Exhibit 10.1
================================================================================
CREDIT AGREEMENT
dated as of
December 3, 2007
among
THE GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC.,
and
The Other Borrowers Party Hereto,
as Borrowers
and
The Lenders Party Hereto,
and
BANK OF AMERICA, N.A.,
as Administrative Agent and Collateral Agent
and
BANC OF AMERICA SECURITIES LLC
as Lead Arranger
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TABLE OF CONTENTS
Page
----
ARTICLE I Definitions.........................................................6
SECTION 1.01 Defined Terms................................................6
SECTION 1.02 Classification of Loans and Borrowings......................53
SECTION 1.03 Terms Generally.............................................53
SECTION 1.04 Accounting Terms; GAAP......................................54
SECTION 1.05 Borrowing Base Adjustments..................................54
SECTION 1.06 Letter of Credit Amounts....................................55
ARTICLE II The Credits.......................................................56
SECTION 2.01 Loans; Mandatory Advances of Tranche A-1 Loans .............56
SECTION 2.02 Increase in Tranche A Commitments...........................57
SECTION 2.03 Loans and Borrowings........................................59
SECTION 2.04 Requests for Borrowings.....................................60
SECTION 2.05 Swingline Loans.............................................62
SECTION 2.06 Letters of Credit...........................................63
SECTION 2.07 Funding of Borrowings.......................................68
SECTION 2.08 Interest Elections..........................................69
SECTION 2.09 Termination or Reduction of Commitments.....................70
SECTION 2.10 Repayment of Loans; Evidence of Debt........................72
SECTION 2.11 Prepayment of Loans.........................................73
SECTION 2.12 Fees........................................................76
SECTION 2.13 Interest....................................................77
SECTION 2.14 Alternate Rate of Interest..................................78
SECTION 2.15 Increased Costs.............................................78
SECTION 2.16 Break Funding Payments......................................79
SECTION 2.17 Taxes.......................................................80
SECTION 2.18 Payments Generally; Pro Rata Treatment; Sharing of Setoffs..82
SECTION 2.19 Mitigation Obligations; Replacement of Lenders..............84
SECTION 2.20 Designation of Company as each Borrowers' Agent.............85
ARTICLE III Representations and Warranties...................................85
SECTION 3.01 Organization; Powers........................................85
SECTION 3.02 Authorization; Enforceability...............................86
SECTION 3.03 Governmental Approvals; No Conflicts........................86
SECTION 3.04 Financial Condition; No Material Adverse Change.............86
SECTION 3.05 Properties..................................................87
SECTION 3.06 Litigation and Environmental Matters........................87
SECTION 3.07 Compliance with Laws and Agreements.........................88
SECTION 3.08 Investment Company Status...................................88
SECTION 3.09 Taxes.......................................................88
SECTION 3.10 Employee Benefit Plans......................................88
SECTION 3.11 Disclosure..................................................88
SECTION 3.12 Subsidiaries................................................89
i
SECTION 3.13 Insurance....................................................89
SECTION 3.14 Labor Matters................................................89
SECTION 3.15 Security Documents...........................................89
SECTION 3.16 Federal Reserve Regulations..................................90
SECTION 3.17 Merger Agreement.............................................91
ARTICLE IV Conditions.........................................................91
SECTION 4.01 Effective Date...............................................91
SECTION 4.02 Each Credit Event............................................94
ARTICLE V Affirmative Covenants...............................................95
SECTION 5.01 Financial Statements and Other Information...................95
SECTION 5.02 Notices of Material Events...................................98
SECTION 5.03 Information Regarding Collateral.............................99
SECTION 5.04 Existence; Conduct of Business...............................99
SECTION 5.05 Payment of Obligations.......................................99
SECTION 5.06 Maintenance of Properties...................................100
SECTION 5.07 Insurance...................................................100
SECTION 5.08 Casualty and Condemnation...................................101
SECTION 5.09 Books and Records; Inspection and Audit Rights..............101
SECTION 5.10 Compliance with Laws........................................102
SECTION 5.11 Use of Proceeds and Letters of Credit.......................102
SECTION 5.12 Additional Subsidiaries.....................................102
SECTION 5.13 Further Assurances..........................................103
SECTION 5.14 Cash Management.............................................104
SECTION 5.15 Priority of Claims Waivers..................................107
SECTION 5.16 Benefit Plans Payments......................................107
ARTICLE VI Negative Covenants................................................107
SECTION 6.01 Indebtedness; Certain Equity Securities.....................107
SECTION 6.02 Liens.......................................................109
SECTION 6.03 Fundamental Changes.........................................110
SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions...111
SECTION 6.05 Asset Sales.................................................112
SECTION 6.06 Sale and Leaseback Transactions.............................113
SECTION 6.07 Hedging Agreements..........................................113
SECTION 6.08 Restricted Payments; Certain Payments of Indebtedness.......113
SECTION 6.09 Transactions with Affiliates................................115
SECTION 6.10 Restrictive Agreements......................................115
SECTION 6.11 Amendment of Material Documents.............................115
SECTION 6.12 Minimum Excess Availability.................................116
SECTION 6.13 Limitation on Change in Fiscal Year.........................116
ARTICLE VII Events of Default................................................116
SECTION 7.01 Events of Default...........................................116
SECTION 7.02 Remedies Upon Event of Default..............................119
ii
SECTION 7.03 Application of Funds........................................119
ARTICLE VIII The Agents......................................................122
SECTION 8.01 Appointment and Administration by Administrative Agent......122
SECTION 8.02 Appointment of Collateral Agent.............................122
SECTION 8.03 Agreement of Applicable Lenders.............................122
SECTION 8.04 Liability of Agents.........................................123
SECTION 8.05 Notice of Default...........................................124
SECTION 8.06 Credit Decisions............................................124
SECTION 8.07 Reimbursement and Indemnification...........................124
SECTION 8.08 Rights of Agents............................................125
SECTION 8.09 Notice of Transfer..........................................125
SECTION 8.10 Successor Agents............................................125
SECTION 8.11 Relation Among the Lenders..................................126
SECTION 8.12 Reports and Financial Statements............................126
SECTION 8.13 Agency for Perfection.......................................127
SECTION 8.14 Delinquent Lender...........................................127
SECTION 8.15 Collateral and Guaranty Matters ..........................128
ARTICLE IX Miscellaneous.....................................................129
SECTION 9.01 Notices.....................................................129
SECTION 9.02 Waivers; Amendments.........................................130
SECTION 9.03 Expenses; Indemnity; Damage Waiver..........................132
SECTION 9.04 Successors and Assigns......................................134
SECTION 9.05 Survival....................................................139
SECTION 9.06 Counterparts; Integration; Effectiveness....................139
SECTION 9.07 Severability................................................139
SECTION 9.08 Right of Setoff.............................................139
SECTION 9.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS..140
SECTION 9.10 WAIVER OF JURY TRIAL........................................141
SECTION 9.11 Headings....................................................141
SECTION 9.12 Confidentiality.............................................141
SECTION 9.13 Interest Rate Limitation....................................141
SECTION 9.14 Patriot Act.................................................142
SECTION 9.15 Foreign Asset Control Regulations...........................142
SECTION 9.16 Additional Waivers..........................................142
SECTION 9.17 No Advisory or Fiduciary Responsibility.....................144
SECTION 9.18 Press Releases..............................................145
iii
SCHEDULES:
Schedule A -- Priming Jurisdictions
Schedule B -- Distribution Centers
Schedule C -- Financial and Collateral Reports
Schedule 1.01(A) -- Existing Letters of Credit
Schedule 1.01(B) -- Title Policy Endorsements
Schedule 1.01(C) Principal Properties
Schedule 1.01(D) Immaterial Subsidiaries
Schedule 2.01 -- Lenders and Commitments
Schedule 3.01 Subsidiaries not in Good Standing
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Schedule 3.15(b) -- UCC Filings
Schedule 3.15(c) -- Intellectual Property Filings
Schedule 5.01 Internet Addresses
Schedule 5.14(a) -- DDA Accounts
Schedule 5.14(b) -- Credit Card Arrangements
Schedule 5.14(c) -- Third Party Insurance Payors
Schedule 5.14(d)(iii) -- Blocked Accounts
Schedule 5.14(i) -- Disbursement Accounts
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.04 -- Existing Investments
Schedule 6.10 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Borrowing Base Certificate
Exhibit C -- Form of Guaranty
Exhibit D -- Form of Indemnity, Subrogation and Contribution
Agreement
Exhibit E -- Form of Perfection Certificate
Exhibit F -- Form of Pledge Agreement
Exhibit G -- Form of Security Agreement
Exhibit H -- Form of Additional Commitment Lender Joinder Agreement
Exhibit I -- Form of Opinion General Counsel of the Loan Parties
Exhibit J -- Form of Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
Exhibit K -- Form of Credit Card Notification
Exhibit L -- Form of Insurance Provider Notification
Exhibit M -- Form of Blocked Account Agreement
Exhibit N -- Form of Coinstar Notification
Exhibit O -- Form of DDA Notification
Exhibit P-1 -- Form of Priority of Claims Waiver (Landlord)
Exhibit P-2 Form of Priority Claims Waiver (Bailee)
Exhibit Q-1 Form of Mortgage
iv
Exhibit Q-2 Form of Mortgage (Principal Properties)
Exhibit R Form of New Borrower Joinder Agreement
v
CREDIT AGREEMENT
CREDIT AGREEMENT (this "Agreement") dated as of December 3, 2007,
among
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC., a Maryland
corporation;
the other BORROWERS party hereto,
the LENDERS party hereto, and
BANK OF AMERICA, N.A., a national banking association, as
Administrative Agent and Collateral Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINED TERMS. As used in this Agreement, the following terms
have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"ACT" has the meaning set forth in Section 9.14.
"ADDITIONAL COMMITMENT LENDER" has the meaning set forth in Section So long
as no Default or Event of Default exists or would arise therefrom, (i) the
Company shall have the right, at any time from time to time after the Effective
Date, to request an increase of the aggregate of the then outstanding Tranche A
Commitments by an amount not to exceed in the aggregate $100,000,000. Any such
requested increase shall be first made to all existing Tranche A Lenders on a
pro rata basis based on their respective Tranche A Applicable Percentages. At
the time of sending such notice, the Company (in consultation with the
Administrative Agent) shall specify the time period within which each Tranche A
Lender is requested to respond (which shall in no event be less than ten (10)
Business Days from the date of delivery of such notice to the Tranche A
Lenders). Each Tranche A Lender shall notify the Administrative Agent within
such time period whether or not it agrees to increase its Tranche A Commitment
and, if so, whether by an amount equal to, greater than, or less than its
Tranche A Applicable Percentage of such requested increase. Any Tranche A Lender
not responding within such time period shall be deemed to have declined to
increase its Tranche A Commitment. To the extent that the existing Tranche A
Lenders decline to increase their Tranche A Commitments, or decline to increase
their Tranche A Commitments to the amount requested by the Company, the
Administrative Agent, in consultation with the Company, will use its reasonable
efforts to arrange for other Persons to become a Tranche A Lender hereunder and
to issue commitments in an amount equal to the amount of the increase in the
Tranche A Commitments requested by the Company and not
6
accepted by the existing Tranche A Lenders (each such increase by either means,
a "COMMITMENT INCREASE," and each Person issuing, or Tranche A Lender
increasing, its Commitment, an "Additional Commitment Lender"), PROVIDED,
HOWEVER, that (i) no Tranche A Lender shall be obligated to provide a Commitment
Increase as a result of any such request by the Company, and (ii) any Additional
Commitment Lender which is not an existing Tranche A Lender shall be subject to
the approval of the Administrative Agent, the Issuing Bank and the Company
(which approval shall not be unreasonably withheld). Each Commitment Increase
shall be in a minimum aggregate amount of at least $10,000,000 and in integral
multiples of $5,000,000 in excess thereof.
"ADJUSTED LIBO RATE" means, for any Interest Period, an interest rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the
LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE AGENT" means Bank of America, N.A., in its capacity as
administrative agent for the Lenders hereunder, together with its successors and
assigns.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"AFFECTED LIBOR LOANS" has the meaning set forth in Section Prior to any
optional or mandatory prepayment of Borrowings hereunder, the Borrowers shall
select the Borrowing or Borrowings to be prepaid and shall specify such
selection in the notice of such prepayment pursuant to Section 2.11(k).
Notwithstanding the foregoing provisions of this Section Prepayment of Loans, if
at any time the Borrowers are required to make a prepayment under this Section
Prepayment of Loans and the Borrowers would incur breakage costs under Section
Break Funding Payments as a result of LIBOR Loans being prepaid other than on
the last day of an Interest Period applicable thereto (the "AFFECTED LIBOR
LOANS"), and PROVIDED that no Default has occurred and is continuing at the
time, then the Borrowers may in their sole discretion initially deposit a
portion (up to 100%) of the amounts that otherwise would have been paid in
respect of the Affected LIBOR Loans with the Administrative Agent (which deposit
must be equal in amount to the amount of the Affected LIBOR Loans not
immediately prepaid) to be held as security for such obligations of the
Borrowers hereunder pursuant to a cash collateral agreement to be entered into
in form and substance reasonably satisfactory to the Administrative Agent and
shall provide for investments in Cash and Cash Equivalents satisfactory to the
Administrative Agent and the Company, with such cash collateral to be directly
applied upon the first occurrence (or occurrences) thereafter of the last day of
an Interest Period applicable to the relevant Loans that are LIBOR Loans (or
such earlier date or dates as shall be requested by the Company), to repay an
aggregate principal amount of such Loans equal to the Affected LIBOR Loans not
initially prepaid pursuant to this sentence. Notwithstanding anything to the
contrary contained in the immediately preceding sentence, all amounts deposited
as cash collateral pursuant to the immediately preceding sentence shall be held
for the sole benefit of the Lenders and may be applied to the prepayment of such
Loans immediately if an Event of Default has occurred and is continuing.
7
"AFFILIATE" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"AGENT" means each of the Administrative Agent and the Collateral Agent.
"AGENT'S ACCOUNT" has the meaning set forth in Section Each DDA
Notification, Credit Card Notification, Insurance Provider Notification and
Blocked Account Agreement and the Coinstar Notification shall require, after the
occurrence and during the continuance of a Triggering Event, the Loan Parties
shall promptly and in any event within two Business Days, cause the ACH or wire
transfer on each Business Day (and whether or not there is then an outstanding
balance in the Loan Account) of all available cash receipts (the "Cash
Receipts") to the concentration account maintained by the Administrative Agent
at Bank of America (the "Agent's Account") from:.
"AGREEMENT" has the meaning set forth in the preamble hereto.
"AGGREGATE COMMITMENTS" means the sum of the Aggregate Tranche A
Commitments of all the Tranche A Lenders, the Aggregate Tranche A-1 Commitments
of all the Tranche A-1 Lenders and the Aggregate Term Outstandings of all the
Term Lenders. As of the Effective Date, the Aggregate Commitments are
$675,000,000.
"AGGREGATE REVOLVING COMMITMENTS" means, collectively, the Aggregate
Tranche A Commitments and the Aggregate Tranche A-1 Commitments.
"AGGREGATE TERM OUTSTANDINGS" means, at any time, the aggregate outstanding
principal balance of the Term Loans of all Term Lenders at such time. As of the
Effective Date, the Aggregate Term Outstandings are $82,900,000.
"AGGREGATE TRANCHE A COMMITMENTS" means, at any time, the sum of the
Tranche A Commitments at such time. As of the Effective Date, the Aggregate
Tranche A Commitments are $547,100,000.
"AGGREGATE TRANCHE A-1 COMMITMENTS" means, at any time, the sum of the
Tranche A-1 Commitments at such time. As of the Effective Date, the Aggregate
Tranche A-1 Commitments are $45,000,000.
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds
Effective Rate in effect on such day plus one-half of one percent (0.50%). Any
change in the Alternate Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective from and including the effective
date of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"APPLICABLE LAW" means as to any Person, all statutes, rules, regulations,
orders, or other requirements having the force of law and applicable to such
Person, and all court orders and injunctions, and/or similar rulings and
applicable to such Person, in each case of or by any
8
Governmental Authority, or court, or tribunal which has jurisdiction over such
Person, or any property of such Person.
"APPLICABLE MARGIN" means, for any Interest Payment Date with respect to a
particular Type of Loan, (a) from and after the Effective Date through March 31,
2008, the percentages set forth in Level III of the applicable pricing grid
below; and (b) thereafter, the applicable rate per annum set forth in the
applicable pricing grid below based upon the Average Daily Excess Availability
during the immediately preceding fiscal quarter:
(a) If Eligible Leaseholds are included in the Tranche A Borrowing Base and
the Tranche A-1 Borrowing Base:
==================================================================================================================
Level ABR ABR APPLICABLE TRANCHE TRANCHE
APPLICABLE APPLICABLE APPLICABLE LIBOR MARGIN A UNUSED A-1
AVERAGE DAILY MARGIN LIBOR MARGIN MARGIN (TRANCHE A-1) FEE UNUSED
EXCESS (TRANCHE A (TRANCHE A (TRANCHE A-1) FEE
AVAILABILITY AND TERM LOAN) AND TERM LOAN)
------------------------------------------------------------------------------------------------------------------
1 Greater than or 0.25% 1.50% 1.25% 2.75% 0.25% 0.50%
equal to
$400,000,000
------------------------------------------------------------------------------------------------------------------
2 Greater than or 1.50% 3.00% 0.25% 0.50%
equal to
$200,000,000 but
less than
$400,000,000 0.25% 1.75%
------------------------------------------------------------------------------------------------------------------
3 Less than 0.50% 2.00% 1.75% 3.25% 0.25% 0.375%
$200,000,000
==================================================================================================================
(b) If Eligible Leaseholds are not included in the Tranche A Borrowing
Base and the Tranche A-1 Borrowing Base:
==================================================================================================================
Level AVERAGE DAILY ABR APPLICABLE ABR APPLICABLE TRANCHE TRANCHE
APPLICABLE APPLICABLE LIBOR MARGIN A UNUSED A-1
MARGIN LIBOR MARGIN MARGIN (TRANCHE A-1) FEE UNUSED
EXCESS (TRANCHE A (TRANCHE A (TRANCHE A-1) FEE
AVAILABILITY AND TERM LOAN) AND TERM LOAN)
------------------------------------------------------------------------------------------------------------------
1 Greater than or 0.00% 1.25% 1.25% 2.75% 0.25% 0.50%
equal to
==================================================================================================================
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==================================================================================================================
Level AVERAGE DAILY ABR APPLICABLE ABR APPLICABLE TRANCHE TRANCHE
APPLICABLE APPLICABLE LIBOR MARGIN A UNUSED A-1
MARGIN LIBOR MARGIN MARGIN (TRANCHE A-1) FEE UNUSED
EXCESS (TRANCHE A (TRANCHE A (TRANCHE A-1) FEE
AVAILABILITY AND TERM LOAN) AND TERM LOAN)
------------------------------------------------------------------------------------------------------------------
$400,000,000
------------------------------------------------------------------------------------------------------------------
2 Greater than or 1.50% 3.00% 0.25% 0.50%
equal to
$200,000,000 but
less than
$400,000,000 0.00% 1.50%
------------------------------------------------------------------------------------------------------------------
3 Less than 0.25% 1.75% 1.75% 3.25% 0.25% 0.375%
$200,000,000
==================================================================================================================
Except as provided in the following sentence, the Applicable Margin shall be
adjusted quarterly as of the first day of each fiscal quarter of the Company
commencing April 1, 2008, based upon the Average Daily Excess Availability for
the immediately preceding fiscal quarter. Upon the occurrence and during the
continuance of an Event of Default, at the election of the Required Lenders,
interest shall be determined in the manner set forth in Section Notwithstanding
the foregoing, upon the occurrence and during the continuance of a Specified
Default, at the written election of the Required Lenders, principal or interest
on any Loan shall bear interest, after as well as before judgment, at a rate per
annum equal to (i) in the case of overdue principal of any Loan, two percent
(2.0%) plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Interest. and (ii) in the case of any other
amounts, two percent (2.0%) plus the rate applicable to ABR Loans as provided in
paragraph (a) of this .
"APPLICABLE PERCENTAGE" means (a) with respect to each Credit Extension
under the Tranche A Commitments, the Tranche A Applicable Percentage, (b) with
respect to each Credit Extension under the Tranche A-1 Commitments, the Tranche
A-1 Applicable Percentage, (c) with respect to the Term Loan, the Term
Applicable Percentage and (d) with respect to each Lender, that percentage of
the Aggregate Commitments of all Lenders hereunder to make Credit Extensions to
the Borrowers, in each case as the context provides. If any of the Tranche A
Commitments or Tranche A-1 Commitments have terminated or expired, the
Applicable Percentage with respect to such Commitments shall be determined based
upon such Commitments as most recently in effect.
"APPRAISED VALUE" means (a) with respect to the Borrowers' Eligible
Inventory, the net appraised orderly liquidation value (which is expressed as a
percentage of Cost) of the Borrowers' Eligible Inventory as set forth in the
Borrowers' inventory stock ledger or (b) with respect to the Borrowers' Scripts,
the orderly liquidation value of the Borrowers' Scripts as set forth in the most
recent appraisal of the Borrowers' Scripts conducted by an independent
10
appraiser reasonably satisfactory to the Administrative Agent or (c) with
respect to the Borrowers' Eligible Real Estate, the fair market value of the
Borrowers' Eligible Real Estate as set forth in the most recent appraisal of the
Borrowers' Eligible Real Estate conducted by an independent appraiser reasonably
satisfactory to the Administrative Agent, which appraisal shall assume, among
other things, a marketing time of not greater than twelve (12) months or less
than three (3) months or (d) with respect to the Borrowers' Eligible Leaseholds,
the forced liquidation value of the Borrowers' Eligible Leaseholds as set forth
in the most recent appraisal of the Borrowers' Eligible Leaseholds conducted by
an independent appraiser reasonably satisfactory to the Administrative Agent,
which appraisal shall assume, among other things, a marketing time of not
greater than twelve (12) months or less than three (3) months.
"APPROVED FUND" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"ASSET SWAP" means any transaction or series of related transactions
pursuant to which the Borrowers or one or more of the Subsidiaries shall
exchange, with a Person not a Subsidiary, one or more stores or facilities owned
by them for one or more stores or facilities owned by third parties where no
more than 10% of the aggregate consideration delivered by the Borrowers and the
Subsidiaries shall consist of consideration other than the stores and facilities
being so exchanged.
"ASSIGNEE GROUP" means two or more Eligible Assignees that are Affiliates
of one another or two or more Approved Funds managed by the same investment
advisor.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section Successors and Assigns), and accepted by the Administrative
Agent, in the form of Exhibit A or any other form approved by the Administrative
Agent.
"AVAILABILITY PERIOD" means the period from and including the Effective
Date to the earliest of (a) the Maturity Date, (b) the date of termination of
the Aggregate Revolving Commitments pursuant to Section 7.02, and (c) the date
of termination of the Aggregate Revolving Commitments pursuant to Section 2.09.
"AVAILABILITY RESERVES" means such reserves as the Administrative Agent
from time to time determines in the Administrative Agent's reasonable credit
judgment as being appropriate (a) to reflect the impediments to the Agents'
ability to realize upon the Collateral or (b) to reflect costs, expenses and
other amounts that the Agents may incur or be required to pay to realize upon
the Collateral. Availability Reserves may include (but are not limited to)
reserves based on (i) the aggregate dollar amount represented by gift
certificates then outstanding and entitling the holder thereof to use all or a
portion thereof to pay all or a portion of the purchase price for any Inventory
as of such day, (ii) the Reserve for Leasehold Obligations, (iii) the PACA/PASA
Liability Reserve (to the extent Inventory subject to PACA or PASA is included
in the Tranche A Borrowing Base or the Tranche A-1 Borrowing Base), (iv) the
maximum aggregate amount (giving effect to any netting agreements) that the
Company and its Subsidiaries would be required to pay under any Hedging
Agreements secured by the Security Documents the
11
obligations under which constitute Obligations if such Hedging Agreements were
terminated, determined as of the most recent date for which financial statements
have been delivered pursuant to Section within 90 days after the end of each
fiscal year of the Company, its audited consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows as of the end of
and for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, all reported on by PricewaterhouseCoopers LLP or
other independent public accountants of recognized national standing (without a
"going concern" or like qualification or exception and without any qualification
or exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Company and its consolidated
subsidiaries on a consolidated basis in accordance with GAAP consistently
applied;, within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Company, the Company's consolidated balance
sheet and related statements of operations, stockholders' equity and cash flows
as of the end of and for such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of the Company and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes; or within 45
days after the end of each of the first two (or three, in the event of a fiscal
quarter having four fiscal four week periods) fiscal four-week periods of each
fiscal quarter of the Company (other than the first fiscal four-week period of
each fiscal year), its consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows as of the end of and for such
fiscal four-week periods and the then elapsed portion of the fiscal year, all
certified by one of its Financial Officers as presenting in all material
respects the financial condition and results of operations of the Company and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes; PROVIDED that, the information required by this Section
shall not be required with respect to any month during which the average daily
Exposure during such month is less than $50,000,000;, (v) outstanding Taxes and
other governmental charges, including, ad valorem, real estate, personal
property, sales, and other Taxes (in each case to the extent such Taxes or other
governmental charges are due and payable (except if being contested in good
faith in appropriate proceedings and for which adequate reserves have been
taken) and entitle any Person to a Lien on any Collateral that has priority
over, or is otherwise superior in right to, the Lien in such Collateral Agent
for the benefit of the Secured Parties) (vi) Cash Management Reserves, (vii)
Bank Products Reserves; (viii) Realty Reserves and (ix) a reserve in the sum of
$200,000,000 (which reserve shall be eliminated immediately following the
consummation of the Merger). Provided no Default or Event of Default has
occurred and is continuing, the Administrative Agent shall give the Borrowers
ten (10) days prior notice of the imposition of any Availability Reserve not
described in clauses (i) through (viii) above.
"AVERAGE DAILY EXCESS AVAILABILITY" means, for any period, the average
daily Excess Availability for such period.
"BANK OF AMERICA" means Bank of America, N.A. and its successors.
12
"BANK PRODUCTS" means any services of facilities provided to any Loan Party
by any Lender or any of its Affiliates (but excluding Cash Management Services)
on account of, without limitation, (a) credit cards, (b) Hedging Agreements, (c)
purchase cards, and (d) leasing.
"BANK PRODUCT RESERVES" means such reserves as the Administrative Agent
from time to time determine in its discretion as being appropriate to reflect
the liabilities and obligations of the Loan Parties with respect to Bank
Products then provided or outstanding.
"BLOCKED ACCOUNT AGREEMENT" means with respect to an account established by
a Loan Party, an agreement, in form and substance satisfactory to the Collateral
Agent, establishing Control (as defined in the Security Agreement) of such
account by the Collateral Agent and whereby the bank maintaining such account
agrees, upon the occurrence and during the continuance of a Triggering Event, to
comply only with the instructions originated by the Collateral Agent without the
further consent of any Loan Party.
"BLOCKED ACCOUNTS" has the meaning set forth in Section Within ninety (90)
days after the Effective Date (or such longer time as the Administrative Agent
may, in its sole discretion, agree in writing), each Loan Party shall:.
"BOARD" means the Board of Governors of the Federal Reserve System of the
United States of America.
"BORROWERS" means the Company, Compass Foods, Inc., Shopwell, Inc.,
▇▇▇▇▇▇▇▇, Inc., Super Fresh Food Markets, Inc., Super Market Service Corp.,
Super Fresh/Sav-A-Center, Inc., Hopelawn Property I, Inc., Lo-Lo Discount
Stores, Inc., Food Basics, Inc., ▇▇▇▇▇▇▇▇▇ Foods of Conn., Inc., Pathmark
Stores, Inc., APW Supermarkets, Inc., ▇▇▇▇▇▇ Avenue Plaza Corp., Superplus Food
Warehouse, Inc., Bridge Stuart, Inc., East Brunswick Stuart, LLC, Plainbridge,
LLC, Upper ▇▇▇▇▇ ▇▇▇▇▇▇, LLC, Bergen Street Pathmark, Inc., Lancaster ▇▇▇▇
▇▇▇▇▇▇, LLC, AAL Realty Corp., and MacDade Boulevard Stuart, LLC.
"BORROWING" means (i) a group of Loans of the same Type, made, converted or
continued on the same date and, in the case of LIBOR Loans, as to which a single
Interest Period is in effect or (ii) a Swingline Loan.
"BORROWING BASE CERTIFICATE" means a certificate substantially in the form
of Exhibit B hereto (with such changes therein as may be required by the
Administrative Agent to reflect the components of and reserves against the
Tranche A Borrowing Base and the Tranche A-1 Borrowing Base as provided for
hereunder from time to time), executed and certified as accurate and complete by
a Financial Officer of the Company which shall include appropriate exhibits,
schedules, supporting documentation, and additional reports (i) as outlined in
Schedule 1 to Exhibit B and (ii) as reasonably requested by the Administrative
Agent.
"BORROWING REQUEST" means a request by a Borrower for a Borrowing in
accordance with Section 2.04.
"BRIDGE FINANCING FACILITY" means the bridge loan facility established by
the Bridge Loan Agreement dated December 3, 2007 by and among the Company, the
guarantors party thereto, Banc of America, N.A., as administrative agent and
collateral agent, ▇▇▇▇▇▇ Commercial Paper
13
Inc., as syndication agent, and the lenders identified therein in a
principal amount not to exceed $370,000,000, and any exchange or rollover notes
issued in conjunction therewith, as amended, modified, or supplemented from time
to time, in accordance with the provisions hereof and of the Intercreditor
Agreement.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other day on
which commercial banks in Boston, Massachusetts or New York, New York are
authorized or required by law to remain closed; PROVIDED that, when used in
connection with a LIBOR Loan, the term "Business Day" shall also exclude any day
on which banks are not open for dealings in dollar deposits in the London
interbank market.
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as liabilities
on a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
"CASH AND CASH EQUIVALENTS" means:
1) Dollars;
2) securities issued or directly and fully guaranteed or
insured by the United States of America or any agency or
instrumentality of the United States of America (PROVIDED
that the full faith and credit of the United States of
America is pledged in support of those securities) having
maturities of not more than one year from the date of
acquisition;
3) obligations issued or fully guaranteed by any state of the
United States of America or any political subdivision of any
such state or province or any instrumentality thereof
maturing within one year from the date of acquisition and
having a rating of either "A" or better from S&P, A2 or
better from ▇▇▇▇▇'▇;
4) certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition,
banker's acceptances with maturities not exceeding one year
and overnight bank deposits, in each case, with any Lender
or with any United States commercial bank having capital and
surplus in excess of $300,000,000;
5) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in
clauses (2), (3), and (4) above entered into with any
financial institution meeting the qualifications specified
in clause (4) above;
6) commercial paper rated at least "P-2" by ▇▇▇▇▇'▇, at least
"A-2" by S&P and in each case maturing within one year after
the date of acquisition; and
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7) money market funds that are SEC.270.2a-7 compliant or
enhanced cash funds having a weighted average maturity of
not greater than 120 days.
"CASH RECEIPTS" has the meaning set forth in Section Each DDA Notification,
Credit Card Notification, Insurance Provider Notification and Blocked Account
Agreement and the Coinstar Notification shall require, after the occurrence and
during the continuance of a Triggering Event, the Loan Parties shall promptly
and in any event within two Business Days, cause the ACH or wire transfer on
each Business Day (and whether or not there is then an outstanding balance in
the Loan Account) of all available cash receipts (the "Cash Receipts") to the
concentration account maintained by the Administrative Agent at Bank of America
(the "Agent's Account") from:.
"CASH MANAGEMENT RESERVES" means such reserves as the Administrative
Agent, from time to time, determines in its discretion as being appropriate to
reflect the reasonably anticipated liabilities and obligations of the Loan
Parties with respect to Cash Management Services then provided or outstanding.
