================================================================================
$600,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of June 29, 2004,
among
▇▇▇▇-▇▇▇▇▇ STORES, INC. AND CERTAIN SUBSIDIARIES,
as the Borrowers,
VARIOUS FINANCIAL INSTITUTIONS AND OTHER PERSONS
FROM TIME TO TIME PARTIES HERETO,
as the Lenders,
WACHOVIA BANK, NATIONAL ASSOCIATION
(formerly known as First Union Bank National Bank),
as the Administrative Agent for the Lenders,
GMAC COMMERCIAL FINANCE LLC,
as the Syndication Agent for the Lenders,
▇▇▇▇▇ FARGO FOOTHILL, LLC, GENERAL ELECTRIC CAPITAL CORPORATION
and THE CIT GROUP/BUSINESS CREDIT, INC.,
as Co-Documentation Agents for the Lenders,
and
CONGRESS FINANCIAL CORPORATION (FLORIDA),
as the Collateral Monitoring Agent for the Lenders
WACHOVIA CAPITAL MARKETS, LLC,
as Sole Arranger and Sole Bookrunner
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms ..................................................................... 2
SECTION 1.2. Use of Defined Terms .............................................................. 39
SECTION 1.3. Cross-References .................................................................. 39
SECTION 1.4. Accounting and Financial Determinations ........................................... 39
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT
SECTION 2.1. Commitments ....................................................................... 39
SECTION 2.1.1. Revolving Loan Commitment and Swing Line Loan Commitment ........................ 39
SECTION 2.1.2. Subfacility Letter of Credit Commitment; Existing Letters of Credit ............. 41
SECTION 2.1.3. Standby Letter of Credit Commitment ............................................. 43
SECTION 2.2. Reduction of the Commitment Amounts ............................................... 44
SECTION 2.2.1. Optional ........................................................................ 44
SECTION 2.2.2. Mandatory ....................................................................... 44
SECTION 2.3. Borrowing Procedures .............................................................. 44
SECTION 2.3.1. Borrowing Procedure ............................................................. 44
SECTION 2.3.2. Swing Line Loans ................................................................ 45
SECTION 2.4. Continuation and Conversion Elections ............................................. 46
SECTION 2.5. Funding ........................................................................... 46
SECTION 2.6. Issuance Procedures ............................................................... 46
SECTION 2.6.1. Other Lenders' Participation .................................................... 47
SECTION 2.6.2. Disbursements ................................................................... 47
SECTION 2.6.3. Reimbursement ................................................................... 47
SECTION 2.6.4. Deemed Disbursements ............................................................ 48
SECTION 2.6.5. Nature of Reimbursement Obligations ............................................. 48
SECTION 2.7. Register; Notes ................................................................... 49
SECTION 2.8. Extensions of Stated Maturity Date ................................................ 50
SECTION 2.9. Joint and Several Liability ....................................................... 50
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments ........................................................ 51
SECTION 3.1.1. Repayments and Prepayments ...................................................... 51
SECTION 3.2. Interest Provisions ............................................................... 52
SECTION 3.2.1. Rates ........................................................................... 52
SECTION 3.2.2. Default Rates ................................................................... 52
SECTION 3.2.3. Payment Dates ................................................................... 52
SECTION 3.3. Fees .............................................................................. 53
SECTION 3.3.1. Unused Line Fee ................................................................. 53
SECTION 3.3.2. Agents' Fees .................................................................... 53
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SECTION 3.3.3. Subfacility Letter of Credit Fee ................................................ 53
SECTION 3.3.4. Standby Letter of Credit Fee .................................................... 54
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful ........................................................ 54
SECTION 4.2. Deposits Unavailable; Market Disruptions .......................................... 54
SECTION 4.3. Increased LIBO Rate Loan Costs, etc. .............................................. 54
SECTION 4.4. Funding Losses .................................................................... 55
SECTION 4.5. Increased Capital Costs ........................................................... 55
SECTION 4.6. Taxes ............................................................................. 55
SECTION 4.7. Payments, Computations, etc. ...................................................... 57
SECTION 4.8. Sharing of Payments ............................................................... 58
SECTION 4.9. Setoff ............................................................................ 58
SECTION 4.10. Defaulting Lenders ............................................................... 58
SECTION 4.11. Replacement of Lenders ........................................................... 59
ARTICLE V
CONDITIONS TO EFFECTIVENESS AND INITIAL CREDIT EXTENSIONS
SECTION 5.1. Effectiveness and Initial Credit Extension ........................................ 59
SECTION 5.1.1. Resolutions, etc. ............................................................... 59
SECTION 5.1.2. Closing Date Certificate ........................................................ 60
SECTION 5.1.3. Refinancing of Outstanding Indebtedness, etc. ................................... 60
SECTION 5.1.4. Closing Fees, Expenses, etc. .................................................... 60
SECTION 5.1.5. Financial Information, etc. ..................................................... 60
SECTION 5.1.6. Compliance Certificate .......................................................... 61
SECTION 5.1.7. Opinions of Counsel ............................................................. 61
SECTION 5.1.8. Filings. ........................................................................ 61
SECTION 5.1.9. Reaffirmation ................................................................... 61
SECTION 5.1.10. Solvency, etc .................................................................. 61
SECTION 5.1.11. Pledge Agreements .............................................................. 61
SECTION 5.1.12. Foreign Pledge Agreements ...................................................... 61
SECTION 5.1.13. Security Agreement Searches and Filings ........................................ 61
SECTION 5.1.14. Insurance ...................................................................... 62
SECTION 5.1.15. Mortgage Amendments. The Agents shall have received the following: ............ 62
SECTION 5.1.16. Collateral Access Agreements ................................................... 63
SECTION 5.1.17. Delivery of Notes .............................................................. 63
SECTION 5.1.18. Perfection Certificate ......................................................... 64
SECTION 5.1.19. Adjusted Excess Availability ................................................... 64
SECTION 5.1.20. No Material Adverse Change ..................................................... 64
SECTION 5.1.21. Field Review and Appraisal ..................................................... 64
SECTION 5.1.22. Blocked Account Agreements ..................................................... 64
SECTION 5.1.23. Processor Letters .............................................................. 64
SECTION 5.1.24. Required Consents and Approvals ................................................ 64
SECTION 5.1.25. Existing Security Documents .................................................... 65
SECTION 5.1.26. Direction Letters .............................................................. 65
SECTION 5.1.27. Securities Control Agreements .................................................. 65
SECTION 5.2. All Credit Extensions ............................................................. 65
SECTION 5.2.1. Compliance with Warranties, No Default, etc. .................................... 65
ii
SECTION 5.2.2. Credit Extension Request, etc. .................................................. 65
SECTION 5.2.3. Satisfactory Legal Form ......................................................... 66
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1. Organization, etc. ................................................................ 66
SECTION 6.2. Due Authorization, Non-Contravention, etc. ........................................ 66
SECTION 6.3. Government Approval, Regulation, etc. ............................................. 66
SECTION 6.4. Validity, etc. .................................................................... 67
SECTION 6.5. Financial Information ............................................................. 67
SECTION 6.6. No Material Adverse Change ........................................................ 67
SECTION 6.7. Litigation. ....................................................................... 67
SECTION 6.8. Subsidiaries ...................................................................... 67
SECTION 6.9. Ownership of Properties ........................................................... 68
SECTION 6.10. Taxes ............................................................................ 68
SECTION 6.11. Pension and Welfare Plans ........................................................ 68
SECTION 6.12. Environmental Warranties ......................................................... 68
SECTION 6.13. Accuracy of Information .......................................................... 69
SECTION 6.14. Regulations U and X .............................................................. 69
SECTION 6.15. Issuance of Subordinated Debt; Status of Obligations as Senior
Indebtedness, etc. ............................................................... 70
SECTION 6.16. Solvency ......................................................................... 70
SECTION 6.17. Capitalization ................................................................... 70
SECTION 6.18. Compliance with Laws; Authorizations ............................................. 71
SECTION 6.19. No Contractual or Other Restrictions ............................................. 71
SECTION 6.20. Absence of Any Undisclosed Liabilities ........................................... 71
SECTION 6.21. Intellectual Property ............................................................ 71
SECTION 6.22. Priority of Security Interests ................................................... 71
SECTION 6.23. Material Contracts ............................................................... 72
SECTION 6.24. Subsidiary Guarantors ............................................................ 72
SECTION 6.25. Accounts ......................................................................... 72
SECTION 6.26. Labor Disputes ................................................................... 72
SECTION 6.27. Distribution Centers ............................................................. 72
SECTION 6.28. Credit Card Issuers and Credit Card Processors ................................... 72
SECTION 6.29. Payable Practices ................................................................ 73
SECTION 6.30. Direction Banks .................................................................. 73
SECTION 6.31. Borrowers ........................................................................ 73
SECTION 6.32. Existing Letters of Credit ....................................................... 73
SECTION 6.33. Anti-Terrorism Laws .............................................................. 73
SECTION 6.34. HIPAA Compliance ................................................................. 73
SECTION 6.35. Compliance with Health Care Laws ................................................. 74
SECTION 6.36. Notices from Farm Products Sellers, etc. ......................................... 74
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants ............................................................. 75
SECTION 7.1.1. Financial Information, Reports, Notices, etc. ................................... 75
SECTION 7.1.2. Maintenance of Existence; Compliance with Laws, etc. ............................ 77
SECTION 7.1.3. Maintenance of Properties ....................................................... 77
SECTION 7.1.4. Insurance ....................................................................... 77
iii
SECTION 7.1.5. Books and Records ............................................................... 78
SECTION 7.1.6. Environmental Law Covenant ...................................................... 78
SECTION 7.1.7. Use of Proceeds ................................................................. 78
SECTION 7.1.8. Future Guarantors, Security, etc. ............................................... 78
SECTION 7.1.9. Conduct of Business; Separate Existence; Maintenance of Authorizations .......... 79
SECTION 7.1.10. Standby Letters of Credit ...................................................... 79
SECTION 7.1.11. Offsite Books and Records ...................................................... 79
SECTION 7.1.12. Eligible Borrowing Base Assets ................................................. 79
SECTION 7.1.13. Agricultural Products .......................................................... 79
SECTION 7.1.14. Credit Card Agreements ......................................................... 80
SECTION 7.1.15. Post-Closing Obligations ....................................................... 81
SECTION 7.2. Negative Covenants ................................................................ 81
SECTION 7.2.1. Business Activities ............................................................. 81
SECTION 7.2.2. Indebtedness .................................................................... 81
SECTION 7.2.3. Liens ........................................................................... 83
SECTION 7.2.4. Financial Condition ............................................................. 85
SECTION 7.2.5. Investments ..................................................................... 87
SECTION 7.2.6. Restricted Payments, etc. ....................................................... 88
SECTION 7.2.7. Changes to Fiscal Year .......................................................... 89
SECTION 7.2.8. No Prepayment of Debt ........................................................... 89
SECTION 7.2.9. Issuance of Capital Securities .................................................. 89
SECTION 7.2.10. Consolidation, Merger, etc. .................................................... 89
SECTION 7.2.11. Permitted Dispositions ......................................................... 90
SECTION 7.2.12. Modification of Certain Agreements ............................................. 91
SECTION 7.2.13. Transactions with Affiliates ................................................... 92
SECTION 7.2.14. Restrictive Agreements, etc. ................................................... 92
SECTION 7.2.15. Sale and Leaseback ............................................................. 92
SECTION 7.2.16. Collateral Access Agreements ................................................... 92
SECTION 7.2.17. Credit Card Issuers and Credit Card Processors ................................. 93
SECTION 7.2.18. Accounts; Investment Property .................................................. 93
SECTION 7.2.19. Capital Expenditures ........................................................... 93
SECTION 7.3. Collateral Reporting and Covenants ................................................ 93
SECTION 7.3.1. Collateral Reporting ............................................................ 93
SECTION 7.3.2. Inventory Covenants ............................................................. 95
SECTION 7.3.3. Power of Attorney. .............................................................. 95
SECTION 7.3.4. Right to Cure. .................................................................. 96
SECTION 7.3.5. Access to Premises/Field Audits ................................................. 96
SECTION 7.3.6. Pharmacy Scripts Covenants ...................................................... 97
SECTION 7.3.7. Pharmacy Receivables Covenants .................................................. 97
SECTION 7.3.8. Real Property Covenants ......................................................... 98
SECTION 7.4. Majority Accounts ................................................................. 98
SECTION 7.4.1. Maintaining Majority Accounts ................................................... 98
SECTION 7.4.2. Disposition of Funds ............................................................ 98
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default ...................................................... 98
SECTION 8.1.1. Non-Payment of Obligations ...................................................... 99
SECTION 8.1.2. Breach of Warranty .............................................................. 99
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations ............................ 99
iv
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations .............................. 99
SECTION 8.1.5. Default on Other Indebtedness ................................................... 99
SECTION 8.1.6. Judgments ....................................................................... 99
SECTION 8.1.7. Pension Plans ................................................................... 100
SECTION 8.1.8. Change in Control ............................................................... 100
SECTION 8.1.9. Bankruptcy, Insolvency, etc. .................................................... 100
SECTION 8.1.10. Impairment of Security, etc. ................................................... 100
SECTION 8.1.11. Failure of Subordination ....................................................... 101
SECTION 8.1.12. Default Under Senior Unsecured Notes ........................................... 101
SECTION 8.1.13. Suspension under Credit Card Agreement, etc. ................................... 101
SECTION 8.2. Action if Bankruptcy .............................................................. 101
SECTION 8.3. Action if Other Event of Default .................................................. 101
SECTION 8.4. Application of Proceeds ........................................................... 102
ARTICLE IX
THE AGENTS
SECTION 9.1. Actions ........................................................................... 102
SECTION 9.2. Funding Reliance, etc. ............................................................ 103
SECTION 9.3. Exculpation ....................................................................... 103
SECTION 9.4. Successor ......................................................................... 104
SECTION 9.5. Loans by Wachovia Bank and Congress ............................................... 104
SECTION 9.6. Credit Decisions .................................................................. 104
SECTION 9.7. Copies, etc. ...................................................................... 104
SECTION 9.8. Reliance by Agents ................................................................ 105
SECTION 9.9. Defaults .......................................................................... 105
SECTION 9.10. Syndication and Co-Documentation Agents .......................................... 105
SECTION 9.11. Field Audit, Examination Reports and other Information ........................... 105
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, etc. ........................................................ 106
SECTION 10.2. Notices; Time .................................................................... 107
SECTION 10.3. Payment of Costs and Expenses .................................................... 107
SECTION 10.4. Indemnification .................................................................. 108
SECTION 10.5. Survival ......................................................................... 109
SECTION 10.6. Severability ..................................................................... 110
SECTION 10.7. Headings ......................................................................... 110
SECTION 10.8. Execution in Counterparts, Effectiveness, etc. ................................... 110
SECTION 10.9. Governing Law; Entire Agreement .................................................. 110
SECTION 10.10. Successors and Assigns .......................................................... 110
SECTION 10.11. Sale and Transfer of Credit Extensions; Participations in Credit
Extensions Notes ................................................................ 110
SECTION 10.11.1. Assignments ................................................................... 111
SECTION 10.11.2. Participations ................................................................ 112
SECTION 10.12. Other Transactions .............................................................. 114
SECTION 10.13. Certain Collateral and Other Matters; Rate Protection Agreements ................ 114
SECTION 10.14. Forum Selection and Consent to Jurisdiction ..................................... 115
SECTION 10.15. Waiver of Jury Trial ............................................................ 115
SECTION 10.16. Reallocation and Assignment of Existing Revolving Loans and L/C Obligations
with Respect to Existing Letters of Credit ...................................... 116
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SECTION 10.17. Effect of this Agreement ........................................................ 116
SECTION 10.18. Appointment of the Administrative Borrower as Agent for Requesting Loans and
Receipts of Loans and Statements ................................................ 116
SECTION 10.19. Waiver of Counterclaims, etc. ................................................... 117
SECTION 10.20. Patriot Act Notice, etc. ........................................................ 117
SECTION 10.21. Additional Loans ................................................................ 117
vi
SCHEDULE I - Disclosure Schedule
SCHEDULE II - Percentages; LIBO Office; Domestic Office
SCHEDULE III - Capitalization and Ownership
SCHEDULE IV - Fiscal Quarters of the Borrower and its Subsidiaries
SCHEDULE V - Fiscal Years of the Borrower and its Subsidiaries
SCHEDULE VI - Restructuring Plan
SCHEDULE VII - Designated Officers
EXHIBIT A-1 - Form of Second Amended and Restated Revolving Credit Note
EXHIBIT A-2 - Form of Second Amended and Restated Swing Line Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Standby Letter of Credit Issuance Request
EXHIBIT B-3 - Form of Subfacility Letter of Credit Issuance Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Borrower Closing Date Certificate
EXHIBIT E - Form of Compliance Certificate
EXHIBIT F-1 - Borrower Pledge Agreement, as executed
EXHIBIT F-2 - Form of Subsidiary Pledge Agreement
EXHIBIT G - Form of Collateral Access Agreement
EXHIBIT H - Subsidiary Guaranty, as executed
EXHIBIT I-1 - Borrower Security Agreement, as executed
EXHIBIT I-2 - Subsidiary Security Agreement, as executed
EXHIBIT J-1 - Form of Mortgage
EXHIBIT J-2 - Form of Deed of Trust
EXHIBIT J-3 - Form of ▇▇▇▇▇▇▇ Facility Mortgage
EXHIBIT J-4 - Form of Opinion of Local Counsel for ▇▇▇▇▇▇▇ Facility Mortgage
EXHIBIT J-5 - Form of Mortgage Amendment
EXHIBIT K - Interco Subordination Agreement, as executed
EXHIBIT L - Form of Lender Assignment Agreement
EXHIBIT M - Form of Officer's Solvency Certificate
EXHIBIT N - Form of Perfection Certificate
EXHIBIT O - Form of Processor Letter
EXHIBIT P - Form of Blocked Account Agreement
EXHIBIT Q - Form of Borrowing Base Certificate
EXHIBIT R - Form of Direction Letter
EXHIBIT S-1 - Form of Securities Account Control Agreement, in respect of
securities entitlements
EXHIBIT S-2 - Form of Securities Account Control Agreement, in respect of
uncertificated securities
vii
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 29,
2004, is among ▇▇▇▇-▇▇▇▇▇ STORES, INC., a Florida corporation ("▇▇▇▇-▇▇▇▇▇"),
certain subsidiaries of ▇▇▇▇-▇▇▇▇▇ listed on the signature pages hereto
(collectively, the "Subsidiary Borrowers"; and together with ▇▇▇▇-▇▇▇▇▇, each a
"Borrower" and, collectively, the "Borrowers"), the various financial
institutions and other Persons from time to time parties hereto (the "Lenders"),
WACHOVIA BANK, NATIONAL ASSOCIATION (formerly known as First Union National
Bank, "Wachovia Bank"), as administrative agent (in such capacity, the
"Administrative Agent") for the Lenders, GMAC COMMERCIAL FINANCE LLC, as
syndication agent for the Lenders (in such capacity, the "Syndication Agent"),
▇▇▇▇▇ FARGO FOOTHILL, LLC, GENERAL ELECTRIC CAPITAL CORPORATION and THE CIT
GROUP/BUSINESS CREDIT, INC., as Co-Documentation Agents for the Lenders (in such
capacity, the "Co-Documentation Agents"), CONGRESS FINANCIAL CORPORATION
(FLORIDA) ("Congress"), as collateral monitoring agent for the Lenders (in such
capacity, the "Collateral Monitoring Agent"; and together with the
Administrative Agent, referred to as the "Agents"), and WACHOVIA CAPITAL
MARKETS, LLC ("WCM"), as sole arranger and sole bookrunner (in such capacity,
the "Arranger").
W I T N E S S E T H:
WHEREAS, pursuant to the Amended and Restated Credit Agreement, dated
as of October 7, 2003 (the "Existing Effective Date"), by and among ▇▇▇▇-▇▇▇▇▇,
certain subsidiaries of ▇▇▇▇-▇▇▇▇▇ (collectively with ▇▇▇▇-▇▇▇▇▇, each an
"Existing Borrower"), various financial institutions and other persons from time
to time party thereto (the "Existing Lenders"), Wachovia Bank as administrative
agent, certain other agents and arrangers and WCM as sole arranger and sole
bookrunner (as heretofore amended or otherwise modified, the "Existing Credit
Agreement"), the Existing Lenders were committed to make extensions of credit to
the Existing Borrowers on the terms and conditions set forth therein and made
revolving loans (the "Existing Revolving Loans"), and issued (or participated in
the issuance of) letters of credit (the "Existing Letters of Credit") to or for
the account of the Existing Borrowers, and Wachovia Bank, as swing line lender,
made swing line loans to the Existing Borrowers (the "Existing Swing Line
Loans"; and, together with the Existing Revolving Loans, the "Existing Loans");
WHEREAS, in connection with certain ongoing working capital and general
corporate needs of the Existing Borrowers and their Subsidiaries, the Borrowers
desire to, among other things, continue the Existing Revolving Loans and
Existing Swing Line Loans as Loans under this Agreement and the Existing Letters
of Credit as Letters of Credit under this Agreement, increase the commitment to
make revolving loans to an aggregate principal amount of up to $400,000,000,
create a new facility for the issuance of standby letters of credit in an
aggregate amount at any time outstanding of up to $200,000,000 to support
workers compensation obligations and bankers acceptance and performance bonds,
surety bonds, appeal bonds and performance guarantees in each case in the
ordinary course of business, and obtain Commitments to make Loans and other
Credit Extensions as set forth herein;
WHEREAS, the Existing Borrowers have requested that the Existing Credit
Agreement be amended and restated in its entirety to become effective and
binding on the Borrowers pursuant to the terms hereof, and the Lenders
(including the Existing Lenders that are parties hereto) have agreed (subject to
the terms of this Agreement) to amend and restate the Existing Credit Agreement
in its entirety to read as set forth herein, and it has been agreed by the
parties hereto that (a) the commitments which the Existing Lenders that are
parties hereto extended to the Existing Borrowers under the Existing Credit
Agreement and the commitments of new Lenders that become parties hereto shall be
extended or advanced upon the amended and restated terms and conditions
contained in this Agreement and (b) the
Existing Loans and other Obligations outstanding under the Existing Credit
Agreement shall be governed by and deemed to be outstanding under the amended
and restated terms and conditions contained herein;
WHEREAS, all existing Obligations are and shall continue to be (and all
Obligations incurred pursuant hereto shall be) secured by, among other things,
the Security Agreements, the Pledge Agreements, the Mortgages and the other Loan
Documents and shall be guaranteed pursuant to the Subsidiary Guaranty; and
WHEREAS, the Borrowers operate a food retail business and each Borrower
will derive substantial direct and indirect benefits from the Credit Extensions
made from time to time to any Borrower by the Lenders and the Issuer hereunder
and the execution and delivery of Rate Protection Agreements between any
Borrower or Obligor and certain Secured Parties and it is therefore in the best
interests of each Borrower to execute this Agreement;
NOW, THEREFORE, the parties hereto hereby agree to amend and restate
the Existing Credit Agreement, and the Existing Credit Agreement is hereby
amended and restated, in its entirety as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Account Debtor" means a Third Party Payor obligated on a Pharmacy
Receivable.
"Accounts" means, as to each Borrower and Guarantor, all present and
future rights of such Borrower and Guarantor to payment of a monetary
obligation, whether or not earned by performance, which is not evidenced by
chattel paper or an instrument, (a) for property that has been or is to be sold,
leased, licensed, assigned or otherwise disposed of, (b) for services rendered
or to be rendered, (c) for a secondary obligation incurred or to be incurred or
(d) arising out of the use of a credit or charge card or information contained
on or for use with the card.
"Adjusted Borrowing Base" means, at any time, for the Borrowers
collectively, the amount equal to:
(a) the amount equal to the sum of:
(i) the lesser of (A) seventy percent (70%) multiplied by
the Value of the Eligible Inventory consisting of finished goods
(other than Perishable Inventory) or (B) eighty-five percent
(85%) of the Net Recovery Percentage multiplied by the Value
of the Eligible Inventory consisting of finished goods (other
than Perishable Inventory); plus
(ii) the least of (A) seventy percent (70%) multiplied by
the Value of the Eligible Inventory consisting of finished goods
that is Perishable Inventory or (B) eighty-five percent (85%) of
the Net Recovery Percentage multiplied by the Value of the
Eligible Inventory consisting of finished goods that is
Perishable Inventory or (C) the lesser of (x) $125,000,000 or (y)
20.8% multiplied by the Total Commitment Amount as in effect at
the time of determination; plus
2
(iii) the lesser of (A) the Pharmacy Scripts Availability
or (B) the Pharmacy Scripts Cap; plus
(iv) the lesser of (A) eighty percent (80%) multiplied by
the Net Amount of Eligible Pharmacy Receivables or (B) the lesser
of (x) $25,000,000 or (y) 4.2% multiplied by the Total Commitment
Amount as in effect at the time of determination; plus
(v) the lesser of (A) the Real Property Availability, or
(B) the lesser of (x) $30,000,000, or (y) 5.0% multiplied by the
Total Commitment Amount as in effect at the time of
determination.
minus
(b) all Reserves.
The amounts of Eligible Inventory of the Borrowers shall, at the
Collateral Monitoring Agent's option, be determined based on the lesser of (x)
the amount of Inventory set forth in the general ledgers of the Borrowers or (y)
the perpetual inventory records (by distribution center and, if any, by retail
store) maintained by the Borrowers.
"Adjusted Excess Availability" means the aggregate amount for all the
Borrowers, as determined by the Collateral Monitoring Agent, calculated at any
date, equal to: (a) the Adjusted Borrowing Base (which shall be based on the
Borrowing Base Certificate most recently provided by the Borrowers pursuant to
Section 7.3.1(a)(iv) and acceptable to the Agents) after giving effect to any
Reserves other than any Reserves in respect of Letter of Credit Outstandings,
minus (b) the sum of: (i) the amount of all then outstanding and unpaid
Obligations (but not including for this purpose Obligations of any Borrower
arising pursuant to any guarantees in favor of an Agent and the Lenders of the
Obligations of the other Borrowers or any Letter of Credit Outstandings), plus
(ii) the amount of all Reserves then established in respect of Letter of Credit
Outstandings.
"Administrative Agent" is defined in the preamble and includes each
other Person appointed as the successor Administrative Agent pursuant to Section
9.4.
"Administrative Borrower" means ▇▇▇▇-▇▇▇▇▇ in its capacity as
Administrative Borrower on behalf of itself and the other Borrowers pursuant to
Section 10.18 hereof and its successors and assigns in such capacity.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person. "Control" of a Person means the power, directly or indirectly, (a) to
vote 10% or more of the Capital Securities (on a fully diluted basis) or other
equity or membership interests having ordinary voting power for the election of
directors, managing members or general partners (as applicable) or (b) to direct
or cause the direction of the management and policies of such Person (whether
through ownership of Capital Securities, by contract or otherwise).
"Agents" is defined in the preamble.
"Agreement" means, on any date, the Original Credit Agreement, as
amended and restated by the Existing Credit Agreement, as further amended and
restated by this Second Amended and Restated Credit Agreement and as hereafter
from time to time further amended, supplemented, amended and restated or
otherwise modified from time to time and in effect on such date.
3
"Alternate Base Rate" means, on any date and with respect to all Base
Rate Loans, a fluctuating rate of interest per annum equal to the higher of (a)
the Base Rate in effect on such day; or (b) the Federal Funds Rate in effect on
such day plus 1/2 of 1%. Changes in the rate of interest on that portion of any
Loans maintained as Base Rate Loans will take effect as of the opening of
business on the date of each change in the Alternate Base Rate. The
Administrative Agent will give notice promptly to the Borrower and the Lenders
of changes in the Alternate Base Rate; provided that the failure to give such
notice shall not affect the Alternate Base Rate in effect after such change. If
for any reason the Administrative Agent shall have determined (which
determination shall be conclusive in the absence of manifest error) that it is
unable to ascertain the Federal Funds Rate for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient quotations
in accordance with the terms hereof, the Alternate Base Rate shall be determined
without regard to clause (b) of the first sentence of this definition, until the
circumstances giving rise to such inability no longer exist.
"Applicable Amount" has the meaning specified in Section 2.1.3(b).
"Applicable Margin" means, with respect to any Loan, (a) for the period
from the Closing Date until and including December 31, 2004, 1.00% for Base Rate
Loans and 2.25% for LIBO Rate Loans and (b) following December 31, 2004, the
applicable percentage set forth below corresponding to the relevant Average
Excess Availability level:
Required Average Excess
Availability Applicable Margin For Applicable Margin For
($ in millions) Base Rate Loans LIBO Rate Loans
------------------------------------- --------------------- ----------------------
Greater than 350 0.50% 1.75%
Greater than 300 but equal to or less
than 350 0.75% 2.00%
Greater than 250 but equal to or less
than 300 1.00% 2.25%
Greater than 200 but equal to or less 1.25% 2.50%
than 250
Equal to or less than 200 1.50% 2.75%
For purposes of this definition, (a) Average Excess Availability will be
computed for each calendar quarter, commencing with the quarter ending December
31, 2004, on the last day of each quarter and (b) any failure to timely deliver
such Borrowing Base Certificates pursuant to Section 7.3.1(a)(iv) shall result
in the application of the highest Applicable Margin set forth above until such
certificates are duly delivered. Changes in the Applicable Margin resulting from
a change in the Average Excess Availability level shall become effective one
Business Day after the Collateral Monitoring Agent makes a determination of a
change therein (such determination to be notified to the Borrowers and the
Administrative Agent in writing on such Business Day).
"Arranger" is defined in the preamble.
"Assignee Lender" is defined in Section 10.11.1.
"Assignor Lender" is defined in Section 10.11.1.
"Authorized Officer" means, relative to any Obligor, those of its
officers, general partners or managing members (as applicable) whose signatures
and incumbency shall have been certified to the Administrative Agent, the
Lenders and the Issuer pursuant to Section 5.1.1 or as updated by the Borrowers
from time to time and certified in the manner provided above.
4
"Average Excess Availability" means, at any time, the average daily
Excess Availability for the most recently ended three calendar months, in each
case as determined by the Collateral Monitoring Agent in good faith.
"Average Stated Amount" means, on any date and with respect to a
particular Letter of Credit, the average daily maximum amount available to be
drawn under such Letter of Credit.
"Bahamian Subsidiaries" means each of W-D (Bahamas) Limited, Bahamas
Supermarkets Limited and The City Meat Market Limited.
"▇▇▇▇▇▇▇ Facility" means the two adjoining pieces of Real Property
located at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, one of which is
owned by ▇▇▇▇-▇▇▇▇▇ on the Closing Date and the other of which is owned by ▇▇▇▇▇
Realty Trust 1999-1 on the Closing Date.
"▇▇▇▇▇▇▇ Facility Mortgages" is defined in Section 5.1.15A.
"Bank Accounts" means all deposit accounts, investment accounts or
securities accounts in the name of or used by any Borrower or any Guarantor or
any Subsidiary.
"Base Rate" means, at any time, the rate of interest per annum then
most recently publicly announced by Wachovia Bank at its principal office in
Charlotte, North Carolina as its prime rate for Dollars loaned in the United
States. The parties hereto acknowledge that the Base Rate is an index rate and
is not necessarily intended to be the lowest or best rate of interest charged to
other banks or to customers in connection with extensions of credit.
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"Blocked Account Agreement" means each blocked account agreement duly
executed and delivered by any bank or financial institution, as account holder,
any Borrower or any of their Subsidiaries and the Administrative Agent, pursuant
to the requirements of the Existing Credit Agreement or of this Agreement,
substantially in the form of Exhibit P hereto or as otherwise approved by the
Agents.
"Borrower" is defined in the preamble.
"Borrower Closing Date Certificate" means the closing date certificate
to be executed and delivered by an Authorized Officer of each Borrower pursuant
to the terms of this Agreement substantially in the form of Exhibit D hereto.
"Borrower Pledge Agreement" means the Pledge Agreement executed and
delivered by an Authorized Officer of ▇▇▇▇-▇▇▇▇▇ in favor of the Administrative
Agent for the benefit of the Secured Parties, dated as of March 29, 2001,
pursuant to the Original Credit Agreement, a copy of which is attached hereto as
Exhibit F-1, together with any supplemental Foreign Pledge Agreements delivered
pursuant to the terms of the Existing Credit Agreement or this Agreement, as
reaffirmed by the Guaranty, Security Document and Subordination Reaffirmation,
in each case as amended, supplemented, amended and restated or otherwise
modified from time to time.
"Borrower Security Agreement" means the Security Agreement executed and
delivered by an Authorized Officer of ▇▇▇▇-▇▇▇▇▇ in favor of the Administrative
Agent for the benefit of the Secured Parties, dated as of March 29, 2001,
pursuant to the Original Credit Agreement, a copy of which is
5
attached hereto as Exhibit I-1, as reaffirmed by the Guaranty, Security Document
and Subordination Reaffirmation and as amended, supplemented, amended and
restated or otherwise modified from time to time.
"Borrowing" means the Loans of the same type and, in the case of LIBO
Rate Loans, having the same Interest Period made by all Lenders required to make
such Loans on the same Business Day and pursuant to the same Borrowing Request
in accordance with Section 2.1.
"Borrowing Base" means, at any time, for the Borrowers collectively,
the amount equal to:
(a) the lesser of:
(i) the sum of:
(A) the lesser of (1) seventy percent (70%)
multiplied by the Value of the Eligible Inventory
consisting of finished goods (other than Perishable
Inventory) or (2) eighty-five percent (85%) of the
Net Recovery Percentage multiplied by the Value of
the Eligible Inventory consisting of finished goods
(other than Perishable Inventory); plus
(B) the least of (1) seventy percent (70%)
multiplied by the Value of the Eligible Inventory
consisting of finished goods that is Perishable
Inventory or (2) eighty-five percent (85%) of the Net
Recovery Percentage multiplied by the Value of the
Eligible Inventory consisting of finished goods that
is Perishable Inventory or (3) the lesser of (x)
$125,000,000 and (y) 20.8% multiplied by the Total
Commitment Amount as in effect at the time of
determination; plus
(C) the lesser of (1) the Pharmacy Scripts
Availability or (2) the Pharmacy Scripts Cap; plus
(D) the lesser of (1) eighty percent (80%)
multiplied by the Net Amount of Eligible Pharmacy
Receivables or (2) the lesser of (x) $25,000,000 or
(y) 4.2% multiplied by the Total Commitment Amount as
in effect at the time of determination; plus
(E) the lesser of (1) the Real Property
Availability, or (2) the lesser of (x) $30,000,000 or
(y) 5.0% multiplied by the Total Commitment Amount as
in effect at the time of determination, or
(ii) the Total Commitment Amount,
minus
(b) all Reserves.
The amounts of Eligible Inventory of the Borrowers shall, at the
Collateral Monitoring Agent's option, be determined based on the lesser of (x)
the amount of Inventory set forth in the general ledgers of the Borrowers or (y)
the perpetual inventory records (by distribution center and, if any, by retail
store) maintained by the Borrowers.
6
"Borrowing Base Assets" means Inventory, Pharmacy Scripts, Pharmacy
Receivables and the ▇▇▇▇▇▇▇ Facility.
"Borrowing Base Certificate" is defined in Section 7.3.1(a)(iv).
"Borrowing Request" means a Loan request and certificate duly executed
by an Authorized Officer of the Administrative Borrower substantially in the
form of Exhibit B-1 hereto.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in New
York, New York or Charlotte, North Carolina; and
(b) relative to the making, continuing, prepaying or repaying of
any LIBO Rate Loans, any day which is a Business Day described in
clause (a) above and which is also a day on which dealings in Dollars
are carried on in the London interbank eurodollar market.
"Capital Expenditures" means, for any period, the aggregate net amount
of all expenditures of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries made during such period
for property, plant and equipment calculated in accordance with GAAP in the
manner set forth in ▇▇▇▇-Dixie's Consolidated Statements of Cash Flows as
contained in ▇▇▇▇-Dixie's annual report on Form 10-K for the 2003 Fiscal Year.
"Capital Securities" means, with respect to any Person, all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital, whether now outstanding or
issued after the Closing Date.
"Capitalized Lease Liabilities" means, with respect to any Person, all
monetary obligations of such Person and its Subsidiaries under any leasing or
similar arrangement which have been (or, in accordance with GAAP, should be)
classified as capitalized leases, and for purposes of each Loan Document the
amount of such obligations shall be the capitalized amount thereof, determined
in accordance with GAAP, and the stated maturity thereof shall be the date of
the last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without payment
of a premium or a penalty.
"Cash Collateralize" means, with respect to a Letter of Credit, the
deposit of immediately available funds into a cash collateral account maintained
with (or on behalf of) the Administrative Agent on terms satisfactory to the
Administrative Agent in an amount equal to the Stated Amount of such Letter of
Credit and all related fees and other amounts.
"Cash Equivalent Investment" means, at any time:
(a) any direct obligation of (or unconditionally guaranteed by)
the United States or a state thereof (or any agency or political
subdivision thereof, to the extent such obligations are supported by
the full faith and credit of the United States or a state thereof)
maturing not more than one year after such time;
7
(b) commercial paper maturing not more than 270 days from the
date of issue, which is issued by
(i) a corporation (other than a Subsidiary or an
Affiliate of any Obligor) organized under the laws of any state
of the United States or of the District of Columbia and rated A-1
or higher by S&P or P-1 or higher by ▇▇▇▇▇'▇, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit, time deposit or bankers
acceptance, maturing not more than one year after its date of issuance,
which is issued by either
(i) any bank organized under the laws of the United
States (or any state thereof) and which has (x) a credit rating
of A2 or higher from ▇▇▇▇▇'▇ or A or higher from S&P and (y) a
combined capital and surplus greater than $500,000,000, or
(ii) any Lender;
(d) any repurchase agreement having a term of 30 days or less
entered into with any Lender or any commercial banking institution
satisfying the criteria set forth in clause (c)(i) which
(i) is secured by a fully perfected security interest in
any obligation of the type described in clause (a), and
(ii) has a market value at the time such repurchase
agreement is entered into of not less than 100% of the repurchase
obligation of such commercial banking institution thereunder; or
(e) mutual funds investing only in assets described in clauses
(a) through (d) of this definition.
"Casualty Event" means the damage, destruction or condemnation, as the
case may be, of property of any Person or any of its Subsidiaries.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change in Control" means
(a) any "person" or "group" (as such terms are used in Rule 13d-5
of the Exchange Act, and Sections 13(d) and 14(d) of the Exchange Act)
of persons (i) becomes, directly or indirectly, in a single
transaction or in a related series of transactions by way of merger,
consolidation, or other business combination or otherwise, the
"beneficial owner" (as such term is used in Rule 13d-3 of the Exchange
Act) of more than (A) 35% of the total voting power in the aggregate
of all classes of Capital Securities of ▇▇▇▇-▇▇▇▇▇ then outstanding
entitled to vote generally in elections of directors of ▇▇▇▇-▇▇▇▇▇ and
(B) the total voting power in the aggregate of all classes of Capital
Securities of ▇▇▇▇-▇▇▇▇▇ held by the ▇▇▇▇▇ Family, or (ii) otherwise
8
acquires the power to direct or cause the direction of the management
or policies of ▇▇▇▇-▇▇▇▇▇; provided that the acquisition by members of
the ▇▇▇▇▇ Family of additional Capital Securities of ▇▇▇▇-▇▇▇▇▇ shall
not constitute a Change in Control hereunder;
(b) during any period of 24 consecutive months, individuals who
at the beginning of such period constituted the Board of Directors of
▇▇▇▇-▇▇▇▇▇ (together with any new directors whose election to such
Board or whose nomination for election by the stockholders of
▇▇▇▇-▇▇▇▇▇ was approved by a vote of 66 2/3% of the directors then
still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of ▇▇▇▇-▇▇▇▇▇ then in office;
(c) ▇▇▇▇-▇▇▇▇▇ shall cease to be the holder and owner of 100% of
the Capital Securities of each other Person who is then a Borrower,
subject to the lien of the Security Agreements; or
(d) the occurrence of any "Change of Control" (or similar term)
under (and as defined in) any Sub Debt Document or the Senior Unsecured
Notes Documents.
"Closing Date" means the date on which all conditions to the
effectiveness of this Agreement are satisfied, but in no event shall such date
be later than June 30, 2004.
"Co-Documentation Agents" is defined in the preamble.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, in each case as amended, reformed or otherwise modified
from time to time.
"Collateral" means any property purported to be pledged or with respect
to which a Lien is purported to be granted pursuant to any Loan Document to
secure the Obligations.
"Collateral Access Agreement" means each collateral access agreement
duly executed and delivered by any landlord of the Borrowers or any of their
Subsidiaries with respect to ▇▇▇▇-Dixie's headquarters in Jacksonville, Florida
or any leased distribution centers or warehouses pursuant to the requirements of
the Existing Credit Agreement or this Agreement, substantially in the form of
Exhibit G hereto or, as otherwise approved by the Agents.
"Collateral Monitoring Agent" is defined in the preamble.
"Commitment" means, as the context may require, the Revolving Loan
Commitment, the Subfacility Letter of Credit Commitment, the Standby Letter of
Credit Commitment or the Swing Line Loan Commitment.
"Commitment Amount" means, as the context may require, the Revolving
Loan Commitment Amount, the Subfacility Letter of Credit Commitment Amount, the
Standby Letter of Credit Commitment Amount or the Swing Line Loan Commitment
Amount.
"Commitment Termination Date" means the earliest to occur of
(a) June 30, 2004 (if the Closing Date has not occurred on or
prior to such date);
(b) the Stated Maturity Date;
9
(c) the date on which the Total Commitment Amount is terminated
in full or reduced to zero pursuant to the terms of this Agreement; and
(d) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in the preceding clauses, the
Commitments shall terminate automatically and without any further action.
"Commitment Termination Event" means
(a) the occurrence of any Event of Default described in clauses
(a) through (d) of Section 8.1.9 with respect to any Borrower; or
(b) the occurrence and continuance of any other Event of Default
and either
(i) the declaration of all or any portion of the Loans to
be due and payable pursuant to Section 8.3, or
(ii) the giving of notice by the Administrative Agent,
acting at the direction of the Required Lenders, to the Borrowers
that the Commitments have been terminated.
"Compliance Certificate" means a certificate to be duly completed and
executed by an Authorized Officer of ▇▇▇▇-▇▇▇▇▇ pursuant to the terms of this
Agreement, substantially in the form of Exhibit E hereto or as otherwise
approved by the Administrative Agent, together with such changes thereto as the
Administrative Agent may from time to time request for the purpose of monitoring
the Borrowers' compliance with the financial covenants contained herein.
"Confidential Memorandum" means the Confidential Information Memorandum
dated June 2004 for ▇▇▇▇ ▇▇▇▇▇ Stores, Inc. $600,000,000 Senior Secured Credit
Facilities, prepared by the Arranger based upon information supplied by the
Borrowers.
"Congress" is defined in the preamble.
"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the Indebtedness of any
other Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions upon
the Capital Securities of any other Person. The amount of any Person's
obligation under any Contingent Liability shall (subject to any limitation set
forth therein) be deemed to be the outstanding principal amount of the debt,
obligation or other liability guaranteed thereby.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate to be duly executed by an Authorized Officer of a
Borrower, substantially in the form of Exhibit C hereto.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with
▇▇▇▇-▇▇▇▇▇, are treated as a single employer under Section 414(b) or 414(c) of
the Code or Section 4001 of ERISA.
10
"Copyright Security Agreement" means any Copyright Security Agreement
executed and delivered by any Obligor in substantially the form of Exhibit C to
any Security Agreement pursuant to the terms of the Existing Credit Agreement,
this Agreement or such Security Agreement, as amended, supplemented, amended and
restated or otherwise modified from time to time.
"Credit Card Agreements" shall mean all agreements now or hereafter
entered into by any Borrower with any Credit Card Issuer or any Credit Card
Processor (in each case, in such capacity), as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
"Credit Card Issuer" shall mean any person (other than a Borrower) who
issues or whose members issue credit or debit cards, including, without
limitation, MasterCard or VISA bank credit or debit cards or other bank credit
or debit cards issued through MasterCard International, Inc., Visa, U.S.A., Inc.
or Visa International and American Express, Discover, Diners Club, ▇▇▇▇▇ ▇▇▇▇▇▇▇
and other non-bank credit or debit cards, including, without limitation, credit
or debit cards issued by or through American Express Travel Related Services
Company, Inc. or Discover Financial Services, Inc.
"Credit Card Processor" shall mean any servicing or processing agent or
any factor or financial intermediary who facilitates, services, processes or
manages the credit authorization, billing transfer and/or payment procedures
with respect to any Borrower's or Guarantor's sales transactions involving
credit card or debit card purchases by customers using credit cards or debit
cards issued by any Credit Card Issuer.
"Credit Extension" means, as the context may require,
(a) the making of a Loan by a Lender; or
(b) the issuance of any Letter of Credit, or the extension of any
Stated Expiry Date of any existing Letter of Credit, by an Issuer.
"▇▇▇▇▇ Family" means the Persons included in the joint Schedule 13(G)
filing filed with the Securities and Exchange Commission on February 12, 1999,
and all current or future heirs, successors and Affiliates to such Persons and
all trusts or other entities established or maintained, or to be established or
maintained, for the benefit of such Persons and their heirs, successors and
Affiliates.
"Declining Lender" is defined in Section 2.8.
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"Defaulting Lender" is defined in Section 4.10.
"Designated Officer" means each individual and type of officer listed
on Schedule VII hereto, as it may be amended, supplemented, amended and restated
or otherwise modified from time to time by a Borrower with the written consent
of the Administrative Agent.
"Designated Permitted Liens" means any Lien permitted pursuant to
clauses (a), (c) and (f) through (k) of Section 7.2.3.
11
"Direction Banks" means U.S. Bank National Association, Compass Bank,
Hibernia National Bank, ▇▇▇▇▇▇▇ Bank of Louisiana, Regions Financial Corp. and
Branch Banking & Trust and each other bank or financial institution that is sent
a Direction Letter pursuant to the terms of this Agreement.
"Direction Letter" means each direction letter duly executed and
delivered to any bank or financial institution, as account holder, pursuant to
the requirements of the Existing Credit Agreement or this Agreement, in
substantially the form of Exhibit R hereto or as otherwise approved by the
Agents.
"Disbursement" is defined in Section 2.6.2.
"Disbursement Date" is defined in Section 2.6.2.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented, amended and restated or
otherwise modified from time to time by the Borrowers with the written consent
of the Required Lenders.
"Disposition" (or similar words such as "Dispose") means any sale,
transfer, lease, contribution or other conveyance (including by way of merger)
of, or the granting of options, warrants or other rights to, any of the
Borrowers' or their Subsidiaries' assets (including accounts receivable and
Capital Securities of Subsidiaries) to any other Person (other than to another
Obligor) in a single transaction or series of related transactions.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Office" means the office of a Lender designated as its
"Domestic Office" on Schedule II hereto or in a Lender Assignment Agreement, or
such other office within the United States as may be designated from time to
time by notice from such Lender to the Administrative Agent and the Borrowers.
"EBITDA" means, with respect to ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries on a
consolidated basis, for any applicable period, the sum of
(a) Net Income for such period, plus
(b) to the extent deducted in determining Net Income, the sum of
(i) amounts attributable to amortization, (ii) income tax expense,
(iii) Interest Expense and (iv) depreciation of assets.
"Eligible Assignee" means each Lender, any Affiliate of a Lender, any
commercial bank or other financial institution, any fund that invests in loans
(and any Related Fund) and any other Person approved in writing (which approval
shall not be unreasonably withheld) by the Administrative Agent with (so long as
no Default has occurred and is continuing) the consent of the Borrowers (not to
be unreasonably withheld or delayed).
