon the surrender of the relevant Notes by the assigning Lender
(or, upon such assigning Lender's indemnifying the Borrower for any lost Note
pursuant to a customary indemnification agreement) new Notes will be issued, at
the Borrower's expense, to such new Lender and to the assigning Lender upon the
request of such new Lender or assigning Lender, such new Notes to be in
conformity with the requirements of Section 1.05 (with appropriate
modifications) to the extent needed to reflect the revised Commitments and/or
outstanding Loans, as the case may be, (iii) (x) in the case of any assignment
by a Lender other than a Lender that is also the Syndication Agent, the
Administrative Agent or an Affiliate thereof, the consent of the Syndication
Agent and the Administrative Agent and, so long as no Default or Event of
Default then exists, the consent of the Borrower shall be required in connection
with any assignment to an Eligible Transferee pursuant to clause (y) above (each
of which consents shall not be unreasonably withheld or delayed), and (y) in the
case of an assignment pursuant to clause (x) above, the assigning Lender shall
give notice thereof to the Administrative Agent and the Syndication Agent, (iv)
the Administrative Agent shall receive at the time of each assignment pursuant
to this Section 13.04(b), from the assigning or assignee Lender, the payment of
a non-refundable assignment fee of $3,500 and (v) no such transfer or assignment
will be effective until recorded by the Administrative Agent on the Register
pursuant to Section 13.15. To the extent of any assignment pursuant to this
Section 13.04(b), the assigning Lender shall be relieved of its obligations
hereunder with respect to its assigned Commitments and outstanding Loans. At the
time of each assignment pursuant to this Section 13.04(b) to a Person which is
not already a Lender hereunder and which is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for Federal income tax
purposes, the respective assignee Lender shall, to the extent legally entitled
to do so, provide to the Borrower the appropriate Internal Revenue Service Forms
(and, if applicable, a Section 4.04(b)(ii) Certificate) described in Section
4.04(b). To the extent that an assignment of all or any portion of a Lender's
Commitments and related outstanding Obligations pursuant to Section 1.13 or this
Section 13.04(b) would, at the time of such assignment, result in increased
costs under Section 1.10, 2.06 or 4.04 from those being charged by the
respective assigning Lender prior to such assignment, then the Borrower shall
not be obligated to pay such increased costs (although the Borrower, in
accordance with and pursuant to the other provisions of this Agreement, shall be
obligated to pay any other increased costs of the type described above resulting
from changes after the date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Lender
from pledging its Loans and Notes hereunder to a Federal Reserve Bank in support
of borrowings made by such Lender from such Federal Reserve Bank and, with the
consent of the Administrative Agent, any Lender which is a fund may pledge all
or any portion of its Loans and Notes to its trustee in support of its
obligations to its trustee. No pledge pursuant to this clause (c) shall release
the transferor Lender from any of its obligations hereunder.
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13.05 No Waiver; Remedies Cumulative. No failure or delay on the part
------------------------------
of the Administrative Agent, the Syndication Agent, the Collateral Agent, any
Issuing Lender or any Lender in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
the Borrower or any other Credit Party and the Administrative Agent, the
Syndication Agent, the Collateral Agent, any Issuing Lender or any Lender shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder or thereunder. The rights, powers and remedies herein or
in any other Credit Document expressly provided are cumulative and not exclusive
of any rights, powers or remedies which the Administrative Agent, the
Syndication Agent, the Collateral Agent, any Issuing Lender or any Lender would
otherwise have. No notice to or demand on any Credit Party in any case shall
entitle any Credit Party to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Administrative
Agent, the Syndication Agent, the Collateral Agent, any Issuing Lender or any
Lender to any other or further action in any circumstances without notice or
demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided in this
-----------------
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of the Borrower in respect of any Obligations
hereunder, it shall distribute such payment to the Lenders (other than any
Lender that has consented in writing to waive its pro rata share of any such
--- ----
payment) pro rata based upon their respective shares, if any, of the Obligations
--- ----
with respect to which such payment was received.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, A TL Commitment Commission, RL Commitment
Commission or Letter of Credit Fees, of a sum which with respect to the related
sum or sums received by other Lenders is in a greater proportion than the total
of such Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations of the respective Credit Party to such Lenders in such amount as
shall result in a proportional participation by all the Lenders in such amount;
provided that if all or any portion of such excess amount is thereafter
--------
recovered from such Lenders, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 13.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.
