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EXHIBIT 4-Q
TRUSERV CORPORATION
$105,000,000
AMENDED AND RESTATED SENIOR SECURED NOTES DUE 2008
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AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
DATED AS OF APRIL 14, 2000
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TRUSERV CORPORATION
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
April 14, 2000
To Each of the Purchasers
Listed in the Attached Schedule 1
(each, a "PURCHASER")
Ladies and Gentlemen:
Re: AMENDED AND RESTATED NOTE PURCHASE AGREEMENT (the
"AGREEMENT")
The undersigned, TruServ Corporation, a Delaware corporation
formerly known as ▇▇▇▇▇▇ & Company (herein called the "COMPANY"), hereby agrees
and acknowledges that:
A. The Company and you are parties to the Note Purchase
Agreement dated as of September 10, 1998 as amended by Amendment No. 1 to Note
Purchase Agreements dated as of April 1, 1999 (the "ORIGINAL NPA").
B. Pursuant to the Original NPA, the Company issued and sold
to you $105,000,000 aggregate principal amount of its 6.85% Senior Notes due
2008 (the "ORIGINAL NOTES").
C. You and the Company desire to amend the Original NPA and to
restate the Original NPA in full as hereinafter set forth.
D. In addition, you and the Company desire to amend the
Original Notes and to restate the Original Notes in full as hereinafter set
forth.
In consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company hereby agrees with you as set forth below. Reference is made to
paragraph 10 hereof for definitions of capitalized terms used herein and not
otherwise defined herein; references to a "paragraph," a "Schedule" or an
"Exhibit" are, unless otherwise specified, to a paragraph of this Agreement or
to a Schedule or an Exhibit attached to this Agreement.
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DESCRIPTION OF NOTES.
1A. DESCRIPTION OF NOTES. As of the Effective Date, the
Original Notes are hereby amended and restated in accordance with the terms of
this Agreement (such Original Notes, as so amended and restated, the "NOTES,"
such term to include any such notes issued in substitution therefor pursuant to
paragraph 11 of this Agreement or the Other Agreements). As a result, each of
the Notes shall (i) be dated as of the Effective Date, (ii) bear interest from
(and including) the Original Issuance Date to (but excluding) the date of
repayment in full of all amounts due thereunder, at a rate per annum equal to
(x) for each day during the period from (and including) the Original Issuance
Date to (but excluding) April 1, 1999, 6.85% (y) for each day during the period
from (and including) April 1, 1999 to (but excluding) January 1, 2000, 7.35%,
and (z) for each day during the period from (and including) January 1, 2000 to
(but excluding) the date of repayment in full of all amounts due thereunder, the
Applicable Interest Rate; (iii) bear interest on overdue principal (whether by
acceleration or otherwise and including any overdue prepayment of principal),
Make-Whole Amount (as defined in paragraph 4F), premium, if any, and
installments of interest at the Overdue Rate until paid; and (iv) be
substantially in the form attached hereto as Exhibit A. Interest on the Notes
shall be computed on the basis of a 360-day year of twelve 30 day months. In
this paragraph 1A, the following terms have the following meanings:
"APPLICABLE INTEREST RATE" shall mean, for each day during
each Relevant Period,
(a) 10.10%, if (i) the long-term unsecured debt of the Company
is not rated by Standard & Poor's Rating Services, a Division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. ("S&P"), on the first day of such Relevant Period, or (ii) the
long-term unsecured debt of the Company is rated lower than BBB by S&P on the
first day of such Relevant Period;
(b) 9.25%, if the long-term unsecured debt of the Company is
rated BBB or higher by S&P on the first day of such Relevant Period;
provided, however, that the Applicable Interest Rate shall mean, for each day
during any Relevant Period in which an Event of Default shall have occurred or
be continuing, the Overdue Rate for such day.
"RELEVANT PERIOD" shall mean (i) each six-month period from
(and including) January 1 of each year to (but excluding) July 1 of such year
and (ii) each six-month period from (and including) July 1 of each year to (but
excluding) January 1 of the immediately succeeding year.
1B. ORIGINAL ISSUANCE DATE; REPLACEMENT OF NOTES; AMENDMENT
FEE.
(a) The Company issued and sold to each Purchaser listed in
the attached Schedule 1, and each Purchaser purchased from the Company, the
principal amount of Original Notes set forth beside such Purchaser's name on
Schedule 1 at a price of 100% of the principal amount thereof (the "PURCHASE
PRICE"), on September 10, 1998 (the "ORIGINAL ISSUANCE DATE"). The aggregate
principal amount of Original Notes issued and sold on the Original Issuance Date
by the Company was $105,000,000.
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(b) On the Effective Date, each Purchaser will surrender all
Original Notes held by it to the Company and the Company will deliver in
exchange therefor, without expense to such Purchaser, Notes in the same
aggregate principal amount as the then aggregate unpaid principal amount of the
Original Notes so surrendered, in such denominations of U.S. $100,000 or any
amount in excess thereof, and registered in such names, as such Purchaser shall
have specified.
(c) On the Effective Date, the Company shall pay to each
Purchaser an amendment fee in an amount equal to 0.50% of the aggregate
principal amount of the Original Notes that are being exchanged by such
Purchaser pursuant to this paragraph 1B (the "AMENDMENT FEE").
2. OTHER AGREEMENTS; OTHER NOTES.
Contemporaneously with entering into this Agreement, the
Company is entering into separate Amended and Restated Note Purchase Agreements
(the "OTHER AGREEMENTS") identical with this Agreement with each of the other
purchasers listed in Schedule 1 (the "OTHER PURCHASERS"), providing for the
amendment and restatement of their Original NPAs and of their Original Notes and
for the exchange of the Original Notes held by each of such Other Purchasers for
Notes in the principal amount specified opposite such Other Purchaser's name in
Schedule 1. Your obligation hereunder and the obligations of the Other
Purchasers under the Other Agreements are several and not joint obligations and
you shall have no obligation under any Other Agreement and no liability to any
Person for the performance or non-performance by any Other Purchaser thereunder.
3. EFFECTIVENESS.
This Agreement shall become effective on the date on which the
following conditions have been fulfilled to your satisfaction (the "EFFECTIVE
DATE"):
3A. CERTAIN DOCUMENTS. You shall have received the following,
each dated the date of the Effective Date:
(i) The Notes to be issued to you pursuant to paragraph
1B.
(ii) This Agreement executed by the Company.
(iii) Certified copies of the resolutions of the Board of
Directors of the Company and each Guarantor authorizing the
execution and delivery of this Agreement, the Notes, the
Intercreditor Agreement, the Guaranty and all other Note
Documents to be delivered by it hereunder, and of all
documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this
Agreement, the Notes, the Intercreditor Agreement, the
Guaranty and all other Note Documents to be delivered by it
hereunder.
(iv) A certificate of the Secretary or an Assistant
Secretary of the Company and each Guarantor, dated the
Effective Date, certifying the names and true signatures of
the officers of the Company and each Guarantor authorized to
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sign this Agreement, the Notes, the Intercreditor Agreement,
the Guaranty and all other Note Documents to be delivered by
it hereunder and certifying as to the resolutions attached to
such certificate and other corporate proceedings relating to
the authorization, execution and delivery of this Agreement,
the Notes, the Intercreditor Agreement, the Guaranty and all
other Note Documents to be delivered by it hereunder.
(v) A certificate of an officer of the Company, dated the
date of the Effective Date, certifying that the conditions
specified in paragraphs 3B and 3F have been fulfilled.
(vi) Copies of the Certificate of Incorporation and
By-laws (or other organizational documents) of the Company and
each Guarantor certified by the Secretary or an Assistant
Secretary of the Company and each Guarantor, as applicable.
(vii) A favorable opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLC
counsel to the Company and the Guarantors satisfactory to you
and substantially in the form of Exhibit B attached hereto,
and as to such other matters as you may reasonably request.
The Company hereby directs such counsel to deliver such
opinions, agrees that the issuance of any Notes will
constitute a reconfirmation of such directions, and
understands and agrees that you upon receipt of such opinions
will and hereby are authorized to rely on such opinions.
(viii) Good standing certificates for (a) the Company from
the Secretaries of State of Delaware and Illinois, and (b)
each Guarantor from the Secretary of State (or similar
applicable Governmental Authority) of its State of
incorporation, each dated of a recent date, and such other
evidence of the status of the Company or any Guarantor as you
may reasonably request.
(ix) Evidence of payment by the Company of all accrued and
unpaid fees, costs and reasonable expenses to the extent then
due and payable on the Effective Date, together with Attorney
Costs of each Purchaser to the extent invoiced prior to or on
the Effective Date, plus such additional amounts of Attorney
Costs as shall constitute each Purchaser's reasonable estimate
of Attorney Costs incurred or to be incurred by it through the
closing proceedings (provided that such estimate shall not
thereafter preclude final settling of accounts between the
Company and such Purchaser), including any such costs, fees
and reasonable expenses arising under or referenced in
paragraph 13.
(x) Evidence of payment by the Company of the Amendment
Fee referred to in paragraph 1B.
(xi) The Guaranty, signed by each Guarantor.
(xii) The Security Agreement signed by the Company and
each Guarantor, together with evidence, satisfactory to the
Collateral Agent and the holders of the Notes, that the
Company and each Guarantor have delivered to the
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Collateral Agent all financing statements and other documents
necessary to perfect the Collateral Agent's Lien on all
collateral granted under the Security Agreement.
(xiii) The Pledge Agreement, executed by the Company and
each Guarantor that as of the Effective Date has one or more
Subsidiaries, together with all stock certificates, stock
powers and other items required to be delivered in connection
therewith.
(xiv) The Intercreditor Agreement, signed by the parties
thereto and consented to by the Company and the Guarantors.
(xv) The Trademark Security Agreement, signed by the
Company.
(xvi) Copies of each of the BA Credit Agreement, the
Prudential Agreement and each of the other Financing
Agreements (as defined in the Intercreditor Agreement)
certified as true and correct by the Secretary or an Assistant
Secretary of the Company, together with evidence reasonably
satisfactory to the holders of Notes that all conditions to
the effectiveness thereof have been satisfied.
(xvii) Additional documents or certificates with respect
to legal matters or corporate or other proceedings related to
the transactions contemplated hereby as may be reasonably
requested by you.
3B. REPRESENTATIONS AND WARRANTIES; PERFORMANCE; NO DEFAULT.
The representations and warranties contained in paragraph 8 shall be true when
made and on the Effective Date. The Company shall have performed and complied
with all agreements and conditions contained in this Agreement required to be
performed or complied with by it prior to or on the Effective Date and no
Default or Event of Default shall have occurred and be continuing or would
result from the execution and performance by the Company of this Agreement and
all the other Note Documents. Neither the Company nor any Subsidiary nor any
Guarantor shall have entered into any transaction since the date of the
Memorandum that would have been prohibited by paragraph 6 had such paragraph
applied since such date. Since December 31, 1999, no event or circumstance has
occurred that has resulted or could reasonably be expected to result in a
Material Adverse Effect.
3C. PURCHASE PERMITTED BY APPLICABLE LAWS. The execution and
delivery of this Agreement and all other Note Documents shall (i) be permitted
by the laws and regulations of each jurisdiction to which you are subject,
without recourse to provisions (such as Section 1405(a)(8) of the New York
Insurance Law) permitting limited investments by insurance companies without
restriction as to the character of the particular investment, (ii) not violate
any applicable law or regulation (including, without limitation, Section 5 of
the Securities Act or Regulation T, U or X of the Board of Governors of the
Federal Reserve System) and (iii) not subject you to any tax, penalty, liability
or other onerous condition under or pursuant to any applicable law or
regulation, and you shall have received such certificates or other evidence as
you may request to establish compliance with this condition.
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3D. OTHER PURCHASERS. The Other Purchasers shall have executed
the Other Agreements referred to in paragraph 2 and shall have exchanged their
Original Notes for Notes as contemplated thereby on the Effective Date.
3E. PRIVATE PLACEMENT NUMBER. A Private Placement number
issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for the Notes.
3F. CHANGES IN CORPORATE STRUCTURE. The Company shall not have
changed its jurisdiction of incorporation or been a party to any merger or
consolidation and shall not have succeeded to all or any substantial part of the
liabilities of any other entity, at any time following the date of the most
recent financial statements referred to in Schedule 8E.
3G. PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and the other Note Documents and all documents and instruments incident to such
transactions shall be satisfactory to you and your special counsel, and you and
your special counsel shall have received all such counterpart originals or
certified or other copies of such documents as you or they may reasonably
request.
4. PREPAYMENTS.
4A. REQUIRED PREPAYMENTS. On July 1, 2002, the Company will
prepay $10,500,000 principal amount (or such lesser principal amount as shall
then be outstanding) of the Notes, and on July 1, 2003 and on each July 1
thereafter to and including July 1, 2007 the Company will prepay $15,750,000
principal amount (or such lesser principal amount as shall then be outstanding)
of the Notes, each such prepayment to be at par and without payment of the
Make-Whole Amount or any premium, provided that upon any partial prepayment of
the Notes pursuant to paragraph 4B or purchase of the Notes permitted by
paragraph 4E the principal amount of each required prepayment of the Notes
becoming due under this paragraph 4A on and after the date of such prepayment or
purchase shall be reduced in the same proportion as the aggregate unpaid
principal amount of the Notes is reduced as a result of such prepayment or
purchase.
4B. OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT. The Company
may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes, in an amount not less than 10% of the
aggregate principal amount of the Notes then outstanding in the case of a
partial prepayment, at 100% of the principal amount so prepaid, together with
interest on such principal amount so prepaid accrued to the prepayment date plus
the Make-Whole Amount determined for the prepayment date with respect to such
principal amount. The Company will give each holder of Notes written notice of
each optional prepayment under this paragraph 4B not less than 30 days and not
more than 60 days prior to the date fixed for such prepayment. Each such notice
shall specify such date, the aggregate principal amount of the Notes to be
prepaid on such date, the principal amount of each Note held by such holder to
be prepaid (determined in accordance with paragraph 4C), and the interest to be
paid on the prepayment date with respect to such principal amount being prepaid,
and shall be accompanied by a certificate of a Senior Financial Officer as to
the estimated Make-Whole Amount due in connection with such prepayment
(calculated as if the date of such notice were
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the date of the prepayment), setting forth the details of such computation. Two
Business Days prior to such prepayment, the Company shall deliver to each holder
of Notes a certificate of a Senior Financial Officer specifying the calculation
of such Make-Whole Amount as of the specified prepayment date.
4C. ALLOCATION OF PARTIAL PREPAYMENTS. In the case of each
partial prepayment of the Notes, the principal amount of the Notes to be prepaid
shall be allocated among all of the Notes at the time outstanding in proportion,
as nearly as practicable, to the respective unpaid principal amounts thereof not
theretofore called for prepayment.
4D. MATURITY; SURRENDER, ETC. In the case of each prepayment
of Notes pursuant to this paragraph 4, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full
shall be surrendered to the Company and canceled and shall not be reissued, and
no Note shall be reissued in lieu of any prepaid principal amount of any Note.
4E. PURCHASE OF NOTES. The Company will not and will not
permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly
or indirectly, any of the outstanding Notes except upon the payment or
prepayment of the Notes in accordance with the terms of this Agreement and the
Notes. The Company will promptly cancel all Notes acquired by it or any
Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to
any provisions of this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.
4F. MAKE-WHOLE AMOUNT. The term "MAKE-WHOLE AMOUNT" means,
with respect to any Note, an amount equal to the excess, if any, of the
Discounted Value of the Remaining Scheduled Payments with respect to the Called
Principal of such Note over the amount of such Called Principal, provided that
the Make-Whole Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to paragraph 4B or has
become or is declared to be immediately due and payable pursuant to paragraph
7A, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due dates
to the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
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"REINVESTMENT YIELD" means, with respect to the Called
Principal of any Note, 0.50% over the yield to maturity implied by (i) the
yields reported, as of 11:00 A.M. (New York City time) on the second Business
Day preceding the Settlement Date with respect to such Called Principal, on page
"USD" of the Bloomberg Financial Markets Services Screen (or, if not available,
any other nationally recognized trading screen reporting on-line intraday
trading in United States government securities) for actively traded U.S.
Treasury securities having a maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date, or (ii) if such yields are not
reported as of such time or the yields reported as of such time are not
ascertainable, the Treasury Constant Maturity Series Yields reported, for the
latest day for which such yields have been so reported as of the second Business
Day preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities having a constant
maturity equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield will be determined, if necessary, by (a)
converting U.S. Treasury bill quotations to bond-equivalent yields in accordance
with accepted financial practice and (b) interpolating linearly between (1) the
actively traded U.S. Treasury security with the duration closest to and greater
than the Remaining Average Life and (2) the actively traded U.S. Treasury
security with the duration closest to and less than the Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (i) such Called Principal into (ii) the sum of the products
obtained by multiplying (a) the principal component of each Remaining Scheduled
Payment with respect to such Called Principal by (b) the number of years
(calculated to the nearest one-twelfth year) that will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the
Called Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such Called
Principal if no payment of such Called Principal were made prior to its
scheduled due date (it being understood and agreed that the interest rate on the
Notes, for purposes of this calculation, shall be the interest rate that applies
to the Notes on the third Business Day immediately preceding such Settlement
Date), provided that if such Settlement Date is not a date on which interest
payments are due to be made under the terms of the Notes, then the amount of the
next succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on such
Settlement Date pursuant to paragraph 4B or 7A.
"SETTLEMENT DATE" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid pursuant
to paragraph 4B or has become or is declared to be immediately due and payable
pursuant to paragraph 7A, as the context requires.