"Eligible Borrowing Base Assets" means Eligible Inventory, Eligible
Pharmacy Scripts, Eligible Pharmacy Receivables and Eligible Real Property.
"Eligible Inventory" means Inventory owned by any Borrower consisting
of finished goods held for resale in the ordinary course of the business of such
Borrower, in each case which are acceptable to the Collateral Monitoring Agent
based on the criteria set forth below. In general, Eligible Inventory shall not
include (a) raw materials and work-in-process; (b) components which are not part
of finished goods;
12
(c) spare parts for equipment; (d) packaging and shipping materials; (e)
supplies used or consumed in such Borrower's business; (f) Inventory at premises
other than those owned and controlled by any Borrower; provided that (i) as to
distribution centers or warehouses which are leased by a Borrower, if the Agents
shall have received a Collateral Access Agreement from the owner and lessor with
respect to such distribution center or warehouse, duly authorized, executed and
delivered by such owner and lessor (or the Collateral Monitoring Agent shall
determine to accept a Collateral Access Agreement that does not include all
required provisions or provisions in the form otherwise required by the
Collateral Monitoring Agent), the Collateral Monitoring Agent shall not exclude
Inventory contained in such distribution center or warehouse from Eligible
Inventory by reason of this clause (f), (ii) as to Inventory at distribution
centers or warehouses which are leased by a Borrower or owned and operated by a
third Person, if the Agents shall not have received a Collateral Access
Agreement from the owner and lessor or operator with respect to such location,
duly authorized, executed and delivered by such lessor or owner and operator (or
the Collateral Monitoring Agent shall have received a Collateral Access
Agreement that does not include all required provisions or provisions in the
form otherwise required by the Collateral Monitoring Agent), the Collateral
Monitoring Agent shall not exclude such Inventory from Eligible Inventory by
reason of this clause (f) and may, at its option, establish such Reserves in an
amount equal to ninety (90) days rent for such premises as the Collateral
Monitoring Agent shall determine, provided that in addition, if required by the
Collateral Monitoring Agent, in order for such Inventory at locations owned and
operated by a third person to be Eligible Inventory, the Collateral Monitoring
Agent shall have received: (A) UCC financing statements between the owner and
operator, as consignee or bailee and such Borrower, as consignor or ▇▇▇▇▇▇, in
form and substance satisfactory to the Collateral Monitoring Agent, which are
duly assigned to the Collateral Monitoring Agent and (B) a written notice to any
lender to the owner and operator of the first priority security interest in such
Inventory of an Agent, and (iii) as to retail stores which are leased by a
Borrower, the Collateral Monitoring Agent shall not exclude Inventory contained
in such retail stores from Eligible Inventory by reason of this clause f; (g)
Inventory subject to a security interest or lien in favor of any Person other
than an Agent except those permitted in this Agreement that are subject to an
intercreditor agreement in form and substance satisfactory to the Collateral
Monitoring Agent between the holder of such security interest or lien and the
Administrative Agent; (h) ▇▇▇▇ and hold goods; (i) unserviceable, obsolete or
slow moving Inventory; (j) Inventory which is not subject to the first priority,
valid and perfected security interest of an Agent; (k) returned, damaged and/or
defective Inventory; (l) Inventory purchased or sold on consignment, (m)
pharmaceuticals, tobacco and alcohol which such Borrower is not duly licensed to
sell or with respect to which such Borrower is not complying with any duly
issued license, (n) Inventory located in manufacturing facilities and (o)
Inventory located outside the United States of America. The criteria for
Eligible Inventory set forth above may only be changed and any new criteria for
Eligible Inventory may only be established by the Collateral Monitoring Agent in
good faith based on either: (i) an event, condition or other circumstance
arising after the date hereof, or (ii) an event, condition or other circumstance
existing on the date hereof to the extent the Collateral Monitoring Agent has no
written notice thereof from a Borrower prior to the date hereof, in either case
under clause (i) or (ii) which adversely affects or could reasonably be expected
to adversely affect the Inventory in the good faith determination of the
Collateral Monitoring Agent. Any Inventory which is not Eligible Inventory shall
nevertheless be part of the Collateral.
"Eligible Pharmacy Receivables" means Pharmacy Receivables owed to
any Borrower, in each case which are acceptable to the Collateral Monitoring
Agent based on the criteria set forth below. In general, Pharmacy Receivables
shall be Eligible Pharmacy Receivables if
(a) such Pharmacy Receivables arise from the actual and bona fide sale
and delivery of prescription drugs by such Borrower in the ordinary course of
its business which transactions are completed in accordance with the terms and
provisions contained in any documents related thereto;
13
(b) such Pharmacy Receivables are not unpaid more than thirty (30) days
after the original invoice;
(c) such Pharmacy Receivables comply with the terms and conditions
contained in Section 7.3.7 of this Agreement;
(d) such Pharmacy Receivables do not arise from sales on consignment,
guaranteed sale, sale and return, sale on approval, or other terms under which
payment by the Account Debtor may be conditional or contingent;
(e) the chief executive office of the Account Debtor with respect to
such Pharmacy Receivables is located in the United States of America or Canada
(provided, that, at any time promptly upon Agent's request, such Borrower shall
execute and deliver, or cause to be executed and delivered, such other
agreements, documents and instruments as may be required by the Agents to
perfect the security interests of the Administrative Agent in those Pharmacy
Receivables of an Account Debtor with its chief executive office or principal
place of business in Canada in accordance with the applicable laws of the
Province of Canada in which such chief executive office or principal place of
business is located and take or cause to be taken such other and further actions
as the Agents may request to enable the Administrative Agent as secured party
with respect thereto to collect such Pharmacy Receivables under the applicable
Federal or Provincial laws of Canada);
(f) such Pharmacy Receivables do not consist of progress ▇▇▇▇▇▇▇▇ (such
that the obligation of the Account Debtors with respect to such Pharmacy
Receivables is conditioned upon such Borrower's satisfactory completion of any
further performance under the agreement giving rise thereto), ▇▇▇▇ and hold
invoices or retainage invoices;
(g) the Account Debtor with respect to such Pharmacy Receivables has
not asserted a counterclaim, defense or dispute and is not owed any amounts that
may give rise to any right of setoff or recoupment against such Pharmacy
Receivables (but the portion of the Pharmacy Receivables of such Account Debtor
in excess of the amount at any time and from time to time owed by such Borrower
to such Account Debtor or claimed owed by such Account Debtor may be deemed
Eligible Pharmacy Receivables);
(h) there are no facts, events or occurrences known to any Borrower or
any Agent which would impair the validity, enforceability or collectability of
such Pharmacy Receivables;
(i) such Pharmacy Receivables are subject to the first priority, valid
and perfected security interest of the Administrative Agent and any goods giving
rise thereto are not, and were not at the time of the sale thereof, subject to
any liens except those in favor of the Administrative Agent or otherwise
permitted in this Agreement that are subject to an intercreditor agreement in
form and substance satisfactory to the Agents between the holder of such
security interest or lien and the Administrative Agent;
(j) neither the Account Debtor nor any officer or employee of the
Account Debtor with respect to such Pharmacy Receivables is an officer of any
Borrower or Guarantor;
(k) the Account Debtors with respect to such Pharmacy Receivables are
not Medicare, Medicaid or any foreign government, the United States of America,
any State, political subdivision, department, agency or instrumentality thereof;
14
(l) there are no proceedings or actions known to any Borrower or any
Agent which are threatened or pending against the Account Debtors with respect
to such Pharmacy Receivables which might result in any material adverse change
in any such Account Debtor's financial condition (including, without limitation,
any bankruptcy, dissolution, liquidation, reorganization or similar proceeding);
(m) the aggregate amount of such Pharmacy Receivables owing by a single
Account Debtor do not constitute more than twenty (20%) percent of the aggregate
amount of all otherwise Eligible Pharmacy Receivables of Borrowers (but the
portion of the Pharmacy Receivables not in excess of the applicable percentages
may be deemed Eligible Pharmacy Receivables);
(n) such Pharmacy Receivables are not owed by an Account Debtor who has
Pharmacy Receivables unpaid more than thirty (30) days after the original
invoice which constitute more than fifty (50%) percent of the total Pharmacy
Receivables of such Account Debtor;
(o) the Account Debtor is not located in (i) New Jersey, Minnesota or
West Virginia or (ii) in respect of any Account Debtor that has defaulted on a
Pharmacy Receivable or against which any Borrower otherwise has a claim, a state
requiring the filing of a Notice of Business Activities Report or similar report
in order to permit such Borrower to seek judicial enforcement in such State of
payment of such Pharmacy Receivables, in each case unless such Borrower has
qualified to do business in such state or has filed a Notice of Business
Activities Report or equivalent report for the then current year or such failure
to file and inability to seek judicial enforcement is capable of being remedied
without any material delay or material cost;
(p) such Pharmacy Receivables are owed by Account Debtors deemed
creditworthy at all times by the Agents in good faith; and
(q) (i) the Borrower making the sale giving rise to such Pharmacy
Receivables has a valid and enforceable agreement with the Third Party Payor
providing for payment to such Borrower or such Borrower is otherwise entitled to
payment under the terms of its arrangements with the insurance company that is
the Third Party Payor, and such agreement and arrangements are in full force and
effect and there is no default thereunder that could be a basis for such Third
Party Payor to cease or suspend any payments to such Borrower (including any
deductions, setoffs or defenses), (ii) the prescription drugs sold giving rise
to such Pharmacy Receivables are of the type that are covered under the
agreement or arrangements with the Third Party Payor and the party receiving
such goods is entitled to coverage under such agreement or arrangement, (iii)
the Borrower making the sale giving rise to such Pharmacy Receivables has
contacted the Third Party Payor or otherwise received confirmation from such
Third Party Payor that the party receiving the prescription drugs is entitled to
coverage under the terms of the agreement with such Third Party Payor and the
Borrower is entitled to reimbursement for such Pharmacy Receivables, (iv) the
amount of such Pharmacy Receivables does not exceed the amounts to which the
Borrower making such sale is entitled to reimbursement for the prescription
drugs sold under the terms of such agreements or arrangements, (v) there are no
contractual or statutory limitations or restrictions on the rights of the
Borrower making such sale to assign its rights to payment arising as a result
thereof or to grant any security interest therein, (vi) all authorization and
billing procedures and documentation required in order for the Borrower making
such sale to be reimbursed and paid on such Pharmacy Receivables by the Third
Party Payor have been properly completed and satisfied to the extent required
for such Borrower to be so reimbursed and paid and (vii) the terms of the sale
giving rise to such Pharmacy Receivables and all practices of such Borrower and
Guarantors with respect to such Pharmacy Receivables comply in all material
respects with applicable federal, state, and local laws and regulations.
15
The criteria for Eligible Pharmacy Receivables set forth above may only be
changed and any new criteria for Eligible Pharmacy Receivables may only be
established by the Collateral Monitoring Agent in good faith based on either:
(A) an event, condition or other circumstance arising after the date hereof, or
(B) an event, condition or other circumstance existing on the date hereof to the
extent the Collateral Monitoring Agent has no written notice thereof from a
Borrower prior to the date hereof, in either case under clause (A) or (B) which
adversely affects or could reasonably be expected to adversely affect the
Pharmacy Receivables in the good faith determination of the Collateral
Monitoring Agent. Any Pharmacy Receivables that are not Eligible Pharmacy
Receivables shall nevertheless be part of the Collateral.
"Eligible Pharmacy Scripts" means Pharmacy Scripts owned by any
Borrower, in each case which are acceptable to the Collateral Monitoring Agent
based on the criteria set forth below. In general, Pharmacy Scripts shall be
Eligible Pharmacy Scripts if arising and maintained in the ordinary course of
the business of such Borrower and included in an appraisal of Pharmacy Scripts
received by the Collateral Monitoring Agent in accordance with the terms hereof,
in each case which are acceptable to the Collateral Monitoring Agent in good
faith based on the criteria set forth below. In general, Eligible Pharmacy
Scripts shall not include (a) Pharmacy Scripts for which the Borrowers' pharmacy
store computer and phone systems, in the Agents' determination, (i) are
inadequate to facilitate the sale of prescriptions to a potential purchaser and
(ii) do not facilitate the transfer of pharmacy prescriptions files to a
potential purchaser, (b) Pharmacy Scripts subject to a security interest or lien
in favor of any Person other than the Administrative Agent except those
permitted in this Agreement that are subject to an intercreditor agreement in
form and substance satisfactory to the Agents between the holder of such
security interest or lien and the Administrative Agent; and (c) Pharmacy Scripts
that are not in a form that may be sold or otherwise transferred or are subject
to regulatory restrictions on the transfer thereof that are not acceptable to
the Collateral Monitoring Agent in good faith. The criteria for Eligible
Pharmacy Scripts set forth above may only be changed and any new criteria for
Eligible Pharmacy Scripts may only be established by the Collateral Monitoring
Agent in good faith based on either: (A) an event, condition or other
circumstance arising after the date hereof, or (B) an event, condition or other
circumstance existing on the date hereof to the extent the Collateral Monitoring
Agent has no written notice thereof from a Borrower prior to the date hereof, in
either case under clause (A) or (B) which adversely affects or could reasonably
be expected to adversely affect the value of the Pharmacy Scripts or ability of
the Agent to sell or otherwise dispose of them in the good faith determination
of the Collateral Monitoring Agent. Any Pharmacy Scripts that are not Eligible
Pharmacy Scripts shall nevertheless be part of the Collateral.
"Eligible Real Property" means the ▇▇▇▇▇▇▇ Facility only so long as (x)
▇▇▇▇-▇▇▇▇▇ and ▇▇▇▇▇ Realty Trust 1999-1 each continue to own the parcels of
such Real Property that they own on the Closing Date free and clear of any and
all Liens other than Designated Permitted Liens and (y) the Administrative Agent
continues to hold a perfected first priority lien over such Real Property.
"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to Sections of ERISA also refer to any successor Sections thereto.
"Event of Default" is defined in Section 8.1.
"Excess Availability" means, at any time, for all the Borrowers
collectively, the amount, as determined by the Collateral Monitoring Agent,
equal to: (a) the Borrowing Base (which shall be based on the Borrowing Base
Certificate most recently provided by the Borrowers pursuant to Section
16
7.3.1(a)(iv) and acceptable to the Agents) after giving effect to any Reserves
other than any Reserves in respect of Letter of Credit Outstandings minus (b)
the sum of: (i) the amount of all then outstanding and unpaid Obligations (but
not including for this purpose Obligations of any Borrower arising pursuant to
any guarantees in favor of an Agent and Lenders of the Obligations of the other
Borrowers or any Letter of Credit Outstandings), plus (ii) the amount of all
Reserves then established in respect of Letter of Credit Outstandings.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exemption Certificate" is defined in clause (e) of Section 4.6.
"Existing Borrower" is defined in the first recital.
"Existing Credit Agreement" is defined in the first recital.
"Existing Effective Date" is defined in the first recital.
"Existing Lenders" is defined in the first recital.
"Existing Letters of Credit" is defined in the first recital.
"Existing Loans" is defined in the first recital.
"Existing Revolving Loans" is defined in the first recital.
"Existing Swing Line Loans" is defined in the first recital.
"Extending Lender" is defined in Section 2.8.
"Farm Products" shall mean crops, livestock, supplies used or produced
in a farming operation and products of crops or livestock and including farm
products as such term is defined in the Food Security Act and the UCC.
"Farm Products Sellers" shall mean, collectively, sellers or suppliers
to any Borrower or Guarantor of any farm product (as such term is defined in the
Food Security Act and the UCC) and including any milk or dairy products,
perishable agricultural commodity (as defined in PACA) or livestock (as defined
in the PSA), meat, meat food products or livestock products derived therefrom or
any poultry or poultry products derived therefrom; sometimes being referred to
herein individually as a "Farm Products Seller".
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to
(a) 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
(b) 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 Wachovia Bank from three federal funds
brokers in the national federal funds market of recognized standing
selected by it.
17
"Filing Statements" is defined in Section 5.1.8.
"Fiscal Month" means each four week fiscal period of ▇▇▇▇-▇▇▇▇▇ and its
Subsidiaries, beginning with the first four weeks of each Fiscal Year.
"Fiscal Quarter" means each fiscal quarter of ▇▇▇▇-▇▇▇▇▇ and its
Subsidiaries as set forth on Schedule IV hereto (as such Schedule IV shall be
supplemented to include any fiscal quarters of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries
occurring after the 2007 Fiscal Year upon the request of the Administrative
Agent).
"Fiscal Year" means, for the period commencing on June 28, 2000 through
the 2007 Fiscal Year, each fiscal year of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries as set
forth on Schedule V hereto (as such Schedule V shall be supplemented to include
any fiscal years of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries occurring after the 2007
Fiscal Year upon the request of the Administrative Agent); reference to a Fiscal
Year with a number corresponding to any calendar year (e.g., the "2004 Fiscal
Year") refers to the Fiscal Year ending in June of such calendar year.
"Food Security Act" shall mean the Food Security Act of 1984, 7 U.S.C.
Section 1631 et. seq., as the same now exists or may hereafter from time to time
be amended, modified, recodified or supplemented, together with all rules and
regulations thereunder.
"Food Security Act Notices" shall have the meaning set forth in Section
6.36 hereof.
"Foreign Pledge Agreement" means any supplemental pledge agreement
governed by the laws of a jurisdiction other than the United States or a state
(or the District of Columbia) thereof executed and delivered by ▇▇▇▇-▇▇▇▇▇ or
any of its Material Subsidiaries pursuant to the terms of the Original Credit
Agreement, the Existing Credit Agreement or this Agreement, in form and
substance satisfactory to the Administrative Agent, as may be necessary or
desirable under the laws of organization or incorporation of a Material
Subsidiary to further protect or perfect the Lien on and security interest in
any Collateral (as defined in a Pledge Agreement).
"Foreign Subsidiary" means any Subsidiary that is not a U.S.
Subsidiary.
"Fronting Fee" means, with respect to any Letter of Credit, a fronting
fee in an amount equal to 0.25% per annum multiplied by the Average Stated
Amount of such Letter of Credit.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP" is defined in Section 1.4.
"Governmental Authority" means the government of the United States, any
other nation or any political subdivision of any thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other Person exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantor" means each Subsidiary that has executed and delivered to
the Administrative Agent a Subsidiary Guaranty and each other Obligor that has
executed and delivered a guaranty to the Administrative Agent with respect to
the Obligations, which shall in any event include all Material Subsidiaries.
18
"Guaranty, Security Document and Subordination Reaffirmation" is defined in
Section 5.1.9.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource Conservation and
Recovery Act; or
(c) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance (including any petroleum product) within
the meaning of any other applicable federal, state or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of
conduct concerning any hazardous, toxic or dangerous waste, substance or
material, all as amended.
"Health Care Laws" shall mean all Federal, State and local laws, rules,
regulations, interpretations, guidelines, ordinances and decrees primarily
relating to patient healthcare, any health care provider, medical assistance and
cost reimbursement program, as now or at any time hereafter in effect,
applicable any Borrower or Guarantor, including, but not limited to, the Social
Security Act, the Social Security Amendments of 1972, the Medicare-Medicaid
Anti-Fraud and Abuse Amendments of 1977, the Medicare and Medicaid Patient and
Program Protection Act of 1987 and HIPAA.
"Hedging Obligations" means, with respect to any Person, all liabilities of
such Person under currency exchange agreements, interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements, and all other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates or currency exchange rates.
"herein", "hereof", "hereto", "hereunder" and similar terms contained in
any Loan Document refer to such Loan Document as a whole and not to any
particular Section, paragraph or provision of such Loan Document.
"HIPAA" shall mean the Health Insurance Portability and Accountability Act
of 1996, as the same now exists or may hereafter from time to time be amended,
modified, recodified or supplemented, together with all rules and regulations
thereunder.
"Impermissible Qualification" means any qualification or exception to the
opinion or certification of any independent public accountant as to any
financial statement of the Borrower
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of matters
relevant to such financial statement; or
(c) which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause
the Borrower to be in Default.
"In Store Cash" means cash on hand held in retail stores, including,
without limitation, in registers, vaults and automatic teller machines.
19
"including" and "include" means including without limiting the generality
of any description preceding such term, and, for purposes of each Loan Document,
the parties hereto agree that the rule of ejusdem generis shall not be
applicable to limit a general statement, which is followed by or referable to an
enumeration of specific matters, to matters similar to the matters specifically
mentioned.
"Indebtedness" of any Person means:
(a) all obligations of such Person for borrowed money or advances and
all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments;
(b) all obligations, contingent or otherwise, relative to the face
amount of all letters of credit, whether or not drawn, and banker's
acceptances issued for the account of such Person;
(c) all Capitalized Lease Liabilities of such Person;
(d) for purposes of Section 8.1.5 only, all other items which, in
accordance with GAAP, would be included as liabilities on the balance sheet
of such Person as of the date at which Indebtedness is to be determined;
(e) net Hedging Obligations of such Person;
(f) whether or not so included as liabilities in accordance with GAAP,
all obligations of such Person to pay the deferred purchase price of
property or services (excluding trade accounts payable in the ordinary
course of business which are not overdue for a period of more than 60 days
or, if overdue for more than 60 days, as to which a dispute exists and
appropriate reserves in conformity with GAAP have been established on the
books of such Person), and indebtedness secured by (or for which the holder
of such indebtedness has an existing right, contingent or otherwise, to be
secured by) a Lien on property owned or being acquired by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse;
(g) obligations arising under Synthetic Leases;
(h) all obligations evidenced by preferred stock (or other Capital
Securities convertible into preferred stock) which pursuant to its terms
could (at the request of the holders thereof or otherwise) be subject to
mandatory sinking fund payments, redemption or other acceleration rights;
and
(i) all Contingent Liabilities of such Person in respect of any of the
foregoing.
The Indebtedness of any Person shall include the Indebtedness of any other
Person (including any partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such Person, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Liabilities" is defined in Section 10.4.
"Indemnified Parties" is defined in Section 10.4.
20
"Insurance Captive" means WIN General Insurance Company, a South Carolina
insurance captive.
"Interco Subordination Agreement" means the Subordination Agreement,
executed and delivered by various Obligors dated as of March 29, 2001, pursuant
to the Original Credit Agreement, a copy of which is attached hereto as Exhibit
K, as reaffirmed by the Guaranty, the Security Document and Subordination
Reaffirmation and as amended, supplemented, amended and restated or otherwise
modified from time to time.
"Interest Expense" means, for any applicable period, without duplication,
the aggregate interest expense accrued or paid (without prior accrual), net of
interest income received, during such period by the Borrowers and their
Subsidiaries for such applicable period, including the portion of any payments
made in respect of Capitalized Lease Liabilities allocable to interest expense.
"Interest Period" means, relative to any LIBO Rate Loan, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Section 2.3 or 2.4
and ending on (but excluding) the day which numerically corresponds to such date
one, two, three or six months thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month), as the Borrowers may
select in their relevant notices pursuant to Section 2.3 or 2.4; provided,
however, that
(a) the Borrowers shall not be permitted to select Interest Periods to
be in effect at any one time which have expiration dates occurring on more
than six different dates;
(b) if such Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall end on the next following
Business Day (unless such next following Business Day is the first Business
Day of a calendar month, in which case such Interest Period shall end on
the Business Day next preceding such numerically corresponding day); and
(c) no Interest Period for any Loan may end later than the Stated
Maturity Date for such Loan.
"Inventory" means, as to each Borrower and Guarantor, all of such
Borrower's and Guarantor's now owned and hereafter existing or acquired goods,
wherever located, which (a) are leased by such Borrower or Guarantor as lessor;
(b) are held by such Borrower for sale or lease or to be furnished under a
contract of service; (c) are furnished by such Borrower or Guarantor under a
contract of service; or (d) consist of raw materials, work in process, finished
goods or materials used or consumed in its business.
"Investment" means, relative to any Person,
(a) any loan, advance or extension of credit made by, or payment under
any Contingent Liability entered into by, such Person to or for the benefit
of any other Person, including the purchase by such Person of any bonds,
notes, debentures or other debt securities of any other Person; and
(b) any Capital Securities held by such Person in any other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon and shall, if made by
the transfer or exchange of property other than cash, be
21
deemed to have been made in an original principal or capital amount equal to the
fair market value of such property at the time of such Investment.
"ISP Rules" is defined in Section 10.9.
"Issuance Request" means, in the case of Subfacility Letters of Credit, a
Subfacility Letter of Credit Issuance Request and, in the case of Standby
Letters of Credit, a Standby Letter of Credit Issuance Request.
"Issuer" means Wachovia Bank in its capacity as Issuer of the Subfacility
Letters of Credit and the Standby Letters of Credit. At the request of Wachovia
Bank and with the Borrower's consent (not to be unreasonably withheld), another
Lender or an Affiliate of Wachovia Bank may issue one or more Subfacility
Letters of Credit or Standby Letters of Credit hereunder and thereby also become
an "Issuer" hereunder.
"Lender Assignment Agreement" means an assignment agreement substantially
in the form of Exhibit L hereto.
"Lenders" is defined in the preamble, and includes any Person that becomes
a Lender pursuant to Section 10.11.1.
"Lender's Environmental Liability" means any and all losses, liabilities,
obligations, penalties, claims, litigation, demands, defenses, costs, judgments,
suits, proceedings, damages (including consequential damages), disbursements or
expenses of any kind or nature whatsoever (including reasonable attorneys' fees
at trial and appellate levels and experts' fees and disbursements and expenses
incurred in investigating, defending against or prosecuting any litigation,
claim or proceeding) which may at any time be imposed upon, incurred by or
asserted or awarded against the Administrative Agent, any Lender or the Issuer
or any of such Person's Affiliates, shareholders, directors, officers,
employees, and agents in connection with or arising from:
(a) any Hazardous Material on, in, under or affecting all or any
portion of any property of the Borrowers or any of their Subsidiaries, the
groundwater thereunder, or any surrounding areas thereof to the extent
caused by Releases from the Borrowers' or any of their Subsidiaries' or any
of their respective predecessors' properties;
(b) any misrepresentation, inaccuracy or breach of any warranty,
contained or referred to in Section 6.12;
(c) any violation or claim of violation by the Borrowers or any of
their Subsidiaries of any Environmental Laws; or
(d) the imposition of any lien for damages caused by or the recovery
of any costs for the cleanup, release or threatened release of Hazardous
Material by the Borrowers or any of their Subsidiaries, or in connection
with any property owned or formerly owned or leased or operated by the
Borrower or any of its Subsidiaries.
"Letter of Credit" means a Standby Letter of Credit or a Subfacility Letter
of Credit, as the case may be.
"Letter of Credit Outstandings" means Standby Letter of Credit Outstandings
and/or Subfacility Letter of Credit Outstandings, as the case may be.
22
"LIBO Rate" means, with respect to each day during each Interest Period
pertaining to a LIBO Rate Loan, the rate per annum determined by the
Administrative Agent (rounded upward to the nearest 1/16th of 1%) of the offered
rates for deposits in Dollars with a term comparable to such Interest Period
that appears on the Telerate British Bankers Assoc. Interest Settlement Rates
Page (as defined below) at approximately 11:00 A.M., London time, on the second
full Business Day preceding the first day of such Interest Period; provided,
however, that if there shall at any time no longer exist a Telerate British
Bankers Assoc. Interest Settlement Rates Page or such rate is for any reason not
available thereon, "LIBO Rate" shall mean, with respect to each day during each
Interest Period pertaining to a LIBO Rate Loan, either (a) the rate per annum
determined by the Administrative Agent (rounded upward to the nearest 1/16th of
1%) appearing on Reuters Screen LIBO Page (or, if more than one rate appears on
such screen, the arithmetic mean for all such rates rounded upward to the
nearest 1/16th of 1%) as the London interbank offered rate for deposits in
Dollars at approximately 11:00 A.M., London time, on the second full Business
Day preceding the first day of such Interest Period or (b) if such rate is for
any reason not available, the rate per annum equal to the rate at which the
Administrative Agent or its designee is offered Dollar deposits at or about
11:00 A.M., London time, two Business Days prior to the beginning of such
Interest Period in the interbank eurodollar market where the eurodollar and
foreign currency and exchange operations in respect of its LIBO Rate Loans are
then being conducted for settlement in immediately available funds, for delivery
on the first day of such Interest Period for the number of days comprised
therein and in an amount comparable to the amount of its LIBO Rate Loan to be
outstanding during such Interest Period. "Telerate British Bankers Assoc.
Interest Settlement Rates Page" shall mean the display designated as Page 3750
or 3740 on the Telerate System Incorporated Service (or such other page as may
replace such page on such service for the purpose of displaying the rates which
Dollar deposits are offered by leading banks in the London interbank deposit
market).
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a rate of interest determined by
reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) determined pursuant to the following formula:
LIBO Rate = LIBO Rate
--------------------------
(Reserve Adjusted) 1.00 - Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans
will be determined by the Administrative Agent on the basis of the LIBOR Reserve
Percentage in effect two Business Days before the first day of such Interest
Period.
"LIBOR Office" means the office of a Lender designated as its "LIBOR
Office" on Schedule II hereto or in a Lender Assignment Agreement, or such other
office designated from time to time by notice from such Lender to the Borrowers
and the Administrative Agent, whether or not outside the United States, which
shall be making or maintaining the LIBO Rate Loans of such Lender.
"LIBOR Reserve Percentage" means, relative to any Interest Period for
LIBO Rate Loans, the reserve percentage (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of or including
"Eurocurrency Liabilities", as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.
23
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property, or other priority or preferential
arrangement of any kind or nature whatsoever, to secure payment of a debt or
performance of an obligation.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Standby Letters of Credit, the Subfacility Letters of Credit, each Rate
Protection Agreement, the Proposal Letter, the Subsidiary Guaranty, the
Guaranty, Security Document and Subordination Reaffirmation, each Collateral
Access Agreement, each agreement pursuant to which the Administrative Agent is
granted a Lien to secure the Obligations (including the Pledge Agreements, the
Security Agreements, each Mortgage and each Mortgage Amendment), and each other
agreement, certificate, document or instrument delivered in connection with any
Loan Document, whether or not specifically mentioned herein or therein, in each
case as amended, supplemented, amended and restated or otherwise modified from
time to time.
"Loans" means, as the context may require, a Revolving Loan and/or a
Swing Line Loan of any type.
"Majority Accounts" means those Bank Accounts listed in Item 6.25(b) of
the Disclosure Schedule.
"Majority Account Bank" means each bank or financial institution which
is a holder of a Majority Account or that enters into a Blocked Account
Agreement in favor of the Administrative Agent.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, revenues, financial condition, operations or prospects of
▇▇▇▇-▇▇▇▇▇ and its Subsidiaries taken as a whole, (b) the rights and remedies of
any Secured Party under this Agreement or any Security Document or (c) the
ability of any Obligor to perform its Obligations under any Loan Document.
"Material Contracts" means all contracts to which ▇▇▇▇-▇▇▇▇▇ or any of
its Subsidiaries is a party and which have been disclosed in ▇▇▇▇-Dixie's public
filings as material contracts.
"Material Subsidiary" means ▇▇▇▇▇ Realty Trust 1999-1 and each U.S.
Subsidiary (other than the Insurance Captive) now existing or hereafter acquired
or formed, and each successor thereto, which (a) accounts for more than five
(5%) percent of (i) the consolidated gross revenues of ▇▇▇▇-▇▇▇▇▇ and its
Subsidiaries, (ii) Net Income, or (iii) the consolidated assets of ▇▇▇▇-▇▇▇▇▇
and its Subsidiaries, or (b) together with all other U.S. Subsidiaries not
otherwise deemed a "Material Subsidiary" hereunder, accounts for more than ten
(10%) percent of such consolidated gross revenues, Net Income or consolidated
assets described in clause (a) hereof, in each case, as of the last day of the
most recently completed Fiscal Quarter with respect to which, pursuant to clause
(a) or (b) of Section 7.1.1, financial statements have been, or are required to
have been, delivered by ▇▇▇▇-▇▇▇▇▇, and in any event includes all of the
Subsidiaries listed in Item 6.8(b) of the Disclosure Schedule.
"Medicaid" shall mean the health care financial assistance program
jointly financed and administered by the Federal and State governments under
Title XIX of the Social Security Act.
"Medicare" shall mean the health care financial assistance program
under Title XVIII of the Social Security Act.
"Monthly Payment Date" means the last day of each calendar month, or,
if any such day is not a Business Day, the next succeeding Business Day.
24
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" means each mortgage, deed of trust or agreement for each of
the Properties executed and delivered by any Obligor in favor of the
Administrative Agent for the benefit of the Secured Parties pursuant to the
requirements of the Original Credit Agreement, or pursuant to the Existing
Credit Agreement or this Agreement, in substantially the form of Exhibit J-1,
Exhibit J-2 or Exhibit J-3 hereto, as applicable, or in form satisfactory to the
Administrative Agent, under which a Lien is granted on the Real Property and
fixtures described therein, in each case as amended, supplemented, amended and
restated or otherwise modified from time to time (including, without limitation,
as amended by the Mortgage Amendment).
"Mortgage Amendment" is defined in Section 5.1.15.
"Net Amount of Eligible Pharmacy Receivables" means, as to any Borrower,
the gross amount of the Eligible Pharmacy Receivables of such Borrower less
sales, excise or similar taxes, and less returns, discounts, claims, credits,
allowances, accrued rebates, offsets, deductions, counter claims, disputes and
other defenses of any name at any time issued, owing, granted, outstanding,
available or claimed and less any other fees or charges.
"Net Disposition Proceeds" means, with respect to a Permitted Disposition
(other than a Permitted Disposition under clause (c) of Section 7.2.11) of the
assets of any Borrower or any of their U.S. Subsidiaries (other than the
Insurance Captive), the excess of
(a) the gross cash proceeds received by any Borrower or any of
their Subsidiaries from any Permitted Disposition, less
(b) the sum of
(i) all reasonable and customary underwriting commissions
and legal, investment banking, brokerage and accounting and other
professional fees, sales commissions, payments required to be made
in connection with such Permitted Disposition under any lease or
other contractual obligation permitted under this Agreement and
other out-of-pocket expenses and disbursements (including but not
limited to closing costs) actually incurred in connection with
such Permitted Disposition which have not been paid to Affiliates
or Subsidiaries of the Borrowers; and
(ii) all Taxes actually paid, assessed or estimated by the
Borrowers (in good faith) to be payable in connection with such
Permitted Disposition;
provided, however, that if, after the payment of all Taxes with respect to such
Permitted Disposition, the amount of estimated or assessed Taxes, if any,
pursuant to clause (b)(ii) above exceeded the Taxes actually paid in cash in
respect of such Permitted Disposition, the aggregate amount of such excess shall
be immediately payable, pursuant to clause (b) of Section 3.1.1, as Net
Disposition Proceeds.
"Net Income" means, for any period, the aggregate of all amounts
(exclusive of all amounts in respect of any extraordinary gains but including
extraordinary losses) which would be included as net income on the consolidated
financial statements of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries for such period,
excluding to the extent included in such net income (a) income or losses from
operations that are discontinued, gains or losses in respect of assets that are
Disposed of and facilities that are closed, in each case in connection with the
Restructuring Plan and (b) without duplication with clause(a), for Fiscal Year
2005, Fiscal Year 2006 and Fiscal Year 2007, non-recurring restructuring and
other non-recurring charges
25
and a non-recurring inventory write-down relating to Dispositions and facility
closings in connection with the Restructuring Plan up to an aggregate amount
(for all three Fiscal Years) not to exceed $400 million.
"Net Recovery Percentage" means in respect of Inventory, the fraction,
expressed as a percentage, (a) the numerator of which is the amount equal to the
amount of the recovery in respect of the Inventory of the Borrowers at such time
on a "going out of business sale" basis as set forth in the most recent
acceptable appraisal of Inventory received by the Collateral Monitoring Agent in
accordance with Section 7.3.2 net of operating expenses, liquidation expenses
and commissions, and (b) the denominator of which is the applicable original
cost of the aggregate amount of the Eligible Inventory subject to such
appraisal.
"Net Sale and Leaseback Proceeds" means, with respect to any Permitted
Sale and Leaseback Transaction, the excess of
(a) the gross cash proceeds received by ▇▇▇▇-▇▇▇▇▇ or any of its
Subsidiaries from such Permitted Sale and Leaseback Transaction, less
(b) the sum of
(i) all reasonable and customary underwriting commissions
and legal, investment banking, brokerage and accounting and other
professional fees, sales commissions and other out-of-pocket
expenses and disbursements actually incurred in connection with
such Permitted Sale and Leaseback Transaction which have not been
paid to ▇▇▇▇-▇▇▇▇▇ or any of its Subsidiaries; and
(ii) all Taxes actually paid, assessed or estimated by
▇▇▇▇-▇▇▇▇▇ or any of its Subsidiaries (in good faith) to be
payable in connection with such Permitted Sale and Leaseback
Transaction;
provided, however, that if, after the payment of all Taxes with respect to such
Permitted Sale and Leaseback Transaction, the amount of estimated or assessed
Taxes, if any, pursuant to clause (b)(ii) above exceeded the Taxes actually paid
in cash in respect of such Permitted Sale and Leaseback Transaction, the
aggregate amount of such excess shall be immediately payable, pursuant to clause
(f) of Section 3.1.1, as Net Sale and Leaseback Proceeds.
"Non-Excluded Taxes" means any Taxes in respect of any Loan Document or
the accrual or payment of any amounts or income thereunder, or any Secured
Party's execution, delivery or performance of its obligations thereunder, other
than net income and franchise Taxes, imposed with respect to any Secured Party
(a) under the laws under which such Secured Party is organized or in which it
maintains its applicable lending office or (b) as a result of a connection
between such Secured Party and the relevant taxing jurisdiction other than
solely by reason of such Lender's having executed, delivered or performed its
obligations, or having earned or received interest, any other payment or any
income, under any Loans or any of the Loan Documents.
"Non-U.S. Lender" means any Lender that is not a "United States
person", as defined under Section 7701(a)(30) of the Code.
"Note" means, as the context may require, a Revolving Note or a Swing
Line Note.
"Obligations" means all obligations (monetary or otherwise, whether
absolute or contingent, matured or unmatured) of each Borrower and each other
Obligor arising under or in connection with a
26
Loan Document, including the principal of and premium, if any, and interest
(including interest accruing during, or which would have accrued but for, the
pendency of any proceeding of the type described in Section 8.1.9, whether or
not allowed in such proceeding) on the Loans and all Reimbursement Obligations.
"Obligor" means, as the context may require, each Borrower and each other
Person (other than a Secured Party) obligated under any Loan Document.
"Organic Document" means, relative to any Obligor, as applicable, its
certificate of incorporation, by-laws, certificate of partnership, partnership
agreement, certificate of formation, limited liability agreement, operating
agreement and all shareholder agreements, voting trusts and similar arrangements
applicable to any of such Obligor's partnership interests, limited liability
company interests or authorized shares of Capital Securities.
"Original Credit Agreement" means the Credit Agreement, dated as of March
29, 2001, by and among ▇▇▇▇-▇▇▇▇▇, various financial institutions and other
persons from time to time party thereto, Wachovia Bank as administrative agent,
certain other agents and arrangers and First Union Securities, Inc. as joint
arranger and sole bookrunner.
"Other Permitted Investments" means, at any time:
(a) any direct obligation of (or unconditionally guaranteed by)
the United States (or any agency thereof to the extent such obligations
are supported by the full faith and credit of the United States),
maturing not more than one year after such time;
(b) any repurchase agreement that is secured by a fully perfected
security interest in any obligation of the type described in clause (a),
(d), (e) or (f) of this definition, so long as the market value of the
collateral deposited to secure such repurchase agreement shall have a
market value at all times of not less than 101% of the face value of such
repurchase agreement;
(c) Tax exempt general obligations and revenue secured instruments
of United States state and local governments rated A2 or higher by
Moody's or A or higher by S&P;
(d) Bankers' acceptances eligible for purchase or discount with
the Federal Reserve System;
(e) Any certificate of deposit or time deposit which matures not
more than two years after such time and which is issued by any bank
organized under the laws of United States (or any state thereof) and
which has (x) a credit rating of A2 or higher from Moody's or A or higher
from S&P and (y) a combined capital and surplus greater than
$500,000,000;
(f) Commercial paper which is issued by finance, industrial,
utility, bank holding companies and state and local governments with
ratings Prime-1 or Prime-2 by Moody's and A-1+, A-1 or A-2 by S&P;
(g) Corporate bonds rated by Moody's and S&P with an average
rating of at least A and maturing not more than two years after such
time;
(h) Mutual funds investing only in the above assets; provided that
only up to $30,000,000 of such Investments shall constitute Other
Permitted Investments, unless such mutual fund solely owns government
securities for non-overnight investments;
27
(i) Master notes of a bank organized under the laws of the United
States (or any state thereof) or a United States government agency, in
each case, which has (x) a credit rating of A2 or higher from Moody's or
A or higher from S&P and (y) a combined capital and surplus greater than
$500,000,000, with limits authorized for each specific note, in all cases
maturing not more than two years after such time; and
(j) Asset backed securities maturing not more than two years after
such time, collateralized by credit card receivables or other loans which
are rated AAA or higher by both Moody's and S&P; provided that only up to
$20,000,000 of such securities issued by any single issuer shall be
considered Other Permitted Investments.
"Other Taxes" means any and all stamp, documentary, mortgage recordation
or similar Taxes, or any other excise or property Taxes or similar levies that
arise on account of any payment made or required to be made under any Loan
Document or from the execution, delivery, registration, recording or enforcement
of any Loan Document.
"Participant" is defined in Section 10.11.2.
"Patent Security Agreement" means any Patent Security Agreement executed
and delivered by any Obligor in substantially the form of Exhibit A to any
Security Agreement pursuant to the terms of the Existing Credit Agreement, this
Agreement or such Security Agreement, as amended, supplemented, amended and
restated or otherwise modified from time to time.
"Patriot Act" means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub.
L. 107-56, signed into law October 26, 2001.
"Payment Date" means a Quarterly Payment Date except that if Excess
Availability falls below $125,000,000 at any time, Payment Date shall mean a
Monthly Payment Date at all times thereafter.
"PACA" shall mean the Perishable Agricultural Commodities Act, 1930, as
amended, 7 U.S.C. Section 499a et. seq., as the same now exists or may hereafter
from time to time be amended, modified, recodified or supplemented, together
with all rules and regulations thereunder.
"PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer
plan as defined in Section 4001(a)(3) of ERISA), and to which ▇▇▇▇-▇▇▇▇▇ or any
corporation, trade or business that is, along with such Borrower, a member of a
Controlled Group, may have liability, including any liability by reason of
having been a substantial employer within the meaning of Section 4063 of ERISA
at any time during the preceding five years, or by reason of being deemed to be
a contributing sponsor under Section 4069 of ERISA.
"Percentage" means the applicable percentage set forth opposite each
Lender's name on Schedule II hereto under the Total Commitment column or set
forth in a Lender Assignment Agreement under the Total Commitment column, as
such percentage may be adjusted from time to time pursuant to Lender Assignment
Agreements executed by such Lender and its Assignee Lender and delivered
pursuant to Section 10.11.1. A Lender shall not have any Total Commitment if its
percentage under the Total Commitment column is zero.
28
"Perfection Certificate" means the Perfection Certificate to be executed
and delivered by an Authorized Officer of each Obligor that is a party to a
Security Agreement pursuant to the terms of this Agreement, substantially in the
form of Exhibit N hereto, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Perishable Inventory" means Inventory included in the following
categories as reported by the Borrowers consistent with past practice: bakeries,
produce, floral, dairy, fresh seafood, meat and deli.
"Permitted Acquisition" means an acquisition (whether pursuant to an
acquisition of Capital Securities, assets or otherwise) by any Borrower or any
Subsidiary from any Person of a business or of all or substantially all of the
assets or of all of the Capital Securities of any Person (or any division
thereof) in which the following conditions are satisfied:
(a) immediately before and after giving effect to such
acquisition, no Default shall have occurred and be continuing or would
result therefrom (including under Sections 7.2.1 and 7.2.4);
(b) ▇▇▇▇-▇▇▇▇▇ shall have delivered to the Agents, in form and
substance satisfactory to the Agents, (i) a Compliance Certificate for
the period of four full Fiscal Quarters immediately preceding such
acquisition giving pro forma effect to the consummation of such
acquisition and any Borrowings necessary in connection therewith and
evidencing compliance with the covenants set forth in Section 7.2.4 and
Section 7.2.19; (ii) the most recent annual and interim financial
statements for the Person being acquired and related statements of income
and cash flows showing positive cash flows for the preceding fiscal year
of such Person, (iii) detailed forecasts of cash flows for the Person
being acquired forecasting positive future cash flows and (iv) new
detailed projections for ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries through the
Stated Maturity Date giving pro forma effect to such acquisition, based
on assumptions satisfactory to the Agents and demonstrating pro forma
compliance with all financial covenants contained in this Agreement,
including those contained in Section 7.2.4, in each case, prepared in
good faith and in a manner and using such methodology which is consistent
with the most recent financial statements delivered pursuant to Section
7.1.1 and in form reasonably satisfactory to the Agents, provided that
▇▇▇▇-▇▇▇▇▇ shall not be required to comply with this clause (b) in
respect of any acquisition of a single retail store or any acquisition of
a series of up to twenty (20) related retail stores (whether through the
acquisition of Capital Securities or assets) to the extent that such
acquisitions of retail stores (the "Retail Store Acquisitions") do not
exceed $25,000,000 (excluding inventory) in the aggregate during any
Fiscal Year;
(c) concurrently with the consummation of such acquisition, the
Borrowers will have complied with the requirements of Section 7.1.8,
including that the documentation for such acquisition shall permit the
Administrative Agent to obtain a Lien thereon to the extent provided in
Section 7.1.8; and
(d) such acquisition shall be in the same line of business as that
engaged in by ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries as of the Closing Date.
"Permitted Disposition" means a sale, disposition or other conveyance of
assets (including Capital Securities of a Subsidiary) by any Borrower or any of
its Subsidiaries pursuant to clause (b) or (c) of Section 7.2.11.
"Permitted Lien" means a Lien permitted pursuant to Section 7.2.3.
29
"Permitted Sale and Leaseback Transaction" means a transaction by any
Borrower or any of its Subsidiaries permitted pursuant to the proviso to Section
7.2.15.
"Person" means any natural person, corporation, limited liability
company, partnership, joint venture, association, trust or unincorporated
organization, Governmental Authority or any other legal entity, whether acting
in an individual, fiduciary or other capacity.
"Pharmacy Receivables" means as to each Borrower and each Guarantor, all
present and future rights of such Borrower and Guarantor to payment from a Third
Party Payor arising from the sale of prescription drugs by such Borrower or
Guarantor (it being understood that the portion of the purchase price for such
prescription drugs payable by the purchaser of such prescription drugs or any
Person other than a Third Party Payor shall not be deemed to be a Pharmacy
Receivable).
"Pharmacy Scripts" means as to each Borrower and Guarantor, all of such
Borrower's and Guarantor's now owned or hereafter existing or acquired retail
customer files (including prescriptions for retail customers and other medical
information related thereto) maintained by the retail pharmacies of Borrowers
and Guarantors, wherever located.