"CASH MANAGEMENT SERVICES" means any one or more of the following types or
services or facilities provided to any Loan Party by any Lender or any of its
Affiliates (a) ACH transactions, (b) cash management services, including,
without limitation, controlled disbursement services, treasury, depository,
overdraft, and electronic funds transfer services, (c) foreign exchange
facilities, and (d) credit or debit cards.
"CHANGE IN CONTROL" means, at any time, (a) the board of directors of the
Company shall cease to consist of a majority of the Continuing Directors, or (b)
any person or group (within the meaning of Sections 13(d) and 14(d) of the
Securities and Exchange Act of 1934, as amended) other than a Permitted Holder
shall acquire a majority of the voting power represented by the Company's
outstanding capital stock entitled to vote in the election of directors of the
Company.
"CHANGE IN LAW" means (a) the adoption of any law, rule or regulation after
the date of this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the date of this Agreement or (c) compliance by any Lender or the Issuing Bank
(or, for purposes of Section If any Lender or any Issuing Bank determines that
any Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or Issuing Bank's capital or on the
capital of such Lender's or Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by such Issuing
Bank, to a level below that which such Lender or such Issuing Bank or such
Lender's or Issuing Bank's holding company could have achieved but for such
Change in Law (taking into consideration such Lender's or Issuing Bank's
policies and the policies of such Lender's or Issuing Bank's holding company
with respect to capital adequacy), then from time to time the Company will pay
to such Lender or Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Lender or Issuing Bank or such Lender's or the
Issuing Bank's holding company for any such reduction suffered., by any lending
office of such Lender or by such Lender's or such Issuing Bank's holding
company, if any) with any request, guideline or directive (whether or not having
the force of law) of any Governmental Authority made or issued after the date of
this Agreement.
15
"CHARGES" has the meaning set forth in Interest Rate Limitation.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COINSTAR ADVANCE RATE" means 85%.
"COINSTAR INSTALLATION AGREEMENTS" means that certain Coinstar Installation
Agreement, dated April 29, 2002 (as the same may be amended, supplemented and
otherwise modified from time to time with the prior written consent of the
Administrative Agent), between the Company and Coinstar, Inc., together with
each other installation agreement between the Company (or any of its
Subsidiaries) and Coinstar, Inc. in form and substance satisfactory to the
Administrative Agent.
"COINSTAR NOTIFICATION" has the meaning set forth in Section Within ninety
(90) days after the Effective Date (or such longer time as the Administrative
Agent may, in its sole discretion, agree in writing), each Loan Party shall:.
"COINSTAR RECEIVABLE" means each "Account" (as defined in the UCC )
together with all income, payments and proceeds thereof due and owing to the
Company (or any of its Subsidiaries) by Coinstar, Inc., pursuant to any contract
between the Company (or any of its Subsidiaries) and Coinstar, Inc., including
but not limited to the Coinstar Installation Agreements.
"COLLATERAL" means any and all "Collateral" or "Mortgaged Property", as
defined in any applicable Security Document.
"COLLATERAL AGENT" means Bank of America, N.A., in its capacity as
collateral agent for the Secured Parties under the Security Documents.
"COMMERCIAL LETTER OF CREDIT" means any letter of credit or similar
instrument (including, without limitation, banker's acceptances) issued for the
purpose of providing credit support in connection with the purchase of any
materials, goods or services by a Borrower in the ordinary course of business of
such Borrower.
"COMMITMENT" means, with respect to each Lender, its Tranche A Commitment,
its Tranche A-1 Commitment and its Term Commitment.
"COMMITMENT INCREASE" has the meaning set forth in Section So long as no
Default or Event of Default exists or would arise therefrom, (i) the Company
shall have the right, at any time from time to time after the Effective Date, to
request an increase of the aggregate of the then outstanding Tranche A
Commitments by an amount not to exceed in the aggregate $100,000,000. Any such
requested increase shall be first made to all existing Tranche A Lenders on a
pro rata basis based on their respective Tranche A Applicable Percentages. At
the time of sending such notice, the Company (in consultation with the
Administrative Agent) shall specify the time period within which each Tranche A
Lender is requested to respond (which shall in no event be less than ten (10)
Business Days from the date of delivery of such notice to the Tranche A
Lenders). Each Tranche A Lender shall notify the Administrative Agent within
such time period whether or not it agrees to increase its Tranche A Commitment
and, if so, whether by an
16
amount equal to, greater than, or less than its Tranche A Applicable Percentage
of such requested increase. Any Tranche A Lender not responding within such time
period shall be deemed to have declined to increase its Tranche A Commitment. To
the extent that the existing Tranche A Lenders decline to increase their Tranche
A Commitments, or decline to increase their Tranche A Commitments to the amount
requested by the Company, the Administrative Agent, in consultation with the
Company, will use its reasonable efforts to arrange for other Persons to become
a Tranche A Lender hereunder and to issue commitments in an amount equal to the
amount of the increase in the Tranche A Commitments requested by the Company and
not accepted by the existing Tranche A Lenders (each such increase by either
means, a "COMMITMENT INCREASE," and each Person issuing, or Tranche A Lender
increasing, its Commitment, an "ADDITIONAL COMMITMENT LENDER"), PROVIDED,
HOWEVER, that (i) no Tranche A Lender shall be obligated to provide a Commitment
Increase as a result of any such request by the Company, and (ii) any Additional
Commitment Lender which is not an existing Tranche A Lender shall be subject to
the approval of the Administrative Agent, the Issuing Bank and the Company
(which approval shall not be unreasonably withheld). Each Commitment Increase
shall be in a minimum aggregate amount of at least $10,000,000 and in integral
multiples of $5,000,000 in excess thereof.
"COMMITMENT INCREASE DATE" has the meaning set forth in Section The
Administrative Agent shall promptly notify each Lender as to the effectiveness
of each Commitment Increase (with each date of such effectiveness being referred
to herein as a "COMMITMENT INCREASE DATE"), and at such time (i) the Tranche A
Commitments, under, and for all purposes of, this Agreement shall be increased
by the aggregate amount of such Commitment Increases, (ii) Schedule 2.01 shall
be deemed modified, without further action, to reflect the revised Tranche A
Commitments of the Tranche A Lenders and (iii) this Agreement shall be deemed
amended, without further action, to the extent necessary to reflect such
increased Tranche A Commitments.
"COMPANY" means The Great Atlantic & Pacific Tea Company, Inc., a Maryland
corporation.
"CONTINUING DIRECTORS" means directors of the Company who are in office on
the Effective Date and each other director, whose nomination for election to the
board of directors of the Company is recommended by a majority of the then
Continuing Directors or a Permitted Holder.
"CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"CONVERTIBLE NOTES" means collectively, the Company's Convertible Senior
Notes which may be issued subsequent to the Effective Date to refinance the
Bridge Financing Facility and/or the Senior Notes. The Convertible Notes shall
be deemed Indebtedness under this Agreement (and not Equity Interests) unless
and until such securities are converted into or exchanged for shares of capital
stock of the Company.
17
"COST" means the cost of purchases as reported on the Borrowers' stock
ledger, based upon the Borrowers' accounting practices, which practices are in
effect on the Effective Date or thereafter consented to by the Administrative
Agent. "Cost" does not include inventory capitalization costs or other
non-purchase price charges (such as deferred freight) used in the Borrowers'
calculation of cost of goods sold.
"CREDIT CARD NOTIFICATION" has the meaning set forth in Section Within
ninety (90) days after the Effective Date (or such longer time as the
Administrative Agent may, in its sole discretion, agree in writing), each Loan
Party shall:.
"CREDIT CARD RECEIVABLES" means each "Account" (as defined in the UCC)
together with all income, payments and proceeds thereof, owed by a major credit
or debit card issuer (including, but not limited to, Visa, Mastercard and
American Express and such other issuers approved by the Administrative Agent) to
a Loan Party resulting from charges by a customer of a Loan Party on credit or
debit cards issued by such issuer in connection with the sale of goods by a Loan
Party, or services performed by a Loan Party, in each case in the ordinary
course of its business.
"CREDIT EXTENSION" mean (a) a Borrowing or (b) an L/C Credit Extension.
"CREDIT PARTY" or "CREDIT PARTIES" means (a) individually, (i) each Lender
and its Affiliates, (ii) each Agent, (iii) the Issuing Bank, (iv) the Lead
Arranger, (v) each beneficiary of each indemnification obligation undertaken by
any Loan Party under any Loan Document, (vi) any other Person to whom
Obligations under this Agreement and other Loan Documents are owing, and (vii)
the successors and assigns of each of the foregoing, and (b) collectively, all
of the foregoing.
"CURRENCY AND COMMODITY HEDGING AGREEMENT" means any foreign currency
exchange agreement, commodity price protection agreement or other currency
exchange rate or commodity price hedging arrangement.
"DDAs" means any checking, savings or other demand deposit account
maintained by a Loan Party.
"DDA NOTIFICATION" has the meaning set forth in Section Within ninety (90)
days after the Effective Date (or such longer time as the Administrative Agent
may, in its sole discretion, agree in writing), each Loan Party shall:.
"DEFAULT" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DELINQUENT LENDER" has the meaning set forth in If for any reason any
Lender shall fail or refuse to abide by its obligations under this Agreement,
including without limitation its obligation to make available to Administrative
Agent its Applicable Percentage of any Loans, expenses or setoff or purchase its
Applicable Percentage of a participation interest in the Swingline Loans or L/C
Exposure (a "Delinquent Lender") and such failure is not cured within ten (10)
days of receipt from the Administrative Agent of written notice thereof, then,
in addition to the rights and remedies that may be available to the other Credit
Parties, the Loan Parties or
18
any other party at law or in equity, and not at limitation thereof, (i) such
Delinquent Lender's right to participate in the administration of, or
decision-making rights related to, the Obligations, this Agreement or the other
Loan Documents shall be suspended during the pendency of such failure or
refusal, and (ii) a Delinquent Lender shall be deemed to have assigned any and
all payments due to it from the Loan Parties, whether on account of outstanding
Loans, interest, fees or otherwise, to the remaining non-delinquent Lenders for
application to, and reduction of, their proportionate shares of all outstanding
Obligations until, as a result of application of such assigned payments the
Lenders' respective Applicable Percentages of all outstanding Obligations shall
have returned to those in effect immediately prior to such delinquency and
without giving effect to the nonpayment causing such delinquency. The Delinquent
Lender's decision-making and participation rights and rights to payments as set
forth in clauses (i) and (ii) hereinabove shall be restored only upon the
payment by the Delinquent Lender of its Applicable Percentage of any
Obligations, any participation obligation, or expenses as to which it is
delinquent, together with interest thereon at the rate set forth in SECTION
2.13(c) hereof from the date when originally due until the date upon which any
such amounts are actually paid.
"DISBURSEMENT ACCOUNTS" has the meaning set forth in Section The Borrowers
may also maintain one or more disbursement accounts (the "Disbursement
Accounts") to be used by the Borrowers for disbursements and payments (including
payroll) in the ordinary course of business or as otherwise permitted hereunder.
The only Disbursement Accounts as of the Effective Date are those described in
SCHEDULE 5.14(i).
"DISCLOSED MATTERS" means the actions, suits and proceedings and the
environmental matters disclosed in SCHEDULE 3.06.
"DISTRIBUTION CENTER SHRINK PERCENTAGE" shall be applicable to Inventory
located at the Distribution Centers and shall mean, at the end of each fiscal
quarter, average shrink expressed in terms of cost value resulting from the
physical inventories performed at each Distribution Center during the two (2)
fiscal quarters ending on such date, expressed as a percentage of the cost value
of Inventory.
"DISTRIBUTION CENTER SHRINK RESERVE" shall be equal to the product of (a)
the excess of the Distribution Center Shrink Percentage over 1%, multiplied by
(b) Inventory at the Distribution Centers as of the date of the most recent
Borrowing Base Certificate.
"DISTRIBUTION CENTERS" means (i) the warehouse facilities operated by the
Loan Parties on the date hereof as set forth in SCHEDULE B and (ii) any
warehouse facility located in the United States and operated by Loan Parties
that is designated as a Distribution Center by (a) giving 30 days prior written
notice to the Administrative Agent and (b) effecting the execution, filing and
recordation of such financing statements, the delivery of such Priority of
Claims Waivers as required hereby and taking any and all such further actions as
may be reasonably requested by the Administrative Agent.
"DOLLARS" and the symbol "$" mean the lawful currency of the United States.
"EFFECTIVE DATE" means the date on which the conditions specified in
Section Effective Date are satisfied (or waived in accordance with Section
Waivers; Amendments).
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"ELIGIBLE ASSIGNEE" means (a) a Lender or any Affiliate of a Lender; (b) an
Approved Fund; and (c) any other Person having a combined capital and surplus in
excess of $1,000,000,000 approved by (i) the Administrative Agent, the Issuing
Bank and the Swingline Lender, and (ii) unless an Event of Default has occurred
and is continuing, the Company (each such approval under clauses (i) and (ii)
not to be unreasonably withheld or delayed); provided that notwithstanding the
foregoing, "Eligible Assignee" shall not include a natural person or a Loan
Party or any of the Loan Parties' Affiliates or Subsidiaries.
"ELIGIBLE COINSTAR RECEIVABLES" means, at the time of any determination
thereof, each Coinstar Receivable that satisfies the following criteria at the
time of creation and continues to meet the same at the time of such
determination: such Coinstar Receivable (i) has been earned and represents the
bona fide amounts due to the Company or another Loan Party from Coinstar, Inc.
and in each case originated in the ordinary course of business of the Company or
another Loan Party and (ii) is not ineligible for inclusion in the calculation
of the Tranche A Borrowing Base or Tranche A-1 Borrowing Base pursuant to any of
clauses (a) through (i) below. Without limiting the foregoing, to qualify as
Eligible Coinstar Receivable, an Account shall indicate no Person other than the
Company or another Loan Party (other than an Excluded Subsidiary) as payee or
remittance party. In determining the amount to be so included, the face amount
of an Account shall be reduced by, without duplication, to the extent not
reflected in such face amount, (i) the amount of all accrued and actual
discounts, claims, credits or credits pending, promotional program allowances,
price adjustments, finance charges or other allowances (including any amount
that the Company or another Loan Party, as applicable, may be obligated to
rebate to a customer) and (ii) the aggregate amount of all cash received in
respect of such Account but not yet applied by the Company or another Loan Party
to reduce the amount of such Coinstar Receivable. Any Coinstar Receivables
meeting the foregoing criteria shall be deemed Eligible Coinstar Receivables but
only as long as such Coinstar Receivable is not included in any material respect
within any of the following categories, in which case such Coinstar Receivable
shall not constitute an Eligible Conistar Receivable:
(a) such Coinstar Receivable is not owned by the Company or another Loan
Party, (other than an Excluded Subsidiary) and the Company or another Loan Party
(other than an Excluded Subsidiary) does not have good or marketable title to
such receivable free and clear of any Lien of any Person other than the
Collateral Agent and to secure the Junior Secured Facilities;
(b) such Coinstar Receivable does not constitute an "Account" (as defined
in the UCC) or such receivables have been outstanding for more than ten (10)
Business Days;
(c) either the Company (or the applicable Loan Party) or Coinstar, Inc. is
the subject of any bankruptcy or insolvency proceedings;
(d) such Coinstar Receivable is not a valid, legally enforceable obligation
of Coinstar, Inc.;
(e) such Coinstar Receivable is not subject to a properly perfected first
priority security interest in favor of the Collateral Agent, or is not in form
and substance reasonably
20
satisfactory to the Administrative Agent, or is subject to any Lien whatsoever
(other than the Lien of the Collateral Agent and the Lien to secure the Junior
Secured Facilities);
(f) such Coinstar Receivable otherwise does not conform to all
representations, warranties, covenants and agreements in the Loan Documents
relating to receivables;
(g) Coinstar, Inc. has not received the Coinstar Notification in accordance
with the provisions of Section 5.14(d);
(h) such Coinstar Receivable does not meet such other usual and customary
eligibility criteria for receivables as the Administrative Agent may determine
from time to time in its commercially reasonable discretion; or
(i) such Coinstar Receivable is evidenced by "chattel paper" or an
"instrument" of any kind unless such "chattel paper" or "instrument" is in the
possession of the Collateral Agent, and to the extent necessary or appropriate,
endorsed to the Collateral Agent.
"ELIGIBLE CREDIT CARD ACCOUNTS RECEIVABLE" means at the time of any
determination thereof, each Credit Card Receivable that satisfies the following
criteria at the time of creation and continues to meet the same at the time of
such determination: such Credit Card Receivable (i) has been earned and
represents the bona fide amounts due to the Company or another Loan Party from a
credit card payment processor and/or credit card issuer, and in each case
originated in the ordinary course of business of the Company and the related
Loan Party and (ii) is not ineligible for inclusion in the calculation of the
Tranche A Borrowing Base or the Tranche A-1 Borrowing Base pursuant to any of
clauses (a) through (j) below. Without limiting the foregoing, to qualify as an
Eligible Credit Card Accounts Receivable, an Account shall indicate no Person
other than the Company or the related Loan Party as payee or remittance party.
In determining the amount to be so included, the face amount of an Account shall
be reduced by, without duplication, to the extent not reflected in such face
amount, (i) the amount of all accrued and actual discounts, claims, credits or
credits pending, promotional program allowances, price adjustments, finance
charges or other allowances (including any amount that the Company or the
related Loan Party, as applicable, may be obligated to rebate to a customer, a
credit card payment processor, or credit card issuer pursuant to the terms of
any agreement or understanding (written or oral)) and (ii) the aggregate amount
of all cash received in respect of such Account but not yet applied by the
Company or the related Loan Party to reduce the amount of such Credit Card
Receivable. Any Credit Card Receivables meeting the foregoing criteria shall be
deemed Eligible Credit Card Receivables but only as long as such Credit Card
Receivable is not included in any material respect within any of the following
categories, in which case such Credit Card Receivable shall not constitute an
Eligible Credit Card Receivable:
(a) such Credit Card Receivable is not owned by a Loan Party (other than an
Excluded Subsidiary) and such Loan Party does not have good or marketable title
to such Credit Card Receivable free and clear of any Lien of any Person other
than the Collateral Agent and to secure the Junior Secured Facilities;
21
(b) such Credit Card Receivable does not constitute an "Account" (as
defined in the UCC) or such Credit Card Receivable has been outstanding for more
than seven (7) business days;
(c) the issuer or payment processor of the applicable credit card with
respect to such Credit Card Receivable is the subject of any bankruptcy or
insolvency proceedings;
(d) such Credit Card Receivable is not a valid, legally enforceable
obligation of the applicable issuer with respect thereto;
(e) such Credit Card Receivable is not subject to a properly perfected
first priority security interest in favor of the Collateral Agent, or is not in
form and substance reasonably satisfactory to the Administrative Agent, or is
subject to any Lien whatsoever other than (i) Permitted Encumbrances
contemplated by the credit card processor agreements and for which appropriate
reserves (as determined by the Administrative Agent) have not been established
or maintained by the Borrowers, or (ii) Liens to secure the Junior Secured
Facilities;
(f) the Credit Card Receivable does not conform to all representations,
warranties or other provisions in the Loan Documents relating to Credit Card
Receivables;
(g) such Credit Card Receivable is owed by a Person that has not received a
Credit Card Notification in accordance with the provisions of Within ninety (90)
days after the Effective Date (or such longer time as the Administrative Agent
may, in its sole discretion, agree in writing), each Loan Party shall:;
(h) such Credit Card Receivable is subject to risk of set-off,
non-collection or not being processed due to unpaid and/or accrued credit card
processor fee balances, limited to the lesser of the balance of Credit Card
Receivable or unpaid credit card processor fees;
(i) such Credit Card Receivable is evidenced by "chattel paper" or an
"instrument" of any kind unless such "chattel paper" or "instrument" is in the
possession of the Collateral Agent, and to the extent necessary or appropriate,
endorsed to the Collateral Agent; or
(j) such Credit Card Receivable does not meet such other usual and
customary eligibility criteria for Credit Card Receivables as the Administrative
Agent may determine from time to time in its commercially reasonable discretion.
"ELIGIBLE INVENTORY" means, at the time of any determination thereof the
Inventory of the Company or a Loan Party at the time of such determination that
is not ineligible for inclusion in the Tranche A Borrowing Base or the Tranche
A-1 Borrowing Base pursuant to any of the clauses (a) through (o) below. Without
limiting the foregoing, to qualify as Eligible Inventory no Person other than
the Company or a Loan Party (other than an Excluded Subsidiary) shall have any
direct or indirect ownership, interest or title to such Inventory and no Person
other than the Company or a Loan Party (other than an Excluded Subsidiary),
shall be indicated on any purchase order or invoice with respect to such
Inventory as having or purporting to have an interest therein. Any Inventory
meeting the foregoing criteria shall be deemed Eligible Inventory but only as
long as such Inventory is not included in any material respect within any of the
following categories, in which case such Inventory shall not constitute an
Eligible Inventory:
22
(a) it is located at a reclamation center of any Distribution Center or is
otherwise held at any Distribution Center for return to vendor;
(b) it is supplies, packaging, selling or display materials;
(c) it is produce, floral, seafood, meat, bakery, dairy, deli, or fuel
(provided that fuel in an aggregate amount not to exceed $1,000,000 may be
deemed eligible inventory for purposes of calculating the Tranche A Borrowing
Base and the Tranche A-1 Borrowing Base);
(d) it is not owned solely by the Company or any other Loan Party or is
owned by an Excluded Subsidiary;
(e) it is on consignment to the Company or any other Loan Party;
(f) it is not located at property that is owned or leased by the Company or
any other Loan Party or is in transit from vendors to such a property; provided
that (I) Inventory in third party storage facilities located in jurisdictions
other than Priming Jurisdictions shall, if not otherwise excluded, be included
as Eligible Inventory, minus any claims or Liens, other than Permitted
Encumbrances, that vendors, landlords, public warehouse operators or any third
party bailee may have against such property, from time to time, and (II)
Inventory located in Priming Jurisdictions shall not be included in Eligible
Inventory pursuant to this paragraph (f) unless either (A) the applicable
vendor, landlord, public warehouse or any third party bailee has provided to the
related Loan Party a Priority of Claims Waiver in form and substance reasonably
satisfactory to the Administrative Agent, or (B)(i) the Borrowers have deposited
with the Collateral Agent collateral consisting of Cash and Cash Equivalents an
amount equal to the Reserve for Leasehold Obligations (as applicable) with
respect to such property or (ii) the Administrative Agent has established an
appropriate Reserve for Leasehold Obligations, or (C) Borrowers' obligations to
such vendor, landlord, public warehouse or third party bailee are supported by a
standby letter of credit issued by a Lender pursuant to this Agreement in an
amount at least equal to the Reserve for Leasehold Obligations;
(g) it is not located in the United States of America;
(h) it is not subject to a perfected first priority Lien in favor of the
Collateral Agent securing the Obligations, regardless of its location, other
than Permitted Encumbrances;
(i) it (i) is damaged, defective, "seconds," or otherwise unmerchantable,
(ii) is to be returned to the vendor, (iii) is not in good condition, (iv) does
not meet all standards imposed by any Governmental Authority having regulatory
authority over it, or (v) is not currently saleable in the normal course of
business of the Company and the Subsidiaries;
(j) it is inventory located at any Distribution Center on such date that
represents over 13 weeks old inventory based on date of receipt determined at an
individual product level (provided that such inventory shall be eligible for
purposes of calculating the Tranche A Borrowing Base and the Tranche A-1
Borrowing Base to the extent of fifty percent (50%) of the book value thereof);
23
(k) it is Inventory that is accounted for in both the Company's
Distribution Center and Store Inventory;
(l) it includes any profits or transfer price additions charged or accrued
in connection with transfers of Inventory between the Company and its
Subsidiaries or Affiliates;
(m) it is accounted for in the Store Shrink Reserve;
(n) it is accounted for in the Distribution Center Shrink Reserve; or
(o) it is accounted for in the Company's reserve which adjusts Inventory
valued under the Company's historical retail method of accounting to actual cost
value (product mix) or adjusts Inventory for unallocated earned allowances (net
costing).
"ELIGIBLE LEASEHOLDS" means any Real Estate meeting in all material
respects the following criteria:
(a) A Loan Party (other than an Excluded Subsidiary) is the lessee
under a Lease for such Real Estate, the terms and conditions of which are
reasonably satisfactory to the Administrative Agent;
(b) Without limiting the provisions of clause (a), above, the Lease
may be mortgaged and collaterally assigned to the Collateral Agent without the
prior consent of the lessor (or if consent is required, such consent has been
obtained on terms and conditions reasonably satisfactory to the Administrative
Agent);
(c) Unless waived by the Administrative Agent, the Lease contains
customary estoppels, cure rights, and other provisions protecting a leasehold
mortgagee's interests in the Lease as the Administrative Agent may determine in
its commercially reasonable discretion or if not contained therein, such
provisions have been included in a landlord agreement in form and substance
reasonably satisfactory to the Administrative Agent. Notwithstanding the
foregoing, all Leases upon which the Collateral Agent obtains a Mortgage on the
Effective Date shall be deemed to have satisfied this requirement;
(d) The Loan Parties shall not be in default of the terms of the Lease
and no event shall have occurred, or solely with the passage of time, giving of
notice or both, would permit the lessor to terminate the Lease;
(e) The Collateral Agent shall have received evidence that all actions
that the Collateral Agent may reasonably deem necessary or appropriate in order
to create valid first and subsisting Liens (subject only to those Liens
permitted by Section 6.02 hereof which have priority over the Lien of the
Collateral Agent by operation of Applicable Law or otherwise reasonably
acceptable to the Administrative Agent) on the leasehold interest has been
taken;
(f) The Administrative Agent shall have received an appraisal (based
upon Appraised Value) of such leasehold interest complying with the requirements
of FIRREA by a third party appraiser reasonably acceptable to the Administrative
Agent and otherwise in form and substance reasonably satisfactory to the
Administrative Agent; and
24
(g) The Real Estate Eligibility Requirements have been satisfied.
"ELIGIBLE REAL ESTATE" means any Real Estate meeting in all material
respects the following criteria:
(a) A Loan Party (other than an Excluded Subsidiary) owns such Real
Estate in fee simple absolute;
(b) The Administrative Agent shall have received evidence that all
actions that the Administrative Agent may reasonably deem necessary or
appropriate in order to create valid first and subsisting Liens (subject
only to those Liens permitted by Section 6.02 hereof which have priority
over the Lien of the Collateral Agent by operation of Applicable Law or
otherwise reasonably acceptable to the Administrative Agent) on the
property described in the Mortgages has been taken.
(c) The Administrative Agent shall have received an appraisal (based
upon Appraised Value) of such Real Estate complying with the requirements
of FIRREA by a third party appraiser reasonably acceptable to the
Administrative Agent and otherwise in form and substance reasonably
satisfactory to the Administrative Agent; and
(d) The Real Estate Eligibility Requirements have been satisfied.
"ELIGIBLE THIRD PARTY INSURANCE PROVIDER ACCOUNTS RECEIVABLE" means,
at the time of any determination thereof, each third party insurance
provider "Account" (as defined in the UCC) together with all income,
payments and proceeds thereof, that satisfies the following criteria at the
time of creation and continues to meet the same at the time of such
determination: such Account (i) has been earned and submitted for
reimbursement to, and represents the bona fide amounts due to the Company
or other Loan Party (other than an Excluded Subsidiary) from, a third party
insurance provider, in each case originated in the ordinary course of
business of the Company or the related Loan Party and (ii) is not
ineligible for inclusion in the calculation of the Tranche A Borrowing Base
and the Tranche A-1 Borrowing Base pursuant to any of clauses (a) through
(p) below. Without limiting the foregoing, to qualify as an Eligible Third
Party Insurance Provider Accounts Receivable, a third party insurance
provider account receivable shall indicate no Person other than the Company
or the related Loan Party (other than an Excluded Subsidiary) as payee or
remittance party. In determining the amount to be so included, the face
amount of such an account shall be reduced by, without duplication, to the
extent not reflected in such face amount, (i) the amount of all accrued and
actual discounts, claims, credits or credits pending, promotional program
allowances, price adjustments, finance charges or other allowances
(including any amount that the Company or the related Loan Party, as
applicable, may be obligated to rebate to a third party insurance provider
pursuant to the terms of any agreement or understanding (written or oral))
and (ii) the aggregate amount of all cash received in respect of such
Account but not yet applied by the Company or the related Loan Party to
reduce the amount of such Account. All third party insurance provider
accounts receivable meeting the foregoing criteria shall be deemed Eligible
Third Party Insurance Provider Accounts Receivable but only as long as such
third party insurance provider account receivable is not included in any
material
25
respect within any of the following categories, in which case such third
party insurance provider account receivable shall not constitute an
Eligible Third Party Insurance Provider Accounts Receivable:
(a) an invoice (in form and substance satisfactory to the Administrative
Agent) with respect to such third party insurance provider accounts receivable
has not been sent to the applicable account debtor;
(b) such third party insurance provider accounts receivable does not
constitute an "ACCOUNT" (as defined in the UCC);
(c) such third party insurance provider accounts receivable are not due and
payable in full, or are subject to any ▇▇▇▇ and hold arrangement, or more than
90 days have elapsed since the date of the sale of goods giving rise to such
third party insurance provider accounts receivable;
(d) the aggregate amount of accounts due from third party insurance
providers exceeds Fifteen Million Dollars ($15,000,000) for which more than 60
days but not more than 90 days have elapsed since the date of the sale of goods
or rendering of services giving rise to such third party insurance provider
accounts receivable;
(e) such third party insurance provider accounts receivable did not arise
from the provision of goods authorized by a physician's prescription, and such
goods have been performed or provided;
(f) such third party insurance provider accounts receivable arose from the
provision of durable medical equipment;
(g) such third party insurance provider accounts receivable (i) are not
owned by a Loan Party and such Loan Party does not have good or marketable title
to such third party insurance provider accounts receivable or (ii) are owned by
an Excluded Subsidiary;
(h) such third party insurance provider accounts receivable are subject to
any assignment, claim, lien, or security interest, except in favor of the
Administrative Agent and the Lenders;
(i) such third party insurance provider accounts receivable are not subject
to a properly perfected first priority security interest in favor of the
Collateral Agent, or is not in form and substance reasonably satisfactory to the
Administrative Agent, or is subject to any Lien whatsoever other than Permitted
Encumbrances and for which appropriate reserves (as determined by the
Administrative Agent) have not been established or maintained by the Borrowers;
(j) such third party insurance provider accounts receivable are not valid
and legally enforceable obligations of the account debtor, are with recourse, or
are subject to any claim for credit, defense, offset, chargeback, counterclaim
or adjustment by the account debtor (other than any discount allowed for prompt
payment and reconciliations in the ordinary course of business), and the
assignment or pledging thereof violates any agreement to which the account
debtor is subject;
26
(k) such third party insurance provider accounts receivable did not arise
in the ordinary course of business of the Company and its Subsidiaries, or a
notice of the bankruptcy, insolvency, failure, or suspension or termination of
business of the account debtor has been received by the Company or the related
Loan Party, or the payor thereunder shall have provided written notice to anyone
of a challenge or dispute of its obligations thereunder;
(l) such third party insurance provider accounts receivable do not conform
to all representations, warranties or other provisions of the Loan Documents
relating to such third party insurance provider accounts receivable;
(m) such third party insurance provider accounts receivable are obligations
payable under Medicare, Medicaid or any other governmental program or the
related account debtor is any unit of government;
(n) such third party insurance provider accounts receivable is owed by a
Person that has not received an Insurance Provider Notification in accordance
with the provisions of Within ninety (90) days after the Effective Date (or such
longer time as the Administrative Agent may, in its sole discretion, agree in
writing), each Loan Party shall:;
(o) such third party insurance provider accounts receivable do not meet
other usual and customary eligibility criteria for third party insurance
provider accounts receivable, including the payors thereunder, as determined by
the Administrative Agent in its commercially reasonable discretion; or
(p) such third party insurance provider accounts receivable is evidenced by
"chattel paper" or an "instrument" of any kind unless such "chattel paper" or
"instrument" is in the possession of the Collateral Agent, and to the extent
necessary or appropriate, endorsed to the Collateral Agent.