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5. AFFIRMATIVE COVENANTS. The Company covenants that so long
as any Note is outstanding:
5A. FINANCIAL STATEMENTS. The Company covenants that it will
deliver to each holder of Notes that is an Institutional Investor:
(i) as soon as practicable and in any event within 60 days
after the end of each quarterly period (other than the last
quarterly period) in each fiscal year, consolidated statements
of operations and cash flows of the Company and its
Subsidiaries for the period from the beginning of the current
fiscal year to the end of such quarterly period, and a
consolidated balance sheet of the Company and its Subsidiaries
as at the end of such quarterly period, setting forth in each
case in comparative form figures for the corresponding period
in the preceding fiscal year, all in reasonable detail,
prepared in accordance with GAAP and satisfactory in form to
the Required Holders and certified by a Senior Financial
Officer of the Company, subject to changes resulting from
year-end adjustments;
(ii) as soon as practicable and in any event within 120
days after the end of each fiscal year, consolidated
statements of operations, capital stock and retained earnings
and cash flows of the Company and its Subsidiaries for such
year, and a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such year, setting forth in each
case in comparative form corresponding consolidated figures
from the preceding fiscal year, all in reasonable detail and
satisfactory in scope to the Required Holder(s) and, as to
such consolidated statements, certified by ▇▇▇▇▇ & Young LLP
(or any independent public accountants of recognized national
standing) whose certificate shall be in scope and substance
satisfactory to the Required Holder(s) accompanied by an
additional certificate of such accountants stating that they
have reviewed this Agreement and stating further whether, in
making their audit, they have become aware of any condition or
event that then constitutes a Default or an Event of Default,
and, if they are aware that any such condition or event then
exists, specifying the nature and period of the existence
thereof (it being understood that such accountants shall not
be liable, directly or indirectly, for any failure to obtain
knowledge of any Default or Event of Default unless such
accountants should have obtained knowledge thereof in making
an audit in accordance with generally accepted auditing
standards or did not make such an audit);
(iii) as soon as practicable and in any event within 45
days after the end of each month in each fiscal year,
consolidated statements of operations and cash flows of the
Company and its Subsidiaries for such month, and a
consolidated balance sheet of the Company and its Subsidiaries
as at the end of such month, setting forth in each case in
comparative form figures for the corresponding period in the
preceding fiscal year, all in reasonable detail, prepared in
accordance with GAAP and satisfactory in form to the Required
Holders and certified by a Senior Financial Officer of the
Company, subject to changes resulting from year-end
adjustments;
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(iv) promptly upon transmission thereof, copies of all
such financial statements, proxy statements, notices and
reports as it shall send to its stockholders and copies of all
registration statements (without exhibits) and all reports
which it files with the Securities and Exchange Commission (or
any governmental body or agency succeeding to the functions of
the Securities and Exchange Commission);
(v) promptly, and in any event within ten days after a
Responsible Officer becoming aware of any of the following, a
written notice setting forth the nature thereof and the
action, if any, that the Company or an ERISA Affiliate
proposes to take with respect thereto:
(a) with respect to any Plan, any reportable event, as
defined in section 4043(b) of ERISA and the regulations
thereunder, for which notice thereof has not been waived
pursuant to such regulations as in effect on the date hereof
if such reportable event could reasonably be expected to have
a Material Adverse Effect; or
(b) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from
a Multiemployer Plan that such action has been taken by the
PBGC with respect to such Multiemployer Plan; or
(c) any event, transaction or condition that could result
in the incurrence of any liability by the Company or any ERISA
Affiliate pursuant to Title 1 or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit
plans, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or such penalty or excise
tax provisions, if such liability or Lien, taken together with
any other such liabilities or Liens then existing, could
reasonably be expected to have a Material Adverse Effect;
(vi) promptly, and in any event within 30 days of receipt
thereof, copies of any notice to be Company or any Subsidiary
from any Federal or state Governmental Authority relating to
any order, ruling, statute or other law or regulation that
could reasonably be expected to have a Material Adverse
Effect;
(vii) promptly, such information or documentation as any
such holder of Notes may request from time to time regarding
the efforts of the Company and its Subsidiaries to address the
Year 2000 Problem;
(viii) promptly, and in any event within five Business
Days after a Responsible Officer becoming aware of any of the
following, a written notice to you setting forth the nature of
any of the following matters that has resulted or may
reasonably be expected to result in a Material Adverse Effect:
(a) any breach
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or non-performance of, or any default under, a Contractual
Obligation of the Company or any Subsidiary; (b) any dispute,
litigation, investigation, proceeding or suspension between
the Company or any Subsidiary and any Governmental Authority;
or (c) the commencement of, or any material development in,
any litigation or proceeding affecting the Company or any
Subsidiary including pursuant to any applicable Environmental
Laws;
(ix) together with each delivery of financial statements
required by clauses (i) and (ii) above relating to each of the
periods covered by the projections attached hereto as Schedule
8E, the Company will deliver to each such holder of Notes a
management's discussion and analysis (x) discussing the
results of such period and (y) showing all the variances from
such projections that occurred in such period and explaining
in reasonable detail the reasons therefor;
(x) promptly following, and in any event within five
Business Days of, (x) any change in, or withdrawal of, the
rating of the Company's long-term unsecured debt by S&P or (y)
any material change in accounting policies or financial
reporting practices by the Company or any Subsidiary, notice
thereof;
(xi) simultaneously with the delivery thereof under the BA
Credit Agreements, copies of all information and notices
required to be given by the Company pursuant to Section 6.3
thereof (or any successor provision thereto) or of any other
notice, report or other written information delivered to the
agent or any lender under the BA Credit Agreements; and
(xii) with reasonable promptness, such other data and
information relating to the business, operations, affairs,
financial condition, assets or properties of the Company or
any of its Subsidiaries or relating to the ability of the
Company to perform its obligations hereunder, under the Notes
and under the other Note Documents as from time to time may be
reasonably requested by any such holder of Notes.
Together with each delivery of financial statements required by clauses (i) and
(ii) above, the Company will deliver to each such holder an Officer's
Certificate executed by a Responsible Officer demonstrating (with computations
in reasonable detail) compliance by the Company and its Subsidiaries with the
provisions of paragraph 6 and stating that there exists no Event of Default or
Default, or, if any Event of Default or Default exists, specifying the nature
and period of existence thereof and what action the Company proposes to take
with respect thereto. The Company also covenants that immediately after any
Responsible Officer obtains knowledge of an Event of Default or Default, and in
any event within five Business Days of the date that such Responsible Officer
obtains such knowledge, it will deliver to each holder of Notes an Officer's
Certificate executed by a Responsible Officer specifying the nature and period
of existence thereof and what action the Company proposes to take with respect
thereto.
5B. INSPECTION. The Company shall, and shall cause each
Subsidiary to, maintain proper books of record and account, in which full, true
and correct entries in conformity with GAAP consistently applied shall be made
of all financial transactions and matters involving
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the assets and business of the Company and such Subsidiary. The Company shall
permit the representatives of each holder of Notes that is an Institutional
Investor:
(i) No Default. If no Default or Event of Default then
exists, at the expense of the Company and upon reasonable
prior notice to the Company, to visit the principal executive
office of the Company, to discuss the affairs, finances and
accounts of the Company and its Subsidiaries with the
Company's officers, and (with the consent of the Company,
which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the
Company, which consent will not be unreasonably withheld) to
visit the other offices and properties of the Company and each
Subsidiary, all at such reasonable times and as often as may
be reasonably requested in writing; and
(ii) Default. If a Default or Event of Default then
exists, at the expense of the Company to visit and inspect any
of the offices or properties of the Company or any Subsidiary,
to examine all their respective books of account, records,
reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances
and accounts with their respective officers and independent
public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances
and accounts of the Company and its Subsidiaries), all at such
times and as often as may be requested.
5C. MAINTENANCE OF PROPERTIES. The Company will and will cause
each of its Subsidiaries to maintain and keep, or cause to be maintained and
kept, their respective properties in good repair, working order and condition
(other than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times and shall make all
repairs, replacements, additions and betterments as needed so that the
efficiency of such properties shall be maintained, provided that this paragraph
5C shall not prevent the Company or any Subsidiary from discontinuing the
operation and the maintenance of any of its properties if such discontinuance is
desirable in the conduct of its business and such discontinuance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
5D. MAINTENANCE OF INSURANCE. The Company covenants that it
and each Subsidiary will maintain, with financially sound and reputable
insurers, insurance in such amounts and against such liabilities and hazards as
are customarily maintained by companies in businesses similar to the businesses
of the Company and each such Subsidiary and owning properties similar to the
properties owned by the Company and each such Subsidiary; provided, however,
that such insurance is commercially available; and provided further that the
Company and its Subsidiaries may maintain a system of self insurance against
such liabilities and hazards if such system is comparable to the self-insurance
systems customarily maintained by companies in businesses similar to the
Company's business and owning properties similar to the Company's properties.
Together with each delivery of financial statements under clause (ii) of
paragraph 5A, the Company will, upon the request of any holder of Notes that is
an Institutional Investor, deliver an Officer's Certificate specifying the
details of such insurance in effect.
5E. COOPERATIVE STATUS. The Company covenants that it will at
all times maintain its status as a cooperative for purposes of Subchapter T of
the Code; provided,
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however, in the event that the Code or other applicable law is modified after
the date hereof and as a result of such modification the Company is unable to
satisfy its obligations under this paragraph, then the Required Holders and the
Company shall agree, or in good faith negotiate to agree, to amend the covenants
contained in this Agreement so that the application of such covenants (following
such modification of the Code or other applicable law and the effect thereof on
the Company) will be substantially the same as prior thereto.
5F. COMPLIANCE WITH LAWS. The Company covenants that it shall,
and shall cause each Subsidiary to, comply with all applicable laws, rules,
regulations, decrees and orders of all federal, state, local or foreign courts
or governmental agencies, authorities, instrumentalities or regulatory bodies
(including, without limitation, Environmental Laws) the noncompliance with which
could be reasonably expected to result in a Material Adverse Effect.
5G. PAYMENT OF TAXES AND CLAIMS. The Company will and will
cause each of its Subsidiaries to file all tax returns required to be filed in
any jurisdiction and to pay and discharge all taxes shown to be due and payable
on such returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their respective properties, assets, income or
franchises, to the extent such taxes and assessments have become due and payable
and before they have become delinquent and all claims (including, without
limitation, claims for labor, materials and supplies) for which sums have become
due and payable that have or might become a Lien on properties or assets of the
Company or any Subsidiary, provided that neither the Company nor any Subsidiary
need pay any such tax or assessment or claims if the amount, applicability or
validity thereof is contested by the Company or such Subsidiary on a timely
basis in good faith and in appropriate proceedings, and the Company or such
Subsidiary has established adequate reserves therefor in accordance with GAAP on
the books of the Company or such Subsidiary.
5H. CORPORATE EXISTENCE, ETC. The Company will at all times
preserve and keep in full force and effect its corporate existence. Subject to
paragraph 6A(3)(ii), the Company will at all times preserve and keep in full
force and effect the corporate existence of each of its Subsidiaries (unless
merged into the Company or a Subsidiary) and all rights and franchises of the
Company and its Subsidiaries unless, in the good faith judgment of the Company,
the termination of or failure to preserve and keep in full force and effect such
corporate existence, right or franchise could not, individually or in the
aggregate, have a Material Adverse Effect. Notwithstanding the provisions of
this paragraph 5H, the Company may dissolve or liquidate any Inactive
Subsidiary.
5I. COLLATERAL ACCOUNTING SYSTEMS EXAMINATION. The Company
covenants that it will (a) cooperate with the Collateral Agent, the holders of
the Notes and their respective representatives in commencing a collateral and
accounting systems examination within 30 days following the Effective Date and
completing such examination as promptly as practicable thereafter and (b) pay
all reasonable costs and expenses in connection with such examination.
5J. REAL ESTATE DOCUMENTS. (a)(i) The Company shall, and shall
cause each applicable Guarantor to, promptly (and, in any event, no later than
April 26, 2000) execute and deliver a Mortgage providing for a fully perfected
Lien, in favor of the Collateral Agent, in all
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right, title and interest of the Company or such Guarantor in each parcel of
real property listed on Part 1 of Schedule 5J (each a "PRIMARY PROPERTY").
(ii) The Company shall, and shall cause each applicable
Guarantor to, promptly (and in any event, no later than May
10, 2000) execute and deliver a Mortgage providing for a fully
perfected Lien, in favor of the Collateral Agent, in all
right, title and interest of the Company or such Guarantor in
each parcel of real property listed on Part 2 of Schedule 5J
(each a "SECONDARY PROPERTY"; the Primary Properties and the
Secondary Properties are collectively referred to as the
"PROPERTIES").
(b) The Company shall, and shall cause each Guarantor to,
promptly (and, in any event, no later than May 15, 2000 for each Primary
Property and May 31, 2000 for each Secondary Property) provide the following
documents in connection with each Mortgage referred to above:
(i) an ALTA Loan Title Insurance Policy, issued by an
insurer acceptable to the Collateral Agent, insuring the
Collateral Agent's Lien on the Property subject to such
Mortgage and containing such endorsements as the Collateral
Agent and the Majority Holders may reasonably require (it
being understood that the amount of coverage, exceptions to
coverage and status of title set forth in such policy shall be
acceptable to the Collateral Agent and the Majority Holders);
(ii) copies of all documents of record concerning such
Property as shown on the commitment for the ALTA Loan Title
Insurance Policy referred to above;
(iii) original or certified copies of all insurance
policies required to be maintained with respect to such
Property by this Agreement or the applicable Mortgage; and
(iv) a flood insurance policy covering such Property,
reasonably satisfactory to the Collateral Agent and the
Majority Holders, if required by the Flood Disaster Protection
Act of 1973.
Additionally, in the case of any real property leased by the
Company or any Guarantor, the Company shall use its best efforts to, or shall
cause such Guarantor to use its best efforts to, provide a consent, in form and
substance satisfactory to the Collateral Agent, from the owner and each
mortgagee of such property (a) consenting to the Mortgage in favor of the
Collateral Agent with respect to such property and (b) waiving any landlord's
Lien in respect of personal property kept at the premises subject to such lease.
5K. FURTHER ASSURANCES. The Company shall (a) cause all
Subsidiaries to guarantee the obligations of the Company hereunder pursuant to
the Guaranty (and in furtherance of the foregoing, immediately upon the creation
or acquisition of any Subsidiary, cause each Subsidiary to execute and deliver a
counterpart of the Guaranty, together with such other documents, including
resolutions and opinions of counsel, as the Collateral Agent or any
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holder of Notes may reasonably request), provided neither TruServ Specialty
Company, LLC nor any Inactive Subsidiary or Foreign Subsidiary (other than
▇▇▇▇▇▇ Canada Hardware and Variety Company, Inc.), shall have an obligation to
execute a counterpart of the Guaranty; and (b) take, and cause each of
Guarantors to take (at the expense of the Company or such Guarantor, as the case
may be), such actions as are necessary or as the Collateral Agent or the
Majority Holders may reasonably request from time to time (including the
execution and delivery of security agreements, pledge agreements, financing
statements, mortgages, deeds of trust and other documents, the filing or
recording of any of the foregoing, the delivery of stock certificates and other
collateral with respect to which perfection is obtained solely by possession,
the notation of the Collateral Agent's Liens on certificates of title for
vehicles and the delivery of opinions of counsel) to ensure that the obligations
of the Company and each Guarantor hereunder, under the Guaranty and under any
other Note Document, as applicable, are and continue to be secured by valid and
perfected security interests in substantially all of the personal property of
each such entity, and provided further that neither the Company nor any
Guarantor shall be required to pledge more than 65% of the stock of any Foreign
Subsidiary (other than ▇▇▇▇▇▇ Canada Hardware and Variety Company, Inc.).
5L. WAIVER OF NEGATIVE PLEDGE. The Company will not later than
June 30, 2000 cause The Industrial Development Authority of the State of New
Hampshire (the "▇▇▇") to waive the negative pledge set forth in Section 8.1 of
the Loan Agreement dated as of October 1, 1982 between the ▇▇▇ and the Company
(then known as ▇▇▇▇▇▇ & Company) to permit a Lien in favor of the Collateral
Agent on the Project (as defined in the Loan Agreement referred to above).
6. NEGATIVE COVENANTS.
6A. LIEN, DEBT AND OTHER RESTRICTIONS. The Company covenants
that it will not and will not permit any Subsidiary to:
6A(1) LIENS. Create, assume or suffer to exist any Lien upon
any of its property or assets, whether now owned or hereafter acquired, except:
(i) Liens for taxes, assessments, governmental charges or
levies, statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics and materialmen incurred in the
ordinary course of business for sums not yet due or which are
being actively contested in good faith by appropriate
proceedings and with respect to which the Company or the
applicable Subsidiary maintains adequate reserves;
(ii) Liens arising out of judgments or awards against the
Company or any Subsidiary which are being actively contested
in good faith by appropriate proceedings;
(iii) Liens incidental to the conduct of its business or
the ownership of its properties and assets (including
attorneys' Liens and Liens in connection with worker's
compensation, unemployment insurance and other like laws, but
excluding any Lien imposed by ▇▇▇▇▇) and ▇▇▇▇▇ to secure the
performance of
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bids, tenders or trade contracts, or to secure statutory
obligations, surety or appeal bonds or other Liens of like
general nature, all of which were not incurred in connection
with the borrowing of money or the obtaining of advances or
credit; provided in each case, the obligation secured is not
overdue, or, if overdue, is being actively contested in good
faith by appropriate proceedings;
(iv) minor survey exceptions or minor encumbrances,
easements or reservations, or rights of others for
rights-of-way, utilities and other similar purposes, or zoning
or other restrictions as to the use of real property that are
necessary for the conduct of the operations of the Company and
its Subsidiaries or that customarily exist on properties of
corporations engaged in similar businesses and are similarly
situated and that do not in any event materially impair their
use in the operations of the Company and its Subsidiaries;
(v) Liens on property or assets of a Subsidiary to secure
obligations of such Subsidiary to the Company or another
Subsidiary;
(vi) Liens in existence on the date hereof described on
Schedule 6A(1);
(vii) after the date hereof, Liens (A) consisting of
Capitalized Lease Obligations, or (B) existing prior to the
time of acquisition upon any property acquired by the Company
or any Subsidiary through purchase, merger or consolidation or
otherwise, whether or not expressly assumed by the Company or
such Subsidiary, or (C) placed on property at the time of
acquisition by the Company or any Subsidiary to secure all or
a portion of (or to secure Debt incurred to pay all or a
portion of) the purchase price thereof, provided that (1) in
the case of (B), any such Lien shall not -------- have been
created, incurred or assumed in contemplation of such
purchase, merger, consolidation or other event in (B), (2) all
of such property is not or shall not thereby become encumbered
in any amount in excess of the lesser of 100% of the cost
thereof or fair market value thereof (as determined in good
faith by the board of directors of the Company), (3) in the
case of (B) and (C), any such Lien shall be confined solely to
the item(s) of property so acquired, (4) in the case of (C),
any such Lien shall have been created or incurred concurrently
with the acquisition of such property, and (5) any Debt
secured by such Lien is permitted by the provisions of
paragraph 6A(2). Notwithstanding the terms of this clause
(vii) of paragraph 6(A)(1), the Company or any Subsidiary may
not dispose of assets to a third party and repurchase them
with Debt secured in whole or in part by ▇▇▇▇▇ placed on such
assets; however, this subparagraph is not intended to limit
the Company's ability to sell assets and lease such assets
back under operating leases;
(viii) Liens renewing or extending any Lien permitted by
clauses (vi) and (vii) of this paragraph 6(A)(1), provided
that (A) such Lien is not extended to other property of the
Company or any Subsidiary, (B) the principal amount of Debt
secured by such Lien does not exceed the principal amount
outstanding at the time of such renewal or extension, and (C)
no Default or Event of Default shall exist or result
therefrom;
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(ix) other Liens securing Funded Debt (other than Funded
Debt that constitutes Subordinated Debt); provided, however,
that (a) such Funded Debt is permitted by the provisions of
paragraph 6A(2), (b) the aggregate amount of all Secured
Funded Debt outstanding together with all Funded Debt of any
Subsidiary (other than as permitted by clause (i) of paragraph
6A(2)) does not at any time exceed (A) prior to the Reset
Date, $25,000,000 and (B) on and after the Reset Date, an
amount equal to ten percent (10%) of Consolidated Total
Assets, and (c) no Default or Event of Default shall exist or
result therefrom; and
(x) Liens in favor of the Collateral Agent, provided that
the Intercreditor Agreement shall be in full force and effect.