"Pharmacy Scripts Availability" means an amount equal to a percentage of
the "net orderly liquidation value" of the Eligible Pharmacy Scripts based on
the appraisal thereof received by the Collateral Monitoring Agent prior to the
Closing Date (using such methodology or methodologies as may be acceptable to
the Collateral Monitoring Agent), net of estimated liquidation expenses, costs
and commissions, such percentage to equal thirty-five percent (35%) from the
Closing Date until the end of the third Fiscal Month of Fiscal Year 2005, which
percentage shall be reduced by 1% at the end of each Fiscal Month occurring
thereafter until such percentage has been reduced to twenty-five percent (25%);
provided, however, that the Pharmacy Scripts Availability may be reduced, at the
Agents' option in good faith, to reflect (a) any sales of Eligible Pharmacy
Scripts, (b) reductions in the number of prescriptions, the average volume of
prescriptions being filled or the average dollar amount of prescription values,
(c) any change in the mix of the types of payors with respect to prescriptions,
(d) any statutory or regulatory changes after the date hereof that adversely
affect the transferability of the Pharmacy Scripts or (e) any other changes to
the factors identified in any appraisal that adversely affect the amount that
may be recovered by the Agents from the sale or other disposition of the
Pharmacy Scripts; provided further that the amount of any such reduction shall
have a reasonable relationship to the event, condition or other matter which is
the basis for such reduction as determined by the Agents in good faith.
"Pharmacy Scripts Cap" means, at any time of determination, an amount
equal to the lesser of (a) an amount equal to $35,000,000 from the Closing Date
until the end of the third Fiscal Month of Fiscal Year 2005, which amount shall
be reduced by $1,000,000 at the end of each Fiscal Month occurring thereafter
until such amount has been reduced to $25,000,000 and (b) an amount equal to the
Total Commitment Amount as in effect at the time of such determination
multiplied by, during Fiscal Year 2005, 5.8% and, at all times thereafter, 4.2%.
"Pledge Agreement" means, as the context may require, the Borrower Pledge
Agreement, each Subsidiary Pledge Agreement and each other document pursuant to
which a pledge may be created by the owners of Capital Securities of ▇▇▇▇-▇▇▇▇▇
or any of ▇▇▇▇-Dixie's Subsidiaries to the Administrative Agent for the benefit
of the Lenders (including any Foreign Pledge Agreement), in each case as
reaffirmed by the Guaranty, Security Document and Subordination Reaffirmation
and as amended, supplemented, amended and restated or otherwise modified from
time to time.
"Pledged Subsidiary" means each Material Subsidiary in respect of which
the Administrative Agent has been granted a security interest in or a pledge of
(a) any of the Capital Securities of such
30
Subsidiary or (b) any intercompany notes of such Material Subsidiary owing to
▇▇▇▇-▇▇▇▇▇ or another Subsidiary.
"Process Agent" is defined in Section 10.15.
"Processor Letter" means any direction letter duly executed and delivered
by any Obligor to any Credit Card Issuer or Credit Card Processor of the
Obligors, pursuant to the requirements of the Existing Credit Agreement or this
Agreement, substantially in the form of Exhibit O hereto or as otherwise
approved by the Agents.
"Properties" means those properties listed in Item 5.1.15 of the
Disclosure Schedule.
"Proposal Letter" means the confidential letter, dated April 19, 2004 by
and among WCM, Wachovia Bank, Congress and ▇▇▇▇-▇▇▇▇▇.
"PSA" shall mean the Packers and Stockyard Act of 1921, 7 U.S.C. Section
181 et. seq., as the same now exists or may from time to time hereafter be
amended, modified, recodified or supplemented, together with all rules,
regulations and interpretations thereunder or related thereto.
"Quarterly Payment Date" means the last day of March, June, September and
December, or, if any such day is not a Business Day, the next succeeding
Business Day.
"Rate Protection Agreement" means, collectively, any interest rate swap,
cap, collar or similar agreement entered into by any Borrower or any of their
Subsidiaries under which the counterparty of such agreement is (or at the time
such agreement was entered into, was) a Lender or an Affiliate of a Lender.
"Real Property" means, with respect to any Person, such Person's present
and future right, title and interest (including, without limitation, any
leasehold estate) in
(a) any plots, pieces or parcels of land;
(b) any improvements, buildings, structures and fixtures now or
hereafter located or erected thereon or attached thereto of every nature
whatsoever (the rights and interest described in clauses (a) and (b)
being the "Premises");
(c) any other interests in property constituting appurtenances to
the Premises, or which hereafter shall in any way belong, relate or be
appurtenant thereto; and
(d) all other rights and privileges thereunto belonging or
appertaining and all extensions, additions, improvements, betterments,
renewals, substitutions and replacements to or of any of the rights and
interests described in clause (c) above.
"Real Property Availability" means an amount equal to fifty-five percent
(55%) of the fair market value of the Eligible Real Property, as set forth in
the most recent acceptable appraisal of such Real Property received by the
Collateral Monitoring Agent in accordance with Section 7.3.8 hereof; provided,
that, the Real Property Availability shall be reduced on the last day of each
Fiscal Month, commencing on the last day of the first full Fiscal Month after
the Closing Date, by an amount equal to the initial Real Property Availability
divided by ninety-one (91).
"Records" means, as to each Borrower and Guarantor, all of such
Borrower's and Guarantor's present and future books of account of every kind or
nature, purchase and sale agreements, invoices,
31
ledger cards, bills of lading and other shipping evidence, statements,
correspondence, memoranda, credit files and other data relating to the
Collateral or any account debtor, together with the tapes, disks, diskettes and
other data and software storage media and devices, file cabinets or containers
in or on which the foregoing are stored (including any rights of any Borrower or
Guarantor with respect to the foregoing maintained with or by any other Person).
"Refunded Swing Line Loans" is defined in clause (b) of Section 2.3.2.
"Register" is defined in clause (b) of Section 2.7.
"Reimbursement Obligation" is defined in Section 2.6.3.
"Related Fund" means, with respect to any Lender which is a fund that
invests in loans, any other fund that invests in loans and is controlled by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.
"Release" means a "release", as such term is defined in CERCLA.
"Replaced Lender" is defined in Section 4.11.
"Replacement Lender" is defined in Section 2.8.
"Reports" is defined in Section 9.11.
"Required Lenders" means, at any time,
(a) prior to the date of the making of the initial Credit
Extensions hereunder, Lenders having at least a majority of the
Commitments; and
(b) on and after the date of the making of the initial Credit
Extensions hereunder, Lenders holding at least a majority of the Total
Exposure Amount.
"Reserves" means, as of any date of determination, such amounts as the
Agents may from time to time establish and revise in good faith, without
duplication, reducing the amount of Revolving Loans, Subfacility Letter of
Credit Outstandings and Standby Letter of Credit Outstandings that would
otherwise be available to the Borrowers under the lending formula(s) provided
for herein: (a) to reflect events, conditions, contingencies or risks which, as
determined by the Collateral Monitoring Agent in good faith, adversely affect,
or would have a reasonable likelihood of adversely affecting, (i) the Eligible
Borrowing Base Assets or any other property which is security for the
Obligations or its value, (ii) the assets, business, financial condition or
prospects of any Borrower or Obligor or (iii) the security interests and other
rights of the Agents or any Lender in the Eligible Borrowing Base Assets or any
other property which is security for the Obligations (including the
enforceability, perfection and priority thereof), (b) to reflect the Collateral
Monitoring Agent's good faith belief (whether based on the receipt or discovery
of new information, any change, occurrence or development with respect to
previously furnished information, or otherwise) that any collateral report or
financial information furnished by or on behalf of any Borrower or Obligor to
any Agent is, has become or may have been incomplete, inaccurate or misleading
in any material respect, (c) to fully reflect Subfacility Letter of Credit
Outstandings to the extent provided in Section 2.1.2 hereof, (d) to fully
reflect Standby Letter of Credit Outstandings to the extent provided in Section
2.1.3 hereof, (e) to fully reflect (i) past due payables which are outstanding
more than sixty (60) days past the invoice date as of such time, (ii) past due
accruals which are outstanding more than sixty (60) days past the receipt of
Inventory related to such accrual as of such time,
32
in excess of $10,000,000, (iii) past due rent payments which are outstanding
more than thirty (30) days past due as of such time and (iv) without
duplication, the amount of checks issued but not sent by the Borrowers to pay
such payables, accruals and rent payments, in each case other than (A) payables,
accruals or rent payments which are being contested by a Borrower in good faith
and (B) past due payables and accruals in respect of which a Reserve has been
established pursuant to clause (1) below, (f) to fully reflect any dividends
declared in accordance with the proviso to Section 7.2.6(b), (g) to fully
reflect the net obligations of any Borrower or any of its Subsidiaries under
each Rate Protection Agreement, (h) to fully reflect write-ups or write-downs in
value with respect to currency exchange rates and/or payments and/or (i) in
respect of any state of facts which the Agents determine in good faith
constitutes a Default or an Event of Default. Without limiting the generality of
the foregoing, Reserves may, at the Agents' option in good faith, be
established, without duplication, to take into account: (1) liabilities of any
Borrower to any Person that is entitled to receive the benefit of a security
interest or trust pursuant to the PACA, the PSA, the Food Security Act, any law
relating to dairy products or any other similar law and (2) dilution with
respect to the Pharmacy Receivables (based on the ratio of the aggregate amount
of non-cash reductions in Pharmacy Receivables for any period to the aggregate
dollar amount of the prescription drug sales of Borrowers for such period) as
calculated by the Collateral Monitoring Agent for any period that is or is
reasonably anticipated to be greater than five (5%) percent. To the extent the
Agents (a) have reflected in the lending formulas used to establish the
Borrowing Base any circumstance, condition, event or contingency in a manner
satisfactory to the Agents or (b) may revise the lending formulas used to
determine the Borrowing Base or establish new criteria or revise existing
criteria for any of the Eligible Borrowing Base Assets so as to address any
circumstances, condition, event or contingency in a manner satisfactory to the
Agents, in each case the Agents shall not establish a Reserve for the same
purpose. The amount of any Reserve established by the Agents shall have a
reasonable relationship to the event, condition or other matter which is the
basis for such reserve as determined by the Agents in good faith.
"Resource Conservation and Recovery Act" means the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended.
"Restricted Payment" means the declaration or payment of any dividend
(other than dividends payable solely in Capital Securities of any Borrower or
any Subsidiary which do not contain mandatory redemption provisions) on, or the
making of any payment or distribution on account of, or setting apart assets for
a sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement, repurchase or other acquisition of any class of Capital Securities
of any Borrower or any Subsidiary or any warrants or options to purchase any
such Capital Securities, whether now or hereafter outstanding, or the making of
any other distribution in respect thereof, either directly or indirectly,
whether in cash or property, obligations of any Borrower or any Subsidiary or
otherwise.
"Restricted Subsidiary" shall have the meaning ascribed thereto in the
Senior Unsecured Notes Indenture.
"Restructuring Plan" means the restructuring plan publicly announced by
▇▇▇▇-▇▇▇▇▇ on April 30, 2004 as described more fully on Schedule VI attached
hereto and in the Confidential Memorandum.
"Retail Store Acquisitions" is defined in the definition of "Permitted
Acquisitions".
"Revolving Loan Commitment" means, relative to any Lender, such Lender's
obligation (if any) to make Revolving Loans pursuant to clause (a) of Section
2.1.1.
"Revolving Loan Commitment Amount" means, on any date, $400,000,000, as
such amount may be reduced from time to time pursuant to Section 2.2.
33
"Revolving Loans" is defined in clause (a) of Section 2.1.1.
"Revolving Note" means a second amended and restated promissory note of a
Borrower payable to any Lender, substantially in the form of Exhibit A-1 hereto
(as such amended restated promissory note may be further amended, amended and
restated, extended, endorsed or otherwise modified from time to time),
evidencing the aggregate Indebtedness of such Borrower to such Lender resulting
from outstanding Revolving Loans, and also means all other promissory notes
accepted from time to time in substitution therefor or renewal thereof.
"S&P" means Standard & Poor's Rating Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"SEC" means the Securities and Exchange Commission.
"Secured Parties" means, collectively, the Lenders, the Issuer, the
Administrative Agent, each counterparty to a Rate Protection Agreement that is
(or at the time such Rate Protection Agreement was entered into, was) a Lender
or an Affiliate thereof and (in each case), each of their respective successors,
transferees and assigns.
"Securities Control Agreement" means a securities control agreement duly
executed and delivered by (a) in respect of securities entitlements, any
securities intermediary, any Borrower or any of their subsidiaries and the
Administrative Agent, substantially in the form of Exhibit S-1 hereto or as
otherwise satisfactory to the Agents or (b) in respect of uncertificated
securities, any issuer, any Borrower or any of their subsidiaries and the
Administrative Agent, substantially in the form of Exhibit S-2 hereto, or as
otherwise satisfactory to the Agents.
"Security Agreement" means, as the context may require, the Borrower
Security Agreement, each Subsidiary Security Agreement and each other document,
including supplements with respect to intellectual property, pursuant to which a
Lien may be granted by any Borrower, any of their Subsidiaries or any Affiliates
thereof to the Administrative Agent for the benefit of the Lenders, in each case
as amended, supplemented, amended and restated or otherwise modified from time
to time.
"Security Document" means, as the context may require, each Security
Agreement, Pledge Agreement, Mortgage and Subsidiary Guaranty.
"Senior Unsecured Notes" means ▇▇▇▇-Dixie's 8 7/8% Senior Unsecured Notes
due 2008 issued for gross cash proceeds of $300,000,000 on March 29, 2001, as
amended, supplemented, amended and restated or otherwise modified from time to
time in accordance with Section 7.2.12.
"Senior Unsecured Notes Documents" means, collectively, the Senior
Unsecured Notes Indenture, the Senior Unsecured Notes and each of the other loan
agreements, indentures, note purchase agreements, promissory notes, guarantees,
and other instruments and agreements executed and delivered in connection with
or pursuant to the Senior Unsecured Notes Offering, as amended, supplemented,
amended, restated and otherwise modified from time to time in accordance with
Section 7.2.12.
"Senior Unsecured Notes Indenture" means the Indenture, dated as of March
29, 2001, between ▇▇▇▇-▇▇▇▇▇ and the Trustee, pursuant to which the Senior
Unsecured Notes were issued, as the same may be amended, supplemented, amended
and restated or otherwise modified from time to time in accordance with Section
7.2.12.
"Senior Unsecured Notes Offering" means the issuance of the Senior
Unsecured Notes.
34
"Social Security Act" shall mean the Social Security Act, 92 U.S.C.
(S)(S)1396, et seq, as the same now exists or may from time to time hereafter be
amended, modified, recodified or supplemented, together with all rules,
regulations and interpretations thereunder or related thereto.
"Special Agent Advances" is defined in Section 2.1.1.
"Standby Letter of Credit" is defined in Section 2.1.3.
"Standby Letter of Credit Commitment" means, with respect to the Issuer,
such Issuer's obligation to issue Standby Letters of Credit pursuant to Section
2.1.3 and, with respect to each Lender, the obligations of each such Lender to
participate in such Standby Letters of Credit pursuant to Section 2.6.1.
"Standby Letter of Credit Commitment Amount" means, on any date, a maximum
amount of $200,000,000, as such amount may be permanently reduced from time to
time pursuant to Section 2.2.
"Standby Letter of Credit Issuance Request" means a Standby letter of
Credit request and certificate to be duly executed by an Authorized Officer of a
Borrower pursuant to the terms of this Agreement, substantially in the form of
Exhibit B-2 hereto.
"Standby Letter of Credit Outstandings" means, on any date, an amount equal
to the sum of (a) the then aggregate amount which is undrawn and available under
all issued and outstanding Standby Letters of Credit, and (b) the then aggregate
amount of all unpaid and outstanding Reimbursement Obligations in respect of
Standby Letters of Credit.
"Stated Amount" means, on any date and with respect to a particular Letter
of Credit or Standby Letter of Credit, the total amount then available to be
drawn under such Letter of Credit or Standby Letter of Credit in Dollars.
"Stated Expiry Date" is defined in Section 2.6.
"Stated Maturity Date" means June 29, 2007 or, if extended pursuant to
Section 2.8, the date that is 364 days after the Stated Maturity date then in
effect.
"Sub Debt Documents" means, collectively, any loan agreements, indentures,
note purchase agreements, promissory notes, guarantees or other instruments and
agreements evidencing the terms of any Subordinated Debt, as amended,
supplemented, amended and restated or otherwise modified in accordance with
Section 7.2.12.
"Subfacility Letter of Credit" is defined in Section 2.1.2.
"Subfacility Letter of Credit Commitment" means, with respect to the
Issuer, such Issuer's obligation to issue Subfacility Letters of Credit pursuant
to Section 2.1.2 and, with respect to each Lender, the obligations of each such
Lender to participate in such Subfacility Letters of Credit pursuant to Section
2.6.1.
"Subfacility Letter of Credit Commitment Amount" means, on any date, a
maximum amount of $50,000,000, as such amount may be permanently reduced from
time to time pursuant to Section 2.2.
35
"Subfacility Letter of Credit Issuance Request" means a Subfacility Letter
of Credit request and certificate to be duly executed by an Authorized Officer
of a Borrower pursuant to the terms of this Agreement, substantially in the form
of Exhibit B-3 hereto.
"Subfacility Letter of Credit Outstandings" means, on any date, an amount
equal to the sum of (a) the then aggregate amount which is undrawn and available
under all issued and outstanding Subfacility Letters of Credit, and (b) the then
aggregate amount of all unpaid and outstanding Reimbursement Obligations in
respect of Subfacility Letters of Credit.
"Subordinated Debt" means any unsecured Indebtedness of ▇▇▇▇-▇▇▇▇▇ bearing
a market rate of interest and subordinated in right of payment to the
Obligations pursuant to documentation containing redemption and other prepayment
events, maturities, amortization schedules, covenants, events of default,
remedies, acceleration rights, subordination provisions and other material terms
satisfactory to the Agents.
"Subordination Provisions" is defined in Section 8.1.11.
"Subsidiary" means, with respect to any Person, any other Person of which
more than 50% of the outstanding Voting Securities of such other Person
(irrespective of whether at the time Capital Securities of any other class or
classes of such other Person shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more other Subsidiaries of
such Person, or by one or more other Subsidiaries of such Person. Unless the
context otherwise specifically requires, the term "Subsidiary" shall be a
reference to a Subsidiary of ▇▇▇▇-▇▇▇▇▇.
"Subsidiary Borrowers" is defined in the preamble.
"Subsidiary Guarantor" means each Subsidiary that has executed and
delivered to the Administrative Agent a Subsidiary Guaranty or a supplement
thereto.
"Subsidiary Guaranty" means the Subsidiary Guaranty executed and delivered
by an Authorized Officer of each Material Subsidiary that is a U.S. Subsidiary
in favor of the Administrative Agent for the benefit of the Secured Parties
dated as of March 29, 2001, pursuant to the Original Credit Agreement, a copy of
which is attached hereto as Exhibit H, as reaffirmed by the Guaranty, Security
Document and Subordination Reaffirmation and as amended, supplemented, amended
and restated or otherwise modified from time to time.
"Subsidiary Pledge Agreement" means the Pledge Agreement to be executed and
delivered by each U.S. Subsidiary, if any, that in turn has any Material
Subsidiaries that are U.S. Subsidiaries in favor of the Administration Agent for
the benefit of the Secured Parties, pursuant to the terms of this Agreement
substantially in the form of Exhibit F-2 hereto, together with any supplemental
Foreign Pledge Agreements delivered pursuant to the terms of this Agreement, in
each case as reaffirmed by the Guaranty, Security Document and Subordination
Reaffirmation and as amended, supplemented, amended and restated or otherwise
modified from time to time.
"Subsidiary Security Agreement" means, collectively, each Security
Agreement executed and delivered by an Authorized Officer of each Material
Subsidiary that is a U.S. Subsidiary in favor of the Administrative Agent for
the benefit of the Secured Parties dated as of March 29, 2001, pursuant to the
Original Credit Agreement, a copy of which is attached hereto as Exhibit I-2, in
each case, as reaffirmed by the Guaranty, Security Document and Subordination
Reaffirmation and as amended, supplemented, amended and restated or otherwise
modified from time to time.
36
"Substitute Lender" is defined in clause (f) of Section 10.11.1.
"Swing Line Lender" means, subject to the terms of this Agreement, Wachovia
Bank.
"Swing Line Loan" is defined in clause (b) of Section 2.1.1.
"Swing Line Loan Commitment" is defined in clause (b) of Section 2.1.1.
"Swing Line Loan Commitment Amount" means, on any date, $20,000,000, as
such amount may be reduced from time to time pursuant to Section 2.2.
"Swing Line Note" means a second amended and restated promissory note of a
Borrower payable to the Swing Line Lender, substantially in the form of Exhibit
A-2 hereto (as such amended and restated promissory note may be further amended,
amended and restated, extended, endorsed or otherwise modified from time to
time), evidencing the aggregate Indebtedness of such Borrower to the Swing Line
Lender resulting from outstanding Swing Line Loans, and also means all other
promissory notes accepted from time to time in substitution therefor or renewal
thereof.
"Syndication Agent" is defined in the preamble.
"Synthetic Lease" means, as applied to any Person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) (a) that is not a capital lease in accordance
with GAAP and (b) in respect of which the lessee retains or obtains ownership of
the property so leased for federal income tax purposes, other than any such
lease under which that Person is the lessor.
"Taxes" means all income, stamp or other taxes, duties, levies, imposts,
charges, assessments, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority,
and all interest, penalties or similar liabilities with respect thereto.
"Termination Date" means the date on which all Obligations have been paid
in full in cash, all Letters of Credit have been terminated or expired (or been
Cash Collateralized), all Rate Protection Agreements have been terminated and
all Commitments shall have terminated or expired.
"Test Date" is defined in clause (b) of Section 7.2.4.
"Third Party Payor" shall mean any private health insurance company that is
obligated to reimburse or otherwise make payments to pharmacies who sell
prescription drugs to eligible patients under any insurance contract with such
private health insurer.
"Total Commitment Amount" means the sum of the Revolving Loan Commitment
Amount and the Standby Letter of Credit Commitment Amount.
"Total Exposure Amount" means, on any date of determination (and without
duplication), the outstanding principal amount of all Loans, the amount of the
Total Letter of Credit Outstandings and the unfunded amount of the Commitments.
"Total Letter of Credit Outstandings" means the aggregate amount of all
Subfacility Letter of Credit Outstandings and all Standby Letter of Credit
Outstandings.
37
"Trademark Security Agreement" means any Trademark Security Agreement
executed and delivered by any Obligor substantially in the form of Exhibit B to
any Security Agreement pursuant to the terms of the Existing Credit Agreement,
this Agreement or such Security Agreement, as amended, supplemented, amended and
restated or otherwise modified from time to time.
"Trigger Date" means any date that Excess Availability is below (a)
$100,000,000 for the purposes of Section 7.2.4 and Section 7.2.19 and (b)
$150,000,000 for all other purposes.
"Trustee" means Wilmington Trust Company.
"type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of New York; provided that if, with respect to any Filing Statement or
by reason of any provisions of law, the perfection or the effect of perfection
or non-perfection of the security interests granted to the Administrative Agent
pursuant to the applicable Loan Document is governed by the Uniform Commercial
Code as in effect in a jurisdiction of the United States other than New York,
then "UCC" means the Uniform Commercial Code as in effect from time to time in
such other jurisdiction for purposes of the provisions of each Loan Document and
any Filing Statement relating to such perfection or effect of perfection or
non-perfection.
"United States" or "U.S." means the United States of America, its fifty
states and the District of Columbia.
"U.S. Subsidiary" means any Subsidiary that is incorporated or organized
under the laws of the United States, a state thereof, or the District of
Columbia, in each case which is not a Subsidiary of a Foreign Subsidiary.
"Value" means, as determined by the Collateral Monitoring Agent in good
faith with respect to Inventory, the cost of such Inventory computed on a
first-in/first-out basis in accordance with GAAP, provided that, for purposes of
the calculation of the Borrowing Base, the Value of the Inventory shall not
include: (a) the portion of the value of Inventory equal to the profit earned by
any Affiliate on the sale thereof to any Borrower, (b) the portion of the value
of Inventory in an amount equal to such Borrower's accrued liability for gift
certificates or (c) the portion of the value of Inventory in an amount equal to
such Borrower's shrink reserve, ▇▇▇▇ ▇▇▇▇▇ and dated inventory reserves as
reflected in the Borrower's reporting consistent with past practice and any
related accruals deemed reasonably necessary by the Agents.
"Voting Securities" means, with respect to any Person, Capital Securities
of any class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.
"Wachovia Bank" is defined in the preamble.
"WCM" is defined in the preamble.
"Welfare Plan" means a "welfare plan", as such term is defined in Section
3(1) of ERISA.
38
"wholly owned Subsidiary" means any Subsidiary all of the outstanding
Capital Securities of which (other than any director's qualifying shares or
investments by foreign nationals mandated by applicable laws) is owned directly
or indirectly by ▇▇▇▇-▇▇▇▇▇.
"▇▇▇▇-▇▇▇▇▇" is defined in the preamble.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the context
otherwise requires, terms for which meanings are provided in this Agreement
shall have such meanings when used in each other Loan Document, the Disclosure
Schedule and each notice or communication delivered from time to time in
connection with this Agreement or any other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified, references in a
Loan Document to any Article or Section are references to such Article or
Section of such Loan Document, and references in any Article, Section or
definition to any clause are references to such clause of such Article, Section
or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless otherwise
specified, all accounting terms used in each Loan Document shall be interpreted,
and all accounting determinations and computations thereunder (including under
Section 7.2.4 and the definitions used in such calculations) shall be made, in
accordance with those generally accepted accounting principles ("GAAP") applied
in the preparation of the financial statements of ▇▇▇▇-▇▇▇▇▇ and its
Subsidiaries as contained in ▇▇▇▇-Dixie's annual report on Form 10-K for the
Fiscal Year ended June 25, 2003. Unless otherwise expressly provided, all
financial covenants and defined financial terms shall be computed on a
consolidated basis for ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries, in each case without
duplication.
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT
SECTION 2.1. Commitments. On the terms and subject to the conditions of
this Agreement, the Lenders and the Issuer severally agree to make Credit
Extensions as set forth below.
SECTION 2.1.1. Revolving Loan Commitment and Swing Line Loan Commitment.
From time to time on any Business Day occurring from and after the Closing Date
but prior to the Commitment Termination Date,
(a) each Lender severally agrees that it will make loans (relative to
such Lender, its "Revolving Loans") to the Administrative Borrower for the
account of the applicable Borrower equal to such Lender's Percentage of the
aggregate amount of each Borrowing of Revolving Loans requested by any
Borrower (or the Administrative Borrower on behalf of a Borrower) to be
made on such day; provided that, in any event, (i) the aggregate principal
amount of Revolving Loans, Swing Line Loans and Subfacility Letter of
Credit Outstandings outstanding with respect to all the Borrowers at any
one time shall not exceed the Revolving Loan Commitment Amount and (ii) the
aggregate principal amount of Revolving Loans, Swing Line Loans and Total
Letter of Credit Outstandings outstanding with respect to all the Borrowers
at any one time shall not exceed the Borrowing Base at such time.
(b) the Swing Line Lender agrees that it will make loans (its "Swing
Line Loans") to the Administrative Borrower for the account of the
applicable Borrower equal to the principal amount of the Swing Line Loan
requested by any Borrower (or the Administrative Borrower on behalf of a
Borrower) to be made on such day; provided that, in any event, (i) the
aggregate
39
principal amount of Revolving Loans, Swing Line Loans and Total Letter of
Credit Outstandings outstanding with respect to all the Borrowers at any
one time shall not exceed the Borrowing Base at such time and (ii) the
aggregate principal amount of Swing Line Loans outstanding to all the
Borrowers at any one time shall not exceed the Swing Line Loan Commitment
Amount. The Commitment of the Swing Line Lender described in this clause is
herein referred to as its "Swing Line Loan Commitment".
(c) the Collateral Monitoring Agent may, in its discretion, from time
to time, upon not less than five (5) days prior notice to the
Administrative Borrower (or, if an Event of Default has occurred and is
continuing, no prior notice to the Administrative Borrower), reduce the
lending formula(s) with respect to Borrowing Base Assets to the extent that
the Collateral Monitoring Agent determines in good faith that the
liquidation value of the Borrowing Base Assets or any category thereof has
decreased, including any decrease attributable to a change in the nature,
quality, turnover or mix of the Borrowing Base Assets. The amount of any
decrease in the lending formulas shall have a reasonable relationship to
the event, condition or circumstance which is the basis for such decrease
as determined by the Collateral Monitoring Agent in good faith. In
determining whether to reduce the lending formula(s), the Collateral
Monitoring Agent may consider events, conditions, contingencies or risks
which are also considered in determining Eligible Inventory, Eligible
Pharmacy Scripts, Eligible Pharmacy Receivables or Eligible Real Property,
as the case may be, or in establishing Reserves, provided that, to the
extent the Agents have established Reserves to address any circumstances,
condition, event or contingency in a manner satisfactory to the Agents, the
Agents shall not reduce the lending formulas for the same purpose.
(d) in the event that (i) the aggregate principal amount of the
Revolving Loans, Swing Line Loans and Total Letter of Credit Outstandings
outstanding with respect to all the Borrowers exceeds the Borrowing Base,
(ii) the aggregate principal amount of Revolving Loans, Swing Line Loans
and Total Letter of Credit Outstandings based on Eligible Inventory
consisting of finished goods that is Perishable Inventory exceeds the
sublimit set forth in clause (a)(i)(B)(3) of the definition of Borrowing
Base, (iii) the aggregate principal amount of Revolving Loans, Swing Line
Loans and Total Letter of Credit Outstandings based on Eligible Pharmacy
Scripts exceeds the sublimit set forth in clause (a)(i)(C)(2) of the
definition of Borrowing Base, (iv) the aggregate principal amount of
Revolving Loans, Swing Line Loans and Total Letter of Credit Outstandings
based on Eligible Pharmacy Receivables exceeds the sublimit set forth in
clause (a)(i)(D)(2) of the definition of Borrowing Base, (v) the aggregate
principal amount of Revolving Loans, Swing Line Loans and Total Letter of
Credit Outstandings based on Eligible Real Property exceeds the sublimit
set forth in clause (a)(i)(E)(2) of the definition of Borrowing Base, (vi)
the aggregate principal amount of Revolving Loans, Swing Line Loans and
Subfacility Letter of Credit Outstandings exceeds the Revolving Loan
Commitment Amount, (vii) the aggregate amount of the Subfacility Letter of
Credit Outstandings exceeds the Subfacility Letter of Credit Commitment
Amount, (viii) the aggregate amount of the Swing Line Loans exceeds the
Swing Line Loan Commitment Amount, or (ix) the aggregate amount of Standby
Letter of Credit Outstandings exceeds the Standby Letter of Credit
Commitment Amount, in each case such event shall not limit, waive or
otherwise affect any rights of any Agent or the Lenders in such
circumstances or on any future occasions and the Borrowers shall
immediately repay to the Administrative Agent the entire amount of any such
excess(es) for which payment is demanded.
Notwithstanding anything to the contrary contained herein, the
Administrative Agent may, at its option, from time to time, at any time on or
after an Event of Default and for so long as the same is continuing or upon any
other failure of a condition precedent to the making of Loans or the issuance of
Letters of Credit hereunder, make such disbursements and advances ("Special
Agent
40
Advances") which the Agents, in their sole discretion, deem necessary or
desirable either (x) to preserve or protect the Collateral or any portion
thereof or (y) to enhance the likelihood or maximize the amount of repayment by
the Borrowers and Guarantors of the Loans and other Obligations, provided, that,
(i) the aggregate outstanding principal amount of the Special Agent Advances
which the Administrative Agent may make or provide, plus the then outstanding
principal amount of additional Loans or Letters of Credit which the
Administrative Agent or the Issuer may make or provide as set forth in Section
10.21 hereof, shall not exceed the aggregate outstanding amount equal to five
(5%) percent of the Borrowing Base, (ii) the aggregate outstanding principal
amount of the Special Agent Advances which the Administrative Agent may make or
provide plus the aggregate principal amount of Revolving Loans, Swing Line Loans
and Total Letter of Credit Outstandings outstanding with respect to all the
Borrowers at any one time shall not exceed the Total Commitment Amount and (iii)
the aggregate outstanding principal amount of the Special Agent Advances which
the Administrative Agent may make or provide plus the aggregate principal amount
of Revolving Loans, Swing Line Loans and Subfacility Letter of Credit
Outstandings outstanding with respect to all the Borrowers at any one time shall
not exceed the Revolving Loan Commitment Amount. Special Agent Advances shall be
repayable on demand and be secured by the Collateral, provided that, demand
shall be made by the Administrative Agent for the repayment of any outstanding
Special Agent Advance no later than 90 days after the date such Special Agent
Advance was made (unless the Required Lenders shall have consented to a later
date for demand). Special Agent Advances shall not constitute Loans but shall
otherwise constitute Obligations hereunder. Without limitation of its
obligations hereunder, each Lender agrees that it shall make available to the
Administrative Agent, upon the Administrative Agent's demand, in immediately
available funds, the amount equal to such Lender's Percentage of each such
Special Agent Advance.
On the terms and subject to the conditions hereof, each Borrower
may from time to time borrow, prepay and reborrow Revolving Loans and Swing Line
Loans. No Lender shall be required to make any Revolving Loan if, after giving
effect thereto, the aggregate outstanding principal amount of all Revolving
Loans of such Lender, together with such Lender's Percentage of the aggregate
amount of all Swing Line Loans and Subfacility Letter of Credit Outstandings,
would exceed such Lender's Percentage of the then existing Revolving Loan
Commitment Amount. Furthermore, the Swing Line Lender shall not be required to
make Swing Line Loans if, after giving effect thereto, (i) the aggregate
outstanding principal amount of all Swing Line Loans would exceed the then
existing Swing Line Loan Commitment Amount or (ii) unless otherwise agreed to by
the Swing Line Lender, in its sole discretion, the sum of all Swing Line Loans
and Revolving Loans made by the Swing Line Lender plus the Swing Line Lender's
Percentage of the aggregate amount of Subfacility Letter of Credit Outstandings
would exceed the Swing Line Lender's Percentage of the then existing Revolving
Loan Commitment Amount.
SECTION 2.1.2. Subfacility Letter of Credit Commitment; Existing Letters
of Credit.
(a) From time to time on any Business Day occurring from and after the
Closing Date but prior to the Commitment Termination Date, the Issuer agrees
that it will
(i) issue one or more import letters of credit or standby letters
of credit (relative to such Issuer, its "Subfacility Letter of Credit")
for the account of any Borrower or any Subsidiary Guarantor in the Stated
Amount requested by such Borrower or Subsidiary Guarantor (or the
Administrative Borrower on behalf of such Borrower or Subsidiary
Guarantor) on such day; provided that (A) the aggregate principal amount
of Revolving Loans, Swing Line Loans and Total Letter of Credit
Outstandings outstanding at any one time shall not exceed the Borrowing
Base at such time, (B) the aggregate principal amount of Revolving Loans,
Swing Line Loans and Subfacility Letter of Credit Outstandings
outstanding at any one time shall not exceed the Revolving Loan
Commitment Amount, and (C) the aggregate principal amount of Subfacility
41
Letter of Credit Outstandings to all the Borrowers and Subsidiary
Guarantors at any one time shall not exceed the Subfacility Letter of
Credit Commitment Amount; or
(ii) extend the Stated Expiry Date of an existing Subfacility
Letter of Credit previously issued hereunder.
No Stated Expiry Date shall extend beyond the earlier of (w) the Commitment
Termination Date and (x) one year from the date of such initial issuance or, if
applicable, most recent extension, in each case unless otherwise agreed to by
the Issuer in its sole discretion; provided that in the case of a Stated Expiry
Date that extends beyond the Commitment Termination Date, such Subfacility
Letter of Credit is fully cash collateralized in a manner satisfactory to the
Issuer on the date of its issuance (or extension, if prior to such extension the
Stated Expiry Date was prior to the Commitment Termination Date). The Issuer
shall not be required to issue or extend the Stated Expiry Date of any
Subfacility Letter of Credit if, after giving effect thereto, (x) the sum of the
aggregate amount of all Revolving Loans, Swing Line Loans and Total Letter of
Credit Outstandings would exceed the Borrowing Base, (y) the aggregate amount of
all Subfacility Letter of Credit Outstandings would exceed the Subfacility
Letter of Credit Commitment Amount or (z) the sum of the aggregate amount of all
Subfacility Letter of Credit Outstandings plus the aggregate principal amount of
all Revolving Loans and Swing Line Loans then outstanding would exceed the
Revolving Loan Commitment Amount. For the avoidance of doubt, no Stated Expiry
Date shall in any event extend beyond the date which is one year after the
Commitment Termination Date, even if the applicable Letter of Credit is fully
Cash Collateralized.
(b) The Issuer shall not be required to issue any Subfacility Letter of
Credit for the account of a Borrower or a Subsidiary Guarantor or extend the
Stated Expiry Date of an existing Subfacility Letter of Credit for the account
of a Borrower or a Subsidiary Guarantor unless the Excess Availability, prior to
giving effect to any Reserves with respect to such Subfacility Letter of Credit,
on the date of the proposed issuance of any Subfacility Letter of Credit, shall
be equal to or greater than: (i) if the proposed Subfacility Letter of Credit is
for the purpose of purchasing Eligible Inventory and the documents of title with
respect thereto are consigned to the Issuer, the sum of (A) the percentage equal
to one hundred (100%) percent minus the then applicable percentage with respect
to Eligible Inventory set forth in the definition of the term Borrowing Base
multiplied by the Value of such Eligible Inventory, plus (B) freight, taxes,
duty and other amounts which the Collateral Monitoring Agent estimates must be
paid in connection with such Inventory upon arrival and for delivery to one of
such Borrower's or Subsidiary Guarantor's locations for Eligible Inventory
within the United States of America and (ii) if the proposed Subfacility Letter
of Credit is for any other purpose or the documents of title are not consigned
to the Issuer in connection with a Subfacility Letter of Credit for the purpose
of purchasing Inventory, an amount equal to one hundred (100%) percent of the
face amount thereof and all other commitments and obligations made or incurred
by the Administrative Agent with respect thereto. Effective on the issuance of
each Subfacility Letter of Credit, a Reserve shall be established in the
applicable amount set forth in Section 2.1.2(b)(i) or Section 2.1.2(b)(ii),
except to the extent such Subfacility Letter of Credit is fully cash
collateralized pursuant to Section 2.1.2(a).
(c) In connection with Inventory purchased with Subfacility Letters of
Credit, the Borrowers and the Guarantors shall, at the Collateral Monitoring
Agent's request, instruct all suppliers, carriers, forwarders, customs brokers,
warehouses or others receiving or holding cash, checks, Inventory, documents or
instruments in which an Agent holds a security interest to deliver them to the
applicable Agent and/or subject to an Agent's order, and if they shall come into
such Borrower's or Guarantor's possession, to deliver them, upon the Collateral
Monitoring Agent's request, to the Administrative Agent in their original form.
The Borrowers and the Guarantors shall also, at the Collateral Monitoring
Agent's request, designate the Administrative Agent as the consignee on all
bills of lading and other negotiable and non-negotiable documents.
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(d) All Existing Letters of Credit listed in Part I of Item 7.2.2(a) of
the Disclosure Schedule shall be deemed to have been issued as Subfacility
Letters of Credit under this Agreement and shall be governed by, and
participated in by the Lenders pursuant to, the terms of this Agreement.
SECTION 2.1.3. Standby Letter of Credit Commitment.
(a) From time to time on any Business Day occurring from and after the
Closing Date but prior to the Commitment Termination Date, the Issuer agrees
that it will
(i) issue one or more standby letters of credit (relative to such
Issuer, its "Standby Letter of Credit") for the account of any Borrower
or any Subsidiary Guarantor that is a Restricted Subsidiary in the Stated
Amount requested by such Borrower or Subsidiary Guarantor (or the
Administrative Borrower on behalf of such Borrower or Subsidiary
Guarantor) on such day; provided that (A) Standby Letters of Credit shall
be issued only to support workers compensation obligations and bankers
acceptances and performance bonds, surety bonds, appeal bonds and
performance guarantees of a Borrower or any Restricted Subsidiary, in
each case, in the ordinary course of business of such Borrower or such
Restricted Subsidiary consistent with past practice, (B) the aggregate
principal amount of Revolving Loans, Swing Line Loans and Total Letter of
Credit Outstandings outstanding at any one time shall not exceed the
Borrowing Base at such time and (C) the aggregate principal amount of
Standby Letter of Credit Outstandings to all the Borrowers and Subsidiary
Guarantors at any one time shall not exceed the Standby Letter of Credit
Commitment Amount; or
(ii) extend the Stated Expiry Date of an existing Standby Letter
of Credit previously issued hereunder.
No Stated Expiry Date shall extend beyond the earlier of (w) the Commitment
Termination Date and (x) one year from the date of initial issuance or, if
applicable, most recent extension, in each case unless otherwise agreed to by
the Issuer in its sole discretion; provided that in the case of a Stated Expiry
Date that extends beyond the Commitment Termination Date, such Standby Letter of
Credit is fully cash collateralized in a manner satisfactory to the Issuer on
the date of its issuance (or extension, if prior to such extension the Stated
Expiry Date was prior to the Commitment Termination Date). The Issuer shall not
be required to issue or extend the Stated Maturity Date of any Standby Letter of
Credit if, after giving effect thereto, (y) the aggregate amount of all Standby
Letter of Credit Outstandings would exceed the Standby Letter of Credit
Commitment Amount or (z) the sum of the aggregate amount of the Total Letter of
Credit Outstandings plus the aggregate principal amount of all Revolving Loans
and Swing Line Loans then outstanding would exceed the Total Commitment Amount.
For the avoidance of doubt, no Stated Expiry Date shall in any event extend
beyond the date which is one year after the Commitment Termination Date, even if
the applicable Letter of Credit is fully Cash Collateralized.
(b) The Issuer shall not be required to issue any Standby Letter of
Credit for the account of a Borrower or extend the Stated Expiry Date of an
existing Standby Letter of Credit for the account of a Borrower unless the
Excess Availability, prior to giving effect to any Reserves with respect to such
Standby Letter of Credit, on the date of the proposed issuance of any Standby
Letter of Credit, shall be equal to or greater than an amount equal to the sum
(the "Applicable Amount") of (i) one hundred percent (100%) of the face amount
thereof plus (ii) all other commitments and obligations made or incurred by the
Administrative Agent with respect thereto. Effective on the issuance of each
Standby Letter of Credit, a Reserve shall be established in the Applicable
Amount for such Standby Letter of Credit, except to the extent such Standby
Letter of Credit is fully Cash Collateralized pursuant to Section 2.1.3(a).
43
(c) The Issuer shall not be required to issue any Standby Letter of
Credit if it is to be used other than as set forth in Section 2.1.3(a)(i)(A)
above.
(d) All Existing Letters of Credit listed in Part II of Item 7.2.2(a) of
the Disclosure Schedule shall be deemed to have been issued as Standby Letters
of Credit under this Agreement and shall be governed by, and participated in by
the Lenders pursuant to, this Agreement.
SECTION 2.2. Reduction of the Commitment Amounts. The Commitment Amounts
are subject to reduction from time to time as set forth below.
SECTION 2.2.1. Optional. ▇▇▇▇-▇▇▇▇▇ may, from time to time on any
Business Day occurring after the Closing Date, voluntarily reduce the undrawn
amount of the Revolving Loan Commitment Amount and the Swing Line Loan
Commitment Amount, the unutilized Subfacility Letter of Credit Commitment Amount
or the unutilized Standby Letter of Credit Commitment Amount on the Business Day
so specified by ▇▇▇▇-▇▇▇▇▇ without premium or penalty (subject to Section 4.4
hereof); provided, however, that all such reductions shall require at least one
Business Day's prior notice to the Administrative Agent and be permanent, and
any partial reduction of (x) any Commitment Amount other than the Swing Line
Loan Commitment Amount shall be in a minimum amount of $5,000,000 and in an
integral multiple of $1,000,000 and (y) the Swing Line Loan Commitment Amount
shall be in a minimum amount of $1,000,000 and in an integral multiple of
$100,000. Any optional or mandatory reduction of the Revolving Loan Commitment
Amount pursuant to the terms of this Agreement which reduces the Revolving Loan
Commitment Amount below the sum of (a) the Swing Line Loan Commitment Amount and
(b) the Subfacility Letter of Credit Commitment Amount shall result in an
automatic and corresponding reduction of the Swing Line Loan Commitment Amount
and/or Subfacility Letter of Credit Commitment Amount (as directed by ▇▇▇▇-▇▇▇▇▇
in a notice to the Administrative Agent delivered together with the notice of
such voluntary reduction in the Revolving Loan Commitment Amount) to an
aggregate amount not in excess of the Revolving Loan Commitment Amount, as so
reduced, without any further action on the part of the Swing Line Lender or the
Issuer.
SECTION 2.2.2. Mandatory. (a) The Revolving Loan Commitment Amount shall,
without any further action, automatically and permanently be reduced on the
Commitment Termination Date so that the Revolving Loan Commitment Amount equals
$0.
(b) The Standby Letter of Credit Commitment Amount shall, without any
further action, automatically and permanently be reduced on the Commitment
Termination Date so that the Standby Letter of Credit Commitment Amount equals
$0.
SECTION 2.3. Borrowing Procedures. Loans (other than Swing Line Loans)
shall be made by the Lenders in accordance with Section 2.3.1, and Swing Line
Loans shall be made by the Swing Line Lender in accordance with Section 2.3.2.
SECTION 2.3.1. Borrowing Procedure. In the case of Loans other than Swing
Line Loans, by delivering a Borrowing Request to the Administrative Agent on or
before 12:00 noon (New York time) on a Business Day, a Borrower (or the
Administrative Borrower on behalf of such Borrower) may from time to time
irrevocably request, on the same day as the proposed Borrowing in the case of
Base Rate Loans, or three Business Days' notice in the case of LIBO Rate Loans,
and in either case not more than five Business Days' notice, that a Borrowing be
made, in the case of LIBO Rate Loans, in a minimum amount of $5,000,000 and an
integral multiple of $1,000,000, in the case of Base Rate Loans, in a minimum
amount of $5,000,000 and an integral multiple of $500,000 or, in either case, in
the unused amount of the applicable Commitment. On the terms and subject to the
conditions of this Agreement, each Borrowing shall be comprised of the type of
Loans, and shall be made on the Business Day,
44
specified in such Borrowing Request. In the case of LIBO Rate Loans, on or
before 11:00 a.m. (New York time), and in the case of Base Rate Loans other than
Swing Line Loans, on or before 3:00 p.m. (New York time), on such specified
Business Day each Lender that has a Commitment to make the Loans being requested
shall deposit with the Administrative Agent same day funds in an amount equal to
such Lender's Percentage of the requested Borrowing. Such deposit will be made
to an account which the Administrative Agent shall specify from time to time by
notice to the Lenders. To the extent funds are received from the Lenders, the
Administrative Agent shall make such funds available to the applicable Borrower
by wire transfer to the accounts such Borrower shall have specified in its
Borrowing Request. No Lender's obligation to make any Loan shall be affected by
any other Lender's failure to make any Loan.
SECTION 2.3.2. Swing Line Loans.