"ENVIRONMENTAL COMPLIANCE RESERVE" means, with respect to Eligible Real
Estate and Eligible Leaseholds, any reserve which the Agents, from time to time
in their discretion establish for estimable amounts that are reasonably likely
to be expended by any of the Loan Parties in order for such Loan Party and its
operations and property (a) to comply with any notice from a Governmental
Authority asserting non-compliance with Environmental Laws, or (b) to correct
any such non-compliance with Environmental Laws or to provide for any
Environmental Liability.
"ENVIRONMENTAL LAWS" means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the pollution or protection of the environment or the preservation or
reclamation of natural resources, including those relating to the management,
release or threatened release of any Hazardous Material, or to employee health
and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability, obligation, damage, loss,
claim, action, suit, judgment, order, fine, penalty, fee, expense or cost,
contingent or otherwise (including any liability for costs of environmental
remediation, or natural resource damages, administrative oversight costs, and
indemnities), of the Company or any Subsidiary arising under any
27
Environmental Law resulting from or based upon (a) compliance or noncompliance
with any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal or presence of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract or agreement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"EQUITY INTERESTS" means, as to any Person, all of the authorized shares of
capital stock of (or other ownership or profit interests in) such Person,
including all classes of common and preferred capital stock, all of the
warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, membership or trust interests
therein), rights to receive distributions of cash and other property, and to
receive allocations of items of income, gain, loss, deduction and credit and
similar items from such Person, whether voting or nonvoting, whether or not such
interests include rights entitling the holder thereof to exercise control over
such Person, and whether or not such shares, warrants, options, rights or other
interests are outstanding on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not incorporated)
that, together with the Company, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.
"ERISA EVENT" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Company or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Company or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Company or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Company or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"EVENT OF DEFAULT" has the meaning set forth in Events of Default.
28
"EXCESS AMOUNT" has the meaning set forth in Section 2.06(d).
"EXCESS AVAILABILITY" means, as of any date of determination thereof by the
Administrative Agent, the result, if a positive number, of:
(a) The lesser of:
(i) the Tranche A-1 Borrowing Base (or if the Tranche A-1
Commitments have been terminated, the Tranche A Borrowing Base); or
(ii) the Aggregate Revolving Commitments;
MINUS
(b) The aggregate of the outstanding Credit Extensions (other than the
Aggregate Term Outstandings).
In calculating Excess Availability at any time and for any purpose under
this Agreement, the Company shall certify to the Administrative Agent that all
accounts payable and Taxes are being paid on a timely basis and consistent with
past practices (absent which the Administrative Agent may establish a reserve
therefor).
"EXCHANGE ACT FILINGS" means all filings made by the Company pursuant to
the Securities and Exchange Act of 1934, and the rules promulgated thereunder,
since and including the annual report of the Company on Form 10-K for the fiscal
year ended immediately prior to the date as of which representation and warranty
is made or deemed to be made hereunder.
"EXCLUDED SUBSIDIARY" means each Subsidiary of the Company which (a) is
affected by any event or circumstance referred to in any of Sections 7.01 (h),
(i) or (j) and (b) meets all the following conditions: (i) the Company's direct
and indirect investments in and advances to the Subsidiary is less than 1% of
the total assets of the Company consolidated as of the end of the most recently
completed fiscal year; (ii) the Company's direct and indirect proportionate
share of the total assets (after intercompany eliminations) of the Subsidiary is
less than 1% of the total assets of the Company consolidated as of the end of
the most recently completed fiscal year; and (iii) the Company's direct and
indirect equity in the income from continuing operations before income taxes,
extraordinary items and cumulative effect of a change in accounting principle of
the Subsidiary is less than 1% of such income of the Company consolidated for
the most recently completed fiscal year; PROVIDED that, (A) all Excluded
Subsidiaries shall be considered to be a single consolidated Subsidiary for
purposes of determining whether the conditions specified in clauses (i), (ii)
and (iii) above are satisfied and (ii) a Subsidiary shall not be an Excluded
Subsidiary if such Subsidiary holds rights under any long-term contracts for the
purchase of inventory accounting for more than 5% of the total inventory
purchased by the Company and its Subsidiaries during the most recently completed
four fiscal quarters.
"EXCLUDED TAXES" means, with respect to the Administrative Agent, any
Lender (including for this purpose the Issuing Bank) or any other recipient of
any payment to be made by or on account of any obligation of any Borrower
hereunder, (a) taxes imposed on (or measured by) its net income, profits or
overall gross income or receipts, and franchise or similar
29
taxes, imposed by the United States of America, by a jurisdiction under the laws
of which such recipient is organized or in which its principal office is located
or, in the case of any Lender, in which its applicable lending office is
located, or by any other jurisdiction with which the recipient has or had any
other present or former connection (other than a connection arising solely from
entering into, performing its obligations under, receiving a payment under or
enforcing this Agreement or the other Loan Documents), (b) any branch profits
taxes imposed by the United States of America or any similar tax imposed by any
jurisdiction described in clause (a) above, (c) in the case of a Non-U.S.
Lender, any withholding tax that is imposed on amounts payable to such Non-U.S.
Lender (A) pursuant to a Tax law in effect on the date such Non-U.S. Lender
becomes a party hereto or a Participant through the purchase of a participation
hereunder, the date such Non-U.S. Lender designates a new Lending Office, or,
with respect to any additional position in any Obligation acquired after such
Non-U.S. Lender becomes a party hereto, the date such additional position was
acquired by such Non-U.S. Lender, or (B) is attributable to such Non-U.S.
Lender's failure or inability (other than as a result of a Change in Law
occurring after the date such Non-U.S. Lender becomes a party to this Agreement,
a Participant through the purchase of a participation hereunder, or with respect
to any additional position in any Obligation acquired after such Non-U.S. Lender
becomes a party hereto, the date such additional position was acquired by such
Non-U.S. Lender) to comply with Section 2.17(e), except, in each case described
in clause (A) or (B), to the extent that such Non-U.S. Lender (or its assignor,
if any) was entitled, at the time of designation of a new lending office,
assignment or acquisition of such additional position in any Obligation (as
applicable), to receive additional amounts from the Borrowers with respect to
such withholding tax pursuant to Section 2.17, and (d) any U.S. federal, state
or local backup withholding tax.
"EXECUTIVE ORDER" has the meaning set forth in Foreign Asset Control
Regulations.
"EXISTING FINANCING AGREEMENTS" means collectively, (i) the credit
facilities evidenced pursuant to the Credit Agreement, dated as of November 15,
2005, by and among the Company, the borrowers party thereto, the lenders party
thereto and Bank of America, as administrative agent and collateral agent
thereunder and other "Loan Documents" as defined therein, each as amended, (ii)
the credit facilities evidenced pursuant to the Letter of Credit Agreement,
dated as of October 15, 2005, by and among the Company and Bank of America, as
issuing bank thereunder and other "Credit Documents" as defined therein, each as
amended, and (iii) the credit facilities evidenced pursuant to the Amended and
Restated Credit Agreement, dated as of October 1, 2004, by and among Pathmark,
the guarantors party thereto, the lenders party thereto and Fleet Retail Group,
LLC, as administrative agent and collateral agent thereunder and other "Loan
Documents" as defined therein, each as amended.
"EXISTING LETTERS OF CREDIT" means each of the Letters of Credit issued by
a Lender and outstanding on the Effective Date, as listed on SCHEDULE 1.01(A).
"EXPOSURE" means, at any time, the aggregate principal amount, without
duplication, of outstanding Loans, Swingline Exposure, and L/C Exposure at such
time. The Exposure of any Lender at any time shall be the sum of, without
duplication, its L/C Exposure, plus its Swingline Exposure, plus the aggregate
principal amount of its outstanding Loans at such time.
30
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FINANCIAL OFFICER" of any corporation means the chief financial officer,
principal accounting officer, treasurer, controller or any vice
president-finance, vice-president-financial services or vice-president -treasury
services of such corporation.
"FIRREA" means the Financial Institutions Reform, Recovery and Enforcement
Act of 1989, as amended from time to time.
"FOREIGN ASSETS CONTROL REGULATIONS" has the meaning set forth in Foreign
Asset Control Regulations.
"FOREIGN SUBSIDIARY" means any Subsidiary that is organized under the laws
of a jurisdiction other than the United States of America or any State thereof
or the District of Columbia.
"FUND" shall mean any person that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.
"GAAP" means generally accepted accounting principles in the United States
of America.
"GOVERNMENTAL AUTHORITY" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"GUARANTEE" of or by any Person (the "GUARANTOR") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; PROVIDED that the term Guarantee shall not
31
include endorsements for collection or deposit in the ordinary course of
business. The amount of any Guarantee by a person shall be deemed to be an
amount equal to the stated amount or determinable amount of the primary
obligation in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such person is required to perform thereunder) as determined by such
person in good faith.
"GUARANTY" means the Guaranty among the Loan Parties and the Administrative
Agent, substantially in the form of Exhibit C.
"HAZARDOUS MATERIALS" means all explosive, radioactive, hazardous or toxic
substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes, and all other substances or
wastes of any nature regulated pursuant to any Environmental Law.
"HBA" means health and beauty aids.
"HEDGING AGREEMENT" means any Currency and Commodity Hedging Agreement or
Interest Rate Hedging Agreement.
"IMMATERIAL SUBSIDIARIES" means the Subsidiaries of the Company listed on
Schedule 1.01(D), which the Company intends to dissolve, liquidate or merge into
another Loan Party.
"INCREMENTAL AVAILABILITY" means, at any time of calculation, the
additional amount available to be borrowed by the Borrowers based upon the
difference between the Tranche A-1 Borrowing Base and the Tranche A Borrowing
Base as reflected on the most recent Borrowing Base Certificate delivered by the
Borrowers to the Administrative Agent pursuant to Section 5.01(f) hereof.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid
(excluding current accounts payable in the ordinary course of business), (d) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person
of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
32
"INDEMNIFIED TAXES" means Taxes, other than Excluded Taxes or Other Taxes,
imposed on any payment by or on account of any obligation of the Borrowers
hereunder or under any other Loan Document.
"INDEMNITEE" has the meaning set forth in The Borrowers agree, jointly and
severally, to indemnify the Administrative Agent, the Collateral Agent, the
Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless (on an after tax basis) from, any and all losses, claims,
causes of action, damages, liabilities, settlement payments, costs and related
expenses, including the reasonable fees, charges and disbursements of any
counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution or
delivery of any Loan Document or any other agreement or instrument contemplated
hereby or thereby, the performance by the parties to the Loan Documents of their
respective obligations thereunder or the consummation of the Transactions or any
other transactions contemplated hereby or thereby, (ii) any Loan or Letter of
Credit or the use of the proceeds therefrom (including any refusal by the
Issuing Bank to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit), (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property currently or formerly
owned or operated by the Company or any of its subsidiaries, or any
Environmental Liability related to the operations of the Company or any of its
subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities, costs or related
expenses are determined by a court of competent jurisdiction by final judgment
to have resulted from the gross negligence, bad faith, or willful misconduct of
such Indemnitee, or relate to Hazardous Materials that first arise at any
property owned by a Borrower after such property is transferred to any
Indemnitee or its successors and assigns by foreclosure, deed in lieu of
foreclosure or similar transfer.
"INDEMNITY, Subrogation and Contribution Agreement" means the Indemnity,
Subrogation and Contribution Agreement among the Loan Parties party thereto and
the Collateral Agent, substantially in the form of Exhibit D.
"INFORMATION" has the meaning set forth in Confidentiality.
"INSURANCE PROVIDER NOTIFICATION" has the meaning set forth in Section
Within ninety (90) days after the Effective Date (or such longer time as the
Administrative Agent may, in its sole discretion, agree in writing), each Loan
Party shall:.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor Agreement dated
as of December 3, 2007 by and between the Collateral Agent and Bank of America,
N.A., as collateral agent under the Junior Secured Facilities, as amended and in
effect from time to time.
"INTEREST ELECTION REQUEST" means a request by a Borrower to convert or
continue a Borrowing in accordance with Section Interest Elections.
33
"INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan (including
any Swingline Loan) , the first Business Day of each calendar month and (b) with
respect to any LIBOR Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a LIBOR Borrowing
with an Interest Period of more than three months' duration, each day prior to
the last day of such Interest Period that occurs at intervals of three months'
duration after the first day of such Interest Period.
"INTEREST PERIOD" means, with respect to any LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six (or to
the extent available to all of the Lenders nine or twelve) months thereafter, as
the Borrowers may elect, PROVIDED that (a) if any Interest Period would end on a
day other than a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless such next succeeding Business Day would fall
in the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (b) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.
"INTEREST RATE HEDGING AGREEMENT" means any interest rate protection
agreement or other interest rate hedging arrangement.
"INVENTORY" means all products available for sale by the Company and the
other Loan Parties in the following categories as defined and classified by the
Company and the other Loan Parties on a basis consistent with the Company's
current and historical accounting practices: HBA, perishable, grocery, pharmacy,
meat, seafood, produce, floral, bakery, deli, dairy, liquor, general merchandise
and fuel, each valued at cost on a basis consistent with the current and
historical accounting practices (without giving effect to LIFO reserves).
"INVENTORY ADVANCE RATE" means 90%.
"INVENTORY RESERVES" means such reserves as may be established from time to
time by the Administrative Agent in its reasonable credit judgment as being
appropriate to reflect changes in the determination of the saleability, at
retail, of the Eligible Inventory or which reflect such other factors as
negatively affect the market value of the Eligible Inventory. Inventory Reserves
shall not be duplicative of any factors taken into consideration in determining
the Appraised Value of Inventory.
"ISSUING BANK" means Bank of America, in its capacity as the issuer of
Letters of Credit hereunder, and its successors in such capacity as provided in
Section Replacement OF THE ISSUING BANK. The Issuing Bank may be replaced at any
time by written agreement among the Company, the Administrative Agent and the
successor Issuing Bank. The Administrative Agent shall notify the Lenders of any
such replacement of the Issuing Bank. At the time any such replacement shall
become effective, the Borrowers shall pay all unpaid fees accrued for the
account of the replaced Issuing Bank pursuant to Section 2.12(c). From and after
the effective date of any such
34
replacement, (i) such successor Issuing Bank shall have all the rights and
obligations of the Issuing Bank under this Agreement with respect to Letters of
Credit to be issued thereafter and (ii) references herein to the term "Issuing
Bank" and the term "Issuing Bank" shall be deemed to refer to such successor or
to any previous Issuing Bank, or to such successor and all previous Issuing
Banks, as the context shall require. After the replacement of an Issuing Bank
hereunder, the replaced Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of the Issuing Bank under this
Agreement with respect to Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional Letters of Credit.;
provided, that (i) the Issuing Bank may, in its discretion, arrange for one or
more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which
case the term "Issuing Bank" shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate; and (ii) with the consent of the
Borrowers and the Administrative Agent, the Issuing Bank may arrange for one or
more Letters of Credit to be issued by a Lender other than the Issuing Bank (or
an Affiliate of such other Lender), in which case the term "Issuing Bank" shall
include such Lender (or Affiliate of such Lender) with respect to Letters of
Credit issued by such Lender (or Affiliate of such Lender). In the event that
there is more than one Issuing Bank at any time, references herein and in the
other Loan Documents to the Issuing Bank shall be deemed to refer to the Issuing
Bank in respect of the applicable Letter of Credit or to all Issuing Banks, as
the context requires.
"JUNIOR SECURED FACILITIES" means, collectively, the Bridge Financing
Facility and the Senior Notes.
"L/C CREDIT EXTENSION" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the increase of the
amount thereof.
"L/C DISBURSEMENT" means a payment made by the Issuing Bank pursuant to a
Letter of Credit.
"L/C EXPOSURE" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time PLUS (b) the aggregate
principal amount of all L/C Disbursements made pursuant to Letters of Credit
that have not yet been reimbursed by or on behalf of a Borrower at such time.
The L/C Exposure of any Lender at any time shall mean its Applicable Percentage
of the aggregate L/C Exposure at such time.
"LEAD ARRANGER" means Banc of America Securities LLC.
"LEASE" means any agreement, whether written or oral, no matter how styled
or structured, pursuant to which a Loan Party is entitled to the use or
occupancy of any real property for any period of time.
"LEASEHOLD ADVANCE RATE" means 40%.
"LEASEHOLD CAP" means, subject to the provisions of Section 5.13(b), (a)
during the period commencing on the Effective Date and ending on and including
February 28, 2009, $100,000,000, (b) commencing on March 1, 2009 and ending on
May 31, 2009, $75,000,000, (c) commencing on June 1, 2009 and ending on August
31, 2009, $50,000,000, (d) commencing on
35
September 1, 2009 and ending on November 30, 2009, $25,000,000, and (e) at any
time after December 1, 2009, $0.
"LEASEHOLD DIFFERENTIAL" means the difference between $300,000,000 (or such
lesser amount to which the Administrative Agent in its reasonable discretion may
agree, but in no event less than an amount which would maintain a loan to value
based on such Eligible Leaseholds of 25%) and the Appraised Value of the then
Eligible Leaseholds.
"LEASEHOLD OBLIGATIONS" means, with respect to each Loan Party, all
payments made, if any, by such Loan Party with respect to rent (including fixed
rent and variable rent), common area maintenance charges and other monetary
obligations under any Lease (including any Distribution Center or Store) where
any Inventory is stored or otherwise located.
"LENDER" means each Person listed on Schedule 2.01 and any other Person
that shall have become a party hereto pursuant to an Assignment and Acceptance,
other than any Person that ceases to be a Party hereto pursuant to an Assignment
and Acceptance.
"LETTER OF CREDIT" means any letter of credit issued by the Issuing Bank
for the account of a Borrower. Without limiting the foregoing, all Existing
Letters of Credit shall be deemed to have been issued hereunder and shall for
all purposes be deemed to be "Letters of Credit" hereunder.
"LETTER OF CREDIT FEE" has the meaning set forth in Section 2.12(c).
"LETTER OF CREDIT SUBLIMIT" means an amount equal to $400,000,000. The
Letter of Credit Sublimit is part of, and not in addition to, the Tranche A
Commitments. A permanent reduction of the Aggregate Revolving Commitments or the
Tranche A Commitments shall not require a corresponding pro rata reduction in
the Letter of Credit Sublimit; provided, however, that if the Aggregate
Revolving Commitments or the Tranche A Commitments are reduced to an amount less
than the Letter of Credit Sublimit, then the Letter of Credit Sublimit shall be
reduced to an amount equal to (or, at Company's option, less than) the Aggregate
Revolving Commitments or the Tranche A Commitments, as applicable.
"LIBOR" means, when used in reference to any Loan or Borrowing, whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.
"LIBO RATE" means for any Interest Period with respect to a LIBO Rate Loan,
the rate per annum equal to the British Bankers Association LIBOR Rate ("BBA
LIBOR"), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as designated by the Administrative Agent from
time to time) at approximately 11:00 a.m., London time, two Business Days prior
to the commencement of such Interest Period, for Dollar deposits (for delivery
on the first day of such Interest Period) with a term equivalent to such
Interest Period. If such rate is not available at such time for any reason, then
the "LIBO Rate" for such Interest Period shall be the rate per annum determined
by the Administrative Agent to be the rate at which deposits in Dollars for
delivery on the first day of such Interest Period in same day funds in the
approximate amount of the LIBO Rate Loan being made, continued or converted by
Bank of America and with a term equivalent to such Interest Period would be
offered by Bank of
36
America's London Branch to major banks in the London interbank eurodollar market
at their request at approximately 11:00 a.m. (London time) two Business Days
prior to the commencement of such Interest Period.
"LIEN" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"LOAN" means all ABR Loans, LIBOR Loans, Swingline Loans and all other
advances to or for the account of the Borrowers pursuant to this Agreement.
"LOAN DOCUMENTS" means this Agreement, the Guaranty, the Indemnity,
Subrogation and Contribution Agreement, all Borrowing Base Certificates, the
Blocked Account Agreements, the DDA Notifications, the Credit Card
Notifications, the Security Documents, the Intercreditor Agreement, and any
other instrument or agreement now or hereafter executed and delivered in
connection herewith, or in connection with any transaction arising out of any
Cash Management Services and Bank Products provided by the Administrative Agent
or any of its Affiliates, each as amended and in effect from time to time.
"LOAN PARTIES" means each of the Company, the other Borrowers and each
other Subsidiary identified as a "Loan Party" on SCHEDULE 3.12 and each
Subsidiary made a party hereto pursuant to Section Additional Subsidiaries.
"LOW USAGE PERIOD" has the meaning set forth in SECTION 2.11(c).
"MARGIN STOCK" shall have the meaning assigned to such term in Regulation
U.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, assets, operations or condition, financial or otherwise, of the
Company and its Subsidiaries taken as a whole, (b) the ability of any Loan Party
to perform any of its obligations under any Loan Document, (c) the rights of or
benefits available to the Lenders under any Loan Document or (d) the Collateral
as a whole.
"MATERIAL CONTRACT" means any agreement to which any Loan Party is a party,
the termination of which would have a Material Adverse Effect, including,
without limitation, as of the Effective Date, the Supply Agreement, dated as of
June 27, 2005 by and between the Company and C&S Wholesale Grocers, Inc., as the
same may be amended or replaced from time to time.
"MATERIAL INDEBTEDNESS" MEANS INDEBTEDNESS (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of the Company and its Subsidiaries in an aggregate principal
amount exceeding $10,000,000 (or its equivalent). For purposes of determining
Material Indebtedness, the "principal amount" of the obligations of the Company
or any Subsidiary in respect of any Hedging Agreement at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that the
37
Company or such Subsidiary would be required to pay if such Hedging Agreement
were terminated at such time.
"MATURITY DATE" means December 3, 2012.
"MAXIMUM RATE" has the meaning set forth in Section Interest Rate
Limitation.
"MERGER" means the transactions contemplated by the Merger Agreement.
"MERGER AGREEMENT" means the Agreement and Plan of Merger dated as of March
4, 2007 by and among the Company, Sand Merger Corp. and Pathmark Stores, Inc.,
as in effect on the Effective Date.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. and its successors.
"MORTGAGE(S)" means each and every fee and leasehold mortgage or deed of
trust, security agreement and assignment by and between the Loan Party owning or
holding the leasehold interest in the Real Estate encumbered thereby in favor of
the Collateral Agent. Each Mortgage shall be substantially in the form of
EXHIBIT Q-1 or EXHIBIT Q-2, as applicable, with such modifications as may be
appropriate to reflect Applicable Law of the jurisdiction in which the Real
Estate is located.
"MORTGAGE POLICIES" has the meaning specified in the definition of Real
Estate Eligibility Requirements.
"MULTIEMPLOYER PLAN" or "MULTIEMPLOYER PLAN" means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NET PROCEEDS" means, with respect to any event (a) the cash proceeds
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses paid by the Company and the
Subsidiaries to third parties (other than Affiliates) in connection with such
event, (ii) in the case of a sale, transfer or other disposition of an asset
(including pursuant to a sale and leaseback transaction or a casualty or a
condemnation or similar proceeding), the amount of all payments required to be
made by the Company and the Subsidiaries as a result of such event to repay
Indebtedness (other than Loans) secured by a Lien superior to that of the
Collateral Agent on such asset, (iii) as long as no Triggering Event then
exists, the amount of all taxes paid (or reasonably estimated to be payable) by
the Company and the Subsidiaries, and the amount of any reserves established by
the Company and the Subsidiaries to fund contingent liabilities reasonably
estimated to be payable, in each case during the year that such event occurred
or the next succeeding year and that are directly attributable to such event (as
determined reasonably and in good faith by the chief financial officer of the
Company), (iv) all amounts deposited in trust or escrow for the benefit of any
third party or to which any third party may be entitled in connection with such
event, provided that any such amounts returned to the Company or any Subsidiary
shall constitute Net Proceeds when received and (v) the reasonable costs and
expenses of any repairs, alterations, or improvements made by the Company or any
Subsidiary to the assets subject to such event to the
38
extent such repairs, alterations or improvements were required or permitted
pursuant to the terms of any Lease or this Agreement.
"NONCOMPLIANCE NOTICE" has the meaning set forth in Section The Company's
request for a Swingline Loan shall be deemed a representation that the
applicable conditions for borrowing under Article Conditions are satisfied. If
the conditions for borrowing under Article Conditions cannot in fact be
fulfilled, (x) the Company shall give immediate notice (a "Noncompliance
Notice") thereof to the Administrative Agent and the Swingline Lender, and the
Administrative Agent shall promptly provide each Tranche A Lender with a copy of
the Noncompliance Notice, and (y) the Required Lenders may direct the Swingline
Lender to, and the Swingline Lender thereupon shall, cease making Swingline
Loans until such conditions can be satisfied or are waived in accordance with
Section Waivers; Amendments. Unless the Required Lenders so direct the Swingline
Lender, the Swingline Lender may, but is not obligated to, continue to make
Swingline Loans commencing one (1) Business Day after the Noncompliance Notice
is furnished to the Tranche A Lenders. Notwithstanding the foregoing, no
Swingline Loans shall be made pursuant to this Section ERROR! NOT A VALID
BOOKMARK SELF-REFERENCE. if the aggregate outstanding amount of the Exposure
would exceed the limitations set forth in Section 2.01.
"NON-U.S. LENDER" means a Lender or a Participant that is organized under
the laws of a jurisdiction other than the United States of America, any state
thereof or the District of Columbia.
"OBLIGATIONS" has the meaning set forth in the Security Agreement.
"OTHER LIABILITIES" means any obligations on account of (a) any Cash
Management Services furnished to any of the Loan Parties or any of their
Subsidiaries and/or (b) any Bank Product entered into with any Loan Party or any
of its Subsidiaries, as each may be amended from time to time.
"OTHER TAXES" means any and all present or future recording, stamp,
documentary, excise, or similar taxes, charges or levies arising from any
payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document; provided,
however, that any such taxes imposed on any assignment of the Obligations, any
Assignment and Acceptance Agreements or any sales of participations in the
Obligations pursuant to Section 9.04(d), and any estate, gift or inheritance
taxes shall not constitute "Other Taxes."
"PACA" means the Perishable Agricultural Commodities Act of 1930, as
amended.
"PACA/PASA LIABILITY RESERVE" means an amount calculated on a monthly basis
by the Collateral Agent to provide for vendor liabilities pursuant to PACA and
PASA.
"PATHMARK" means Pathmark Stores, Inc., a Delaware corporation.
"PARTICIPANT" has the meaning set forth in Section 9.04(d).
39
"PASA" means the Packers and ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ and all regulations
promulgated thereunder, as amended from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"PERFECTION CERTIFICATE" means a certificate substantially in the form of
Exhibit E or any other form reasonably approved by the Administrative Agent.
"PERMITTED DIVESTITURES" means:
(a) the Federal Trade Commission divestitures as publicly disclosed by the
Company on or before the Effective Date;
(b) the sale of the Falcon 900 Aircraft;
(c) the sale of the leasehold interests as announced on August 14, 2007 by
Pathmark; and
(d) the sale of SAV-A-CENTER supermarkets in the Greater New Orleans area.
"PERMITTED ENCUMBRANCES" means:
(a) liens imposed by law for Taxes, assessments and governmental charges or
claims that are not yet delinquent or are being contested in compliance with
Section Payment of Obligations;
(b) carriers', landlord's, warehousemen's, mechanics', materialmen's and
repairmen's liens, statutory liens of banks and rights of set-off and other
Liens imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 30 days or are being contested in
compliance with Section Payment of Obligations;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations and deposits securing liability to insurance
carriers under insurance arrangements;
(d) deposits to secure the performance of bids, tenders, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;
(e) judgment liens in respect of judgments that do not constitute an Event
of Default under one or more judgments for the payment of money in an aggregate
amount in excess of $35,000,000 shall be rendered against the Company, any
Subsidiary or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of the Company or any Subsidiary to enforce any such
judgment;;
40
(f) easements, zoning restrictions, rights-of-way and similar encumbrances
on real property imposed by law or arising in the ordinary course of business
that do not secure any monetary obligations and do not materially detract from
the value of the affected property or interfere with the ordinary conduct of
business of the Company or any Subsidiary;
(g) encumbrances on assets disposed or to be disposed in a Permitted
Divestiture created by an agreement(s) providing for such Permitted Divestiture
or encumbrances on assets disposed or to be disposed permitted by Section 6.05
created by an agreement(s) providing for such disposition;
(h) any (i) interest or title of lessor or sublessor under any Lease, (ii)
easement, restriction or encumbrance to which the interest or title of such
lessor or sublessor may be subject to or (iii) subordination of the interest of
the lessee or sublessees under such Lease to any restriction or encumbrance
referred to in the preceding clause (ii);
(i) Liens arising from filing Uniform Commercial Code financing statements
relating solely to Leases; and
(j) encumbrances referred to in Schedule B of the Mortgage Policies
insuring the Mortgages;
PROVIDED that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"PERMITTED HOLDER" means (i) Tengelmann Warenhandelsgesellschaft or (ii)
any Affiliate of Tengelmann Warenhandelsgesellschaft.
"PERSON" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"PLAN" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Company or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"PLEDGE AGREEMENT" means the Pledge Agreement among the Loan Parties party
thereto and the Collateral Agent, substantially in the form of Exhibit F.
"PREPAYMENT EVENT" means:
(a) any sale, transfer or other disposition (including pursuant to a sale
and leaseback transaction) of any property or asset of the Company or any
Subsidiary, other than (i) dispositions described in clauses (a) and (b) of
Asset Sales, and (ii) prior to the occurrence of a Triggering Event, other
dispositions resulting in aggregate Net Proceeds not exceeding $20,000,000
during any fiscal year of the Company; or
41
(b) any casualty or other insured damage to, or any taking under power of
eminent domain or by condemnation or similar proceeding of, any property or
asset of the Company or any Subsidiary, but, prior to the occurrence of a
Triggering Event (i) only to the extent that the Net Proceeds therefrom have not
been applied to repair, restore or replace such property or asset within 180
days after such event and (ii) only to the extent the value of such loss is in
excess of $1,000,000 (or its equivalent); or
(c) the incurrence by the Company or any Subsidiary of any Indebtedness,
other than Indebtedness permitted by Section Indebtedness; Certain Equity
Securities.
"PRESCRIPTION ADVANCE RATE" means 85%.
"PRIME RATE" means the rate of interest per annum publicly announced from
time to time by Bank of America, N.A. as its prime rate in effect at its
principal office in Charlotte, North Carolina; each change in the Prime Rate
shall be effective on the date such change is publicly announced as being
effective.
"PRIMING JURISDICTION" means any jurisdiction listed on SCHEDULE A hereto,
which schedule may be revised by the Administrative Agent to reflect changes in
Applicable Law. The Administrative Agent shall provide the Company with ten (10)
days' prior written notice of any revisions to the jurisdictions listed on
Schedule A hereto.
"PRINCIPAL PROPERTIES" means, (a) initially, the Real Estate described on
SCHEDULE 1.01(C), provided that such Schedule may be updated by the Company to
the extent necessary to eliminate Real Estate which, after the Effective Date,
is determined by the Company and the Administrative Agent to no longer to be a
"Principal Property" under any agreement evidencing Material Indebtedness, and
(b) any other Real Estate which is determined by the Company and the
Administrative Agent after the Effective Date to have been a "Principal
Property" as of the Effective Date under any agreement evidencing Material
Indebtedness.
"PRIORITY OF CLAIMS WAIVER" means an agreement executed by (a) a bailee or
other Person in possession of Collateral, including, without limitation, any
warehouseman substantially in the form of EXHIBIT P-2 hereto with such
modifications thereto as may be approved by the Collateral Agent or such other
agreement reasonably satisfactory in form and substance to the Collateral Agent,
or (b) a landlord of Real Estate leased by any Loan Party (including, without
limitation, any warehouse or distribution center), substantially in the form of
EXHIBIT P-1 hereto with such modifications thereto as may be approved by the
Collateral Agent or such other agreement reasonably satisfactory in form and
substance to the Collateral Agent pursuant to which such Person (i) acknowledges
the Collateral Agent's Lien on the Collateral, (ii) releases or subordinates
such Person's Liens in the Collateral held by such Person or located on such
Real Estate, (iii) agrees to furnish the Collateral Agent with access to the
Collateral in such Person's possession or on the Real Estate for the purposes of
assembling, repossessing, selling or otherwise disposing of such Collateral and
(iv) makes such other agreements with the Collateral Agent as the Collateral
Agent may reasonably require.