6A(2) DEBT. Create, incur, assume or suffer to exist any
Debt, except:
(i) Funded Debt of any Subsidiary to the Company or any
other wholly-owned Subsidiary;
(ii) Subordinated Funded Debt;
(iii) Senior Funded Debt of the Company and its
Subsidiaries, so long as (a) the aggregate principal amount
(without duplication) of consolidated Senior Funded Debt does
not exceed at any time (i) through (and including) December
31, 2000, an amount equal to sixty percent (60%) of the sum of
Consolidated Capitalization plus Special 1999 Charges plus
Special A/P Charges, (ii) from (and including) January 1, 2001
through (and including) December 31, 2001 an amount equal to
sixty per cent (60%) of Consolidated Capitalization and (iii)
after December 31, 2001, an amount equal to fifty-five per
cent (55%) of Consolidated Capitalization, and (b) the
aggregate amount of all Funded Debt of Subsidiaries (excluding
that permitted by clause (i) of this paragraph 6A(2) and that
evidenced by the Guaranty), together with all Secured Funded
Debt does not exceed 10% of Consolidated Total Assets (it
being understood that for purposes of this clause (iii)
Consolidated Capitalization and Consolidated Total Assets
shall be measured as of the later of (x) the end of the
Company's most recent quarterly period and (y) any other date
as of which the Company has prepared and delivered to each
holder of the Notes that is an Institutional Investor a
consolidated balance sheet of the Company and its
Subsidiaries);
(iv) Current Debt of the Company provided that commencing
on September 1, 1998 and at all times thereafter there shall
have been a period of at least thirty (30) consecutive days
within the twelve month period immediately preceding the date
of determination during which the average aggregate principal
amount of Current Debt of the Company outstanding during such
30-day period did not exceed at any time during such 30-day
period an amount equal to the minimum amount of Funded Debt
which would have been permitted as additional Senior Funded
Debt under clause (iii) of this paragraph 6A(2) at any time
during such 30-day period, it being understood and agreed that
to the extent Current Debt
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is treated as Senior Funded Debt for purposes of this
paragraph 6A(2)(iv), it shall also be included in Consolidated
Capitalization.
Without limiting the foregoing provisions of this paragraph 6A(2), the Company
shall not permit the aggregate principal amount of all Debt of the Company and
its Subsidiaries (other than (i) Debt hereunder and under the other Note
Documents, (ii) Debt under the BA Credit Agreements referred to in clause (i) of
the definition thereof (without giving effect to any amendments thereto that
would increase the amounts that may be borrowed thereunder), (iii) Debt referred
to on Schedule 6A(2) which was outstanding on March 31, 2000 and (iv)
Subordinated Debt owed to members of the Company) to exceed $35,000,000 at any
time prior to the Reset Date.
6A(3)(I) SALE OF ASSETS. Sell, lease, transfer or otherwise
dispose of any assets of the Company or any Subsidiary (an "ASSET SALE") (it
being understood that an Asset Sale shall include (A) the sale and/or issuance
of stock of any Subsidiary to Persons other than the Company or any wholly-owned
Subsidiary and (B) any dilution of ownership arising from a merger or
consolidation of Subsidiaries as permitted by paragraph 6A(3)(ii)), other than
in the ordinary course of business, unless the Net Cash Proceeds of all such
assets sold, leased or otherwise disposed of outside of the ordinary course of
business during the most recent 36-month rolling period when added together,
without duplication, with any assets then proposed to be sold outside of the
ordinary course of business, do not exceed $10,000,000. Excluded from the
foregoing limitation are the disposition of assets the proceeds of which are,
within 180 days of such disposition, either (i) reinvested in property or assets
for use in the existing business of the Company and its Subsidiaries, or (ii)
applied on a pro rata basis to prepay Senior Funded Debt, including, without
limitation, the Notes pursuant to paragraph 4B hereof, including the Make-Whole
Amount provided for in said paragraph 4B. Notwithstanding the foregoing, TruServ
Canada Cooperative Inc. may issue and sell shares of its stock in the ordinary
course of business consistent with its practices as of April 13, 1992.
6A(3)(II) MERGER. Merge or consolidate with any other Person,
except that (a) Subsidiaries may be merged into the Company or any other
Subsidiary, (b) the Company may after the Reset Date merge with another Person,
provided that the Company is the surviving corporation, and no Event of Default
or Default shall exist either immediately before or after such merger and (c)
any Subsidiary may after the Reset Date merge with another Person (other than
the Company unless permitted by clauses (a) and (b) above) so long as no Event
of Default or Default shall exist immediately before or after such merger.
6A(4) RESTRICTIONS ON TRANSACTIONS WITH AFFILIATES AND
STOCKHOLDERS. Directly or indirectly, purchase, acquire or lease any property
from, or sell, transfer or lease any property (other than shares of stock of
Company) to, or otherwise deal with (i) any Affiliate or Substantial
Stockholder, or (ii) any corporation in which an Affiliate, Substantial
Stockholder or the Company (either directly or through Subsidiaries) owns 5% or
more of the outstanding voting stock, except that (a) any such Affiliate or
Substantial Stockholder may be a director, officer or employee of the Company or
any Subsidiary and may be paid reasonable compensation in connection therewith,
(b) the Company and its Subsidiaries may perform or engage in any of the
foregoing in the ordinary course of business upon terms no less favorable to the
Company or such Subsidiary (as the case may be) than if no such relationship
described in
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clauses (i) and (ii) above existed and (c) the Company may sell or purchase from
any such Person shares of the Company's stock subject to the provisions of
paragraphs 6B and 6C.
6B. RESTRICTED INVESTMENTS. The Company will not, and will not
permit any Subsidiary to, make or permit a Subsidiary to make any Investment
except the Company and any Subsidiary may:
(a) make or permit to remain outstanding loans or advances
to any Subsidiary other than an Inactive Subsidiary;
(b) after the Reset Date, own, purchase or acquire stock,
obligations or securities of a Subsidiary or of a corporation
which immediately after such purchase or acquisition will be a
Subsidiary;
(c) acquire and own stock, obligations or securities
received in settlement of debts (created in the ordinary
course of business) owing to the Company or any Subsidiary;
(d) own, purchase or acquire prime commercial paper,
banker's acceptances and certificates of deposit in United
States and Canadian commercial banks (having combined capital
and surplus of not less than U.S. $100,000,000) and repurchase
agreements with respect to the foregoing, in each case due
within one year from the date of purchase and payable in the
United States in United States dollars, obligations of the
government of the United States or any agency thereof, and
obligations guaranteed by the government of the United States;
(e) make or permit to remain outstanding travel and other
similar advances to officers and employees in the ordinary
course of business;
(f) permit to remain outstanding Investments existing on
the Effective Date and described on Schedule 6B;
(g) to the extent applicable, make Investments permitted
under paragraph 6C below; and
(h) maintain deposit accounts with financial institutions
in the ordinary course of business; provided that the amount
maintained in deposit accounts with financial institutions
other than the Lenders (as defined in the BA Credit Agreement)
shall not exceed (x) in the case of any one such account,
$200,000 for more than three consecutive Business Days; and
(y) in the case of all such accounts in the aggregate,
$600,000 for more than two consecutive Business Days.
Notwithstanding the foregoing, the Company will not permit the aggregate amount
of Investments in TruServ Specialty Company, LLC to exceed $1,500,000 at any
time.
6C. RESTRICTED PAYMENTS. The Company will not, and will not
permit any Subsidiary to, pay or declare cash dividends, cash patronage
dividends or dividends on any class
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of its stock (other than dividends in kind) or redeem, purchase or otherwise
acquire, or make any redemptions, purchase, or other acquisition of any of its
stock or apply miscellaneous deductions in lieu of patronage dividends, or make
or permit any Subsidiary to make any Restricted Investment (each a "RESTRICTED
PAYMENT") except, if Consolidated Net Earnings for any fiscal year are positive,
to the extent that the aggregate amount of all such Restricted Payments made in
such fiscal year does not exceed the Applicable Percentage (as defined below) of
Consolidated Net Earnings for such fiscal year. For purposes of the foregoing,
"APPLICABLE PERCENTAGE" means 40%. Notwithstanding the foregoing, the Company
will not and will not permit any Subsidiary to make or pay any Restricted
Payment (a) prior to January 1, 2001, or (b) if at the time such Restricted
Payment is made or paid, or after giving effect thereto, a Default or an Event
of Default would exist.
6D. COMPLIANCE WITH ▇▇▇▇▇. The Company will not, and will not
permit any Subsidiary to, engage in any transaction in connection with which the
Company or any Subsidiary could be subject to either a civil penalty assessed
pursuant to section 502(i) of ERISA or a tax imposed by section 4975 of the
Code, terminate or withdraw from any Plan in a manner, or take any other action
with respect to any such Plan (including, without limitation, a substantial
cessation of operations within the meaning of section 4062(e) of ERISA), which
could result in any liability of the Company or any Subsidiary under Title IV of
ERISA to any Person (including the PBGC or a trustee appointed under section
4042(b) or (c) of ERISA), fail to make full payment when due of all amounts
which, under the provisions of any Plan, the Company or any Subsidiary is
required to pay as contributions thereto, or permit to exist any accumulated
funding deficiency, whether or not waived, with respect to any Plan (other than
a Multiemployer Plan), if, in any such case, such penalty or tax or such
liability, or the failure to make such payment, or the existence of such
deficiency, as the case may be, could be reasonably expected to have a Material
Adverse Effect.
6E. NO CHANGE IN SUBORDINATION TERMS, NO OPTIONAL PREPAYMENTS
ETC. The Company will not, and will not permit any Subsidiary to, (a) amend,
alter or otherwise change any provision of any of the subordinated promissory
notes now or hereafter issued by the Company or take any other action (or
refrain from taking an action) which would have the effect of eliminating or
altering in any way the effect of the subordination language appearing in such
subordinated promissory notes or the rights of the holders of the Notes arising
as a result thereof or (b) make any optional or voluntary prepayment, in whole
or in part, of any Subordinated Debt. The Company will not, and will not permit
any Subsidiary to, make any optional or voluntary prepayment, in whole or in
part, of any Benefited Obligations, other than (i) optional or voluntary
prepayments, in whole or in part, of loans under the BA Credit Agreements that
do not trigger a reduction in any commitments of the lenders thereunder and (ii)
optional or voluntary prepayments, in whole or in part, of the Senior Note
Obligations (as defined in the Intercreditor Agreement) pursuant to the terms
hereof.
6F. NATURE OF BUSINESS. The Company will not, and will not
permit any Subsidiary to, engage in the business of underwriting risks for
insurance purposes, or in any other aspect of insurance related business other
than in the ordinary course of business in accordance with its practices as of
the Effective Date; or purchase and sell real estate (other than on an agency
basis) for purposes other than those relating directly to its principal business
except for purchases and sales of store locations in the ordinary course of
business.
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6G. RATIO OF ASSET BASE TO DEBT. The Company will not permit
the ratio of (a) the Asset Base as of the last day of any fiscal month to (b)
the remainder of (i) the daily average of the amount of Total Senior Debt
outstanding during the fiscal month ending on such date minus (ii) the daily
average of cash and marketable securities during the fiscal month ending on such
date to be equal to or less than the applicable ratio set forth below:
Fiscal Month(s) Ending Ratio
---------------------- -----
04/3/99 through 05/29/99 1.10 to 1
07/3/99 through 10/2/99 1.15 to 1
10/30/99 through 12/31/99 1.20 to 1
01/29/00 1.10 to 1
02/26/00 through 12/31/00 1.20 to 1
01/27/01 1.10 to 1
02/24/01 through 12/31/01 1.20 to 1
01/26/02 1.10 to 1
02/23/02 and thereafter 1.20 to 1
6H. FIXED CHARGE COVERAGE RATIO. The Company shall not permit
the Fixed Charge Coverage Ratio as of the end of any fiscal quarter to be less
than the applicable ratio set forth below:
Fiscal Quarter(s) Ending Ratio
------------------------ -----
03/31/00 through 06/30/00 1.20 to 1.00
09/30/00 1.40 to 1.00
12/31/00 through 12/31/01 1.75 to 1.00
03/31/02 and thereafter 1.85 to 1.00
6I. MINIMUM EBITDA. The Company shall not permit the sum of
(i) EBITDA as of the end of any four consecutive fiscal quarters, plus (ii) for
the period of four fiscal quarters ending March 31, 2000, June 30, 2000 and
September 30, 2000, Special 1999 Charges (to the extent taken during such
period), plus (iii) for the period of four fiscal quarters ending March 31, 2000
and June 30, 2000, Special A/P Charges (to the extent taken during such period),
to be less than $85,000,000.
6J. INACTIVE SUBSIDIARIES. The Company will not at any time
permit its Inactive Subsidiaries, taken as a whole, to have more than $200,000
of assets (based on fair market value) or to generate more than $5,000 of
revenues in any fiscal quarter.
6K. AMENDMENTS TO FINANCING AGREEMENTS. The Company covenants
that, without the consent of the Majority Holders, it will not, and will not
permit any Subsidiary to, amend, modify, supplement or restate any Financing
Agreement. The Company will not deliver any certificate to the Collateral Agent
pursuant to Section 3(f) of the Intercreditor Agreement unless it shall have
furnished a copy thereof to each holder of Notes at least ten days prior to the
date that it proposes to deliver such certificate to the Collateral Agent.
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7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall occur
and be continuing for any reason whatsoever (and whether such occurrence shall
be voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) the Company defaults in the payment of any principal
or Make-Whole Amount, if any, payable with respect to any Note
when the same shall become due, either by the terms thereof or
otherwise as herein provided (including, without limitation,
paragraph 4A); or
(ii) the Company defaults in the payment of any interest
on any Note payable with respect to any Note, or the Company
or any Subsidiary defaults in the payment of any other amount
payable hereunder or under any other Note Document, for more
than 3 days after the date due; or
(iii) the Company or any Subsidiary defaults (whether as
primary obligor or as guarantor or other surety) in any
payment of principal of or premium or make-whole amount or
interest on any other obligation for money borrowed (or any
Capitalized Lease Obligation, any obligation under a
conditional sale or other title retention agreement, any
obligation issued or assumed as full or partial payment for
property whether or not secured by a purchase money mortgage
or any obligation under notes payable or drafts accepted
representing extensions of credit) beyond any period of grace
provided with respect thereto, or the Company or any
Subsidiary fails to perform or observe any other agreement,
term or condition contained in any agreement under which any
such obligation is created (or if any other event thereunder
or under any such agreement shall occur and be continuing) and
the effect of such failure or other event is to cause, or to
permit the holder or holders of such obligation (or a trustee
on behalf of such holder or holders) to cause, such obligation
to become due (or to be repurchased by the Company or any
Subsidiary) prior to any stated maturity, provided that the
aggregate amount of all obligations (other than -------- any
such obligation for money borrowed which is payable solely out
of the property or assets of a partnership, joint venture or
similar entity of which the Company or any Subsidiary is an
equity participant or is secured by a Lien on property or
assets owned or held by such an entity without further
recourse to or liability of the Company or any Subsidiary) as
to which such a payment default shall occur and be continuing
or such a failure or other event causing or permitting
acceleration (or resale to the Company or any Subsidiary)
shall occur and be continuing exceeds $5,000,000; or
(iv) any representation or warranty made by the Company or
any Subsidiary herein or in any other Note Document or by the
Company or any Subsidiary or any of their respective officers
in any writing furnished in connection with or pursuant to
this Agreement or any other Note Document shall be false in
any material respect on the date as of which made; or
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(v) the Company fails to perform or observe any agreement
contained in paragraph 6; or
(vi) the Company or any Subsidiary fails to perform or
observe any other agreement, term or condition contained
herein or in any other Note Document (subject to any
applicable grace period); or
(vii) the Company or any Subsidiary makes an assignment
for the benefit of creditors or is generally not paying its
debts as such debts become due; or
(viii) any decree or order for relief in respect of the
Company or any Subsidiary (other than an Inactive Subsidiary)
is entered under any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law, whether now or hereafter in effect
(herein called the "BANKRUPTCY LAW"), of any jurisdiction; or
(ix) the Company or any Subsidiary (other than an Inactive
Subsidiary) petitions or applies to any tribunal for, or
consents to, the appointment of, or taking possession by, a
trustee, receiver, custodian, liquidator or similar official
of the Company or such Subsidiary, or of any substantial part
of the assets of the Company or such Subsidiary, or commences
a voluntary case under the Bankruptcy Law of the United States
or any proceedings (other than proceedings for the voluntary
liquidation and dissolution of a Subsidiary) relating to the
Company or such Subsidiary under the Bankruptcy Law of any
other jurisdiction; or
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any
Subsidiary (other than an Inactive Subsidiary) and the Company
or such Subsidiary by any act indicates its approval thereof,
consent thereto or acquiescence therein, or an order, judgment
or decree is entered appointing any such trustee, receiver,
custodian, liquidator or similar official, or approving the
petition in any such proceedings, and such order, judgment or
decree remains unstayed and in effect for more than 60 days;
or
(xi) any order, judgment or decree is entered in any
proceedings against the Company decreeing the dissolution of
the Company and such order, judgment or decree remains
unstayed and in effect for more than 60 days; or
(xii) any order, judgment or decree is entered in any
proceedings against the Company or any Subsidiary decreeing a
split-up of the Company or such Subsidiary which requires the
divestiture of assets representing a substantial part, or the
divestiture of the stock of a Subsidiary whose assets
represent a substantial part, of the Consolidated Total Assets
or which requires the divestiture of assets, or stock of a
Subsidiary, which shall have contributed a substantial part of
the Consolidated Net Earnings of the Company and its
Subsidiaries for any of
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the three fiscal years then most recently ended, and such
order, judgment or decree remains unstayed and in effect for
more than 60 days; or
(xiii) a final judgment or judgments in an aggregate
amount in excess of $7,000,000 is or are rendered against the
Company and/or any Subsidiaries and, within 60 days after
entry thereof, such judgment or judgments are not discharged
or execution thereof stayed pending appeal, or within 60 days
after the expiration of any such stay, such judgment or
judgments are not discharged; or
(xiv) an Event of Default exists under any BA Credit
Agreement or under the Prudential Agreement; or an Event of
Default (as defined in the Intercreditor Agreement) exists; or
(xv) the Guaranty shall cease to be in full force and
effect with respect to any Guarantor (other than as a result
of a transaction permitted hereunder), any Guarantor shall
fail (subject to any applicable grace period) to comply with
or to perform any applicable provision of the Guaranty, or any
Guarantor (or any Person by, through or on behalf of such
Guarantor) shall contest in any manner the validity, binding
nature or enforceability of the Guaranty with respect to such
Guarantor; or
(xvi) any Collateral Document shall cease to be full force
and effect with respect to the Company or any Guarantor (other
than as a result of a transaction permitted hereunder), the
Company or any Guarantor shall fail (subject to any applicable
grace period) to comply with or to perform any applicable
provision of any Collateral Document to which such entity is a
party, or the Company or any Guarantor (or any Person by,
through or on behalf of the Company or such Guarantor) shall
contest in any manner the validity, binding nature or
enforceability of any Collateral Document, or any Collateral
Document shall cease to be effective to ▇▇▇▇▇ ▇ ▇▇▇▇ on the
collateral described therein with the priority purported to be
created thereby; or
(xvii) any Lien created by any of the Collateral Documents
shall at any time fail to constitute a valid and perfected
Lien on all of the collateral purported to be secured thereby,
subject to no prior or equal Lien (other than Liens expressly
permitted by paragraph 6A(1) hereunder), or the Company or any
Subsidiary shall so assert in writing; or
(xviii) the Lenders (as defined in the BA Agreements)
shall at any time refuse to make revolving loans available to
the Company thereunder when requested by the Company; or
(xix) the Company shall, on any date, not have in effect a
BA Agreement for a revolving loan facility to the Company in
the amount of at least $250,000,000 for a period expiring at
least 6 months after such date; or
(xx) the Company fails to furnish to you and each Other
Purchaser by 5:00 pm (New York time) on Monday, April 17, 2000
the audited consolidated
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financial statements of the Company and its Subsidiaries as at
December 31, 1999 and consolidated statements of operations
and cash flows and a consolidated statement of capital stock
and retained earnings of the Company and its Subsidiaries for
the year ended December 31, 1999, all reported by ▇▇▇▇▇ &
Young without material qualification and in a manner
acceptable to the Required Holders,
then (a) if such event is an Event of Default specified in clause (i) or (ii) of
this paragraph 7A, any holder of any Note may at its option during the
continuance of such Event of Default, by notice in writing to the Company,
declare all of the Notes held by such holder to be, and all of the Notes held by
such holder shall thereupon be and become, immediately due and payable at par
together with interest accrued thereon and together with, to the full extent
permitted by applicable law, the Make-Whole Amount, if any, with respect to such
Notes, without presentment, demand, protest or notice of any kind, all of which
are hereby waived by the Company, (b) if such event is an Event of Default
specified in clause (vii), (viii), (ix), (x) or (xi) of this paragraph 7A with
respect to the Company, all of the Notes at the time outstanding shall
automatically become immediately due and payable together with interest accrued
thereon and together with, to the full extent permitted by applicable law, the
Make-Whole Amount, if any, with respect to each Note, without presentment,
demand, protest or notice of any kind, all of which are hereby waived by the
Company, and (c) with respect to any other event constituting an Event of
Default, the Majority Holder(s) of the Notes may at its or their option during
the continuance of such Event of Default, by notice in writing to the Company,
declare all of the Notes to be, and all of the Notes shall thereupon be and
become, immediately due and payable together with interest accrued thereon and
together with, to the full extent permitted by applicable law, the Make-Whole
Amount, if any, with respect to each Note, without presentment, demand, protest
or notice of any kind, all of which are hereby waived by the Company. The
Company acknowledges, and the parties hereto agree, that each holder of a Note
has the right to maintain its investment in the Notes free from repayment by the
Company (except as herein specifically provided for) and that the provision for
payment of a Make-Whole Amount by the Company in the event that the Notes are
prepaid or are accelerated as a result of an Event of Default, is intended to
provide compensation for the deprivation of such right under such circumstances.