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13.07 Calculations; Computations; Accounting Terms. (a) The financial
--------------------------------------------
statements to be furnished to the Lenders pursuant hereto shall be made and
prepared in accordance with generally accepted accounting principles in the
United States consistently applied throughout the periods involved (except as
set forth in the notes thereto or as otherwise disclosed in writing by Holdings
or the Borrower to the Lenders); provided that, except as otherwise specifically
provided herein, all computations of Excess Cash Flow, all computations and all
definitions used in determining compliance with Sections 9.07 through 9.11,
inclusive, and all computations in determining the Applicable Base Rate Margin
and the Applicable Eurodollar Rate Margin, shall (i) utilize accounting
principles and policies in conformity with those used to prepare the historical
financial statements of Holdings and its Subsidiaries referred to in Section
7.05(a) and (ii) not treat New Supermarket Capital Lease Obligations as
Indebtedness even though generally accepted accounting principles may treat same
as Indebtedness and any portion of such New Supermarket Capital Lease
Obligations representing the principal or interest component in respect thereof
shall be treated as an operating lease expense which reduces Consolidated Net
Income even though generally accepted accounting principles may treat same
differently.
(b) Notwithstanding anything to the contrary contained in this Section
13.07 or elsewhere in this Agreement, (i) any equity issued by Holdings as
contemplated by clause (ii)(A), (B) or (C) of the first parenthetical contained
in Section 4.02(c) shall not be included (and to the extent otherwise included
therein, shall be deducted therefrom) in determining Consolidated Net Worth,
except to the extent the cash proceeds therefrom have been contributed to the
Borrower as a cash equity contribution, (ii) Consolidated Net Worth in each case
shall be determined as if no Qualified Preferred Stock has been issued, (iii)
all cash and Cash Equivalents held by Holdings and BV Holdings (and any
investment income therefrom) shall be excluded in any determination of assets
(or income in the case of any such investment income) of Holdings and its
Subsidiaries, (iv) for purposes of all computations of Excess Cash Flow, all
computations and all definitions used in determining compliance with Sections
9.07 through 9.11, inclusive, and all computations in determining the Applicable
Base Rate Margin and the Applicable Eurodollar Rate Margin, the ▇▇▇▇▇▇
Subsidiary and any of its Subsidiaries shall not be accounted for as
consolidated subsidiaries of the Borrower, but shall instead be accounted for as
an equity investment in unconsolidated subsidiaries with a book value equal to
the liquidation value of the ▇▇▇▇▇▇ Property, (v) any deductions to Consolidated
Net Worth resulting from purchases of Holdings' common stock by members of
management with money borrowed from Holdings as permitted by Section 9.05(x)
shall be ignored, (vi) all calculations of costs of goods sold shall be made on
a FIFO (i.e., first in-first out) basis and (vii) any deductions to Consolidated
Net Worth resulting from depreciation, amortization of intangibles and non-cash
write-offs with respect to the Borrower's supermarkets shall be ignored.
(c) All computations of interest, A TL Commitment Commission, RL
Commitment Commission and other Fees hereunder shall be made on the basis of a
year of 360 days for the actual number of days (including the first day but
excluding the last day; except that in the case of Letter of Credit Fees, the
last day shall be included) occurring in the period for which such interest, A
TL Commitment Commission, RL Commitment Commission or Fees are payable.
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13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
----------------------------------------------------------------
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
-----
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT, EACH CREDIT AGREEMENT PARTY HEREBY
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH CREDIT AGREEMENT
PARTY HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK
PERSONAL JURISDICTION OVER SUCH CREDIT AGREEMENT PARTY, AND AGREES NOT TO PLEAD
OR CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENTS BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH
COURTS LACK PERSONAL JURISDICTION OVER SUCH CREDIT AGREEMENT PARTY. EACH CREDIT
AGREEMENT PARTY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF
ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH
CREDIT AGREEMENT PARTY AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW,
SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH CREDIT
AGREEMENT PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF
PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT
SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE SYNDICATION AGENT, THE ADMINISTRATIVE AGENT, ANY LENDER
OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT
AGREEMENT PARTY IN ANY OTHER JURISDICTION.