"QUALIFIED PREFERRED STOCK" means, with respect to any Person, any
preferred capital stock or preferred equity interest that by its terms (or by
the terms of any security into which it is
42
convertible or for which it is exchangeable or exercisable) or upon the
happening of any event does not (a) mature or becomes mandatorily redeemable
prior to the Maturity Date, pursuant to a sinking fund obligation or otherwise;
(b) become convertible or exchangeable at the option of the holder thereof for
Indebtedness or preferred stock that is not Qualified Preferred Stock, prior to
the Maturity Date; or (c) become redeemable at the option of the holder thereof,
in whole or in part, prior to the Maturity Date.
"REAL ESTATE" means all Leases and all land, together with the buildings,
structures, parking areas, and other improvements thereon, now or hereafter
owned by any Loan Party, including all easements, rights-of-way, and similar
rights relating thereto and all leases, tenancies, and occupancies thereof.
"REAL ESTATE ADVANCE RATE" means 60%.
"REAL ESTATE ELIGIBILITY REQUIREMENTS: means collectively, each of the
following:
(a) The applicable Loan Party has executed and delivered to the
Collateral Agent a Mortgage with respect to any Real Estate intended, by
the Company or other Loan Party, to be included in Eligible Real Estate or
Eligible Leaseholds;
(b) Such Real Estate is used by a Loan Party (other than an Excluded
Subsidiary), or is leased or subleased by a Loan Party (other than an
Excluded Subsidiary) to another Person, for offices or as a store or
distribution center;
(c) As to any particular property, the Loan Party is in compliance in
all material respects with the representations, warranties and covenants
set forth in the Mortgage relating to such Real Estate;
(d) The Collateral Agent shall have received fully paid American Land
Title Association Lender's Extended Coverage title insurance policies or
marked-up title insurance commitments having the effect of a policy of
title insurance) (the "Mortgage Policies") in form and substance, with the
endorsements set forth on Schedule 1.01(B) hereto (to the extent available
at commercially reasonable rates) and in amounts reasonably acceptable to
the Collateral Agent (provided that such amounts shall not exceed the
Appraised Value of the applicable Mortgaged Property), issued, coinsured
and reinsured (to the extent required by the Collateral Agent) by title
insurers reasonably acceptable to the Collateral Agent, insuring the
Mortgages to be valid first and subsisting Liens on the property or
leasehold interests described therein, free and clear of all defects
(including, but not limited to, mechanics' and materialmen's Liens) and
encumbrances, excepting only those Liens permitted by Section 6.02 having
priority over the Lien of the Collateral Agent under Applicable Law or
otherwise reasonably acceptable to the Collateral Agent;
(e) With respect to any Real Estate owned by a Borrower or any other
Loan Party (as opposed to interests as lessee under a Lease) which is
intended by such Borrower or such other Loan Party to be included in
Eligible Real Estate, within ninety (90) days after the Effective Date (or
such later date, if any, as the Administrative Agent may agree in writing
in its sole discretion), the Collateral Agent shall have received
43
American Land Title Association/American Congress on Surveying and Mapping
form surveys, for which all necessary fees (where applicable) have been
paid, certified to the Collateral Agent and the issuer of the Mortgage
Policies in a manner reasonably satisfactory to the Collateral Agent by a
land surveyor duly registered and licensed in the states in which the
property described in such surveys is located and reasonably acceptable to
the Collateral Agent, showing all buildings and other improvements, the
location of any easements, parking spaces, rights of way, building set-back
lines and other dimensional regulations and the absence of encroachments,
either by such improvements or on to such property, and other defects,
other than encroachments and other defects reasonably acceptable to the
Collateral Agent;
(f) With respect to any leased Real Estate intended by any Borrower or
other Loan Party to be included in Eligible Leaseholds, the Collateral
Agent shall have received a consent agreement to the extent required under
the terms of the applicable Lease or Title Policy relating to such leased
Real Estate, in form and substance reasonably satisfactory to the
Collateral Agent, executed by the lessor of the Lease, along with (1) a
memorandum of lease in recordable form with respect to such leasehold
interest, executed and acknowledged by the owner of the affected real
property, as lessor, or (2) evidence that the applicable Lease with respect
to such leasehold interest or a memorandum thereof has been recorded in all
places necessary, in the Collateral Agent's reasonable judgment, to give
constructive notice to third-party purchasers of such leasehold interest,
or (3) if such leasehold interest was acquired or sub-leased from the
holder of a recorded leasehold interest, the applicable assignment or
sublease document, executed and acknowledged by such holder, in each case
in form sufficient to give such constructive notice upon recordation and
otherwise in form reasonably satisfactory to the Collateral Agent;
(g) With respect to any Real Estate intended by any Borrower or other
Loan Party to be included in Eligible Real Estate, the Collateral Agent
shall have received a Phase I Environmental Site Assessment in accordance
with ASTM Standard E1527-05, in form and substance reasonably satisfactory
to the Collateral Agent, from an environmental consulting firm reasonably
acceptable to the Collateral Agent, which report shall identify recognized
environmental conditions and shall to the extent possible quantify any
related costs and liabilities, associated with such conditions and the
Collateral Agent shall be satisfied with the nature and amount of any such
matters. The Collateral Agent may, upon the receipt of a Phase I
Environmental Site Assessment require the delivery of further environmental
assessments or reports to the extent such further assessments or reports
are recommended in the Phase I Environmental Site Assessment; and
(h) The applicable Loan Party shall have delivered to the Collateral
Agent evidence of flood insurance naming the Collateral Agent as mortgagee
as required by the National Flood Insurance Program as set forth in the
Flood Disaster Protection Act of 1973, as amended and in effect, which
shall be reasonably satisfactory in form and substance to the Collateral
Agent.
44
"REALTY RESERVES" means such reserves as the Administrative Agent from time
to time determines in the Administrative Agent's discretion as being appropriate
to reflect the impediments to the Agents' ability to realize upon any Eligible
Real Estate. Without limiting the generality of the foregoing, Realty Reserves
may include (but are not limited to) (i) Environmental Compliance Reserves, (ii)
reserves for (A) municipal taxes and assessments, (B) repairs and (C)
remediation of title defects, and (iii) reserves for Indebtedness secured by
Liens having priority over the Lien of the Collateral Agent.
"RECEIVABLES ADVANCE RATE" means 90%.
"REGISTER" has the meaning set forth in Section 9.04(c).
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"REQUIRED LENDERS" means, at any time, Lenders having Exposure and unused
Commitments representing greater than 50% of the sum of all Exposure and unused
Commitments at such time; provided that until such time as a "Successful
Syndication" (as defined in a certain letter agreement between, among others,
the Administrative Agent and the Company) has occurred, Required Lenders shall
include at least three Lenders.
"RESERVE FOR LEASEHOLD OBLIGATIONS" means, on any date, the aggregate
amount of Leasehold Obligations of the Loan Parties due and owing with respect
to properties of a vendor, landlord, public warehouse operator or other third
party bailee located in a Priming Jurisdiction or at a distribution center at
which more than $5,000,000 of Inventory is located, in each case which is not
subject to a Priority of Claims Waiver in form and substance satisfactory to the
Administrative Agent; for each such property the amount of Leasehold Obligations
shall be the next two months' Leasehold Obligations (net of any Letter of Credit
amount benefiting such landlord in respect of such Leasehold Obligations). For
the avoidance of doubt, the amount of Leasehold Obligations for any property for
which a satisfactory Priority of Claims Waiver is delivered by a vendor,
landlord, public warehouse operator or other third party bailee, shall be zero.
"RESTRICTED PAYMENT" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any Equity Interests in the
Company or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any Equity Interests in the Company or any option, warrant or other right to
acquire any such Equity Interests in the Company.
"REVOLVING LENDER PRIORITY COLLATERAL" has the meaning set forth in the
Intercreditor Agreement.
"S&P" means Standard & Poor's Ratings Service, a Division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, and its successors.
"SCRIPT ADVANCE RATE" means 85%.
45
"SCRIPTS" means the pharmaceutical customer list owned and controlled by
each Loan Party relating to certain items and services, including, without
limitation, any drug price data, drug eligibility data, clinical drug
information and health information of a pharmaceutical customer that is not
protected under Sections 1171 through 1179 of the Social Security Act or other
Applicable Law.
"SECURED PARTIES" has the meaning set forth in the Security Agreement.
"SECURITY AGREEMENT" means the Security Agreement among the Loan Parties
party thereto and the Collateral Agent, substantially in the form of EXHIBIT G.
"SECURITY DOCUMENTS" means the Security Agreement, the Pledge Agreement,
the Mortgages and each other security agreement or other instrument or document
executed and delivered by any Loan Party to secure any of the Obligations.
"SENIOR NOTES" means collectively, the Company's Senior Notes which may be
issued after the Effective Date to refinance the Bridge Financing Facility and
any senior notes issued in exchange or substitution therefor pursuant to the
registration rights agreement related thereto entered into by the Company on the
Effective Date.
"SOLVENT" means, with respect to any Person on a particular date, that on
such date (a) at fair valuations, all of the properties and assets of such
Person are greater than the sum of the debts, including contingent liabilities,
of such Person, (b) the present fair saleable value of the properties and assets
of such Person is not less than the amount that would be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its properties and assets and
pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (d) such Person
does not intend to, and does not believe that it will, incur debts beyond such
Person's ability to pay as such debts mature, and (e) such Person is not engaged
in a business or a transaction, and is not about to engage in a business or
transaction, for which such Person's properties and assets would constitute
unreasonably small capital after giving due consideration to the prevailing
practices in the industry in which such Person is engaged. The amount of all
Guarantees and contingent obligations at any time shall be computed as the
amount that, in light of all the facts and circumstances existing at the time,
can reasonably be expected to become an actual or matured liability.
"SPECIFIED DEFAULT" means the occurrence and continuance of an Event of
Default under Section 7.01 (a), (b), (c) (only with respect to a Borrowing Base
Certificate delivered pursuant to Section 5.01(f)), (h) or (i) or Section
7.01(d) (in the case of the failure of the Loan Parties to comply with (x)
Section 5.01(f) (after giving effect to a five (5) day grace period relating
thereto or such longer time, if any, as the Administrative Agent may agree in
writing in its sole discretion), (y) Section 5.14 (other than Section 5.14(d) to
the extent the Administrative Agent has approved an extension relating to the
applicable delivery requirements therein) or (z) Section 6.12).
"STANDBY LETTER OF CREDIT" means Letter of Credit other than a Commercial
Letter of Credit.
46
"STATED AMOUNT" means at any time the maximum amount for which a Letter of
Credit may be honored.
"STATUTORY RESERVE RATE" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D of the Board. LIBOR Loans shall be deemed to
constitute Eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D of the Board
or any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"STORE SHRINK PERCENTAGE" shall be applicable to Inventory located at
Stores and shall mean, as of any date, the amount of loss recorded in accordance
with GAAP of the grocery and HBA inventories expressed as a percentage of the
grocery and HBA sales for the most recently ended two (2) fiscal quarters.
"STORE SHRINK RESERVE" shall be equal to the product of (a) the excess of
the Store Shrink Percentage over 1%, multiplied by (b) the Inventory of the
Company and the other Loan Parties as of the date of the most recent Borrowing
Base Certificate.
"STORES" means all supermarket retail locations of the Company and other
Loan Parties selling Inventory owned by the Loan Parties.
"SUBSIDIARY" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
"SWINGLINE EXPOSURE" means, at any time, the aggregate amount of all
outstanding Swingline Loans at such time. The Swingline Exposure of any Lender
at any time shall mean its Applicable Percentage of the aggregate Swingline
Exposure at such time
"SWINGLINE LENDER" means Bank of America, N.A., in its capacity as Lender
of Swingline Loans hereunder.
"SWINGLINE LOAN" means a Loan made by the Swingline Lender to the Borrowers
pursuant to Section Swingline Loans.
47
"SWINGLINE SUBLIMIT" means an amount equal to $50,000,000. The Swingline
Sublimit is part of, and not in addition to, the Aggregate Tranche A
Commitments.
"TARGET MATERIAL ADVERSE EFFECT" means "Company Material Adverse Effect" as
defined in the Merger Agreement.
"TAXES" means any and all present or future taxes, levies, imposts, duties,
deductions, withholdings or similar charges imposed by any Governmental
Authority.
"TERM APPLICABLE PERCENTAGE" means with respect to any Term Lender at any
time, the percentage (carried out to the fourth decimal place) of the
outstanding principal balance of such Term Lender's Term Loan at such time to
the Aggregate Term Outstandings at such time. The initial Term Applicable
Percentage of each Term Lender is set forth opposite the name of such Term
Lender on Schedule 2.01 or in the Assignment and Acceptance pursuant to which
such Term Lender becomes a party hereto, as applicable
"TERM COMMITMENT" means, with respect to each Term Lender, the commitment
of such Term Lender hereunder set forth as its Term Commitment opposite its name
on SCHEDULE 2.01 hereto.
"TERM LENDER" means each Lender having a Term Commitment as set forth on
SCHEDULE 2.01 hereto or in the Assignment and Acceptance by which it becomes a
Tranche A Lender, or after the making of the Term Loan, each Lender holding any
portion of the Term Loan.
"TERM LOAN" means the term loan to be made by the Term Lenders on the
Effective Date pursuant to Section 2.01(b).
"TERM PREPAYMENT CONDITIONS" means that (a) no Default or Event of Default
then exists or would arise from the prepayment of the Term Loan, and (b) the
Company shall deliver to the Agent either (i) an opinion as to Solvency of the
Loan Parties before and after giving effect to such prepayment, which opinion
shall be in form and substance acceptable to the Agent and rendered by a Person
acceptable to the Agent or (ii) evidence that Excess Availability (A) on the
date of any such prepayment and (B) projected on a pro forma basis for the
following twelve months shall be in an amount greater than $150,000,000.
"TRADING WITH THE ENEMY ACT" has the meaning set forth in Section 9.15.
"TRANCHE A APPLICABLE PERCENTAGE" means with respect to any Tranche A
Lender at any time, the percentage (carried out to the fourth decimal place) of
the Aggregate Tranche A Commitments represented by such Tranche A Lender's
Tranche A Commitment at such time. If the commitment of each Tranche A Lender to
make Tranche A Loans and the obligation of the Issuing Bank to make L/C Credit
Extensions have been terminated pursuant to SECTION 2.09(a) or if the Aggregate
Tranche A Commitments have expired, then the Tranche A Applicable Percentage of
each Lender shall be determined based on the Tranche A Applicable Percentage of
such Tranche A Lender most recently in effect, giving effect to any subsequent
assignments. The initial Tranche A Applicable Percentage of each Tranche A
Lender is set forth opposite the name of such Tranche A Lender on SCHEDULE 2.01
or in the Assignment and Acceptance pursuant to which such Tranche A Lender
becomes a party hereto, as applicable.
48
"TRANCHE A BORROWING BASE" means, on any date (subject to adjustment as
provided in Section Borrowing Base Adjustments), the aggregate value of the
assets of the Loan Parties, in an amount (calculated based on the most recent
Borrowing Base Certificate delivered to the Administrative Agent in accordance
with Section within ten (10) Business Days after the end of each fiscal month, a
completed Borrowing Base Certificate calculating and certifying the Tranche A
Borrowing Base and the Tranche A-1 Borrowing Base as of the last day of such
fiscal month, signed on behalf of the Company by one of its Financial Officers,
PROVIDED, HOWEVER, that upon the occurrence of a Triggering Event, the Borrowing
Base Certificate required by this paragraph will be delivered by the Borrowers
weekly within eight (8) Business Days after the end of each calendar week and
shall calculate and certify the Tranche A Borrowing Base and the Tranche A-1
Borrowing Base as of the last day of such calendar week;, absent any error in
such Borrowing Base Certificate) that is equal to:
(a) the product of (x) the Inventory Advance Rate (or such other rate as
determined from time to time by the Administrative Agent in its commercially
reasonable discretion in accordance with Section Borrowing Base Adjustments) and
(y) Appraised Value of Eligible Inventory (subject to the provisions of clause
(j) of the definition of Eligible Inventory) and (z) the Cost of Eligible
Inventory (net of Inventory Reserves); PLUS
(b) the product of (x) the Receivables Advance Rate (or such other rate as
determined from time to time by the Administrative Agent in its commercially
reasonable discretion in accordance with Section Borrowing Base Adjustments) and
(y) the face amount of all Eligible Credit Card Accounts Receivables; PLUS
(c) subject to the proviso hereto, the product of (x) the Script Advance
Rate (or such other rate as determined from time to time by the Administrative
Agent in its commercially reasonable discretion in accordance with Section
Borrowing Base Adjustments) and (y) the Appraised Value of Scripts; PLUS
(d) the product of (x) Coinstar Advance Rate (or such other rate as
determined from time to time by the Administrative Agent in its commercially
reasonable discretion in accordance with Section Borrowing Base Adjustments) and
(y) the face amount of Eligible Coinstar Receivables; PLUS
(e) the product of (x) Prescription Advance Rate (or such other rate as
determined from time to time by the Administrative Agent in its commercially
reasonable discretion in accordance with Section Borrowing Base Adjustments) and
(y) the face amount of all Eligible Third Party Insurance Provider Accounts
Receivables; PLUS
(f) subject to the proviso hereto, the product of (x) Real Estate Advance
Rate (or such other rate as determined from time to time by the Administrative
Agent in its commercially reasonable discretion in accordance with Section
Borrowing Base Adjustments) and (y) the Appraised Value of all Eligible Real
Estate; PLUS
(g) subject to the proviso hereto, during the period commencing on the
Effective Date and ending on and including November 30, 2009, the lesser of (x)
the Leasehold Cap and (y) the product of (i) the Leasehold Advance Rate (or such
other rate as determined from time to time by
49
the Administrative Agent in its commercially reasonable discretion in accordance
with Section Borrowing Base Adjustments) and (ii) the Appraised Value of all
Eligible Leaseholds; MINUS
(h) the then amount of all Availability Reserves (without duplication of
any Inventory Reserves included in the calculation set forth in clause (a)
above); MINUS
(i) the then Aggregate Term Outstandings;
PROVIDED, HOWEVER, that in no event shall (a) the amounts advanced against
Scripts exceed twenty percent (20%) of the total amount advanced or available to
be advanced under the Tranche A Borrowing Base (without giving effect to the
provisions of clause (i)) and (b) the aggregate amounts advanced against
Eligible Real Estate and Eligible Leaseholds exceed thirty-six percent (36%) of
the total amount advanced or available to be advanced under Tranche A Borrowing
Base (without giving effect to the provisions of clause (i)); and PROVIDED
FURTHER that, the Company may at any time, without consent or approval from the
Agents or the Lenders, permanently terminate its right to receive Credit
Extensions under both the Tranche A Borrowing Base and the Tranche A-1 Borrowing
Base based on Eligible Leaseholds as long as (x) no Default or Event of Default
then exists or would arise therefrom, and (y) no overadvance would result from
the removal of Eligible Leaseholds from the Tranche A Borrowing Base or the
Tranche A-1 Borrowing Base.
The Tranche A Borrowing Base shall be computed for each fiscal month as required
by and subject to the proviso after Section 5.01(f), and established based upon
the most recent Borrowing Base Certificate delivered to the Administrative Agent
and shall remain in effect until the delivery to the Administrative Agent of a
subsequent Borrowing Base Certificate.
"TRANCHE A COMMITMENT" means, with respect to each Tranche A Lender, the
commitment of such Lender hereunder set forth as its Tranche A Commitment
opposite its name on SCHEDULE 2.01 hereto or as may subsequently be set forth in
the Register from time to time, as the same may be reduced from time to time
pursuant to the terms of this Agreement.
"TRANCHE A LENDER" means each Lender having a Tranche A Commitment as set
forth on SCHEDULE 2.01 hereto or in the Assignment and Acceptance by which it
becomes a Tranche A Lender.
"TRANCHE A LOANS" has the meaning set forth in Loans; Mandatory Advances of
Tranche A-1 Loans .
"TRANCHE A UNUSED FEE" has the meaning set forth in SECTION 2.12(b).
"TRANCHE A-1 APPLICABLE PERCENTAGE" means with respect to any Tranche A-1
Lender at any time, the percentage (carried out to the fourth decimal place) of
the Aggregate Tranche A-1 Commitments represented by such Tranche A-1 Lender's
Tranche A-1 Commitment at such time. If the commitment of each Tranche A-1
Lender to make Tranche A-1 Loans and the obligation of the Issuing Bank to make
L/C Credit Extensions have been terminated pursuant to SECTION 2.09(c) or if the
Aggregate Tranche A-1 Commitments have expired, then the Tranche A-1 Applicable
Percentage of each Lender shall be determined based on the Tranche A-1
Applicable Percentage of such Tranche A-1 Lender most recently in effect, giving
effect to any
50
subsequent assignments. The initial Tranche A-1 Applicable Percentage of each
Tranche A-1 Lender is set forth opposite the name of such Tranche A-1 Lender on
SCHEDULE 2.01 or in the Assignment and Acceptance pursuant to which such Tranche
A-1 Lender becomes a party hereto, as applicable.
"TRANCHE ▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇" means, on any date (subject to adjustment as
provided in Section Borrowing Base Adjustments), the aggregate value of the
assets of the Loan Parties, in an amount (calculated based on the most recent
Borrowing Base Certificate delivered to the Administrative Agent in accordance
with Section within ten (10) Business Days after the end of each fiscal month, a
completed Borrowing Base Certificate calculating and certifying the Tranche A
Borrowing Base and the Tranche A-1 Borrowing Base as of the last day of such
fiscal month, signed on behalf of the Company by one of its Financial Officers,
PROVIDED, HOWEVER, that upon the occurrence of a Triggering Event, the Borrowing
Base Certificate required by this paragraph will be delivered by the Borrowers
weekly within eight (8) Business Days after the end of each calendar week and
shall calculate and certify the Tranche A Borrowing Base and the Tranche A-1
Borrowing Base as of the last day of such calendar week;, absent any error in
such Borrowing Base Certificate) that is equal to:
(a) the product of (x) the Tranche A-1 Inventory Advance Rate (or such
other rate as determined from time to time by the Administrative Agent in its
commercially reasonable discretion in accordance with Section Borrowing Base
Adjustments) and (y) Appraised Value of Eligible Inventory (subject to the
provisions of clause (j) of the definition of Eligible Inventory) and (z) the
Cost of Eligible Inventory (net of Inventory Reserves); PLUS
(b) the product of (x) the Receivables Advance Rate (or such other rate as
determined from time to time by the Administrative Agent in its commercially
reasonable discretion in accordance with Section Borrowing Base Adjustments) and
(y) the face amount of all Eligible Credit Card Accounts Receivables; PLUS
(c) subject to the proviso hereto, the product of (x) the Script Advance
Rate (or such other rate as determined from time to time by the Administrative
Agent in its commercially reasonable discretion in accordance with Section
Borrowing Base Adjustments) and (y) the Appraised Value of Scripts; PLUS
(d) the product of (x) Coinstar Advance Rate (or such other rate as
determined from time to time by the Administrative Agent in its commercially
reasonable discretion in accordance with Section Borrowing Base Adjustments) and
(y) the face amount of Eligible Coinstar Receivables; PLUS
(e) the product of (x) Tranche A-1 Prescription Advance Rate (or such other
rate as determined from time to time by the Administrative Agent in its
commercially reasonable discretion in accordance with Section Borrowing Base
Adjustments) and (y) the face amount of all Eligible Third Party Insurance
Provider Accounts Receivables; PLUS
(f) subject to the proviso hereto, the product of (x) Tranche A-1 Real
Estate Advance Rate (or such other rate as determined from time to time by the
Administrative Agent in its
51
commercially reasonable discretion in accordance with Section Borrowing Base
Adjustments) and (y) the Appraised Value of all Eligible Real Estate; PLUS
(g) subject to the proviso hereto, during the period commencing on the
Effective Date and ending on and including November 30, 2009, the lesser of (x)
the Leasehold Cap and (y) the product of (i) the Leasehold Advance Rate (or such
other rate as determined from time to time by the Administrative Agent in its
commercially reasonable discretion in accordance with Section Borrowing Base
Adjustments) and (ii) the Appraised Value of all Eligible Leaseholds; MINUS
(h) the then amount of all Availability Reserves (without duplication of
any Inventory Reserves included in the calculation set forth in clause (a)
above); MINUS
(i) the then Aggregate Term Outstandings;
PROVIDED, HOWEVER, that in no event shall (a) the amounts advanced against
Scripts exceed twenty percent (20%) of the total amount advanced or available to
be advanced under the Tranche A-1 Borrowing Base (without giving effect to the
provisions of clause (i)) and (b) the aggregate amounts advanced against
Eligible Real Estate and Eligible Leaseholds exceed thirty-six percent (36%) of
the total amount advanced or available to be advanced under the Tranche A-1
Borrowing Base (without giving effect to the provisions of clause (i)) and
PROVIDED FURTHER that, the Company may at any time, without consent or approval
from the Agents or the Lenders, permanently terminate its right to receive
Credit Extensions under both the Tranche A Borrowing Base and the Tranche A-1
Borrowing Base based on Eligible Leaseholds as long as (x) no Default or Event
of Default then exists or would arise therefrom, and (y) no overadvance would
result from the removal of Eligible Leaseholds from the Tranche A Borrowing Base
or the Tranche A-1 Borrowing Base.
The Tranche A-1 Borrowing Base shall be computed for each fiscal month as
required by and subject to the proviso after Section 5.01(f), and established
based upon the most recent Borrowing Base Certificate delivered to the
Administrative Agent and shall remain in effect until the delivery to the
Administrative Agent of a subsequent Borrowing Base Certificate.
"TRANCHE A-1 COMMITMENT" shall mean, with respect to each Tranche A-1
Lender, the commitment of such Tranche A-1 Lender hereunder set forth as its
Tranche A-1 Commitment opposite its name on SCHEDULE 2.01 hereto or as may
subsequently be set forth in the Register from time to time, as the same may be
reduced from time to time pursuant to this Agreement.
"TRANCHE A-1 INVENTORY ADVANCE RATE MEANS 95%.
"TRANCHE A-1 LENDER" means each Lender having a Tranche A-1 Commitment as
set forth on SCHEDULE 2.01 hereto or in the Assignment and Acceptance by which
it becomes a Tranche A-1 Lender.
"TRANCHE A-1 LOANS" has the meaning set forth in Loans; Mandatory Advances
of Tranche A-1 Loans.
"TRANCHE A-1 PRESCRIPTION ADVANCE RATE" means 90%.
52
"TRANCHE A-1 REAL ESTATE ADVANCE RATE" means 75%.
"TRANCHE A-1 UNUSED FEE" has the meaning set forth in Section 2.12(b).
"TRANSACTIONS" means, collectively, the Merger and the execution, delivery
and performance by each Loan Party of the Loan Documents to which it is to be a
party, the borrowing of Loans, the use of the proceeds thereof, and the issuance
of Letters of Credit hereunder.
"TRIGGERING EVENT" means the notification from the Administrative Agent to
the Company that either (a) any Event of Default has occurred or (b) Excess
Availability at any time is less than $75,000,000. Upon the occurrence of a
Triggering Event, such Triggering Event shall be deemed "continuing" until such
time as the applicable Event of Default is waived or Excess Availability shall
exceed $75,000,000 for thirty (30) consecutive days; provided, however, that the
foregoing cure provision may only be exercised once in any six (6) month period,
and provided, further, that the foregoing cure provision may only be exercised
five (5) times during the term of the Loans.
"TYPE", when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
"UNIFORM COMMERCIAL CODE" or "UCC" means the Uniform Commercial Code as in
effect on the date of determination in the applicable jurisdiction.
"UNUSED FEE" has the meaning set forth in Section 2.12(b).
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02 CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of this
Agreement, Loans may be classified and referred to by Type (e.g., an "ABR LOAN"
or a "LIBOR LOAN"). Borrowings also may be classified and referred to by Type
(e.g., an "ABR BORROWING" or a "LIBOR BORROWING").
SECTION 1.03 TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not
53
to any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement, (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights, and (f) unless
otherwise stated herein, all provisions herein within the discretion or to the
satisfaction of a party shall be deemed to include a standard of reasonableness,
good faith and fair dealing.
SECTION 1.04 ACCOUNTING TERMS; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; PROVIDED
that, if the Company notifies the Administrative Agent that the Company requests
an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the Company
that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
affirmatively withdrawn by the Company (or, in the case of a request for an
amendment under this Section by the Required Lenders, the Administrative Agent)
or such provision amended in accordance herewith.
SECTION 1.05 BORROWING BASE ADJUSTMENTS. The Administrative Agent or the
Required Lenders may, in their commercially reasonable discretion (x) in
reviewing the collateral components of the Tranche A Borrowing Base and the
Tranche A-1 Borrowing Base, (y) after completion of any evaluation or any
appraisal contemplated by Section 5.09(a) or Section The Company will, and will
cause each of the Subsidiaries to, permit any representatives designated by the
Administrative Agent (including any consultants, accountants, lawyers and
appraisers retained by the Administrative Agent) in consultation with the
Borrowers to conduct commercial finance examinations and appraisals of the
assets included in the computation of the Tranche A Borrowing Base and the
Tranche A-1 Borrowing Base, including supporting systems, processes and
controls, all at the expense of the Borrowers (i) one (1) time during any twelve
month period in which Excess Availability is at all times greater than
$250,000,000, (ii) up to two (2) times during any twelve month period in which
Excess Availability is at any time less than or equal to $250,000,000 but
greater than or equal to $100,000,000, (iii) up to three (3) times during any
twelve month period in which Excess Availability is at any time less than
$100,000,000 and (iv) at any time at the request of the Administrative Agent
after the occurrence and the continuation of an Event of Default; PROVIDED,
THAT, notwithstanding the provisions of clause (iii) above, no more than two (2)
appraisals of Eligible Real Estate, Eligible Leaseholds, and Scripts may be
conducted during any twelve month period unless an Event of Default has occurred
and is continuing. In addition to the foregoing the Administrative Agent will
have the right to conduct such commercial finance examinations and appraisals at
the expense of the Administrative Agent, but no more frequently than twice in
any calendar year. The expenses reimbursable by the Borrowers pursuant to his
Section shall include the reasonable fees and expenses of any representatives
retained by the Administrative Agent. or (z) upon the occurrence and during the
continuation of a Default, from time to time (a) decrease the advance rates for
the Tranche A Borrowing Base or the Tranche A-1 Borrowing Base (or both), (b)
establish and
54
revise reserves reducing the amount of Eligible Coinstar Receivables, Eligible
Credit Card Accounts Receivable, Eligible Third Party Insurance Provider
Accounts Receivable, Eligible Inventory, Eligible Leaseholds, Eligible Real
Estate or Scripts and (c) impose additional eligibility criteria to be
applicable to Eligible Coinstar Receivables, Eligible Credit Card Accounts
Receivable, Eligible Third Party Insurance Provider Accounts Receivable,
Eligible Inventory, Eligible Leaseholds, Eligible Real Estate or Scripts;
provided that any such adjustment described in clause (a), (b) or (c) above
shall be made only in the event that the Administrative Agent or the Required
Lenders reasonably determine (based upon an evaluation or appraisal referred to
in Section 5.09(a) or Section The Company will, and will cause each of the
Subsidiaries to, permit any representatives designated by the Administrative
Agent (including any consultants, accountants, lawyers and appraisers retained
by the Administrative Agent) in consultation with the Borrowers to conduct
commercial finance examinations and appraisals of the assets included in the
computation of the Tranche A Borrowing Base and the Tranche A-1 Borrowing Base,
including supporting systems, processes and controls, all at the expense of the
Borrowers (i) one (1) time during any twelve month period in which Excess
Availability is at all times greater than $250,000,000, (ii) up to two (2) times
during any twelve month period in which Excess Availability is at any time less
than or equal to $250,000,000 but greater than or equal to $100,000,000, (iii)
up to three (3) times during any twelve month period in which Excess
Availability is at any time less than $100,000,000 and (iv) at any time at the
request of the Administrative Agent after the occurrence and the continuation of
an Event of Default; PROVIDED, THAT, notwithstanding the provisions of clause
(iii) above, no more than two (2) appraisals of Eligible Real Estate, Eligible
Leaseholds, and Scripts may be conducted during any twelve month period unless
an Event of Default has occurred and is continuing. In addition to the foregoing
the Administrative Agent will have the right to conduct such commercial finance
examinations and appraisals at the expense of the Administrative Agent, but no
more frequently than twice in any calendar year. The expenses reimbursable by
the Borrowers pursuant to his Section shall include the reasonable fees and
expenses of any representatives retained by the Administrative Agent. or other
objectively determinable facts or circumstances) that the Tranche A Borrowing
Base or the Tranche A-1 Borrowing Base Borrowing Base, or any component thereof,
or its value as Collateral, is adversely affected by one or more events,
conditions, contingencies or risks that are not already adequately reflected in
the calculation of the Tranche A Borrowing Base and the Tranche A-1 Borrowing
Base (as applicable); and provided further that no change will be made to the
borrowing base standards pursuant to this Section 1.05 if such change would
increase the Tranche A Borrowing Base or the Tranche A-1 Borrowing Base in
effect at any time above the Tranche A Borrowing Base or the Tranche A-1
Borrowing Base, as applicable, that would be in effect at such time if such
Tranche A Borrowing Base or the Tranche A-1 Borrowing Base were calculated using
the standards in effect on the date hereof or, if such standards have been
amended pursuant to Section 9.02(b)(vi), using the standards as in effect on the
date of such amendment. The Administrative Agent will provide written notice to
the Company of any adjustments made pursuant to this Section Borrowing Base
Adjustments on the date of such adjustments.