7B. RESCISSION OF ACCELERATION. At any time after any or all
of the Notes shall have been declared immediately due and payable pursuant to
paragraph 7A(a) or (c), the Majority Holder(s) of the Notes may, by notice in
writing to the Company, rescind and annul such declaration and its consequences
if (i) the Company shall have paid all overdue interest on the Notes, the
principal of and Make-Whole Amount, if any, payable with respect to any Notes
which have become due otherwise than by reason of such declaration, and interest
on such overdue interest and overdue principal and Make-Whole Amount at the rate
specified in the Notes, (ii) the Company shall not have paid any amounts which
have become due solely by reason of such declaration, (iii) all Events of
Default and Defaults, other than non-payment of amounts which have become due
solely by reason of such declaration, shall have been cured or waived pursuant
to paragraph 15 or to the satisfaction (in their sole discretion) of the
Majority Holders, and (iv) no judgment or decree shall have been entered for the
payment of any amounts due pursuant to the Notes or this Agreement. No such
rescission or annulment shall extend to or affect any subsequent Event of
Default or Default or impair any right arising therefrom.
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7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note
shall be declared immediately due and payable pursuant to paragraph 7A or any
such declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
at the time outstanding.
7D. OTHER REMEDIES. If any Event of Default or Default shall
occur and be continuing, the holder of any Note may proceed to protect and
enforce its rights under this Agreement and such Note by exercising such
remedies as are available to such holder in respect thereof under applicable
law, either by suit in equity or by action at law, or both, whether for specific
performance of any covenant or other agreement contained in this Agreement or in
aid of the exercise of any power granted in this Agreement. No remedy conferred
in this Agreement upon the holder of any Note is intended to be exclusive of any
other remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.
7E. NO CURE OF DEFAULT BY APPLICATION OF COLLATERAL.
Notwithstanding anything in this Agreement or any other Note Documents to the
contrary, it is understood that if the Company shall fail to pay any amount
payable hereunder or thereunder when due and an Event of Default described in
paragraph 7A shall have occurred as a result thereof, such Event of Default
shall continue to exist (and shall not be deemed to be cured) notwithstanding
any repayment of such amount as a result of the application of any proceeds
realized from the sale or disposition of any collateral described in any of the
Collateral Documents.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. THE COMPANY
REPRESENTS, COVENANTS AND WARRANTS AS FOLLOWS:
8A. ORGANIZATION; QUALIFICATIONS; CORPORATE POWER. The Company
is a corporation duly organized and existing in good standing under the laws of
the State of Delaware, each Subsidiary is duly organized and existing in good
standing under the laws of the jurisdiction in which it is formed and the
Company and each of its Subsidiaries is duly qualified as a foreign corporation
or entity and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions in which the
failure to be so qualified could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The Company has and
each Subsidiary has the power to own their respective properties and to carry on
their respective businesses as now being conducted. No Subsidiary has
outstanding any shares of stock of a class which has priority over any other
class as to dividends or in liquidation (except as otherwise disclosed on
Schedule 8A). Each of the Company and each Subsidiary has the power and
authority to execute and deliver this Agreement, the Other Agreements, the
Guaranty, the Collateral Documents, the Notes and all other Note Documents to
which it is a party and to perform the provisions hereof and thereof.
8B. AUTHORIZATION, ETC. This Agreement, the Other Agreements,
the Guaranty, the Collateral Documents, the Notes and all other Note Documents
have been duly authorized by all necessary action on the part of the Company and
each Subsidiary party thereto and this Agreement, the Other Agreements, the
Guaranty, the Collateral Documents and all other Note Documents constitute, and
upon execution and delivery thereof each Note will constitute, a legal, valid
and binding obligation of the Company and each Subsidiary party thereto
enforceable
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against the Company and each such Subsidiary in accordance with its terms,
except as such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
8C. DISCLOSURE. The Company, through its agent, ▇▇▇▇▇▇▇ ▇▇▇▇▇
& Company, has delivered to you and each Other Purchaser a copy of a Private
Placement Memorandum, dated July 1998 (the "MEMORANDUM"), relating to the
transactions contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal properties
of the Company and its Subsidiaries. The Memorandum, the documents, certificates
or other writings delivered to you by or on behalf of the Company in connection
with the transactions contemplated hereby and the financial statements provided
pursuant to paragraph 8E, taken as a whole, do not contain any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under which they
were made. Except as disclosed in the Memorandum or as expressly described in
Schedule 8C, or in one of the documents, certificates or other writings
identified therein, or in the financial statements provided pursuant to
paragraph 8E, since December 31, 1999, there has been no change in the financial
condition, operations, business, properties or prospects of the Company or any
Subsidiary except changes that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. There is no fact known
to the Company that could reasonably be expected to have a Material Adverse
Effect that has not been set forth herein or in the Memorandum or in the other
documents, certificates and other writings delivered to you by or on behalf of
the Company specifically for use in connection with the transactions
contemplated hereby.
8D. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES;
AFFILIATES. (a) Schedule 8D contains complete and correct lists (i) of the
Company's Subsidiaries, showing, as to each Subsidiary, the correct name
thereof, the jurisdiction of its organization, the percentage of shares of each
class of its capital stock or similar equity interests outstanding owned by the
Company and each other Subsidiary, (ii) of the Company's Affiliates, other than
Subsidiaries, and (iii) of the Company's directors and senior officers.
(b) All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in Schedule 8D as being owned by the
Company and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another Subsidiary free and clear
of any Lien (except as otherwise disclosed in Schedule 8D).
(c) No Subsidiary is a party to, or otherwise subject to any
legal restriction or any agreement (other than this Agreement, the agreements
listed on Schedule 8D and customary limitations imposed by corporate law
statutes) restricting the ability of such Subsidiary to pay dividends out of
profits or make any other similar distributions of profits to the Company or any
of its Subsidiaries that owns outstanding shares of capital stock or similar
equity interests of such Subsidiary.
(d) The Subsidiaries that are parties to the Guaranty and the
Security Agreement constitute all of the Subsidiaries of the Company, other than
the Inactive
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Subsidiaries, TruServ Specialty Company, LLC and the Foreign Subsidiaries (other
than, in the case of the Guaranty only, ▇▇▇▇▇▇ Canada Hardware and Variety
Company, Inc.). The Company has pledged, pursuant to the Pledge Agreement, all
of the capital stock of each Subsidiary, other than TruServ Canada Cooperative
Inc. and TruServ Specialty Company, LLC and other than 35% of the capital stock
of each Foreign Subsidiary (other than ▇▇▇▇▇▇ Canada Hardware and Variety
Company, Inc.).
8E. FINANCIAL STATEMENTS. (a) The Company has furnished you
and each Other Purchaser of any Note with the following financial statements,
identified by a Senior Financial Officer of the Company: (i) a consolidated
balance sheet of the Company and its Subsidiaries as at fiscal year end in each
of the three fiscal years of the Company most recently completed prior to the
date as of which this representation is made or repeated to such Purchaser
(other than fiscal years completed within 90 days prior to such date for which
audited financial statements have not been released) and consolidated statements
of operations and cash flows and a consolidated statement of capital stock and
retained earnings of the Company and its Subsidiaries for each such year, all
reported on by Ernst & Young (or any independent public accounting firm of
recognized national standing) and (ii) a consolidated balance sheet of the
Company and its Subsidiaries as at the end of the quarterly period (if any) most
recently completed prior to such date and after the end of such fiscal year
(other than quarterly periods completed within 60 days prior to such date for
which financial statements have not been released) and the comparable quarterly
period in the preceding fiscal year and consolidated statements of operations
and cash flows and a consolidated statement of capital stock and retained
earnings for the periods from the beginning of the fiscal years in which such
quarterly periods are included to the end of such quarterly periods, prepared by
the Company. Such financial statements (including any related schedules and/or
notes) are true and correct in all material respects (subject, as to interim
statements, to changes resulting from audits and year-end adjustments), have
been prepared in accordance with GAAP consistently followed throughout the
periods involved and show all liabilities, direct and contingent, of the Company
and its Subsidiaries required to be shown in accordance with such principles.
The balance sheets fairly present the condition of the Company and its
Subsidiaries as at the dates thereof, and the statements of operations, capital
stock and retained earnings and cash flows fairly present the results of the
operations of the Company and its Subsidiaries and their cash flows for the
periods indicated.
(b) There has been no material adverse change in the business,
operations, condition (financial or otherwise), assets, properties or prospects
of the Company and its Subsidiaries taken as a whole since the end of the most
recent fiscal year for which such audited financial statements have been
furnished. The projections relating to the Company and its Subsidiaries for the
three-year period 2000 through 2002, a copy of which is attached hereto as
Schedule 8E, disclose all material assumptions used in formulating such
projections. The Company is not aware of any facts that (individually or in the
aggregate) would result in any material change in any of such projections. Such
projections have been prepared on the basis of the assumptions stated therein
(all of which were made by the Company in good faith), and reflect the
reasonable estimates of the Company of the financial condition, results of
operations and other information projected therein.
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(c) Notwithstanding the provisions of paragraph 8E(a) and (b),
the representations made by the Company in paragraph 8E(a)(i) as at the
Effective Date only shall refer to the audited consolidated financial statements
of the Company and its Subsidiaries as at December 31, 1998, and the
representations made by the Company in paragraph 8E(a)(ii) as at the Effective
Date only shall refer to the unaudited consolidated financial statements of the
Company and its Subsidiaries as at September 30, 1999, copies of each of which
have been delivered to each Purchaser.
8F. ACTIONS PENDING. There is no action, suit, investigation
or proceeding pending or, to the knowledge of the Company, threatened against
the Company or any of its Subsidiaries, or any properties or rights of the
Company or any of its Subsidiaries, by or before any court, arbitrator or
administrative or governmental body which could be reasonably expected to have a
Material Adverse Effect.
8G. OUTSTANDING DEBT. Neither the Company nor any of its
Subsidiaries has outstanding any Debt except as permitted by paragraph 6A(2).
There exists no default under the provisions of any instrument evidencing Debt
of the Company or any of its Subsidiaries in an amount greater than $250,000 or
of any agreement relating thereto (it being understood that the representation
and warranty in this sentence is made after giving effect to the effectiveness
of this Agreement and the amendments referred to in paragraph 3A(xvi)). All
outstanding Funded Debt and all outstanding Current Debt of the Company and its
Subsidiaries are listed on and described in reasonable detail on Schedule 8G
(including, without limitation, maturity dates, scheduled prepayments, mandatory
prepayments, interest rates, the extent (if any) to which such Debt is secured
and, if secured, a brief description of the nature of the collateral.)
8H. TITLE TO PROPERTIES. The Company has and each of its
Subsidiaries has good and marketable title to its respective real properties
(other than properties which it leases) and good title to all of its other
respective properties and assets, including the properties and assets reflected
in the most recent audited balance sheet referred to in paragraph 8E (other than
properties and assets disposed of in the ordinary course of business), subject
to no Lien of any kind except Liens permitted by paragraph 6A(1). All leases
necessary in any material respect for the conduct of the respective businesses
of the Company and its Subsidiaries are valid and subsisting and are in full
force and effect. The security interests granted under the Security Agreement by
the Company and its Subsidiaries (the "SECURITY INTERESTS") are granted as
security only and shall not subject the Collateral Agent or any holder of the
Notes to, or transfer or in any way affect or modify, any obligation or
liability of the Company or any other Debtor (as defined in the Security
Agreement) with respect to any of the Collateral (as defined in the Security
Agreement) or any transaction in connection therewith. The Security Interests
constitute valid security interests under the Uniform Commercial Code as in
effect from time to time in the State of Illinois ("UCC") securing the
Liabilities (as defined in the Security Agreement). The Security Interests
constitute perfected security interests in the Collateral (as defined in the
Security Agreement) (except inventory in transit) to the extent that a security
interest therein may be perfected by filing pursuant to the UCC, prior to all
other liens, claims and rights of others therein except for Permitted Liens (as
defined in the Security Agreement).
8I. TAXES. The Company has and each of its Subsidiaries has
filed all federal, state and other tax returns which are required to be filed,
and each has paid all taxes as shown on
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such returns and on all assessments received by it to the extent that such taxes
have become due, except such unfiled returns and unpaid taxes (i) as are being
contested in good faith by appropriate proceedings for which adequate reserves
have been established in accordance with GAAP or (ii) the non-filing or
non-payment of which (a) could not be reasonably expected to have a Material
Adverse Effect and (b) does not result in the creation of any Lien other than
Liens permitted by paragraph 6A(1)(i).
8J. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the
Company nor any of its Subsidiaries is a party to any contract or agreement or
subject to any charter or other corporate restriction which could have a
Material Adverse Effect. Neither the execution nor delivery of this Agreement,
the Other Agreements, the Guaranty, the Collateral Documents, the Notes or any
of the other Note Documents, nor the offering, issuance and sale of the Notes,
nor fulfillment of nor compliance with the terms and provisions hereof and
thereof and of the Notes will conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under, or result in any
violation of, or result in the creation of any Lien (other than the Liens
created by the Collateral Documents) upon any of the properties or assets of the
Company or any of its Subsidiaries pursuant to, the charter or by-laws of the
Company or any of its Subsidiaries, any award of any arbitrator or any agreement
(including any agreement with stockholders), instrument, order, judgment,
decree, statute, law, rule or regulation to which the Company or any of its
Subsidiaries is subject. Neither the Company nor any of its Subsidiaries is a
party to, or otherwise subject to any provision contained in, any instrument
evidencing Indebtedness of the Company or such Subsidiary, any agreement
relating thereto or any other contract or agreement (including its charter)
which limits the amount of, or otherwise imposes restrictions on the incurring
of, Debt of the Company of the type to be evidenced by the Notes except as set
forth in the agreements listed in Schedule 8J attached hereto (as such Schedule
8J may have been modified from time to time by written supplements thereto
delivered by the Company and accepted in writing by the Required Holders).
8K. OFFERING OF NOTES. Neither the Company nor any agent
acting on its behalf (including ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company) has, directly or
indirectly, offered the Notes or any similar security of the Company for sale
to, or solicited any offers to buy the Notes or any similar security of the
Company from, or otherwise approached or negotiated with respect thereto with,
any Person other than you, the Other Purchasers and not more than 86
Institutional Investors, each of which has been offered the Notes at a private
sale for investment. Neither the Company nor any agent acting on its behalf has
taken or will take any action which would subject the issuance or sale of the
Notes to the provisions of Section 5 of the Securities Act or to the provisions
of any securities or Blue Sky law of any applicable jurisdiction.