(a) By telephonic notice to the Swing Line Lender on or before 12:00 noon
(New York time) on a Business Day (followed (on the same Business Day) by the
delivery of a confirming Borrowing Request), a Borrower (or the Administrative
Borrower on such Borrower's behalf) may from time to time irrevocably request
that Swing Line Loans be made by the Swing Line Lender in an aggregate minimum
principal amount of $500,000 and an integral multiple of $100,000. All Swing
Line Loans shall be made as Base Rate Loans and shall not be entitled to be
converted into LIBO Rate Loans. The proceeds of each Swing Line Loan shall be
made available by the Swing Line Lender to the applicable Borrower by wire
transfer to the account such Borrower shall have specified in its notice
therefor by the close of business on the Business Day telephonic notice is
received by the Swing Line Lender. The Administrative Agent shall be entitled to
rely upon any certification, notice or other communication permitted to be made
by telephone hereunder and clause (a)(ii) of Section 3.1.1 believed by it to be
genuine and correct. The Borrowers shall not request (and shall not be permitted
to request) any Swing Line Loans when any Default has occurred and is
continuing.
(b) If (i) any Swing Line Loan shall be outstanding for more than four
Business Days, (ii) any Swing Line Loan is or will be outstanding on a date when
a Borrower requests that a Revolving Loan be made, or (iii) any Default shall
occur and be continuing, then each Lender (other than the Swing Line Lender)
irrevocably agrees that it will, at the request of the Swing Line Lender (and
the Swing Line Lender agrees to make such request by the fifth Business Day that
any Swing Line Loan is outstanding), (A) make a Revolving Loan (which shall
initially be funded as a Base Rate Loan) in an amount equal to such Lender's
Percentage of the aggregate principal amount of all such Swing Line Loans then
outstanding or (B) if, for any reason, it cannot make a Revolving Loan, purchase
a participation in an amount equal to such Lender's Percentage of the aggregate
principal amount of all Swing Line Loans outstanding (in either case, such
outstanding Swing Line Loans hereinafter referred to as the "Refunded Swing Line
Loans"). On or before 11:00 a.m. (New York time) on the first Business Day
following receipt by each Lender of a request to make Revolving Loans as
provided in the preceding sentence, each Lender shall deposit in an account
specified by the Swing Line Lender the amount so requested in same day funds and
such funds shall be applied by the Swing Line Lender to repay the Refunded Swing
Line Loans. At the time the Lenders make the above referenced Revolving Loans
the Swing Line Lender shall be deemed to have made, in consideration of the
making of the Refunded Swing Line Loans, Revolving Loans in an amount equal to
the Swing Line Lender's Percentage of the aggregate principal amount of the
Refunded Swing Line Loans. Upon the making (or deemed making, in the case of the
Swing Line Lender) of any Revolving Loans pursuant to this clause, the amount so
funded shall become outstanding under such Lender's Revolving Note and shall no
longer be owed under the Swing Line Note. All interest payable with respect to
any Revolving Loans made (or deemed made, in the case of the Swing Line Lender)
pursuant to this clause shall be appropriately adjusted to reflect the period of
time during which the Swing Line Lender had outstanding Swing Line Loans in
respect of which such Revolving Loans were made. Each Lender's obligation to
make the Revolving Loans (or purchase participations)
45
referred to in this clause shall be absolute and unconditional and shall not be
affected by any circumstance, including (i) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against the Swing
Line Lender, any Obligor or any Person for any reason whatsoever; (ii) the
occurrence or continuance of any Default; (iii) any adverse change in the
condition (financial or otherwise) of any Obligor; (iv) the acceleration or
maturity of any Obligations or the termination of any Commitment after the
making of any Swing Line Loan; (v) any breach of any Loan Document by any
Person; or (vi) any other circumstance, happening or event whatsoever, whether
or not similar to any of the foregoing.
SECTION 2.4. Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Administrative Agent on or before 11:00
a.m. (New York time) on a Business Day, a Borrower (or the Administrative
Borrower on such Borrower's behalf) may from time to time irrevocably elect, on
not less than one Business Day's notice in the case of conversions to or
continuations of Base Rate Loans, or three Business Days' notice in the case of
conversions to or continuations of LIBO Rate Loans, and in either case not more
than five Business Days' notice, that all, or any portion in an aggregate
minimum amount of $5,000,000 and an integral multiple of $1,000,000 be, in the
case of Base Rate Loans, converted into LIBO Rate Loans or be, in the case of
LIBO Rate Loans, converted into Base Rate Loans or continued as LIBO Rate Loans
(in the absence of delivery of a Continuation/Conversion Notice with respect to
any LIBO Rate Loan at least three Business Days (but not more than five Business
Days) before the last day of the then current Interest Period with respect
thereto, such LIBO Rate Loan shall, on such last day, automatically convert to a
Base Rate Loan); provided, however, that (x) each such conversion or
continuation shall be pro rated among the applicable outstanding Loans of all
Lenders that have made such Loans, and (y) no portion of the outstanding
principal amount of any Loans may be continued as, or be converted into, LIBO
Rate Loans when any Default has occurred and is continuing unless the Agents
otherwise agree.
SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
however, that such LIBO Rate Loan shall nonetheless be deemed to have been made
and to be held by such Lender, and the obligation of a Borrower to repay such
LIBO Rate Loan shall nevertheless be to such Lender for the account of such
foreign branch, Affiliate or international banking facility. In addition, each
Borrower hereby consents and agrees that, for purposes of any determination to
be made for purposes of Section 4.1, 4.2, 4.3 or 4.4, it shall be conclusively
assumed that each Lender elected to fund all LIBO Rate Loans by purchasing
Dollar deposits in its LIBOR Office's interbank eurodollar market.
SECTION 2.6. Issuance Procedures. By delivering to the Administrative
Agent an Issuance Request on or before 11:00 a.m. (New York time) on a Business
Day, a Borrower (or the Administrative Borrower on such Borrower's behalf) may
from time to time irrevocably request on not less than three nor more than ten
Business Days' notice, in the case of an initial issuance of a Letter of Credit
and not less than three Business Days' prior notice, in the case of a request
for the extension of the Stated Expiry Date of an outstanding Letter of Credit
(in each case, unless a shorter notice period is agreed to by the Issuer, in its
sole discretion), that the Issuer issue, or extend the Stated Expiry Date of, a
Letter of Credit in a minimum amount of $25,000 in such form as may be requested
by such Borrower and approved by such Issuer, solely for the purposes described
in Section 7.1.7. Each Letter of Credit shall by its terms be stated to expire
on a date (its "Stated Expiry Date") no later than the earlier to occur of (a)
the Commitment Termination Date or (b) one year from the date of its initial
issuance or extension, in each case unless otherwise agreed to by the Issuer in
its sole discretion; provided that in the case of a Stated Expiry Date that
extends beyond the Commitment Termination Date, such Letter of Credit is fully
cash collateralized in a manner satisfactory to the Issuer on the date of its
issuance (or extension, if prior to
46
such extension the Stated Expiry Date was prior to the Commitment Termination
Date). Each Issuer will make available to the beneficiary thereof the original
of the Letter of Credit which it issues.
SECTION 2.6.1. Other Lenders' Participation. Upon the issuance of each
Letter of Credit, and without further action, each Lender (other than such
Issuer) shall be deemed to have irrevocably purchased, to the extent of its
Percentage, a participation interest in such Letter of Credit (including the
Contingent Liability and any Reimbursement Obligation with respect thereto), and
such Lender shall, to the extent of its Percentage, be responsible for
reimbursing within one Business Day the Issuer for Reimbursement Obligations
which have not been reimbursed by the Borrowers in accordance with Section 2.6.2
or which have been required to be returned or disgorged by the Issuer or the
Administrative Agent. In addition, such Lender shall, to the extent of its
Percentage, be entitled to receive a ratable portion of the Subfacility Letter
of Credit fees payable pursuant to Section 3.3.3 with respect to each
Subfacility Letter of Credit or the Standby Letter of Credit fees payable
pursuant to Section 3.3.4 with respect to each Standby Letter of Credit (in each
case other than the Fronting Fee), and of interest payable pursuant to Section
3.2 with respect to any Reimbursement Obligation. To the extent that any Lender
has reimbursed any Issuer for a Disbursement, such Lender shall be entitled to
receive its ratable portion of any amounts subsequently received (from the
Borrower or otherwise) in respect of such Disbursement.
SECTION 2.6.2. Disbursements. The Issuer will notify the Administrative
Borrower and the Administrative Agent promptly of the presentment for payment of
any Letter of Credit issued by the Issuer, together with notice of the date (the
"Disbursement Date") such payment shall be made (each such payment, a
"Disbursement"). Subject to the terms and provisions of such Letter of Credit
and this Agreement, the Issuer shall make such payment to the beneficiary (or
its designee) of such Letter of Credit. Prior to 11:00 a.m. on the first
Business Day following the Disbursement Date, the applicable Borrower will
reimburse the Administrative Agent, for the account of the applicable Issuer,
for all amounts which the Issuer has disbursed under such Letter of Credit
together with interest thereon at a rate per annum equal to the rate per annum
then in effect for Base Rate Loans (with the then Applicable Margin accruing on
such amount) pursuant to Section 3.2 for the period from the Disbursement Date
through the date of such reimbursement. Without limiting in any way the
foregoing and notwithstanding anything to the contrary contained herein or in
any separate application for any Letter of Credit, each Borrower hereby
acknowledges and agrees that it shall be obligated to reimburse the Issuer upon
each Disbursement of a Letter of Credit, and it shall be deemed to be the
obligor for purposes of each such Letter of Credit issued hereunder (whether the
account party on such Letter of Credit is a Borrower or a Subsidiary Guarantor).
SECTION 2.6.3. Reimbursement. The obligation (a "Reimbursement
Obligation") of each Borrower under Section 2.6.2 to reimburse the Issuer with
respect to each Disbursement (including interest thereon), and, upon the failure
of a Borrower to reimburse the Issuer (or upon the disgorgement of any amounts
theretofore reimbursed by a Borrower), each Lender's obligation under Section
2.6.1 to reimburse the Issuer, shall be absolute and unconditional under any and
all circumstances and irrespective of any setoff, counterclaim or defense to
payment which any Borrower or such Lender, as the case may be, may have or have
had against the Issuer or any Lender, including any defense based upon the
failure of any Disbursement to conform to the terms of the applicable Letter of
Credit (if, in the Issuer's good faith opinion, such Disbursement is determined
to be appropriate), or any non-application or misapplication by the beneficiary
of the proceeds of such Letter of Credit; provided, however, that after paying
in full its Reimbursement Obligation hereunder, nothing herein shall adversely
affect the right of any Borrower or such Lender, as the case may be, to commence
any proceeding against the Issuer for any wrongful Disbursement made by the
Issuer under a Letter of Credit as a result of acts or omissions constituting
gross negligence or willful misconduct on the part of the Issuer.
47
SECTION 2.6.4. Deemed Disbursements. Upon the occurrence and during the
continuation of any Default under Section 8.1.9 or upon notification by the
Administrative Agent (acting at the direction of the Required Lenders) to any
Borrower of its obligations under this Section, following the occurrence and
during the continuation of any other Event of Default,
(a) the aggregate Stated Amount of all Letters of Credit shall,
without demand upon or notice to any Borrower or any other Person, be
deemed to have been paid or disbursed by the Issuer of such Letters of
Credit (notwithstanding that such amount may not in fact have been paid
or disbursed); and
(b) such Borrower shall be immediately obligated to reimburse the
Issuer for the amount deemed to have been so paid or disbursed by such
Issuer.
Amounts payable by such Borrower pursuant to this Section shall be deposited in
immediately available funds with the Administrative Agent and held as collateral
security for the Reimbursement Obligations. When all Defaults giving rise to the
deemed disbursements under this Section have been cured or waived the
Administrative Agent shall promptly return to such Borrower all amounts then on
deposit with the Administrative Agent pursuant to this Section which have not
been applied to the satisfaction of the Reimbursement Obligations or other
Obligations.
SECTION 2.6.5. Nature of Reimbursement Obligations. Each Borrower, each
other Obligor and, to the extent set forth in Section 2.6.1 as to each Lender's
participation interest in such Letter of Credit, each Lender shall assume all
risks of the acts, omissions or misuse of any Letter of Credit by the
beneficiary thereof. The Issuer (except to the extent of its own gross
negligence, lack of good faith or willful misconduct) shall not be responsible
for:
(a) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any Letter of Credit or any document submitted by any
party in connection with the application for and issuance of a Letter of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged;
(b) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit, or the rights or benefits
thereunder or the proceeds thereof in whole or in part, which may prove
to be invalid or ineffective for any reason;
(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;
(d) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise;
or
(e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Disbursement under a Letter
of Credit.
None of the foregoing shall affect, impair or prevent the vesting of any of the
rights or powers granted to any Issuer or any Lender hereunder. In furtherance
and not in limitation or derogation of any of the foregoing, any action taken or
omitted to be taken by the Issuer in good faith and without gross negligence or
willful misconduct shall be binding upon each Obligor and each such Secured
Party, and shall not put the Issuer under any resulting liability to any Obligor
or any Secured Party, as the case may be. In any event, if any Obligor fails to
object with specificity in writing to any draw under a Letter of
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Credit, by the close of business on the Business Day following the date notice
of such draw is received by a Borrower from the Issuer, such Obligor shall be
deemed to have waived any objection to the same.
SECTION 2.7. Register; Notes.
(a) Each Lender may maintain in accordance with its usual practice an
account or accounts evidencing the Indebtedness of each Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder;
provided, however, that the failure of any Lender to maintain such account or
accounts shall not limit or otherwise affect any Obligations of any Borrower or
any other Obligor.
(b) (i) Each Borrower hereby designates the Administrative Agent to serve
as such Borrower's agent, solely for the purpose of this clause (b), to maintain
a register (the "Register") on which the Administrative Agent will record each
Lender's Commitment, the Loans made by each Lender and each repayment in respect
of the principal amount of the Loans of each Lender and annexed to which the
Administrative Agent shall retain a copy of each Lender Assignment Agreement
delivered to the Administrative Agent pursuant to Section 10.11.1. Failure to
make any recordation, or any error in such recordation, shall not affect any
Borrower's obligation in respect of such Loans. The entries in the Register
shall be conclusive, in the absence of manifest error, and each Borrower, the
Administrative Agent and the Lenders shall treat each Person in whose name a
Loan (and as provided in clause (ii) the Note evidencing such Loan) is
registered as the owner thereof for all purposes of this Agreement,
notwithstanding notice or any provision herein to the contrary. A Lender's
Commitment and the Loans made pursuant thereto may be assigned or otherwise
transferred in whole or in part only by registration of such assignment or
transfer in the Register. Any assignment or transfer of a Lender's Commitment or
the Loans made pursuant thereto shall be registered in the Register only upon
delivery to the Administrative Agent of a Lender Assignment Agreement duly
executed by the Assignor Lender thereof (and a Borrower, when its consent is
required hereunder). No assignment or transfer of a Lender's Commitment or the
Loans made pursuant thereto shall be effective unless such assignment or
transfer shall have been recorded in the Register by the Administrative Agent as
provided in this Section 2.7.
(ii) Each Borrower agrees that such Borrower will execute and deliver to
each Lender a Note evidencing the Loans made by such Lender. Each Borrower
hereby irrevocably authorizes each Lender to make (or cause to be made)
appropriate notations on the grid attached to such Lender's Notes (or on any
continuation of such grid), which notations, if made, shall evidence, inter
alia, the date of, the outstanding principal amount of, and the interest rate
and Interest Period applicable to the Loans evidenced thereby. Such notations
shall, to the extent not inconsistent with the notations made by the
Administrative Agent in the Register, be conclusive and binding absent manifest
error; provided, however, that the failure of any Lender to make any such
notations shall not limit or otherwise affect any Obligations of any Borrower or
any other Obligor. The Loans evidenced by each such Note and interest thereon
shall at all times (including after assignment pursuant to Section 10.11.1) be
payable to the order of the payee named therein and its registered assigns.
Subject to the provisions of Section 10.11.1, a Note and the obligation
evidenced thereby may be assigned or otherwise transferred in whole or in part
only by registration of such assignment or transfer of such Note and the
obligation evidenced thereby in the Register (and each Note shall expressly so
provide). Any assignment or transfer of all or part of an obligation evidenced
by a Note shall be registered in the Register only upon surrender for
registration of assignment or transfer of the Note evidencing such obligation,
accompanied by a Lender Assignment Agreement duly executed by the assignor
thereof (and a Borrower, when its consent is required hereunder) and the
compliance by the parties thereto with the other requirements of Section
10.11.1, and thereupon, if requested by the assignee, one or more new Notes
shall be issued to the designated assignee and the old Note shall be returned by
the Administrative Agent to the applicable Borrower marked "exchanged". No
assignment of a Note and
49
the obligation evidenced thereby shall be effective unless it shall have been
recorded in the Register by the Administrative Agent as provided in this
Section.
SECTION 2.8. Extensions of Stated Maturity Date. No earlier than 120 days
and no later than 90 days prior to the Stated Maturity Date in effect at any
time, ▇▇▇▇-▇▇▇▇▇ may, by written notice to the Administrative Agent, request
that such Stated Maturity Date be extended for a period of 364 days. Such
request shall be irrevocable and binding upon each Borrower. The Administrative
Agent shall promptly notify each Lender and the Issuer of such request. If a
Lender or Issuer agrees, in its individual and sole discretion, to so extend its
Commitment (an "Extending Lender"), it shall deliver to the Administrative Agent
a written notice of its agreement to do so no earlier than 90 days and no later
than 60 days (or such later date, if any, as shall be agreed upon by the
Administrative Borrower and the Agents in writing) prior to such Stated Maturity
Date and the Administrative Agent shall notify ▇▇▇▇-▇▇▇▇▇ of such Extending
Lender's agreement to extend its Commitment no later than 15 days prior to such
Stated Maturity Date. The Commitment of any Lender or Issuer that fails to
accept or respond to ▇▇▇▇-Dixie's request for extension of the Stated Maturity
Date (a "Declining Lender") shall be terminated on the Commitment Termination
Date originally in effect (without regard to any extension by other Lenders) and
on the Stated Maturity Date originally in effect the Borrowers shall repay in
full the unpaid principal amount of the Loans made by such Declining Lender,
together with accrued interest thereon to the date of such payment of principal
and all other amounts payable to such Declining Lender under this Agreement,
and, in the case of the Issuer, make provision for the replacement or
termination of all Letters of Credit. The Administrative Agent shall promptly
notify each Extending Lender of the aggregate Commitments of the Declining
Lender. The Extending Lenders, or any of them, may offer to increase their
respective Commitments by an aggregate amount up to the aggregate amount of the
Declining Lenders' Commitments and any such Extending Lender shall deliver to
the Administrative Agent a notice of its offer to so increase its Commitment no
later than 10 days prior to such Stated Maturity Date. To the extent of any
shortfall in the aggregate amount of extended Commitments, ▇▇▇▇-▇▇▇▇▇ shall have
the right to require any Declining Lender to assign in full its rights and
obligations under this Agreement to one or more Eligible Assignees designated by
▇▇▇▇-▇▇▇▇▇ and acceptable to the Administrative Agent, such acceptance not to be
unreasonably withheld, that agree to accept all of such rights and obligations
(each a "Replacement Lender"), provided that (a) such increase and/or such
assignment is otherwise in compliance with Section 10.11.1, (b) such Declining
Lender receives payment in full of the unpaid principal amount of the Loans made
by such Declining Lender, together with accrued interest thereon to the date of
such payment of principal and all other amounts payable to such Declining Lender
under this Agreement and (c) any such increase shall be effective on the Stated
Maturity Date in effect at the time ▇▇▇▇-▇▇▇▇▇ requests such extension and any
such assignment shall be effective on the date specified by ▇▇▇▇-▇▇▇▇▇ and
agreed to by the Replacement Lender and the Administrative Agent. If Extending
Lenders and Replacement Lenders provide Commitments in an aggregate amount
greater than 75% of the aggregate amount of the Commitments outstanding 60 days
(or such later date, if any, as shall be agreed upon by the Administrative
Borrower and the Agents in writing) prior to the Stated Maturity Date in effect
at the time ▇▇▇▇-▇▇▇▇▇ requests such extension, the Stated Maturity Date shall
be extended by 364 days for such Extending Lenders and Replacement Lenders.
SECTION 2.9. Joint and Several Liability. Each Borrower shall be jointly
and severally liable for all Revolving Loans, Letter of Credit Outstandings and
other Obligations of the Borrowers. Each Borrower shall have a right of
contribution against the other Borrowers to the extent payments made by such
Borrower exceed the amount of Credit Extensions and related Obligations directly
obtained by such Borrower.
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ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments. Each Borrower agrees that the
Loans shall be repaid and prepaid pursuant to the following terms.
SECTION 3.1.1. Repayments and Prepayments. Each Borrower shall repay in
full the unpaid principal amount of each Loan upon the applicable Stated
Maturity Date therefor. Prior thereto, payments and prepayments of the Loans
shall or may be made as set forth below.
(a) At any time and from time to time on any Business Day, each
Borrower shall have the right to make a voluntary prepayment without
premium or penalty (subject to Section 4.4 hereof), in whole or in part, of
the outstanding principal amount of any
(i) Revolving Loans; provided, however, that (A) all such
prepayments shall be made pro rata among the Revolving Loans of the
same type and, if applicable, having the same Interest Period of all
Lenders that have made such Revolving Loans; (B) all such voluntary
prepayments shall require at least one but no more than five Business
Days' prior notice to the Administrative Agent; and (C) all such
voluntary partial prepayments shall be, in the case of LIBO Rate
Loans, in an aggregate minimum amount of $5,000,000 and an integral
multiple of $1,000,000 and, in the case of Base Rate Loans, in an
aggregate minimum amount of $1,000,000 and an integral multiple of
$100,000; and
(ii) Swing Line Loans; provided that (A) all such voluntary
prepayments shall require prior telephonic notice to the Swing Line
Lender on or before 1:00 p.m. (New York time) on the day of such
prepayment (such notice to be confirmed in writing within 24 hours
thereafter); and (B) all such voluntary partial prepayments shall be
in an aggregate minimum amount of $200,000 and an integral multiple of
$100,000.
(b) (i) On each date when the sum of (A) the aggregate outstanding
principal amount of all Revolving Loans and Swing Line Loans and (B) the
amount of Total Letter of Credit Outstandings exceeds the Borrowing Base
(except in the case where such excess is due to Special Agent Advances or
additional Loans or Letters of Credit made or issued pursuant to Section
10.21 and demand is made by the Administrative Agent for the repayment of
any such outstanding Special Agent Advance or additional Loan or Letter of
Credit within 90 days after the date such Special Agent Advance or
additional Loan or Letter of Credit was made or issued (unless the Required
Lenders shall have consented to a later date for demand)), the Borrowers
shall make a mandatory prepayment of Revolving Loans or Swing Line Loans
(or both) and, if necessary, Cash Collateralize all Letter of Credit
Outstandings, in an aggregate amount equal to any such excess and (ii)
within five Business Days after any Borrower or any of its Subsidiaries
realizes any Net Disposition Proceeds in excess of $2,500,000 (for an
individual disposition or collectively for a related series of
dispositions), the Borrowers shall make a mandatory prepayment of Revolving
Loans or Swing Line Loans (or both) in an aggregate amount equal to the
amount of such Net Disposition Proceeds (provided, that so long as no
Default has occurred and is continuing, if the making of such prepayment
would result in the breakage of any Interest Period, the Borrowers may make
such prepayment at the end of the then applicable Interest Periods).
(c) Immediately upon any acceleration of the Stated Maturity Date of
any Loans pursuant to Section 8.2 or Section 8.3, each Borrower shall repay
all the Loans, unless, pursuant
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to Section 8.3, only a portion of all the Loans is so accelerated (in which
case the portion so accelerated shall be so repaid).
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.4.
SECTION 3.2. Interest Provisions. Interest on the outstanding principal
amount of Loans shall accrue and be payable in accordance with the terms set
forth below.
SECTION 3.2.1. Rates. Subject to Section 2.3.2, pursuant to an
appropriately delivered Borrowing Request or Continuation/Conversion Notice, the
Borrower may elect that Loans comprising a Borrowing accrue interest at a rate
per annum:
(a) on that portion maintained from time to time as a Base Rate Loan,
equal to the sum of the Alternate Base Rate from time to time in effect
plus the Applicable Margin; provided that all Swing Line Loans shall always
accrue interest at a rate per annum equal to the sum of the Alternate Base
Rate from time to time in effect plus the then effective Applicable Margin
for Revolving Loans maintained as Base Rate Loans; and
(b) on that portion maintained as a LIBO Rate Loan, during each
Interest Period applicable thereto, equal to the sum of the LIBO Rate
(Reserve Adjusted) for such Interest Period plus the Applicable Margin.
All LIBO Rate Loans shall bear interest from and including the first day of the
applicable Interest Period to (but not including) the last day of such Interest
Period at the interest rate determined as applicable to such LIBO Rate Loan.
SECTION 3.2.2. Default Rates. Upon the occurrence and during the
continuance of a Default, if demanded by the Administrative Agent (or
automatically in the case of the occurrence of an event described in Section
8.1.9), the Borrower shall pay to the extent permitted by law:
(a) in the case of LIBO Rate Loans only, (i) interest (after as well
as before judgment) on the principal amount of all outstanding LIBO Rate
Loans at a rate per annum equal to the LIBO Rate (Reserve Adjusted) from
time to time in effect, plus, the Applicable Margin for LIBO Rate Loans,
plus, 2% per annum, until the expiration of the applicable Interest Period
in effect at such time, and (ii) thereafter, in accordance with clause (b)
of this Section 3.2.2; and
(b) in the case of Base Rate Loans, Swing Line Loans and all other
amounts payable under this Agreement, interest (after as well as before
judgment) on (i) the principal amount of all outstanding Loans, (ii) all
unpaid interest and fees payable hereunder and (iii) any other amounts due
and payable, in each case at a rate per annum equal to the Alternate Base
Rate from time to time in effect, plus the Applicable Margin for Base Rate
Loans, plus 2% per annum.
SECTION 3.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole or in part, of
principal outstanding on such Loan on the principal amount so paid or
prepaid;
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(c) with respect to Base Rate Loans, on each Payment Date in arrears
occurring after the Closing Date;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and on each Payment Date occurring after the
first day of such Interest Period);
(e) with respect to any Base Rate Loans converted into LIBO Rate Loans
on a day when interest would not otherwise have been payable pursuant to
clause (c), on the date of such conversion; and
(f) on that portion of any Loans the Stated Maturity Date of which is
accelerated pursuant to Section 8.2 or Section 8.3, immediately upon such
acceleration;
Interest accrued on Loans or other monetary Obligations after the date such
amount is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise) shall be payable upon demand.
SECTION 3.3. Fees. Each Borrower agrees to pay the fees set forth below.
All such fees shall be non-refundable.
SECTION 3.3.1. Unused Line Fee. The Borrowers agree to pay to the
Administrative Agent for the account of each Lender, for the period (including
any portion thereof when the Lenders' Commitments are suspended by reason of the
Borrowers' inability to satisfy any condition of Article V) commencing on the
Closing Date and continuing through the Commitment Termination Date, an unused
line fee in an amount equal to 0.375% per annum, in each case on such Lender's
Percentage of the sum of the average quarterly unused portion of the Total
Commitment Amount (net of Total Letter of Credit Outstandings). All unused line
fees payable pursuant to this Section shall be calculated on a year comprised of
360 days and payable by the Borrowers in arrears on each Payment Date,
commencing with the first Payment Date following the Closing Date, and on the
Commitment Termination Date; provided, however, that if the unused line fee is
payable on a Monthly Payment Date, it shall be calculated based on the average
monthly unused portion of the Total Commitment Amount (net of Total Letter of
Credit Outstandings). The making of Swing Line Loans shall not constitute usage
of the Revolving Loan Commitment with respect to the calculation of unused line
fees to be paid by the Borrowers to the Lenders.
SECTION 3.3.2. Agents' Fees. The Borrowers agree to pay the fees in the
amounts, on the dates and on the terms set forth in the Proposal Letter.
SECTION 3.3.3. Subfacility Letter of Credit Fee. The Borrowers agree to pay
to the Administrative Agent, for the pro rata account of each Lender, a
Subfacility Letter of Credit fee (a) with respect to import Subfacility Letters
of Credit, in an amount equal to 50% of the then effective Applicable Margin for
Revolving Loans maintained as LIBO Rate Loans, multiplied by the Average Stated
Amount for all import Subfacility Letters of Credit, and (b) with respect to
standby Subfacility Letters of Credit, in an amount equal to 100% of the then
effective Applicable Margin for Revolving Loans maintained as LIBO Rate Loans,
multiplied by the Average Stated Amount for all standby Subfacility Letters of
Credit, such fees being payable in arrears on each Payment Date following the
date of issuance of each such Subfacility Letter of Credit and on the Commitment
Termination Date. The Borrowers further agree to pay to the applicable Issuer in
arrears on each Payment Date following the date of issuance of each standby
Letter of Credit and on the Commitment Termination Date, a Fronting Fee for all
outstanding standby Letters of Credit, together with the Issuer's customary
administrative, amendment, drawing, transfer and other fees incurred with
respect to such Letters of Credit.
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SECTION 3.3.4. Standby Letter of Credit Fee. The Borrowers agree to pay to
the Administrative Agent, for the pro rata account of each Lender, a Standby
Letter of Credit fee in an amount equal to 100% of the then effective Applicable
Margin for Revolving Loans maintained as LIBO Rate Loans, multiplied by the
Average Stated Amount for all Standby Letters of Credit, such fees being payable
in arrears on each Payment Date following the date of issuance of each such
Standby Letter of Credit and on the Commitment Termination Date. The Borrowers
further agree to pay to the applicable Issuer in arrears on each Payment Date
following the date of issuance of each Standby Letter of Credit and on the
Commitment Termination Date, a Fronting Fee for all outstanding Standby Letters
of Credit, together with the Issuer's customary administrative, amendment,
drawing, transfer and other fees incurred with respect to such Standby Letters
of Credit.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful. If any Lender shall determine
(which determination shall, upon notice thereof to the Administrative Borrower
and the Administrative Agent, be conclusive and binding on the Borrowers) that
the introduction of or any change in or in the interpretation of any law makes
it unlawful, or any Governmental Authority asserts that it is unlawful, for such
Lender to make or continue any Loan as, or to convert any Loan into, a LIBO Rate
Loan, the obligations of such Lender to make, continue or convert any such LIBO
Rate Loan shall, upon such determination, forthwith be suspended until such
Lender shall notify the Administrative Agent that the circumstances causing such
suspension no longer exist, and all outstanding LIBO Rate Loans payable to such
Lender shall automatically convert into Base Rate Loans at the end of the then
current Interest Periods with respect thereto or sooner, if required by such law
or assertion.
SECTION 4.2. Deposits Unavailable; Market Disruptions. If the
Administrative Agent shall have determined that
(a) Dollar deposits in the relevant amount and for the relevant
Interest Period are not available to it in its relevant market; or
(b) by reason of circumstances affecting its relevant market, adequate
means do not exist for ascertaining the interest rate applicable hereunder
to LIBO Rate Loans;
then, upon notice from the Administrative Agent to the Administrative Borrower
and the Lenders, the obligations of all Lenders under Section 2.3 and Section
2.4 to make or continue any Loans as, or to convert any Loans into, LIBO Rate
Loans shall forthwith be suspended until the Administrative Agent shall notify
the Administrative Borrower and the Lenders that the circumstances causing such
suspension no longer exist.
SECTION 4.3. Increased LIBO Rate Loan Costs, etc. The Borrowers agree to
reimburse each Lender and Issuer for any increase in the cost to such Lender or
Issuer of, or any reduction in the amount of any sum receivable by such Secured
Party in respect of, such Secured Party's Commitments and the making of Credit
Extensions hereunder (including the making, continuing or maintaining (or of its
obligation to make or continue) any Loans as, or of converting (or of its
obligation to convert) any Loans into, LIBO Rate Loans) that arise in connection
with any change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in after the Closing Date of, any law
or regulation, directive, guideline, decision or request (whether or not having
the force of law) of any Governmental Authority, except for such changes with
respect to increased capital costs and Taxes which are governed by Sections 4.5
and 4.6, respectively. Each affected Secured Party shall promptly notify the
Administrative Agent and the Administrative Borrower in writing of the
occurrence of any such event,
54
stating the reasons therefor and the additional amount required fully to
compensate such Secured Party for such increased cost or reduced amount. Such
additional amounts shall be payable by the Borrowers directly to such Secured
Party within five days of its receipt of such notice, and such notice shall, in
the absence of manifest error, be conclusive and binding on the Borrowers.
SECTION 4.4. Funding Losses. In the event any Lender shall incur any loss
or expense (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to make or
continue any portion of the principal amount of any Loan as, or to convert any
portion of the principal amount of any Loan into, a LIBO Rate Loan) as a result
of
(a) any conversion or repayment or prepayment of the principal amount
of any LIBO Rate Loan on a date other than the scheduled last day of the
Interest Period applicable thereto, whether pursuant to Article III or
otherwise (and including without limitation any repayment or prepayment or
assignment pursuant to Sections 2.8, 4.11 or 10.11.1(f)), or the Borrowers
failing to make a prepayment after giving notice thereof);
(b) any Loans not being made as LIBO Rate Loans in accordance with the
Borrowing Request therefor; or
(c) any Loans not being continued as, or converted into, LIBO Rate
Loans in accordance with the Continuation/Conversion Notice therefor;
then, upon the written notice of such Lender to the Administrative Borrower
(with a copy to the Administrative Agent), the Administrative Borrower shall,
within five days of its receipt thereof, pay directly to such Lender such amount
as will (in the reasonable determination of such Lender) reimburse such Lender
for such loss or expense. Such written notice shall, in the absence of manifest
error, be conclusive and binding on the Borrowers.
SECTION 4.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any Governmental Authority affects
or would affect the amount of capital required or expected to be maintained by
any Secured Party or any Person controlling such Secured Party, and such Secured
Party determines (in good faith but in its sole and absolute discretion) that
the rate of return on its or such controlling Person's capital as a consequence
of the Commitments or the Credit Extensions made, or the Letters of Credit
participated in, by such Secured Party is reduced to a level below that which
such Secured Party or such controlling Person could have achieved but for the
occurrence of any such circumstance, then upon notice from time to time by such
Secured Party to the Administrative Borrower, the Borrowers shall within five
days following receipt of such notice pay directly to such Secured Party
additional amounts sufficient to compensate such Secured Party or such
controlling Person for such reduction in rate of return. A statement of such
Secured Party as to any such additional amount or amounts shall, in the absence
of manifest error, be conclusive and binding on the Borrowers. In determining
such amount, such Secured Party may use any method of averaging and attribution
that it (in its sole and good faith discretion) shall deem applicable.
SECTION 4.6. Taxes. The Borrowers covenant and agree as follows with
respect to Taxes.
(a) Any and all payments by the Borrowers under each Loan Document
shall be made without setoff, counterclaim or other defense, and free and
clear of, and without deduction or withholding for or on account of, any
Taxes, except to the extent any such Taxes are imposed by applicable law.
In the event that any Taxes are imposed and required by applicable law to
be
55
deducted or withheld from any payment required to be made by any Obligor to
or on behalf of any Secured Party under any Loan Document, then:
(i) subject to clause (f), if such Taxes are Non-Excluded Taxes,
the amount of such payment shall be increased as may be necessary so
that such payment is made, after withholding or deduction for or on
account of such Taxes, in an amount that is not less than the amount
provided for in such Loan Document; and
(ii) the applicable Borrower shall withhold the full amount of
such Taxes from such payment (as increased pursuant to clause (a)(i))
and shall pay such amount to the Governmental Authority imposing such
Taxes in accordance with applicable law.
(b) In addition, the Borrowers shall pay all Other Taxes imposed to
the relevant Governmental Authority imposing such Other Taxes in accordance
with applicable law.
(c) As promptly as practicable after the payment of any Taxes or Other
Taxes, and in any event within 45 days of any such payment being due, the
Borrowers shall furnish to the Administrative Agent a copy of an official
receipt (or a certified copy thereof) evidencing the payment of such Taxes
or Other Taxes. The Administrative Agent shall make copies thereof
available to any Lender upon request therefor.
(d) Subject to clause (f), the Borrowers shall indemnify each Secured
Party for any Non-Excluded Taxes and Other Taxes levied, imposed or
assessed on (and whether or not paid directly by) such Secured Party
whether or not such Non-Excluded Taxes or Other Taxes are correctly or
legally asserted by the relevant Governmental Authority. Promptly upon
having knowledge that any such Non-Excluded Taxes or Other Taxes have been
levied, imposed or assessed, and promptly upon notice thereof by any
Secured Party, the applicable Borrower shall pay such Non-Excluded Taxes or
Other Taxes directly to the relevant Governmental Authority (provided,
however, that no Secured Party shall be under any obligation to provide any
such notice to the Borrowers). In addition, the Borrowers shall indemnify
each Secured Party for any incremental Taxes that may become payable by
such Secured Party as a result of any failure of any Borrower to pay any
Taxes when due to the appropriate Governmental Authority or to deliver to
the Administrative Agent, pursuant to clause (c), documentation evidencing
the payment of Taxes or Other Taxes. With respect to indemnification for
Non-Excluded Taxes and Other Taxes actually paid by any Secured Party or
the indemnification provided in the immediately preceding sentence, such
indemnification shall be made within 30 days after the date such Secured
Party makes written demand therefor. The Borrowers acknowledge that any
payment made to any Secured Party or to any Governmental Authority in
respect of the indemnification obligations of the Borrowers provided in
this clause shall constitute a payment in respect of which the provisions
of clause (a) and this clause shall apply.
(e) Each Non-U.S. Lender, on or prior to the date on which such
Non-U.S. Lender becomes a Lender hereunder (and from time to time
thereafter upon the request of the Administrative Borrower or the
Administrative Agent, but only for so long as such Non-U.S. Lender is
legally entitled to do so), shall deliver to the Administrative Borrower
and the Administrative Agent either (i) two duly completed copies of either
(x) Internal Revenue Service Form W-8BEN claiming eligibility of Non-U.S.
Lenders to the benefits of an income tax treaty to which the United States
is party or (y) Internal Revenue Service Form W-8ECI, or in either case an
applicable successor form; or (ii) in the case of a Non-U.S. Lender that is
not legally entitled to deliver either form listed in clause (e)(i), (x) a
certificate to the effect that such Non-U.S. Lender is not (A) a "bank"
within the meaning of Section 881(c)(3)(A) of the Code, (B) a "10 percent
56
shareholder" of a Borrower within the meaning of Section 881(c)(3)(B) of
the Code, or (C) a controlled foreign corporation receiving interest from a
related person within the meaning of Section 881(c)(3)(C) of the Code
(referred to as an "Exemption Certificate") and (y) two duly completed
copies of Internal Revenue Service Form W-8BEN or applicable successor
form.
(f) The Borrowers shall not be obligated to pay any additional amounts
to any Lender pursuant to clause (a)(i), or to indemnify any Lender
pursuant to clause (d), in respect of United States federal withholding
taxes to the extent imposed as a result of (i) the failure of such Lender
to deliver to a Borrower the form or forms and/or an Exemption Certificate,
as applicable to such Lender, pursuant to clause (e), (ii) such form or
forms and/or Exemption Certificate not establishing a complete exemption
from U.S. federal withholding tax or the information or certifications made
therein by the Lender being untrue or inaccurate on the date delivered in
any material respect, or (iii) the Lender designating a successor lending
office at which it maintains its Loans which has the effect of causing such
Lender to become obligated for tax payments in excess of those in effect
immediately prior to such designation; provided, however, that the
Borrowers shall be obligated to gross up any payments to any such Lender
pursuant to clause (a)(i), and to indemnify any such Lender pursuant to
clause (d), in respect of United States federal withholding taxes if (i)
any such failure to deliver a form or forms or an Exemption Certificate or
the failure of such form or forms or Exemption Certificate to establish a
complete exemption from U.S. federal withholding tax or inaccuracy or
untruth contained therein resulted from a change in any applicable statute,
treaty, regulation or other applicable law or any interpretation of any of
the foregoing occurring after the Closing Date, which change rendered such
Lender no longer legally entitled to deliver such form or forms or
Exemption Certificate or otherwise ineligible for a complete exemption from
U.S. federal withholding tax, or rendered the information or certifications
made in such form or forms or Exemption Certificate untrue or inaccurate in
a material respect, (ii) the redesignation of the Lender's lending office
was made at the request of any Borrower or (iii) the obligation to pay any
additional amounts to any such Lender pursuant to clause (a)(i) or to
indemnify any such Lender pursuant to clause (d) is with respect to an
Assignee Lender that becomes an Assignee Lender as a result of an
assignment made at the request of any Borrower.
SECTION 4.7. Payments, Computations, etc. Unless otherwise expressly
provided in a Loan Document, all payments by the Borrowers pursuant to each Loan
Document shall be made by the Borrowers to the Administrative Agent for the pro
rata account of the Secured Parties entitled to receive such payment. All
payments shall be made without setoff, deduction or counterclaim not later than
11:00 a.m. on the date due in same day or immediately available funds to such
account as the Administrative Agent shall specify from time to time by notice to
the Administrative Borrower. Funds received after that time shall be deemed to
have been received by the Administrative Agent on the next succeeding Business
Day. The Administrative Agent shall promptly remit in same day funds to each
Secured Party its share, if any, of such payments received by the Administrative
Agent for the account of such Secured Party. All interest (including interest on
LIBO Rate Loans) and fees shall be computed on the basis of the actual number of
days (including the first day but excluding the last day) occurring during the
period for which such interest or fee is payable over a year comprised of 360
days (or, in the case of interest on a Base Rate Loan, 365 days or, if
appropriate, 366 days). Payments due on other than a Business Day shall (except
as otherwise required by clause (c) of the definition of "Interest Period") be
made on the next succeeding Business Day and such extension of time shall be
included in computing interest and fees in connection with that payment. The
Administrative Agent shall apply amounts contained in the accounts of the
Borrowers maintained with the Administrative Agent to amounts due to the Agents
and the Lenders under the Loan Documents when due.
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SECTION 4.8. Sharing of Payments. If any Secured Party shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Credit Extension or Reimbursement
Obligation (other than pursuant to the terms of Sections 4.3, 4.4, 4.5 or 4.6)
in excess of its pro rata share of payments obtained by all Secured Parties,
such Secured Party shall purchase from the other Secured Parties such
participations in Credit Extensions made by them as shall be necessary to cause
such purchasing Secured Party to share the excess payment or other recovery
ratably (to the extent such other Secured Parties were entitled to receive a
portion of such payment or recovery) with each of them; provided, however, that
if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Secured Party, the purchase shall be rescinded
and each Secured Party which has sold a participation to the purchasing Secured
Party shall repay to the purchasing Secured Party the purchase price to the
ratable extent of such recovery together with an amount equal to such selling
Secured Party's ratable share (according to the proportion of (a) the amount of
such selling Secured Party's required repayment to the purchasing Secured Party
to (b) total amount so recovered from the purchasing Secured Party) of any
interest or other amount paid or payable by the purchasing Secured Party in
respect of the total amount so recovered. The Borrowers agree that any Secured
Party purchasing a participation from another Secured Party pursuant to this
Section may, to the fullest extent permitted by law, exercise all its rights of
payment (including pursuant to Section 4.9) with respect to such participation
as fully as if such Secured Party were the direct creditor of the applicable
Borrower in the amount of such participation. If under any applicable
bankruptcy, insolvency or other similar law any Secured Party receives a secured
claim in lieu of a setoff to which this Section applies, such Secured Party
shall, to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Secured Parties entitled
under this Section to share in the benefits of any recovery on such secured
claim.
SECTION 4.9. Setoff. Each Secured Party shall, upon the occurrence and
during the continuance of any Default described in clauses (a) through (d) of
Section 8.1.9 or, with the consent of the Required Lenders, upon the occurrence
and during the continuance of any other Event of Default, have the right to
appropriate and apply to the payment of the Obligations owing to it (whether or
not then due), and (as security for such Obligations) the Borrowers hereby grant
to each Secured Party a continuing security interest in, any and all balances,
credits, deposits, accounts or moneys of the Borrowers then or thereafter
maintained with such Secured Party; provided, however, that any such
appropriation and application shall be subject to the provisions of Section 4.8.
Each Secured Party agrees promptly to notify the Administrative Borrower and the
Administrative Agent after any such setoff and application made by such Secured
Party; provided, however, that the failure to give such notice shall not affect
the validity of such setoff and application. The rights of each Secured Party
under this Section are in addition to other rights and remedies (including other
rights of setoff under applicable law or otherwise) which such Secured Party may
have.
SECTION 4.10. Defaulting Lenders. Notwithstanding anything in this
Agreement to the contrary, as to any Lender which (a) has refused (which refusal
has not been retracted) to make available its portion of any Borrowing or to
fund its portion of any unreimbursed (or disgorged) payment under Section 2.6.1
or (b) has given notice to the Administrative Agent and/or the Administrative
Borrower that it does not intend to comply with its obligations under Section
2.1 or under Section 2.6.1:
(i) such Lender shall not be deemed a Required Lender hereunder and
such Lender's (A) Revolving Loan Commitments, (B) Loans and (C) Letter of
Credit Outstandings shall be excluded from the calculations set forth in
the definition of Required Lenders above;
(ii) such Lender shall not be entitled to receive any portion of (A)
Subfacility Letter of Credit fees, (B) Standby Letter of Credit Fees, (C)
interest payable with respect to any Disbursements or (D) amounts received
in respect of Disbursements; and
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(iii) such Lender shall not be entitled to receive any unused line
fee.
In addition to the foregoing, and notwithstanding Section 2.1.2, if any Lender
shall fall within the description set forth in clause (a) or (b) above, the
Issuer shall not be required to issue any Letter of Credit, unless arrangements
reasonably satisfactory to the Issuer have been entered into to eliminate the
Issuer's risk with respect to the participation in Letters of Credit by such
Lender, including cash collateralizing such Lender's Subfacility Letter of
Credit Commitment or such Lender's Standby Letter of Credit Commitment, as the
case may be.
SECTION 4.11. Replacement of Lenders. If (a) the Administrative Borrower
receives notice from any Lender requesting increased costs or additional amounts
under Sections 4.3, 4.5 or 4.6 not being requested generally by other Lenders,
(b) any Lender is affected in the manner described in Section 4.1, or (c) a
Lender becomes a Defaulting Lender, then, in each case, the Borrowers shall have
the right, so long as no Default shall have occurred and be continuing, and
unless, in the case of clause (a), such Lender has removed or cured the
conditions which resulted in the obligation to pay such increased costs or
additional amounts or agreed to waive and otherwise forego any right it may have
to any payments provided for under Sections 4.3, 4.5 or 4.6 in respect of such
conditions, to replace in its entirety such Lender (the "Replaced Lender"), upon
prior written notice to the Administrative Agent and such Replaced Lender, with
Replacement Lenders; provided, however, that, at the time of any replacement
pursuant to this Section 4.11, the Replaced Lender and the Replacement Lenders
shall enter into (and each Replaced Lender hereby unconditionally agreeing to
enter into) one or more Lender Assignment Agreement(s) (appropriately
completed), pursuant to which (i) the Replacement Lender shall acquire all of
the Commitments and outstanding Revolving Loans of the Replaced Lender and, in
connection therewith, shall pay (x) to the Replaced Lender in respect thereof an
amount equal to the sum of (a) an amount equal to the principal of, and all
accrued but unpaid interest on, all outstanding Loans of the Replaced Lender and
(b) an amount equal to all accrued but theretofore unpaid fees owing to the
Replaced Lender pursuant to Sections 3.3.1 and 3.3.3, and (y) to the Issuer, an
amount equal to any portion of the Replaced Lender's funding of an unpaid
drawing under a Letter of Credit as to which the Replaced Lender is then in
default; and (ii) the Borrowers shall pay to the Replaced Lender any other
amounts payable to the Replaced Lender under this Agreement (including amounts
payable under Sections 4.1, 4.3, 4.4, 4.5 and 4.6 which have accrued to the date
of such replacement). Upon the execution of the Lender Assignment Agreement(s),
the payment of the amounts referred to in the preceding sentence and, if so
requested by the Replacement Lenders, delivery to the Replacement Lenders of the
applicable Note(s) executed by the Borrower, the Replacement Lenders shall
automatically become Lenders hereunder and the Replaced Lender shall cease to
constitute a Lender hereunder, except with respect to indemnification provisions
under this Agreement, which shall survive as to such Replaced Lender. It is
understood and agreed that if any Replaced Lender shall fail to enter into a
Lender Assignment Agreement in accordance with the foregoing, it shall be deemed
to have entered into such a Lender Assignment Agreement.