SECTION 1.06 LETTER OF CREDIT AMOUNTS. Unless otherwise specified, all
references herein to the amount of a Letter of Credit at any time shall be
deemed to be the Stated Amount of such Letter of Credit in effect at such time;
provided, however, that with respect to any Letter of Credit that, by its terms
of any documents related thereto, provides for one or more automatic increases
in the Stated Amount thereof, the amount of such Letter of Credit shall be
55
deemed to be the maximum Stated Amount of such Letter of Credit after giving
effect to all such increases, whether or not such maximum Stated Amount is in
effect at such time.
ARTICLE II
THE CREDITS
SECTION 2.01 LOANS; MANDATORY ADVANCES OF TRANCHE A-1 LOANS.
(a) Subject to the terms and conditions set forth herein, (x) each Tranche
A Lender severally agrees to make loans (each such loan, a "TRANCHE A LOAN") to
the Borrowers from time to time, on any Business Day during the Availability
Period, in an aggregate principal amount not to exceed at any time outstanding
the lesser of (i) the amount of such Lender's Tranche A Commitment or (ii) such
Lender's Applicable Percentage of the Tranche A Borrowing Base and (y) each
Tranche A-1 Lender severally agrees to make loans (each such loan, a "TRANCHE
A-1 LOAN") to the Borrowers from time to time, on any Business Day during the
Availability Period, in an aggregate principal amount not to exceed at any time
the lesser of (i) the amount such Lender's Tranche A-1 Commitment, as
applicable, or (y) such Lender's Applicable Percentage of Incremental
Availability; subject in each case to the following limitations:
(i) after giving effect to any Borrowing, the total Exposure shall not
exceed the lesser of (A) the Aggregate Commitments, or (B) the Tranche A-1
Borrowing Base (without giving effect to any reduction of the Tranche A-1
Borrowing Base by the amount of the Aggregate Term Outstandings) (or, if
the Tranche A-1 Commitments have been terminated, the then Tranche A
Borrowing Base, without giving effect to any reduction of the Tranche A
Borrowing Base by the amount of the Aggregate Term Outstandings),
(ii) after giving effect to any Borrowing, the aggregate outstanding
principal amount of the Tranche A Loans of any Tranche A Lender, plus such
Lender's Applicable Percentage of the outstanding L/C Exposure in respect
of Letters of Credit, plus such Tranche A Lender's Applicable Percentage of
the outstanding principal amount of all Swingline Loans shall not exceed
the lesser of (x) such Tranche A Lender's Tranche A Commitment, or (y) such
Tranche A Lender's Applicable Percentage of the Tranche A Borrowing Base,
(iii) after giving effect to any Borrowing, the aggregate outstanding
principal amount of the Tranche A-1 Loans of any Tranche A-1 Lender, shall
not exceed the lesser of (x) such Tranche A-1 Lender's Tranche A-1
Commitment, or (y) such Tranche A-1 Lender's Applicable Percentage of
Incremental Availability,
(iv) The L/C Exposure in respect of Letters of Credit shall not at any
time exceed the Letter of Credit Sublimit,
(v) The aggregate outstanding principal amount of the Tranche A Credit
Extensions shall not at any time exceed the Aggregate Tranche A
Commitments; and
56
(vi) The aggregate outstanding amount of the Tranche A-1 Credit
Extensions shall not exceed the lesser of the Aggregate Tranche A-1
Commitments or Incremental Availability.
(b) Subject to the terms and conditions set forth herein, each Term Lender
severally agrees to make a term loan to the Borrowers on the Effective Date, in
a principal amount not to exceed at any time outstanding the Term Commitment of
each such Term Lender.
(c) Within the foregoing limits, and subject to the other terms and
conditions hereof, the Borrowers may borrow under this SECTION 2.01, prepay
under SECTION 2.11, and, except with respect to the Term Loan, reborrow under
this SECTION 2.01. Loans may be ABR Loans or LIBOR Loans, as further provided
herein.
(d) Except as otherwise provided in , all Credit Extensions under the
Tranche A-1 Commitments shall be Tranche A-1 Loans and all Letters of Credit
shall be issued under Tranche A Commitments.
(e) Except as provided in Section 2.01(f), each Borrowing of Loans to the
Borrowers (other than Swingline Loans) shall be made by the Lenders PRO RATA in
accordance with their respective Tranche A Commitments, Tranche A-1 Commitments
or Term Commitments. The failure of any Lender to make any Loan to the Borrowers
shall neither relieve any other Lender of its obligation to fund its Loan to the
Borrowers in accordance with the provisions of this Agreement nor increase the
obligation of any other such Lender.
(f) If at any time the aggregate outstanding principal amount of Tranche A
Loans and the Term Loan equals or exceeds $100,000,000, (i) no Borrowings of
Tranche A Loans shall be made unless Tranche A-1 Loans are outstanding in an
aggregate principal amount equal to the lesser of Incremental Availability or
the then outstanding Tranche A-1 Commitments, and (ii) the Borrowers shall make
a Borrowing of a Tranche A-1 Loan in an amount equal to the lesser of (i)
Incremental Availability and (ii) the then unfunded amount of the outstanding
Tranche A-1 Commitments. Proceeds of any Tranche A-1 Loan made pursuant to this
Section 2.01(f) shall be first applied to the repayment of the principal amount
of the then outstanding Tranche A Loans.
SECTION 2.02 INCREASE IN TRANCHE A COMMITMENTS.
(a) So long as no Default or Event of Default exists or would arise
therefrom, (i) the Company shall have the right, at any time from time to time
after the Effective Date, to request an increase of the aggregate of the then
outstanding Tranche A Commitments by an amount not to exceed in the aggregate
$100,000,000. Any such requested increase shall be first made to all existing
Tranche A Lenders on a pro rata basis based on their respective Tranche A
Applicable Percentages. At the time of sending such notice, the Company (in
consultation with the Administrative Agent) shall specify the time period within
which each Tranche A Lender is requested to respond (which shall in no event be
less than ten (10) Business Days from the date of delivery of such notice to the
Tranche A Lenders). Each Tranche A Lender shall notify the Administrative Agent
within such time period whether or not it agrees to increase its Tranche A
Commitment and, if so, whether by an amount equal to, greater than, or less than
its Tranche A Applicable Percentage of such requested increase. Any Tranche A
Lender not responding within
57
such time period shall be deemed to have declined to increase its Tranche A
Commitment. To the extent that the existing Tranche A Lenders decline to
increase their Tranche A Commitments, or decline to increase their Tranche A
Commitments to the amount requested by the Company, the Administrative Agent, in
consultation with the Company, will use its reasonable efforts to arrange for
other Persons to become a Tranche A Lender hereunder and to issue commitments in
an amount equal to the amount of the increase in the Tranche A Commitments
requested by the Company and not accepted by the existing Tranche A Lenders
(each such increase by either means, a "COMMITMENT INCREASE," and each Person
issuing, or Tranche A Lender increasing, its Commitment, an "ADDITIONAL
COMMITMENT LENDER"), PROVIDED, HOWEVER, that (i) no Tranche A Lender shall be
obligated to provide a Commitment Increase as a result of any such request by
the Company, and (ii) any Additional Commitment Lender which is not an existing
Tranche A Lender shall be subject to the approval of the Administrative Agent,
the Issuing Bank and the Company (which approval shall not be unreasonably
withheld). Each Commitment Increase shall be in a minimum aggregate amount of at
least $10,000,000 and in integral multiples of $5,000,000 in excess thereof.
(b) No Commitment Increase shall become effective unless and until each of
the following conditions have been satisfied:
(i) The Additional Commitment Lender shall have executed and delivered
a joinder to the Loan Documents, which shall have been consented to by the
Administrative Agent and the Company, in substantially the form of EXHIBIT
H hereto;
(ii) The Borrowers shall deliver, or cause to be delivered, to the
Administrative Agent a certificate of each Loan Party dated as of the
Commitment Increase Date signed by a responsible officer of such Person (i)
certifying and attaching the resolutions adopted by such Person approving
or consenting to such increase, and (ii) in the case of the Borrowers,
certifying that, before and after giving effect to such increase, (A) the
representations and warranties contained in Representations and Warranties
and the other Loan Documents are true and correct on and as of the
Commitment Increase Date, except to the extent that such representations
and warranties specifically refer to an earlier date, in which case they
are true and correct as of such earlier date, and (B) no Default or Event
of Default exists.
(iii) The Borrowers shall have paid such fees and other compensation
to the Additional Commitment Lenders and to the Administrative Agent as the
Borrowers and the Administrative Agent or such Additional Commitment
Lenders, as applicable, shall agree;
(iv) The Borrowers shall deliver to the Administrative Agent and the
Tranche A Lenders an opinion or opinions, in form and substance reasonably
satisfactory to the Administrative Agent, from counsel to the Borrowers
reasonably satisfactory to the Administrative Agent and dated such date;
and
(v) The Borrowers and the Additional Commitment Lender shall have
delivered such other instruments, documents and agreements as the
Administrative Agent, may reasonably have requested in order to effectuate
the documentation of the foregoing.
58
(c) The Administrative Agent shall promptly notify each Lender as to the
effectiveness of each Commitment Increase (with each date of such effectiveness
being referred to herein as a "COMMITMENT INCREASE DATE"), and at such time (i)
the Tranche A Commitments, under, and for all purposes of, this Agreement shall
be increased by the aggregate amount of such Commitment Increases, (ii) SCHEDULE
2.01 shall be deemed modified, without further action, to reflect the revised
Tranche A Commitments of the Tranche A Lenders and (iii) this Agreement shall be
deemed amended, without further action, to the extent necessary to reflect such
increased Tranche A Commitments. The Borrowers shall prepay any Tranche A Loans
outstanding on the Commitment Increase Date (and pay any breakage costs and
additional amounts required pursuant to Section 2.16) to the extent necessary to
keep the outstanding Tranche A Loans ratable with any revised Tranche A
Applicable Percentages arising from any nonratable increase in the Tranche A
Commitments under this Section 2.02.
SECTION 2.03 LOANS AND BORROWINGS.
(a) Each Loan shall be made as part of a Borrowing consisting of Loans of
the same Type made by the Lenders ratably in accordance with their respective
Applicable Percentages. The failure of any Lender to make any Loan required to
be made by it shall not relieve any other Lender of its obligations hereunder;
provided that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required.
(b) Each Borrowing shall be denominated in Dollars and comprised entirely
of ABR Loans or LIBOR Loans as the Borrowers may request in accordance herewith;
provided that all Swingline Loans shall be ABR Loans. Each Lender at its option
may make any LIBOR Loan by causing any domestic or foreign branch or Affiliate
of such Lender to make such Loan; PROVIDED that any exercise of such option
shall not affect the obligation of the Borrowers to repay such Loan in
accordance with the terms of this Agreement and PROVIDED FURTHER, that the
exercise of such option shall not result in an increase in additional amounts
payable by the Borrowers pursuant to Section Taxes.
(c) At the commencement of each Interest Period for any LIBOR Borrowing,
such Borrowing shall be in an aggregate principal amount that is an integral
multiple of $1,000,000 and not less than $3,000,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate principal amount that
is an integral multiple of $1,000,000 and not less than $3,000,000; PROVIDED
that an ABR Borrowing may be in an aggregate principal amount that is equal to
the entire unused balance of Tranche A Commitments or Tranche A-1 Commitments,
or the entire outstanding balance of the Term Loan, as applicable, or that is
required to finance the reimbursement of a L/C Disbursement as contemplated by
Section Reimbursement. If the Issuing Bank in respect of a Letter of Credit
shall make any L/C Disbursement in respect of such Letter of Credit, the
Borrowers shall reimburse such L/C Disbursement by paying to the Administrative
Agent an amount equal to such L/C Disbursement (i) prior to the close of
business, Boston, Massachusetts time, on the Business Day immediately following
the day that such L/C Disbursement is made, if the Borrowers shall have received
notice of such L/C Disbursement prior to 11:00 a.m., Boston, Massachusetts time,
or (ii) if such notice has not been
59
received by the Borrowers prior to 11:00 a.m., Boston, Massachusetts time, then
prior to the close of business, Boston, Massachusetts time, on the second
Business Day immediately following the day the Borrowers receive such notice;
provided that, if such L/C Disbursement is not less than $1,000,000, the
Borrowers may, subject to the conditions to borrowing set forth herein, request
in accordance with Section Requests for Borrowings that such payment be financed
with an ABR Borrowing in an equivalent amount and, to the extent so financed,
the Borrowers' obligation to make such payment shall be discharged and replaced
by the resulting ABR Loan. If the Borrowers fail to make such payment when due,
subject to the obligations of Tranche A-1 Lenders with respect to the Excess
Amount, the Administrative Agent shall notify each Tranche A Lender of the
applicable L/C Disbursement, the payment then due from the Borrowers in respect
thereof and such Tranche A Lender's Tranche A Applicable Percentage thereof.
Promptly following receipt of such notice, each such Tranche A Lender shall pay
to the Administrative Agent its Tranche A Applicable Percentage of the payment
then due from the Borrowers, in the same manner as provided in Section Funding
of Borrowings with respect to Loans made by such Tranche A Lender (and Section
Funding of Borrowings shall apply, MUTATIS MUTANDIS, to the payment obligations
of such Tranche A Lenders), and the Administrative Agent shall promptly pay to
the Issuing Bank the amounts so received by it from such Tranche A Lenders.
Promptly following receipt by the Administrative Agent of any payment from the
Borrowers pursuant to this paragraph, the Administrative Agent shall distribute
such payment to the Issuing Bank or, to the extent that Tranche A Lenders have
made payments pursuant to this paragraph to reimburse the Issuing Bank, then to
such Tranche A Lenders and the Issuing Bank as their interests may appear. Any
payment made by a Tranche A Lender pursuant to this paragraph to reimburse the
Issuing Bank for any L/C Disbursement (other than the funding of ABR Loans as
contemplated above) shall not constitute a Loan and shall not relieve the
Borrowers of their obligation to reimburse such L/C Disbursement.. Borrowings of
more than one Type may be outstanding at the same time; PROVIDED that there
shall not at any time be more than a total of ten (10) LIBOR Borrowings
outstanding. For purposes of the foregoing, Loans having different Interest
Periods, regardless of whether they commence on the same date, shall be deemed
as made under separate Borrowings.
(d) Notwithstanding any other provision of this Agreement, the Borrowers
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.
SECTION 2.04 REQUESTS FOR BORROWINGS. To request a Borrowing, the Company
shall notify the Administrative Agent of such request by telephone (a) in the
case of a LIBOR Borrowing, not later than 4:00 p.m., Boston, Massachusetts time,
three Business Days before the date of the proposed Borrowing, or (b) in the
case of an ABR Borrowing, not later than 2:00 p.m., Boston, Massachusetts time,
on the day of the proposed Borrowing; PROVIDED that any such notice of an ABR
Borrowing to finance the reimbursement of an L/C Disbursement as contemplated by
Section Reimbursement. If the Issuing Bank in respect of a Letter of Credit
shall make any L/C Disbursement in respect of such Letter of Credit, the
Borrowers shall reimburse such L/C Disbursement by paying to the Administrative
Agent an amount equal to such L/C Disbursement (i) prior to the close of
business, Boston, Massachusetts time, on the Business Day immediately following
the day that such L/C Disbursement is made, if the Borrowers shall have received
notice of such L/C Disbursement prior to 11:00
60
a.m., Boston, Massachusetts time, or (ii) if such notice has not been received
by the Borrowers prior to 11:00 a.m., Boston, Massachusetts time, then prior to
the close of business, Boston, Massachusetts time, on the second Business Day
immediately following the day the Borrowers receive such notice; PROVIDED that,
if such L/C Disbursement is not less than $1,000,000, the Borrowers may, subject
to the conditions to borrowing set forth herein, request in accordance with
Section Requests for Borrowings that such payment be financed with an ABR
Borrowing in an equivalent amount and, to the extent so financed, the Borrowers'
obligation to make such payment shall be discharged and replaced by the
resulting ABR Loan. If the Borrowers fail to make such payment when due, subject
to the obligations of Tranche A-1 Lenders with respect to the Excess Amount, the
Administrative Agent shall notify each Tranche A Lender of the applicable L/C
Disbursement, the payment then due from the Borrowers in respect thereof and
such Tranche A Lender's Tranche A Applicable Percentage thereof. Promptly
following receipt of such notice, each such Tranche A Lender shall pay to the
Administrative Agent its Tranche A Applicable Percentage of the payment then due
from the Borrowers, in the same manner as provided in Section Funding of
Borrowings with respect to Loans made by such Tranche A Lender (and Section
Funding of Borrowings shall apply, MUTATIS MUTANDIS, to the payment obligations
of such Tranche A Lenders), and the Administrative Agent shall promptly pay to
the Issuing Bank the amounts so received by it from such Tranche A Lenders.
Promptly following receipt by the Administrative Agent of any payment from the
Borrowers pursuant to this paragraph, the Administrative Agent shall distribute
such payment to the Issuing Bank or, to the extent that Tranche A Lenders have
made payments pursuant to this paragraph to reimburse the Issuing Bank, then to
such Tranche A Lenders and the Issuing Bank as their interests may appear. Any
payment made by a Tranche A Lender pursuant to this paragraph to reimburse the
Issuing Bank for any L/C Disbursement (other than the funding of ABR Loans as
contemplated above) shall not constitute a Loan and shall not relieve the
Borrowers of their obligation to reimburse such L/C Disbursement. may be given
not later than 10:00 a.m., Boston, Massachusetts time on the date of the
proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable
and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Company. Each such telephonic and written
Borrowing Request shall specify the following information in compliance with
Section Loans and Borrowings:
(i) the Borrower(s) on whose behalf the Company is requesting such
Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) whether such Borrowing is to be an ABR Borrowing or a LIBOR
Borrowing;
(v) in the case of a LIBOR Borrowing, the initial Interest Period to
be applicable thereto, which shall be a period contemplated by the
definition of the term "Interest Period"; and
61
(vi) the location and number of the Borrowers' account to which funds
are to be disbursed, which shall comply with the requirements of Section
Funding of Borrowings.
If no election as to the Type of Borrowing is specified with respect to a
Borrowing in Dollars, then the requested Borrowing shall be an ABR Borrowing. If
no Interest Period is specified with respect to any requested LIBOR Borrowing,
then the Borrowers shall be deemed to have selected an Interest Period of one
month's duration. Promptly following receipt of a Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each of the
Lenders of the details thereof and of the amount of such Lender's Loan to be
made as part of the requested Borrowing.
SECTION 2.05 SWINGLINE LOANS.
(a) During the Availability Period, the Swingline Lender is authorized by
the Tranche A Lenders, and shall make Swingline Loans at any time (subject to
Section The Company's request for a Swingline Loan shall be deemed a
representation that the applicable conditions for borrowing under Article
Conditions are satisfied. If the conditions for borrowing under Article
Conditions cannot in fact be fulfilled, (x) the Company shall give immediate
notice (a "NONCOMPLIANCE NOTICE") thereof to the Administrative Agent and the
Swingline Lender, and the Administrative Agent shall promptly provide each
Tranche A Lender with a copy of the Noncompliance Notice, and (y) the Required
Lenders may direct the Swingline Lender to, and the Swingline Lender thereupon
shall, cease making Swingline Loans until such conditions can be satisfied or
are waived in accordance with Section Waivers; Amendments. Unless the Required
Lenders so direct the Swingline Lender, the Swingline Lender may, but is not
obligated to, continue to make Swingline Loans commencing one (1) Business Day
after the Noncompliance Notice is furnished to the Tranche A Lenders.
Notwithstanding the foregoing, no Swingline Loans shall be made pursuant to this
Section ERROR! NOT A VALID BOOKMARK SELF-REFERENCE. if the aggregate outstanding
amount of the Exposure would exceed the limitations set forth in Section 2.01.)
to the Borrowers up to the amount of the sum of the Swingline Sublimit upon a
notice of Borrowing from the Company received by the Administrative Agent and
the Swingline Lender (which notice, at the Swingline Lender's discretion, may be
submitted prior to 3:00 p.m., Boston, Massachusetts time on the Business Day on
which such Swingline Loan is requested). Immediately upon the making of a
Swingline Loan, each Tranche A Lender shall be deemed to, and hereby irrevocably
and unconditionally agrees to, purchase from the Swingline Lender a risk
participation in such Swingline Loan in an amount equal to the such Tranche A
Lender's Tranche A Applicable Percentage of the amount of such Swingline Loan.
Swingline Loans shall be ABR Loans and shall be subject to weekly settlement
with the Tranche A Lenders.
(b) The Company's request for a Swingline Loan shall be deemed a
representation that the applicable conditions for borrowing under Article
Conditions are satisfied. If the conditions for borrowing under Article
Conditions cannot in fact be fulfilled, (x) the Company shall give immediate
notice (a "NONCOMPLIANCE NOTICE") thereof to the Administrative Agent and the
Swingline Lender, and the Administrative Agent shall promptly provide each
Tranche A Lender with a copy of the Noncompliance Notice, and (y) the Required
Lenders may direct the Swingline Lender to, and the Swingline Lender thereupon
shall, cease making Swingline Loans
62
until such conditions can be satisfied or are waived in accordance with Section
Waivers; Amendments. Unless the Required Lenders so direct the Swingline Lender,
the Swingline Lender may, but is not obligated to, continue to make Swingline
Loans commencing one (1) Business Day after the Noncompliance Notice is
furnished to the Tranche A Lenders. Notwithstanding the foregoing, no Swingline
Loans shall be made pursuant to this Section ERROR! NOT A VALID BOOKMARK
SELF-REFERENCE. if the aggregate outstanding amount of the Exposure would exceed
the limitations set forth in Section 2.01.
(c) Each Tranche A Lender's obligation to purchase and fund risk
participations in Swingline Loans pursuant to this Section 2.05 shall be
absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right which
such Tranche A Lender may have against the Swingline Lender, the Borrowers or
any other Person for any reason whatsoever, (B) the occurrence or continuance of
a Default, or (C) any other occurrence, event or condition, whether or not
similar to any of the foregoing. No such funding of risk participations shall
relieve or otherwise impair the obligation of the Borrowers to repay Swingline
Loans, together with interest as provided herein.
SECTION 2.06 LETTERS OF CREDIT.
(a) GENERAL. Subject to the terms and conditions set forth herein, at any
time and from time to time during the Availability Period, the Company may
request the issuance of a Letter of Credit for the account of a Borrower, in a
form appropriately completed and reasonably acceptable to the Administrative
Agent and the Issuing Bank. In the event of any inconsistency between the terms
and conditions of this Agreement and the terms and conditions of any form of
letter of credit application or other agreement submitted by the Company or any
Borrower to, or entered into by the Company or any Borrower with, the Issuing
Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control. Each Letter of Credit shall be denominated in Dollars.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN CONDITIONS.
To request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Company shall hand deliver or
telecopy (or transmit by electronic communication, if arrangements for doing so
have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or extended,
and specifying the date of issuance, amendment, renewal or extension (which
shall be a Business Day, the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such
Letter of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Bank, the Company or the applicable
Borrower also shall submit a letter of credit application on the Issuing Bank's
standard form in connection with any request for a Letter of Credit. Following
receipt of such notice and prior to the issuance of the requested Letter of
Credit or the applicable amendment, renewal or extension, the Administrative
Agent shall notify the Company and the Issuing Bank whether such Letter of
Credit may be issued under this Agreement after giving effect to (i) the
issuance, amendment, renewal or extension of such Letter of Credit, (ii) the
issuance or expiration of any other Letter of Credit that
63
is to be issued or will expire prior to the requested date of issuance of such
Letter of Credit and (iii) the borrowing or repayment of any Loans that (based
upon notices delivered to the Administrative Agent by the Company or a Borrower)
are to be borrowed or repaid prior to the requested date of issuance of such
Letter of Credit. A Letter of Credit shall be issued, amended, renewed or
extended only if (and upon issuance, amendment, renewal or extension of each
Letter of Credit, the Borrowers shall be deemed to represent and warrant that)
such issuance, amendment, renewal or extension the total L/C Exposure shall not
exceed $400,000,000, (2) the total Exposure shall not exceed the Aggregate
Commitments and (3) the total Exposure of the Tranche A Lenders shall not exceed
the lesser of the Aggregate Tranche A Commitments or the Tranche A Borrowing
Base then in effect.
(c) EXPIRATION DATE. Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one (1) year after the date of
the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) unless
cash collateralized or otherwise credit supported to the reasonable satisfaction
of the Issuing Bank, the date that is five (5) Business Days prior to the
Maturity Date. Each Letter of Credit may, upon the request of the Company
include a provision whereby such Letter of Credit shall be renewed automatically
for additional consecutive periods of twelve (12) months or less (but not beyond
the date that is five (5) Business Days prior to the Maturity Date) unless the
Issuing Bank notifies the beneficiary thereof at least thirty (30) days prior to
the then-applicable expiration date that such Letter of Credit will not be
renewed; provided, however, that no Letter of Credit shall be renewed or
extended on or after the occurrence of a Default or an Event of Default.
(d) PARTICIPATIONS. By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit increasing the amount thereof) and without any further
action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby
grants to each Tranche A Lender, and each such Tranche A Lender hereby acquires
from such Issuing Bank, a participation in such Letter of Credit equal to such
Tranche A Lender's Tranche A Applicable Percentage of the aggregate amount
available to be drawn under such Letter of Credit. In consideration and in
furtherance of the foregoing, each such Tranche A Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of
such Issuing Bank, such Tranche A Lender's Tranche A Applicable Percentage of
each L/C Disbursement made by such Issuing Bank and not reimbursed by the
Borrowers on the date due as provided in paragraph (e) of this Section, or of
any reimbursement payment required to be refunded to the Borrowers for any
reason. If any L/C Exposure remains outstanding upon the termination of the
Tranche A Commitments, to the extent the lesser of the Aggregate Tranche A-1
Commitments or Incremental Availability exceeds the Tranche A-1 Loans (the
"EXCESS AMOUNT") upon such termination of the Tranche A Commitments, the Tranche
A Lenders shall be deemed to have sold to each Tranche A-1 Lender, and each
Tranche A-1 Lender shall be deemed unconditionally and irrevocably to have so
purchased from the Tranche A Lenders, without recourse or warranty, an undivided
interest and participation, to the extent of such Tranche A-1 Lender's Tranche
A-1 Applicable Percentage in the lesser of such Excess Amount or such undivided
interest and participation of each Tranche A Lender in the L/C Exposure, each
drawing thereunder and the obligations of the Borrowers under this Agreement and
the other Loan Documents with respect thereto. Each Tranche A Lender and Tranche
A-1 Lender acknowledges and agrees that its obligation to acquire participations
pursuant to this paragraph in respect of Letters of Credit is absolute and
unconditional and shall
64
not be affected by any circumstance whatsoever, including any amendment, renewal
or extension of any Letter of Credit or the occurrence and continuance of a
Default or reduction or termination of the Tranche A Commitments or the Tranche
A-1 Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(e) REIMBURSEMENT. If the Issuing Bank in respect of a Letter of Credit
shall make any L/C Disbursement in respect of such Letter of Credit, the
Borrowers shall reimburse such L/C Disbursement by paying to the Administrative
Agent an amount equal to such L/C Disbursement (i) prior to the close of
business, Boston, Massachusetts time, on the Business Day immediately following
the day that such L/C Disbursement is made, if the Borrowers shall have received
notice of such L/C Disbursement prior to 11:00 a.m., Boston, Massachusetts time,
or (ii) if such notice has not been received by the Borrowers prior to 11:00
a.m., Boston, Massachusetts time, then prior to the close of business, Boston,
Massachusetts time, on the second Business Day immediately following the day the
Borrowers receive such notice; PROVIDED that, if such L/C Disbursement is not
less than $1,000,000, the Borrowers may, subject to the conditions to borrowing
set forth herein, request in accordance with Section Requests for Borrowings
that such payment be financed with an ABR Borrowing in an equivalent amount and,
to the extent so financed, the Borrowers' obligation to make such payment shall
be discharged and replaced by the resulting ABR Loan. If the Borrowers fail to
make such payment when due, subject to the obligations of Tranche A-1 Lenders
with respect to the Excess Amount, the Administrative Agent shall notify each
Tranche A Lender of the applicable L/C Disbursement, the payment then due from
the Borrowers in respect thereof and such Tranche A Lender's Tranche A
Applicable Percentage thereof. Promptly following receipt of such notice, each
such Tranche A Lender shall pay to the Administrative Agent its Tranche A
Applicable Percentage of the payment then due from the Borrowers, in the same
manner as provided in Section Funding of Borrowings with respect to Loans made
by such Tranche A Lender (and Section Funding of Borrowings shall apply, MUTATIS
MUTANDIS, to the payment obligations of such Tranche A Lenders), and the
Administrative Agent shall promptly pay to the Issuing Bank the amounts so
received by it from such Tranche A Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrowers pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the Issuing
Bank or, to the extent that Tranche A Lenders have made payments pursuant to
this paragraph to reimburse the Issuing Bank, then to such Tranche A Lenders and
the Issuing Bank as their interests may appear. Any payment made by a Tranche A
Lender pursuant to this paragraph to reimburse the Issuing Bank for any L/C
Disbursement (other than the funding of ABR Loans as contemplated above) shall
not constitute a Loan and shall not relieve the Borrowers of their obligation to
reimburse such L/C Disbursement.
(f) OBLIGATIONS ABSOLUTE. Each Borrower's obligation to reimburse L/C
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
65
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrowers' obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; PROVIDED that the foregoing shall not be construed to excuse the
Issuing Bank from liability to a Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by each of the Borrowers to the extent permitted by Applicable Law)
suffered by a Borrower that are caused by the Issuing Bank's failure to exercise
care when determining whether drafts and other documents presented under a
Letter of Credit comply with the terms thereof. The parties hereto expressly
agree that, in the absence of gross negligence or willful misconduct on the part
of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised care in each
such determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.