8L. USE OF PROCEEDS. The Company has applied the proceeds of
the sale of the Notes as set forth in Schedule 8L. None of the proceeds of the
sale of any Notes were or will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any "MARGIN
STOCK" as defined in Regulation U of the Board of Governors of the Federal
Reserve System (herein called "MARGIN STOCK") or for the purpose of maintaining,
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry any stock that is then currently a margin stock or for any other
purpose which might constitute the purchase of such Notes a "PURPOSE CREDIT"
within the meaning of such Regulation U. Neither the Company nor any agent
acting on its behalf (including ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
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Company) has taken or will take any action which might cause this Agreement or
the Notes to violate Regulation U, Regulation T, Regulation X or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
the Exchange Act, in each case as in effect now or as the same may hereafter be
in effect.
8M. ERISA. No contribution required to have been made to any
Plan by the Company or any Subsidiary under the provisions of the Plan or ERISA
remains unpaid and no accumulated funding deficiency (as defined in section 302
of ERISA and section 412 of the Code), whether or not waived, exists with
respect to any Plan (other than a Multiemployer Plan). No liability to the PBGC
has been or is expected by the Company or any ERISA Affiliate to be incurred
with respect to any Plan (other than a Multiemployer Plan) by the Company, any
Subsidiary or any ERISA Affiliate which has caused or could cause a Material
Adverse Effect. None of the Company, any Subsidiary or any ERISA Affiliate has
incurred or presently expects to incur any withdrawal liability under Title IV
of ERISA with respect to any Multiemployer Plan which has caused or could cause
a Material Adverse Effect. The execution and delivery of this Agreement and the
issuance and sale of the Notes will be exempt from or will not involve any
transaction which is subject to the prohibitions of section 406 of ERISA and
will not involve any transaction in connection with which a penalty could be
imposed under section 502(i) of ERISA or a tax could be imposed pursuant to
section 4975 of the Code. The representation by the Company in the next
preceding sentence is made in reliance upon and subject to the accuracy of the
representation of you in paragraph 9B as to the source of funds used by you to
purchase any Notes.
8N. GOVERNMENTAL CONSENT. Neither the nature of the Company or
of any Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes is such as to require any authorization, consent, approval, exemption or
any action by or notice to or filing with any court or administrative or
governmental body (other than routine filings after the Effective Date for any
Notes with the Securities and Exchange Commission and/or state Blue Sky
authorities) in connection with the execution and delivery of this Agreement,
the offering, issuance, sale or delivery of the Notes or fulfillment of or
compliance with the terms and provisions hereof or of the Notes.
8O. ENVIRONMENTAL COMPLIANCE. The Company and its Subsidiaries
and all of their respective properties and facilities have complied at all times
and in all respects with all Environmental Laws, except, in any such case, where
failure to so comply could not reasonably be expected to result in a Material
Adverse Effect.
8P. SECTION 144A. The Notes are not of the same class as
securities, if any, of the Company listed on a national securities exchange
registered under Section 6 of the Exchange Act or quoted in a U.S. automated
inter-dealer quotation system.
8Q. STATUS UNDER CERTAIN STATUTES. Neither the Company nor any
Subsidiary is subject to regulation under the Investment Company Act of 1940, as
amended, the Public Utility Holding Company Act of 1935, as amended, the
Interstate Commerce Act, as amended, or the Federal Power Act, as amended.
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8R. PRIORITY OF NOTES; BENEFITED OBLIGATIONS. The Notes
constitute "SUPERIOR INDEBTEDNESS" as such term is defined in the Company's
Promissory (subordinated) Notes, the form of which is attached hereto as Exhibit
D and the Subordinated Debt is subordinated to the Indebtedness owing from time
to time by the Company to the holders of the Notes in connection with this
Agreement. Schedule 8R lists, as of the date hereof, the principal or face
amount of each of the Benefited Obligations held by a Benefited Party and the
amount thereof constituting First Tier Benefited Obligations.
8S. LICENSES, PERMITS, ETC.
Except as disclosed in Schedule 8S,
(i) the Company and its Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents,
copyrights, service marks, trademarks and trade names, or
rights thereto, that individually or in the aggregate are
Material, without known conflict with the rights of others;
(ii) to the best knowledge of the Company, no product of
the Company infringes in any material respect any license,
permit, franchise, authorization, patent, copyright, service
mark, trademark, trade name or other right owned by any other
Person; and
(iii) to the best knowledge of the Company, there is no
Material violation by any Person of any right of the Company
or any of its Subsidiaries with respect to any patent,
copyright, service mark, trademark, trade name or other right
owned or used by the Company or any of its Subsidiaries.
8T. YEAR 2000 PROBLEM. The Company and its Subsidiaries (a)
have reviewed the areas within their business and operations which could be
adversely affected by, and have developed or are developing a program to address
on a timely basis, the Year 2000 Problem and (b) have made appropriate inquiries
as to the effect the Year 2000 Problem will have on their material suppliers and
customers. Based on such a review, program and inquiries, the Company reasonably
believes that the Year 2000 Problem will not have a Material Adverse Effect.
9. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
9A. PURCHASE FOR INVESTMENT. You represent that you have
purchased the Note for your own account or for one or more separate accounts
maintained by you or for the account of one or more pension, trust or commingled
pension trust funds or for the account of one or more investors who are
accredited investors within the meaning of Regulation D of the Securities Act
for whom you are acting as investment manager, agent or investment advisor and
not with a view to the distribution thereof, provided that the disposition of
your or their property shall at all times be within your or their control. You
understand that the Notes have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the Securities
Act of if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law, and that the Company is not required to register the Notes.
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9B. SOURCE OF FUNDS. You represent that at least one of the
following statements is an accurate representation as to each source of funds (a
"SOURCE") used by you to pay the purchase price of the Notes purchased by you
hereunder:
(i) if you are an insurance company, the Source is your
"INSURANCE COMPANY GENERAL ACCOUNT" as defined in Department
of Labor Prohibited Transaction Exemption PTE 95-60 (60 FR
35925), July 12, 1995 (hereinafter "PTE 95-60"), and in
respect thereof you represent that there is no "EMPLOYEE
BENEFIT PLAN" (as defined in section 3(3) of ERISA and section
4975(e)(1) of the Code) established or maintained by the
Company (and affiliates thereof as defined in section V(a)(1)
of the PTE 95-60) with respect to which the amount of general
account reserves and liabilities of all contracts held by or
on behalf of such plan exceed ten percent (10%) of the total
reserves and liabilities of such general account (exclusive of
separate account liabilities) plus surplus, as set forth in
the National Association of Insurance Commissioners' Annual
Statement filed with your state of domicile; or
(ii) the Source is either (i) an insurance company pooled
separate account, within the meaning of Prohibited Transaction
Exemption ("PTE") 90-1 (issued January 29, 1990), or (ii) a
bank collective investment fund, within the meaning of the PTE
91-38 (issued July 12, 1991) and, except as you have disclosed
to the Company in writing pursuant to this clause (ii), no
employee benefit plan or group of plans maintained by the same
employer or employee organization beneficially owns more than
10% of all assets allocated to such pooled separate account or
collective investment fund; or
(iii) the Source constitutes assets of an "INVESTMENT
FUND" (within the meaning of Part V of the QPAM Exemption)
managed by a "QUALIFIED PROFESSIONAL ASSET MANAGER" or "QPAM"
(within the meaning of Part V of the QPAM Exemption), no
employee benefit plan's assets that are included in such
investment fund, when combined with the assets of all other
employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section
V(c)(1) of the QPAM Exemption) of such employer or by the same
employee organization and managed by such QPAM, exceed 20% of
the total client assets managed by such QPAM, the conditions
of Part I(c) and (g) of the QPAM Exemption are satisfied,
neither the QPAM nor a Person controlling or controlled by the
QPAM (applying the definition of "CONTROL" in Section V(e) of
the QPAM Exemption) owns a 5% or more interest in the Company
and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such
investment fund have been disclosed to the Company in writing
pursuant to this clause (iii); or
(iv) the Source is a governmental plan; or
(v) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more
employee benefit plans, each of which has been identified to
the Company in writing pursuant to this clause (v); or
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(vi) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of
ERISA.
As used in this paragraph 9B, the terms "EMPLOYEE BENEFIT PLAN", "GOVERNMENTAL
PLAN", "PARTY IN INTEREST" and "SEPARATE ACCOUNT" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
10. DEFINITIONS; ACCOUNTING MATTERS. For the purpose of this
Agreement, the terms defined in paragraph 10A (or within the text of any other
paragraph) shall have the respective meanings specified therein and all
accounting matters shall be subject to determination as provided in paragraph
10B.
10A. DEFINED TERMS.
"AFFILIATE" shall mean, at any time, and with respect to any
Person, any other Person that at such time directly or indirectly through one or
more intermediaries Controls, or is Controlled by, or is under common Control
with, such first Person. As used in this definition, "CONTROL" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, membership interests, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "AFFILIATE"
is a reference to an Affiliate of the Company.
"APPLICABLE INTEREST RATE" shall have the meaning specified in
paragraph 1A.
"ASSET BASE" shall mean, as of the last day of any fiscal
month, the total of (i) 85% of the remainder of (A) the daily average for such
month of the amount of "ACCOUNTS AND NOTES RECEIVABLE, NET" as would be shown on
the Company's consolidated balance sheet minus (B) the sum of (x) all Debt
payable to members of the Company and (y) the then outstanding amount of all
Indebtedness secured by a Lien on any such Accounts and notes receivable (other
than Liens in favor of the Collateral Agent) plus (ii) 50% of the remainder of
(A) the amount, based on the lower of cost or market value, of "INVENTORIES" as
would be shown on the Company's consolidated balance sheet as of the last day of
such month minus (B) the then outstanding amount of all Indebtedness secured by
a Lien on any such Inventories (other than Liens in favor of the Collateral
Agent) plus (iii) the remainder of (x) the Specified Percentage (as defined
below) of the amount of "PROPERTIES, LESS ACCUMULATED DEPRECIATION" as would be
shown on the Company's consolidated balance sheet as of the last day of such
month minus (y) the then outstanding amount of all Indebtedness secured by a
Lien on any such properties (other than Liens in favor of the Collateral Agent);
provided that the "Accounts and notes receivable", "Inventories" and
"Properties" of ▇▇▇▇▇▇ Canada Hardware and Variety Company Inc. and of TruServ
Canada Cooperative Inc. shall be excluded from clauses (i), (ii) and (iii)
above; and provided further that the amount determined pursuant to clause (ii)
(the "INVENTORY AMOUNT") shall be reduced by the amount (if any) necessary so
that the Inventory Amount is not more than 45% of the total of clauses (i), (ii)
and (iii). For purposes of the foregoing, "SPECIFIED PERCENTAGE" means (a) from
January 1, 2000 through December 31, 2000, 40%, (b) from January 1, 2001 through
December 31, 2001, 30%, and (c) thereafter, 20%.
"ASSET SALE" shall have the meaning specified in paragraph
6A(3)(i).
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"ATTORNEY COSTS" shall mean all fees and charges of any law
firm or other external counsel, and, without duplication, the allocated costs of
internal legal services and all disbursements of internal counsel.
"AUTHORIZED OFFICER" shall mean, in the case of the Company,
its chief executive officer, its chief financial officer, its chief operating
officer or any other officer of the Company designated as an "AUTHORIZED
OFFICER" of the Company for the purpose of this Agreement and the other Note
Documents in an Officer's Certificate executed by the Company's chief executive
officer or chief financial officer and delivered to the holders of the Notes.
Any action taken under this Agreement or any other Note Document on behalf of
the Company by any individual who on or after the date of this Agreement shall
have been an Authorized Officer of the Company shall be binding on the Company
even though such individual shall have ceased to be an Authorized Officer of the
Company.
"BA CREDIT AGREEMENTS" shall mean (i) the Amended and Restated
Credit Agreement dated as of April 14, 2000 among the Company, Bank of America,
N.A., as agent, and the various financial institutions party thereto, as amended
from time to time, and (ii) any refinancings, renewals or replacements of the
credit agreement referred to in clause (i) above.
"BANKRUPTCY LAW" shall have the meaning specified in clause
(viii) of paragraph 7A.
"BENEFITED OBLIGATIONS" shall have the meaning specified in
the Intercreditor Agreement.
"BENEFITED PARTIES" shall have the meaning specified in the
Intercreditor Agreement.
"BUSINESS DAY" shall mean any day other than (i) a Saturday or
a Sunday and (ii) a day on which commercial banks in New York City or in the
State of Illinois are required or authorized to be closed.
"CAPITALIZED LEASE OBLIGATION" shall mean any rental
obligation which, under GAAP, is or will be required to be capitalized on the
books of the Company or any Subsidiary, taken at the amount thereof accounted
for as indebtedness (net of interest expenses) in accordance with such
principles.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"COLLATERAL AGENT" shall mean Bank of America, N.A., a
national banking association, in its capacity as collateral agent under the
Intercreditor Agreement and the Collateral Documents, together with any
successor thereto in such capacity.
"COLLATERAL DOCUMENTS" shall mean the Security Agreement, the
Trademark Security Agreement, the Pledge Agreement, each Mortgage and any other
document or
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instrument pursuant to which the Company or any Guarantor grants to the
Collateral Agent, for the benefit of the Benefited Parties, a security interest
in any of its property to secure the payment of any of the Benefited
Obligations, as such documents are amended from time to time in accordance with
their respective terms and the terms of the Intercreditor Agreement.
"CONFIDENTIAL INFORMATION" shall have the meaning specified in
paragraph 18.
"CONSOLIDATED CAPITALIZATION" shall mean, as of the time of
any determination, the sum of (i) Consolidated Net Worth and (ii) Funded Debt of
the Company and its Subsidiaries on a consolidated basis.
"CONSOLIDATED NET EARNINGS" shall mean with respect to any
period:
(i) consolidated gross revenues of the Company and its
Subsidiaries, minus
(ii) all operating and non-operating expenses of the
Company and its Subsidiaries including all charges of a proper
character (including current and deferred taxes on income,
provision for taxes on unremitted foreign earnings which are
included in gross revenues, and current additions to reserves
and merger integration costs), provided that it is agreed and
understood that the following shall not be included in the
calculation of consolidated gross revenues of the Company and
its Subsidiaries:
(a) any gains (net of expenses and taxes applicable
thereto) in excess of losses resulting from the sale,
conversion or other disposition of capital assets (i.e.,
assets other than current assets);
(b) any gains resulting from the appraised write-up of
assets;
(c) any equity of the Company or any Subsidiary in the
unremitted earnings of any corporation which is not a
Subsidiary;
(d) any earnings of any Person acquired by the Company or
any Subsidiary through purchase, merger or consolidation or
otherwise for any year prior to the year of acquisition; or
(e) any deferred credit representing the excess of equity
in any Subsidiary at the date of acquisition over the cost of
the investment in the Subsidiary,
all determined in accordance with GAAP provided that, to the extent that amounts
are deducted from Consolidated Net Earnings during the Company's 1999 fiscal
year as a result of SOP 98-5, "REPORTING THE COSTS OF START-UP ACTIVITIES",
issued by the American Institute of Certified Public Accountants ("SOP 98-5"),
in excess of the amount that would have been deducted absent SOP 98-5, such
excess shall be added back to Consolidated Net Earnings.
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"CONSOLIDATED NET WORTH" shall mean, as of any date of
determination, the sum of (i) the par value (or value stated on the books of the
Company) of the capital stock of all classes of the Company, plus (or minus in
the case of a surplus deficit) (ii) the amount of the consolidated surplus,
whether capital or earned, of the Company and its Subsidiaries, all determined
in accordance with GAAP.
"CONSOLIDATED TOTAL ASSETS" shall mean the consolidated assets
of the Company and its Subsidiaries calculated in accordance with GAAP.
"CONTRACTUAL OBLIGATION" shall mean, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other instrument,
document or agreement to which such Person is a party or by which it or any of
its property is bound.
"CURRENT DEBT" shall mean, with respect to any Person, all
Indebtedness of such Person for borrowed money which by its terms or by the
terms of any instrument or agreement relating thereto matures on demand or
within one year from the date of the creation thereof and is not directly or
indirectly renewable or extendible at the option of the debtor to a date more
than one year from the date of the creation thereof, provided that (i)
borrowings under any revolving credit facility (including, without limitation,
the BA Credit Agreements) shall constitute Current Debt and (ii) Guarantees of
Indebtedness of Company members in an aggregate amount not to exceed $20,000,000
shall not constitute Current Debt, so long as no event has occurred the result
of which would be to cause or permit such Indebtedness to become due prior to
any stated maturity.
"DEBT" shall mean Current Debt and Funded Debt.
"EBITDA" shall mean, for any period, Consolidated Net Earnings
for such period plus, to the extent deducted in computing such Consolidated Net
Earnings, interest expense, taxes, depreciation and amortization.
"EFFECTIVE DATE" shall have the meaning specified in paragraph
3.
"ENVIRONMENTAL LAWS" shall mean all federal, state, local and
foreign laws relating to pollution or protection of the environment, including
laws relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment (including without limitation ambient
air, surface water, ground water, or land), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes, and any and all regulations, codes,
plans, orders, decrees, judgments, injunctions, notices or demand letters
issued, entered, promulgated or approved thereunder.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA AFFILIATE" shall mean any corporation which is a member
of the same controlled group of corporations as the Company within the meaning
of section 414(b) of the
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Code, or any trade or business which is under common control with the Company
within the meaning of section 414(c) of the Code.
"EVENT OF DEFAULT" shall mean any of the events specified in
paragraph 7A, provided that there has been satisfied any requirement in
connection with such event for the giving of notice, or the lapse of time, or
the happening of any further condition, event or act, and "DEFAULT" shall mean
any of such events, whether or not any such requirement has been satisfied.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, and the regulations promulgated thereunder.
"FINANCING AGREEMENT" shall have the meaning specified in the
Intercreditor Agreement.
"FIRST TIER BENEFITED OBLIGATIONS" shall have the meaning
specified in the Intercreditor Agreement.
"FIXED CHARGE COVERAGE RATIO" shall mean, as of the last day
of any fiscal quarter, the ratio of:
(a) the sum, for the period of four consecutive fiscal
quarters ending on such day, of (i) Consolidated Net Earnings
plus (ii) to the extent deducted in determining such
Consolidated Net Earnings, interest expense, taxes, operating
lease expense, depreciation and amortization plus (iii) for
the period of four fiscal quarters ending March 31, 2000, June
30, 2000 and September 30, 2000, Special 1999 Charges (to the
extent taken in such period), plus (iv) for the period of four
fiscal quarters ending March 31, 2000 and June 30, 2000,
Special A/P Charges (to the extent taken in such period),
to
(b) the sum for such period of (i) operating lease expense
and (ii) interest expense;
each as determined for the Company and its Subsidiaries on a consolidated basis.
"FOREIGN SUBSIDIARY" shall mean each Subsidiary of the Company
which is organized under the laws of any jurisdiction other than, and which is
conducting the majority of its business outside of, the United States or any
state thereof.