ARTICLE V
CONDITIONS TO EFFECTIVENESS AND INITIAL CREDIT EXTENSIONS
SECTION 5.1. Effectiveness and Initial Credit Extension. The effectiveness
of this Second Amended and Restated Credit Agreement, and the obligations of the
Lenders and, if applicable, the Issuer to fund the initial Credit Extension
hereunder, shall be subject to the prior or concurrent satisfaction of each of
the conditions precedent set forth in this Article.
SECTION 5.1.1. Resolutions, etc. The Agents shall have received from each
Obligor which is not a natural Person, as applicable, (a) a copy of a good
standing certificate, dated a date reasonably close to the Closing Date, for
each such Person and (b) a certificate, dated the Closing Date with counterparts
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for each Lender, duly executed and delivered by such Person's Secretary or
Assistant Secretary, managing member or general partner, as applicable, as to
(i) resolutions of each such Person's Board of Directors (or
other managing body, in the case of other than a corporation) then in
full force and effect expressly and specifically authorizing, to the
extent relevant, the execution, delivery and performance of each Loan
Document to be executed by each Person and the transactions
contemplated hereby and thereby;
(ii) the incumbency and signatures of those of its officers,
managing member or general partner, as applicable, authorized to act
with respect to each Loan Document to be executed by such Person; and
(iii) the full force and validity of each Organic Document of
such Person and copies thereof;
upon which certificates each Secured Party may conclusively rely until it shall
have received a further certificate of the Secretary, Assistant Secretary,
managing member or general partner, as applicable, of any such Person canceling
or amending the prior certificate of such Person.
SECTION 5.1.2. Closing Date Certificate. The Agents shall have received,
with counterparts for each Lender, the Borrower Closing Date Certificate, dated
the Closing Date and duly executed and delivered by an Authorized Officer of
each Borrower, in which certificate the Borrowers shall agree and acknowledge
that the statements made therein shall be deemed in all material respects to be
true and correct representations and warranties of the Borrowers as of such
date, and, at the time each such certificate is delivered, such statements shall
in fact be true and correct in all material respects. All documents and
agreements required to be appended to the Borrower Closing Date Certificate
shall be in form and substance satisfactory to the Agents, including the
certificates of incorporation and by-laws for the Borrowers.
SECTION 5.1.3. Refinancing of Outstanding Indebtedness, etc. All
Indebtedness outstanding under the Existing Credit Agreement together with all
interest, all prepayment premiums and other amounts due and payable with respect
thereto to the Existing Lenders who are not Lenders party hereto, shall have
been refinanced in full from the proceeds of Revolving Loans made by Lenders
party hereto and the commitments of such Existing Lenders shall have been
assigned to Lenders party hereto in accordance with the provisions of Sections
10.11.1 and 10.16.
SECTION 5.1.4. Closing Fees, Expenses, etc. The Agents shall have received
for their own account, or for the account of each Lender, as the case may be,
all fees, costs and expenses due and payable pursuant to Sections 3.3 and, to
the extent invoiced, 10.3.
SECTION 5.1.5. Financial Information, etc. The Agents shall have received,
with counterparts for each Lender,
(a) audited consolidated financial statements of ▇▇▇▇-▇▇▇▇▇ and its
Subsidiaries for the 2003 Fiscal Year satisfactory to the Agents;
(b) financial projections of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries through
the 2007 Fiscal Year satisfactory to the Agents.
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SECTION 5.1.6. Compliance Certificate. The Agents shall have received, with
counterparts for each Lender, an initial Compliance Certificate on a pro forma
basis as if the Closing Date occurred on the date of ▇▇▇▇-Dixie's last Fiscal
Quarter end and as to such items therein as the Agents reasonably request, dated
the Closing Date, duly executed (and with all schedules thereto duly completed)
and delivered by the chief financial or accounting Authorized Officer of the
Borrowers, and such Compliance Certificate shall be satisfactory in form and
substance to the Agents.
SECTION 5.1.7. Opinions of Counsel. The Agents shall have received
opinions, dated the Closing Date and addressed to the Agents and all Lenders,
from ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A., counsel for the Obligors, in form and substance
satisfactory to the Agents, and from ▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Utah counsel for the
Obligors, in form and substance satisfactory to the Agents.
SECTION 5.1.8. Filings. All Uniform Commercial Code financing statements or
other similar financing statements and Uniform Commercial Code (Form UCC-3)
termination statements required pursuant to the Loan Documents (collectively,
the "Filing Statements") shall have been delivered to CSC or another similar
filing service company acceptable to the Administrative Agent, including "in
lieu" financing statements in accordance with the revised Uniform Commercial
Code.
SECTION 5.1.9. Reaffirmation. The Agents shall have received, with
counterparts for each Lender, a duly executed acknowledgment, reaffirmation and
agreement from ▇▇▇▇-▇▇▇▇▇ and all parties to the Subsidiary Guaranty and the
Security Documents, and any other Material Subsidiary, dated as of the Closing
Date, in form and substance reasonably satisfactory to the Agents, with respect
to this Agreement, the Subsidiary Guaranty and the Security Documents (the
"Guaranty, Security Document and Subordination Reaffirmation").
SECTION 5.1.10. Solvency, etc. The Agents shall have received, with
counterparts for each Lender, a certificate duly executed and delivered by the
chief financial or accounting Authorized Officer of the Borrowers, dated as of
the Closing Date, substantially in the form of Exhibit M hereto.
SECTION 5.1.11. Pledge Agreements. The Agents and their counsel shall be
satisfied that (i) the Lien granted to the Administrative Agent, for the benefit
of the Secured Parties, in the collateral described in each Pledge Agreement is
a first priority (or local equivalent thereof) security interest; and (ii) no
Lien exists on any of the collateral described in any Pledge Agreement other
than the Lien created in favor of the Administrative Agent, for the benefit of
the Secured Parties, pursuant to a Loan Document, subject in each case to any
Designated Permitted Liens.
SECTION 5.1.12. Foreign Pledge Agreements. The Agents and their counsel
shall be satisfied that all Liens granted to the Administrative Agent pursuant
to the Foreign Pledge Agreements are duly perfected and provide the
Administrative Agent with a security interest in and Lien on all collateral
granted thereunder free and clear of other Liens, except to the extent consented
to by the Agents and subject to any Designated Permitted Liens.
SECTION 5.1.13. Security Agreement Searches and Filings.
(a) The Agents shall have received certified copies of UCC Requests for
Information or Copies (Form UCC-11), or a similar search report certified by a
party acceptable to the Administrative Agent, dated a date reasonably near to
the Closing Date, listing all effective financing statements, tax liens and
judgment liens which name such Obligor (under its present names and any previous
names) as the debtor and which are filed in any applicable jurisdictions,
together with copies of such financing statements (none of which (other than (A)
those described in Section 5.1.8, if such Form UCC-11 or search report, as the
case may be, is current enough to list such financing statements described in
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Section 5.1.8, (B) those which name the Administrative Agent as the secured
party and describe a security interest granted to the Administrative Agent in
the interests of such Obligor in collateral pledged pursuant to a Security
Agreement and (C) financing statements evidencing Liens permitted pursuant to
clause (b) of Section 7.2.3) shall cover any collateral described in any Loan
Document).
(b) The Administrative Agent and its counsel shall be satisfied that (i)
the Lien granted to the Administrative Agent, for the benefit of the Secured
Parties in the collateral (other than motor vehicles, motor vehicle trailers,
Florida liquor licenses, fixtures and Deposit Accounts (as defined in the
Borrower Security Agreement) that are not Majority Accounts) described in each
Security Agreement is a first (subject to Designated Permitted Liens) priority
(or local equivalent thereof) security interest and (ii) no Lien (other than
Designated Permitted Liens) exists on any of the collateral described in any
Security Agreement other than the Lien created in favor of the Administrative
Agent, for the benefit of the Secured Parties, pursuant to a Loan Document.
SECTION 5.1.14. Insurance. The Agents shall have received (a) a
satisfactory broker's letter stating that the Borrowers' insurance coverage is
sufficient and customary as provided therein and complies with the requirements
of the Loan Documents and (b) evidence of insurance (including, without
limitation, property insurance) satisfactory to the Agents, including
endorsements naming the Administrative Agent as additional insured and loss
payee with financially sound and reputable insurance companies.
SECTION 5.1.15. Mortgage Amendments. The Agents shall have received the
following:
(a) a title search for each Property showing that the applicable mortgagor
is the current record title holder and showing no liens of record other than
Designated Permitted Liens and any matters an accurate survey of such Property
would disclose subsequent to the date of the survey referenced in the title
insurance policies delivered pursuant to the Existing Credit Agreement;
(b) amendments to the Mortgages substantially in the form of Exhibit J-5
(with such changes as may be required by the Administrative Agent and its
counsel in order to comply with matters of local law) and otherwise in form and
substance satisfactory to the Administrative Agent and in a form suitable for
recording or filing, each duly executed and acknowledged by the applicable
Obligor (the "Mortgage Amendments");
(c) a Date Down Endorsement to the mortgagee's title insurance policies
delivered with respect to the Mortgages under the Existing Credit Agreement in
form and substance satisfactory to the Administrative Agent; and
(d) such other approvals, opinions, or documents as the Agents may request
in form and substance satisfactory to the Agents, including, with respect to
those Properties located in states that assess a mortgage recordation tax or
similar tax, a Mortgage Tax Endorsement to the applicable mortgagee's title
insurance policy or an opinion of local counsel with respect to the proper
payment of any applicable mortgage recordation taxes as the Administrative Agent
may require in its reasonable discretion.
SECTION 5.1.15A. ▇▇▇▇▇▇▇ Facility Mortgages. The Agents shall have
received counterparts of two mortgages substantially in the form of Exhibit J-3
(the "▇▇▇▇▇▇▇ Facility Mortgages") for the ▇▇▇▇▇▇▇ Facility for filing in the
state in which such property is located, dated as of the Closing Date, duly
executed by the applicable Obligors, together with
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(a) evidence of the completion (or satisfactory arrangements for the
completion) of all recordings and filings of the ▇▇▇▇▇▇▇ Facility Mortgages as
may be necessary or, in the opinion of the Agents, desirable to create a valid,
perfected first (subject to Designated Permitted Liens) priority Lien against
the properties purported to be covered thereby;
(b) mortgagee's title insurance policy in favor of the Administrative Agent
for the benefit of the Secured Parties in amounts and in form and substance and
issued by insurers, satisfactory to the Agents, with respect to the properties
purported to be covered by the ▇▇▇▇▇▇▇ Facility Mortgages, insuring that title
to such property is marketable and that the interests created by the ▇▇▇▇▇▇▇
Facility Mortgages constitute valid first Liens (subject to Designated Permitted
Liens) thereon free and clear of all material defects and encumbrances (other
than Designated Permitted Liens) other than as approved by the Administrative
Agent, and, if required by the Administrative Agent and if available, revolving
credit endorsement, comprehensive endorsement, variable rate endorsement, access
and utilities endorsements, mechanic's lien endorsement and such other
endorsements as the Administrative Agent shall reasonably request and
accompanied by evidence of the payment in full of all premiums thereon;
(c) American Land Title Association/American Congress on Surveying and
Mapping form survey for which all necessary fees (where applicable) have been
paid, and dated no more than 30 days before the day of the Closing Date,
certified to the Administrative Agent and issuer of the mortgagees' title
insurance policy in a manner satisfactory to the Administrative Agent by a land
surveyor duly registered and licensed in the states in which the Property
described in such survey is located and acceptable to the Administrative Agent,
showing all buildings and other improvements, any off-site improvements, the
location of any easements, parking spaces, rights of way, building set-back
lines and other dimensional regulations and the absence of encroachments, either
by such improvements or on to such property, and other defects, other than
encroachments and other defects acceptable to the Administrative Agent; and
(d) such other approvals, opinions, or documents as the Agents may request
in form and substance satisfactory to the Agents, including an opinion of local
counsel substantially in the form of Exhibit J-4 hereof.
SECTION 5.1.16. Collateral Access Agreements. The Agents shall have
received copies of notices satisfactory to the Agents duly executed and
delivered by each applicable Obligor with respect to each Collateral Access
Agreement delivered pursuant to the Existing Credit Agreement to each applicable
landlord advising such landlord of the existence of this Agreement and the
Agents and their counsel shall be otherwise satisfied that the Collateral Access
Agreements duly executed by the applicable landlord and applicable Obligor
pursuant to the Existing Credit Agreement will be in full force and effect as of
the Closing Date and are sufficient for the purposes hereof.
SECTION 5.1.17. Delivery of Notes.
(a) The Administrative Agent shall have received from any Existing Lenders
that were issued promissory notes by the Existing Borrower promising to repay
the Existing Revolving Loans or the Existing Swing Line Loans, all such
promissory notes or duly executed lost note affidavits in favor of the
Administrative Agent in lieu thereof.
(b) The Administrative Agent shall have received, for the account of each
Lender, such Lender's Notes dated the Closing Date and duly executed and
delivered by Authorized Officers of the Borrowers.
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SECTION 5.1.18. Perfection Certificate. The Agents shall have received the
Perfection Certificate, dated as of the Closing Date, duly executed and
delivered by Authorized Officers of the Borrowers.
SECTION 5.1.19. Adjusted Excess Availability. On the Closing Date, the
Adjusted Excess Availability as determined by the Collateral Monitoring Agent
shall be not less than $400,000,000 after giving effect to the initial Loans
made or to be made and the Letters of Credit issued or to be issued on the
Closing Date, as reflected by the certification made in the Closing Date
Certificate.
SECTION 5.1.20. No Material Adverse Change. Except to the extent reflected
in the financial projections of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries delivered
pursuant to Section 5.1.5(b), in the Quarterly Reports on Form 10-Q filed with
the SEC prior to the Closing Date by ▇▇▇▇-▇▇▇▇▇ since the end of Fiscal Year
2003 and in Item 6.6 of the Disclosure Schedule, no material adverse change
shall have occurred in the operations, assets, business, revenues, financial
conditions, profits or prospects of Borrowers and their Subsidiaries on a
consolidated basis or in the condition of the assets of the Borrowers and their
Subsidiaries on a consolidated basis since ▇▇▇▇-Dixie's most recent audited
financial statements nor since the date of the Collateral Monitoring Agent's
latest field examination (not including for this purpose the field review
referred to in Section 5.1.21), and no change or event shall have occurred which
would impair the ability of any Borrower or Obligor to perform its obligations
hereunder or under any of the other Loan Documents to which it is a party or of
any Agent or any Lender to enforce the Obligations.
SECTION 5.1.21. Field Review and Appraisal. The Collateral Monitoring Agent
shall have completed a field review of the Records and such other information
with respect to the Inventory, the Pharmacy Scripts and the Pharmacy Receivables
as the Collateral Monitoring Agent may require to determine the amount of Loans
available to the Borrowers (including, without limitation, current perpetual
inventory records and/or roll-forwards of Inventory, the Pharmacy Scripts and
the Pharmacy Receivables through the Closing Date and test counts of the
Inventory and Pharmacy Scripts in a manner satisfactory to the Collateral
Monitoring Agent, together with such supporting documentation as may be
necessary or appropriate, and other documents and information that will enable
the Collateral Monitoring Agent to accurately identify and verify the Eligible
Inventory and the Eligible Pharmacy Scripts), the results of which in each case
shall be satisfactory to the Collateral Monitoring Agent, not more than three
(3) Business Days prior to the date hereof.
SECTION 5.1.22. Blocked Account Agreements. The Agents and their counsel
shall be satisfied that the Blocked Account Agreements with respect to each
Majority Account (other than those held by Wachovia Bank) duly executed by the
applicable Obligor, the applicable Majority Account Bank and the Administrative
Agent, pursuant to the terms of the Existing Credit Agreement shall continue to
be in full force and effect as of the Closing Date and are sufficient for the
purposes hereof.
SECTION 5.1.23. Processor Letters. The Agents and their counsel shall be
satisfied that Processor Letters have been delivered to each Credit Card Issuer
and Credit Card Processor listed in Item 6.28 of the Disclosure Schedule, duly
executed by the applicable Obligor, pursuant to the terms of the Existing Credit
Agreement and such Processor Letters shall continue to be in full force and
effect as of the Closing Date and are sufficient for the purposes hereof.
SECTION 5.1.24. Required Consents and Approvals. All required material
consents and approvals shall have been duly obtained and be in full force and
effect with respect to the transactions contemplated hereby and the continuing
operations of the Borrower from (a) all relevant Governmental Authorities and
(b) any other Person whose consent or approval is so required to effect the
transactions, and all applicable waiting periods shall have expired without any
action being taken by any competent
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authority that could restrain, prevent or otherwise impose any adverse
conditions on the transactions and related financing contemplated hereby.
SECTION 5.1.25. Existing Security Documents. The Administrative Agent shall
be satisfied that the Security Documents executed in connection with the
Existing Credit Agreement are sufficient for the purposes hereof or such
Security Documents shall have been modified to the reasonable satisfaction of
the Administrative Agent.
SECTION 5.1.26. Direction Letters. The Agents shall have received copies of
notices satisfactory to the Agents duly executed and delivered by each
applicable Borrower or Subsidiary with respect to each Bank Account listed in
Item 6.30 of the Disclosure Schedule to each Direction Bank advising such
Direction Bank of the existence of this Agreement, and the Agents and their
counsel shall be otherwise satisfied that each Direction Letter sent pursuant to
the terms of the Existing Credit Agreement shall continue to be in full force
and effect as of the Closing Date and are sufficient for the purposes hereof.
SECTION 5.1.27. Securities Control Agreements. The Agents shall have
received Securities Control Agreements with respect to each of the securities
accounts and uncertificated securities listed in Item 6.25(c) of the Disclosure
Schedule, duly executed by the applicable Obligor, the applicable securities
intermediary and the Administrative Agent or, to the extent that all of such
Securities Control Agreements are not delivered by the Closing Date, (a) the
Agents shall be satisfied that the Borrowers shall have used commercially
reasonable efforts to obtain delivery thereof and (b) the Borrowers and the
Guarantors shall not hold any financial assets in any securities account, or
hold any uncertificated securities (other than of direct wholly owned
subsidiaries), in respect of which a Securities Control Agreement has not been
delivered to the Agents.
SECTION 5.2. All Credit Extensions. The obligation of each Lender and each
Issuer to make any Credit Extension (including the initial Credit Extension)
shall be subject to and the satisfaction of each of the conditions precedent set
forth below.
SECTION 5.2.1. Compliance with Warranties, No Default, etc. Both before and
after giving effect to any Credit Extension (but, if any Default of the nature
referred to in Section 8.1.5 shall have occurred with respect to any other
Indebtedness, without giving effect to the application, directly or indirectly,
of the proceeds thereof), the following statements shall be true and correct:
(a) the representations and warranties set forth in each Loan Document
shall, in each case, be true and correct in all material respects with the
same effect as if then made (unless stated to relate solely to an earlier
date, in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date); and
(b) no Default shall have then occurred and be continuing.
SECTION 5.2.2. Credit Extension Request, etc. Subject to Section 2.3.2, the
Administrative Agent shall have received a Borrowing Request if Loans are being
requested, or an Issuance Request if a Letter of Credit is being requested or
extended. Each of the delivery of a Borrowing Request or Issuance Request and
the acceptance by any Borrower of the proceeds of such Credit Extension shall
constitute a representation and warranty by each Borrower that on the date of
such Credit Extension (both immediately before and after giving effect to such
Credit Extension and the application of the proceeds thereof) the statements
made in Section 5.2.1 are true and correct in all material respects.
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SECTION 5.2.3. Satisfactory Legal Form. All documents executed or submitted
pursuant hereto by or on behalf of any Obligor shall be reasonably satisfactory
in form and substance to the Agents and their counsel, and the Agents and their
counsel shall have received all information, approvals, opinions, documents or
instruments as the Agents and their counsel may reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties to enter into this Agreement and to
make Credit Extensions hereunder, each Borrower represents and warrants to each
Secured Party as set forth in this Article.
SECTION 6.1. Organization, etc. Such Borrower and each other Obligor is
validly organized and existing and in good standing under the laws of the state
or jurisdiction of its incorporation or organization, is duly qualified to do
business and is in good standing as a foreign entity in each jurisdiction where
the nature of its business requires such qualification, and has full power and
authority and holds all requisite governmental licenses, permits and other
approvals to enter into and perform its Obligations under each Loan Document to
which it is a party, to own and hold under lease its property and to conduct its
business substantially as currently conducted by it, except where the failure to
be so qualified or in good standing or to have such power or authority as to
licenses, permits or approvals would not be reasonably expected to have a
Material Adverse Effect.
SECTION 6.2. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by such Borrower of each Loan Document executed or to
be executed by it, the execution, delivery and performance by each other Obligor
of each Loan Document executed or to be executed by it, such Borrower's and each
such Obligor's participation in the consummation of all aspects of the
transactions contemplated herein, and the execution, delivery and performance by
such Borrower or (if applicable) any other Obligor of the agreements executed
and delivered by it in connection with the transactions contemplated herein are
in each case within such Person's powers, have been duly authorized by all
necessary action, and do not
(a) contravene or result in a default under (i) such Borrower's or any
other Obligor's Organic Documents, (ii) any contractual restriction
(including the Senior Unsecured Notes Documents) binding on or affecting
such Borrower or any other Obligor, (iii) any court decree or order binding
on or affecting such Borrower or any other Obligor or (iv) any law or
governmental regulation binding on or affecting such Borrower or any other
Obligor; or
(b) result in, or require the creation or imposition of, any Lien on
such Borrower's or any other Obligor's properties (except as permitted by
this Agreement).
SECTION 6.3. Government Approval, Regulation, etc. No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority, regulatory body or other Person (other than those that have been, or
on the Closing Date will be, duly obtained or made and which are, or on the
Closing Date will be, in full force and effect) is required for the consummation
of the transactions contemplated herein or the due execution, delivery or
performance by such Borrower or any other Obligor of any Loan Document to which
it is a party, or for the due execution, delivery and/or performance of the
documents evidencing the transactions contemplated herein, in each case by the
parties thereto. No Borrower nor any of their respective Subsidiaries is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or 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.
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SECTION 6.4. Validity, etc. This Agreement and the other documents which
evidence the transactions contemplated herein have been duly executed and
delivered and constitute, and each other Loan Document executed by each Borrower
will, on the due execution and delivery thereof, constitute, the legal, valid
and binding obligations of such Borrower, enforceable against such Borrower in
accordance with their respective terms; and each Loan Document executed by each
other Obligor will, on the due execution and delivery thereof by such Obligor,
constitute the legal, valid and binding obligation of such Obligor enforceable
against such Obligor in accordance with its terms (except, in any case, as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws from time to time in effect affecting creditors'
rights generally and by general principles of equity).
SECTION 6.5. Financial Information. The consolidated financial statements
of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries furnished to the Administrative Agent and
each Lender pursuant to Section 5.1.5(a) have been prepared in accordance with
GAAP consistently applied, and present fairly the consolidated financial
condition of the Persons covered thereby as at the dates thereof and the results
of their operations for the periods then ended. All consolidated balance sheets,
all statements of income and of cash flow and all other financial information of
each of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries furnished pursuant to Section 7.1.1(a)
and (b) have been and will for periods following the Closing Date be prepared in
accordance with GAAP consistently applied with the financial statements
delivered pursuant to Section 5.1.5(a), and do or will present fairly the
consolidated financial condition of the Persons covered thereby as at the dates
thereof and the results of their operations for the periods then ended. The
financial projections of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries furnished to the
Administrative Agent and each Lender pursuant to Section 5.1.5(b) were prepared
in good faith on the basis of the assumptions stated therein, which assumptions
are fair and reasonable in the light of the then existing conditions.
SECTION 6.6. No Material Adverse Change. Except to the extent reflected in
the financial projections of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries delivered pursuant
to Section 5.1.5(b), in the Quarterly Reports on Form 10-Q filed with the SEC
prior to the Closing Date by ▇▇▇▇-▇▇▇▇▇ since the end of Fiscal Year 2003 and in
Item 6.6 of the Disclosure Schedule, there has been no material adverse change
in the business, assets, revenues, financial condition, operations or prospects
of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries taken as a whole since June 25, 2003.
SECTION 6.7. Litigation. There is no pending or, to the knowledge of any
Borrower or any of their Subsidiaries, threatened litigation, action, proceeding
or labor controversy
(a) except as disclosed in Item 6.7 of the Disclosure Schedule, the
Quarterly Reports on Form 10-Q filed with the SEC prior to the Closing Date
by ▇▇▇▇-▇▇▇▇▇ since the end of Fiscal Year 2003 or in ▇▇▇▇-Dixie's most
recent public filings, affecting ▇▇▇▇-▇▇▇▇▇, any of its Subsidiaries or any
other Obligor, or any of their respective properties, businesses, assets or
revenues, which could reasonably be expected to have a Material Adverse
Effect; or
(b) which purports to affect the legality, validity or enforceability
of any Loan Document, the other documents evidencing the transactions
contemplated herein and the other transactions contemplated herein
(including the Credit Extensions).
SECTION 6.8. Subsidiaries. ▇▇▇▇-▇▇▇▇▇ has (a) no Subsidiaries, except those
Subsidiaries (i) which are U.S. Subsidiaries and are identified in Item
6.8(a)(i) of the Disclosure Schedule (including those identified thereon as
"Inactive Subsidiaries" which conduct no material business and own no material
property or assets), (ii) which are Subsidiaries organized under the laws of the
Bahamas and are identified in Item 6.8(a)(ii) of the Disclosure Schedule, or
(iii) which are permitted to have been organized or acquired in accordance with
Sections 7.2.5 or 7.2.10, and (b) as of the Closing Date, no
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Material Subsidiaries, except those Material Subsidiaries which are identified
in Item 6.8(b) of the Disclosure Schedule.
SECTION 6.9. Ownership of Properties. Such Borrower and each of its
Subsidiaries owns (a) in the case of owned Real Property, good and marketable
fee title to, and (b) in the case of owned personal property, good and valid
title to, or, in the case of leased Real Property or personal property, valid
and enforceable leasehold interests (as the case may be) in, all of its
properties and assets, real and personal, tangible and intangible, of any nature
whatsoever, free and clear in each case of all Liens or claims, except (x) in
the case of the Properties, Designated Permitted Liens and (y) in the case of
any other Real Property, Permitted Liens.
SECTION 6.10. Taxes. Such Borrower and each of its Subsidiaries has filed
all tax returns and reports required by law to have been filed by it and has
paid all Taxes thereby shown to be due and owing, except any such Taxes which
are being diligently contested in good faith by appropriate proceedings and for
which appropriate reserves in accordance with GAAP shall have been set aside on
its books.
SECTION 6.11. Pension and Welfare Plans. During the twelve-consecutive-
month period prior to the Existing Effective Date and prior to the date of any
Credit Extension hereunder, no steps have been taken to terminate any Pension
Plan, and no contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA. No condition
exists or event or transaction has occurred with respect to any Pension Plan
which might result in the incurrence by ▇▇▇▇-▇▇▇▇▇ or any member of the
Controlled Group of any material liability, fine or penalty. Except as disclosed
in Item 6.11 of the Disclosure Schedule, neither ▇▇▇▇-▇▇▇▇▇ nor any member of
the Controlled Group has any contingent liability with respect to any
post-retirement benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Title I of ERISA.
SECTION 6.12. Environmental Warranties. Except as set forth in Item 6.12 of
the Disclosure Schedule and except to the extent that the failure to comply with
any of the requirements listed below could not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect:
(a) all facilities and property (including underlying groundwater)
owned or leased by any Borrower or any of their Subsidiaries have been, and
continue to be, owned or leased by such Borrower and such Subsidiaries in
compliance with all Environmental Laws;
(b) there have been no past, and there are no pending or, to the best
of the Borrowers' knowledge, threatened (i) claims, complaints, notices or
requests for information received by any Borrower or any of their
Subsidiaries with respect to any alleged violation of any Environmental
Law, or (ii) complaints, notices or inquiries to any Borrower or any of
their Subsidiaries regarding potential liability under any Environmental
Law;
(c) there have been no Releases of Hazardous Materials at, on or under
any property now or previously owned or leased by any Borrower or any of
their Subsidiaries;
(d) each Borrower and its Subsidiaries have been issued and are in
compliance with all permits, certificates, approvals, licenses and other
authorizations relating to environmental matters;
(e) no property now or previously owned or leased by any Borrower or
any of their Subsidiaries is listed or proposed for listing (with respect
to owned property only) on the National
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Priorities List pursuant to CERCLA, on the CERCLIS or on any similar state
list of sites requiring investigation or clean-up;
(f) there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now or
previously owned or leased by any Borrower or any of their Subsidiaries;
(g) neither any Borrower nor any Subsidiary has directly transported
or directly arranged for the transportation of any Hazardous Material to
any location which is listed or proposed for listing on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any similar state
list or which is the subject of federal, state or local enforcement actions
or other investigations which may lead to claims against any Borrower or
such Subsidiary for any remedial work, damage to natural resources or
personal injury, including claims under CERCLA;
(h) there are no polychlorinated biphenyls or friable asbestos present
at any property now or previously owned or leased by any such Borrower or
any Subsidiary; and
(i) no conditions exist at, on or under any property now or previously
owned or leased by any Borrower which, with the passage of time, or the
giving of notice or both, would give rise to liability under any
Environmental Law.
SECTION 6.13. Accuracy of Information. None of the factual information
heretofore or contemporaneously furnished in writing to any Secured Party by or
on behalf of any Obligor in connection with any Loan Document or any transaction
contemplated hereby or contained in the Confidential Memorandum contains any
untrue statement of a material fact, or omits to state any material fact
necessary to make any information not misleading, and no other factual
information hereafter furnished in connection with any Loan Document by or on
behalf of any Obligor to any Secured Party will contain any untrue statement of
a material fact or will omit to state any material fact necessary to make any
information not misleading on the date as of which such information is dated or
certified.
SECTION 6.14. Regulations U and X. No Obligor is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock, and no
proceeds of any Credit Extensions will be used to purchase or carry margin stock
or otherwise for a purpose which violates, or would be inconsistent with, F.R.S.
Board Regulation U or Regulation X. Terms for which meanings are provided in
F.R.S. Board Regulation U or Regulation X or any regulations substituted
therefor, as from time to time in effect, are used in this Section with such
meanings.
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SECTION 6.15. Issuance of Subordinated Debt; Status of Obligations as
Senior Indebtedness, etc. The subordination provisions of any Subordinated Debt
contained in any Sub Debt Documents are enforceable against the holders of such
Subordinated Debt by the holder of any "Senior Indebtedness" or similar term
referring to the Obligations (as defined in any Sub Debt Documents). All
Obligations, including those to pay principal of and interest (including
post-petition interest, whether or not allowed as a claim under bankruptcy or
similar laws) on the Loans and Reimbursement Obligations, and fees and expenses
in connection therewith, constitute "Senior Indebtedness" or similar term
relating to the Obligations (as defined in any Sub Debt Documents) and all such
Obligations are entitled to the benefits of the subordination created by any Sub
Debt Documents. Each Borrower acknowledges that each Agent, each Lender and each
Issuer is entering into this Agreement and is extending its Commitments in
reliance upon the subordination provisions of any Sub Debt Documents.
SECTION 6.16. Solvency. Both before and immediately after giving effect to
any Borrowing requested hereunder:
(a) the fair value of the assets of each Borrower and its Subsidiaries
on a consolidated basis will exceed the total amount of liabilities
(including contingent, subordinated, unmatured and unliquidated
liabilities) of such Borrower and its Subsidiaries on a consolidated basis,
on a going-concern basis;
(b) the present fair salable value (as defined below) of the assets of
each Borrower and its Subsidiaries on a consolidated basis will exceed the
probable total liabilities (including contingent, subordinated, unmatured
and unliquidated liabilities) of such Borrower and its Subsidiaries on a
consolidated basis as they become absolute and matured;
(c) each Borrower and its Subsidiaries on a consolidated basis will be
able to pay their debts, including contingent liabilities, as they mature
and become due;
(d) each Borrower and its Subsidiaries on a consolidated basis are
not, and will not be, engaged in a business for which their consolidated
capital is, or would be, unreasonably small for their consolidated
business; and
(e) each Borrower and its Subsidiaries on a consolidated basis have
not incurred (by way of assumption or otherwise) any obligations or
liabilities (contingent or otherwise) under this Agreement or any other
Loan Document, nor have they made any conveyance pursuant to or in
connection therewith, with actual intent to hinder, delay or defraud either
present or future creditors of such Borrower or any of its Subsidiaries.
For purposes of this Section, the "fair salable value" of a Borrower's and its
Subsidiaries' assets means the amount which may be realized within a reasonable
time, either through collection or sale of such assets at the regular market
value, based upon the amount which could be obtained for such assets within such
period by a capable and diligent seller from an interested buyer who is willing
(but is under no compulsion) to purchase under ordinary selling conditions.
SECTION 6.17. Capitalization. Attached as Schedule III hereto is a true,
complete and accurate description as of the Closing Date of the equity capital
structure of ▇▇▇▇-▇▇▇▇▇ showing accurate ownership percentages of the
equityholders of record and accompanied by a statement of authorized and issued
Capital Securities for ▇▇▇▇-▇▇▇▇▇ as of the date hereof. Except as set forth on
Schedule III hereto, there are no (a) preemptive rights, outstanding
subscriptions, warrants or options to purchase any Capital Securities, (b)
obligations of any Person to redeem or repurchase any of its securities and (c)
other agreements, arrangements or plans to which any Person is a party or of
which ▇▇▇▇-▇▇▇▇▇ has knowledge
70
that could directly or indirectly affect the capital structure of ▇▇▇▇-▇▇▇▇▇.
All such Capital Securities (i) are validly issued and fully paid and
non-assessable and (ii) are owned of record and beneficially as set forth on
Schedule III hereto or as otherwise disclosed in writing to the Administrative
Agent, free of any Lien, except for Liens granted to the Secured Parties or
otherwise permitted under this Agreement.
SECTION 6.18. Compliance with Laws; Authorizations. Except as disclosed in
Item 6.18 of the Disclosure Schedule, each Borrower and its Subsidiaries have
complied in all respects with all applicable statutes, rules, regulations,
orders and restrictions of any Governmental Authority having jurisdiction over
the conduct of its businesses or the ownership of its properties, including,
without limitation, the Patriot Act and those relating to public health and
safety and those relating to sales of Inventory comprising tobacco, alcohol and
pharmaceuticals, except to the extent such compliance could not reasonably be
expected to have a Material Adverse Effect. Neither any Borrower nor any of
their respective Subsidiaries has received any notice to the effect that its
operations are not in compliance with any of the requirements of applicable
federal, state and local health and safety statutes and regulations which
non-compliance could be reasonably expected to have a Material Adverse Effect.
Each Borrower and its Subsidiaries have obtained all authorizations necessary
and appropriate to own and operate their businesses (including those relating to
sales of Inventory comprising tobacco, alcohol and pharmaceuticals) and all such
authorizations are in full force and effect, except where the failure to so
obtain such authorizations or to so keep such authorizations in full force and
effect could not be reasonably expected to have a Material Adverse Effect.
SECTION 6.19. No Contractual or Other Restrictions. Except for restrictions
contained in this Agreement or any other agreement with respect to Indebtedness
of any Borrower or Guarantor permitted hereunder as in effect on the Closing
Date, there are no contractual or consensual restrictions on any Borrower or
Guarantor or any of its Subsidiaries which prohibit or otherwise restrict (a)
the transfer of cash or other assets (i) between any Borrower or Guarantor and
any of its or their Subsidiaries (other than the Insurance Captive) or (ii)
between any Subsidiaries of any Borrower or Guarantor (other than the Insurance
Captive) or (b) the ability of any Borrower or Guarantor or any of its or their
Subsidiaries (other than the Insurance Captive) to incur Indebtedness or grant
security interests to any Agent or any Lender in the Collateral.
SECTION 6.20. Absence of Any Undisclosed Liabilities. Except to the extent
reflected in the financial projections of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries
delivered pursuant to Section 5.1.5(b), there are no liabilities of any Borrower
or any of its Subsidiaries of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise, and there is no existing
condition, situation or set of circumstances, which could reasonably be expected
to result in a Material Adverse Effect, other than those liabilities provided
for or disclosed in the most recently delivered financial statements.
SECTION 6.21. Intellectual Property. Each of the Borrowers and their
respective Subsidiaries owns and possesses or licenses (as the case may be) all
such patents, patent rights, trademarks, trademark rights, trade names, trade
name rights, service marks, service ▇▇▇▇ rights and copyrights as the Borrowers
consider necessary for the conduct of the businesses of the Borrowers and their
respective Subsidiaries as now conducted without, individually or in the
aggregate, any infringement upon rights of other Persons, in each case except as
could not reasonably be expected to result in a Material Adverse Effect, and
there is no individual patent, patent right, trademark, trademark right, trade
name, trade name right, service ▇▇▇▇, service ▇▇▇▇ right or copyright the loss
of which could reasonably be expected to result in a Material Adverse Effect,
except as may be disclosed in Item 6.21 of the Disclosure Schedule.
SECTION 6.22. Priority of Security Interests. The Liens granted to the
Administrative Agent in the Collateral (as defined in the applicable Pledge
Agreement and Security Agreement) are first (subject to, on the Closing Date,
Designated Permitted Liens, and thereafter, Permitted Liens, and other than
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motor vehicles, motor vehicle trailers, fixtures, and Deposit Accounts (as
defined in the Borrower Security Agreement) that are not Majority Accounts)
priority (or the local equivalent thereof) security interests and no Liens exist
on any of the collateral described above other than the Liens created in favor
of the Administrative Agent pursuant to a Loan Document and the Permitted Liens.
SECTION 6.23. Material Contracts. Except as set forth on Item 6.23 of the
Disclosure Schedule, as of the Closing Date, neither the Borrowers nor any of
their respective Subsidiaries is party to any Material Contract.
SECTION 6.24. Subsidiary Guarantors. The Borrowers and the Subsidiary
Guarantors will at all times account for no less than 90% of (a) the
consolidated gross revenues of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries (excluding, for
purposes of this calculation, the gross revenues of the Insurance Captive), (b)
Net Income (excluding, for purposes of this calculation, the Net Income of any
Bahamian Subsidiaries and of the Insurance Captive), and (c) the consolidated
assets of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries (excluding, for the purposes of this
calculation, the consolidated assets of the Insurance Captive).
SECTION 6.25. Accounts. (a) By the close of business on each day,
substantially all of the cash of the Borrowers and their Subsidiaries (other
than In Store Cash) will be held in, or wired to and expected to be received on
the next Business Day in, Bank Accounts maintained with the Administrative
Agent.
(b) As of the Closing Date, set forth in Item 6.25(b) of the
Disclosure Schedule is a true and correct list of Bank Accounts containing
a majority of the cash of the Borrowers. A majority of the cash of the
Borrowers and Guarantors is held in Bank Accounts with Majority Account
Banks.
(c) As of the Closing Date, none of the Borrowers or Guarantors own
any investment property (as defined in the UCC) other than securities
pledged pursuant to the Borrower Pledge Agreement and Subsidiary Pledge
Agreement and the securities accounts and uncertificated securities listed
in Item 6.25(c) of the Disclosure Schedule.
SECTION 6.26. Labor Disputes.
(a) Set forth in Item 6.26 of the Disclosure Schedule is a true and
correct list (including dates of termination) of all collective bargaining
or similar agreements between or applicable to each Borrower and Guarantor
and any union, labor organization or other bargaining agent in respect of
the employees of any Borrower or Guarantor on the date hereof.
(b) There is (i) no significant unfair labor practice complaint
pending against any Borrower or Guarantor or, to the best of any Borrower's
or Guarantor's knowledge, threatened against it, before the National Labor
Relations Board, and no significant grievance or significant arbitration
proceeding arising out of our under any collective bargaining agreement is
pending on the date hereof against any Borrower or Guarantor or, to best of
any Borrower's or Guarantor's knowledge, threatened against it, and (ii) no
material strike, labor dispute, slowdown or stoppage is pending against any
Borrower or Guarantor or, to the best of any Borrower's or Guarantor's
knowledge, threatened against any Borrower or Guarantor.
SECTION 6.27. Distribution Centers. Set forth in Item 6.27 of the
Disclosure Schedule is a true and correct list of all distribution centers
leased by the Obligors as of the Closing Date.
SECTION 6.28. Credit Card Issuers and Credit Card Processors. Set forth in
Item 6.28 of the Disclosure Schedule is a true and correct list of all of the
Credit Card Agreements and all other
72
agreements, documents and instruments existing as of the date hereof between or
among any Borrower, any of its Affiliates, the Credit Card Issuers, the Credit
Card Processors and any of their Affiliates as of the Closing Date. The Credit
Card Agreements constitute all of such agreements necessary for each Borrower to
operate its business as presently conducted with respect to credit cards and
debit cards and no Accounts of any Borrower arise from purchases by customers of
Inventory with credit cards or debit cards, other than those which are issued by
Credit Card Issuers or Credit Card Processors to whom such Borrower has sent a
Processor Letter. Each of the Credit Card Agreements constitutes the legal,
valid and binding obligations of the Borrower that is party thereto and, to the
best of each Borrower's knowledge, the other parties thereto, enforceable in
accordance with their respective terms and is in full force and effect. No
default or event of default, or act, condition or event which after notice or
passage of time or both, would constitute a default or an event of default under
any of the Credit Card Agreements exists or has occurred and is continuing. Each
Borrower and the other parties thereto have complied in all material respects
with all of the terms and conditions of the Credit Card Agreements to the extent
necessary for such Borrower to be entitled to receive all payments thereunder.
The Borrowers have delivered, or caused to be delivered to the Agents, true,
correct and complete copies of all of the Credit Card Agreements in effect as of
the date hereof.
SECTION 6.29. Payable Practices. Each Borrower and Guarantor have not made
any material change in the historical accounts payable practices from those in
effect immediately prior to the Closing Date.
SECTION 6.30. Direction Banks. Set forth in Item 6.30 of the Disclosure
Schedule is a true and correct list of all Bank Accounts held with each
Direction Bank as of the Closing Date. A majority of the cash of the Borrowers
and Guarantors that is not held with Majority Account Banks is held with
Direction Banks.
SECTION 6.31. Borrowers. All Borrowing Base Assets included in the
Borrowing Base at any time are owned by Borrowers at such time under this
Agreement, except for the ▇▇▇▇▇▇▇ Facility which is owned by either a Borrower
or a Guarantor.
SECTION 6.32. Existing Letters of Credit. All letters of credit listed in
Part II of Item 7.2.2.(a) of the Disclosure Schedule were issued to support
workers compensation obligations and bankers' acceptances and performance bonds,
surety bonds, appeal bonds and performance guarantees of ▇▇▇▇-▇▇▇▇▇ or any
Restricted Subsidiary, in each case, in the ordinary course of business
consistent with past practice.
SECTION 6.33. Anti-Terrorism Laws. None of the Borrowers, nor any of their
respective Subsidiaries, is in material violation of any laws relating to
terrorism or money laundering, including, without limitation, the Patriot Act.
SECTION 6.34. HIPAA Compliance.
(a) To the extent that and for so long as any Borrower is a "covered
entity" within the meaning of HIPAA, such Borrower (i) has undertaken or
will promptly undertake all appropriate surveys, audits, inventories,
reviews, analyses and/or assessments (including any necessary risk
assessments) of all areas of its business and operations required by HIPAA;
(ii) has developed or will promptly develop an appropriate plan and time
line for becoming HIPAA Compliant (a "HIPAA Compliance Plan"); and (iii)
has implemented or will implement those provisions of such HIPAA Compliance
Plan in all material respects necessary to ensure that such Borrower is or
becomes HIPAA Compliant.
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(b) For purposes hereof, "HIPAA Compliant" shall mean that a Borrower
(i) is or will be in compliance in all material respects with each of the
applicable requirements of the so-called "Administrative Simplification"
provisions of HIPAA on and as of each date that any part thereof, or any
final rule or regulation thereunder, becomes effective in accordance with
its or their terms, as the case may be (each such date, a "HIPAA Compliance
Date") and (ii) is not and could not reasonably be expected to become, as
of any date following any such HIPAA Compliance Date, the subject of any
civil or criminal penalty, process, claim, action or proceeding, or any
administrative or other regulatory review, survey, process or proceeding
(other than routine surveys or reviews conducted by any government health
plan or other accreditation entity) that could result in any of the
foregoing or that has or could reasonably be expected to have a Material
Adverse Effect.
SECTION 6.35. Compliance with Health Care Laws. Without limiting the
generality of or any other representation or warranty made herein or in any of
the other Loan Documents:
(a) Each Borrower is in compliance in all material respects with all
applicable Health Care Laws, including all Medicare and Medicaid program
rules and regulations applicable to them. Without limiting the generality
of the foregoing, no Borrower has received notice by a Governmental
Authority of any violation of any provisions of the Medicare and Medicaid
Anti-Fraud and Abuse or Anti-Kickback Amendments of the Social Security Act
(presently codified in Section 1128(B)(b) of the Social Security Act) or
the Medicare and Medicaid Patient and Program Protection Act of 1987.
(b) Each Borrower has maintained in all material respects all records
required to be maintained by the Joint Commission on Accreditation of
Healthcare Organizations, the Food and Drug Administration, Drug
Enforcement Agency and State Boards of Pharmacy and the Federal and State
Medicare and Medicaid programs and each Borrower and has all necessary
permits, licenses, franchises, certificates and other approvals or
authorizations of Governmental Authority as are required under applicable
Health Care Laws.
SECTION 6.36. Notices from Farm Products Sellers, etc.. (a) Each Borrower
has not, within the two (2) year period prior to the date hereof, received any
written notice in respect of any claim greater than $100,000 individually or
written notices in respect of claims greater than $250,000 in the aggregate
pursuant to the applicable provisions of the PSA, PACA, the Food Security Act,
the UCC or any other applicable local laws from (i) any Farm Products Seller or
(ii) any lender to any Farm Products Seller or any other Person with a security
interest in the assets of any Farm Products Seller or (iii) the Secretary of
State (or equivalent official) or other Governmental Authority of any State,
Commonwealth or political subdivision thereof in which any Farm Products
purchased by such Borrower are produced, in any case advising or notifying such
Borrower of the intention of such Farm Products Seller or other Person to
preserve the benefits of any trust applicable to any assets of any Borrower
established in favor of such Farm Products Seller or other Person under the
provisions of any law or claiming a security interest in or lien upon or other
claim or encumbrance with respect to any perishable agricultural commodity or
any other Farm Products which may be or have been purchased by a Borrower or any
related or other assets of such Borrower (all of the foregoing, together with
any such notices as any Borrower may at any time hereafter receive,
collectively, the "Food Security Act Notices").
(b) No Borrower is a "live poultry dealer" (as such term is defined in
the PSA) or otherwise purchases or deals in live poultry of any type whatsoever.