(g) DISBURSEMENT PROCEDURES. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the Borrowers by telephone (confirmed by telecopy) of
such demand for payment and whether the Issuing Bank has made or will make an
L/C Disbursement thereunder; provided that any failure to give or delay in
giving such notice shall not relieve the Borrowers of their obligation to
reimburse the Issuing Bank and Lenders with respect to any such L/C
Disbursement.
(h) INTERIM INTEREST. If the Issuing Bank in respect of a Letter of Credit
shall make any L/C Disbursement under such Letter of Credit, then, unless the
Borrowers shall reimburse such L/C Disbursement in full on the date such L/C
Disbursement is due pursuant to paragraph (e) of this Section, the unpaid amount
thereof shall bear interest, for each day from and including the date such L/C
Disbursement is made to but excluding the date that the Borrowers reimburse such
L/C Disbursement, at the rate per annum then applicable to ABR Loans; PROVIDED
that, if the Borrowers fail to reimburse such L/C Disbursement when due pursuant
to paragraph (e) of this Section, then Section 2.13(c) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Lender
pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be
for the account of such Lender to the extent of such payment.
66
(i) REPLACEMENT OF THE ISSUING BANK. The Issuing Bank may be replaced at
any time by written agreement among the Company, the Administrative Agent and
the successor Issuing Bank. The Administrative Agent shall notify the Lenders of
any such replacement of the Issuing Bank. At the time any such replacement shall
become effective, the Borrowers shall pay all unpaid fees accrued for the
account of the replaced Issuing Bank pursuant to Section 2.12(c). From and after
the effective date of any such replacement, (i) such successor Issuing Bank
shall have all the rights and obligations of the Issuing Bank under this
Agreement with respect to Letters of Credit to be issued thereafter and (ii)
references herein to the term "Issuing Bank" and the term "Issuing Bank" shall
be deemed to refer to such successor or to any previous Issuing Bank, or to such
successor and all previous Issuing Banks, as the context shall require. After
the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall
remain a party hereto and shall continue to have all the rights and obligations
of the Issuing Bank under this Agreement with respect to Letters of Credit
issued by it prior to such replacement, but shall not be required to issue
additional Letters of Credit.
(j) CASH COLLATERALIZATION. If any Event of Default shall occur and be
continuing, on the Business Day that the Company receives notice from the
Administrative Agent or the Required Lenders demanding the deposit of cash
collateral pursuant to this paragraph, the Borrowers shall deposit in an account
with the Administrative Agent an amount in cash for the benefit of the Lenders,
equal to the total L/C Exposure as of such date plus any accrued and unpaid
interest thereon; PROVIDED that the obligation to deposit such cash collateral
shall become effective immediately, and such deposit shall become immediately
due and payable, without demand or other notice of any kind, upon the occurrence
of any Event of Default with respect to any Borrower described in clause (h) or
(i) of Events of Default. The Borrowers also shall deposit cash collateral
pursuant to this paragraph as and to the extent required by Section 2.11(g) and
Section 2.11(h). Each such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the Obligations of the Borrowers.
The Administrative Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over such accounts. Other than any interest
earned on the investment of such deposits, which investments shall be made at
the option and sole discretion of the Administrative Agent and at the Borrowers'
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such accounts. Moneys in such
accounts shall be (i) applied by the Administrative Agent to reimburse the
Issuing Bank for L/C Disbursements for which it has not been reimbursed and
(ii), to the extent not so applied, held for the satisfaction of the
reimbursement obligations of the Borrowers for their L/C Exposure at such time,
or (iii) be applied to satisfy other obligations of the Borrowers under this
Agreement. If the Borrowers are required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Borrowers within
three Business Days after all Events of Default have been cured or waived. If
the Borrowers are required to provide cash collateral other than as a result of
an occurrence of an Event of Default hereunder, such amount (to the extent not
applied as aforesaid) shall be promptly returned to the extent that, and
following such time as, after giving effect to such return: (i) the total
Exposure does not exceed the Aggregate Commitments, and (ii) the total Exposure
of the Tranche A Lenders does not exceed the lesser of the Aggregate Tranche A
Commitments or the Tranche A Borrowing Base as then in effect and (iii) the
total Exposure of the Tranche A-1 Lenders does not exceed the lesser of the
Aggregate Tranche A-1 Commitments or Incremental Availability.
67
SECTION 2.07 FUNDING OF BORROWINGS.
(a) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 2:00
p.m., Boston, Massachusetts time, to the account of the Administrative Agent
most recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make each such Loan available to the Borrowers by
promptly crediting the amounts so received, in like funds, to an account of the
Borrowers maintained with the Administrative Agent in Boston, Massachusetts and
designated by the Company in the applicable Borrowing Request; provided that any
ABR Loans made to finance the reimbursement of an L/C Disbursement as provided
in Section Reimbursement. If the Issuing Bank in respect of a Letter of Credit
shall make any L/C Disbursement in respect of such Letter of Credit, the
Borrowers shall reimburse such L/C Disbursement by paying to the Administrative
Agent an amount equal to such L/C Disbursement (i) prior to the close of
business, Boston, Massachusetts time, on the Business Day immediately following
the day that such L/C Disbursement is made, if the Borrowers shall have received
notice of such L/C Disbursement prior to 11:00 a.m., Boston, Massachusetts time,
or (ii) if such notice has not been received by the Borrowers prior to 11:00
a.m., Boston, Massachusetts time, then prior to the close of business, Boston,
Massachusetts time, on the second Business Day immediately following the day the
Borrowers receive such notice; PROVIDED that, if such L/C Disbursement is not
less than $1,000,000, the Borrowers may, subject to the conditions to borrowing
set forth herein, request in accordance with Section Requests for Borrowings
that such payment be financed with an ABR Borrowing in an equivalent amount and,
to the extent so financed, the Borrowers' obligation to make such payment shall
be discharged and replaced by the resulting ABR Loan. If the Borrowers fail to
make such payment when due, subject to the obligations of Tranche A-1 Lenders
with respect to the Excess Amount, the Administrative Agent shall notify each
Tranche A Lender of the applicable L/C Disbursement, the payment then due from
the Borrowers in respect thereof and such Tranche A Lender's Tranche A
Applicable Percentage thereof. Promptly following receipt of such notice, each
such Tranche A Lender shall pay to the Administrative Agent its Tranche A
Applicable Percentage of the payment then due from the Borrowers, in the same
manner as provided in Section Funding of Borrowings with respect to Loans made
by such Tranche A Lender (and Section Funding of Borrowings shall apply, MUTATIS
MUTANDIS, to the payment obligations of such Tranche A Lenders), and the
Administrative Agent shall promptly pay to the Issuing Bank the amounts so
received by it from such Tranche A Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrowers pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the Issuing
Bank or, to the extent that Tranche A Lenders have made payments pursuant to
this paragraph to reimburse the Issuing Bank, then to such Tranche A Lenders and
the Issuing Bank as their interests may appear. Any payment made by a Tranche A
Lender pursuant to this paragraph to reimburse the Issuing Bank for any L/C
Disbursement (other than the funding of ABR Loans as contemplated above) shall
not constitute a Loan and shall not relieve the Borrowers of their obligation to
reimburse such L/C Disbursement. shall be remitted by the Administrative Agent
to the Issuing Bank.
(b) Each Borrowing of Tranche A Loans (other than Swingline Loans) shall be
made by the Tranche A Lenders PRO RATA in accordance with their respective
Tranche A Applicable Percentage; each Borrowing of Tranche A-1 Loans shall be
made by the Tranche A-1 Lenders PRO RATA in accordance with their respective
Tranche A-1 Applicable Percentage, and each
68
Borrowing of Term Loans shall be made by the Term Lenders PRO RATA in accordance
with their respective Term Applicable Percentage. The failure of any Lender to
make any Loan shall neither relieve any other Lender of its obligation to fund
its Loan in accordance with the provisions of this Agreement nor increase the
obligation of any such other Lender.
(c) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Loan to be made by such Lender on the
occasion of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender's share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in reliance upon such
assumption, make available to the Borrowers a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then such Lender and the Borrowers
jointly and severally agree to pay to the Administrative Agent forthwith on
demand such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to the Borrowers to but
excluding the date of payment to the Administrative Agent, at (i) in the case of
any Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation or (ii) in the case of the Borrowers, the interest
rate applicable to ABR Loans. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
SECTION 2.08 INTEREST ELECTIONS.
(a) Each Borrowing initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a LIBOR Borrowing, shall have
an initial Interest Period as specified in such Borrowing Request. Thereafter,
the Borrowers may elect to convert such Borrowing to a different Type or to
continue such Borrowing and, in the case of a LIBOR Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The Borrowers may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Company shall notify
the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section Requests for Borrowings if the
Company were requesting a Borrowing of the Type resulting from such election to
be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Company.
(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section Loans and Borrowings and
Section 2.04:
(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
69
thereof, the portions thereof to be allocated to each resulting Borrowing
(in which case the information to be specified pursuant to clauses (iii)
and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
LIBOR Borrowing; and
(iv) if the resulting Borrowing is a LIBOR Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term "Interest
Period".
(d) If any such Interest Election Request requests a LIBOR Borrowing but
does not specify an Interest Period, then the Borrowers shall be deemed to have
selected an Interest Period of one month's duration.
(e) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each affected Lender of the details thereof
and of such Lender's portion of each resulting Borrowing.
(f) If the Company fails to deliver a timely Interest Election Request with
respect to a LIBOR Borrowing prior to the end of the Interest Period applicable
thereto, then, unless such Borrowing is repaid as provided herein, at the end of
such Interest Period such Borrowing shall be converted to an ABR Borrowing.
Notwithstanding any contrary provision hereof, if an Event of Default has
occurred and is continuing and the Administrative Agent, at the request of the
Required Lenders, so notifies the Company, then, so long as an Event of Default
is continuing (i) no outstanding Borrowing may be converted to or continued as a
LIBOR Borrowing and (ii) unless repaid, each LIBOR Borrowing shall be converted
to an ABR Borrowing at the end of the Interest Period applicable thereto.
SECTION 2.09 TERMINATION OR REDUCTION OF COMMITMENTS.
(a) The Borrowers may, upon irrevocable notice from the Company to the
Administrative Agent, terminate the Aggregate Tranche A Commitments, the Letter
of Credit Sublimit or the Swingline Sublimit or from time to time permanently
reduce the Aggregate Tranche A Commitments, the Letter of Credit Sublimit or the
Swingline Sublimit; provided that (i) any such notice shall be received by the
Administrative Agent not later than 11:00 a.m. five Business Days prior to the
date of termination or reduction, (ii) any such partial reduction shall be in an
aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess
thereof, (iii) the Borrowers shall not terminate or reduce (A) the Aggregate
Tranche A Commitments if, after giving effect thereto and to any concurrent
prepayments hereunder, the total Exposure of the Tranche A Lenders would exceed
the Aggregate Tranche A Commitments, (B) the Letter of Credit Sublimit if, after
giving effect thereto, the L/C Exposure not fully cash collateralized in
accordance with Section 2.06(j) hereunder would exceed the Letter of Credit
Sublimit, and (C) the Swingline Sublimit if, after giving effect thereto, and to
any concurrent payments hereunder,
70
the outstanding principal amount of Swingline Loans hereunder would exceed the
Swingline Sublimit.
(b) If, after giving effect to any reduction of the Aggregate Tranche A
Commitments, the Letter of Credit Sublimit or the Swingline Sublimit exceeds the
amount of the Aggregate Tranche A Commitments, such Letter of Credit Sublimit or
Swingline Sublimit shall be automatically reduced by the amount of such excess.
(c) The Borrowers may terminate the Aggregate Tranche A-1 Commitments in
whole or in part, upon irrevocable notice from the Company to the Administrative
Agent, if (i) at the time of such termination, (A) there are no outstanding
Tranche A Loans and (B) Excess Availability is not less than twenty percent
(20%) of the Tranche A Borrowing Base, and (ii) the Borrowers have demonstrated
to the reasonable satisfaction of the Administrative Agent that Excess
Availability, as projected on a pro-forma basis for the twelve (12) months
following such payment, will be equal to or greater than twenty percent (20%) of
the Tranche A Borrowing Base PROVIDED that any such notice shall be received by
the Administrative Agent not later than 11:00 a.m. five Business Days prior to
the date of termination or reduction. Each such reduction shall be in the
principal amount of $5,000,000 or any integral multiple thereof. The Borrowers
shall pay to the Administrative Agent for application as provided herein (i) at
the effective time of any such termination (but not any partial reduction), all
Unused Fees accrued on the Aggregate Tranche A-1 Commitments so terminated, and
(ii) at the effective time of any such reduction or termination, any amount by
which the Tranche A-1 Credit Extensions to the Borrowers outstanding on such
date exceed the amount to which the Aggregate Tranche A-1 Commitments are to be
reduced effective on such date.
(d) The Administrative Agent will promptly notify the Lenders of any
termination or reduction of the Letter of Credit Sublimit, the Swingline
Sublimit, the Aggregate Tranche A Commitments or the Aggregate Tranche A-1
Commitments under this Termination or Reduction of Commitments.. Upon any
reduction of the Aggregate Tranche A Commitments, the Tranche A Commitment of
each Tranche A Lender shall be reduced by such Tranche A Lender's Tranche A
Applicable Percentage of such reduction amount. Upon any reduction of the
Aggregate Tranche A-1 Commitments, the Tranche A-1 Commitment of each Tranche
A-1 Lender shall be reduced by such Tranche A-1 Lender's Tranche A-1 Applicable
Percentage of such reduction amount. All fees (including, without limitation,
Unused Fees and Letter of Credit Fees) in respect of the Aggregate Revolving
Commitments, as applicable, accrued until the effective date of any termination
of such Commitments shall be paid on the effective date of such termination.
(e) Each notice delivered by the Company pursuant to this Section shall be
irrevocable; PROVIDED that a notice of termination of the Commitments may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Company (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent.
(f) On the Effective Date and the funding of the Term Loan, the Term
Commitments of the Term Lenders shall be terminated.
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(g) To the extent that any Real Estate which constitutes a Principal
Property on the Effective Date is reasonably determined by the Administrative
Agent to no longer constitute a Principal Property, at the Company's election,
the Term Loan may be decreased by an amount equal to the Appraised Value of such
Real Estate; provided that (i) the Tranche A Commitments are increased by a
corresponding amount, and (ii) the Mortgages and other Loan Documents are
amended in form reasonably satisfactory to the Administrative Agent (A) to
provide that such Real Estate secures all Obligations and (B) as may otherwise
be reasonably required by the Administrative Agent to reflect that such Real
Estate is no longer a Principal Property.
(h) To the extent that any Real Estate owned on the Effective Date which
has been determined not to constitute a Principal Property on the Effective Date
but is reasonably determined by the Administrative Agent after the Effective
Date to have constituted a Principal Property on the Effective Date, at the
Company's election, the Term Loan may be increased by an amount equal to the
Appraised Value of such Real Estate; provided that (i) the Tranche A Commitments
are decreased by a corresponding amount, and (ii) the Mortgages and other Loan
Documents are amended in form reasonably satisfactory to the Administrative
Agent (A) to provide that such Real Estate secures only the Term Loans and (B)
as may otherwise be reasonably required by the Administrative Agent to reflect
that such Real Estate is a Principal Property.
SECTION 2.10 REPAYMENT OF LOANS; EVIDENCE OF DEBT.
(a) Each Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Loan made to the Borrowers and held by such Lender on the
Maturity Date applicable to such Loan.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of each Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time under this
Agreement.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from each Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the respective Lenders and each respective Lender's
share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b)
or (c) of this Section shall be PRIMA FACIE evidence of the existence and
amounts of the obligations recorded therein; PROVIDED that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of any Borrower to repay
its Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it to any Borrower or
Borrowers be evidenced by a promissory note. In such event, each of the
Borrowers shall prepare, execute and deliver to such Lender a promissory note
payable to the order of such Lender (or, if requested by
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such Lender, to such Lender and its registered assigns) and in a form approved
by the Administrative Agent. Thereafter, the Loans evidenced by such promissory
note and interest thereon shall at all times (including after assignment
pursuant to Section Successors and Assigns) be represented by one or more
promissory notes in such form payable to the order of the payee named therein
(or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.11 PREPAYMENT OF LOANS.
(a) Subject to the requirements of this Section and the payment of any
amounts required under Section Break Funding Payments, (i) each Borrower shall
promptly prepay any Borrowing (or deposit such amounts) as may be required by
this Agreement, together with any and all amounts required under Section Break
Funding Payments.
(b) The Borrowers may, upon irrevocable notice from the Company to the
Administrative Agent, at any time or from time to time voluntarily prepay
Tranche A Loans in whole or in part without premium or penalty.
(c) In the event the aggregate amount of outstanding Loans is less than
$85,000,000 for five (5) consecutive Business Days (a "Low Usage Period"), the
Borrowers may, upon irrevocable notice from the Company to the Administrative
Agent, prepay the Tranche A-1 Loans in whole or in part without premium or
penalty; PROVIDED, THAT the date of such prepayment shall be not more than ten
(10) Business Days after the end of the Low Usage Period relating to the
prepayment and PROVIDED FURTHER that no Default or Event of Default then exists
or shall arise from such prepayment.
(d) The Borrowers may, upon irrevocable notice from the Company to the
Administrative Agent, prepay the Tranche A-1 Loans in whole or in part without
premium or penalty in connection with the termination or reduction of the
Tranche A-1 Commitments in accordance with Section 2.09(c) hereof. Any such
prepayment shall be subject to the notice provisions of Section 2.11(c).
(e) The Borrowers may, upon irrevocable notice from the Company to the
Swingline Lender (with a copy to the Administrative Agent), at any time or from
time to time, voluntarily prepay Swingline Loans in whole or in part without
premium or penalty; provided that (i) such notice must be received by the
Swingline Lender and the Administrative Agent not later than 1:00 p.m. on the
date of the prepayment, and (ii) any such prepayment shall be in a minimum
principal amount of $100,000. Each such notice shall specify the date and amount
of such prepayment. If such notice is given by the Company, the Borrowers shall
make such prepayment and the payment amount specified in such notice shall be
due and payable on the date specified therein.
(f) Except as provided in Section 2.09(g) and Section 2.09(i) hereof or
unless the Term Prepayment Conditions are satisfied, the Borrowers may not
prepay the Term Loan until all other Obligations have been paid in full in cash
(other than contingent indemnification obligations for which no claim has then
been asserted) and the Tranche A Commitments and the Tranche A-1 Commitments
have been terminated.
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(g) In the event and on such occasion that the total Exposure exceeds the
lesser of the Aggregate Commitments or the Tranche A-1 Borrowing Base (without
giving effect to any reduction of the Tranche A-1 Borrowing Base by the amount
of the Aggregate Term Outstandings) (or, if the Tranche A-1 Commitments have
been terminated, the then Tranche A Borrowing Base, without giving effect to any
reduction of the Tranche A Borrowing Base by the amount of the Aggregate Term
Outstandings), each as then in effect, each of the Borrowers shall promptly
prepay Loans and/or cash collateralize the L/C Exposure in an aggregate amount
equal to such excess; PROVIDED, HOWEVER, that the Borrowers shall not be
required to cash collateralize the L/C Exposure pursuant to this SECTION 2.11(g)
unless after the prepayment in full of the Loans (other than the Term Loan), the
total Exposure exceeds the lesser of the Aggregate Commitments or the Tranche
A-1 Borrowing Base (without giving effect to any reduction of the Tranche A-1
Borrowing Base by the amount of the Aggregate Term Outstandings) (or, if the
Tranche A-1 Commitments have been terminated, the then Tranche A Borrowing Base,
without giving effect to any reduction of the Tranche A Borrowing Base by the
amount of the Aggregate Term Outstandings), each as then in effect, and PROVIDED
further that the Borrowers shall not be required to prepay the Term Loan
pursuant to this SECTION 2.11(g) unless after the prepayment in full of the
Loans (other than the Term Loan) and the cash collateralization of the L/C
Exposure, the total Exposure exceeds the lesser of the Aggregate Commitments or
the Tranche A-1 Borrowing Base (without giving effect to any reduction of the
Tranche A-1 Borrowing Base by the amount of the Aggregate Term Outstandings)
(or, if the Tranche A-1 Commitments have been terminated, the then Tranche A
Borrowing Base, without giving effect to any reduction of the Tranche A
Borrowing Base by the amount of the Aggregate Term Outstandings), each as then
in effect.
(h) In the event and on such occasion that the total Exposure of the
Tranche A Lenders exceeds the lesser of the Aggregate Tranche A Commitments or
the Tranche A Borrowing Base as then in effect, each of the Borrowers shall
promptly prepay Tranche A Loans and/or cash collateralize the L/C Exposure in an
aggregate amount equal to such excess; PROVIDED, HOWEVER, that the Borrowers
shall not be required to cash collateralize the L/C Exposure pursuant to this
SECTION 2.11(h) unless after the prepayment in full of the Tranche A Loans, the
total Exposure of the Tranche A Lenders exceeds the lesser of the Aggregate
Tranche A Commitments or the Tranche A Borrowing Base as then in effect.
(i) At any time that any Loans are outstanding, in the event and on each
occasion that any Net Proceeds are received by or on behalf of any Loan Party in
respect of any Prepayment Event, including, without limitation, the Net Proceeds
of any Permitted Divestiture, such Loan Party shall, within five Business Days
after such Net Proceeds are received, prepay Borrowings in an aggregate amount
equal to such Net Proceeds, PROVIDED that any Net Proceeds from the Principal
Properties shall be applied solely to the Term Loan.
(j) Prior to any optional or mandatory prepayment of Borrowings hereunder,
the Borrowers shall select the Borrowing or Borrowings to be prepaid and shall
specify such selection in the notice of such prepayment pursuant to Section
2.11(k). Notwithstanding the foregoing provisions of this Section Prepayment of
Loans, if at any time the Borrowers are required to make a prepayment under this
Section Prepayment of Loans and the Borrowers would incur breakage costs under
Section Break Funding Payments as a result of LIBOR Loans being prepaid other
than on the last day of an Interest Period applicable thereto (the "AFFECTED
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LIBOR LOANS"), and PROVIDED that no Default has occurred and is continuing at
the time, then the Borrowers may in their sole discretion initially deposit a
portion (up to 100%) of the amounts that otherwise would have been paid in
respect of the Affected LIBOR Loans with the Administrative Agent (which deposit
must be equal in amount to the amount of the Affected LIBOR Loans not
immediately prepaid) to be held as security for such obligations of the
Borrowers hereunder pursuant to a cash collateral agreement to be entered into
in form and substance reasonably satisfactory to the Administrative Agent and
shall provide for investments in Cash and Cash Equivalents satisfactory to the
Administrative Agent and the Company, with such cash collateral to be directly
applied upon the first occurrence (or occurrences) thereafter of the last day of
an Interest Period applicable to the relevant Loans that are LIBOR Loans (or
such earlier date or dates as shall be requested by the Company), to repay an
aggregate principal amount of such Loans equal to the Affected LIBOR Loans not
initially prepaid pursuant to this sentence. Notwithstanding anything to the
contrary contained in the immediately preceding sentence, all amounts deposited
as cash collateral pursuant to the immediately preceding sentence shall be held
for the sole benefit of the Lenders and may be applied to the prepayment of such
Loans immediately if an Event of Default has occurred and is continuing.
(k) The Company shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment (other than mandatory prepayments
which shall be payable immediately when due without notice and prepayments of
Swingline Loans) hereunder (i) in the case of prepayment of a LIBOR Borrowing,
not later than 4:00 p.m., Boston, Massachusetts time, three Business Days before
the date of prepayment or (ii) in the case of prepayment of an ABR Borrowing,
not later than 2:00 p.m., Boston, Massachusetts time, on the date of prepayment.
Each such notice shall be irrevocable and shall specify the prepayment date, the
principal amount of each Borrowing or portion thereof to be prepaid and, in the
case of a mandatory prepayment, a reasonably detailed calculation of the amount
of such prepayment; PROVIDED that, if a notice of optional prepayment is given
in connection with a conditional notice of termination of the Commitments as
contemplated by Section 2.09, then such notice of prepayment may be revoked if
such notice of termination is revoked in accordance with Section 2.09. Promptly
following receipt of any such notice, the Administrative Agent shall advise the
relevant Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Loans and Borrowings.,
except as necessary to apply fully the required amount of a mandatory
prepayment. Each prepayment of a Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by accrued
interest to the extent required by Interest.
(l) Each prepayment shall be applied to the applicable Loans of the
applicable Lenders in accordance with their respective Applicable Percentages.
(m) Subject to the provisions of Section 7.03, prepayments made pursuant to
this Section 2.11 (other than paragraphs (c), (d), and (f) hereof and other than
those made with the Net Proceeds of the Principal Properties), FIRST, shall be
applied ratably to the Swingline Loans, SECOND, shall be applied ratably to the
outstanding Tranche A Loans, THIRD, shall be applied ratably to the outstanding
Tranche A-1 Loans, and, FOURTH, if an Event of Default then exists, shall be
used to cash collateralize the remaining L/C Exposure; FIFTH, shall, to the
extent permitted or required in this Section 2.11, be applied ratably to the
outstanding Term Loans, and,
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sixth, the amount remaining, if any, after the prepayment in full of all Loans
outstanding at such time and the cash collateralization of the remaining L/C
Exposure in full may be retained by the Borrowers for use in the ordinary course
of its business. Prepayments made pursuant to paragraphs (c) and (d) of this
Section 2.11 first shall be applied ratably first to the outstanding Tranche A-1
Loans and then in accordance with the priorities in the preceding sentence. Upon
the drawing of any Letter of Credit that has been cash collateralized, the funds
held as cash collateral shall be applied (without any further action by or
notice to or from the Borrowers or any other Loan Party) to reimburse the
Issuing Bank or the Lenders, as applicable.
(n) Prepayments of the Term Loan made pursuant to this Section 2.11,
including, without limitation those made with the Net Proceeds of the Principal
Properties, first, shall be applied ratably to the Term Loans of the Term
Lenders, and, second, the amount remaining, if any, after the prepayment in full
of all Term Loans outstanding at such time may be retained by the Borrowers for
use in the ordinary course of business.
(o) The Loans shall be repaid daily in accordance with (and to the extent
required under) the provisions of Section 5.14.
SECTION 2.12 FEES.
(a) The Borrowers shall pay to the Administrative Agent, for its own
account, the fees and other charges payable in the amounts and at the times
separately agreed upon between the Borrowers and the Administrative Agent.
(b) The Borrowers shall pay to the Administrative Agent for the account of
each Tranche A Lender, in accordance with its Tranche A Applicable Percentage, a
fee, calculated on the basis of a 360 day year and actual days elapsed, equal to
the percentage set forth under the heading "Tranche A Unused Fee" in the
definition of Applicable Margin TIMES the actual daily amount by which the then
Aggregate Tranche A Commitments exceed the sum of (A) the principal amount of
Tranche A Loans and Swingline Loans, then outstanding, and (B) the then L/C
Exposure. In addition, the Borrowers shall pay to the Administrative Agent for
the account of each Tranche A-1 Lender, in accordance with its Tranche A-1
Applicable Percentage, a fee, calculated on the basis of a 360 day year and
actual days elapsed, equal to the percentage set forth under the heading
"Tranche A-1 Unused Fee" in the definition of Applicable Margin TIMES the actual
daily amount by which the then Aggregate Tranche A-1 Commitments exceed the
principal amount of Tranche A-1 Loans then outstanding. The foregoing fees (the
"UNUSED FEES") shall accrue at all times during the Availability Period,
including at any time during which one or more of the conditions in ARTICLE IV
is not met, and shall be due and payable quarterly in arrears on the tenth
Business Day of each January, April, July and October, commencing with the first
such date to occur after the Effective Date, and on the last day of the
Availability Period. The Unused Fees shall be calculated quarterly in arrears.
(c) The Borrowers shall pay the Administrative Agent for the account of the
Lenders, on the tenth Business Day of each October, January, April and July, in
arrears, a fee calculated on the basis of a 360 day year and actual days elapsed
(each, a "LETTER OF CREDIT FEE"), equal to the following per annum percentages
of the average Stated Amount of the following categories of Letters of Credit
outstanding during the three month period then ended:
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(i) Standby Letters of Credit for the Borrowers: At a per annum rate
equal to the then Applicable Margin for Tranche A LIBOR Loans; and
(ii) Commercial Letters of Credit for the Borrowers: At a per annum
rate equal to fifty percent (50%) of the then Applicable Margin for Tranche
A LIBOR Loans.
(d) The Borrowers shall pay directly to the Issuing Bank for its own
account a fronting fee with respect to each Letter of Credit, at a rate equal to
one-eighth of one percent (0.125%) per annum, computed on the Stated Amount of
such Letter of Credit. Such fronting fees shall be due and payable on the tenth
Business Day after the end of each October, January, April and July, in arrears,
on the basis of a 360 day year and actual days elapsed, commencing with the
first such date to occur after the issuance of such Letter of Credit, on the
expiration date of such Letter of Credit and thereafter on demand. For purposes
of computing the daily amount available to be drawn under any Letter of Credit,
the amount of the Letter of Credit shall be determined in accordance with LETTER
OF CREDIT AMOUNTS. The Borrowers shall pay to the Issuing Bank, in addition to
all Letter of Credit Fees otherwise provided for hereunder, the reasonable and
customary fees, costs and charges of the Issuing Bank in connection with the
issuance, negotiation, settlement, amendment and processing of each Letter of
Credit issued by the Issuing Bank in such amounts as shall be mutually agreed by
the Company and the Issuing Bank, provided that no such fees, costs or charges
shall be payable in respect of the issuance of any Existing Letters of Credit.
Such customary fees and standard costs and charges are due and payable on demand
and are nonrefundable.
(e) All fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for the respective accounts of the
Administrative and other Lenders as provided herein. Once due, all fees shall be
fully earned and shall not be refundable under any circumstances.
SECTION 2.13 INTEREST.
(a) The Loans comprising each ABR Borrowing shall bear interest at the
Alternate Base Rate plus the Applicable Margin.
(b) The Loans comprising each LIBOR Borrowing shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Margin.
(c) Notwithstanding the foregoing, upon the occurrence and during the
continuance of a Specified Default, at the written election of the Required
Lenders, principal or interest on any Loan shall bear interest, after as well as
before judgment, at a rate per annum equal to (i) in the case of overdue
principal of any Loan, two percent (2.0%) plus the rate otherwise applicable to
such Loan as provided in the preceding paragraphs of this Interest. and (ii) in
the case of any other amounts, two percent (2.0%) plus the rate applicable to
ABR Loans as provided in paragraph (a) of this Interest.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and upon termination of the Commitments;
PROVIDED that (i) interest accrued pursuant to paragraph (c) of this Interest.
shall be payable on demand, (ii) in the event of any repayment or prepayment of
any Loan of any Lender (other than a prepayment of an ABR
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Loan prior to the end of the Availability Period with respect to such Lender),
accrued interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment and (iii) in the event of any
conversion of any LIBOR Loan prior to the end of the current Interest Period
therefor, accrued interest on such Loan shall be payable on the effective date
of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of 360
days (or 365/366 days in the case of ABR Loans), and in each case shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day). The applicable Alternate Base Rate or Adjusted LIBO
Rate shall be determined by the Administrative Agent, and such determination
shall be conclusive absent manifest error.
SECTION 2.14 ALTERNATE RATE OF INTEREST. If prior to the commencement of
any Interest Period for a LIBOR Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by a majority in interest of the
Lenders that the Adjusted LIBO Rate for such Interest Period will not adequately
and fairly reflect the cost to such Lenders of making or maintaining their Loans
included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent thereafter notify the Company and the Lenders
that the circumstances giving rise to such notice no longer exist, (i) any
Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a LIBOR Borrowing shall be ineffective and
(ii) if any Borrowing Request requests a LIBOR Borrowing, such Borrowing shall
be made as an ABR Borrowing.