(b) EACH CREDIT AGREEMENT PARTY HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT
ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
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(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower, the
Administrative Agent and the Syndication Agent.
13.10 Effectiveness. This Agreement shall become effective on the date
-------------
(the "Effective Date") on which Holdings, BV Holdings, the Borrower, each Agent
and each of the Lenders shall have signed a counterpart hereof (whether the same
or different counterparts) and shall have delivered the same to the
Administrative Agent at the Notice Office or, in the case of the Lenders, shall
have given to the Administrative Agent telephonic (confirmed in writing),
written or telex notice (actually received) at such office that the same has
been signed and mailed to it. The Administrative Agent will give Holdings, BV
Holdings, the Borrower and each Lender prompt written notice of the occurrence
of the Effective Date.
13.11 Headings Descriptive. The headings of the several sections and
--------------------
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12 Amendment or Waiver; etc. (a) Except as provided in Section
------------------------
13.18, neither this Agreement nor any other Credit Document nor any terms hereof
or thereof may be changed, waived, discharged or terminated unless such change,
waiver, discharge or termination is in writing signed by the respective Credit
Parties party thereto and the Required Lenders, provided that no such change,
waiver, discharge or termination shall, without the consent of each Lender
(other than a Defaulting Lender) (with Obligations being directly affected in
the case of following clause (i)), (i) extend the final scheduled maturity of
any Loan or Note or extend the stated expiration date of any Letter of Credit
beyond the Revolving Loan Maturity Date, or reduce the rate or extend the time
of payment of interest or Fees thereon (except in connection with the waiver of
applicability of any post-default increase in interest rates), or reduce the
principal amount thereof (it being understood that any amendment or modification
to the financial definitions in this Agreement or to Section 13.07(a) or (b)
shall not constitute a reduction in the rate of interest or Fees for purposes of
this clause (i)), (ii) release all or substantially all of the Collateral
(except as expressly provided in the Credit Documents) under all the Security
Documents, (iii) amend, modify or waive any provision of this Section 13.12
(except for technical amendments with respect to additional extensions of credit
pursuant to this Agreement which afford the protections to such additional
extensions of credit of the type provided to the Term Loans and the Revolving
Loan Commitments on the Effective Date), (iv) reduce the percentage specified in
the definition of Required Lenders (it being understood that, with the consent
of the Required Lenders, additional extensions of credit pursuant to this
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Agreement may be included in the determination of the Required Lenders on
substantially the same basis as the extensions of Term Loans and Revolving Loan
Commitments are included on the Effective Date) or (v) consent to the assignment
or transfer by the Borrower of any of its rights and obligations under this
Agreement; provided further, that no such change, waiver, discharge or
termination 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 waivers or modifications of conditions precedent, covenants, Defaults or
Events of Default or of a mandatory reduction in the Total Commitment 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 of the Commitment of such Lender), (2) without the consent of each
Issuing Lender, amend, modify or waive any provision of Section 2 or alter its
rights or obligations with respect to Letters of Credit, (3) without the consent
of the Swingline Lender, alter the Swingline Lender's rights or obligations with
respect to Swingline Loans, (4) without the consent of any Agent, amend, modify
or waive any provision of Section 12 or any other provision as same relates to
the rights or obligations of such Agent, (5) without the consent of Collateral
Agent, amend, modify or waive any provision relating to the rights or
obligations of the Collateral Agent, (6) except in cases where additional
extensions of term loans are being afforded substantially the same treatment
afforded to the Term Loans pursuant to this Agreement as originally in effect,
without the consent of the Majority Lenders of each Tranche which is being
allocated a lesser prepayment, repayment or commitment reduction as a result of
the actions described below (or without the consent of the Majority Lenders of
each Tranche in the case of an amendment to the definition of Majority Lenders),
amend the definition of Majority Lenders or alter the required application of
any prepayments or repayments (or commitment reduction), as between the various
Tranches, pursuant to Section 4.01 or 4.02 (excluding Section 4.02(b)) (although
the Required Lenders may waive, in whole or in part, any such prepayment,
repayment or commitment reduction, so long as the application, as amongst the
various Tranches, of any such prepayment, repayment or commitment reduction
which is still required to be made is not altered), or (7) without the consent
of the Supermajority Lenders of the respective Tranche, reduce the amount of, or
extend the date of, any Tranche A Term Loan Scheduled Repayment or Tranche B
Term Loan Scheduled Repayment, as the case may be, or amend the definition of
Supermajority Lenders (it being understood that, with the consent of the
Required Lenders, additional extensions of credit pursuant to this Agreement may
be included in the determination of the Supermajority Lenders on substantially
the same basis as the extensions of Term Loans and Revolving Loan Commitments
are included on the Effective Date).