"FUNDED DEBT" shall mean and include, (i) any obligation
payable more than one year from the date of creation thereof which under GAAP is
shown on a balance sheet as a liability (including Capitalized Lease Obligations
but excluding reserves for deferred income taxes and other reserves to the
extent that such reserves do not constitute an obligation and excluding
borrowings under any revolving credit facility (including, without limitation,
any BA Credit Agreement)); (ii) indebtedness payable more than one year from the
date of creation thereof which is secured by any Lien on property owned by the
Company or any Subsidiary; and
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(iii) Guarantees, provided that Guarantees of Indebtedness of Company members in
an aggregate amount not to exceed $20,000,000 shall not constitute Funded Debt,
so long as no event has occurred the result of which would be to cause or permit
such Indebtedness to become due prior to any stated maturity.
"GAAP" shall mean United States generally accepted accounting
principles.
"GOVERNMENT AUTHORITY" shall mean any nation or government,
any state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"GUARANTEE" shall mean, with respect to any Person, any direct
or indirect liability, contingent or otherwise, of such Person with respect to
any Indebtedness, lease, dividend or other obligation of another, including,
without limitation, any such obligation directly or indirectly guaranteed,
endorsed (other than for collection or deposit in the ordinary course of
business) or discounted or sold with recourse by such Person, or in respect of
which such Person is otherwise directly or indirectly liable, including, without
limitation, any such obligation in effect guaranteed by such Person through any
agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain the solvency or
any balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or for
any transportation or services regardless of the non-delivery or non-furnishing
thereof, in any such case if the purpose or intent of such agreement is to
provide assurance that such obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected against loss in respect thereof. The amount of any
Guarantee shall be equal to the outstanding principal amount of the obligation
guaranteed or such lesser amount to which the maximum exposure of the guarantor
shall have been specifically limited.
"GUARANTOR" shall mean, on any day, each Subsidiary that has
executed a counterpart of the Guaranty on or prior to that day (or is required
to execute a counterpart of the Guaranty on or prior to that day).
"GUARANTY" shall mean the Guaranty executed by various
Subsidiaries, substantially in the form of Exhibit F, as amended from time to
time in accordance with its terms and the terms of the Intercreditor Agreement.
"HAZARDOUS MATERIALS" means (a) any "hazardous substance" as
defined by CERCLA; (b) any "hazardous waste" or "petroleum," as defined by the
Resource Conservation and Recovery Act, as amended; (c) any petroleum product;
(d) any pollutant or contaminant or hazardous, dangerous or toxic chemical,
material or substance within the meaning of any other Environmental Law, as
amended or hereafter amended; (e) any radioactive material, including any
source, special nuclear or by-product material as defined at 42 U.S.C. 2011 et
seq., as
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amended or hereafter amended; or (f) any other toxic chemical, hazardous
substance, contaminant or pollutant, medical waste, infectious waste or
hazardous waste.
"INACTIVE SUBSIDIARY" means any Subsidiary which does not
actively conduct business and which has less than $100,000 of assets.
"INCLUDING" shall mean, unless the context clearly requires
otherwise, "including without limitation".
"INDEBTEDNESS" shall mean, with respect to any Person, without
duplication, (i) all items (excluding items of contingency reserves or of
reserves for deferred income taxes) which in accordance with GAAP would be
included in determining total liabilities as shown on the liability side of a
balance sheet of such Person as of the date on which Indebtedness is to be
determined, (ii) all indebtedness secured by any Lien on any property or asset
owned or held by such Person subject thereto, whether or not the indebtedness
secured thereby shall have been assumed, and (iii) all indebtedness of others
with respect to which such Person has become liable by way of Guarantee.
"INSTITUTIONAL INVESTOR" shall mean (i) any original purchaser
of a Note (or any of its affiliates) or (ii) any insurance company, pension
fund, mutual fund, investment company, bank, savings bank, savings and loan
association, investment banking company, broker, dealer, trust company, or any
finance or credit company, any portfolio or any investment fund managed by any
of the foregoing, or any other institutional investor, and any nominee of the
foregoing. The term "INSTITUTIONAL INVESTOR" shall not include any competitor of
the Company or its Subsidiaries or any labor union with which the Company then
has a collective bargaining agreement; provided that it is understood and agreed
that no original purchaser of a Note (or any of its affiliates) shall be deemed
to be a competitor of the Company or any of its Subsidiaries for purposes of
this Agreement.
"INTERCREDITOR AGREEMENT" shall mean the Intercreditor
Agreement dated as of April 14, 2000 among the Agent, the Collateral Agent and
various other parties, substantially in the form of Exhibit G, as amended from
time to time in accordance with its terms.
"INVESTMENTS" shall mean any loan or advance to, or ownership,
purchase or acquisition of any security (including stock) or obligations of, or
any other interest in, or any capital contribution made to, any Person.
"LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, lien (statutory or otherwise) or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction) or any other type of preferential arrangement for the purpose,
or having the effect, of protecting a creditor against loss or securing the
payment or performance of an obligation.
"MAJORITY HOLDER(S)" shall mean the holder or holders of at
least 50.1% of the aggregate principal amount of the Notes from time to time
outstanding (exclusive of Notes then owned by the Company or any of its
Affiliates).
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"MATERIAL" means material in relation to the business,
operations, affairs, condition (financial or otherwise), assets, properties, or
prospects of the Company and its Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect
on (a) the business, operations, affairs, condition (financial or otherwise),
assets, properties or prospects of the Company and its Subsidiaries taken as a
whole, or (b) the ability of the Company or any Subsidiary to perform its
obligations under this Agreement, the Notes, the Other Agreements, the Guaranty,
the Collateral Documents or any other Note Documents, or (c) the validity or
enforceability of this Agreement, the Notes, the Other Agreements, the Guaranty,
the Collateral Documents or any other Note Documents.
"MEMORANDUM" shall have the meaning specified in paragraph 8C.
"MORTGAGE" shall mean a mortgage, deed of trust, leasehold
mortgage or similar instrument granting the Collateral Agent a Lien on real
property owned or leased by the Company or any Subsidiary (such Mortgage to be
in form and substance satisfactory to the Collateral Agent and the Majority
Holders).
"MULTIEMPLOYER PLAN" shall mean any Plan which is a
"MULTIEMPLOYER PLAN" (as such term is defined in section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS" shall mean, with respect to any Asset
Sale, the aggregate cash proceeds (including cash proceeds received by way of
deferred payment of principal pursuant to a note, installment receivable or
otherwise, but only as and when received) received by the Company or any
Subsidiary pursuant to such Asset Sale net of (i) the direct costs relating to
such Asset Sale (including sales commissions and legal, accounting and
investment banking fees), (ii) taxes paid or reasonably estimated by the Company
to be payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements) and (iii) amounts
required to be applied to the repayment of any Debt or lease obligations secured
by a Lien (other than Liens in favor of the Collateral Agent) on any asset
subject to such Asset Sale (if such Lien is permitted by paragraph 6A(1)).
"NOTE DOCUMENTS" shall mean this Agreement, the Other
Agreements, any Note, the Guaranty, the Intercreditor Agreement, the Collateral
Documents, and all other documents delivered to the Collateral Agent or any
holder of Notes in connection herewith.
"NOTES" shall have the meaning specified in paragraph 1A.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the
name of the Company by an Authorized Officer of the Company.
"ORIGINAL NPA" shall have the meaning specified in the
Recitals hereto.
"OVERDUE RATE" shall mean, for each day, a rate per annum
equal to the greater of (a) 12.60% and (b) the sum of 3.50% plus the Prime Rate
for such day.
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"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.
"PERSON" shall mean and include an individual, a partnership,
a limited liability company, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency
thereof.
"PLAN" shall mean any employee pension benefit plan (as such
term is defined in section 3 of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the Company or
any ERISA Affiliate.
"PLEDGE AGREEMENT" shall mean the Pledge Agreement among the
Company, various Subsidiaries of the Company and the Collateral Agent,
substantially in the form of Exhibit H, as amended from time to time in
accordance with its terms and the terms of the Intercreditor Agreement.
"PRIME RATE" shall mean the rate of interest publicly
announced by ▇▇▇▇▇▇ Guaranty Trust Company of New York in New York City from
time to time as its "BASE" or "PRIME" rate.
"PRUDENTIAL AGREEMENT" shall mean, collectively, (i) the
Amended and Restated Note Purchase and Private Shelf Agreement dated as of
November 13, 1997, among the Company and The Prudential Insurance Company of
America and certain of its affiliates ("PRUDENTIAL"), and (ii) the Note Purchase
Agreement dated as of April 13, 1992 between the Company and Prudential, each as
amended from time to time.
"PURCHASER'S ENVIRONMENTAL LIABILITY" shall mean 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 any Purchaser or any of
its respective affiliates, shareholders, directors, officers, employees or
agents in connection with or arising from:
(a) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment to which the Company or any of its Subsidiaries
may be subject;
(b) the Release by the Company or any of its Subsidiaries of
any Hazardous Material on, in, under or affecting all or any portion of any
property of the Company or any such Subsidiary, the groundwater, or any of the
surrounding areas;
(c) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real property
owned or operated by the Company or any of its Subsidiaries of any Hazardous
Material (including any losses, liabilities, damages, injuries, costs, expenses
or claims asserted or arising under any Environmental Law);
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(d) any misrepresentation, inaccuracy or breach of any
warranty or covenant, contained in or referred to in paragraph 5F or paragraph
80; or
(e) 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 Company or any of its Subsidiaries, or in connection
with any property owned or formerly owned by the Company or any of its
Subsidiaries.
"QPAM EXEMPTION" shall mean Prohibited Transaction Class
Exemption 84-14 issued by the United States Department of Labor.
"RELEASE" means a "release," as such term is defined in
CERCLA.
"REQUIRED HOLDER(S)" shall mean the holder or holders of at
least 66 2/3% of the aggregate principal amount of the Notes from time to time
outstanding (exclusive of Notes then owned by the Company or any of its
Affiliates).
"RESET DATE" shall mean the first date after the Effective
Date on which the Total Senior Debt to EBITDA Ratio has been below 3.00 to 1.00
for a period of four consecutive fiscal quarters.
"RESPONSIBLE OFFICER" shall mean the chief executive officer,
chief operating officer, chief financial officer or chief accounting officer of
the Company, the general counsel of the Company, or any other officer of the
Company involved principally in its financial administration or its
controllership function.
"RESTRICTED INVESTMENTS" shall mean any Investment prohibited
by paragraph 6B.
"RESTRICTED PAYMENT" shall have the meaning specified in
paragraph 6C.
"S&P" shall have the meaning specified in paragraph 1A.
"SECURED FUNDED DEBT" shall mean Funded Debt which is secured
by any Lien.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, and the regulations promulgated thereunder.
"SECURITY AGREEMENT" shall mean the Security Agreement among
the Company, various Subsidiaries and the Collateral Agent, substantially in the
form of Exhibit I, as amended from time to time in accordance with its terms and
the terms of the Intercreditor Agreement.
"SENIOR FINANCIAL OFFICER" shall mean the chief financial
officer, principal accounting officer, treasurer or controller of the Company.
"SENIOR FUNDED DEBT" shall mean Funded Debt of the Company or
any of its Subsidiaries on a consolidated basis which is not Subordinated Debt.
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"SOURCE" shall have the meaning set forth in paragraph 9B.
"SPECIAL A/P CHARGES" shall mean, at any time through (and
including) June 30, 2000, up to $15,000,000 of accounts payable charges taken by
the Company during the four immediately preceding fiscal quarters.
"SPECIAL 1999 CHARGES" shall mean up to $100,000,000 of
accounting adjustments taken by the Company during the 1999 fiscal year.
"SUBORDINATED DEBT" shall mean any Indebtedness of the Company
which (i) is not Guaranteed by any other Person, (ii) requires no payment of
principal to be made prior to July 1, 2009 and (iii) contains terms of
subordination identical to or, in the reasonable determination of the holders of
the Notes no less favorable to such holders of the Notes than, the terms of
subordination set forth in Exhibit E hereto and, which by virtue of such
language and any necessary action of the Board of Directors of the Company, is
subordinated to the Indebtedness owing from time to time by the Company to the
holders of any Note issued in connection with this Agreement; provided, however,
that notwithstanding the foregoing, Indebtedness which requires payment of
principal to be made prior to July 1, 2009 that has been or is issued to and
beneficially held by any Person that at the time of such issuance is or was a
member of the Company shall be considered "SUBORDINATED DEBT" if such
Indebtedness otherwise complies with clauses (i) and (iii) above.
"SUBORDINATED FUNDED DEBT" shall mean Funded Debt of the
Company or any of its Subsidiaries which is Subordinated Debt.
"SUBSIDIARY" shall mean any corporation eighty percent (80%)
or more of the stock of every class of which, except directors' qualifying
shares, shall, at the time as of which any determination is being made, be owned
by the Company either directly or through Subsidiaries. Notwithstanding the
foregoing, for purposes of calculating the financial covenants, each of ▇▇▇▇▇▇
Canada Hardware and Variety Company Inc. and TruServ Canada Cooperative Inc.
will be deemed a Subsidiary of the Company if, in accordance with GAAP, it is
consolidated in the financial statements of the Company required to be delivered
pursuant to clauses (i) and (ii) of paragraph 5A hereof.
"SUBSTANTIAL STOCKHOLDER" shall mean (i) any Person owning,
beneficially or of record, directly or indirectly, either individually or
together with all other Persons to whom such Person is related by blood,
adoption or marriage, stock of the Company (of any class having ordinary voting
power for the election of directors) aggregating five percent (5%) or more of
such voting power or (ii) any Person related by blood, adoption or marriage to
any Person described or coming within the provisions of clause (i) of this
definition.
"TOTAL SENIOR DEBT" shall mean the sum of (a) all Debt of the
Company and its Subsidiaries other than Subordinated Debt and (b) the principal
or face amount of all outstanding "LC Obligations" under and as defined in the
Intercreditor Agreement.
"TOTAL SENIOR DEBT TO EBITDA RATIO" shall mean, as of the last
day of any fiscal quarter, the ratio of (a) the remainder of (i) the daily
average of the amount of Total Senior Debt outstanding during the last fiscal
month of such fiscal quarter minus (ii) the daily average
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of cash and marketable securities during the last fiscal month of such fiscal
quarter to (b) the sum of (i) EBITDA for the period of four consecutive fiscal
quarters then ending, plus (ii) for the period of four fiscal quarters ending
March 31, 2000, June 30, 2000 and September 30, 2000, Special 1999 Charges (to
the extent taken in such period), plus (iii) for the period of four fiscal
quarters ending March 31, 2000 and June 30, 2000, Special A/P Charges (to the
extent taken in such period).
"TRADEMARK SECURITY AGREEMENT" shall mean the Trademark
Security Agreement between the Company and the Collateral Agent, substantially
in the form of Exhibit J, as amended from time to time in accordance with its
terms and the terms of the Intercreditor Agreement.
"VOTING STOCK" shall mean, with respect to any corporation,
any shares of stock of such corporation whose holders are entitled under
ordinary circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).
"YEAR 2000 PROBLEM" shall mean the risk that computer
applications and embedded microchips in non-computing devices may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999.
10B. ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all determinations with respect to accounting matters hereunder
shall be made, and all unaudited financial statements and certificates and
reports as to financial matters required to be furnished hereunder shall be
prepared, in accordance with GAAP applied on a basis consistent with the most
recent audited financial statements delivered pursuant to clause (ii) of
paragraph 5A or, if no such statements have been so delivered, the most recent
audited financial statements referred to in clause (i) of paragraph 8B.
11. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
11A. REGISTRATION OF NOTES. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of the Notes.
11B. TRANSFER AND EXCHANGE OF NOTES. Upon surrender of any
Note at the principal executive office of the Company for registration of
transfer or exchange (and in the case of a surrender for registration of
transfer, duly endorsed or accompanied by a written
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instrument of transfer duly executed by the registered holder of such Note or
his attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of Exhibit A. Each
such new Note shall be dated and bear interest from the date to which interest
shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Company may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than $100,000, provided that if necessary
to enable the registration of transfer by a holder of its entire holding of
Notes, one Note may be in a denomination of less than $100,000. Any transferee,
by its acceptance of a Note registered in its name (or the name or its nominee),
shall be deemed to have made the representation set forth in Section 9B.
11C. REPLACEMENT OF NOTES. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation) and
(i) in the case of loss, theft, or destruction, of
indemnity reasonably satisfactory to it (provided that if the
holder of such Note is, or is a nominee for, you or an
original Other Purchaser or another holder of a Note with a
minimum net worth of at least $100,000,000, such Person's own
unsecured agreement of indemnity shall be deemed to be
satisfactory), or
(ii) in the case of mutilation, upon surrender and
cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
12. PAYMENTS ON NOTES.
12A. PLACE OF PAYMENT. Subject to paragraph 12B, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in Kansas City, Missouri at the principal office of the
United Missouri Bank in such jurisdiction. The Company may at any time, by
notice to each holder of a Note, change the place of payment of the Notes so
long as such place of payment shall be either the principal office of the
Company in such jurisdiction or the principal office of a bank or trust company
in such jurisdiction.
12B. HOME OFFICE PAYMENT. So long as you or your nominee shall
be the holder of any Note, and notwithstanding anything contained in paragraph
12A or in such Note to the contrary, the Company will pay all sums becoming due
on such Note for principal, Make-Whole Amount, if any, and interest by the
method and at the address specified for such purpose
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below your name in Schedule 1, or by such other method or at such other address
as you shall have from time to time specified to the Company in writing for such
purpose, without the presentation or surrender of such Note or the making of any
notation thereon, except that upon written request of the Company made
concurrently with or reasonably promptly after payment or prepayment in full of
any Note, you shall surrender such Note for cancellation, reasonably promptly
after any such request, to the Company at its principal executive office or at
the place of payment most recently designated by the Company pursuant to
paragraph 12A. Prior to any sale or other disposition of any Note held by you or
your nominee you will, at your election, either endorse thereon the amount of
principal paid thereon and the last date to which interest has been paid thereon
or surrender such Note to the Company in exchange for a new Note or Notes
pursuant to paragraph 11B. The Company will afford the benefits of this
paragraph 12B to any Institutional Investor that is the direct or indirect
transferee of any Note purchased by you under this Agreement and that has made
the same agreement relating to such Note as you have made in this paragraph 12B.