Borrowers do not purchase livestock pursuant to cash sales as such term is
defined in the PSA. Borrowers are not subject to the trust provisions of PSA
because Borrowers have written agreements providing for the extension of credit
to them for all purchases of meat, poultry, meat products, poultry products and
livestock products by Borrowers. Each Borrower is not engaged in, and shall not
engage in, raising, cultivating, propagating, fattening, grazing or any other
farming, livestock or aquacultural operations.
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ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. Each Borrower agrees with each Lender,
each Issuer and the Agents that until the Termination Date has occurred, each
Borrower will, and will cause its Subsidiaries to, perform or cause to be
performed the obligations set forth below.
SECTION 7.1.1. Financial Information, Reports, Notices, etc. ▇▇▇▇-▇▇▇▇▇
will furnish or cause to be furnished to the Agents (with sufficient copies for
each Lender) copies of the following financial statements, reports, notices and
information (all in form reasonably satisfactory to the Agents):
(a) (i) promptly after becoming available and in any event within 45
days after the end of each of the first three Fiscal Quarters of each
Fiscal Year, an unaudited consolidated balance sheet of ▇▇▇▇-▇▇▇▇▇ and its
Subsidiaries as of the end of such Fiscal Quarter and consolidated
statements of income and cash flow of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries for
such Fiscal Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter, and
including (in each case), in comparative form the figures for the
corresponding Fiscal Quarter in, and year to date portion of, the
immediately preceding Fiscal Year, certified as complete and correct in
accordance with GAAP as described in Section 1.4 by the chief financial or
accounting Authorized Officer of ▇▇▇▇-▇▇▇▇▇ and (ii) promptly after
becoming available and in any event within 20 days after the end of each
Fiscal Month, an unaudited consolidated balance sheet of ▇▇▇▇-▇▇▇▇▇ and its
Subsidiaries as of the end of such Fiscal Month and consolidated statements
of income and cash flow of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries for the Fiscal
Month and for the period commencing at the end of the previous Fiscal Year
and ending with the end of such Fiscal Month, and including (in each case)
in comparative form the figures for the corresponding Fiscal Month of, and
year to date portion of, the preceding Fiscal Year, certified as complete
and correct in accordance with GAAP as described in Section 1.4 by the
chief financial or accounting Authorized Officer of ▇▇▇▇-▇▇▇▇▇;
(b) promptly after becoming available and in any event within 90 days
after the end of each Fiscal Year, a copy of the consolidated balance sheet
of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries, and the related consolidated statements
of income and cash flow of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries for such Fiscal
Year, setting forth in comparative form the figures for the immediately
preceding Fiscal Year, audited (without any Impermissible Qualification) by
independent public accountants acceptable to the Administrative Agent and
as prepared in accordance with GAAP, which shall be accompanied by (i) a
calculation of the financial covenants set forth in Section 7.2.4 and in
Section 7.2.19 in accordance with GAAP as described in Section 1.4 and
stating that, in performing the examination necessary to deliver the
audited financial statements of ▇▇▇▇-▇▇▇▇▇, either no knowledge was
obtained of any Event of Default or, if such knowledge was obtained, the
nature thereof and (ii) if there is a material change from the business
plan set forth in the Confidential Information Memorandum, a revised
business plan on a quarterly basis for all subsequent periods through the
2007 Fiscal Year, including projected quarterly financial statements, cash
flow statements and income statements;
(c) concurrently with the delivery of the financial information
pursuant to clause (a)(ii), a Compliance Certificate, executed by the chief
financial or accounting Authorized Officer of ▇▇▇▇-▇▇▇▇▇, showing
compliance with the financial covenants set forth in Section 7.2.4 and in
Section 7.2.19 and stating that no Default has occurred and is continuing
(or, if a Default has occurred, specifying the details of such Default and
the action that ▇▇▇▇-▇▇▇▇▇ or an Obligor has taken or proposes to take with
respect thereto);
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(d) as soon as possible and in any event within three Business Days
after a Designated Officer of ▇▇▇▇-▇▇▇▇▇ or any other Obligor obtains
knowledge of the occurrence of a Default, a statement of an Authorized
Officer of ▇▇▇▇-▇▇▇▇▇ setting forth details of such Default and the action
which ▇▇▇▇-▇▇▇▇▇ or such Obligor has taken and proposes to take with
respect thereto;
(e) as soon as possible and in any event within three Business Days
after a Designated Officer of ▇▇▇▇-▇▇▇▇▇ or any other Obligor obtains
knowledge of (i) the occurrence of any material adverse development with
respect to any litigation, action, proceeding or labor controversy
described in Item 6.7 of the Disclosure Schedule or (ii) the commencement
of any litigation, action, proceeding or labor controversy of the type and
materiality described in Section 6.7, notice thereof and thereafter, to the
extent the Administrative Agent requests, copies of all documentation
relating thereto;
(f) promptly after the sending or filing thereof, copies of all
reports, notices, prospectuses and registration statements which any
Obligor files with the SEC or any national securities exchange;
(g) promptly but, in any event, within three Business Days after a
Designated Officer becoming aware of (i) the institution of any steps by
any Person to terminate any Pension Plan, (ii) the failure to make a
required contribution to any Pension Plan if such failure is sufficient to
give rise to a Lien under Section 302(f) of ERISA, (iii) the taking of any
action with respect to a Pension Plan which could result in the requirement
that any Obligor furnish a bond or other security to the PBGC or such
Pension Plan, or (iv) the occurrence of any event with respect to any
Pension Plan which could result in the incurrence by any Obligor of any
material liability, fine or penalty, notice thereof and copies of all
documentation relating thereto;
(h) promptly after receipt thereof, copies of all "management letters"
submitted to ▇▇▇▇-▇▇▇▇▇ or any other Obligor by the independent public
accountants referred to in clause (b) in connection with each audit made by
such accountants;
(i) promptly following the mailing or receipt of any notice or report
delivered under the terms of any Subordinated Debt or the Senior Unsecured
Notes Documents, copies of such notice or report;
(j) promptly following any Subsidiary becoming a Material Subsidiary,
the name and any other information reasonably requested by the
Administrative Agent in respect of any such Subsidiary which has become a
Material Subsidiary;
(k) promptly as required, the reports and documents specified in
Section 7.3.1;
(l) promptly following the end of each Fiscal Month period (but in any
event within ten (10) Business Days after the end thereof) (i) a
certificate executed by the chief financial or accounting Authorized
Officer of ▇▇▇▇-▇▇▇▇▇, setting forth the consolidated EBITDA and Capital
Expenditures of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries for the most recently ended
trailing thirteen Fiscal Month period and (ii) a report as to the
Dispositions made during such Fiscal Month in connection with the
Restructuring Plan including, without limitation, a description of each
asset Disposed of, such asset's book value, and the consideration received
for such asset; and
(m) such other financial and other information as any Lender or Issuer
through the Administrative Agent may from time to time reasonably request
(including information and
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reports in such detail as the Administrative Agent may request with respect
to the terms of and information provided pursuant to the Compliance
Certificate).
SECTION 7.1.2. Maintenance of Existence; Compliance with Laws, etc.
▇▇▇▇-▇▇▇▇▇ will, and will cause each of its Subsidiaries to (a) preserve and
maintain its legal existence (except as otherwise permitted by Section 7.2.10),
and (b) comply in all respects with all applicable laws, rules, regulations and
orders, including (i) any such applicable laws, rules, regulations and orders
with respect to any Pension Plan, and (ii) the payment (before the same become
delinquent), of (A) all Taxes, imposed upon ▇▇▇▇-▇▇▇▇▇ or its Subsidiaries or
upon their property except to the extent being diligently contested in good
faith by appropriate proceedings and for which appropriate reserves in
accordance with GAAP have been set aside on the books of ▇▇▇▇-▇▇▇▇▇ or its
Subsidiaries, as applicable, and (B) at or before maturity or before they become
delinquent, as the case may be, in accordance with industry practice (subject,
where applicable, to specified grace periods), all their payment obligations of
whatever nature and any additional costs that are imposed as a result of any
failure to so pay, discharge or otherwise satisfy such obligations, except when
the amount or validity of such obligations and costs is currently being
contested in good faith by appropriate proceeding and reserves, if applicable,
in conformity with GAAP with respect thereto have been provided on the books of
▇▇▇▇-▇▇▇▇▇ or its Subsidiaries, as the case may be, except where the failure to
comply with the requirements of this clause (b) could not reasonably be expected
to result in a Material Adverse Effect.
SECTION 7.1.3. Maintenance of Properties. ▇▇▇▇-▇▇▇▇▇ will, and will cause
each of its Subsidiaries to, generally maintain, preserve (including remodeling
or retrofitting), protect and keep its and their respective properties in good
repair, working order and condition (ordinary wear and tear and Casualty Events
excepted), and make necessary repairs, renewals and replacements (except insofar
as such is the obligation of a landlord under a lease of Real Property) so that
the business carried on by ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries may be properly
conducted at all times, unless ▇▇▇▇-▇▇▇▇▇ or such Subsidiary determines in good
faith that the continued preservation or maintenance of such property is no
longer desirable.
SECTION 7.1.4. Insurance. ▇▇▇▇-▇▇▇▇▇ will, and will cause each of its
Subsidiaries to:
(a) maintain insurance on its property with financially sound and
reputable insurance companies against loss and damage in at least the
amounts (and with only those deductibles and self-insurance amounts)
customarily maintained, and against such risks as are typically insured
against in the same general area, by Persons of comparable size engaged in
the same or similar business as ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries, it being
understood that ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries are self-insured in
substantial amounts with respect to various insurable risks, with
deductibles on property insurance of $10 million per year and deductibles
on wind and rain damage of $20 million per year; and
(b) maintain all worker's compensation, employer's liability insurance
or similar insurance as may be required under the laws of any state or
jurisdiction in which it may be engaged in business.
Without limiting the foregoing, all insurance policies required pursuant to this
Section shall (i) name the Administrative Agent on behalf of the Secured Parties
as mortgagee (in the case of property insurance) or additional insured (in the
case of liability insurance), as applicable, and provide that no cancellation or
modification of the policies will be made without thirty days' prior written
notice to the Administrative Agent and (ii) be in addition to any requirements
to maintain specific types of insurance contained in the other Loan Documents
(including hazard insurance and business interruption insurance).
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SECTION 7.1.5. Books and Records. ▇▇▇▇-▇▇▇▇▇ will, and will cause each of
its Subsidiaries to, keep books, records and accounts in accordance with GAAP
which accurately reflect in all material respects all of its business affairs
and transactions and permit each Secured Party or any of their respective
representatives, at reasonable times and intervals upon reasonable notice to
▇▇▇▇-▇▇▇▇▇, to visit each Obligor's offices, to discuss such Obligor's financial
matters with its officers and employees, and its independent public accountants
(and ▇▇▇▇-▇▇▇▇▇ hereby authorizes such independent public accountant to discuss
▇▇▇▇-Dixie's and each other Obligor's financial matters with each Secured Party
or their representatives whether or not any representative of ▇▇▇▇-▇▇▇▇▇ or such
other Obligor is present) and to examine (and photocopy extracts from) any of
its books, records and accounts including any "management letters" prepared by
independent accountants. The Borrowers shall pay any fees of such independent
public accountant incurred in connection with any Secured Party's exercise of
its rights pursuant to this Section.
SECTION 7.1.6. Environmental Law Covenant. Except to the extent the failure
to comply with any of the requirements listed below could not reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect, ▇▇▇▇-▇▇▇▇▇ will, and will cause each of its Subsidiaries to,
(a) use and operate all of its and their facilities and properties in
compliance with all Environmental Laws, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in compliance therewith, and
handle all Hazardous Materials in compliance with all applicable
Environmental Laws; and
(b) promptly notify the Administrative Agent and provide copies upon
receipt of all written claims, complaints, notices or inquiries relating to
the condition of its facilities and properties in respect of, or as to
compliance with, Environmental Laws, and shall diligently resolve any
non-compliance with Environmental Laws and keep its property free of any
Lien imposed by any Environmental Law.
SECTION 7.1.7. Use of Proceeds. The Borrowers will (a) apply the proceeds
of the Revolving Loans (i) for general corporate and working capital purposes of
the Borrowers and their Subsidiaries (including Permitted Acquisitions), (ii)
the payment of fees and expenses in connection with the transactions
contemplated hereby, and (iii) for issuing Letters of Credit for the account of
the Borrowers and the Subsidiary Guarantors in the ordinary course of their
business and (b) use the Standby Letter of Credit Facility and the Standby
Letters of Credit only in a manner consistent with the requirements of Section
7.1.10.
SECTION 7.1.8. Future Guarantors, Security, etc. ▇▇▇▇-▇▇▇▇▇ will, and will
cause each U.S. Subsidiary (other than the Insurance Captive) to, execute any
documents, Filing Statements, agreements and instruments (including, without
limitation, Collateral Access Agreements, Blocked Account Agreements, Securities
Account Control Agreements, Processor Letters and Direction Letters), and take
all further action (including filing Mortgages and/or Mortgage Amendments) that
may be required under applicable law, or that the Administrative Agent may
reasonably request, in order to effectuate the transactions contemplated by the
Loan Documents and in order to grant, preserve, protect and perfect the validity
and first priority (subject to Permitted Liens) of the Liens created or intended
to be created by the Loan Documents. ▇▇▇▇-▇▇▇▇▇ will promptly cause any
subsequently acquired or organized Material Subsidiary which is a U.S.
Subsidiary (other than the Insurance Captive) or any U.S. Subsidiary which
becomes a Material Subsidiary to execute a Subsidiary Guaranty substantially in
the form of Exhibit G attached hereto (or a supplement thereto) and each
applicable Loan Document in favor of the Secured Parties. In addition, from time
to time, the Borrowers will, at their cost and expense, promptly secure the
Obligations by pledging or creating, or causing to be pledged or created,
perfected Liens with respect to such of its and its U.S. Subsidiaries' (other
than the Insurance Captive) assets and properties (other than
78
(i) Real Property owned and located in Florida, Retail Store number 2701 in
Stockbridge, Georgia, any Real Property acquired after the Closing Date
elsewhere for a purchase price of less than $7,500,000 for a single piece of
Real Property or less than $25,000,000 in the aggregate for a purchase of
related properties or series of related properties (including the purchase of a
chain of stores or a portion of a chain of stores), any Real Property Leases,
fixtures, and aircraft; and (ii) in respect of the perfection of Liens only,
motor vehicles, motor vehicle trailers, Florida liquor licenses and, in each
case except as set forth in a Security Agreement, Deposit Accounts (as defined
in a Security Agreement) that are not Majority Accounts as the Administrative
Agent or the Required Lenders shall designate), provided that neither the
Borrowers nor their Subsidiaries shall be required to pledge more than 65% of
the Voting Securities of any Foreign Subsidiary or to ▇▇▇▇▇ ▇ ▇▇▇▇ that would
cause a breach by any Borrower or any of their Subsidiaries of any obligation to
any Person the incurrence of which is permitted by this Agreement (including
under Sections 7.2.2 and 7.2.14 hereof). Such Liens will be created under the
Loan Documents in form and substance satisfactory to the Administrative Agent,
and the Borrowers shall deliver or cause to be delivered to the Administrative
Agent all such instruments and documents (including legal opinions, title
insurance policies and lien searches) as the Administrative Agent shall
reasonably request in connection with the deliveries required under, or to
evidence compliance with this Section.
SECTION 7.1.9. Conduct of Business; Separate Existence; Maintenance of
Authorizations. ▇▇▇▇-▇▇▇▇▇ will, and will cause each of its Material
Subsidiaries to (a) carry on and conduct its business in the same manner as it
is currently conducted; (b) do all things necessary to remain duly organized,
validly existing and in good standing in its jurisdiction of organization and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted; and (c) do all things reasonably necessary to
renew, extend and continue in effect all authorizations which may at any time
and from time to time be necessary to operate and own the business and assets of
▇▇▇▇-▇▇▇▇▇ and its Subsidiaries in compliance with all applicable laws and
regulations, except in each case where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect.
SECTION 7.1.10. Standby Letters of Credit. ▇▇▇▇-▇▇▇▇▇ will, and will cause
each of its applicable Subsidiaries to, ensure that all Standby Letters of
Credit are issued only to support workers' compensation obligations and bankers'
acceptances and performance bonds, surety bonds, appeal bonds and performance
guarantees of ▇▇▇▇-▇▇▇▇▇ or any Restricted Subsidiary, in each case, in the
ordinary course of business consistent with past practice, and for no other
purpose.
SECTION 7.1.11. Offsite Books and Records. ▇▇▇▇-▇▇▇▇▇ will, and will cause
its applicable Subsidiaries to, maintain and update copies of substantially all
electronic records or reports of Collateral and copies of substantially all
electronic books and records of each Borrower and Guarantor in a backup data
storage system housed at the existing distribution facility in Baldwin, Florida,
or other premises owned by any Borrower.
SECTION 7.1.12. Eligible Borrowing Base Assets. ▇▇▇▇-▇▇▇▇▇ will, and will
cause its applicable Subsidiaries to, ensure at all times that all Borrowing
Base Assets included in the Borrowing Base are owned by a Borrower under this
Agreement at the time of such inclusion, except that the parcel of the ▇▇▇▇▇▇▇
Facility owned as of the Closing Date by ▇▇▇▇▇ Realty Trust 1999-1 may be owned
by such trust, so long as such trust is a Guarantor under this Agreement.
SECTION 7.1.13. Agricultural Products. (a) Each Borrower shall at all times
comply in all material respects with all existing and future Food Security Act
Notices during their periods of effectiveness under the Food Security Act,
including, without limitation, directions to make payments to the Farm Products
Seller by issuing payment instruments directly to the secured party with respect
to any assets of the Farm Products Seller or jointly payable to the Farm
Products Seller and any secured party with respect to the assets of such Farm
Products Seller, as specified in the Food Security Act Notice, so as
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to promptly terminate or release the security interest in any Farm Products
maintained by such Farm Products Seller or any secured party with respect to the
assets of such Farm Products Seller under the Food Security Act.
(b) Each Borrower shall take all other actions as may be reasonably
required, if any, to ensure that any perishable agricultural commodity (in
whatever form) or other Farm Products are purchased free and clear of any
security interest, lien or other claims in favor of any Farm Products Seller or
any secured party with respect to the assets of any Farm Products Seller.
(c) Each Borrower shall promptly notify the Collateral Monitoring Agent in
writing after receipt by or on behalf of such Borrower of any Food Security Act
Notice or amendment to a previous Food Security Act Notice, and including any
notice in respect of any claim greater than $100,000 individually or notices in
respect to claims greater than $250,000 in the aggregate from any Farm Products
Seller of the intention of such Farm Products Seller to preserve the benefits of
any trust applicable to any assets of any Borrower or Guarantor under the
provisions of the PSA, PACA or any other statute and such Borrower shall
promptly provide Agent with a true, correct and complete copy of such Food
Security Act Notice or amendment, as the case may be, and other information
delivered to or on behalf of such Borrower pursuant to the Food Security Act.
(d) In the event any Borrower receives a Food Security Act Notice, such
Borrower shall pay the related invoice within the payment terms specified
therein and notify the Collateral Monitoring Agent of such receipt; provided,
that, such invoice may remain unpaid if, and only so long as (i) appropriate
legal or administrative action has been commenced in good faith and is being
diligently pursued or defended by such Borrower, (ii) adequate reserves with
respect to such contest are maintained on the books of such Borrower, in
accordance with GAAP, (iii) the Collateral Monitoring Agent shall have
established a Reserve in an amount at least equal to the amount claimed to be
due by such vendor under the relevant invoice, (iv) such Borrower shall promptly
pay or discharge such contested invoice and all additional charges, interest,
penalties and expenses, if any, and shall deliver to Agent evidence reasonably
acceptable to Agent of such payment, if such contest is terminated or
discontinued adversely to such Borrower or the conditions set forth in this
Section 7.1.13(d) are no longer met.
(e) If any Borrower purchases any Farm Products from a Person who produces
such Farm Products in a state with a central filing system certified by the
United States Secretary of Agriculture, such Borrower shall immediately register
as a buyer with the Secretary of State of such state (or the designated system
operator). Each Borrower shall promptly forward to the Collateral Monitoring
Agent a copy of such registration as well as a copy of all relevant portions of
the master list periodically distributed by any such Secretary of State (or the
designated system operator). Each Borrower shall comply with any payment
obligations in connection with the purchase of any Farm Products imposed by a
secured party as a condition of the waiver or release of a security interest
effective under the Food Security Act or other applicable law whether or not as
a result of direct notice or the filing under any applicable central filing
system. Each Borrower shall also provide to the Collateral Monitoring Agent not
later than the fifth (5th) day of each month, true and correct copies of all
state filings recorded in any such central filing system in respect of a Person
from whom a Borrower has purchased Farm Products within the preceding twelve
(12) months.
SECTION 7.1.14. Credit Card Agreements. Each Borrower and Guarantor shall
(a) observe and perform all material terms, covenants, conditions and provisions
of the Credit Card Agreements to be observed and performed by it at the times
set forth therein; (b) maintain in full force and effect the Credit Card
Agreements and not terminate, cancel, surrender, modify, amend, waive or release
any of the Credit Card Agreements, or consent to or permit to occur any of the
foregoing, except that any Borrower may terminate or cancel any of the Credit
Card Agreements in the ordinary course of the business of such
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Borrower; provided, that, such Borrower shall have given the Collateral
Monitoring Agent not less than fifteen (15) days prior written notice of its
intention to so terminate or cancel any of the Credit Card Agreements; (c) give
the Collateral Monitoring Agent immediate written notice of any Credit Card
Agreement entered into by such Borrower after the date hereof, together with a
true, correct and complete copy thereof and such other information with respect
thereto as the Collateral Monitoring Agent may request; (d) each Borrower and
Guarantor shall notify the Collateral Monitoring Agent promptly of (i) any
notice of a material default by any Borrower under any of the Credit Card
Agreements or of any default which might result in the Credit Card Issuer or
Credit Card Processor ceasing to make payments or suspending payments to any
Borrower, (ii) any notice from any Credit Card Issuer or Credit Card Processor
that such Person is ceasing or suspending, or will cease or suspend, any present
or future payments due or to become due to any Borrower from such Person, or
that such Person is terminating or will terminate any of the Credit Card
Agreements, and (iii) the failure of any Borrower to comply with any material
terms of the Credit Card Agreements or any terms thereof which might result in
the Credit Card Issuer or Credit Card Processor ceasing or suspending payments
to any Borrower; and (e) furnish to the Collateral Monitoring Agent, promptly
upon the request of the Collateral Monitoring Agent, such information and
evidence as the Collateral Monitoring Agent may require from time to time
concerning the observance, performance and compliance by such Borrower or the
other party or parties thereto with the terms, covenants or provisions of the
Credit Card Agreements.
SECTION 7.1.15. Post-Closing Obligations. ▇▇▇▇-▇▇▇▇▇ will, and will cause
each of its U.S. Subsidiaries (other than the Insurance Captive) to, (a) deliver
to the Agents no later than 60 days following the Closing Date any Securities
Control Agreements described in Section 5.1.27 that were not delivered to the
Agents on or prior to the Closing Date or (b) no later than 60 days following
the Closing Date, close any securities account in respect of which a Securities
Control Agreement has not been delivered to the Agents.
SECTION 7.2. Negative Covenants. Each Borrower covenants and agrees with
each Lender, each Issuer and the Agents that until the Termination Date has
occurred, each Borrower will, and will cause its Subsidiaries to, perform or
cause to be performed the obligations set forth below.
SECTION 7.2.1. Business Activities. ▇▇▇▇-▇▇▇▇▇ will not, and will not
permit any of its Subsidiaries to, engage in any business activity except those
business activities engaged in on the date of this Agreement and activities
reasonably related or incidental thereto.
SECTION 7.2.2. Indebtedness. ▇▇▇▇-▇▇▇▇▇ will not, and will not permit any
of its Subsidiaries to, create, incur, assume or permit to exist any
Indebtedness, other than:
(a) Indebtedness in respect of (i) the Obligations (including with
respect to the Existing Letters of Credit, as described in Item 7.2.2(a) of
the Disclosure Schedule) and (ii) any Hedging Obligations incurred in the
ordinary course of business of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries (which shall
exclude Hedging Obligations incurred under agreements entered into for
speculative purposes or as an arbitrage of rates);
(b) until the Closing Date, Indebtedness that is to be repaid in full
as further identified in Item 7.2.2(b) of the Disclosure Schedule;
(c) Indebtedness existing as of the Closing Date which is identified
in Item 7.2.2(c) of the Disclosure Schedule, and refinancing of such
Indebtedness; provided that (x) the principal amount (as such amount may
have been reduced following the Closing Date) thereof is not increased, (y)
the maturity date thereof is not shortened, and (z) the material terms
thereof are not
81
materially more onerous on any Borrower than the terms contained in the
Indebtedness being refinanced;
(d) Indebtedness (i) incurred in the ordinary course of business of
▇▇▇▇-▇▇▇▇▇ and its Subsidiaries (including open accounts extended by
suppliers on normal trade terms in connection with purchases of goods and
services which are not overdue for a period of more than 90 days or, if
overdue for more than 90 days, as to which a dispute exists and appropriate
reserves in conformity with GAAP have been established on the books of
▇▇▇▇-▇▇▇▇▇ or such Subsidiary) and (ii) in respect of performance, surety
or appeal bonds provided in the ordinary course of business, but excluding
(in each case), Indebtedness incurred through the borrowing of money or
Contingent Liabilities in respect thereof;
(e) Indebtedness (i) in respect of industrial revenue bonds or other
similar governmental or municipal bonds, (ii) evidencing the deferred
purchase price of newly acquired property or incurred to finance the
acquisition of equipment of ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries (pursuant to
purchase money mortgages or otherwise, whether owed to the seller or a
third party), in each case used in the ordinary course of business of
▇▇▇▇-▇▇▇▇▇ and its Subsidiaries (provided that such Indebtedness is
incurred within 60 days of the acquisition of such property) and
(iii) Capitalized Lease Liabilities; provided that the aggregate
amount of all Indebtedness outstanding pursuant to this clause shall not at
any time exceed $75,000,000; provided further that neither ▇▇▇▇-▇▇▇▇▇ nor
any Material Subsidiary may have any Contingent Liability
in respect of such Indebtedness incurred by any Subsidiary which is not a
Subsidiary Guarantor;
(f) (i) Indebtedness of any Borrower or Subsidiary Guarantor owing to
any Borrower or any Subsidiary Guarantor, (ii) Indebtedness of any U.S.
Subsidiary that is not a Subsidiary Guarantor (other than the Insurance
Captive) and any Foreign Subsidiary (so long as at the time of the
incurrence of such Indebtedness no Event of Default has occurred and is
continuing and Average Excess Availability is greater than $150,000,000,
and immediately after giving effect thereto, no Event of Default shall have
occurred and be continuing and Excess Availability is greater than
$150,000,000) owing to any Borrower in an aggregate amount outstanding at
any time for all Borrowers collectively not to exceed $10,000,000 (which
Indebtedness shall not (when aggregated with the amount of Investments made
by the Borrowers in Foreign Subsidiaries or U.S. Subsidiaries (other than
the Insurance Captive) that are not Subsidiary Guarantors under clause
(d)(iii) of Section 7.2.5), exceed $10,000,000), (iii) Indebtedness of any
Bahamian Subsidiary owing to any other Bahamian Subsidiary, (iv) so long as
at the time of the incurrence of such Indebtedness no Event of Default has
occurred and is continuing and Average Excess Availability is greater than
$150,000,000, and so long as immediately after giving effect thereto, no
Event of Default shall have occurred and be continuing and Excess
Availability is greater than $150,000,000, Indebtedness of the Insurance
Captive owing to any Borrower or Subsidiary Guarantor in an aggregate
amount for all such Indebtedness not to exceed $25,000,000 (which
Indebtedness shall not, when aggregated with the amount of Investments made
by the Borrowers and Subsidiary Guarantors under clause(d)(v) of Section
7.2.5, exceed $25,000,000), and (v) Indebtedness of any Borrower owing to
the Insurance Captive in an aggregate amount for all such Indebtedness not
to exceed $10,000,000, in each case
(x) which Indebtedness shall not be forgiven or otherwise
discharged for any consideration other than payment in full or in part
in cash (provided that only the amount repaid in part shall be
discharged); and
(y) to the extent such Indebtedness is payable to any Borrower or
a Subsidiary Guarantor and evidenced by one or more promissory notes,
any such
82
promissory notes shall be delivered in pledge to the
Administrative Agent pursuant to a Loan Document;
(g) unsecured Indebtedness (not evidenced by a note or other
instrument) of ▇▇▇▇-▇▇▇▇▇ owing to a Subsidiary Guarantor that has
previously executed and delivered to the Administrative Agent the
Interco Subordination Agreement;
(h) Indebtedness evidenced by the Senior Unsecured Notes in an
aggregate principal amount not exceeding $300,000,000, less any
payments made thereon;
(i) unsecured Subordinated Debt of ▇▇▇▇-▇▇▇▇▇ incurred pursuant to
the terms of the Sub Debt Documents in a principal amount not to
exceed $300,000,000, the proceeds of which are used to refinance in
whole or in part the Senior Unsecured Notes, and unsecured
subordinated Contingent Liabilities of the Subsidiary Borrowers and
the Subsidiary Guarantors in respect of such Subordinated Debt, and
(in each case), refinancings of such Subordinated Debt and
subordinated Contingent Liabilities which continue to satisfy the
terms of the definition of "Subordinated Debt";
(j) Indebtedness of a Person existing at the time such Person
became a Subsidiary of ▇▇▇▇-▇▇▇▇▇, but only if such Indebtedness was
not created or incurred in contemplation of such Person becoming a
Subsidiary and the aggregate outstanding amount of all Indebtedness
existing pursuant to this clause does not result in a Default
(including under Section 7.2.4); provided that neither the Borrowers
nor any Material Subsidiary may have any Contingent Liability in
respect of such Indebtedness incurred by any Subsidiary which is not a
Subsidiary Guarantor;
(k) Indebtedness incurred in connection with the relocation of
personnel in an aggregate amount at any time not to exceed
$10,000,000;
(l) Indebtedness in respect of letters of credit that (i) are
issued subsequent to the date 364 days before the Stated Maturity Date
(as in effect at the time of issuance), (ii) are stated to expire one
year from the date of initial issuance or extension and (iii) are
issued to support workers compensation obligations and bankers
acceptance and performance bonds, surety bonds, appeal bonds and
performance guarantees in each case in the ordinary course of
business, provided that the aggregate amount of all Indebtedness
outstanding pursuant to this clause shall not at any time exceed
$25,000,000 (as such amount may be increased dollar-for-dollar to the
extent that the Standby Letter of Credit Commitment Amount has been
permanently reduced pursuant to Section 2.2), and
(m) other Indebtedness of the Borrowers and their Subsidiaries
(other than Indebtedness of the Foreign Subsidiaries and U.S.
Subsidiaries that are not Subsidiary Guarantors owing to ▇▇▇▇-▇▇▇▇▇)
in an aggregate amount at any time outstanding not to exceed
$10,000,000, provided that none of the Indebtedness permitted by this
clause (m) shall be for the purposes described in clause (l);
provided, however, that no Indebtedness otherwise permitted by clauses (c), (e),
(f)(i), (f)(ii), f(iii), f(iv) (i), (j), (k), (l), or (m) shall be assumed,
created or otherwise incurred if a Default has occurred and is then continuing
or would result therefrom.
SECTION 7.2.3. Liens. ▇▇▇▇-▇▇▇▇▇ will not, and will not permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Lien upon any of
its property (including Capital Securities of any Person), revenues or assets,
whether now owned or hereafter acquired, except:
83
(a) Liens securing payment of the Obligations;
(b) until the Closing Date, Liens securing payment of Indebtedness of
the type described in clause (b) of Section 7.2.2;
(c) (i) Liens existing as of the Closing Date and disclosed in Item
7.2.3(c) of the Disclosure Schedule securing Indebtedness described in
clause (c) of Section 7.2.2 and (ii) Liens securing any extension, renewal
or replacement of any obligations secured by any such Lien; provided, that
(x) in respect of Liens permitted pursuant to clause (c)(i) of this Section
7.2.3, no such Lien shall encumber any additional property and the amount
of Indebtedness secured by such Lien is not increased from that existing on
the Closing Date (as such Indebtedness may have been permanently reduced
subsequent to the Closing Date), and (y) in respect of Liens permitted
pursuant to clause (c)(ii) of this Section 7.2.3, such Lien shall only
cover the same assets which originally secured the obligations being
extended, renewed or replaced;
(d) Liens on property other than Borrowing Base Assets, investment
property (as defined in the UCC) or Bank Accounts securing Indebtedness
permitted under clause (e) of Section 7.2.2; provided that (i) such Lien is
granted within 60 days after such Indebtedness is incurred, (ii) the
Indebtedness secured thereby does not exceed 80% of the lesser of the cost
or the fair market value of the applicable property, improvements or
equipment at the time of such acquisition (or construction) and (iii) such
Lien secures only the assets that are the subject of the Indebtedness
referred to in such clause;
(e) Liens on property securing Indebtedness permitted by clause (j) of
Section 7.2.2; provided that such Liens existed prior to such Person
becoming a Subsidiary, were not created in anticipation thereof and attach
only to specific tangible assets of such Person (and not assets of such
Person generally) and provided further that no such property shall be
included in the Borrowing Base;
(f) Liens in favor of carriers, warehousemen, mechanics, materialmen,
lessors of personal property and landlords granted or arising in the
ordinary course of business or as a matter of law for amounts not overdue
or being diligently contested in good faith by appropriate proceedings and
for which appropriate reserves in accordance with GAAP shall have been set
aside on its books;
(g) Liens incurred or deposits made in the ordinary course of business
in connection with worker's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure performance of
tenders, statutory obligations, bids, leases or other similar obligations
(other than for borrowed money) entered into in the ordinary course of
business or to secure obligations on surety and appeal bonds or performance
bonds;
(h) judgment Liens in existence for less than 60 days after the entry
thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies and which do not
otherwise result in an Event of Default under Section 8.1.6 and other
judgment Liens that do not exceed $1,000,000 individually or $5,000,000 in
the aggregate ;
(i) easements, rights-of-way and zoning restrictions;
84
(j) minor defects or irregularities in title, and rights of licensees
and concessionaires, and other similar encumbrances not interfering in any
material respect with the value or use of the property to which such Lien
is attached;
(k) Liens for Taxes not at the time delinquent or thereafter payable
without penalty or being diligently contested in good faith by appropriate
proceedings and for which appropriate reserves in accordance with GAAP
shall have been set aside on its books;
(l) Liens constituting a property interest of a lessee, concessionaire
or licensee in property leased or occupied by such Person from an Obligor;
(m) Liens on residential Real Property incurred in connection with
Indebtedness permitted pursuant to Section 7.2.2(k);
(n) Liens on cash collateral (and not on Borrowing Base Assets or
investment property, as defined in the UCC) that secure any Letters of
Credit permitted to be incurred pursuant to Section 7.2.2(l); provided that
at any time that the Administrative Agent has the right to direct the
application of certain cash and other assets pursuant to Section 7.4.2,
such cash collateral shall have been provided directly from the proceeds of
Revolving Loans; and
(o) other Liens on property other than Borrowing Base Assets securing
Indebtedness in an aggregate amount not to exceed $10,000,000.
SECTION 1.2.4. Financial Condition. The Borrowers shall not permit any of
the events set forth below to occur (and all calculations of Adjusted Excess
Availability, Excess Availability and EBITDA for purposes hereof shall be
accompanied by a certificate of the chief financial or other Authorized Officer
of ▇▇▇▇-▇▇▇▇▇ acceptable to the Agents, all in reasonable detail and reasonably
satisfactory to the Agents):
(a) The Borrowers will not permit the Adjusted Excess Availability to
fall below $75,000,000 at any time; and
(b) The Borrowers will not permit the consolidated EBITDA of
▇▇▇▇-▇▇▇▇▇ and its Subsidiaries for the most recently ended trailing
thirteen Fiscal Month period, tested on the last day of each Fiscal Month
(each, a "Test Date"), to be less than the amounts set forth below opposite
the period in which such Test Date falls:
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
85
--------------------------------------------------------
EBITDA Covenant Levels for ▇▇▇▇ ▇▇▇▇▇
Minimum
EBITDA
---------------------
2005 Fiscal Month (a) ($000's)
Period 1 $60,000
-------- -------
Period 2 $60,000
-------- -------
Period 3 $60,000
-------- -------
Period 4 $60,000
-------- -------
Period 5 $60,000
-------- -------
Period 6 $60,000
-------- -------
Period 7 $132,000
-------- --------
Period 8 $132,000
-------- --------
Period 9 $132,000
-------- --------
Period 10 $144,000
--------- --------
Period 11 $144,000
--------- --------
Period 12 $144,000
--------- --------
Period 13 $189,000
--------- --------
(a) Fiscal Year 2005 is 7/1/04 - 6/29/05.
2006 Fiscal Month (b)
Period 1 $189,000
-------- --------
Period 2 $189,000
-------- --------
Period 3 $209,000
-------- --------
Period 4 $209,000
-------- --------
Period 5 $209,000
-------- --------
Period 6 $209,000
-------- --------
Period 7 $215,000
-------- --------
Period 8 $215,000
-------- --------
Period 9 $215,000
-------- --------
Period 10 $222,000
--------- --------
Period 11 $222,000
--------- --------
Period 12 $222,000
--------- --------
Period 13 $231,000
--------- --------
(b) Fiscal Year 2006 is 6/30/05 - 6/28/06.
2007 Fiscal Month ( c )
Period 1 $231,000
-------- --------
Period 2 $231,000
-------- --------
Period 3 $250,000
-------- --------
Period 4 $250,000
-------- --------
Period 5 $250,000
-------- --------
Period 6 $250,000
-------- --------
Period 7 $250,000
-------- --------
Period 8 $250,000
-------- --------
Period 9 $250,000
-------- --------
Period 10 $250,000
--------- --------
Period 11 $250,000
--------- --------
Period 12 $250,000
--------- --------
Period 13 $250,000
--------- --------
(c) Fiscal Year 2007 is 6/29/06 - 6/27/07.
--------------------------------------------------------
provided the Borrowers shall not be required to have maintained a minimum
EBITDA for any trailing thirteen Fiscal Month period ending on a Test Date
in accordance with the foregoing provisions of this clause (b) unless and
until a Trigger Date has occurred on or prior to such Test
86
Date, in which case the Borrowers shall be required to have maintained a
minimum EBITDA in accordance with the foregoing provisions of this clause
(b) for the trailing thirteen Fiscal Month period ending on such Test Date
and, unless and until (i) such time as Average Excess Availability equals
or exceeds $125,000,000 and (ii) no more than three Trigger Dates have
occurred during the term of this Agreement, all Test Dates thereafter.
SECTION 7.2.5. Investments. ▇▇▇▇-▇▇▇▇▇ will not, and will not permit any of
its Subsidiaries to, purchase, make, incur, assume or permit to exist any
Investment in any other Person or acquire any business or all or substantially
all of the assets or Capital Securities of any Person (or any division thereof),
except:
(a) Investments existing on the Closing Date and identified in Item
7.2.5(a) of the Disclosure Schedule;
(b) Cash Equivalent Investments with respect to which the Lenders have
a fully perfected first priority Lien pursuant to a Securities Account
Control Agreement or other method satisfactory to the Agents;
(c) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(d) Investments by way of contributions to capital, purchases of
Capital Securities and extensions of credit (i) by ▇▇▇▇-▇▇▇▇▇ in any other
Borrower or Subsidiary Guarantor, by any Subsidiary Borrower or Subsidiary
Guarantor in any wholly owned Subsidiary Borrower or Subsidiary Guarantor,
(ii) by any Subsidiary Borrower or Subsidiary Guarantor in ▇▇▇▇-▇▇▇▇▇,
(iii) by ▇▇▇▇-▇▇▇▇▇ in any U.S. Subsidiary that is not a Subsidiary
Borrower or a Subsidiary Guarantor (other than the Insurance Captive) and
any Foreign Subsidiary (so long as at the time of making such Investment,
no Event of Default has occurred and is continuing and Average Excess
Availability is greater than $150,000,000, and immediately after giving
effect to such Investment, no Event of Default shall have occurred and be
continuing and Excess Availability is greater than $150,000,000) in an
aggregate amount not to exceed (when aggregated with the amount of
Indebtedness owed to the Borrowers by Foreign Subsidiaries and U.S.
Subsidiaries that are not Subsidiary Guarantors (other than the Insurance
Captive) under clause (f)(ii) of Section 7.2.2) $10,000,000 at any time
outstanding, (iv) by W-D (Bahamas) Limited comprising a revolving credit
facility extended by it to Bahamas Supermarkets Limited in a maximum amount
of $7,000,000 or (v) so long as at the time of making such Investments, no
Event of Default has occurred and is continuing and Average Excess
Availability is greater than $150,000,000, and immediately after giving
effect to such Investment, no Event of Default shall have occurred or be
continuing and Excess Availability is greater than $150,000,000, by the
Borrowers and the Subsidiary Guarantors in the Insurance Captive in an
aggregate amount for all such investments not to exceed $25,000,000 (which
Investment shall not, when aggregated with the amount of Indebtedness
incurred pursuant to clause (f)(iv) of Section 7.2.2, exceed $25,000,000);
(e) Investments constituting (i) accounts receivable arising, (ii)
trade debt granted or (iii) deposits made in connection with the purchase
price of goods or services, in each case in the ordinary course of
business;
(f) Investments by way of the acquisition of Capital Securities or
assets in each case constituting Permitted Acquisitions (i) in an aggregate
amount not to exceed $50,000,000 in any
87
Fiscal Year, and (ii) in an aggregate amount not to exceed $150,000,000
over the term of this Agreement; provided that, in any event, (w) except
with respect to Retail Store Acquisitions, immediately prior to such
Investment, Average Excess Availability is greater than $150,000,000, and
immediately after giving effect to such Investment, Excess Availability is
greater than $150,000,000 , (x) such Investments that comprise the
acquisition of all of the Capital Securities of a Person shall result in
the acquisition of a wholly owned Material Subsidiary that is a U.S.
Subsidiary, (y) upon making such Investments, the provisions of Section
7.1.8 are complied with and (z) none of the Inventory, Pharmacy Scripts or
Pharmacy Receivables acquired in connection with such Permitted Acquisition
shall be included in the Borrowing Base unless and until the Collateral
Monitoring Agent has conducted a collateral audit thereon satisfactory to
it and has made appropriate adjustments, if any, to the Reserves and/or the
definition of Eligible Inventory, Eligible Pharmacy Scripts or Eligible
Pharmacy Receivables, as the case may be;
(g) Investments consisting of any deferred portion of the sales price
received by any Borrower or any Subsidiary Guarantor in connection with any
Disposition permitted under Section 7.2.11;
(h) Investments by the Insurance Captive that are "admitted assets" of
the Insurance Captive under the applicable laws of the State of South
Carolina;
(i) Other Permitted Investments with respect to which the Lenders have
a fully perfected first priority Lien pursuant to a Securities Control
Agreement or other method satisfactory to the Agents; and
(j) other Investments after the Closing Date in an aggregate amount
not to exceed (x) $25,000,000, so long as at the time of making such
Investment, Average Excess Availability is greater than $125,000,000 and
after giving effect to such Investment, Excess Availability is greater than
$125,000,000 or (y) $10,000,000, otherwise.
provided, however, that
(A) any Investment which when made complies with the requirements of
the definition of the term "Cash Equivalent Investment" may continue to be
held notwithstanding that such Investment if made thereafter would not
comply with such requirements; and
(B) no Investment otherwise permitted by clauses d(i), d(iii), (f) or
(h) shall be permitted to be made if any Default has occurred and is
continuing or would result therefrom.
SECTION 7.2.6. Restricted Payments, etc. ▇▇▇▇-▇▇▇▇▇ will not, and will not
permit any of its Subsidiaries to make, declare or commit to make a Restricted
Payment, or make or commit to make any deposit for any Restricted Payment,
unless:
(a) such Restricted Payment is made by a Subsidiary to ▇▇▇▇-▇▇▇▇▇ or a
wholly owned Subsidiary, by any wholly owned Subsidiary of a partially
owned subsidiary to its parent or by any partially owned Subsidiary pro
rata to its stockholders;
(b) no Default has occurred and is continuing or would result from the
payment thereof; and
88
(c) at the time of making, declaring or committing to make such
Restricted Payment (or deposit), Average Excess Availability is greater
than $150,000,000 and after giving effect to such Restricted Payment (or
deposit), the Excess Availability will be greater than $150,000,000;
provided that any dividend which has been declared in accordance with the
foregoing provisions of this Section 7.2.6 shall also be permitted to be made if
(and only if) (i) (A) the Agents shall have established a Reserve in an amount
equal to 100% of the amount of the declared dividend on the day such dividend
was declared and (B) the aggregate amount of all such dividends shall not exceed
$8,000,000 during any Fiscal Quarter or $32,000,000 during any Fiscal Year and
(ii) at the time of payment of such dividend, no Default shall exist pursuant to
Section 8.1.1 or under Section 7.2.4(a).
SECTION 7.2.7. Changes to Fiscal Year. ▇▇▇▇-▇▇▇▇▇ will not, and will not
permit any of its Subsidiaries to, change its Fiscal Year.
SECTION 7.2.8. No Prepayment of Debt. ▇▇▇▇-▇▇▇▇▇ will not, and will not
permit any of its Subsidiaries to,
(a) unless the Required Lenders otherwise agree in writing, make any
payment or prepayment of principal of, or premium or interest on, any
Subordinated Debt or the Indebtedness evidenced by the Senior Unsecured
Notes (i) other than the stated, scheduled date for payment of interest set
forth in the applicable Sub Debt Documents and Senior Unsecured Notes
Documents, or (ii) which would violate the terms of this Agreement, the
applicable Sub Debt Documents or the Senior Unsecured Notes Documents;
(b) redeem, retire, purchase, repurchase, defease or otherwise acquire
any Subordinated Debt or any Senior Unsecured Notes; or
(c) make any deposit (including the payment of amounts into a sinking
fund or other similar fund) for any of the foregoing purposes;
provided, however, that the Borrowers may prepay or repurchase a portion of the
Senior Unsecured Notes (to the extent not refinanced pursuant to Section
7.2.2(i)) in an aggregate principal amount not to exceed $50,000,000 so long as
(i) no Default has occurred and is continuing or would result from the
prepayment or repurchase thereof and (ii) at the time of such prepayment or
repurchase, Average Excess Availability is greater than $150,000,000 and after
giving effect to such prepayment or repurchase, the Excess Availability will be
greater than $150,000,000.
Furthermore, neither ▇▇▇▇-▇▇▇▇▇ nor any Subsidiary will designate any
Indebtedness other than the Obligations as "Designated Senior Debt" (or any
analogous term) in any Sub Debt Document.
SECTION 7.2.9. Issuance of Capital Securities. ▇▇▇▇-▇▇▇▇▇ will not, and
will not permit any of its Subsidiaries to, (a) issue any Capital Securities
(whether for value or otherwise) to any Person other than (in the case of
Subsidiaries), to ▇▇▇▇-▇▇▇▇▇ or another wholly owned Subsidiary or (b) become
liable in respect of any obligation (contingent or otherwise) to purchase,
redeem, retire, acquire or make any other payment in respect of any Capital
Securities of ▇▇▇▇-▇▇▇▇▇ or any Subsidiary or any option, warrant or other right
to acquire any such Capital Securities.