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 13.12(a),
the consent of the Required Lenders is obtained but the consent of one or more
of such other Lenders whose consent is required is not obtained, then the
Borrower shall have the right to replace each such non-consenting Lender or
Lenders with one or more Replacement Lenders pursuant to Section 1.13 so long as
at the time of such replacement, each such Replacement Lenders consents to the
proposed change, waiver, discharge or termination, provided, that in any event
the Borrower 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 Section 13.12(a).
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(c) For purposes of this Section 13.12, the Syndication Agent, in
coordination with the Administrative Agent, shall have primary responsibility,
together with the Credit Agreement Parties, in the negotiation, preparation, and
documentation relating to any amendment, modification or waiver of this
Agreement, any other Credit Document or any other agreement or document related
hereto or thereto contemplated pursuant to this Section 13.12.
13.13 Survival. All indemnities set forth herein including, without
--------
limitation, in Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01 shall survive
the execution, delivery and termination of this Agreement and the Notes and the
making and repayment of the Obligations.
13.14 Domicile of Loans. Each Lender may transfer and carry its Loans
-----------------
at, to or for the account of any office, Subsidiary or Affiliate of such Lender.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 1.11, 2.06 or 4.04 from
those being charged by the respective Lender prior to such transfer, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
13.15 Register. The Borrower hereby designates the Administrative
--------
Agent to serve as the Borrower's agent, solely for purposes of this Section
13.15, to maintain a register (the "Register") on which it will record the
Commitments from time to time of each of the Lenders, the Loans made by each of
the Lenders and each repayment in respect of the principal amount of the Loans
of each Lender. Failure to make any such recordation, or any error in such
recordation, shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Lender, the transfer of the Commitments of such
Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Register maintained by the Administrative Agent with respect to
ownership of such Commitments and Loans and prior to such recordation all
amounts owing to the transferor with respect to such Commitments and Loans shall
remain owing to the transferor. The registration of assignment or transfer of
all or part of any Commitments and Loans shall be recorded by the Administrative
Agent on the Register only upon the acceptance by the Administrative Agent of a
properly executed and delivered Assignment and Assumption Agreement pursuant to
Section 13.04(b). Coincident with the delivery of such an Assignment and
Assumption Agreement to the Administrative Agent for acceptance and registration
of assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Lender shall surrender the Note (if
any) evidencing such Loan, and thereupon one or more new Notes in the same
aggregate principal amount shall be issued to the assigning or transferor Lender
and/or the new Lender at the request of any such Lender. The Borrower agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this Section 13.15 (other than any losses, claims, damages and liabilities to
the extent incurred by reason of the gross negligence or willful misconduct of
the Administrative Agent (as finally determined by a court of competent
jurisdiction).
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13.16 Confidentiality. (a) Subject to the provisions of clause
---------------
(b) of this Section 13.16, each Lender agrees that it will use its reasonable
efforts not to disclose without the prior consent of the Borrower (other than to
its employees, auditors, advisors or counsel or to another Lender if such Lender
or such Lender's holding or parent company in its sole discretion determines
that any such party should have access to such information, provided such
Persons shall be subject to the provisions of this Section 13.16 to the same
extent as such Lender) any information with respect to Holdings or any of its
Subsidiaries which is now or in the future furnished pursuant to this Agreement
or any other Credit Document and which is designated by the Borrower to the
Lenders in writing as confidential, provided that any Lender may disclose any
such information (i) as has become generally available to the public other than
by virtue of a breach of this Section 13.16(a) by the respective Lender, (ii) as
may be required or appropriate in any report, statement or testimony submitted
to any municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Lender or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or their successors, (iii) as may be required or
appropriate in respect to any summons or subpoena or in connection with any
litigation, (iv) in order to comply with any law, order, regulation or ruling
applicable to such Lender, (v) to the Administrative Agent, the Syndication
Agent or the Collateral Agent and (vi) to any prospective or actual transferee
or participant in connection with any contemplated transfer or participation of
any of the Notes or Commitments or any interest therein by such Lender, provided
that such prospective transferee agrees to be bound by the confidentiality
provisions contained in this Section 13.16.