SECTION 2.15 INCREASED COSTS.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate) or any Issuing Bank; or
(ii) impose on any Lender or any Issuing Bank or the London interbank
market any other condition affecting this Agreement, any Loans made by such
Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Loan (or of maintaining its obligation to
make any such Loan) or to increase the cost to such Lender or Issuing Bank of
participating in, issuing or maintaining any Letter of
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Credit or to reduce the amount of any sum received or receivable by such Lender
or Issuing Bank hereunder (whether of principal, interest or otherwise), then
the Company will pay to such Lender or Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or Issuing Bank, as
the case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or any Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or Issuing Bank's capital or on the capital of such
Lender's or Issuing Bank's holding company, if any, as a consequence of this
Agreement or the Loans made by, or participations in Letters of Credit held by,
such Lender, or the Letters of Credit issued by such Issuing Bank, to a level
below that which such Lender or such Issuing Bank or such Lender's or Issuing
Bank's holding company could have achieved but for such Change in Law (taking
into consideration such Lender's or Issuing Bank's policies and the policies of
such Lender's or Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Company will pay to such Lender or Issuing
Bank, as the case may be, such additional amount or amounts as will compensate
such Lender or Issuing Bank or such Lender's or the Issuing Bank's holding
company for any such reduction suffered.
(c) A certificate of a Lender or any Issuing Bank setting forth the amount
or amounts necessary to compensate such Lender or Issuing Bank or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Company and shall be conclusive absent
manifest error. The Company shall pay such Lender or Issuing Bank, as the case
may be, the amount shown as due on any such certificate within 10 days after
receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; PROVIDED
that the Company shall not be required to compensate a Lender or Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 180 days prior to the date that such Lender or the Issuing Bank, as the
case may be, notifies the Company of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; PROVIDED FURTHER that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period referred to above shall be extended to include the period of
retroactive effect thereof.
(e) This Section 2.15 shall not apply to Taxes, which shall be governed
exclusively by Taxes.
SECTION 2.16 BREAK FUNDING PAYMENTS. In the event of (a) the payment of
any principal of any LIBOR Loan other than on the last day of an Interest Period
applicable thereto (including as a result of the acceleration of the Obligations
upon the occurrence of an Event of Default or in accordance with the provisions
of Section 2.02), (b) the conversion of any LIBOR Loan other than on the last
day of the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section The Company shall
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notify the Administrative Agent by telephone (confirmed by telecopy) of any
prepayment (other than mandatory prepayments which shall be payable immediately
when due without notice and prepayments of Swingline Loans) hereunder (i) in the
case of prepayment of a LIBOR Borrowing, not later than 4:00 p.m., Boston,
Massachusetts time, three Business Days before the date of prepayment or (ii) in
the case of prepayment of an ABR Borrowing, not later than 2:00 p.m., Boston,
Massachusetts time, on the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date, the principal amount of each
Borrowing or portion thereof to be prepaid and, in the case of a mandatory
prepayment, a reasonably detailed calculation of the amount of such prepayment;
PROVIDED that, if a notice of optional prepayment is given in connection with a
conditional notice of termination of the Commitments as contemplated by Section
2.09, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.09. Promptly following
receipt of any such notice, the Administrative Agent shall advise the relevant
Lenders of the contents thereof. Each partial prepayment of any Borrowing shall
be in an amount that would be permitted in the case of an advance of a Borrowing
of the same Type as provided in Loans and Borrowings., except as necessary to
apply fully the required amount of a mandatory prepayment. Each prepayment of a
Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent
required by Interest.. and is revoked in accordance therewith), or (d) the
assignment of any LIBOR Loan other than on the last day of the Interest Period
applicable thereto as a result of a request by a Borrower pursuant to Section
Mitigation Obligations; Replacement of Lenders, then, in any such event, such
Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a LIBOR Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrowers and shall be
conclusive absent manifest error. The Borrowers shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.17 TAXES.
(a) Any and all payments by or on account of any obligation of any Borrower
hereunder or under any other Loan Document shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if
such Borrower shall be required to deduct any Indemnified Taxes or Other Taxes
from such payments, then (i) the sum payable shall be increased as necessary so
that after making all such required deductions (including deductions applicable
to additional sums payable under this Section), the Administrative Agent, Lender
or Issuing Bank (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) such Borrower shall
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make such deductions and (iii) such Borrower shall pay the full amount deducted
to the relevant Governmental Authority in accordance with Applicable Law.
(b) In addition, each of the Borrowers shall pay any Other Taxes to the
relevant Governmental Authority in accordance with Applicable Law.
(c) Each of the Borrowers shall indemnify the Administrative Agent, each
Lender and each Issuing Bank, within 10 days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) paid by the Administrative Agent, Lender or Issuing Bank, as
the case may be, on or with respect to any payment by or on account of any
obligation of such Borrower hereunder or under any other Loan Document and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability, along with a
reasonably detailed explanation of the tax issue, delivered to a Borrower by a
Lender or Issuing Bank, or by the Administrative Agent on its own behalf or on
behalf of a Lender or Issuing Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by any Borrower to a Governmental Authority, such Borrower shall deliver
to the Administrative Agent the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(e) Any Lender that is entitled to an exemption from or reduction of
withholding tax under the law of any jurisdiction in which any Borrower is
located or doing business, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to such Borrower
(with a copy to the Administrative Agent) or to the Administrative Agent, at the
time or times prescribed by Applicable Law, such properly completed and executed
documentation prescribed by Applicable Law or reasonably requested by such
Borrower as will permit such payments to be made without withholding or at a
reduced rate, provided that such Lender has received written notice from such
Borrower or the Administrative Agent advising it of the availability of such
exemption or reduction and supplying all applicable documentation. Each Lender
will promptly notify the Company and the Administrative Agent in writing if
there is any change in such Lender's circumstances that would prevent such
Lender from providing updates to the documentation previously delivered or would
invalidate any documentation previously delivered.
(f) If the Administrative Agent, any Lender or Issuing Bank becomes aware
that it is entitled to claim a refund from a Governmental Authority in respect
of Indemnified Taxes or Other Taxes as to which it has been indemnified by a
Borrower, or with respect to which a Borrower has paid additional amounts
pursuant to this Section Taxes, it shall promptly notify such Borrower of the
availability of such refund claim and shall, within 30 days after receipt of a
request by such Borrower, make a claim to such Governmental Authority for such
refund at such Borrower's expense. If the Administrative Agent, any Lender or
Issuing Bank receives a refund (including pursuant to a claim for a refund made
pursuant to the preceding sentence) in respect of
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Indemnified Taxes or Other Taxes as to which it has been indemnified by a
Borrower in which such Borrower has paid additional amounts pursuant to this
Section Taxes, it shall within 30 days from the date of such receipt pay over
such refund to such Borrower (but only to the extent of indemnity payments made,
or additional amounts paid, by such Borrower under this Section Taxes with
respect to Indemnified Taxes or Other Taxes giving rise to such refund), net of
all out of pocket expenses of the Administrative Agent, the Lender or Issuing
Bank and without interest (other than interest paid by the relevant Governmental
Authority with respect to such refund); PROVIDED, HOWEVER, that such Borrower,
upon the request of the Administrative Agent, Lender or Issuing Bank, agrees to
repay the amount paid over to such Borrower (plus penalties, interest and other
charges, including the reasonable fees and expenses of the Administrative Agent
and Collateral Agent) to the Administrative Agent, Lender or Issuing Bank if the
Administrative Agent, Lender or Issuing Bank is required to repay such refund to
such Governmental Authority.
(g) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section Taxes shall
survive the payment in full of the principal of and interest on all Loans and
L/C Disbursements made hereunder.
(h) Each Non-U.S. Lender shall deliver to the Company and the
Administrative Agent two copies of either U.S. Internal Revenue Service Form
W-8BEN (in the case of a Non-U.S. Lender claiming treaty benefits), Form W-8BEN
and a tax status certificate in form reasonably acceptable to the Company and
the Administrative Agent (in the case of a Non-U.S. Lender claiming portfolio
interest exemption), Form W-8ECI or, with respect to a Non-U.S. Lender that is
not acting for its own account (e.g., where the Non-U.S. Lender is a partnership
or a participating lender), Form W-8IMY, or any subsequent versions thereof or
successors thereto, properly completed and duly executed by such Non-U.S. Lender
claiming complete exemption from, or reduced rate of, U.S. federal withholding
tax on payments by the Company under this Agreement. Such forms shall be
delivered by each Non-U.S. Lender on or before the date it becomes a party to
this Agreement and on or before the date, if any, such Non-U.S. Lender changes
its applicable lending office by designating a different lending office. In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
expiration, obsolescence or invalidity of any form previously delivered by such
Non-U.S. Lender and shall promptly notify the Company and the Administrative
Agent in writing if there is any change in such Lender's circumstances that
would prevent such Lender from providing a new form or would invalidate a form
previously delivered. Notwithstanding any other provision of this Section
2.17(h), a Non-U.S. Lender shall not be required to deliver any form pursuant to
this Section 2.17(h) that such Non-U.S. Lender is not legally able to deliver.
(i) Nothing contained in this Section Taxes shall require the
Administrative Agent, any Lender or Issuing Bank to make available any of its
tax returns (or any other information that it deems, in its sole discretion, to
be confidential or proprietary).
SECTION 2.18 PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SETOFFS.
(a) Each Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest,
fees, reimbursement of L/C Disbursements, or of amounts payable under Section
Increased Costs, Break Funding Payments or Taxes, or otherwise) prior to the
time expressly required hereunder or under such other Loan
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Document for such payment (or, if no such time is expressly required, prior to
2:00 p.m., Boston, Massachusetts time, on the date when due, in immediately
available funds, without set-off or counterclaim. Any amounts received after
such time on any date may, in the discretion of the Administrative Agent, be
deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, except payments to be made directly to the Issuing Bank as expressly
provided herein and except that payments pursuant to Sections Increased Costs,
Break Funding Payments, Taxes and Expenses; Indemnity; Damage Waiver shall be
made directly to the Persons entitled thereto and payments pursuant to other
Loan Documents shall be made to the Persons specified therein. The
Administrative Agent and the Collateral Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment under any Loan Document shall
be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such
extension. All payments under each Loan Document shall be made in Dollars.
(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed L/C
Disbursements, interest and fees then due hereunder in respect of Obligations,
then such funds shall be applied in the order and manner set forth in Section
7.03.
(c) If any Lender shall, by exercising any right of set-off or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of its Loans or participations in L/C Disbursements resulting in such Lender
receiving payment of a greater proportion of the aggregate amount of its Loans
and participations in L/C Disbursements and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the Loans
and participations in L/C Disbursements of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and participations in L/C Disbursements; provided that
(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest, and (ii) the provisions of this paragraph shall not be construed to
apply to any payment made by any Borrower pursuant to and in accordance with the
express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans or participations in L/C Disbursements to any assignee or participant,
other than to a Borrower or any Subsidiary or Affiliate thereof (as to which the
provisions of this paragraph shall apply). Each Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under Applicable
Law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against any Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of such Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from a
Borrower prior to the date on which any payment by such Borrower is due to the
Administrative Agent for the
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account of any of the Lenders or the Issuing Bank hereunder that such Borrower
will not make such payment, the Administrative Agent may assume that such
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the applicable Lenders or the
Issuing Bank, as the case may be, the amount due. In such event, if such
Borrower has not in fact made such payment, then each of such Lenders or such
Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.
SECTION 2.19 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) If any Lender (including for this purpose an Issuing Bank) requests
compensation under Section 2.15, or if a Borrower is required to pay any
additional amount or indemnification payment to any Lender, the Administrative
Agent, or any Governmental Authority for the account of any Lender pursuant to
Section 2.17, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section Increased
Costs or Taxes, as the case may be, in the future and (ii) would not subject
such Lender to any unreimbursed cost or expense and would not otherwise be
materially disadvantageous to such Lender. Each of the Borrowers hereby agrees
to pay all reasonable costs and expenses incurred by any Lender in connection
with any such designation or assignment.
(b) If any Lender requests compensation under Section Increased Costs, or
if a Borrower is required to pay any additional amount or indemnification
payment to any Lender, the Administrative Agent, or to any Governmental
Authority for the account of any Lender pursuant to Section Taxes, or if any
Lender defaults in its obligation to fund Loans hereunder, then the Company may,
at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section Successors and Assigns), all its interests, rights and obligations under
this Agreement to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment); provided that (i)
the Company shall have received the prior written consent of the Administrative
Agent and the Issuing Bank, which consents shall not be unreasonably withheld,
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in L/C Disbursements,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrowers (in the case of all other amounts)
and (iii) in the case of any such assignment resulting from a claim for
compensation under Section Increased Costs or payments required to be made
pursuant to Section Taxes, such assignment will result in a material reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or
84
otherwise, the circumstances entitling the Company to require such assignment
and delegation cease to apply.
SECTION 2.20 DESIGNATION OF COMPANY AS EACH BORROWERS' AGENT.
(a) Each Borrower hereby irrevocably designates and appoints the Company as
such Borrower's agent to obtain Loans and Letters of Credit, the proceeds of
which shall be available to each Borrower for such uses as are permitted under
this Agreement. As the disclosed principal for its agent, each Borrower shall be
obligated to the Administrative Agent and each Lender on account of Loans so
made and Letters of Credit so issued as if made directly by the Lenders to such
Borrower, notwithstanding the manner by which such Loans and Letters of Credit
are recorded on the books and records of the Company and of any other Borrower.
(b) Each Borrower represents to the Credit Parties that it is an integral
part of a consolidated enterprise, and that each Loan Party will receive direct
and indirect benefits from the availability of the joint credit facility
provided for herein, and from the ability to access the collective credit
resources of the consolidated enterprise which the Loan Parties comprise. Each
Borrower recognizes that credit available to it hereunder is in excess of and on
better terms than it otherwise could obtain on and for its own account and that
one of the reasons therefor is its joining in the credit facility contemplated
herein with all other Borrowers. Consequently, each Borrower hereby assumes and
agrees to discharge all Obligations of each of the other Borrowers as if such
Borrower which is so assuming and agreeing were each of the other Borrowers.
(c) The Company shall act as a conduit for each Borrower (including itself,
as a Borrower) on whose behalf the Company has requested a Loan. None of the
Agents nor any other Credit Party shall have any obligation to see to the
application of such proceeds.
(d) The authority of the Company to request Loans and Letters of Credit on
behalf of, and to bind, the Borrowers, shall continue unless and until the
Administrative Agent actually receives written notice of: (i) the termination of
such authority, and (ii) the subsequent appointment of a successor Company,
which notice is signed by the respective Financial Officers of each Borrower;
and (iii) written notice from such successive Company accepting such appointment
and acknowledging that from and after the date of such appointment, the newly
appointed Company shall be bound by the terms hereof, and that as used herein,
the term "Company" shall mean and include the newly appointed Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Until the Commitments have expired or been terminated and the principal of
and interest on each Loan, all fees and other Obligations payable hereunder
shall have been paid in full, and all Letters of Credit shall have expired or
terminated and all L/C Disbursements shall have been reimbursed, each of the
Borrowers represents and warrants to the Lenders that:
SECTION 3.01 ORGANIZATION; POWERS. Except as set forth on SCHEDULE 3.01,
each of the Company and the Subsidiaries is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in
85
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.
SECTION 3.02 AUTHORIZATION; ENFORCEABILITY. The Transactions to be entered
into by each Loan Party are within such Loan Party's corporate powers and have
been duly authorized by all necessary corporate and, if required, equityholder
action. This Agreement has been duly executed and delivered by each of the
Borrowers and constitutes, and each other Loan Document to which any Loan Party
is to be a party, when executed and delivered by such Loan Party, will
constitute, a legal, valid and binding obligation of each such Borrower or Loan
Party (as the case may be), enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 3.03 GOVERNMENTAL APPROVALS; NO CONFLICTS. The Transactions (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect and have been disclosed to the Lenders
to their reasonable satisfaction, and except filings necessary to perfect Liens
created under the Loan Documents, (b) will not violate any Applicable Law or
regulation or the charter, by-laws or other organizational documents of the
Company or any of the Subsidiaries or any order of any Governmental Authority,
(c) will not violate or result in a default under any indenture, agreement or
other instrument binding upon the Company or any of the Subsidiaries or its
assets, or give rise to a right thereunder to require any payment to be made by
the Company or any of the Subsidiaries, and (d) will not result in the creation
or imposition of any Lien on any asset of the Company or any of the
Subsidiaries, except Liens created under the Loan Documents.
SECTION 3.04 FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.
(a) The Company has heretofore furnished to the Lenders its consolidated
balance sheet and statements of consolidated operations and retained earnings,
consolidated shareholders' equity and consolidated cash flows (i) as of and for
the fiscal year ended February 24, 2007, reported on by Pricewaterhouse Coopers
LLP, independent public accountants, and (ii) as of and for the fiscal quarter
and the portion of the fiscal year ended September 8, 2007, certified by its
chief financial officer. Such financial statements present fairly, in all
material respects, the financial position and results of operations and cash
flows of the Company and the Subsidiaries (other than Pathmark and its
Subsidiaries) as of such dates and for such periods in accordance with GAAP,
subject to year-end audit adjustments and the absence of footnotes in the case
of the statements referred to in clause (ii) above.
(b) The Company has heretofore furnished to the Lenders the consolidated
balance sheet and statements of consolidated operations and retained earnings,
consolidated shareholders' equity and consolidated cash flows of Pathmark and
its Subsidiaries (i) as of and for the fiscal year ended February 3, 2007,
reported on by Deloitte & Touche, LLP, independent public accountants, and (ii)
as of and for the fiscal quarter and the portion of the fiscal year ended August
4, 2007, certified by Pathmark's chief financial officer. Such financial
statements
86
present fairly, in all material respects, the financial position and results of
operations and cash flows of Pathmark and its Subsidiaries as of such dates and
for such periods in accordance with GAAP, subject to year-end audit adjustments
and the absence of footnotes in the case of the statements referred to in clause
(ii) above.
(c) The unaudited consolidated pro forma balance sheet of the Company and
its Subsidiaries as of September 8, 2007, and the related consolidated
statements of income and cash flow of the Company and its Subsidiaries for the
twelve month period then ended, certified by the chief financial officer, senior
vice president-finance, or treasurer of the Company fairly present the
consolidated financial condition of Company and its Subsidiaries as at such date
and the consolidated results of operations of the Company and its Subsidiaries
for the period ended on such date, in the case of the consolidated balance
sheet, giving pro forma effect to the Transactions.
(d) The consolidated forecasted balance sheet, statements of income and
cash flows of the Company and its Subsidiaries delivered to the Lenders were
prepared in good faith on the basis of the assumptions stated therein, which
assumptions were reasonable in light of the conditions existing at the time of
delivery of such forecasts, and represented, at the time of delivery, a
reasonable estimate of the Company's and its Subsidiaries future financial
condition and performance, giving pro forma effect to the Transactions.
(e) Since August 4, 2007, there has been no material adverse change in (a)
the business, assets, operations or condition, financial or otherwise, of the
Company and the Subsidiaries, taken as a whole, except as disclosed in the
Exchange Act Filings made prior to the Effective Date or in any Schedules or
Exhibits to this Agreement as of the Effective Date, (b) after the Effective
Date, the ability of any Loan Party to perform any of its obligations under any
Loan Document, (c) after the Effective Date, the rights of or benefits available
to the Lenders under any Loan Document or (d) the Collateral as a whole.
SECTION 3.05 PROPERTIES.
(a) Each of the Company and the Subsidiaries has good title to, or valid
leasehold interests in, all its real and personal property material to its
business, except for Liens permitted by Section Liens or other Liens reasonably
acceptable to the Administrative Agent. As of the Effective Date, the Real
Estate listed n SCHEDULE 1.01(C) is the only Real Estate constituting a
Principal Property.
(b) Each of the Company and the Subsidiaries owns, or is licensed to use,
all trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Company and the
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.06 LITIGATION AND ENVIRONMENTAL MATTERS.
(a) There are no actions, suits or proceedings by or before any arbitrator
or Governmental Authority pending against or, to the knowledge of any of the
Borrowers, threatened against or affecting the Company or any of the
Subsidiaries (i) as to which there is a
87
reasonable possibility of an adverse determination and that, if adversely
determined, would reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect (other than the Disclosed Matters) or (ii)
that involve any of the Loan Documents or the Transactions.
(b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, would not reasonably be expected
to result in a Material Adverse Effect, neither the Company nor any of the
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability, (iii)
has received written notice of any claim with respect to any Environmental
Liability or (iv) knows of any basis for any Environmental Liability.
(c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07 COMPLIANCE WITH LAWS AND AGREEMENTS. Each of the Company and
the Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default or Event of Default
has occurred and is continuing.
SECTION 3.08 INVESTMENT COMPANY STATUS. Neither the Company nor any of the
Subsidiaries is an "investment company" as defined in, or subject to regulation
under, the Investment Company Act of 1940.
SECTION 3.09 TAXES. Each of the Company and the Subsidiaries has timely
filed or caused to be filed all Tax returns and reports required to have been
filed and has paid or caused to be paid all Taxes required to have been paid by
it, except (a) any Taxes that are being contested in good faith by appropriate
proceedings and for which the Company or such Subsidiary, as applicable, has set
aside on its books adequate reserves in accordance with GAAP or (b) to the
extent that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.10 EMPLOYEE BENEFIT PLANS. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.11 DISCLOSURE. To the best knowledge of the Borrowers, the
Borrowers have disclosed to the Lenders all agreements, instruments and
corporate or other restrictions to which the Company or any of the Subsidiaries
is subject, and all other matters known to any of them, that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect. None of the reports, financial statements, certificates or other
information furnished by or on behalf of any Loan Party to the Administrative
Agent or any
88
Lender in connection with the negotiation of this Agreement or any other Loan
Document or delivered hereunder or thereunder (as modified or supplemented by
other information so furnished) contains, as of the date hereof (or in the case
of items furnished after the date hereof, when furnished), any material
misstatement of fact or omits, as of the date hereof (or in the case of items
furnished after the date hereof, when furnished), to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, with respect to
projected financial information, the Borrowers represent only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time so furnished.
SECTION 3.12 SUBSIDIARIES. Schedule 3.12 sets forth the name of, and the
ownership interest of the Company in, each Subsidiary of the Company, in each
case as of the Effective Date.
SECTION 3.13 INSURANCE. Schedule 3.13 sets forth a description of all
insurance maintained by or on behalf of the Company and the Subsidiaries as of
the Effective Date. As of the Effective Date, all premiums in respect of such
insurance have been paid. The insurance maintained by or on behalf of the
Company and the Subsidiaries is in full force and effect and complies with the
requirements set forth in Section Insurance.
SECTION 3.14 LABOR MATTERS. As of the Effective Date, there are no strikes,
lockouts or slowdowns against the Company or any Subsidiary pending or, to the
knowledge of any Borrower, threatened. The Company and the Subsidiaries have not
been in violation of, in any material respect, the Fair Labor Standards Act or
any other applicable Federal, state, local or foreign law dealing with hours
worked by or payments made to employees or any similar matters. All payments due
from the Company or any Subsidiary, or for which any claim may be made against
the Company or any Subsidiary, on account of wages and employee health and
welfare insurance and other benefits, have been paid or accrued as a liability
on the books of the Company or such Subsidiary. The consummation of the
Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which the Company or any Subsidiary is bound.
SECTION 3.15 SECURITY DOCUMENTS.
(a) The Pledge Agreement creates in favor of the Collateral Agent, for the
benefit of the Secured Parties referred to therein, a legal, valid, continuing
and enforceable security interest in the Collateral (as defined in the Pledge
Agreement), the enforceability of which is subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law, and the Pledged Securities (as
defined in the Pledge Agreement) have been delivered to the Collateral Agent
(together with stock powers or other appropriate instruments of transfer
executed in blank form). The Collateral Agent has a fully perfected first
priority Lien on, and security interest in, to and under all right, title and
interest of each pledgor thereunder in such Collateral, and such security
interest is in each case prior and superior in right and interest to any other
Person.
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(b) The Security Agreement creates in favor of the Collateral Agent, for
the benefit of the Secured Parties referred to therein, a legal, valid,
continuing and enforceable security interest in the Collateral (as defined in
the Security Agreement), the enforceability of which is subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law. The
financing statements, releases and other filings set forth on SCHEDULE 3.15(b)
are in appropriate form and have been or will be filed in the offices specified
in the Perfection Certificate. Upon such filings and/or the obtaining of
"control," the Collateral Agent will have a perfected Lien on, and security
interest in, to and under all right, title and interest of the grantors
thereunder in all Collateral that may be perfected by filing, recording or
registering a financing statement or analogous document (including without
limitation the proceeds of such Collateral subject to the limitations relating
to such proceeds in the UCC) or by obtaining control, under the UCC (in effect
on the date this representation is made) in each case prior and superior in
right to any other Person other than with respect to Liens expressly permitted
by Section Liens hereof.
(c) When the Security Agreement is filed in the United States Patent and
Trademark Office and the United States Copyright Office and when financing
statements, releases and other filings set forth on SCHEDULE 3.15(c) in
appropriate form are filed in the offices specified on the Perfection
Certificate, the Security Agreement shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the applicable Loan
Parties in the Intellectual Property (as defined in the Security Agreement) in
which a security interest may be perfected by filing, recording or registering a
security agreement, financing statement or analogous document in the United
States Patent and Trademark Office or the United States Copyright Office, as
applicable, in each case prior and superior in right to any other Person other
than with respect to Liens expressly permitted by Section Liens hereof (it being
understood that subsequent recordings in the United States Patent and Trademark
Office and the United States Copyright Office may be necessary to perfect a Lien
on registered trademarks, trademark applications and copyrights acquired by the
Loan Parties after the date hereof).
(d) The Mortgages create in favor of the Collateral Agent, for the benefit
of the Secured Parties referred to therein (other than those on the Principal
Properties which secure obligations due to on account of the Term Lenders and
the Collateral Agent with respect to the Term Loan only), a legal, valid,
continuing and enforceable Lien in the Mortgaged Property (as defined in the
Mortgages), the enforceability of which is subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law. Upon the filing of the Mortgages
with the appropriate Governmental Authorties, the Collateral Agent will have a
perfected Lien on, and security interest in, to and under all right, title and
interest of the grantors thereunder in all Mortgaged Property that may be
perfected by such filing (including without limitation the proceeds of such
Mortgaged Property, in each case prior and superior in right to any other Person
other than with respect to Liens expressly permitted by Section Liens hereof or
other Liens reasonably acceptable to the Collateral Agent.
SECTION 3.16 FEDERAL RESERVE REGULATIONS.
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(a) No Loan Party is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of buying or
carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, (i) to buy or carry Margin Stock or to extend credit to others for
the purpose of buying or carrying Margin Stock or to refund indebtedness
originally incurred for such purpose in violation of Regulation U or X or (ii)
for any purpose that entails a violation of, or that is inconsistent with, the
provisions of the Regulations of the Board, including Regulation U or Regulation
X.
SECTION 3.17 MERGER AGREEMENT
(a) As of the date hereof neither the Merger Agreement nor any of the
instruments or documents executed in connection therewith have been amended or
modified except those modifications or amendments that have been disclosed to
the Administrative Agent in writing.
(b) To the best of the Loan Parties' knowledge the representations and
warranties made by Pathmark in connection with the Merger Agreement were true,
complete and accurate in all material respects at the time made and continue to
be true, complete and accurate in all material respects as of the Effective
Date.
ARTICLE IV
CONDITIONS
SECTION 4.01 EFFECTIVE DATE. The obligations of the Lenders to make Loans
and of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section Waivers; Amendments):
(a) The Administrative Agent shall have received from each party hereto
either (i) a counterpart of this Agreement signed on behalf of such party or
(ii) written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page of this Agreement) that
such party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received a favorable written
opinion (addressed to the Agents, the Issuing Bank and the Lenders and dated the
Effective Date) of each of (i) ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President and Legal
Compliance Officer of the Company, and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel
for the Loan Parties, substantially in the form of EXHIBITS I and J,
respectively, and, in the case of each such opinion required by this paragraph,
covering such other matters relating to the Loan Parties, the Loan Documents or
the Transactions as the Required Lenders shall reasonably request. Each of the
Borrowers hereby requests such counsel to deliver such opinions.
(c) The Administrative Agent shall have received a true and complete copy
of each Loan Party's organizational documents, an incumbency certificate for
each person authorized to execute Loan Documents on behalf of a Loan Party,
resolutions authorizing the due execution, delivery and performance of the Loan
Documents and the Transactions and a good standing certificate from each
jurisdiction where a Loan Party is organized and each jurisdiction necessary
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for it to carry on its business and such other documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of each Loan Party, the authorization
of the Transactions and any other legal matters relating to the Loan Parties,
the Loan Documents or the Transactions, all in form and substance satisfactory
to the Administrative Agent and its counsel.
(d) Since the date of the Merger Agreement, no change, event or
circumstance has occurred that has had a Target Material Adverse Effect that is
continuing and no change, event or circumstance has occurred and is continuing
that would reasonably be expected to have a Target Material Adverse Effect.
(e) The Administrative Agent shall have received a certificate, dated the
Effective Date and signed by the president, a vice president or a Financial
Officer of the Company, confirming compliance with the conditions set forth in
this Section 4.01.
(f) The Administrative Agent shall have received all fees and other amounts
due and payable on or prior to the Effective Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses (including
reasonable fees, charges and disbursements of counsel) required to be reimbursed
or paid by any Loan Party hereunder or under any other Loan Document.
(g) The Collateral Agent shall have received counterparts of the Pledge
Agreement signed on behalf of the Loan Parties party thereto, and the Collateral
Agent shall have received certificates or other instruments representing all the
outstanding Equity Interests of each Subsidiary owned by any Loan Party
(excluding the stock certificates representing shares of common stock of a
Foreign Subsidiary), together with stock powers or other instruments of transfer
with respect thereto endorsed in blank form.
(h) The Collateral Agent shall have received counterparts of the Security
Agreement signed on behalf of the Loan Parties party thereto, together with the
following:
(i) all documents and instruments, including Uniform Commercial Code
financing statements, required by law or reasonably requested by the
Collateral Agent to be filed, registered or recorded to create or perfect
the Liens intended to be created under the Security Agreement; and
(ii) a completed Perfection Certificate from the Company dated the
Effective Date and signed by an executive officer or Financial Officer of
the Company, together with all relevant attachments contemplated thereby,
including the then completed results of a search of the Uniform Commercial
Code filings made with respect to the applicable Loan Parties in the
jurisdictions contemplated by the applicable Perfection Certificate and
copies of the financing statements disclosed by such search and evidence
reasonably satisfactory to the Collateral Agent that the Liens indicated by
such financing statements are permitted by Section Liens or have been
released.
(i) The Collateral Agent shall have received counterparts of the Guaranty
signed on behalf of the Loan Parties party thereto.
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(j) The Administrative Agent shall have received counterparts of the
Indemnity, Subrogation and Contribution Agreement signed on behalf of the Loan
Parties party thereto.
(k) The Administrative Agent shall have received evidence satisfactory to
them that the insurance required by Section Insurance and the Security Documents
is in effect.
(l) The Administrative Agent shall have received a completed Borrowing Base
Certificate dated the Effective Date and signed by a Financial Officer of the
Company, calculating the Tranche A Borrowing Base and the Tranche A-1 Borrowing
Base as of the end of the month ended immediately prior to the Effective Date.
(m) The Administrative Agent and the Lenders shall have received (i) copies
of the audited, unaudited, pro forma and other financial statements, schedules
and information of the Company and its Subsidiaries and Pathmark and its
Subsidiaries filed under the Securities Act in connection with the offering of
the Senior Notes (but excluding information required by Regulation S-X Rule 3-10
to the extent not available after the Company's use of commercially reasonable
efforts); and (ii) forecasts prepared by management of the Companies on a
quarterly basis for the first year following the Effective Date and on an annual
basis for each year thereafter through the Maturity Date.
(n) The Administrative Agent shall have received the results of
satisfactory lien searches (including, without limitation, the results of
satisfactory tax lien and judgment lien searches) showing the absence of any
Liens (except for the Liens in favor of the Collateral Agent) on any of any of
the Collateral other than Liens expressly permitted by Section Liens hereof or
Liens which will be terminated on the Effective Date.