SECTION 7.2.10. Consolidation, Merger, etc. ▇▇▇▇-▇▇▇▇▇ will not, and will
not permit any of its Subsidiaries to, liquidate or dissolve, consolidate with,
or merge into or with, any other Person, or purchase or otherwise acquire all or
substantially all of the assets of any Person (or any division thereof), except
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(a) any Subsidiary may liquidate or dissolve voluntarily into, and may
merge with and into, ▇▇▇▇-▇▇▇▇▇ or any other U.S. Subsidiary (other than
the Insurance Captive) (provided, however, that (i) a Subsidiary Borrower
may only liquidate or dissolve into, or merge with and into, ▇▇▇▇-▇▇▇▇▇ or
another Borrower and (ii) a Guarantor may only liquidate or dissolve into,
or merge with and into, ▇▇▇▇-▇▇▇▇▇ or another Borrower or Guarantor), and
the assets or Capital Securities of any Subsidiary may be purchased or
otherwise acquired by ▇▇▇▇-▇▇▇▇▇ or any other U.S. Subsidiary (other than
the Insurance Captive) (provided, however, that (i) the assets or Capital
Securities of any Subsidiary Borrower may only be purchased or otherwise
acquired by ▇▇▇▇-▇▇▇▇▇ or another Borrower and (ii) the assets or Capital
Securities of any Guarantor may only be purchased or otherwise acquired by
▇▇▇▇-▇▇▇▇▇ or another Borrower or Guarantor); provided further that in no
event shall any Pledged Subsidiary consolidate with or merge with and into
any Subsidiary other than another Pledged Subsidiary (except the Insurance
Captive) unless after giving effect thereto, the Administrative Agent shall
have a perfected pledge of, and security interest in and to, at least the
same percentage of the issued and outstanding interests of Capital
Securities (on a fully diluted basis) of the surviving Person as the
Administrative Agent had immediately prior to such merger or consolidation
in form and substance satisfactory to the Administrative Agent and its
counsel, pursuant to such documentation and opinions as shall be necessary
in the opinion of the Administrative Agent to create, perfect or maintain
the collateral position of the Secured Parties therein; and
(b) so long as no Default has occurred and is continuing or would occur
after giving effect thereto, the Borrowers or any of their Subsidiaries may
(to the extent permitted by clause (f) of Section 7.2.5) purchase all or
substantially all of the assets or Capital Securities of any Person (or any
division thereof), or acquire such Person by merger.
SECTION 7.2.11. Permitted Dispositions. ▇▇▇▇-▇▇▇▇▇ will not, and will not
permit any of its U.S. Subsidiaries (other than the Insurance Captive) to,
Dispose of any of ▇▇▇▇-Dixie's or such Subsidiaries' assets (including accounts
receivable and Capital Securities of Subsidiaries) to any Person in one
transaction or series of transactions unless such Disposition:
(a) (i) is in the ordinary course of its business and (A) consists of
(I) the lease (or sublease) of a portion of any Real Property owned or
leased by any Borrower or any Subsidiary or (II) the temporary license (or
temporary sublicense) of any patents, patent rights, trademarks, trademark
rights, trade names, trade name rights, service marks, service ▇▇▇▇ rights,
copyrights or other intellectual property rights; provided that such lease
(or sublease) or temporary license (or temporary sublicense) shall not
interfere with the primary use of such Real Property or intellectual
property right, or (B) constitutes Inventory or is, in the reasonable
determination of ▇▇▇▇-▇▇▇▇▇, of obsolete or worn out assets or property, or
assets or property no longer used in its business (it being understood that
Dispositions made in connection with the Restructuring Plan shall not be
considered to be made in the ordinary course of business), (ii) is to a
Borrower or any Subsidiary Guarantor, or (iii) is permitted by Section
7.2.10;
(b) is for fair market value to any Person other than an Affiliate or
Subsidiary, and the following conditions are met:
(i) the aggregate fair market value, as well as the aggregate book
value, of all such asset sales do not exceed $25,000,000 in any Fiscal
Year and $75,000,000 in the aggregate for the term of this Agreement;
provided that (A) any single asset sold for less than $1,000,000 shall
not be treated as usage of either the $25,000,000 or $75,000,000
baskets contained in this clause (b)(i) unless such asset is sold as
part of a group of assets for an amount in excess of $5,000,000 in the
aggregate, (B) assets sold in connection with
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Dispositions or facility closings as part of the Restructuring Plan up
to an aggregate net book value amount not to exceed $75,000,000 in the
case of assets other than Inventory and $175,000,000 in the case of
Inventory shall not be treated as usage of either the $25,000,000 or
$75,000,000 baskets contained in this clause (b)(i) and (C)
Dispositions of assets that are not Borrowing Base Assets listed in
Item 7.2.11(b)(i) of the Disclosure Schedule up to an aggregate net
book value amount not to exceed $65,000,000 shall not be treated as
usage of either the $25,000,000 or $75,000,000 baskets contained in
this clause (b)(i);
(ii) immediately prior to and immediately after giving effect to
such disposition, no Default shall have occurred or would result
therefrom (including without limitation under Section 7.2.4);
(iii) any Net Disposition Proceeds have been applied pursuant to
clause (b) of Section 3.1.1 to the extent required by the terms
thereof;
(iv) all the consideration for such sale, transfer, lease,
contribution or conveyance is cash (including cash held in escrow or
otherwise subject to a holdback or similar arrangement in support of
indemnification made by the disposing Person in connection with the
Disposition) or, in the case of assets that are not Borrowing Base
Assets, assumption of liabilities by the purchaser thereof;
(v) at least 10 Business Days prior to any such Disposition of
Borrowing Base Assets having a book value of $10,000,000 or more,
▇▇▇▇-▇▇▇▇▇ has provided the Agents with a pro forma Borrowing Base
Certificate which shall be comprised of the most recently delivered
Borrowing Base Certificate, adjusted to give pro forma affect to such
Disposition as if such Disposition occurred on the last day of the
period covered by the most recently delivered Borrowing Base
Certificate; and
(vi) the Agents have received at least 5 Business Days prior
written notice of such Disposition (to the extent a pro forma Borrowing
Base Certificate has not previously been provided pursuant to Section
7.2.11(b)(v)) and, at the request of the Agents, any acquisition or
purchase agreements or other documents relating to the Disposition have
been provided to the Agents;
(c) constitutes a Permitted Sale and Leaseback Transaction;
(d) constitutes a Permitted Lien; or
(e) occurs when no Default shall have occurred and be continuing, and
comprises the sale or discount of accounts receivable arising in the
ordinary course of business in connection with the compromise or collection
thereof; provided that such sale or discount shall be without recourse to
▇▇▇▇-▇▇▇▇▇ or any Subsidiary of ▇▇▇▇-▇▇▇▇▇.
SECTION 7.2.12. Modification of Certain Agreements. ▇▇▇▇-▇▇▇▇▇ will not,
and will not permit any of its Subsidiaries to, consent to any amendment,
supplement, waiver or other modification of, or enter into any forbearance from
exercising any rights with respect to the terms or provisions contained in, or
applicable to (a) any Sub Debt Documents or the Senior Unsecured Notes
Documents, other than any amendment, supplement, waiver or modification for
which no fee (other than as reimbursement of out-of-pocket expenses) is payable
to the holders of the Subordinated Debt or the Senior Unsecured Notes and which
(i) extends the date or reduces the amount of any required repayment, prepayment
or
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redemption of the principal of such Subordinated Debt or Senior Unsecured Notes,
(ii) reduces the rate or extends the date for payment of the interest, premium
(if any) or fees payable on such Subordinated Debt or Senior Unsecured Notes or
(iii) makes the covenants, events of default or remedies in such Sub Debt
Documents or Senior Unsecured Notes Documents less restrictive on ▇▇▇▇-▇▇▇▇▇ or
(b) any acquisition agreement relating to any Permitted Acquisition.
SECTION 7.2.13. Transactions with Affiliates. ▇▇▇▇-▇▇▇▇▇ will not, and will
not permit any of its Subsidiaries to, enter into or cause or permit to exist
any arrangement, transaction or contract (including for the purchase, lease or
exchange of property or the rendering of services) with any of its other
Affiliates, unless such arrangement, transaction or contract (a) is on fair and
reasonable terms no less favorable to ▇▇▇▇-▇▇▇▇▇ or such Subsidiary than it
could obtain in an arm's-length transaction with a Person that is not an
Affiliate and (b) is of the kind which would be entered into by a prudent Person
in the position of ▇▇▇▇-▇▇▇▇▇ or such Subsidiary with a Person that is not one
of its Affiliates.
SECTION 7.2.14. Restrictive Agreements, etc. ▇▇▇▇-▇▇▇▇▇ will not, and will
not permit any of its Subsidiaries to, enter into any agreement prohibiting
(a) other than the Insurance Captive, the creation or assumption of any
Lien upon its properties, revenues or assets, whether now owned or
hereafter acquired;
(b) the ability of any Obligor to amend or otherwise modify any Loan
Document; or
(c) the ability of any Subsidiary to make any payments, directly or
indirectly, to ▇▇▇▇-▇▇▇▇▇, including by way of dividends, advances,
repayments of loans, reimbursements of management and other intercompany
charges, expenses and accruals or other returns on investments.
The foregoing prohibitions shall not apply to restrictions contained (i) in any
Loan Document, (ii) in the case of clause (a), any agreement governing any
Indebtedness permitted by clause (e) of Section 7.2.2 as to the assets financed
with the proceeds of such Indebtedness, or (iii) in the case of clauses (a) and
(c), any agreement of a Foreign Subsidiary governing the Indebtedness permitted
by clause (f)(ii) of Section 7.2.2.
SECTION 7.2.15. Sale and Leaseback. ▇▇▇▇-▇▇▇▇▇ will not, and will not
permit any of its Subsidiaries to, directly or indirectly enter into any
agreement or arrangement providing for the sale or transfer by it of any
property (now owned or hereafter acquired) to a Person and the subsequent lease
or rental of such property or other similar property from such Person; provided
that ▇▇▇▇-▇▇▇▇▇ or any Subsidiary may enter into any such sale and leaseback
transaction if (a)(i) the aggregate net book value of the properties sold or
transferred in any such transactions does not exceed $25,000,000 after the
Closing Date or (ii) such sale and leaseback transaction is entered into in
connection with a Disposition permitted to be made pursuant to Section
7.2.11(b)(i)(C), (b) the Borrower or such Subsidiary has applied any Net Sale
and Leaseback Proceeds pursuant to clause (b) of Section 3.1.1 to the extent
required by the terms thereof and (c) immediately prior to and immediately after
giving effect thereto, no Default shall have occurred or would result therefrom
(including without limitation under Section 7.2.4).
SECTION 7.2.16. Collateral Access Agreements. The Borrowers will not, and
will not permit the Subsidiary Guarantors to, enter into a new lease for a
distribution center or ▇▇▇▇-Dixie's headquarters with any landlord, other than
renewals as to the existing headquarters and the existing distribution centers
in Item 6.27 of the Disclosure Schedule, unless the Agents have received
counterparts of a Collateral Access Agreement duly executed by such landlord and
the applicable Obligor.
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SECTION 7.2.17. Credit Card Issuers and Credit Card Processors. The
Borrowers will not, and will not permit the Subsidiary Guarantors to, enter into
a Credit Card Agreement with any Person or any other agreement, document or
instrument with a Credit Card Issuer or Credit Card Processor other than those
existing arrangements listed in Item 6.28 of the Disclosure Schedule, unless the
Agents have received a copy of a Processor Letter duly executed by the
applicable Obligor and delivered to such Person.
SECTION 7.2.18. Accounts; Investment Property.
(a) The Borrowers will not, and will not permit their Subsidiaries (other
than the Insurance Captive) to, open any Bank Accounts with any Direction Bank
other than those listed in Item 6.30 of the Disclosure Schedule, unless the
applicable Borrower or Subsidiary shall have delivered a Direction Letter to
such Direction Bank with respect to such Bank Account and a copy thereof to the
Administrative Agent.
(b) The Borrowers will not, and will not permit their U.S. Subsidiaries
(other than the Insurance Captive) to, open any securities account (as defined
in the UCC), or hold any financial assets in an existing securities account, or
acquire any other investment property (as defined in the UCC) unless the
Administrative Agent has a perfected first priority Lien over such securities
account or other investment property pursuant to a Securities Control Agreement
or other method acceptable to the Administrative Agent.
SECTION 7.2.19. Capital Expenditures. The Borrowers will not, and will not
permit their Subsidiaries to (and all calculations of Excess Availability and
Capital Expenditures for purposes hereof shall be accompanied by a certificate
of the chief financial officer or other Authorized Officer of ▇▇▇▇-▇▇▇▇▇
acceptable to the Agents, all in reasonable detail and reasonably satisfactory
to the Agents), make any Capital Expenditures that would cause the aggregate of
all such Capital Expenditures made by ▇▇▇▇-▇▇▇▇▇ and its Subsidiaries during the
most recently ended trailing thirteen Fiscal Month period, tested on each Test
Date, to exceed $250,000,000 provided that the Borrowers shall not be required
to have complied with the requirements of the foregoing provisions of this
Section 7.2.19 for any trailing thirteen Fiscal Month period ending on a Test
Date unless and until a Trigger Date has occurred on or prior to such Test Date,
in which case the Borrowers shall be required to have complied with the
requirements of the foregoing provisions of this Section 7.2.19 for the thirteen
Fiscal Month period ending on such Test Date and, unless and until (i) such time
as Average Excess Availability equals or exceeds $125,000,000 and (ii) no more
than three Trigger Dates have occurred during the term of this Agreement, all
Test Dates thereafter.
SECTION 7.3. Collateral Reporting and Covenants.
SECTION 7.3.1. Collateral Reporting.
(a) The Borrowers shall provide the Collateral Monitoring Agent with the
following documents in a form satisfactory to the Collateral Monitoring Agent:
(i) promptly following the Collateral Monitoring Agent's request,
schedules of sales made and cash received;
(ii) promptly following the end of each Fiscal Month (but in any event
within ten (10) Business Days after the end thereof), on a four week period
basis and, if an Event of Default shall have occurred and be continuing or
if a Trigger Date shall have occurred and at all
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times thereafter, weekly or, if available, more frequently, as the
Collateral Monitoring Agent may request, (A) perpetual inventory (in
respect of distribution center inventory) and retail stock ledger reports,
(B) summary inventory mix reports by distribution center and by retail
stores in the aggregate (and including the amounts of Inventory and the
value thereof at any leased locations and at premises of warehouses,
processors or other third parties), (C) agings of accounts payable and
accrued payables (and including information indicating the amounts owing to
Farm Product Sellers and to owners and lessors of leased premises,
warehouses, processors and other third parties from time to time in
possession of any Collateral), (D) rent payments and aging of rent
payments, (E) inventory shrink reports in form and detail satisfactory to
the Collateral Monitoring Agent, (F) reports showing the total exposure and
net obligations of each Borrower and Subsidiary under each Rate Protection
Agreement, (G) a report of pharmacy sales, receivable collections and
receivable credits during such period, (H) an aging of Pharmacy
Receivables, (I) reports showing the number of prescriptions filled and
average dollar amount of such prescriptions for each of the pharmacies of
the Borrowers by store location and (J) a report of pharmacy closings
during such period;
(iii) promptly following the Collateral Monitoring Agent's request,
copies of purchase orders, deposit slips and bank statements of any
Borrower or any of its Subsidiaries;
(iv) promptly following the end of each Fiscal Month (but in any event
within ten (10) Business Days after the end thereof), and, if an Event of
Default shall have occurred and be continuing or if a Trigger Date shall
have occurred and at all times thereafter, more frequently as the
Collateral Monitoring Agent may request, a Borrowing Base certificate,
substantially in the form of Exhibit Q hereto, or with additional form and
detail (including as to Eligible Inventory) as the Agents may require (each
a "Borrowing Base Certificate"); provided that if a Borrowing Base
Certificate is required to be delivered more frequently than at the end of
each Fiscal Month, the Borrowers may use certain information from the most
recently delivered Borrowing Base Certificate solely to the extent such
information has not been made available any more recently than such most
recently delivered Borrowing Base Certificate and is not required to be
made so available pursuant to Section 7.3.1(a)(ii) above; and
(v) such other reports as to the Collateral as the Agents shall
reasonably request from time to time.
(b) If any Borrower's or Guarantor's records or reports of the Collateral
are prepared or maintained by an accounting service, contractor, shipper or
other agent, such Borrower and Guarantor hereby irrevocably authorized such
service, contractor, shipper or agent to deliver such records, reports, and
related documents to the Collateral Monitoring Agent and to follow the
Collateral Monitoring Agent's instructions with respect to further services at
any time that an Event of Default exists or has occurred and is continuing.
(c) Nothing contained in any Borrowing Base Certificate shall be deemed to
limit, impair or otherwise affect the rights of any Agent or Lender contained
herein and in the event of any conflict or inconsistency between the calculation
of the Borrowing Base or Adjusted Borrowing Base as set forth in any Borrowing
Base Certificate and as determined by the Collateral Monitoring Agent, the
determination of the Collateral Monitoring Agent shall govern. Without limiting
the foregoing, the Borrowers shall furnish to the Agents any information which
an Agent may request regarding the determination and calculation of any of the
amounts set forth in any Borrowing Base Certificate.
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SECTION 7.3.2. Inventory Covenants. With respect to the Inventory: (a) each
Borrower and Guarantor shall at all times maintain inventory records reasonably
satisfactory to the Collateral Monitoring Agent, keeping correct and accurate
records itemizing and describing the kind, type, quality and quantity of
Inventory, such Borrower's or Guarantor's cost therefor and daily withdrawals
therefrom and additions thereto; (b) the Borrowers and Guarantors shall continue
their current practices for conducting physical counts of Inventory in the
distribution centers and the retail stores but shall also conduct such physical
counts of such Inventory at any time or times as the Collateral Monitoring Agent
may request on or after an Event of Default, and promptly following such
physical inventory shall supply the Collateral Monitoring Agent with a report in
the form and with such specificity as may be satisfactory to the Collateral
Monitoring Agent concerning such physical count; (c) the Borrowers and
Guarantors shall not remove any Inventory from the locations set forth or
permitted in the Security Documents, without the prior written consent of the
Collateral Monitoring Agent, except for sales or other dispositions of Inventory
in the ordinary course of its business and except to move Inventory directly
from one location set forth or permitted herein to another such location and
except for Inventory shipped from the manufacturer thereof to such Borrower or
Guarantor which is in transit to the locations set forth or permitted herein;
(d) upon the Collateral Monitoring Agent's request, the Borrowers shall, at
their expense, no more than two (2) times in any twelve (12) month period, but
at any time or times as the Collateral Monitoring Agent may request on or after
an Event of Default or at any time after the occurrence of a Trigger Date, and
in any event at any time at the expense of the Lenders, deliver or cause to be
delivered to the Collateral Monitoring Agent written appraisals as to the
Inventory in form, scope and methodology reasonably acceptable to the Collateral
Monitoring Agent and by an appraiser acceptable to the Collateral Monitoring
Agent, addressed to the Agents and Lenders and upon which the Agents and Lenders
are expressly permitted to rely; (e) the Borrowers and Guarantors shall produce,
use, store and maintain the Inventory with all reasonable care and caution and
in accordance with applicable standards of any insurance and in conformity with
applicable laws (including the requirements of the Federal Fair Labor Standards
Act of 1938, as amended and all rules, regulations and orders related thereto);
(f) none of the Inventory or other Collateral constitutes farm products (as
defined in the UCC) or the proceeds thereof; (g) the Borrowers and Guarantors
shall not sell Inventory to any customer on approval, or any other basis upon
which the customer has a right to return or obligates any Borrower or Guarantor
to repurchase such Inventory (it being acknowledged that this does not include
discretionary decisions on the part of the Borrowers and Guarantors to
repurchase Inventory); and (h) the Borrowers and Guarantors shall maintain
current rent payments (within applicable grace periods contained in the leases)
at all locations that contain Inventory.
SECTION 7.3.3. Power of Attorney. Each Borrower and Guarantor hereby
irrevocably designates and appoints the Administrative Agent (and all persons
designated by each Agent) as such Borrower's and Guarantor's true and lawful
attorney-in-fact, and authorizes each Agent, in such Borrower's, Guarantor's or
Agent's name, to: (a) at any time an Event of Default exists or has occurred and
is continuing (i) exercise all of such Borrower's or Guarantor's rights and
remedies to collect any Collateral, (ii) settle, adjust, compromise, extend or
renew an Account, (iii) settle, adjust or compromise any claim, offset,
counterclaim or dispute with account debtors or grant any credits, discounts or
allowances, (iv) prepare, file and sign such Borrower's or Guarantor's name on
any proof of claim in bankruptcy or other similar document against an account
debtor or other obligor in respect of any Collateral, (v) notify the post office
authorities to change the address for delivery of remittances from account
debtors or other obligors in respect of proceeds of any Collateral to an address
designated by such Agent, and open and dispose of all mail addressed to such
Borrower or Guarantor and handle and store all mail relating to the Collateral;
and (vi) do all acts and things which are necessary, in such Agent's
determination, to fulfill such Borrower's or Guarantor's obligations under this
Agreement and the other Loan Documents, (b) at any time an Event of Default
exists or Excess Availability is less than $100,000,000 (i) settle, adjust,
compromise, extend or renew an Account and (ii) settle, adjust or compromise any
claim, offset, counterclaim or dispute with account debtors or grant any
credits,
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discounts or allowances, and (c) at any time (i) have access to any lockbox or
postal box into which remittances from account debtors or other obligors in
respect of proceeds of Collateral are sent or received, (ii) endorse such
Borrower's or Guarantor's name upon any items of payment constituting Collateral
or otherwise received by an Agent and any Lender and deposit the same in an
Agent's account for application to the Obligations, (iii) endorse such
Borrower's or Guarantor's name upon any chattel paper, document, instrument,
invoice, or similar document or agreement relating to any Collateral, including
any warehouse or other receipts, or bills of lading and other negotiable or
non-negotiable documents, and (iv) clear Inventory the purchase of which was
financed with Letters of Credit through U.S. Customs or foreign export control
authorities in such Borrower's or Guarantor's name, an Agent's name or the name
of such Agent's designee, and to sign and deliver to customs officials powers of
attorney in such Borrower's or Guarantor's name for such purpose, and to
complete in such Borrower's or Guarantor's or an Agent's name, any order, sale
or transaction, obtain the necessary documents in connection therewith and
collect the proceeds thereof. Each Borrower and Guarantor hereby releases each
Agent, the Lenders and their respective officers, employees and designees from
any liabilities arising from any act or acts under this power of attorney and in
furtherance thereof, whether of omission or commission, except as to any Agent
or any Lender, for such Agent's or Lender's own gross negligence or willful
misconduct as determined pursuant to a final non-appealable order of a court of
competent jurisdiction.
SECTION 7.3.4. Right to Cure. An Agent (and all persons designated by such
Agent) may, at its option, upon notice to the Administrative Borrower, (a) cure
any default by any Borrower or Guarantor under any material agreement with a
third party that affects the Collateral, its value or the ability of an Agent to
collect, sell or otherwise dispose of the Collateral or the rights and remedies
of such Agent or any Lender therein or the ability of any Borrower or Guarantor
to perform its obligations hereunder or under any of the other Loan Documents,
(b) pay or bond on appeal any judgment entered against any Borrower or
Guarantor, (c) discharge taxes, liens, security interests or other encumbrances
at any time levied on or existing with respect to the Collateral and pay any
amount, incur any expense or perform any act which, in such Agent's judgment, is
necessary or appropriate to preserve, protect, insure or maintain the Collateral
and the rights of the Agents and the Lenders with respect thereto. The Agents
may add any amounts so expended to the Obligations and charge any Borrower's
account therefor, such amounts to be repayable by Borrowers on demand. The
Agents and the Lenders shall be under no obligation to effect such cure, payment
or bonding and shall not, by doing so, be deemed to have assumed any obligation
or liability of any Borrower or Guarantor. Any payment made or other action
taken by any Agent or any Lender under this Section shall be without prejudice
to any right to assert an Event of Default hereunder and to proceed accordingly.
SECTION 7.3.5. Access to Premises/Field Audits. From time to time as
requested by the Collateral Monitoring Agent (and all persons designated by the
Collateral Monitoring Agent), at the cost and expense of the Borrowers, (a) the
Collateral Monitoring Agent or its designee shall have complete access to all of
each Borrower's and Guarantor's premises during normal business hours and after
notice to ▇▇▇▇-▇▇▇▇▇, which right shall be reasonably exercised in a manner such
as to minimize disruption to the Borrowers' business, or at any time and without
notice to the Administrative Borrower if an Event of Default exists or has
occurred and is continuing, for the purposes of inspecting, verifying and
auditing the Collateral and all of each Borrower's and Guarantor's books and
records, and (b) each Borrower and Guarantor shall promptly furnish to the
Collateral Monitoring Agent such copies of such books and records or extracts
therefrom as the Collateral Monitoring Agent may request, and the Collateral
Monitoring Agent or any Lender or Agent's designee may use during normal
business hours such of any Borrower's and Guarantor's personnel, equipment,
supplies and premises as may be reasonably necessary for the foregoing and if an
Event of Default exists or has occurred and is continuing, for the realization
of Collateral. The Collateral Monitoring Agent shall have the right to conduct
field audits and examinations
96
four times per year, but as many times as the Collateral Monitoring Agent may
request on or after an Event of Default.
SECTION 7.3.6. Pharmacy Scripts Covenants. With respect to the Pharmacy
Scripts: (a) each Borrower and Guarantor shall at all times maintain the
Pharmacy Scripts in a manner consistent with the requirements of Federal, State
and local laws and regulations in all material respects, including all Health
Care Laws, which files and records related thereto shall be correct and accurate
in all material respects to the best of the Borrower's and Guarantors'
knowledge; (b) Borrowers and Guarantors shall not remove any Pharmacy Scripts
from the locations set forth or permitted herein, without the prior written
consent of the Collateral Monitoring Agent, except for transfers of Pharmacy
Scripts, (i) in the ordinary course of its business (including at the request of
customers with respect to such customer's own Pharmacy Scripts) and (ii) in
connection with the closing or Disposition of any store or stores or the closing
of any pharmacy; (c) upon the Collateral Monitoring Agent's request, Borrowers
shall, at their expense, no more than two (2) times in any twelve (12) month
period, but at any time or times as the Collateral Monitoring Agent may request
on or after an Event of Default or at any time after the occurrence of a Trigger
Date, deliver or cause to be delivered to the Collateral Monitoring Agent
written appraisals as to the Pharmacy Scripts in form, scope and methodology
reasonably acceptable to the Collateral Monitoring Agent and by an appraiser
acceptable to the Collateral Monitoring Agent, addressed to the Collateral
Monitoring Agent and Lenders and upon which the Collateral Monitoring Agent and
Lenders are expressly permitted to rely; (d) Borrowers and Guarantors shall use,
store and maintain the Pharmacy Scripts with all reasonable care and caution and
in accordance with applicable standards of any insurance and in conformity with
applicable laws (including the requirements of the HIPAA, as amended and all
rules, regulations and orders related thereto) in all material respects; (e)
there are no limitations or restrictions on the rights of any Borrower or
Guarantor to sell, transfer or otherwise assign the Pharmacy Scripts to any
third party so long as such third party has the licenses required under
applicable state law to operate a pharmacy and sell products subject to a
prescription; (f) each Borrower and Guarantor assumes all responsibility and
liability arising from or relating to the use of prescriptions and the
maintenance and use of the Pharmacy Scripts; and (g) Borrowers and Guarantors
shall keep the Pharmacy Scripts in good and marketable condition.
SECTION 7.3.7. Pharmacy Receivables Covenants. (a) With respect to the
Pharmacy Receivables: (i) each Borrower and Guarantor shall notify the
Collateral Monitoring Agent promptly of: (A) any material delay in any
Borrower's performance of any of its material obligations to any Account Debtor
or the assertion of any material claims, offsets, defenses or counterclaims by
any Account Debtor, or any material disputes with Account Debtors, or any
settlement, adjustment or compromise thereof, (B) all material adverse
information known to any Borrower or Guarantor relating to the financial
condition of any Account Debtor reasonably likely to adversely impact the
collectability or enforceability of a Pharmacy Receivable or (C) any event or
circumstance which, to the best of any Borrower's or Guarantor's knowledge,
would cause the Collateral Monitoring Agent to consider any then existing
Accounts as no longer constituting Eligible Pharmacy Receivables, (ii) the
amounts shown on any invoice delivered to the Collateral Monitoring Agent or
schedule thereof delivered to the Collateral Monitoring Agent shall be
materially true and complete, (iii) no payments shall be made thereon except
payments promptly delivered to the Majority Accounts, (iv) there shall be no
material setoffs, deductions, contras, defenses, counterclaims or disputes
existing or asserted with respect thereto except as reported to the Collateral
Monitoring Agent in accordance with the terms of this Agreement and (v) none of
the transactions giving rise thereto will violate any applicable foreign,
Federal, State or local laws or regulations, all documentation relating thereto
will be legally sufficient under such laws and regulations and all such
documentation will be legally enforceable in accordance with its terms.
(b) No credit, discount, allowance or extension or agreement in excess of
$250,000 individually or $1,000,000 in the aggregate for any of the foregoing
shall be granted to any Account Debtor without the Collateral Monitoring Agent's
consent, except in the ordinary course of a Borrower's
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or Guarantor's business in accordance with its usual practices and policies and
except as disclosed to the Collateral Monitoring Agent in accordance with the
provisions of this Agreement. So long as no Event of Default exists or has
occurred and is continuing, Borrowers and Guarantors shall settle, adjust or
compromise any claim, offset, counterclaim or dispute with any Account Debtor.
At any time that an Event of Default exists or has occurred and is continuing,
the Agent shall, at its option, have the exclusive right to settle, adjust or
compromise any claim, offset, counterclaim or dispute with Account Debtors or
grant any credits, discounts or allowances.
(c) The Collateral Monitoring Agent shall have the right at any time or
times, in the Collateral Monitoring Agent's name or in the name of a nominee of
the Collateral Monitoring Agent, to verify the validity, amount or any other
matter relating to any Pharmacy Receivables, by mail, telephone, facsimile
transmission or otherwise, except that no disclosure will be made of Protected
Health Information (as contemplated by HIPAA) unless the Collateral Monitoring
Agent has executed a Business Associate Agreement (as contemplated by HIPAA), it
being noted that the Collateral Monitoring Agent executed such a Business
Associate Agreement prior to the Closing Date.
SECTION 7.3.8. Real Property Covenants. With respect to the Eligible Real
Property: (a) upon the Collateral Monitoring Agent's request, each Borrower and
Guarantor shall, at their expense, no more than one (1) time in any twelve (12)
month period, but at any time or times as the Collateral Monitoring Agent may
request on or after an Event of Default, deliver or case to be delivered to
Agent written appraisals as to the Eligible Real Property in form, scope and
methodology acceptable to the Collateral Monitoring Agent and by an appraiser
acceptable to the Collateral Monitoring Agent, addressed to the Agents and the
Lenders and upon which the Agents and the Lenders are expressly permitted to
rely; (b) each Borrower and Guarantor shall use the Eligible Real Property with
all reasonable care and caution and in accordance with applicable standards of
any insurance and in conformity with all applicable laws; and (c) each Borrower
and Guarantor shall assume all responsibility and liability arising from the use
of the Eligible Real Property.
SECTION 7.4. Majority Accounts.
SECTION 7.4.1. Maintaining Majority Accounts. The Borrowers will, and will
cause each of the Subsidiaries to, limit the amount of In Store Cash such that
the aggregate amount of such cash is not, by the close of business on any day
prior to the first anniversary of the Closing Date, in excess of $30,000,000 and
on any day on or after the first anniversary of the Closing Date, in excess of
$25,000,000. By the close of business on each day, the Borrowers will, and will
cause their U.S. Subsidiaries (other than the Insurance Captive) to, sweep
substantially all the cash of the Borrowers and their U.S. Subsidiaries (other
than the Insurance Captive) into accounts maintained with the Administrative
Agent, in accordance with past practices.
SECTION 7.4.2. Disposition of Funds. If an Event of Default shall have
occurred and be continuing or if a Trigger Date shall have occurred and at all
times thereafter, the Administrative Agent shall have the right to, at any time
and without notice to or consent from any Borrower or Guarantor, direct that any
amounts in Majority Accounts or any assets in securities accounts (as defined in
the UCC) in each case, of any Borrower or Guarantor, be applied to the payment
of any Obligations.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the following events or
occurrences described in this Article shall constitute an "Event of Default".
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SECTION 8.1.1. Non-Payment of Obligations. Any Borrower shall default in
the payment or prepayment when due of
(a) any principal of any Loan, any Reimbursement Obligation or any
deposit of cash for collateral purposes pursuant to Section 2.6.4; or
(b) any interest on any Loan, any fee described in Article III or any
other monetary Obligation, and such default shall continue unremedied for a
period of three days after such amount was due.
SECTION 8.1.2. Breach of Warranty. Any representation or warranty of any
Obligor made or deemed to be made in any Loan Document (including any
certificates delivered pursuant to Article V) is or shall be incorrect when made
or deemed to have been made in any material respect.
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations. Any
Borrower shall default in the due performance or observance of any of its
obligations under Section 6.24, Section 6.25, Section 7.1.1, Section 7.1.7,
Section 7.2, Section 7.3 or Section 7.4 or any Obligor shall default in the due
performance or observance of its obligations under (a) Article 4 of the
Subsidiary Guaranty (to the extent such Article incorporates Section 7.1.1,
Section 7.1.7, Section 7.2, Section 7.3, Section 7.4 or Section 8.1.9 of this
Agreement), (b) Section 4.1.5 of a Security Agreement, (c) the first sentence of
Section 4.1 of a Pledge Agreement or (d) Article I of a Mortgage.
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations. Any
Obligor shall default in the due performance and observance of any other
agreement contained in any Loan Document executed by it, and such default shall
continue unremedied for a period of 30 days after notice thereof shall have been
given to the Administrative Borrower by the Administrative Agent or any Lender.
SECTION 8.1.5. Default on Other Indebtedness. A default shall occur in the
payment of any amount when due (subject to any applicable grace period), whether
by acceleration or otherwise, of any principal or stated amount of, or interest
or fees on, any Indebtedness (other than Indebtedness described in Section
8.1.1) of any Borrower or any of their Subsidiaries or any other Obligor having
a principal or stated amount, individually or in the aggregate, in excess of
$10,000,000, or a default shall occur in the performance or observance of any
obligation or condition with respect to such Indebtedness if the effect of such
default is to accelerate the maturity of any such Indebtedness or such default
shall continue unremedied for any applicable period of time sufficient to permit
the holder or holders of such Indebtedness, or any trustee or agent for such
holders, to cause or declare such Indebtedness to become due and payable or to
require such Indebtedness to be prepaid, redeemed, purchased or defeased, or
require an offer to purchase or defease such Indebtedness to be made, prior to
its expressed maturity.
SECTION 8.1.6. Judgments. Any judgment or order for the payment of money
individually or in the aggregate in excess of $10,000,000 (exclusive of any
amounts fully covered by insurance (less any applicable deductible) and as to
which the insurer has acknowledged its responsibility to cover such judgment or
order) shall be rendered against any Borrower or any of its Subsidiaries or any
other Obligor and such judgment shall not have been vacated or discharged or
stayed or bonded pending appeal within 30 days after the entry thereof or
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order.
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SECTION 8.1.7. Pension Plans. Any of the following events shall occur with
respect to any Pension Plan:
(a) the institution of any steps by ▇▇▇▇-▇▇▇▇▇, any member of its
Controlled Group or any other Person to terminate a Pension Plan if, as a
result of such termination, ▇▇▇▇-▇▇▇▇▇ or any such member could be required
to make a contribution to such Pension Plan, or could reasonably expect to
incur a liability or obligation to such Pension Plan, in excess of
$5,000,000; or
(b) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under section 302(f) of ERISA.
SECTION 8.1.8. Change in Control. Any Change in Control shall occur.
SECTION 8.1.9. Bankruptcy, Insolvency, etc. ▇▇▇▇-▇▇▇▇▇, any of its
Subsidiaries or any other Obligor shall
(a) become insolvent or generally fail to pay, or admit in writing its
inability or unwillingness generally to pay, debts as they become due;
(b) apply for, consent to, or acquiesce in the appointment of a
trustee, receiver, sequestrator or other custodian for any substantial part
of the property of any thereof, or make a general assignment for the
benefit of creditors;
(c) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for a substantial part of the property of
any thereof, and such trustee, receiver, sequestrator or other custodian
shall not be discharged within 60 days; provided that ▇▇▇▇-▇▇▇▇▇, each
Subsidiary and each other Obligor hereby expressly authorizes each Secured
Party to appear in any court conducting any relevant proceeding during such
60-day period to preserve, protect and defend their rights under the Loan
Documents;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law or any dissolution, winding up or liquidation
proceeding, in respect thereof, and, if any such case or proceeding is not
commenced by ▇▇▇▇-▇▇▇▇▇, any Subsidiary or any Obligor, such case or
proceeding shall be consented to or acquiesced in by ▇▇▇▇-▇▇▇▇▇, such
Subsidiary or such Obligor, as the case may be, or shall result in the
entry of an order for relief or shall remain for 60 days undismissed;
provided that ▇▇▇▇-▇▇▇▇▇, each Subsidiary and each Obligor hereby expressly
authorizes each Secured Party to appear in any court conducting any such
case or proceeding during such 60-day period to preserve, protect and
defend their rights under the Loan Documents; or
(e) take any action authorizing, or in furtherance of, any of the
foregoing.
SECTION 8.1.10. Impairment of Security, etc. Any Loan Document or any Lien
granted thereunder shall (except in accordance with its terms), in whole or in
part, terminate, cease to be effective or cease to be the legally valid, binding
and enforceable obligation of any Obligor party thereto; any Obligor or any
other party shall, directly or indirectly, contest in any manner such
effectiveness, validity, binding nature or enforceability; or, except as
permitted under any Loan Document, any Lien securing any Obligation shall, in
whole or in part, cease to be a perfected first priority Lien.
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SECTION 8.1.11. Failure of Subordination. Unless otherwise waived or
consented to by the Administrative Agent, the Lenders and the Issuers in
writing, the subordination provisions relating to any Subordinated Debt (the
"Subordination Provisions") shall fail to be enforceable by the Administrative
Agent, the Lenders and the Issuers in accordance with the terms thereof, or the
monetary Obligations shall fail to constitute "Senior Indebtedness" (or similar
term) referring to the Obligations; or ▇▇▇▇-▇▇▇▇▇ or any of its Subsidiaries
shall, directly or indirectly, disavow or contest in any manner (i) the
effectiveness, validity or enforceability of any of the Subordination
Provisions, (ii) that the Subordination Provisions exist for the benefit of the
Administrative Agent, the Lenders and the Issuers or (iii) that all payments of
principal of or premium and interest on the Subordinated Debt, or realized from
the liquidation of any property of any Obligor, shall be subject to any of such
Subordination Provisions.
SECTION 8.1.12. Default Under Senior Unsecured Notes. ▇▇▇▇-▇▇▇▇▇ shall fail
to observe or perform any covenant or agreement contained in the Senior
Unsecured Notes, the Senior Unsecured Notes Indenture or the other Senior
Unsecured Notes Documents, in each case within any applicable grace period, if
the effect of such failure or other event is to accelerate the Senior Unsecured
Notes, or to permit the holders of the Senior Unsecured Notes, the Trustee or
any other Person, to cause or declare the Senior Unsecured Notes to become due
and payable or to require the Senior Unsecured Notes to be prepaid, redeemed,
purchased or defeased, or require an offer to purchase or defease the Senior
Unsecured Notes to be made, prior to their expressed maturity.
SECTION 8.1.13. Suspension under Credit Card Agreement, etc.. (a) Any
Credit Card Issuer or Credit Card Processor withholds payment of amounts
otherwise payable to a Borrower to fund a reserve account or otherwise holds as
collateral, or shall require a Borrower to pay funds into a reserve account or
for such Credit Card Issuer or Credit Card Processor to otherwise hold as
collateral, or any Borrower shall provide a letter of credit, guarantee,
indemnity or similar instrument to or in favor of such Credit Card Issuer or
Credit Card Processor such that in the aggregate all of such funds in the
reserve account, other amounts held as collateral and the amount of such letters
of credit, guarantees, indemnities or similar instruments shall exceed
$40,000,000; or (b) any Credit Card Issuer or Credit Card Processor shall send
written notice to any Borrower that it is ceasing to make or suspending payments
to any Borrower of amounts due or to become due to any Borrower or shall cease
or suspend such payments, or shall send written notice to any Borrower that it
is terminating its arrangements with any Borrower or such arrangements shall
terminate as a result of any event of default under such arrangements, which
continues for more than the applicable cure period, if any, with respect
thereto, unless such Borrower shall have entered into arrangements with another
Credit Card Issuer or Credit Card Processor, as the case may be, within
forty-five (45) days after the date of any such notice.
SECTION 8.2. Action if Bankruptcy. If any Event of Default described in
clauses (a) through (d) of Section 8.1.9 with respect to any Borrower shall
occur, the Commitments (if not theretofore terminated) shall automatically and
immediately terminate and the outstanding principal amount of all outstanding
Loans and all other Obligations (including Reimbursement Obligations but
excluding Hedging Obligations) shall automatically be and become immediately due
and payable, without notice or demand to any Person and each Obligor shall
automatically and immediately be obligated to Cash Collateralize all Letter of
Credit Outstandings.
SECTION 8.3. Action if Other Event of Default. If any Event of Default
(other than any Event of Default described in clauses (a) through (d) of Section
8.1.9 with respect to any Borrower) shall occur for any reason, whether
voluntary or involuntary, and be continuing, the Administrative Agent, upon the
direction of the Required Lenders, shall by notice to the Administrative
Borrower declare all or any portion of the outstanding principal amount of the
Loans and other Obligations (including Reimbursement Obligations but excluding
Hedging Obligations) to be due and payable and/or the Commitments (if not
theretofore terminated) to be terminated, whereupon the full unpaid amount of
such Loans and other
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Obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment,
and/or, as the case may be, the Commitments shall terminate and the Borrowers
shall automatically and immediately be obligated to Cash Collateralize all
Letter of Credit Outstandings.
SECTION 8.4. Application of Proceeds. Any moneys received or collected from
any Borrower or Subsidiary Guarantor after the occurrence of an Event of Default
(including the monetary proceeds of collections or of realization upon any
Collateral) shall be applied as follows:
First, to pay any costs and expenses or other liabilities of any kind
incurred by the Collateral Monitoring Agent or the Administrative Agent in
connection with any actions relating to any Collateral (including without
limitation, audit and monitoring expenses and any expenses and liabilities in
connection with foreclosing upon any Collateral) or the enforcement of any Loan
Document,
Second, to pay any other fees, indemnities or expense reimbursements then
due to the Collateral Monitoring Agent or the Administrative Agent from any
Borrower or Subsidiary Guarantor,
Third, ratably, to pay all accrued (a) interest in respect of any Loans
(and including any Special Agent Advances), (b) Subfacility Letter of Credit
Fees, (c) Standby Letter of Credit Fees and (d) Unused Line Fees,
Fourth, to pay or prepay principal in respect of Special Agent Advances and
Loans made pursuant to (and to Cash Collateralize all Letters of Credit issued
pursuant to) Section 10.21,
Fifth, ratably, to (a) pay principal due in respect of the Loans, (b) pay
Obligations outstanding under Rate Protection Agreements, (c) pay any
reimbursement amounts outstanding with respect to, and Cash Collateralize all
other obligations (including contingent obligations) in respect of, Subfacility
Letters of Credit and (d) pay any reimbursement amounts outstanding with respect
to, and Cash Collateralize all other obligations (including contingent
obligations) in respect of, Standby Letters of Credit, and
Sixth, to pay or prepay any other Obligations whether or not then due, in
such order and manner as the Administrative Agent determines.
ARTICLE IX
THE AGENTS
SECTION 9.1. Actions. Each Lender hereby appoints Wachovia Bank as its
Administrative Agent and Congress as its Collateral Monitoring Agent under and
for purposes of each Loan Document. Each Lender authorizes the Administrative
Agent and the Collateral Monitoring Agent to act on behalf of such Lender under
each Loan Document and, in the absence of other written instructions from the
Required Lenders received from time to time by the Administrative Agent or the
Collateral Monitoring Agent (with respect to which the Administrative Agent and
the Collateral Monitoring Agent agrees that it will comply, except as otherwise
provided in this Section or as otherwise advised by counsel in order to avoid
contravention of applicable law), to exercise such powers hereunder and
thereunder as are specifically delegated to or required of the Administrative
Agent or the Collateral Monitoring Agent by the terms hereof and thereof,
together with such powers as may be incidental thereto. Each Lender hereby
indemnifies (which indemnity shall survive any termination of this Agreement)
the Administrative Agent, the Collateral Monitoring Agent and the Arranger, pro
rata according to such Lender's proportionate Total Exposure Amount, from and
against any and all liabilities, obligations, losses, damages, claims, costs or
expenses of any kind or nature whatsoever which may at any time be imposed
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on, incurred by, or asserted against, the Administrative Agent, the Collateral
Monitoring Agent or the Arranger, as the case may be, or in any way relating to
or arising out of any Loan Document (including attorneys' fees and expenditures
to protect or preserve any collateral), and as to which the Administrative
Agent, the Collateral Monitoring Agent or the Arranger, as the case may be, is
not reimbursed by the Borrower; provided, however, that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, claims, costs or expenses which (a) in the case of liabilities,
obligations, losses, damages, claims, costs or expenses claimed by the
Administrative Agent, are determined by a court of competent jurisdiction in a
final proceeding to have resulted from the Administrative Agent's gross
negligence or willful misconduct, (b) in the case of liabilities, obligations,
losses, damages, claims, costs or expenses claimed by the Arranger, are
determined by a court of competent jurisdiction in a final proceeding to have
resulted solely from the Arranger's gross negligence or willful misconduct, and
(c) in the case of liabilities, obligations, losses, damages, claims, costs or
expenses claimed by the Collateral Monitoring Agent, are determined by a court
of competent jurisdiction in a final proceeding to have resulted from the
Collateral Monitoring Agent's gross negligence or willful misconduct. The
Administrative Agent and the Collateral Monitoring Agent shall not be required
to take any action under any Loan Document, or to prosecute or defend any suit
in respect of any Loan Document, unless it is indemnified hereunder to its
satisfaction. If any indemnity in favor of the Administrative Agent or the
Collateral Monitoring Agent shall be or become, in the Administrative Agent's or
the Collateral Monitoring Agent determination, inadequate, the Administrative
Agent or the Collateral Monitoring Agent may call for additional indemnification
from the Lenders and cease to do the acts indemnified against hereunder until
such additional indemnity is given.
SECTION 9.2. Funding Reliance, etc. Unless the Administrative Agent shall
have been notified in writing by any Lender by 3:00 p.m. on the Business Day
prior to a Borrowing that such Lender will not make available the amount which
would constitute its Percentage of such Borrowing on the date specified
therefor, the Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent and, in reliance upon such
assumption, make available to any Borrower a corresponding amount. If and to the
extent that such Lender shall not have made such amount available to the
Administrative Agent, such Lender and such Borrower severally agree to repay the
Administrative Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date the Administrative Agent made such
amount available to such Borrower to the date such amount is repaid to the
Administrative Agent, at the interest rate applicable at the time to Loans
comprising such Borrowing (in the case of a Borrower) and (in the case of a
Lender), at the Federal Funds Rate (for the first two Business Days after which
such amount has not been repaid), and thereafter at the interest rate applicable
to Loans comprising such Borrowing.