(b) Each of Holdings and the Borrower hereby acknowledges and
agrees that each Lender may share with any of its affiliates, and such
affiliates may share with such Lender any information related to Holdings or any
of its Subsidiaries (including, without limitation, any non-public customer
information regarding the creditworthiness of Holdings and its Subsidiaries),
provided such Persons shall be subject to the provisions of this Section 13.16
to the same extent as such Lender.
13.17 Certain Agreements with Respect to the Senior Subordinated
----------------------------------------------------------
Notes and the Junior Subordinated Notes. Each Credit Agreement Party hereby (A)
---------------------------------------
represents and warrants that (i) $46,666,667 of Term Loans may be incurred under
this Agreement on the Initial Borrowing Date in reliance on clause (ii)(A) of
the respective definition of "Permitted Indebtedness" contained in the Senior
Subordinated Note Indenture and the Junior Subordinated Note Agreement, (ii)
$25,000,000 of Revolving Loans, Swingline Loans and Letters of Credit in the
aggregate incurred pursuant to the Total Revolving Loan Commitment as in effect
on the Initial Borrowing Date may be incurred in reliance on clause (ii)(B) of
the respective definition of "Permitted Indebtedness" contained in the Senior
Subordinated Note Indenture and the Junior Subordinated Note Agreement and (iii)
$13,333,333 of Term Loans may be incurred on the Initial Borrowing Date in
reliance on clause (xiv) of the respective definition of "Permitted
Indebtedness" contained in the Senior Subordinated Note Indenture and the Junior
Subordinated Note Agreement and (B) agrees it will not take any position
contrary to the representations and warranties set forth in preceding clause
(A). In addition, each Credit Agreement Party (A) acknowledges and agrees that
the Borrower will not be permitted to (i) incur any Tranche A Term Loans on any
Additional Tranche A Term Loan Borrowing Date unless such Tranche A
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Term Loans may be incurred in reliance on clause (xiv) of the respective
definition of "Permitted Indebtedness" contained in the Senior Subordinated Note
Indenture or the Junior Subordinated Note Agreement or (ii) incur any additional
Revolving Loans, Swingline Loans or Letters of Credit pursuant to an increase in
the Total Revolving Loan Commitment under Section 13.18 unless such additional
extensions of credit are incurred in reliance on clauses (ii)(B) and/or (xiv) of
each respective definition of "Permitted Indebtedness" contained in the Senior
Subordinated Note Indenture or the Junior Subordinated Note Agreement and (B)
covenants and agrees that it will take, and will cause each of its Subsidiaries
to take, all such actions as may be necessary so as to ensure that all
Indebtedness (including, without limitation, any Tranche A Term Loans incurred
on any Additional Tranche A Term Loan Date and any incremental Revolving Loans,
Swingline Loans and/or Letters of Credit incurred as a result of any increase to
the Total Revolving Loan Commitment by operation of Section 13.18) incurred
under this Agreement and the other Credit Documents shall always be permitted to
be incurred under clauses (ii) and (xiv) of each respective definition of the
"Permitted Indebtedness" contained in the Senior Subordinated Note Indenture and
the Junior Subordinated Note Agreement without relying on any other provision of
the Senior Subordinated Note Indenture or the Junior Subordinated Note
Agreement.