13. EXPENSES, ETC.
13A. TRANSACTION EXPENSES. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys' fees of a special counsel and, if reasonably
required, local or other counsel) incurred by you and each Other Purchaser or
holder of a Note in connection with such transactions (including, without
limitation, the transactions contemplated by paragraphs 5J and 5K) and in
connection with any amendments, waivers or consents under or in respect of this
Agreement or the Notes or any other Note Documents (whether or not such
amendment, waiver or consent becomes effective), including, without limitation:
(a) the costs and expenses incurred in enforcing or defending (or determining
whether or how to enforce or defend) any rights under this Agreement or the
Notes or any other Note Documents or in responding to any subpoena or other
legal process or informal investigative demand issued in connection with this
Agreement or the Notes or any other Note Documents, or by reason of being a
holder of any Note, and (b) the costs and expenses, including financial
advisors' fees, incurred in connection with the insolvency or bankruptcy of the
Company or any Subsidiary or in connection with any work-out or restructuring of
the transactions contemplated hereby, by the Notes and by the other Note
Documents. The Company will pay, and will save you and each other holder of a
Note harmless from, (i) all claims in respect of any fees, costs or expenses if
any, of brokers and finders (other than those retained by you), (ii) all initial
and ongoing fees and all expenses of the Collateral Agent and (iii) all
liabilities in respect of any filing, recording and other similar fees or
expenses, or any stamp, documentary, recording and other similar taxes, if any,
which may be payable or which may be determined to be payable with respect to
the execution, delivery, filing, recording, or enforcement of this Agreement,
the Notes or the other Note Documents.
13B. COMPANY INDEMNIFICATION. Whether or not the transactions
contemplated by this Agreement are consummated, the Company shall indemnify and
hold you and each of your respective officers, directors, employees, counsel,
agents and attorneys-in-fact (each an "INDEMNIFIED PERSON") harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements (including
attorney's fees and expenses) of any kind or nature whatsoever which may at any
time (including at any time following repayment, or transfer by you, of the
Notes) be imposed on,
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incurred by or asserted against any such Indemnified Person in any way relating
to or arising out of (i) this Agreement, the Notes or any other Note Document or
any document contemplated by or referred to herein or therein, or the
transactions contemplated hereby or thereby, or any action taken or omitted by
any such Indemnified Person under or in connection with any of the foregoing,
including with respect to any investigation, litigation or proceeding (including
any bankruptcy, insolvency, reorganization or other similar proceeding or any
appellate proceeding) related to or arising out of this Agreement, the Notes or
any other Note Document, (ii) the use of the proceeds of the Notes, or (iii) any
Purchaser's Environmental Liability, in each case, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the
"INDEMNIFIED LIABILITIES") provided that the Company shall not have obligation
under this Paragraph 13B to any Indemnified Person with respect to Indemnified
Liabilities resulting solely from the gross negligence or willful misconduct of
such Indemnified Person.
13C. SURVIVAL. The obligations of the Company under this
paragraph 13 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the Notes or any other
Note Document and the termination of this Agreement or any other Note Document.
The obligations of the Company under this paragraph 13 will also survive the
release of any collateral, or a transfer of the Company's property by
foreclosure or by a deed in lieu of foreclosure, regardless of whether caused
by, or within the control of, the Company or any Subsidiary of the Company. The
Company, its successors and assigns, hereby waive, release and agree not to make
any claim or bring any cost recovery action against any Indemnified Person under
CERCLA or any state equivalent, or any other similar law now existing or
hereafter enacted. It is expressly understood and agreed that the Company's
obligation to any Indemnified Person under the indemnity set forth in paragraph
13B shall be without regard to fault on the part of the Company with respect to
the violation or condition which results in liability of any Indemnified Person.
If and to the extent that the foregoing undertaking may be unenforceable for any
reason, the Company hereby agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
14. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT.
All representations and warranties contained herein shall
survive the execution and delivery of this Agreement, the Notes and any other
Note Document, the purchase or transfer by you of any Note or portion thereof or
interest therein and the payment of any Note, and may be relied upon by any
subsequent holder of a Note, regardless of any investigation made at any time by
or on behalf of you or any other holder of a Note. All statements contained in
any certificate or other instrument delivered by or on behalf of the Company
pursuant to this Agreement and any other Note Document shall be deemed
representations and warranties of the Company under this Agreement. Subject to
the preceding sentence, this Agreement, the Notes and the other Note Documents
embody the entire agreement and understanding between you and the Company and
supersede all prior agreements and understandings relating to the subject matter
hereof.
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15. AMENDMENT AND WAIVER.
15A. REQUIREMENTS. This Agreement and the Notes may be
amended, and the observance of any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no amendment or
waiver of any of the provisions of paragraphs 1, 2, 3, 8, 9 or 19 hereof, or any
defined term (as it is used therein), will be effective as to you unless
consented to by you in writing, and (b) no such amendment or waiver may, without
the written consent of the holder of each Note at the time outstanding affected
thereby, (i) subject to the provisions of paragraph 7 relating to acceleration
or rescission, change the amount or time of any prepayment or payment of
principal of, or reduce the rate or change the time of payment or method of
computation of interest or of the Make-Whole Amount on, the Notes, (ii) change
the percentage of the principal amount of the Notes the holders of which are
required to consent to any such amendment or waiver, or (iii) amend any of
paragraphs 4, 7A(i), 7A(ii), 7A(a), 7A(b), 7A(c), 15 or 18.
15B. SOLICITATION OF HOLDERS OF NOTES. (a) Solicitation. The
Company will provide each holder of the Notes (irrespective of the amount of
Notes then owned by it) with sufficient information, sufficiently far in advance
of the date a decision is required, to enable such holder to make an informed
and considered decision with respect to any proposed amendment, waiver or
consent in respect of any of the provisions hereof, of the Notes or of any other
Note Document. The Company will deliver executed or true and correct copies of
each amendment, waiver or consent effected pursuant to the provisions of this
paragraph 15 or pursuant to the provisions of the Intercreditor Agreement or any
other Note Document to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay
or cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, or grant any security, to any holder of
Notes as consideration for or as an inducement to the entering into by any
holder of Notes of any waiver or amendment of any of the terms and provisions
hereof or of any other Note Document unless such remuneration is concurrently
paid, or security is concurrently granted, on the same terms, ratably to each
holder of Notes then outstanding even if such holder did not consent to such
waiver or amendment.
15C. BINDING EFFECT, ETC. Any amendment or waiver consented to
as provided in this paragraph 15 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any rights consequent thereon. No course of dealing between the
Company and the holder of any Note nor any delay in exercising any rights
hereunder, under any Note or under any other Note Document shall operate as a
waiver of any rights of any holder in such Note. As used herein, the term "THIS
AGREEMENT" and references thereto shall mean this Agreement as it may from time
to time be amended or supplemented.
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15D. NOTES HELD BY COMPANY, ETC. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement, the Notes or
under any other Note Document, or have directed the taking of any action
provided herein, in the Notes or in any other Note Document to be taken upon the
direction of the holders of a specified percentage of the aggregate principal
amount of Notes then outstanding, Notes directly or indirectly owned by the
Company or any of its Affiliates shall be deemed not to be outstanding.
16. NOTICES.
All notices and communications provided for hereunder shall be
in writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee or to any Other Purchaser,
or its nominee, to you or it at the address specified for such
communications in Schedule 1, or at such other address as you
or it shall have specified to the Company in writing,
(ii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of the Chief
Financial Officer, or at such other address as the Company
shall have specified to the holder of each Note in writing.
Notices under this paragraph 16 will be deemed given only when actually
received.
17. REPRODUCTION OF DOCUMENTS.
This Agreement, all other Note Documents and all other
agreements relating thereto, including, without limitation, (a) consents,
waivers and modifications that may hereafter be executed, (b) documents received
by you on the Effective Date (except the Notes themselves), and (c) financial
statements, certificates and other information previously or hereafter furnished
to you, may be reproduced by you by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and you may destroy
any original document so reproduced. The Company agrees and stipulates that, to
the extent permitted by applicable law, any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This paragraph 17 shall not prohibit the
Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.
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18. CONFIDENTIAL INFORMATION.
For the purposes of this paragraph 18, "CONFIDENTIAL
INFORMATION" means information delivered to you by or on behalf of the Company
or any Subsidiary in connection with the transactions contemplated by or
otherwise pursuant to this Agreement that is proprietary in nature and that was
clearly marked or labeled or otherwise adequately identified when received by
you as being confidential information of the Company or such Subsidiary,
provided that such term does not include information that (a) was publicly known
or otherwise known to you prior to the time of such disclosure, (b) subsequently
becomes publicly known through no act or omission by you or any Person acting on
your behalf, (c) otherwise becomes known to you other than through disclosure by
the Company or any Subsidiary or (d) constitutes financial statements delivered
to you under paragraph 5A that are otherwise publicly available. You will
maintain the confidentiality of such Confidential Information in accordance with
procedures adopted by you in good faith to protect confidential information of
third parties delivered to you, provided that you may deliver or disclose
Confidential Information to (i) your directors, officers, employees, agents,
attorneys and affiliates (to the extent such disclosure reasonably relates to
the administration of the investment represented by your Notes), (ii) your
financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this paragraph 18, (iii) any other holder of any Note, (iv) any
Institutional Investor to which you sell or offer to sell such Note or any part
thereof or any participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the provisions of
this paragraph 18), (v) any Person from which you offer to purchase any security
of the Company (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this paragraph
18), (vi) any federal or state regulatory authority having jurisdiction over
you, (vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access to
information about your investment portfolio or (viii) any other Person to which
such delivery or disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order applicable to you, (x) in
response to any subpoena or other legal process, (y) in connection with any
litigation to which you are a party or (z) if an Event of Default has occurred
and is continuing, to the extent you may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under your Notes, this Agreement or any
other Note Document. Each holder of a Note shall, to the extent permitted by
applicable law, use reasonable efforts to give the Company timely notice of any
event described in paragraph 18(viii)(w)(x) or (y) of the preceding sentence
which may require disclosure of Confidential Information so that the Company
will have an opportunity to seek a protective order. Each holder of a Note, by
its acceptance of a Note, will be deemed to have agreed to be bound by and to be
entitled to the benefits of this paragraph 18 as though it were a party to this
Agreement. On reasonable request by the Company in connection with the delivery
to any holder of a Note of information required to be delivered to such holder
under this Agreement or requested by such holder (other than a holder that is a
party to this Agreement or its nominee), such holder will enter into an
agreement with the Company embodying the provisions of this paragraph 18.
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19. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your
Affiliates as the purchaser of the Notes that you have agreed to purchase
hereunder, by written notice to the Company, which notice shall be signed by
both you and such Affiliate, shall contain such Affiliate's agreement to be
bound by this Agreement and shall contain a confirmation by such Affiliate of
the accuracy with respect to it of the representations set forth in paragraph 9.
Upon receipt of such notice, wherever the word "you" is used in this Agreement
(other than in this paragraph 19), such word shall be deemed to refer to such
Affiliate in lieu of you. In the event that such Affiliate is so substituted as
a purchaser hereunder and such Affiliate thereafter transfers to you all of the
Notes then held by such Affiliate, upon receipt by the Company of notice of such
transfer, wherever the word "you" is used in this Agreement (other than in this
paragraph 19), such word shall no longer be deemed to refer to such Affiliate,
but shall refer to you, and you shall have all the rights of an original holder
of the Notes under this Agreement.
20. MISCELLANEOUS.
20A. SUCCESSORS AND ASSIGNS. All covenants and other
agreements contained in this Agreement by or on behalf of any of the parties
hereto bind and inure to the benefit of their respective successors and assigns
(including, without limitation, any subsequent holder of a Note) whether so
expressed or not.
20B. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of principal
of or Make-Whole Amount or interest on any Note that is due on a date other than
a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of the interest payable
on such next succeeding Business Day.
20C. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
20D. CONSTRUCTION. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person. This Agreement and the Notes are the result of
negotiations among and have been reviewed by counsel to the holders of the Notes
and the Company, and are the product of all parties. Accordingly, they shall not
be construed against the holders of the Notes merely because of the involvement
of the holders of the Notes in their preparation.
20E. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one
52
54
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
20F. GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of New York, excluding choice-of-law principles of the law
in such State that would require the application of the laws of a jurisdiction
other than such State.
20G. SUBMISSION TO JURISDICTION. The Company hereby submits to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York State court sitting in New
York County for purposes of all legal proceedings arising out of or relating to
this Agreement, the Notes or the transactions contemplated hereby or thereby.
The Company irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
20H. WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND EACH HOLDER
OF NOTES HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
20I. AMENDMENT AND RESTATEMENT. This Agreement amends and
restates the Original NPA in its entirety and, on and after the Effective Date,
the Original NPA shall be of no further force or effect (except for any
provision thereof which by its terms survives termination thereof).
20J. INTERCREDITOR AGREEMENT; COLLATERAL MATTERS. (a)
Collateral Agent. Each holder of Notes hereby acknowledges and agrees that Bank
of America, N.A., may act as Collateral Agent under the Intercreditor Agreement.
(b) Release of Liens. Each holder of Notes irrevocably
authorizes the Collateral Agent, at its option and in its discretion, (i) to
release any Lien on any property granted to or held by the Collateral Agent
under any Collateral Document (x) upon payment in full of all Notes and all
other obligations of the Company hereunder and under the other Note Documents;
(y) which is sold or to be sold or disposed of as part of or in connection with
any disposition permitted hereunder or (z) subject to paragraph 15, if approved,
authorized or ratified in writing by the Required Holders; (ii) to subordinate
any Lien on any property granted to or held by the Collateral Agent under any
Collateral Document to the holder of any Lien on such property which is
permitted by paragraph 6A(1) hereof; and (iii) to release any Guarantor from its
obligations under the Guaranty if such entity ceases to be a Subsidiary as a
result of a transaction permitted hereunder. Upon request by the Collateral
Agent at any time, the Required Holders will confirm in writing the Collateral
Agent's authority to release or subordinate its interest in particular types or
items of property, or to release any Guarantor from its obligations under the
Guaranty, pursuant to this paragraph 20J(b).
53
55
20K. WAIVER. By signing this Agreement, the Required Holders
waive the Company's non-compliance with the financial covenants contained in
paragraph 6H of the Original NPA for the periods ended December 31, 1999 and
March 31, 2000 or with paragraph 6A(2) of the Original NPA for the periods ended
December 31, 1999, January 31, 2000, February 29, 2000 and March 31, 2000.
20L. INTEREST RATE LIMITATION. Nothing contained in the
definition of Overdue Rate or in any Note Document shall require the Company or
any Subsidiary to pay interest at a rate exceeding the maximum rate permitted by
applicable law.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
54
56
* * * * *
If you are in agreement with the foregoing, please sign the form of agreement on
the accompanying counterpart of this Agreement and return it to the Company,
whereupon the foregoing shall become a binding agreement between you and the
Company.
Very truly yours,
TRUSERV CORPORATION
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
The foregoing Agreement is
hereby accepted as of the
date first above written.
[Name of Purchaser]
By:
--------------------------------
Name:
Title:
57
SCHEDULE 1
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes Purchased
----------------------------- -------------------
▇▇▇▇▇▇▇ & CO. $26,750,000
(1) All payments by wire transfer
of immediately available
funds to:
Bank of NYC/CTR/BBK
IOC566 - Custody
JPMIM Incoming Wire Account
ABA=▇▇▇▇▇▇▇▇▇
Ref: TruServ Corp.
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
▇.▇. ▇▇▇▇▇▇ Investment Management Inc.
Securities Administration
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. 10036
(3) All other communications:
▇.▇. ▇▇▇▇▇▇ Investment Management Inc.
Securities Administration
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. 10036
58
SCHEDULE 1
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes Purchased
----------------------------- ------------------
▇▇▇▇▇▇▇ & CO. $2,000,000
(1) All payments by wire transfer
of immediately available
funds to:
Bank of NYC/CTR/BBK
IOC566 - Custody
JPMIM Incoming Wire Account
ABA=▇▇▇▇▇▇▇▇▇
Ref: TruServ Corp.
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
▇.▇. ▇▇▇▇▇▇ Investment Management Inc.
Securities Administration
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. 10036
(3) All other communications:
▇.▇. ▇▇▇▇▇▇ Investment Management Inc.
Securities Administration
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. 10036
59
SCHEDULE 1
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes Purchased
----------------------------- ------------------
HARE & CO. $500,000
(1) All payments by wire transfer
of immediately available
funds to:
State Street Bank and Trust Co. - Boston Ma
ABA #▇▇▇-▇▇▇-▇▇▇
A/C #EF4A
A/C Name: Global Strategic Income (Corporate)
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
State Street Bank and Trust Co.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇ ▇▇▇▇▇▇▇▇
(3) All other communications:
State Street Bank and Trust Co.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇ ▇▇▇▇▇▇▇▇
60
SCHEDULE 1
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes Purchased
----------------------------- ------------------
▇▇▇▇ & CO. $750,000
(1) All payments by wire transfer
of immediately available
funds to:
Chase Manhattan Bank
ABA #▇▇▇-▇▇▇-▇▇▇
FFC: P81858 (▇▇▇▇ & Co.)
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Chase Manhattan Bank, N.A.
Three Chase Metrotec Center (6th Floor)
Brooklyn, New York 11245
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
(3) All other communications:
Chase Manhattan Bank, N.A.
Three Chase Metrotec Center (6th Floor)
Brooklyn, New York 11245
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
61
SCHEDULE 1
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes Purchased
----------------------------- ------------------
ALLSTATE LIFE INSURANCE COMPANY $13,333,340
(1) All payments by wire transfer
of immediately available
funds to:
BBK = ▇▇▇▇▇▇ Trust and Savings Bank
ABA #▇▇▇▇▇▇▇▇▇
BNF = Allstate Life Insurance Company
Collection Account #▇▇▇-▇▇▇-▇
ORG = TruServ Corp.
OBI = DPP - PPN: 89824@AE5 Payment Due
Date (MM/DD/YY) -
P_ (Enter "P" and amount of principal
being remitted, for example,
P 5000000.00)
I_(Enter "I" and amount of interest being
remitted, for example, I 225000.00)
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Allstate Insurance Company
Investment Operations - Private Placements
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(3) All other communications:
Allstate Life Insurance Company
Private Placement Department
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
62
SCHEDULE 1
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes Purchased
----------------------------- -------------------
ALLSTATE LIFE INSURANCE COMPANY $6,666,660
(1) All payments by wire transfer
of immediately available
funds to:
BBK = ▇▇▇▇▇▇ Trust and Savings Bank
ABA #▇▇▇▇▇▇▇▇▇
BNF = Allstate Life Insurance Company
Collection Account #▇▇▇-▇▇▇-▇
ORG = TruServ Corp.