SECTION 9.3. Exculpation. None of the Administrative Agent, the Collateral
Monitoring Agent, the Arranger or any of their respective directors, officers,
employees or agents shall be liable to any Secured Party for any action taken or
omitted to be taken by it under any Loan Document, or in connection herewith or
therewith, except for its own willful misconduct or gross negligence, nor
responsible for any recitals or warranties herein or therein, nor for the
effectiveness, enforceability, validity or due execution of any Loan Document,
nor for the creation, perfection or priority of any Liens purported to be
created by any of the Loan Documents, or the validity, genuineness,
enforceability, existence, value or sufficiency of any collateral security, nor
to make any inquiry respecting the performance by any Obligor of its
Obligations. Any such inquiry which may be made by an Agent shall not obligate
it to make any further inquiry or to take any action. The Agents shall be
entitled to rely upon advice of counsel concerning legal matters and upon any
notice, consent, certificate, statement or writing which such Agent believes to
be genuine and to have been presented by a proper Person. The Agents may
discharge their responsibilities and actions hereunder and under the Loan
Documents through affiliates and/or sub-agents selected by them.
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SECTION 9.4. Successor. Each Agent may resign as such at any time upon at
least 30 days' prior notice to the Administrative Borrower and all Lenders. If
an Agent at any time shall resign, the Required Lenders may appoint another
Lender as a successor Administrative Agent or Collateral Monitoring Agent, as
applicable, which shall thereupon become the Administrative Agent or the
Collateral Monitoring Agent, as the case may be, hereunder. If no successor
Agent shall have been so appointed by the Required Lenders, and shall have
accepted such appointment, within 30 days after the retiring Agent's giving
notice of resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent, which shall be one of the Lenders or a commercial
banking institution organized under the laws of the United States (or any State
thereof) or a United States branch or agency of a commercial banking
institution, and having a combined capital and surplus of at least $250,000,000;
provided, however, that if, such retiring Agent is unable to find a commercial
banking institution which is willing to accept such appointment and which meets
the qualifications set forth in above, the retiring Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall assume and perform
all of the duties of the Administrative Agent or the Collateral Monitoring
Agent, as the case may be, hereunder until such time, if any, as the Required
Lenders appoint a successor as provided for above. Upon the acceptance of any
appointment as Administrative Agent or Collateral Monitoring Agent hereunder by
a successor Administrative Agent or the Collateral Monitoring Agent, such
successor Agent shall be entitled to receive from the retiring Agent such
documents of transfer and assignment as such successor Agent may reasonably
request, and shall thereupon succeed to and become vested with all rights,
powers, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under the Loan Documents.
After any retiring Agent's resignation hereunder as the Administrative Agent or
the Collateral Monitoring Agent, as the case may be, the provisions of this
Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Administrative Agent or the Collateral Monitoring
Agent under the Loan Documents, and Section 10.3 and Section 10.4 shall continue
to inure to its benefit.
SECTION 9.5. Loans by Wachovia Bank and Congress. Wachovia Bank and
Congress shall have the same rights and powers with respect to (x) the Credit
Extensions made by them or any of their Affiliates, and (y) the Notes held by
them or any of their Affiliates as any other Lender and may exercise the same as
if it were not the Administrative Agent or the Collateral Monitoring Agent.
Wachovia Bank and Congress and their Affiliates may accept deposits from, lend
money to, and generally engage in any kind of business with any Borrower or any
Subsidiary or Affiliate of any Borrower as if Wachovia Bank were not the
Administrative Agent hereunder were not the Swing Line Lender hereunder and
Congress were not the Collateral Monitoring Agent hereunder.
SECTION 9.6. Credit Decisions. Each Lender acknowledges that it has,
independently of the Agents and each other Lender, and based on such Lender's
review of the financial information of the Borrowers, the Loan Documents (the
terms and provisions of which being satisfactory to such Lender) and such other
documents, information and investigations as such Lender has deemed appropriate,
made its own credit decision to extend its Commitments. Each Lender also
acknowledges that it will, independently of the Agents and each other Lender,
and based on such other documents, information and investigations as it shall
deem appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under the Loan Documents.
SECTION 9.7. Copies, etc. The Administrative Agent shall give prompt notice
to each Lender of each notice or request given to the Administrative Agent by a
Borrower pursuant to the terms of the Loan Documents for distribution to the
Lenders (unless concurrently delivered to the Lenders by the Borrower). Each
Agent will distribute to each Lender each document or instrument received by
such Agent for the account of such Lender and copies of all other communications
received by such Agent
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from a Borrower for distribution to the Lenders by such Agent to the extent
required to be so distributed in accordance with the terms of the Loan
Documents.
SECTION 9.8. Reliance by Agents. Each Agent shall be entitled to rely upon
any certification, notice or other communication (including any thereof by
telephone, telecopy, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by such Agent. As to any matters not expressly provided for by
the Loan Documents, each Agent shall in all cases be fully protected in acting,
or in refraining from acting, hereunder or thereunder in accordance with
instructions given by the Required Lenders or all of the Lenders as is required
in such circumstance, and such instructions of such Lenders and any action taken
or failure to act pursuant thereto shall be binding on all Secured Parties. For
purposes of applying amounts in accordance with this Section, each Agent shall
be entitled to rely upon any Secured Party that has entered into a Rate
Protection Agreement with any Obligor for a determination (which such Secured
Party agrees to provide or cause to be provided upon request of either Agent) of
the outstanding Obligations owed to such Secured Party under any Rate Protection
Agreement. Unless it has actual knowledge evidenced by way of written notice
from any such Secured Party and ▇▇▇▇-▇▇▇▇▇ to the contrary, each Agent, in
acting in such capacity under the Loan Documents, shall be entitled to assume
that no Rate Protection Agreements or Obligations in respect thereof are in
existence or outstanding between any Secured Party and any Obligor.
SECTION 9.9. Defaults. Neither Agent shall be deemed to have knowledge or
notice of the occurrence of a Default unless such Agent has received a written
notice from a Lender or ▇▇▇▇-▇▇▇▇▇ specifying such Default and stating that such
notice is a "Notice of Default". In the event that an Agent receives such a
notice of the occurrence of a Default, the Administrative Agent shall give
prompt notice thereof to the Lenders. The Administrative Agent shall (subject to
Section 10.1) take such action with respect to such Default as shall be directed
by the Required Lenders; provided that, unless and until the Administrative
Agent shall have received such directions, the Administrative Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default as it shall deem advisable in the best interest of
the Lenders except to the extent that this Agreement expressly requires that
such action be taken, or not be taken, only with the consent or upon the
authorization of the Required Lenders or all Lenders.
SECTION 9.10. Syndication and Co-Documentation Agents. The entities
identified on the cover page of this Agreement as the "Syndication Agent" and
the "Co-Documentation Agents", respectively, shall, in each case, not have any
right, power, obligation, liability, responsibility or duty under this Agreement
(or any other Loan Document) other than those applicable to all Lenders as such.
Without limiting the foregoing, the entities so identified as the "Syndication
Agent" and the "Co-Documentation Agents", respectively, shall not have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on the entities so
identified as the "Syndication Agent" and the "Co-Documentation Agents" in
deciding to enter into this Agreement and each other Loan Document to which it
is a party or not taking action hereunder or thereunder.
SECTION 9.11. Field Audit, Examination Reports and other Information. By
signing this Agreement, each Lender:
(a) is deemed to have requested that the Collateral Monitoring Agent
furnish such Lender, promptly after it becomes available, a copy of each
field audit or examination report and report with respect to the Borrowing
Base prepared or received by the Collateral Monitoring Agent (each field
audit or examination report and report with respect to the borrowing base
being referred to herein as a "Report" and collectively, "Reports"),
appraisal and financial statements;
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(b) expressly agrees and acknowledges that the Collateral Monitoring
Agent (i) does not make any representation or warranty as to the accuracy
of any Report, appraisal or financial statement or (ii) shall not be liable
for any information contained in any Report, appraisal or financial
statement;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Collateral Monitoring Agent
or any other party performing any audit or examination will inspect only
specific information regarding the Borrowers and Guarantors and will rely
significantly upon the Borrowers' and Guarantors' books and records, as
well as on representations of the Borrowers' and Guarantors' personnel; and
(d) agrees to keep all Reports confidential and strictly for its
internal use in accordance with customary banking practices, and not to
distribute or use any Report in any other manner.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, etc. The provisions of each Loan
Document (not including, for any purposes of this Section 10.1, the Proposal
Letter or any Rate Protection Agreement, each of which shall be governed by the
terms thereof) may from time to time be amended, modified or waived, if such
amendment, modification or waiver is in writing and consented to by the
Borrowers and the Required Lenders; provided, however, that no such amendment,
modification or waiver shall:
(a) modify this Section without the consent of all Lenders;
(b) increase the aggregate amount of any Credit Extensions required
to be made by a Lender pursuant to its Commitments, extend the final
Commitment Termination Date of Credit Extensions made (or participated in)
by a Lender or extend the final Stated Maturity Date for any Lender's Loan,
in each case without the consent of such Lender directly affected thereby
(it being agreed, however, that any vote to rescind any acceleration made
pursuant to Section 8.2 and Section 8.3 of amounts owing with respect to
the Loans and other Obligations shall only require the vote of the Required
Lenders);
(c) reduce the principal amount of or rate of interest on any
Lender's Loan or Reimbursement Obligation owing to it, reduce any fees
described in Article III payable to any Lender or extend the date on which
interest or fees are payable in respect of such Lender's Loans, in each
case without the consent of such Lender directly affected thereby;
(d) reduce the percentage set forth in the definition of "Required
Lenders" or modify any requirement hereunder that any particular action be
taken by a specific percentage of Lenders (whether it be Required Lenders
or all Lenders) without the consent of all Lenders;
(e) (i) increase the Stated Amount of any Letter of Credit unless
consented to by the Issuer of such Letter of Credit, (ii) extend the Stated
Expiry Date of any Subfacility Letter of Credit beyond the Commitment
Termination Date without compliance with all requirements of the proviso to
Section 2.1.2(a), without the consent of all of the Lenders deemed to
participate in such Letter of Credit or (iii) extend the Stated Expiry Date
of any Standby Letter of Credit beyond the Commitment Termination Date
without compliance with all requirements of the proviso to Section
2.1.3(a), without the consent of all of the Lenders deemed to participate
in such Letter of Credit;
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(f) except as otherwise expressly provided in a Loan Document, (i)
release the Borrowers from their Obligations under the Loan Documents, (ii)
release parties from the Subsidiary Guaranty comprising all or
substantially all of the value represented by the Subsidiary Guaranty or
all or substantially all of the collateral from the Liens under the Loan
Documents, or a material portion of the Borrowing Base Assets (except as
permitted in accordance with Section 7.2.11), or (iii) increase the five
(5%) percent of the Borrowing Base cap on Special Agent Advances contained
in Section 2.1.1 or Section 10.21, in each case, with respect to each of
subclauses (i), (ii) and (iii), without the consent of all Lenders;
(g) (i) increase the advance percentage rates constituting part of
the Borrowing Base, (ii) increase the Revolving Loan Commitment Amount or
the Standby Letter of Credit Commitment Amount or (iii) decrease the amount
of Adjusted Excess Availability required under Section 7.2.4(a) or increase
the advance percentage rates constituting part of the Adjusted Borrowing
Base, in each case with respect to each of subclauses (i), (ii) and (iii),
without the consent of all Lenders;
(h) affect adversely the interests, rights or obligations of the
Administrative Agent (in its capacity as the Administrative Agent), the
Issuer (in its capacity as Issuer) or the Collateral Monitoring Agent (in
its capacity as Collateral Monitoring Agent), unless consented to by the
Administrative Agent, the Issuer or the Collateral Monitoring Agent, as the
case may be; or
(i) change the relative priority of the Obligations set forth in
Section 8.4, without the consent of all Lenders.
No failure or delay on the part of any Secured Party in exercising any power or
right under any Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right. All rights
and remedies provided for in this Agreement are cumulative, and not exclusive of
rights and remedies provided by law. No notice to or demand on any Obligor in
any case shall entitle it to any notice or demand in similar or other
circumstances. No waiver or approval by any Secured Party under any Loan
Document shall, except as may be otherwise stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or approval hereunder shall
require any similar or dissimilar waiver or approval thereafter to be granted
hereunder.
SECTION 10.2. Notices; Time. All notices and other communications provided
under each Loan Document shall be in writing or by facsimile and addressed,
delivered or transmitted, if to a Borrower or an Agent, at its address or
facsimile number set forth below its signature in this Agreement, and if to a
Lender or Issuer to the applicable Person at its address or facsimile number set
forth on Schedule II hereto or set forth in the Lender Assignment Agreement, or
at such other address or facsimile number as may be designated by such party in
a notice to the other parties. Any notice, if mailed and properly addressed with
postage prepaid or if properly addressed and sent by pre-paid courier service,
shall be deemed given when received; any notice, if transmitted by facsimile,
shall be deemed given when the confirmation of transmission thereof is received
by the transmitter. The parties hereto agree that delivery of an executed
counterpart of a signature page to this Agreement and each other Loan Document
by facsimile shall be effective as delivery of an original executed counterpart
of this Agreement or such other Loan Document. Unless otherwise indicated, all
references to the time of a day in a Loan Document shall refer to New York City
time.
SECTION 10.3. Payment of Costs and Expenses. The Borrowers jointly and
severally agree to pay on demand all reasonable expenses of the Agents and the
Arranger (including the fees, out-of-pocket expenses and other charges of
Shearman & Sterling LLP, Otterbourg, Steindler, Houston & ▇▇▇▇▇, P.C.
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and of local counsel, if any, who may be retained by or on behalf of the Agents
and the Arranger) together with such advance funds as may from time to time be
requested, in connection with
(a) the negotiation, preparation, execution, delivery and ongoing
administration (including analyzing and/or providing legal advice) of each
Loan Document, including schedules and exhibits, and any amendments,
waivers, consents, supplements or other modifications to any Loan Document
as may from time hereafter be required, whether or not the transactions
contemplated hereby or thereby are consummated;
(b) the filing, recording, refiling and rerecording of any Loan
Document and/or any Filing Statements relating thereto and all amendments,
supplements, amendments and restatements and other modifications to any
thereof, searches made following the Closing Date in jurisdictions where
Filing Statements (or other documents evidencing Liens in favor of the
Secured Parties have been recorded and any and all other documents or
instruments of further assurance required to be filed, recorded, refiled
or rerecorded by the terms of any Loan Document;
(c) the preparation and review of the form of any document or
instrument relevant to any Loan Document;
(d) out-of-pocket appraisal fees and field examination expenses, plus
a per diem field examination charge at the Collateral Monitoring Agent's
then standard rate for the Collateral Monitoring Agent's examiners in the
field and office (which rate as of the date hereof is $800 per person per
day, plus travel, hotel and other out-of-pocket expenses); provided that
the Borrowers shall not be liable for such charge per day of the Collateral
Monitoring Agent's examiners to the extent such charges, incurred following
the Closing Date, exceed $75,000 during any Fiscal Year so long as no Event
of Default has occurred and is continuing; and
(e) the syndication of the Loans.
The Borrowers further jointly and severally agree to pay, and to save each
Secured Party and the Arranger harmless from all liability for, any stamp or
other taxes which may be payable in connection with the execution or delivery of
each Loan Document, the Credit Extensions or the issuance of the Notes. The
Borrowers also jointly and severally agree to reimburse each Secured Party and
the Arranger upon demand for all their reasonable out-of-pocket expenses
(including their reasonable attorneys' fees and legal expenses of counsel to
each of them) in connection with (x) the negotiation of any restructuring or
"work-out" with the Borrowers, whether or not consummated, of any Obligations
and (y) the enforcement of any Obligations.
SECTION 10.4. Indemnification. In consideration of the execution and
delivery of this Agreement and the financing arrangements contemplated
hereunder, each of the Borrowers hereby jointly and severally indemnifies,
exonerates and holds each Secured Party, the Arranger, each Agent and each of
their respective officers, directors, employees, trustees, investment advisors
and agents (collectively, the "Indemnified Parties") free and harmless from and
against any and all actions, causes of action, suits, losses, costs, liabilities
and damages, and expenses incurred in connection therewith or in connection with
the preparation of a defense in relation thereto, as the case may be
(irrespective of whether any such action for which indemnification hereunder is
sought is brought by any Borrower, the equityholders or creditors of any
Borrower or by an Indemnified Party or whether an Indemnified Party is otherwise
a party to such action), including reasonable attorneys' fees, disbursements and
other charges, whether incurred in connection with actions between or among the
parties hereto or the parties hereto and third
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parties (collectively, the "Indemnified Liabilities"), incurred by the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to
(a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Credit Extension,
including all Indemnified Liabilities arising in connection with the
transactions contemplated herein;
(b) the entering into and performance of any Loan Document by any of
the Indemnified Parties (including any action brought by or on behalf of
the Borrowers as the result of any determination by the Required Lenders
pursuant to Article V not to fund any Credit Extension, provided that any
such action is resolved in favor of such Indemnified Party);
(c) any investigation, litigation or proceeding or preparation of a
defense in connection therewith related to any acquisition or proposed
acquisition by any Obligor or any Subsidiary thereof of all or any portion
of the Capital Securities or assets of any Person, whether or not an
Indemnified Party is party thereto;
(d) any investigation, litigation or proceeding or preparation of a
defense in connection therewith related to any environmental cleanup,
audit, compliance or other matter relating to the protection of the
environment or the Release by any Obligor or any Subsidiary thereof of any
Hazardous Material;
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any Real
Property owned or operated by any Obligor or any Subsidiary thereof of any
Hazardous Material (including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any Environmental Law),
regardless of whether caused by, or within the control of, such Obligor or
Subsidiary; or
(f) each Lender's Environmental Liability (the indemnification herein
shall survive repayment of the Obligations and any transfer of the property
of any Obligor or its Subsidiaries by foreclosure or by a deed in lieu of
foreclosure for any Lender's Environmental Liability, regardless of whether
caused by, or within the control of, such Obligor or such Subsidiary);
except for Indemnified Liabilities arising for the account of a particular
Indemnified Party by reason of the relevant Indemnified Party's gross negligence
or willful misconduct. Each Obligor and its successors and assigns hereby waive,
release and agree not to make any claim or bring any cost recovery action
against, any Indemnified Party under CERCLA or any state equivalent, or any
similar law now existing or hereafter enacted. It is expressly understood and
agreed that to the extent that any Indemnified Party is strictly liable under
any Environmental Laws, each Obligor's obligation to such Indemnified Party
under this indemnity shall likewise be without regard to fault on the part of
any Obligor with respect to the violation or condition which results in
liability of an Indemnified Party. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, each Obligor agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
SECTION 10.5. Survival. The obligations of the Borrowers under Sections
4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders under
Section 9.1, shall in each case survive any assignment from one Lender to
another (in the case of Sections 10.3 and 10.4) and the occurrence of the
Termination Date. The representations and warranties made by each Obligor in
each Loan Document shall survive the execution and delivery of such Loan
Document.
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SECTION 10.6. Severability. Any provision of any Loan Document which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of such Loan
Document or affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 10.7. Headings. The various headings of each Loan Document are
inserted for convenience only and shall not affect the meaning or interpretation
of such Loan Document or any provisions thereof.
SECTION 10.8. Execution in Counterparts, Effectiveness, etc. This Agreement
may be executed by the parties hereto in several counterparts, each of which
shall be an original and all of which shall constitute together but one and the
same agreement. This Agreement shall become effective when counterparts hereof
executed on behalf of the Borrowers, the Agents, the Arranger and each Lender
(or notice thereof satisfactory to the Administrative Agent), shall have been
received by the Administrative Agent and all of the conditions set forth in
Section 5.1 have been fulfilled to the satisfaction of the Administrative Agent.
SECTION 10.9. Governing Law; Entire Agreement. EACH LOAN DOCUMENT (OTHER
THAN THE LETTERS OF CREDIT, TO THE EXTENT SPECIFIED BELOW AND EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH IN A LOAN DOCUMENT) WILL EACH BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (INCLUDING
FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK). EACH STANDBY LETTER OF CREDIT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO LAWS OR RULES ARE DESIGNATED, THE INTERNATIONAL STANDBY
PRACTICES (ISP98--INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NUMBER 590 (THE
"ISP RULES")) AND, AS TO MATTERS NOT GOVERNED BY THE ISP RULES, THE LAWS OF THE
STATE OF NEW YORK. EACH IMPORT LETTER OF CREDIT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE
FOR DOCUMENTARY CREDITS (UCP500--INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION
NUMBER 500 (THE "UCP RULES")) AND, AS TO MATTERS NOT GOVERNED BY THE UCP RULES,
THE LAWS OF THE STATE OF NEW YORK. The Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter
thereof and supersede any prior agreements, written or oral, with respect
thereto.
SECTION 10.10. Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that the Borrowers may not assign or
transfer their rights or obligations hereunder without the consent of all
Lenders.
SECTION 10.11. Sale and Transfer of Credit Extensions; Participations in
Credit Extensions Notes. Each Lender may assign, or sell participations in, its
Loans, Letters of Credit and Commitments to one or more other Persons in
accordance with this the terms set forth below.
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SECTION 10.11.1. Assignments. Any Lender (such Lender, the "Assignor
Lender"), pursuant to a Lender Assignment Agreement,
(a) subject to clause (b) of this Section 10.11.1, with the consent
of the ▇▇▇▇-▇▇▇▇▇ and the Administrative Agent (which consents shall not be
unreasonably delayed or withheld and, which consent, in the case of
▇▇▇▇-▇▇▇▇▇, shall not be required during the continuation of a Default or
for any assignment to one or more Eligible Assignees; provided, however,
that the Administrative Agent in any event may withhold such consent in its
sole discretion to an assignment to a Person not satisfying the credit
ratings set forth in clause (f)) may at any time assign and delegate to one
or more Eligible Assignees and other Persons; and
(b) upon notice to ▇▇▇▇-▇▇▇▇▇ and the Administrative Agent, upon the
Administrative Agent's acknowledgment on a Lender Assignment Agreement, may
assign and delegate to any of its Affiliates, any Related Fund or to any
other Lender;
(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "Assignee Lender"), all or any fraction of such Assignor Lender's Loans,
Subfacility Letter of Credit Outstandings, Standby Letter of Credit Outstandings
and Commitments in a minimum aggregate amount of $5,000,000 (or, if less, the
entire remaining amount of such Assignor Lender's Loans, Subfacility Letter of
Credit Outstandings, Standby Letter of Credit Outstandings and Commitments),
such minimum amount not to be applicable in the case of an assignment by such
Assignor Lender to another Lender, any Related Fund or its Affiliates. Each
Obligor and the Administrative Agent shall be entitled to continue to deal
solely and directly with a Lender in connection with the interests so assigned
and delegated to an Assignee Lender until
(c) notice of such assignment and delegation, together with (i)
payment instructions, (ii) the Internal Revenue Service forms or other
statements contemplated or required to be delivered pursuant to Section
4.6, if applicable, and (iii) addresses and related information with
respect to such Assignee Lender, shall have been delivered to ▇▇▇▇-▇▇▇▇▇
and the Administrative Agent by such Assignor Lender and such Assignee
Lender;
(d) such Assignee Lender shall have executed and delivered to the
Administrative Borrower and the Administrative Agent a Lender Assignment
Agreement, accepted by the Administrative Agent; and
(e) the processing fees described below shall have been paid.
From and after the date that the Administrative Agent accepts such Lender
Assignment Agreement and such assignment is registered with Register pursuant to
clause (b) of Section 2.7, (x) the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee Lender
in connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender under the Loan Documents, and (y) the Assignor Lender,
to the extent that rights and obligations hereunder have been assigned and
delegated by it in connection with such Lender Assignment Agreement, shall be
released from its obligations hereunder and under the other Loan Documents.
Within five Business Days after its receipt of notice that the Administrative
Agent has received and accepted an executed Lender Assignment Agreement (and if
requested by the Assignee Lender), but subject to clause (c), each Borrower
shall execute and deliver to the Administrative Agent (for delivery to the
relevant Assignee Lender) a new Note evidencing such Assignee Lender's assigned
Loans and Commitments and, if the Assignor Lender has retained Loans and
Commitments hereunder (and if requested by such Lender), a replacement Note in
the principal amount of the Loans and Commitments retained by the Assignor
Lender hereunder (such
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Note to be in exchange for, but not in payment of, the Note then held by such
Assignor Lender). Each such Note shall be dated the date of the predecessor
Note. The Assignor Lender shall ▇▇▇▇ each predecessor Note "exchanged" and
deliver each of them to the applicable Borrower. Accrued interest on the
assigned Loans and Commitments, and accrued fees, shall be paid as provided in
the Lender Assignment Agreement. Accrued interest on the retained Loans and
Commitments shall be paid to the Assignor Lender. Accrued interest and accrued
fees shall be paid at the same time or times provided in the predecessor Note
and in this Agreement. Such Assignor Lender or such Assignee Lender must also
pay a processing fee in the amount of $3,500 to the Administrative Agent upon
delivery of any Lender Assignment Agreement; provided that no such processing
fee shall be required in connection with any such assignment and delegation (i)
by a Lender to its Affiliate or to a Related Fund, (ii) by a Lender to a Federal
Reserve Bank (or, if such Lender is an investment fund, to the trustee under the
indenture to which such fund is a party in support of its obligations to such
trustee) or (iii) if the non-payment of the processing fee is otherwise
consented to in writing by the Administrative Agent. Notwithstanding any other
term of this Section, the agreement of Wachovia Bank to provide the Swing Line
Loan Commitment shall not impair or otherwise restrict in any manner the ability
of Wachovia Bank to make any assignment of its Loans or Commitments, it being
understood and agreed that Wachovia Bank may terminate its Swing Line Loan
Commitment, either in whole or in part, in connection with the making of any
assignment. Any attempted assignment and delegation not made in accordance with
this Section shall be null and void. Notwithstanding anything to the contrary
set forth above, any Lender may (without requesting the consent of any Borrower
or the Administrative Agent) pledge its Loans (a) to a Federal Reserve Bank in
support of borrowings made by such Lender from such Federal Reserve Bank, or (b)
in the case of any Lender which is a fund that invests in loans, to any trustee
or any other representative of holders of obligations owed or securities issued
by such Lender as security for such obligations or securities; provided that no
such pledge or assignment shall (x) release any Lender from any of its
obligations hereunder or (y) substitute any such pledgee or assignee for such
Lender as a party hereto.
(f) In the event that S&P or ▇▇▇▇▇'▇, shall, after the date that any
Person becomes a Lender, downgrade the long-term certificate of deposit
ratings of such Lender, and the resulting ratings shall be below BBB- or
Baa3, respectively, or the equivalent, then ▇▇▇▇-▇▇▇▇▇, the Swing Line
Lender and each Issuer shall each have the right, but not the obligation,
upon notice to such Lender and the Administrative Agent, to replace such
Lender with a financial institution (a "Substitute Lender") acceptable to
▇▇▇▇-▇▇▇▇▇ and the Administrative Agent (such consents not to be
unreasonably withheld or delayed; provided that no such consent shall be
required if the Substitute Lender is an existing Lender), and upon any such
downgrading of any Lender's long-term certificate of deposit rating, each
such Lender hereby agrees to transfer and assign (in accordance with
Section 10.11.1) all of its Commitments and other rights and obligations
under the Loan Documents (including Reimbursement Obligations) to such
Substitute Lender; provided, however, that (i) such assignment shall be
without recourse, representation or warranty (other than that such Lender
owns the Commitments, Loans and Notes being assigned, free and clear of any
Liens) and (ii) the purchase price paid by the Substitute Lender shall be
in the amount of such Lender's Loans and its Percentage of outstanding
Reimbursement Obligations, together with all accrued and unpaid interest
and fees in respect thereof, plus all other amounts (other than the amounts
(if any) demanded and unreimbursed under Sections 4.2, 4.3, 4.5 and 4.6,
which shall be paid by the Borrowers), owing to such Lender hereunder. Upon
any such termination or assignment, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of any provisions
of this Agreement which by their terms survive the termination of this
Agreement.
SECTION 10.11.2. Participations. Any Lender may, without the consent of or
notice to any Borrower or the Administrative Agent, sell to one or more
commercial banks or other Persons (each of
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such commercial banks and other Persons being herein called a "Participant")
participating interests in any of the Loans, Commitments, or other interests of
such Lender hereunder; provided, however, that
(a) no participation contemplated in this Section shall relieve
such Lender from its Commitments or its other obligations under any Loan
Document;
(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations;
(c) each Obligor and the Administrative Agent shall continue to
deal solely and directly with such Lender in connection with such
Lender's rights and obligations under each Loan Document;
(d) no Participant, unless such Participant is an Affiliate of
such Lender or is itself a Lender, shall be entitled to require such
Lender to take or refrain from taking any action under any Loan Document,
except that such Lender may agree with any Participant that such Lender
will not, without such Participant's consent, take any actions of the
type described in clauses (a), (b), (c) or (f) of Section 10.1 with
respect to Obligations participated in by such Participant;
(e) no Borrower shall be required to pay any amount under this
Agreement that is greater than the amount which it would have been
required to pay had no participating interest been sold;
(f) such Lender shall, as agent of the Borrowers solely for the
purpose of this Section, record in book entries maintained by such Lender
the name of its Participants and the amount such Participants are
entitled to receive in respect of any participating interests sold
pursuant to this Section; and
(g) each participation permitted pursuant to this Section shall be
in a minimum aggregate amount of $5,000,000 (or, if less, the entire
remaining amount of such Lender's Loans, Subfacility Letter of Credit
Outstandings, Standby Letter of Credit Outstandings and Commitments).
Each Borrower acknowledges and agrees that each Participant, for purposes of
Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 7.1.1, 10.3 and 10.4, shall be considered
a Lender. Each Participant shall only be indemnified for increased costs
pursuant to Section 4.3, 4.5 or 4.6 if and to the extent that the Lender which
sold such participating interest to such Participant concurrently is entitled to
make, and does make, a claim on the Borrowers for such increased costs. Any
Lender that sells a participating interest in any Loan, Commitment or other
interest to a Participant under this Section shall (x) as agent for the
Borrowers solely for purposes of this Section 10.11.2, record in book entries
maintained by such Lender, the name and amount of the participating interest of
each Participant entitled to receive payments in respect of such participating
interest, and (y) indemnify and hold harmless the Borrowers and the
Administrative Agent from and against any Taxes, penalties, interest or other
costs or losses (including reasonable attorneys' fees and expenses) incurred or
payable by any Borrower or the Administrative Agent as a result of the failure
of any Borrower or the Administrative Agent to comply with its obligations to
deduct or withhold any Taxes from any payments made pursuant to this Agreement
to such Lender or the Administrative Agent, as the case may be, which Taxes
would not have been incurred or payable if such Participant had been a Non-U.S.
Lender that was entitled to deliver to any Borrower, the Administrative Agent or
such Lender, and did in fact so deliver, a duly completed and valid Form W-8BEN
or W-8ECI (or applicable successor form) entitling such Participant to receive
payments under this Agreement without deduction or withholding of any United
States federal taxes.
113
SECTION 10.12. Other Transactions. Nothing contained herein shall
preclude the Agents, any Issuer or any other Lender from engaging in any
transaction, in addition to those contemplated by the Loan Documents, with any
Borrower or any of its Affiliates in which such Borrower or such Affiliate is
not restricted hereby from engaging with any other Person.
SECTION 10.13. Certain Collateral and Other Matters; Rate Protection
Agreements. The Administrative Agent is authorized on behalf of all the Lenders,
without the necessity of any notice to or further consent from the Lenders, from
time to time to take any action with respect to any collateral security or the
Loan Documents which may be necessary to perfect and maintain perfected the
security interest in and Liens upon the collateral security granted pursuant to
the Loan Documents.
(a) The Lenders irrevocably authorize the Administrative Agent to
release any security interest or Lien granted to or held by the
Administrative Agent upon any real or personal collateral and satisfy of
record any Mortgage and to terminate any Collateral Access Agreement,
Processor Letter or Direction Letter (in which case the Lenders hereby
authorize the Administrative Agent to execute, and the Administrative
Agent agrees, if requested by the Borrowers in writing and at the
Borrowers' sole joint and several expense, to execute, reasonable
releases, notices or terminations (including UCC-3 termination statements
and satisfaction of the Mortgages, as may be applicable) in connection
with this Agreement) (i) on the Termination Date; (ii) constituting real
and personal property sold or to be sold or disposed of as part of or in
connection with any Disposition (including any Permitted Disposition or a
Permitted Sale and Leaseback Transaction) made in compliance with the
terms of this Agreement; (iii) constituting property in which a Borrower
or any Subsidiary of a Borrower owned no interest at the time the
security interest and/or Lien was granted or at any time thereafter; (iv)
constituting property leased to a Borrower or any Subsidiary of a
Borrower under a lease which has expired or been terminated in a
transaction permitted under this Agreement or is about to expire and
which has not been, and is not intended by such Borrower or such
Subsidiary to be, renewed or extended; (v) consisting of an instrument
evidencing Indebtedness or other debt instrument, if the Indebtedness
evidenced thereby has been paid in full; or (vi) if approved, authorized
or ratified in writing by the Required Lenders or, if required by Section
10.1, each Lender. Upon request by the Administrative Agent at any time,
each Lender will confirm in writing the Administrative Agent's authority
to release particular types or items of collateral pursuant to this
Section 10.13.
(b) The Agents shall have no obligation whatsoever to any Lender
or any other Person to investigate, confirm or assure that the Collateral
exists or is owned by any Borrower or Guarantor or is cared for,
protected or insured or has been encumbered, or that any particular items
of Collateral meet the eligibility criteria applicable in respect of the
Loans or Letters of Credit hereunder, or whether any particular reserves
are appropriate, or that the liens and security interests granted to the
Agents pursuant hereto or any of the Loan Documents or otherwise have
been properly or sufficiently or lawfully created, perfected, protected
or enforced or are entitled to any particular priority, or to exercise at
all or in any particular manner or under any duty of care, disclosure or
fidelity, or to continue exercising, any of the rights, authorities and
powers granted or available to the Agents in this Agreement or in any of
the other Loan Documents, it being understood and agreed that in respect
of the Collateral, or any act, omission or event related thereto, the
Agents may act in any manner they may deem appropriate, in their
discretion, given the Agents' own interest in the Collateral as Lenders
and that the Agents shall have no duty or liability whatsoever to any
other Lender.
(c) Each Lender which enters into arrangements with a Borrower in
respect of Rate Protection Agreements hereby agrees to supply the
Administrative Agent in writing on each
114
Quarterly Payment Date with the amount of any termination obligations of
such Borrower thereunder and any net payments owing by such Borrower
thereunder.
SECTION 10.14. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, ANY
LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE LENDERS, ANY ISSUER OR ANY
BORROWER IN CONNECTION HEREWITH OR THEREWITH MAY BE BROUGHT AND MAINTAINED IN
THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH BORROWER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES
SPECIFIED IN SECTION 10.2. EACH BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE
OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY BORROWER HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, SUCH BORROWER HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THE LOAN
DOCUMENTS.
SECTION 10.15. Waiver of Jury Trial. EACH AGENT, EACH LENDER, EACH ISSUER
AND EACH BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE TO THE
FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, EACH LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF SUCH AGENT, SUCH
LENDER, SUCH ISSUER OR ANY BORROWER IN CONNECTION THEREWITH. EACH BORROWER
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO
WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
EACH AGENT, EACH LENDER AND EACH ISSUER ENTERING INTO THE LOAN DOCUMENTS. EACH
BORROWER HEREBY IRREVOCABLY APPOINTS CT CORPORATION SYSTEMS (THE "PROCESS
AGENT"), WITH AN OFFICE ON THE DATE HEREOF AT ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, AS ITS AGENT TO RECEIVE, ON SUCH BORROWER'S BEHALF AND ON
BEHALF OF SUCH BORROWER PROPERTY, SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT
AND ANY OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH
SERVICE MAY BE MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS TO EACH
BORROWER IN CARE OF THE PROCESS AGENT AT THE PROCESS AGENT'S ABOVE ADDRESS, AND
EACH
115
BORROWER HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT
SUCH SERVICE ON ITS BEHALF. AS AN ALTERNATIVE METHOD OF SERVICE, EACH BORROWER
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK.
SECTION 10.16. Reallocation and Assignment of Existing Revolving Loans
and L/C Obligations with Respect to Existing Letters of Credit. The credit
extensions and commitments made by the Existing Lenders and outstanding pursuant
to the Existing Credit Agreement shall be assigned without recourse and
re-allocated among the Lenders so that, and credit extensions and commitments
shall be made by the Lenders pursuant to this Agreement so that, from and after
the Closing Date, the respective commitments and credit extensions of the
Lenders shall be in accordance with Schedule II. Credit extensions made by
Existing Lenders shall, effective as of the Closing Date, be evidenced and
governed by this Agreement and the Loan Documents.
SECTION 10.17. Effect of this Agreement. This Agreement amends and
restates the Existing Credit Agreement in its entirety and is entitled to the
benefit of all existing Loan Documents. Any reference in any other Loan Document
to the "Credit Agreement," "thereunder," "therein," "thereof" or words of like
import referring to the Existing Credit Agreement shall mean and refer to this
Agreement. Any reference in any other Loan Document to the "Obligations" or any
similar term including or referencing obligations under the Existing Credit
Agreement shall include and reference the Obligations as defined in this
Agreement. All Obligations under the Existing Credit Agreement and the other
Loan Documents shall continue to be outstanding except as expressly modified by
this Agreement and shall be governed in all respects by this Agreement and the
other Loan Documents, it being agreed and understood by the parties hereto that
this Agreement does not constitute a novation, satisfaction, payment or
reborrowing of any Obligation under the Existing Credit Agreement or any other
Loan Document except as expressly modified by this Agreement, nor, except as
expressly provided herein, does it operate as a waiver of any right, power or
remedy of any Lender under any Loan Document. The security interests granted
pursuant to any Loan Documents shall, as modified hereby, continue in full force
and effect, and are hereby affirmed, with respect to this Agreement and the
Obligations as defined herein. In the event of a conflict between the terms and
provisions of this Agreement and the terms and provisions of any other Loan
Document, the terms and provisions of this Agreement shall govern.
SECTION 10.18. Appointment of the Administrative Borrower as Agent for
Requesting Loans and Receipts of Loans and Statements.
(a) Each Borrower hereby irrevocably appoints and constitutes the
Administrative Borrower as its agent to request and receive Loans and Letters of
Credit pursuant to this Agreement and the other Loan Documents from any Agent or
any Lender in the name or on behalf of such Borrower. The Agents and Lenders may
disburse the Loans to such bank account of the Administrative Borrower or a
Borrower or otherwise make such Loans to a Borrower and provide such Letters of
Credit to a Borrower as the Administrative Borrower may designate or direct,
without notice to any other Borrower or Obligor. Notwithstanding anything to the
contrary contained herein, the Agents may at any time and from time to time
require that Loans to or for the account of any Borrower be disbursed directly
to an operating account of such Borrower.
(b) The Administrative Borrower hereby accepts the appointment by the
other Borrowers to act as the agent of the Borrowers pursuant to this Section
10.18. The Administrative Borrower shall ensure that the disbursement of any
Loans to each Borrower requested by or paid to or for the account of, or the
issuance of any Letters of Credit for a Borrower or Subsidiary Guarantor
hereunder, shall be paid to or for the account of such Borrower or Subsidiary
Guarantor.
116
(c) Each Borrower and other Guarantor hereby irrevocably appoints and
constitutes the Administrative Borrower as its agent to receive statements on
account and all other notices from the Agents and Lenders with respect to the
Obligations or otherwise under or in connection with this Agreement and the
other Loan Documents.
(d) Any notice, election, representation, warranty, agreement or
undertaking by or on behalf of any other Borrower or any Guarantor by the
Administrative Borrower shall be deemed for all purposes to have been made by
such Borrower or Guarantor, as the case may be, and shall be binding upon and
enforceable against such Borrower or Guarantor to the same extent as if made
directly by such Borrower or Guarantor.
(e) No purported termination of the appointment of the Administrative
Borrower as agent as aforesaid shall be effective, except after ten (10) days'
prior written notice to the Agents.
SECTION 10.19. Waiver of Counterclaims, etc.. Each Borrower and Guarantor
waives (a) all rights to interpose any claims, deductions, setoffs or
counterclaims of any nature (other than compulsory counterclaims) in any action
or proceeding with respect to this Agreement, the Obligations, the Collateral or
any matter arising therefrom or relating hereto or thereto and (b) any rights to
punitive or consequential damages.
SECTION 10.20. Patriot Act Notice, etc. Each Lender and the
Administrative Agent (for itself and not on behalf of any other party) hereby
notifies the Borrowers that, pursuant to the requirements of the Patriot Act, it
is required to obtain, verify and record information that identifies each
Borrower, which information includes the names and addresses and other
information that will allow such Lender or the Administrative Agent, as
applicable, to identify each Borrower in accordance with the Patriot Act. The
Borrowers will, and will cause each of their Subsidiaries to, provide, to the
extent commercially reasonable or required by applicable law or regulation, such
information and take such actions as are reasonably requested by the
Administrative Agent or any Lenders in order to assist the Administrative Agent
and the Lenders in maintaining compliance with the Patriot Act.
SECTION 10.21. Additional Loans. The Administrative Agent and the Issuer
shall not make any Loans or issue any Letters of Credit on behalf of the Lenders
intentionally and with actual knowledge that such Loans or Letters of Credit
would cause the aggregate outstanding principal amount of the Loans and Total
Letter of Credit Outstandings to exceed the Borrowing Base, without the prior
consent of all Lenders, except that, the Administrative Agent may make such
additional Loans or the Issuer may issue such additional Letters of Credit on
behalf of Lenders, intentionally and with actual knowledge that such Loans or
Letters of Credit will cause the aggregate outstanding principal amount of the
Loans and Total Letter of Credit Outstandings to exceed the Borrowing Base, as
the Administrative Agent may deem necessary or advisable in its discretion,
provided, that: (a) the total principal amount of the additional Loans or
additional Letters of Credit which the Administrative Agent or the Issuer may
make or provide after obtaining such actual knowledge that the aggregate
outstanding principal amount of the Loans and Total Letter of Credit
Outstandings equal or exceed the Borrowing Base, plus the amount of Special
Agent Advances made pursuant to Section 2.1.1 hereof then outstanding, shall not
exceed the aggregate amount equal to five (5%) percent of the Borrowing Base and
shall not cause the aggregate outstanding principal amount of the Loans and
Total Letter of Credit Outstandings to exceed the Total Commitment Amount, (b)
the aggregate outstanding principal amount of the Loans made and Subfacility
Letters of Credit issued in reliance upon this Section 10.21 may make or provide
plus the aggregate principal amount of Revolving Loans, Swing Line Loans and
Subfacility Letter of Credit Outstandings outstanding with respect to all the
Borrowers at any one time shall not exceed the Revolving Loan Commitment Amount
and (c) no such additional Loan or Letter of Credit shall be outstanding more
than ninety (90) days after the date such additional Loan or Letter of Credit is
made or issued (as the case may be), except
117
as the Required Lenders may otherwise agree. Each Lender shall be obligated to
pay the Administrative Agent the amount of its Percentage of any such additional
Loans or Letters of Credit.
118
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
BORROWERS:
▇▇▇▇-▇▇▇▇▇ STORES, INC.,
as the Administrative Borrower and a Borrower
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Title: Vice President, Finance and Treasurer
SAVE RITE GROCERY WAREHOUSE, INC.,
as a Borrower
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Title: Vice President, Finance and Treasurer
▇▇▇▇-▇▇▇▇▇ CHARLOTTE, INC.,
as a Borrower
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Title: Vice President, Finance and Treasurer
▇▇▇▇-▇▇▇▇▇ SUPERMARKETS, INC.,
as a Borrower
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Title: Vice President, Finance and Treasurer
▇▇▇▇-▇▇▇▇▇ LOUISIANA, INC.,
as a Borrower
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Title: Vice President, Finance and Treasurer
▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, INC.,
as a Borrower
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Title: Vice President, Finance and Treasurer
▇▇▇▇-▇▇▇▇▇ PROCUREMENT, INC.,
as a Borrower
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Title: Vice President, Finance and Treasurer
▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇, INC.,
as a Borrower
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Title: Vice President, Finance and Treasurer
AGENTS AND LENDERS:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as the Administrative Agent, Issuer and Swing Line
Lender
By: /s/ ▇▇▇ ▇▇▇▇▇
------------------------------------------------
Title: Director
WACHOVIA CAPITAL MARKETS, LLC,
as the Arranger
By: /s/ ▇▇▇ ▇▇▇▇▇
-------------------------------------------------
Title: Director
GMAC COMMERCIAL FINANCE LLC
as the Syndication Agent
By: /s/ Field ▇▇▇▇▇
-------------------------------------------------
Title: Director
▇▇▇▇▇ FARGO FOOTHILL, LLC
as Co-Documentation Agent
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------
Title: Executive Vice President
GENERAL ELECTRIC CAPITAL CORPORATION
as Co-Documentation Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Title: Duly Authorized Signatory
THE CIT GROUP/BUSINESS CREDIT, INC.
as Co-Documentation Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Title: Assistant Vice President
CONGRESS FINANCIAL CORPORATION (FLORIDA),
as the Collateral Monitoring Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Title: Vice President
AMSOUTH BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Title: Attorney-In-Fact
BANK ONE
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Title: Director
FLEET RETAIL GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Title: Vice President
ISRAEL DISCOUNT BANK
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Title: Each a Senior Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Title: Vice President
NATIONAL CITY BUSINESS CREDIT, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
--------------------------------------
Title: Vice President
PNC BUSINESS CREDIT
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
Title: Senior Vice President
RZB FINANCE LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
Title: Group Vice President
SIEMENS FINANCIAL SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
Title: Vice President-Credit
SUNTRUST BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
----------------------------------------------
Title: Director
UBS AG, STAMFORD BRANCH
By: /s/ Winstowe Ogbourne
----------------------------------------------
Title: Associate Director, Banking Products
▇▇▇▇▇▇▇ BUSINESS CREDIT CORP.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
Title: Vice President
SCHEDULE I
DISCLOSURE SCHEDULE TO CREDIT AGREEMENT
ITEM 5.1.15. Properties.
ITEM 6.6. Material Adverse Changes.
ITEM 6.7. Litigation.
ITEM 6.8(a)(i) Existing U.S. Subsidiaries.
ITEM 6.8(a)(ii) Existing Bahamian Subsidiaries.
ITEM 6.8(b) Material Subsidiaries.
ITEM 6.11. Employee Benefit Plans.
ITEM 6.12. Environmental Matters.
ITEM 6.18. Compliance with Laws.
ITEM 6.21. Intellectual Property.
ITEM 6.23. Material Contracts.
ITEM 6.25(b). Majority Accounts
ITEM 6.25(c). Securities Accounts
ITEM 6.26. Collective Bargaining Agreements.
ITEM 6.27. Distribution Centers.
ITEM 6.28. Debit and Credit Card Processing Arrangements.
ITEM 6.30. Bank Accounts held with Direction Banks.
ITEM 7.2.2(a). Existing Letters of Credit
Part I: Existing Letters of Credit deemed to be issued as
Subfacility Letters of Credit
Part II: Existing Letters of Credit deemed to be issued as
Standby Letters of Credit
ITEM 7.2.2(b). Indebtedness to be Paid.
ITEM 7.2.2(c). Existing Indebtedness.
ITEM 7.2.3(c.) Existing Liens.
ITEM 7.2.5(a). Existing Investments.
ITEM 7.2.11(b)(i). Certain Asset Dispositions
SCHEDULE II
[ON FILE WITH ADMINISTRATIVE AGENT]
S-1