13.18 Increases of Revolving Loan Commitments. So long as no Default
---------------------------------------
or Event of Default then exists or would result therefrom, the Borrower shall
have the right at any time and from time to time to request one or more Lenders
to increase their respective Revolving Loan Commitments, it being understood and
agreed, however, that (i) no Lender shall be obligated to increase its Revolving
Loan Commitment as a result of any request by the Borrower, (ii) any Lender may
so increase its Revolving Loan Commitment without the consent of any other
Lender, (iii) any increase in the Total Revolving Loan Commitment pursuant to
this Section 13.18 shall be in a minimum amount of at least $1,000,000 (iv) the
Total Revolving Loan Commitment may not be increased by more than $5,000,000
pursuant to this Section 13.18, (v) the Borrower may not request any Lender to
increase its Revolving Loan Commitment without first obtaining the prior consent
of the Syndication Agent and the Administrative Agent, (vi) no increase in the
Total Revolving Loan Commitment pursuant to this Section 13.18 may be made
unless same is permitted under Section 13.17 and (vii) any increase in the
Revolving Loan Commitment of any Lender pursuant to this Section 13.18 shall be
made in coordination with the Administrative Agent. At the time of any increase
in the Total Revolving Loan Commitment pursuant to this Section 13.18, (i) the
Borrower shall, in coordination with the Administrative Agent, repay outstanding
Revolving Loans of certain Lenders and, if necessary, incur additional Revolving
Loans from other Lenders in each case so that the Lenders continue to
participate in each Borrowing of Revolving Loans pro rata on the basis of their
--- ----
respective Revolving Loan Commitments (after giving effect to any such increase
in the Total Revolving Loan Commitment pursuant to this Section 13.18) and with
the Borrower being obligated to pay to the respective Lenders the costs of the
type referred to in Section 1.11 in connection with any such repayment and/or
Borrowing, (ii) Schedule I shall be deemed modified to reflect the revised
Revolving Loan Commitments of the affected Lenders, and (iii) upon surrender of
any old Revolving Notes by those Lenders that have increased their Revolving
Loan Commitments pursuant to this Section 13.18, to the extent requested by such
Lenders, new Revolving Notes will be issued, at
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the Borrower's expense, to such Lenders to be in conformity with the
requirements of Section 1.05 (with appropriate modifications) to the extent
needed to reflect the revised Revolving Loan Commitments.
SECTION 14. Parents Guaranty.
----------------
14.01 Guaranty. In order to induce each Agent, the Collateral Agent,
--------
the Issuing Lenders and the Lenders to enter into this Agreement and to extend
credit hereunder, and to induce the other Guaranteed Creditors to enter into
Interest Rate Protection Agreements or Other Hedging Agreements, and in
recognition of the direct benefits to be received by each Parent Guarantor from
the proceeds of the Loans, the issuance of the Letters of Credit and the
entering into of such Interest Rate Protection Agreements or Other Hedging
Agreements, each Parent Guarantor hereby agrees with the Guaranteed Creditors as
follows: each Parent Guarantor hereby unconditionally and irrevocably, and
jointly and severally, guarantees as primary obligor and not merely as surety
the full and prompt payment when due, whether upon maturity, acceleration or
otherwise, of any and all of the Guaranteed Obligations of the Borrower to the
Guaranteed Creditors. If any or all of the Guaranteed Obligations of the
Borrower to the Guaranteed Creditors becomes due and payable hereunder, each
Parent Guarantor irrevocably and unconditionally, and jointly and severally,
promises to pay such indebtedness to the Administrative Agent and/or the other
Guaranteed Creditors, or order, on demand, together with any and all expenses
which may be incurred by the Administrative Agent or the other Guaranteed
Creditors in collecting any of the Guaranteed Obligations. If claim is ever made
upon any Guaranteed Creditor for repayment or recovery of any amount or amounts
received in payment or on account of any of the Guaranteed Obligations and any
of the aforesaid payees repays all or part of said amount by reason of (i) any
judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property or (ii) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including the Borrower), then and in such event each Parent Guarantor agrees
that any such judgment, decree, order, settlement or compromise shall be binding
upon such Parent Guarantor, notwithstanding any revocation of this Parents
Guaranty or other instrument evidencing any liability of the Borrower, and such
Parent Guarantor shall be and remain liable to the aforesaid payees hereunder
for the amount so repaid or recovered to the same extent as if such amount had
never originally been received by any such payee. This Parents Guaranty is a
guaranty of payment and not collection.