OBI = DPP - PPN: 89824@AE5 Payment Due
Date (MM/DD/YY) -
P_ (Enter "P" and amount of principal
being remitted, for example,
P 5000000.00)
I_(Enter "I" and amount of interest being
remitted, for example, I 225000.00)
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Allstate Insurance Company
Investment Operations - Private Placements
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(3) All other communications:
Allstate Life Insurance Company
Private Placement Department
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
63
SCHEDULE 1
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes Purchased
----------------------------- ------------------
ALLSTATE INSURANCE COMPANY $10,000,000
(1) All payments by wire transfer
of immediately available
funds to:
BBK = ▇▇▇▇▇▇ Trust and Savings Bank
ABA #▇▇▇▇▇▇▇▇▇
BNF = Allstate Insurance Company
Collection Account #▇▇▇-▇▇▇-▇
ORG = TruServ Corp.
OBI = DPP - PPN: 89824@AE5 Payment Due
Date (MM/DD/YY) -
P_ (Enter "P" and amount of principal
being remitted, for example,
P 5000000.00)
I_(Enter "I" and amount of interest
being remitted, for example,
I 225000.00)
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Allstate Insurance Company
Investment Operations - Private Placements
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(3) All other communications:
Allstate Life Insurance Company
Private Placement Department
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
64
SCHEDULE 1
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes Purchased
----------------------------- ------------------
AID ASSOCIATION FOR LUTHERANS $10,000,000
(1) All payments by wire transfer
of immediately available
funds to:
Citibank, N.A.
ABA #▇▇▇-▇▇▇-▇▇▇
DDA #36126473
Attn: ▇▇▇▇ ▇▇▇▇
Ref. Account #846647
Aid Association for Lutherans Custody Account
$105,000,000 Senior Secured Notes Due 2008
July 1, 2008
payable date
principle and interest breakdown
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Income Collection and Disbursement
REF Account #846647
Aid Association for Lutherans Custody Account
3800 Citibank Center Tampa
Building B, ▇▇▇▇▇ ▇, ▇▇▇▇ ▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-9122
Attn: Income Collection/▇▇▇▇▇▇ ▇▇▇▇
(3) All other communications:
Investment Department
Aid Association for Lutherans
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
65
SCHEDULE 1
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes Purchased
----------------------------- ------------------
KEYPORT LIFE INSURANCE COMPANY
C/O ▇▇▇▇▇ ▇▇▇ & ▇▇▇▇▇▇▇ INCORPORATED $10,000,000
(1) All payments by wire transfer
of immediately available
funds to:
Federal Reserve Bank of Boston
ABA# ▇▇▇▇▇▇▇▇▇ / BOS SAFE DEP
DDA# 125261
For: KEYPORT / # KEYF0005002
CUSIP, Pay Date
Physical Private: Federal Reserve Bank of Boston
Placement Wire: ▇▇▇▇▇▇▇▇▇/BOS SAFE DEP
Instructions for Income: Attn.: MBS Income CC: 1253
For: Keyport / # KEYF0005002
Cusip, Description of Security,
Pay Date
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Keyport Life Insurance Company
c/o ▇▇▇▇▇ ▇▇▇ & ▇▇▇▇▇▇▇ Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: Private Placements
(3) All other communications:
Keyport Life Insurance Company
c/o ▇▇▇▇▇ ▇▇▇ & ▇▇▇▇▇▇▇ Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
66
SCHEDULE 1
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes Purchased
----------------------------- ------------------
NATIONWIDE LIFE INSURANCE COMPANY
$10,000,000
(1) All payments by wire transfer
of immediately available
funds to:
The Bank of New York
ABA #▇▇▇-▇▇▇-▇▇▇
BNF: IOC566
F/A/O Nationwide Life Insurance Company
Attn.: P&I Department
PPN #89824@AE5
Security Description ___________________
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Nationwide Life Insurance Company
c/o The Bank of New York
P.O. Box 19266
Attn.: P&I Department
Newark, New Jersey 07915
With a copy to :
Nationwide Life Insurance Company
Attn.: Investment Accounting
One Nationwide Plaza (1-32-05)
Columbus, Ohio 43215-2220
(3) All other communications:
Nationwide Life Insurance Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn.: Corporate Fixed-Income Securities
67
SCHEDULE 1
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes Purchased
----------------------------- ------------------
FEDERATED MUTUAL INSURANCE COMPANY
$3,000,000
(1) All payments by wire transfer
of immediately available
funds to:
Norwest Bank Minnesota, N.A.
ABA #▇▇▇▇▇▇▇▇▇
s/B BNF A/C # 0000840245
BNF A/C Name: Trust Clearing Acct.
OBI: FFC to A/C #12364600
Federated Mutual Insurance Company
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Federal Mutual Insurance Company
Attn.: ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(3) All other communications:
Federated Mutual Insurance Company
Attn.: ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(4) Federal Tax ID#: ▇▇-▇▇▇▇▇▇▇
68
SCHEDULE 1
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes Purchased
----------------------------- -------------------
FEDERATED LIFE INSURANCE COMPANY
$2,000,000
(1) All payments by wire transfer
of immediately available
funds to:
Northwest Bank Minnesota, N.A.
ABA #▇▇▇▇▇▇▇▇▇
BNF A/C S/B# 0000840245
BNF A/C Name: Trust Clearing Acct.
OBI: FFC to A/C #12364500
Federated Life Insurance Company
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Federated Life Insurance Company
Attn.: ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(3) All other communications:
Federated Life Insurance Company
Attn.: ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(4) Federal Tax ID#: ▇▇-▇▇▇▇▇▇▇
69
SCHEDULE 1
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes Purchased
----------------------------- -------------------
MODERN WOODMEN OF AMERICA $5,000,000
(1) All payments by wire transfer
of immediately available
funds to:
The Northern Trust Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ABA No. ▇▇▇-▇▇▇-▇▇▇
Account Name: Modern Woodmen of America
Account No.: 84352
Each such wire transfer shall set forth the name of the
Company, the full title (including the applicable coupon rate
and final maturity date) of the Notes, a reference to PPN. No.
89824@AE5 and the due date and application (as among
principal, premium and interest)
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Modern Woodmen of America
Attn.: Investment Accounting Department
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(3) All other communications:
Modern Woodmen of America
Attn.: Investment Department
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
70
SCHEDULE 1
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes Purchased
----------------------------- -------------------
AMERITAS LIFE INSURANCE CORP. $3,000,000
(1) All payments by wire transfer
of immediately available
funds to:
U.S. Bank
ABA #▇▇▇-▇▇▇-▇▇▇
Acct. #1-494-0070-0188
Re. Description of Note; Principal & Interest Breakdown
Principal and Interest Breakdown
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Ameritas Life Insurance Corp.
▇▇▇▇ "▇" ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-2234
ATTN.: ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(3) All other communications:
Ameritas Life Insurance Corp.
▇▇▇▇ "▇" ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-2234
ATTN.: ▇▇▇▇▇ ▇▇▇▇▇
71
SCHEDULE 1
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes Purchased
----------------------------- -------------------
NATIONAL GUARDIAN LIFE INS. CO $2,000,000
(1) All payments by wire transfer
of immediately available
funds to:
Firstar Bank Madison
P.O. Box 7900
Madison, Wisconsin 53707
ABA No. ▇▇▇▇▇▇▇▇▇
For credit to: National Guardian Life Insurance Company
Account No.: 312 335 010
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
Attn.: Investment Department
National Guardian Life Insurance Company
▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. Box 1191
Madison, Wisconsin 53701-1191
(3) All other communications:
Attn.: Investment Department
National Guardian Life Insurance Company
▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. Box 1191
Madison, Wisconsin 53701-1191
72
EXHIBIT A
[FORM OF NOTE]
TRUSERV CORPORATION
SENIOR SECURED NOTE DUE 2008
No. [_____] April 14, 2000
$[________] PPN: 89824@AE5
FOR VALUE RECEIVED, the undersigned, TruServ Corporation (herein called the
"COMPANY"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to [___________________], or registered
assigns, the principal sum of [_____________] DOLLARS on July 1, 2008, with
interest (computed on the basis of a 360-day year of twelve 30-day months) (a)
on the unpaid balance thereof from (and including) the Original Issuance Date to
(but excluding) the date of repayment in full of all amounts due hereunder, at a
rate per annum equal to (x) for each day during the period from (and including)
the Original Issuance Date to (but excluding) April 1, 1999, 6.85% (y) for each
day during the period from (and including) April 1, 1999 to (but excluding)
January 1, 2000, 7.35%, and (z) for each day during the period from (and
including) January 1, 2000 to (but excluding) the date of repayment in full of
all amounts due hereunder, the Applicable Interest Rate, in each case payable
semiannually, on the first day of January and July in each year and at maturity,
and (b) to the extent permitted by law on any overdue payment (whether by
acceleration or otherwise and including any overdue prepayment) of principal,
any overdue payment of interest and any overdue payment of any Make-Whole Amount
(as defined in the Note Purchase Agreements referred to below), payable
semiannually as aforesaid (or, at the option of the registered holder hereof, on
demand), at a rate per annum equal to the Overdue Rate. In this Note:
"APPLICABLE INTEREST RATE" shall mean, for each day during each Relevant Period,
(a) 10.10%, if (i) the long-term unsecured debt of the Company
is not rated by Standard & Poor's Rating Services, a Division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. ("S&P"), on the first day of such Relevant Period, or (ii) the
long-term unsecured debt of the Company is rated lower than BBB by S&P on the
first day of such Relevant Period;
(b) 9.25%, if the long-term unsecured debt of the Company is
rated BBB or higher by S&P on the first day of such Relevant Period;
provided, however, that the Applicable Interest Rate shall mean, for each day
during any Relevant Period in which an Event of Default (as defined in the Note
Purchase Agreements referred to below) shall have occurred or be continuing, the
Overdue Rate for such day.
"RELEVANT PERIOD" shall mean (i) each six-month period from (and including)
January 1 of each year to (but excluding) July 1 of such year and (ii) each
six-month period from (and including) July 1 of each year to (but excluding)
January 1 of the immediately succeeding year.
73
"OVERDUE RATE" shall mean, for each day, a rate per annum equal to the greater
of (i) 12.60% and (ii) the sum of 3.5% plus the rate of interest publicly
announced by ▇▇▇▇▇▇ Guaranty Trust Company of New York from time to time in the
City of New York as its "base" or "PRIME" rate for such day;
"ORIGINAL ISSUANCE DATE" shall mean September 10, 1998; and
"RELEVANT PERIOD" shall mean (i) each six-month period from (and including)
January 1 of each year to (but excluding) July 1 of such year and (ii) each
six-month period from (and including) July 1 of each year to (but excluding)
January 1 of the immediately succeeding year.
Payments of principal of, interest on and any Make-Whole Amount with respect to
this Note are to be made in lawful money of the United States of America at
Kansas City, Missouri or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided in the Note
Purchase Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the "NOTES") issued
pursuant to separate Amended and Restated Note Purchase Agreements, dated as of
April 14, 2000 (as from time to time amended, the "NOTE PURCHASE AGREEMENTS"),
between the Company and the respective Purchasers named therein and is entitled
to the benefits thereof. Each holder of this Note will be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in paragraph 18 of the Note Purchase Agreements and (ii) to have made the
representation set forth in paragraph 9B of the Note Purchase Agreements.
This Note is a registered Note and, as provided in the Note Purchase Agreements,
upon surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for a like principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of transfer, the
Company may treat the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other purposes, and the
Company will not be affected by any notice to the contrary.
The Company will make required prepayments of principal on the dates and in the
amounts specified in the Note Purchase Agreements. This Note is also subject to
optional prepayment, in whole or from time to time in part, at the times and on
the terms specified in the Note Purchase Agreements, but not otherwise.
This Note is also entitled to the benefits of the Guaranty and the Collateral
Documents referred to in the Note Purchase Agreements.
If an Event of Default, as defined in the Note Purchase Agreements, occurs and
is continuing, the principal of this Note may be declared or otherwise become
due and payable in the manner, at the price (including any applicable Make-Whole
Amount) and with the effect provided in the Note Purchase Agreements.
74
This Note shall be construed and enforced in accordance with, and the rights of
the parties shall be governed by, the law of the State of New York, excluding
choice of law principles in such State that would require the application of the
laws of a jurisdiction other than such State.
TruServ Corporation
By
-------------------------
Name:
Title:
75
SCHEDULE 6A2
[Debt outstanding as of March 31, 2000]
76
SCHEDULE 8E
[Projections on a quarterly basis through 12/31/2000 and on
an annual basis for 2001 and 2002]
77
TABLE OF CONTENTS
1. DESCRIPTION OF NOTES.......................................................................................2
1A. Description Of Notes................................................................................2
1B. Original Issuance Date; Replacement Of Notes; Amendment Fee.........................................2
2. OTHER AGREEMENTS; OTHER NOTES..............................................................................3
3. EFFECTIVENESS..............................................................................................3
3A. Certain Documents...................................................................................3
3B. Representations and Warranties; Performance; No Default.............................................5
3C. Purchase Permitted by Applicable Laws...............................................................5
3D. Other Purchasers....................................................................................6
3E. Private Placement Number............................................................................6
3F. Changes in Corporate Structure......................................................................6
3G. Proceedings and Documents...........................................................................6
4. PREPAYMENTS................................................................................................6
4A. Required Prepayments................................................................................6
4B. Optional Prepayments with Make-Whole Amount.........................................................6
4C. Allocation of Partial Prepayments...................................................................7
4D. Maturity; Surrender, etc............................................................................7
4E. Purchase of Notes...................................................................................7
4F. Make-Whole Amount...................................................................................7
5. AFFIRMATIVE COVENANTS......................................................................................9
5A. Financial Statements................................................................................9
5B. Inspection.........................................................................................11
5C. Maintenance of Properties..........................................................................12
5D. Maintenance of Insurance...........................................................................12
5E. Cooperative Status.................................................................................12
5F. Compliance with Laws...............................................................................13
5G. Payment of Taxes and Claims........................................................................13
5H. Corporate Existence, etc...........................................................................13
5I. Collateral Accounting Systems Examination..........................................................13
5J. Real Estate Documents..............................................................................13
5K. Further Assurances.................................................................................14
5L. Waiver of Negative Pledge..........................................................................15
6. NEGATIVE COVENANTS........................................................................................15
6A. ▇▇▇▇, ▇▇▇▇ and Other Restrictions..................................................................15
6B. Restricted Investments.............................................................................19
6C. Restricted Payments................................................................................19
6D. Compliance with ERISA..............................................................................20
6E. No Change in Subordination Terms, etc..............................................................20
6F. Nature of Business.................................................................................20
6G. Ratio of Asset Base to Debt........................................................................21
6H. Fixed Charge Coverage Ratio........................................................................21
6I. Minimum EBITDA.....................................................................................21
6J. Inactive Subsidiaries..............................................................................21
6K. Amendments to Financing Agreements.................................................................21
78
7. EVENTS OF DEFAULT.........................................................................................22
7A. Acceleration.......................................................................................22
7B. Rescission of Acceleration.........................................................................25
7C. Notice of Acceleration or Rescission...............................................................26
7D. Other Remedies.....................................................................................26
7E. No Cure of Default by Application of Collateral....................................................26
8. REPRESENTATIONS, COVENANTS AND WARRANTIES.................................................................26
8A. Organization; Qualifications; Corporate Power......................................................26
8B. Authorization, etc.................................................................................26
8C. Disclosure.........................................................................................27
8D. Organization and Ownership of Shares of Subsidiaries; Affiliates...................................27
8E. Financial Statements...............................................................................28
8F. Actions Pending....................................................................................29
8G. Outstanding Debt...................................................................................29
8H. Title to Properties................................................................................29
8I. Taxes..............................................................................................29
8J. Conflicting Agreements and Other Matters...........................................................30
8K. Offering of Notes..................................................................................30
8L. Use of Proceeds....................................................................................30
8M. ERISA..............................................................................................31
8N. Governmental Consent...............................................................................31
8O. Environmental Compliance...........................................................................31
8P. Section 144A.......................................................................................31
8Q. Status under Certain Statutes......................................................................31
8R. Priority of Notes; Benefited Obligations...........................................................32
8S. Licenses, Permits, etc.............................................................................32
8T. Year 2000 Problem..................................................................................32
9. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS..........................................................32
9A. Purchase for Investment............................................................................32
9B. Source of Funds....................................................................................33
10. DEFINITIONS; ACCOUNTING MATTERS...........................................................................34
10A. Defined Terms........................................................................................34
10B. Accounting Principles, ▇▇▇▇▇ and Determinations......................................................45
11. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.............................................................45
11A. Registration of Notes................................................................................45
11B. Transfer and Exchange of Notes.......................................................................45
11C. Replacement of Notes.................................................................................46
12. PAYMENTS ON NOTES.........................................................................................46
12A. Place of Payment.....................................................................................46
12B. Home Office Payment..................................................................................46
13. EXPENSES, ETC.............................................................................................47
13A. Transaction Expenses.................................................................................47
13B. Company Indemnification..............................................................................47
13C. Survival.............................................................................................48
79
14. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT..............................................48
15. AMENDMENT AND WAIVER......................................................................................49
15A. Requirements.........................................................................................49
15B. Solicitation of Holders of Notes.....................................................................49
15C. Binding Effect, etc..................................................................................49
15D. Notes Held by Company, etc...........................................................................50
16. NOTICES...................................................................................................50
17. REPRODUCTION OF DOCUMENTS.................................................................................50
18. CONFIDENTIAL INFORMATION..................................................................................51
19. SUBSTITUTION OF PURCHASER.................................................................................52
20. MISCELLANEOUS.............................................................................................52
20A. Successors and Assigns...............................................................................52
20B. Payments Due on Non-Business Days....................................................................52
20C. Severability.........................................................................................52
20D. Construction.........................................................................................52
20E. Counterparts.........................................................................................52
20F. Governing Law........................................................................................53
20G. Submission to Jurisdiction...........................................................................53
20H. WAIVER OF JURY TRIAL.................................................................................53
20I. Amendment and Restatement..........................................................................53
20J. Intercreditor Agreement; Collateral Matters..........................................................53
20K. Waiver...............................................................................................54
20L. Interest Rate Limitation.............................................................................54
Exhibits
Exhibit A Form of Note
Exhibit B Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLC
Exhibit C [Not Used]
Exhibit D Form of Promissory Notes
Exhibit E Form of Subordination Provisions
Exhibit F Guaranty
Exhibit G Intercreditor Agreement
Exhibit H Pledge Agreement
Exhibit I Security Agreement
Exhibit J Trademark Security Agreement
Schedules
Schedule 1 Purchasers
Schedule 5J Part 1 - Primary Property
Part 2 - Secondary Property
Schedule 6A(1) Liens
Schedule 6A(2) Debt
Schedule 6B Investments
Schedule 8A Subsidiary Stock
Schedule 8C Change
Schedule 8D Subsidiaries, Affiliates, Directors/Officers and Agreements
Schedule 8E Financial Statements/Projections
Schedule 8G Outstanding Funded and Current Debt
Schedule 8J Restricting Agreements
Schedule 8L Proceeds of Notes
Schedule 8R Benefited Obligations
Schedule 8S Licenses, Permits