14.02 Bankruptcy. Additionally, each Parent Guarantor unconditionally
----------
and irrevocably, and jointly and severally, guarantees the payment of any and
all of the Guaranteed Obligations of the Borrower to the Guaranteed Creditors
whether or not due or payable by the Borrower upon the occurrence of any of the
events specified in Section 10.05 and irrevocably and unconditionally, and
jointly and severally, promises to pay such indebtedness to the Guaranteed
Creditors, or order, on demand, in lawful currency of the United States.
14.03 Nature of Liability. The liability of each Parent Guarantor
-------------------
hereunder is joint are several and exclusive and independent of any security for
or other guaranty of the Guaranteed Obligations of the Borrower whether executed
by such Parent Guarantor, any other
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guarantor or by any other party, and the liability of each Parent Guarantor
hereunder shall not be affected or impaired by (a) any direction as to
application of payment by the Borrower or by any other party, or (b) any other
continuing or other guaranty, undertaking or maximum liability of a guarantor or
of any other party as to the Guaranteed Obligations of the Borrower, or (c) any
payment on or in reduction of any such other guaranty or undertaking, or (d) any
dissolution, termination or increase, decrease or change in personnel by the
Borrower, or (e) any payment made to any Guaranteed Creditor on the Guaranteed
Obligations which any such Guaranteed Creditor repays to the Borrower pursuant
to court order in any bankruptcy, reorganization, arrangement, moratorium or
other debtor relief proceeding, and each Parent Guarantor waives any right to
the deferral or modification of its obligations hereunder by reason of any such
proceeding.
14.04 Independent Obligation. The obligations of each Parent Guarantor
----------------------
hereunder are independent of the obligations of the other Parent Guarantor, any
other guarantor, any other party or the Borrower, and a separate action or
actions may be brought and prosecuted against each Parent Guarantor whether or
not action is brought against the other Parent Guarantor, any other guarantor,
any other party or the Borrower and whether or not the other Parent Guarantor,
any other guarantor, any other party or the Borrower be joined in any such
action or actions. Each Parent Guarantor waives, to the full extent permitted by
law, the benefit of any statute of limitations affecting its liability hereunder
or the enforcement thereof. Any payment by the Borrower or other circumstance
which operates to toll any statute of limitations as to the Borrower shall
operate to toll the statute of limitations as to Holdings.
14.05 Authorization. Each Parent Guarantor authorizes the Guaranteed
-------------
Creditors without notice or demand (except as shall be required by applicable
statute and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of
the Guaranteed Obligations (including any increase or decrease in the rate
of interest thereon), any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the guaranty herein made
shall apply to the Guaranteed Obligations as so changed, extended, renewed
or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, impair, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower, any other Credit Party or others or otherwise act or refrain from
acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower, other Credit Parties or other obligors;
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(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to its creditors other than
the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Guaranteed Creditors
regardless of what liability or liabilities of such Parent Guarantors or
the Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or default
under, this Agreement, any other Credit Document or any of the instruments
or agreements referred to herein or therein, or otherwise amend, modify or
supplement this Agreement, any other Credit Document or any of such other
instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
such Parent Guarantors from its liabilities under this Parents Guaranty.
14.06 Reliance. It is not necessary for any Guaranteed Creditor to
--------
inquire into the capacity or powers of any Parent Guarantor or any of its
Subsidiaries or the officers, directors, partners or agents acting or purporting
to act on their behalf, and any Guaranteed Obligations made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
14.07 Subordination. Any indebtedness of the Borrower now or hereafter
-------------
owing to any Parent Guarantor is hereby subordinated to the Guaranteed
Obligations of the Borrower owing to the Guaranteed Creditors; and if any Agent
so requests at a time when an Event of Default exists, all such indebtedness of
the Borrower to any Parent Guarantor shall be collected, enforced and received
by such Parent Guarantor for the benefit of the Guaranteed Creditors and be paid
over to the Administrative Agent on behalf of the Guaranteed Creditors on
account of the Guaranteed Obligations of the Borrower to the Guaranteed
Creditors, but without affecting or impairing in any manner the liability of
such Parent Guarantor under the other provisions of this Parents Guaranty. Prior
to the transfer by any Parent Guarantor of any note or negotiable instrument
evidencing any such indebtedness of the Borrower to such Parent Guarantor, such
Parent Guarantor shall ▇▇▇▇ such note or negotiable instrument with a legend
that the same is subject to this subordination. Without limiting the generality
of the foregoing, each Parent Guarantor hereby agrees with the Guaranteed
Creditors that it will not exercise any right of subrogation which it may at any
time otherwise have as a result of this Parents Guaranty (whether contractual,
under Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed
Obligations have been irrevocably paid in full in cash.
14.08 Waiver. (a) Each Parent Guarantor waives any right (except as
------
shall be required by applicable statute and cannot be waived) to require any
Guaranteed Creditor to (i) proceed against the Borrower, the other Parent
Guarantor, any other guarantor or any other party, (ii) proceed against or
exhaust any security held from the Borrower, the other Parent Guarantor,
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any other guarantor or any other party or (iii) pursue any other remedy in any
Guaranteed Creditor's power whatsoever. Each Parent Guarantor waives any defense
based on or arising out of any defense of the Borrower, the other Parent
Guarantor, any other guarantor or any other party, other than payment in full in
cash of the Guaranteed Obligations, based on or arising out of the disability of
the Borrower, the other Parent Guarantor, any other guarantor or any other
party, or the validity, legality or unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower other than payment in full in cash of the
Guaranteed Obligations. The Guaranteed Creditors may, at their election,
foreclose on any security held by the Administrative Agent, the Collateral Agent
or any other Guaranteed Creditor by one or more judicial or nonjudicial sales,
whether or not every aspect of any such sale is commercially reasonable (to the
extent such sale is permitted by applicable law), or exercise any other right or
remedy the Guaranteed Creditors may have against the Borrower or any other
party, or any security, without affecting or impairing in any way the liability
of any Parent Guarantor hereunder except to the extent the Guaranteed
Obligations have been paid. Each Parent Guarantor waives any defense arising out
of any such election by the Guaranteed Creditors, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of such Parent Guarantor against the Borrower or any other
party or any security.
(b) Each Parent Guarantor waives all presentments, demands for
performance, protests and notices, including without limitation notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Parents Guaranty, and notices of the existence, creation or incurring of
new or additional Guaranteed Obligations. Each Parent Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower's financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks which such Parent Guarantor assumes and incurs hereunder, and agrees that
neither Agent nor the Lenders shall have any duty to advise such Parent
Guarantor of information known to them regarding such circumstances or risks.
14.09 Nature of Liability. It is the desire and intent of each
-------------------
Parent Guarantor and the Guaranteed Creditors that this Parents Guaranty shall
be enforced against such Parent Guarantor to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. If, however, and to the extent that, the obligations of
such Parent Guarantor under this Parents Guaranty shall be adjudicated to be
invalid or unenforceable for any reason (including, without limitation, because
of any applicable state or federal law relating to fraudulent conveyances or
transfers), then the amount of such Parent Guarantor's obligations under this
Parents Guaranty shall be deemed to be reduced and such Parent Guarantor shall
pay the maximum amount of the Guaranteed Obligations which would be permissible
under applicable law.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
-------
c/o ▇▇▇▇▇▇ ▇. ▇▇▇ Company BIG V HOLDING CORP.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇. ▇▇▇▇▇▇ ▇▇▇▇ By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
----------------------------------
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Title: Vice President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
c/o Big V Supermarkets, Inc. BV HOLDINGS CORPORATION
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: President By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
----------------------------------
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Title: Vice President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ BIG V SUPERMARKETS, INC.
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
----------------------------------
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ Title: Vice President
DLJ CAPITAL FUNDING, INC.,
Individually and as Syndication Agent
By /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------------
Title: Vice President
FLEET NATIONAL BANK,
Individually and as Administrative Agent
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Title: Vice President
SUMMIT BANK,
Individually and as Documentation Agent
By /s/ ▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Title: Vice President
FIRST SOURCE FINANCIAL LLP
By: First Source Financial, Inc. its
Agent/Manager
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Title: Vice President
(ii)