(o) The Administrative Agent shall have received reports in form and
substance satisfactory to the Administrative Agent relating to inspections,
audits and field searches (which may include conversations with responsible
officers and employees) of each Loan Parties' assets (including, without
limitation, accounts receivable and inventory), liabilities, books and records,
management information systems, cash management, vendor agreements and other
agreements related to the Transactions contemplated hereby.
(p) All necessary consents and approvals to the transactions contemplated
hereby shall have been obtained and shall be satisfactory to the Administrative
Agent.
(q) The Administrative Agent shall have received an appraisal, in form and
substance satisfactory to the Agents, performed by an appraiser acceptable to
the Agents of the Inventory and the Scripts to be pledged or granted as
Collateral.
(r) The Administrative Agent, based upon delivery of a customary officer's
solvency certificate together with the consolidated balance sheet of the
Company, shall be satisfied that Loan Parties, on a consolidated basis, are
Solvent on the Effective Date, before and after giving effect to the Credit
Extensions made on the Effective Date.
(s) The Merger shall have been consummated in accordance with the Merger
Agreement, and no provision of the Merger Agreement shall have been waived,
amended or otherwise modified in a manner materially adverse to the Lenders
without the prior written
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consent of the Administrative Agent. The Administrative Agent shall be
reasonably satisfied in all material respects with the terms of any agreements
that are material to the interests of the Lenders and are to be entered into in
connection with the Merger Agreement. No agreement, order or decree has been
entered into or issued requiring the Company, Pathmark or any of their
Subsidiaries or Affiliates to hold separate (including by trust or otherwise),
divest, dispose of or sell any of their respective businesses or assets with
aggregated Allocated Amounts (as defined in the Merger Agreement) in excess of
the Threshold Amount (as defined in the Merger Agreement).
(t) The Administrative Agent shall have received evidence of the receipt by
the Company of (i) gross proceeds from the Bridge Financing Facility sale of the
Senior Notes of not less than $370,000,000 and (ii) net proceeds from the sale
by the Company of non-operating assets in an amount reasonably satisfactory to
the Administrative Agent.
(u) To the extent required to be satisfied on the Effective Date, the Real
Estate Eligibility Requirements shall have been satisfied.
(v) On the Effective Date, the representations and warranties of each Loan
Party set forth in Sections 3.01, 3.02, 3.08, 3.15, 3.16 and 3.17 shall be true
and correct in all material respects.
The Administrative Agent shall notify the Company and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section Waivers;
Amendments) at or prior to 3:00 p.m., Boston, Massachusetts time on March 4,
2008 (and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).
SECTION 4.02 EACH CREDIT EVENT. Other than with respect to Loans to be
made and Letters of Credit to be issued on the Effective Date, the obligation of
each Lender to make a Loan on the occasion of any Borrowing and of each Issuing
Bank to issue, amend, renew or extend any Letter of Credit, is subject to
receipt of the request therefor in accordance herewith and to the satisfaction
of the following conditions:
(a) The representations and warranties of each Loan Party set forth in the
Loan Documents shall be true and correct in all material respects on and as of
the date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable (unless a representation or
warranty is made as of a specific date, in which case such representation or
warranty shall remain true and correct as of such specified date).
(b) At the time of and immediately after giving effect to such Borrowing or
the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default or Event of Default shall have occurred and be
continuing.
(c) No indictment of, or institution of any legal process or proceeding
against, the Company or any Loan Party, under any federal, state, municipal, and
other civil or criminal
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statute, rule, regulation, order, or other requirement having the force of law,
which is reasonably likely to have a Material Adverse Effect shall have
occurred.
(d) Each of the Borrowers, in connection with each Borrowing, and each
issuance, amendment, renewal or extension of a Letter of Credit shall be deemed
to have represented and warranted on the date thereof that the conditions
specified in paragraphs (a) and (b) of this Section 4.02 have been satisfied at
that time and that after giving effect to such extension of credit the Borrowers
shall continue to be in compliance with the Tranche A Borrowing Base and the
Tranche A-1 Borrowing Base. The conditions set forth in this Section 4.02 are
for the sole benefit of the Administrative Agent, the Issuing Bank and the
Lenders and may be waived by the Administrative Agent, in whole or in part,
without prejudice to the rights of the Administrative Agent, the Issuing Bank or
any Lender.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the principal of
and interest on each Loan, all fees and other Obligations payable hereunder
shall have been paid in full, and all Letters of Credit shall have expired or
terminated and all L/C Disbursements shall have been reimbursed, each of the
Borrowers covenants and agrees with the Lenders that:
SECTION 5.01 FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company will
furnish to the Administrative Agent and each Lender each of the following
together with all supporting documentation as the Administrative Agent may
reasonably require:
(a) within 90 days after the end of each fiscal year of the Company, its
audited consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on by PricewaterhouseCoopers LLP or other independent public
accountants of recognized national standing (without a "going concern" or like
qualification or exception and without any qualification or exception as to the
scope of such audit) to the effect that such consolidated financial statements
present fairly in all material respects the financial condition and results of
operations of the Company and its consolidated subsidiaries on a consolidated
basis in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three fiscal quarters
of each fiscal year of the Company, the Company's consolidated balance sheet and
related statements of operations, stockholders' equity and cash flows as of the
end of and for such fiscal quarter and the then elapsed portion of the fiscal
year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of the Company and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;
(c) within 45 days after the end of each of the first two (or three, in the
event of a fiscal quarter having four fiscal four week periods) fiscal four-week
periods of each fiscal quarter
95
of the Company (other than the first fiscal four-week period of each fiscal
year), its consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such fiscal
four-week periods and the then elapsed portion of the fiscal year, all certified
by one of its Financial Officers as presenting in all material respects the
financial condition and results of operations of the Company and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes; PROVIDED that, the information required by this Section
shall not be required with respect to any month during which the average daily
Exposure during such month is less than $50,000,000;
(d) concurrently with any delivery of financial statements under clause (a)
or (b) above, a certificate of a Financial Officer (i) certifying as to whether
a Default or an Event of Default has occurred and, if a Default or Event of
Default has occurred, specifying the details thereof and any action taken or
proposed to be taken with respect thereto, (ii) setting forth reasonably
detailed calculations demonstrating compliance with Section Minimum Excess
Availability, and (iii) stating whether any change in GAAP or in the application
thereof has occurred since the date of the Company's audited financial
statements referred to in Section Financial Condition; No Material Adverse
Change and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;
(e) concurrently with any delivery of financial statements under clause (a)
above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default or an Event of Default
(which certificate may be limited to the extent required by accounting rules or
guidelines);
(f) within ten (10) Business Days after the end of each fiscal month, a
completed Borrowing Base Certificate calculating and certifying the Tranche A
Borrowing Base and the Tranche A-1 Borrowing Base as of the last day of such
fiscal month, signed on behalf of the Company by one of its Financial Officers,
PROVIDED, HOWEVER, that upon the occurrence of a Triggering Event, the Borrowing
Base Certificate required by this paragraph will be delivered by the Borrowers
weekly within eight (8) Business Days after the end of each calendar week and
shall calculate and certify the Tranche A Borrowing Base and the Tranche A-1
Borrowing Base as of the last day of such calendar week;
(g) prior to the end of the first fiscal quarter of each fiscal year of the
Company, a reasonably detailed consolidated budget for such fiscal year
(including a projected consolidated balance sheet and related statements of
projected operations and cash flow as of the end of and for each fiscal quarter
during such fiscal year and setting forth the assumptions used for purposes of
preparing such budget) and, promptly when available and from time to time, any
significant revisions of such budget (including, without limitation, any amounts
to be paid to any pension plan (including any Plan, or, the best of the
Company's knowledge, a Multiemployer Plan) or to any third party on account of
any such pension plan);
(h) within ten (10) Business Days after any sale, transfer or other
disposition of assets permitted by clause (c) of Section Asset Sales, a complete
description of such sale, transfer or other disposition, and, with respect to
sales, transfers or other dispositions resulting in Net
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Proceeds greater than $20,000,000, (i) the most recently delivered Borrowing
Base Certificate delivered pursuant to Section 5.01(f) revised to give pro forma
effect to such sale, transfer or other disposition and (iii) any significant
revisions to the budget previously delivered pursuant to clause (g) of this
Section;
(i) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by the
Company or any Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by the
Company to its stockholders generally, as the case may be;
(j) the financial and collateral reports described on SCHEDULE C hereto, at
the times set forth in such Schedule; PROVIDED that, the information required by
this Section shall not be required with respect to any month during which the
average daily Exposure during such month is less than $50,000,000;
(k) upon the reasonable request of the Administrative Agent, (i) a list of
all "business associate agreements" (as such term is defined in HIPAA) that any
Loan Party has entered into with any Person and true, correct and complete
copies of all of such agreements; and (ii) a list of all participation
agreements of the Borrowers with health maintenance organizations, insurance
programs, preferred provider organizations and other third party payors; and
(l) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Company or any Subsidiary, or compliance with the terms of any Loan Document, as
the Administrative Agent or any Lender may reasonably request.
Documents required to be delivered pursuant to SECTION 5.01(a), SECTION 5.01(b)
or SECTION 5.01 (c) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Company posts such documents, or provides a link thereto on the Company's
website on the Internet at the website address listed on SCHEDULE 5.01; or (ii)
on which such documents are posted on the Company's behalf on an Internet or
intranet website, if any, to which each Lender and the Administrative Agent have
access (whether a commercial, third-party website or whether sponsored by the
Administrative Agent); PROVIDED that: (x) at the reasonable request of any
Lender, the Company shall deliver paper copies of the documents requested by
such Lender to the Administrative Agent for delivery to such Lender, and (y) the
Company shall notify the Administrative Agent and each Lender (by telecopier or
electronic mail) of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft copies)
of such documents. The Administrative Agent shall have no obligation to request
the delivery or to maintain copies of the documents referred to above, and in
any event shall have no responsibility to monitor compliance by the Loan Parties
with any such request for delivery, and each Lender shall be solely responsible
for requesting delivery to it or maintaining its copies of such documents.
The Loan Parties hereby acknowledge that (a) the Administrative Agent will
make available to the Lenders and the Issuing Bank materials and/or information
provided by or on
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behalf of the Loan Parties hereunder (collectively, "BORROWER MATERIALS") by
posting the Borrower Materials on IntraLinks or another similar electronic
system (the "Platform") and (b) certain of the Lenders may be "public-side"
Lenders (I.E., Lenders that do not wish to receive material non-public
information with respect to the Loan Parties or their securities) (each, a
"PUBLIC LENDER"). The Loan Parties hereby agree that so long as any Loan Party
is the issuer of any outstanding debt or equity securities that are registered
or issued pursuant to a private offering or is actively contemplating issuing
any such securities they will use commercially reasonable efforts to identify
that portion of the Borrower Materials that may be distributed to the Public
Lenders and that (w) all such Borrower Materials shall be clearly and
conspicuously marked "PUBLIC" which, at a minimum, shall mean that the word
"PUBLIC" shall appear prominently on the first page thereof; (x) by marking
Borrower Materials "PUBLIC," the Loan Parties shall be deemed to have authorized
the Administrative Agent, the Issuing Banks and the Lenders to treat such
Borrower Materials as not containing any material non-public information
(although it may be sensitive and proprietary) with respect to the Loan Parties
or their securities for purposes of United States Federal and state securities
laws (PROVIDED, HOWEVER, that to the extent such Borrower Materials constitute
Information, they shall be treated as set forth in SECTION 10.07); (y) all
Borrower Materials marked "PUBLIC" are permitted to be made available through a
portion of the Platform designated "Public Investor"; and (z) the Administrative
Agent shall be entitled to treat any Borrower Materials that are not marked
"PUBLIC" as being suitable only for posting on a portion of the Platform not
designated "Public Investor."
SECTION 5.02 NOTICES OF MATERIAL EVENTS. The Company will furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default or Event of Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the Company
or any Affiliate thereof (including, without limitation, based upon any
provision of any pharmaceutical law or Medicare and Medicaid program rules and
regulations applicable to it) that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other related ERISA Events that have occurred, could reasonably be expected to
result in liability of the Company and its Subsidiaries in an aggregate amount
exceeding $5,000,000;
(d) during the period commencing on the Effective Date and ending on the
date on which Eligible Leaseholds are no longer included in the Tranche A
Borrowing Base or the Tranche A-1 Borrowing Base, the receipt by any Loan Party
of any notice from any lessor of such lessor's intention to terminate any Lease
relating to Eligible Leaseholds, together with a copy of all such notices of
intended termination from the lessors thereunder; and
(e) any other development (other than those specified above as to which the
Lenders have received due notice) that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
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Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Company setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03 INFORMATION REGARDING COLLATERAL.
(a) The Company will furnish to the Administrative Agent at least fifteen
(15) days (or such shorter period of time as may be agreed to by the
Administrative Agent) prior written notice of any change (i) in any Loan Party's
corporate, limited liability company or partnership name, (ii) in the location
of any Loan Party's its "location" (as determined under Section 9-307 of the
UCC), chief executive office or principal place of business (including the
establishment of any such new office or facility), (iii) in any Loan Party's
organizational structure or (iv) in any Loan Party's Federal Taxpayer
Identification Number or state organizational number. The Company agrees not to
effect or permit any change referred to in the preceding sentence unless all
filings have been made under the Uniform Commercial Code or otherwise that are
required in order for the Collateral Agent to continue at all times following
such change to have a valid, legal and perfected security interest in all of the
Collateral.
(b) Each year, at the time required for delivery of annual financial
statements with respect to the preceding fiscal year pursuant to clause (a) of
Section Financial Statements and Other Information, the Company shall deliver to
the Administrative Agent a certificate of a Financial Officer and the chief
legal officer of the Company (i) setting forth the information required pursuant
to Section 2 of the Perfection Certificate or confirming that there has been no
change in such information since the date of the Perfection Certificate
delivered on the Effective Date or the date of the most recent certificate
delivered pursuant to this Section and (ii) certifying that all Uniform
Commercial Code financing statements (including fixture filings, as applicable)
or other appropriate filings, recordings or registrations, including all
refilings, rerecordings and reregistrations, containing a description of the
Collateral have been filed of record in each governmental, municipal or other
appropriate office in each jurisdiction identified pursuant to clause (i) above
to the extent necessary to protect and perfect the security interests under the
Security Agreement for a period of not less than eighteen (18) months after the
date of such certificate (except as noted therein with respect to any
continuation statements to be filed within such period).
SECTION 5.04 EXISTENCE; CONDUCT OF BUSINESS. The Company will, and will
cause each of the Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges, franchises, patents, copyrights,
trademarks and trade names material to the conduct of its business; provided
that the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section Fundamental Changes.
SECTION 5.05 PAYMENT OF OBLIGATIONS. The Company will, and will cause
each of its Subsidiaries to, pay its Indebtedness and other obligations,
including Tax liabilities, before the same shall become delinquent or in
default, except where (a) (1) the validity or amount thereof is being contested
in good faith by appropriate proceedings, (2) the Company or such Subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with
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GAAP, and (3) such contest effectively suspends collection of the contested
obligation and the enforcement of any Lien securing such obligation or (b) the
failure to make such payment could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 5.06 MAINTENANCE OF PROPERTIES. The Company will, and will cause
each of the Subsidiaries to, keep and maintain all property material to the
conduct of its business in good working order and condition, ordinary wear and
tear excepted.
SECTION 5.07 INSURANCE.
(a) The Company will, and will cause each of its Subsidiaries to, (i)
maintain insurance with financially sound and reputable insurers reasonably
acceptable to the Administrative Agent on such of its property and in at least
such amounts and against at least such risks as is customary with companies in
the same or similar businesses operating in the same or similar locations,
including public liability insurance against claims for personal injury or death
occurring upon, in or about or in connection with the use of any properties
owned, occupied or controlled by it including the insurance required pursuant to
the Security Documents; (ii) maintain such other insurance as may be required by
law; and (iii) upon request by the Administrative Agent, which request need not
be made in writing, furnish the Administrative Agent with certificates
evidencing the insurance required by this paragraph. In the event of the
Company's or Loan Parties' failure to obtain or maintain the insurance required
by this paragraph, without waiving any Event of Default occasioned thereby, the
Administrative Agent shall have the right to obtain the required coverage and
invoice the Company for the premium payments therefor. To the extent consistent
with prudent business practice, the Company may maintain a program of
self-insurance in place of any of the insurance required by this paragraph.
(b) Fire and extended coverage policies with respect to any Collateral
shall not include (i) a provision to the effect that any of the Borrowers, the
Administrative Agent, the Collateral Agent, or any other party shall be a
coinsurer and (ii) shall be endorsed, which endorsement shall be satisfactory in
form and substance to the Collateral Agent, to name the Collateral Agent for the
benefit of the Lenders, as additional insured or loss payee, as appropriate, and
shall include such other provisions as the Collateral Agent may reasonably
require from time to time to protect the interests of the Lenders, provided that
the requested provisions are available at reasonable cost. Each such policy
referred to in this paragraph also shall provide that it shall not be cancelled,
modified or not renewed (i) by reason of nonpayment of premium except upon not
less than 30 days' prior written notice thereof by the insurer to the Collateral
Agent (giving the Collateral Agent the right to cure defaults in the payment of
premiums) or (ii) for any other reason except upon not less than 30 days' prior
written notice thereof by the insurer to the Collateral Agent. The Borrowers
shall deliver to the Collateral Agent, prior to the cancellation of any such
policy of insurance, a Certificate of Insurance for the replacement policy.
(c) If at any time the area in which any Eligible Real Estate or Eligible
Leaseholds are located is designated (i) a "flood hazard area" in any Flood
Insurance Rate Map published by the Federal Emergency Management Agency (or any
successor agency), the Borrowers shall obtain flood insurance in such total
amount as is reasonable and customary for companies
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engaged in the business of operating supermarkets, and otherwise comply with the
National Flood Insurance Program as set forth in the Flood Disaster Protection
Act of 1973, as amended from time to time, or (ii) a "Zone 1" area, the Borrower
shall obtain earthquake insurance in such total amount as is reasonable and
customary for companies engaged in the business of operating supermarkets.
(d) The Company and the Loan Parties acknowledge and agree that all income,
payments and proceeds of a physical damage property insurance claim payable to
them and relating to the Collateral will be received by the Company and the Loan
Parties as agent hereunder for the benefit of the Lenders and deposited in an
account subject to a Blocked Account Agreement. Unless a Triggering Event or an
Event of Default has occurred and is continuing, the Collateral Agent shall use
commercially reasonable efforts to cause any insurance proceeds for which it is
loss payee for the benefit of the Secured Parties to be made available to the
Borrowers as promptly as practicable after receipt thereof by the Collateral
Agent. The Company and the Loan Parties disclaim any right, title or interest in
or to such income, payments or proceeds and hereby confirm that the Company and
the Loan Parties have granted a first priority security interest to the
Collateral Agent (for the benefit of the Lenders) in all such income, payments
and proceeds.
(e) The Company shall continue to maintain, for itself and its
subsidiaries, a Directors and Officers insurance policy, and a "Blanket Crime"
policy including employee dishonesty, forgery or alteration, theft,
disappearance and destruction, robbery and safe burglary, property, and computer
fraud coverage with responsible companies in such amounts as are customarily
carried by business entities engaged in similar businesses similarly situated,
and will upon request by the Administrative Agent, which request need not be
made in writing, furnish the Administrative Agent certificates evidencing
renewal of each such policy.
SECTION 5.08 CASUALTY AND CONDEMNATION. The Borrowers (a) will furnish to
the Administrative Agent and the Lenders prompt written notice of any casualty
or other insured damage to any material portion of any Collateral or the
commencement of any action or proceeding for the taking of any Collateral or any
part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding and (b) will ensure that the Net Proceeds of
any such event (whether in the form of insurance proceeds or otherwise) are
collected and applied in accordance with the applicable provisions of this
Agreement and the Security Documents.
SECTION 5.09 BOOKS AND RECORDS; INSPECTION AND AUDIT RIGHTS.
(a) The Company will, and will cause each of its Subsidiaries to, keep
proper financial records in accordance with GAAP. The Company will, and will
cause each of the Subsidiaries to, permit any representatives designated by the
Administrative Agent in consultation with the Borrowers, upon reasonable prior
notice, no less frequently than semi-annually in any period of twelve (12)
consecutive months commencing on or after the Effective Date, to visit and
inspect its properties, to examine and make extracts from such records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at reasonable times. The foregoing provisions are supplemental
of the rights of the Administrative Agent set forth in Section 5.09(b) below.
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(b) The Company will, and will cause each of the Subsidiaries to, permit
any representatives designated by the Administrative Agent (including any
consultants, accountants, lawyers and appraisers retained by the Administrative
Agent) in consultation with the Borrowers to conduct commercial finance
examinations and appraisals of the assets included in the computation of the
Tranche A Borrowing Base and the Tranche A-1 Borrowing Base, including
supporting systems, processes and controls, all at the expense of the Borrowers
(i) one (1) time during any twelve month period in which Excess Availability is
at all times greater than $250,000,000, (ii) up to two (2) times during any
twelve month period in which Excess Availability is at any time less than or
equal to $250,000,000 but greater than or equal to $100,000,000, (iii) up to
three (3) times during any twelve month period in which Excess Availability is
at any time less than $100,000,000 and (iv) at any time at the request of the
Administrative Agent after the occurrence and the continuation of an Event of
Default; PROVIDED, that, notwithstanding the provisions of clause (iii) above,
no more than two (2) appraisals of Eligible Real Estate, Eligible Leaseholds,
and Scripts may be conducted during any twelve month period unless an Event of
Default has occurred and is continuing. In addition to the foregoing the
Administrative Agent will have the right to conduct such commercial finance
examinations and appraisals at the expense of the Administrative Agent, but no
more frequently than twice in any calendar year. The expenses reimbursable by
the Borrowers pursuant to his Section shall include the reasonable fees and
expenses of any representatives retained by the Administrative Agent.
(c) The Administrative Agent may, from time to time, engage a third party,
reasonably acceptable to the Company to undertake Phase I environmental site
assessments during the term of this Agreement of the Eligible Real Estate and
Eligible Leaseholds, provided that such assessments may only be undertaken
during the continuance of any Specified Default. The Borrowers will, and will
cause each of their Subsidiaries to, cooperate in all respects with the
Administrative Agent and such third parties to enable such assessment and
evaluation to be timely completed in a manner reasonably satisfactory to the
Administrative Agent.
SECTION 5.10 COMPLIANCE WITH LAWS. The Company will, and will cause each
of the Subsidiaries to, comply with all laws, rules, regulations and orders of
any Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.11 USE OF PROCEEDS AND LETTERS OF CREDIT. The proceeds of the
Loans will be used to (i) to finance a portion of the Merger (including cash
compensation to holders of up to ten percent of Pathmark's common stock who have
exercised dissenters' rights in accordance with the Merger Agreement and
Applicable Law), (ii) to refinance the Existing Financing Agreements, and (iii)
for general corporate purposes, including working capital, repayment of
Indebtedness (including , without limitation, pursuant to Section 6.08(b)(iii)),
capital expenditures, permitted acquisitions, permitted distributions, and stock
repurchases. No part of the proceeds of any Loan will be used, directly or
indirectly, for any purpose that entails a violation of any of the Regulations
of the Board, including Regulations T, U and X. Letters of Credit will be issued
only for general corporate purposes.
SECTION 5.12 ADDITIONAL SUBSIDIARIES. If any additional Subsidiary is
formed or acquired after the Effective Date or if an Immaterial Subsidiary is
not dissolved or liquidated or
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merged into another Loan Party as contemplated by the Company, the Company will
notify the Administrative Agent, the Collateral Agent and the Lenders thereof
and (a) the Company will cause such Subsidiary (i) to become a party to (A) the
Guaranty (or this Agreement if such Subsidiary shall be a Borrower hereunder by
executing a Joinder in the form of EXHIBIT R), (B) the Indemnity, Subrogation
and Contribution Agreement, (C) the Security Agreement and (D) the Pledge
Agreement, in each case in the manner provided therein and within ten (10)
Business Days after such Subsidiary is formed or acquired and (ii) promptly to
take such actions to perfect the Liens on such Subsidiary's assets granted under
the Security Documents as the Administrative Agent or the Required Lenders shall
reasonably request and (b) if any Equity Interests of such Subsidiary are owned
by or on behalf of any Loan Party, the Company will cause such Equity Interests
to be pledged pursuant to the Pledge Agreement within ten (10) Business Days
after such Subsidiary is formed or acquired (excluding, if such Subsidiary is a
Foreign Subsidiary, shares of voting stock of such Subsidiary).
SECTION 5.13 FURTHER ASSURANCES.
(a) The Borrowers will, and will cause each other Loan Party to, execute
any and all further documents, financing statements, agreements and instruments,
and take all such further actions (including the filing and recording of
financing statements, termination statements, fixture filings and other
documents), which may be required under any Applicable Law, or which the
Administrative Agent or the Required Lenders may reasonably request, to
effectuate the transactions contemplated by the Loan Documents or to grant,
preserve, protect or perfect the Liens created or intended to be created by the
Security Documents or the validity or priority of any such Lien, all at the
expense of the Loan Parties. The Borrowers also agree to provide to the
Administrative Agent, from time to time upon request, evidence reasonably
satisfactory to the Administrative Agent as to the perfection and priority of
the Liens created or intended to be created by the Security Documents.
(b) During the period commencing on the Effective Date and ending on the
date on which Eligible Leaseholds are no longer included in the Tranche A
Borrowing Base or the Tranche A-1 Borrowing Base, if the Appraised Value of all
Eligible Leaseholds is at any time less than $300,000,000, the Loan Parties will
cause additional Leaseholds having an Appraised Value at least equal to the
Leasehold Differential to become the subject of a Mortgage in favor of the
Collateral Agent, failing which the Leasehold Cap shall be reduced by the amount
of the Leasehold Differential.
(c) During the period commencing on the Effective Date and ending on the
date on which Eligible Leaseholds are no longer included in the Tranche A
Borrowing Base or the Tranche A-1 Borrowing Base, the Borrowers will, and will
cause each of the Subsidiaries to, use their commercially reasonable efforts to
obtain lease terms in any lease entered into by any Borrower or any Loan Party
after the date hereof not expressly prohibiting the recording in the relevant
real estate filing office of an appropriate memorandum of lease and the
encumbrancing of the leasehold interest of such Borrower or such other Loan
Party, as the case may be, in the property that is the subject of such lease.
(d) If requested by the Administrative Agent in its reasonable discretion,
with respect to any Distribution Center, the Loan Parties shall use their
commercially reasonable efforts to obtain a Priority of Claims Waiver from the
holder of any Indebtedness incurred under Section 6.01(a)(vi) with respect to
such Distribution Center.
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(e) To the extent that the Obligations shall at any time be less than the
amount originally set forth in any Mortgage on Real Estate located in the State
of New York or to the extent otherwise required by Applicable Law to grant,
preserve, protect or perfect the Liens created by such Mortgage and the validity
or priority thereof, the Borrowers shall to take all further actions including
the payment of any additional mortgage recording taxes, fees, charges, costs and
expenses required so too grant, preserve, protect or perfect the Liens created
by such Mortgage to the maximum amount of Obligations by its terms secured
thereby and the validity or priority of any such Lien.
SECTION 5.14 CASH MANAGEMENT.
(a) Annexed hereto as SCHEDULE 5.14(a) is a schedule of all DDAs that are
maintained by the Loan Parties, which schedule shall include, with respect to
each depository (i) the name and address of such depository; (ii) the account
number(s) maintained with such depository; and (iii) a contact person at such
depository.
(b) Annexed hereto as SCHEDULE 5.14(b) is a list describing all
arrangements to which any Loan Party is a party with respect to the payment to
such Loan Party of the proceeds of all credit card charges for sales by such
Loan Party.
(c) Annexed hereto as SCHEDULE 5.14(c) is a list describing all payors of
the third party insurance provider accounts from which a Loan Party receives
payments of Eligible Third Party Insurance Provider Account Receivables.
(d) Within ninety (90) days after the Effective Date (or such longer time
as the Administrative Agent may, in its sole discretion, agree in writing), each
Loan Party shall:
(i) deliver to the Administrative Agent notifications (each, a "CREDIT
CARD NOTIFICATION") substantially in the form attached hereto as EXHIBIT K
which have been executed on behalf of such Loan Party and addressed to such
Loan Party's credit card clearinghouses and processors;
(ii) deliver to the Administrative Agent notifications, (each, an
"INSURANCE PROVIDER NOTIFICATION") substantially in the form attached as
EXHIBIT L which have been executed on behalf of such Loan Party and
addressed to such Loan Party's payors of third party insurance providers
accounts;
(iii) enter into a Blocked Account Agreement substantially in the form
attached as EXHIBIT M (or in such other form reasonably acceptable to the
Administrative Agent) with the banks with which such Borrower maintains
accounts into which the DDAs are concentrated (collectively, the "BLOCKED
ACCOUNTS") listed on SCHEDULE 5.14(d)(iii) attached hereto; and
(iv) deliver to the Administrative Agent a notification, (the
"Coinstar Notification") substantially in the form attached as Exhibit N
which has been executed on behalf of the Loan Parties and addressed to
Coinstar, Inc.
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(e) At the request of the Administrative Agent (which request shall not be
made prior to the date that is forty-five (45) days after the Effective Date),
each Loan Party shall deliver to the Administrative Agent notifications (each, a
"DDA NOTIFICATION") substantially in the form attached as EXHIBIT O which have
been executed on behalf of each Loan Party to each depository institution with
which any DDA is maintained.
(f) Each DDA Notification, Credit Card Notification, Insurance Provider
Notification and Blocked Account Agreement and the Coinstar Notification shall
require, after the occurrence and during the continuance of a Triggering Event,
the Loan Parties shall promptly and in any event within two Business Days, cause
the ACH or wire transfer on each Business Day (and whether or not there is then
an outstanding balance in the Loan Account) of all available cash receipts (the
"CASH RECEIPTS") to the concentration account maintained by the Administrative
Agent at Bank of America (the "AGENT'S ACCOUNT") from:
(i) the sale of Inventory and other Collateral;
(ii) all proceeds of collections of Accounts;
(iii) all Net Proceeds, and all other cash payments received by a Loan
Party from any Person or from any source or on account of any Prepayment
Event (provided that the prepayment obligations under this Section 5.14
shall be limited to Prepayment Events relating to Revolving Lender Priority
Collateral until the Junior Secured Facilities are in full) or other
transaction or event;
(iv) the then contents of each DDA;
(v) the then entire ledger balance of each Blocked Account; and
(vi) the proceeds of all credit card charges.
(g) Upon the occurrence of a Triggering Event, the Borrowers shall
accurately report to the Administrative Agent all amounts deposited in the
Blocked Accounts to ensure the proper transfer of funds as set forth above. If,
at any time after the occurrence of a Triggering Event, any cash or cash
equivalents owned by any Loan Party that constitutes Collateral are deposited to
any account, or held or invested in any manner, otherwise than in a Blocked
Account that is subject to a Blocked Account Agreement (or a DDA which is swept
daily to a Blocked Account), the Administrative Agent may require the applicable
Loan Party to close such account and have all funds therein transferred to a
Blocked Account, and all future deposits made to a Blocked Account which is
subject to a Blocked Account Agreement.
(h) The Loan Parties may close DDAs or Blocked Accounts and/or open new
DDAs or Blocked Accounts, subject to the execution and delivery to the
Administrative Agent of appropriate Blocked Account Agreements consistent with
the provisions of this Section Cash Management. and otherwise satisfactory to
the Administrative Agent. Unless consented to in writing by the Administrative
Agent, the Loan Parties shall not enter into any agreements with credit card
processors other than the ones expressly contemplated herein unless
contemporaneously therewith, a Credit Card Notification, is executed and
delivered to the Administrative Agent.
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(i) The Borrowers may also maintain one or more disbursement accounts (the
"DISBURSEMENT ACCOUNTS") to be used by the Borrowers for disbursements and
payments (including payroll) in the ordinary course of business or as otherwise
permitted hereunder. The only Disbursement Accounts as of the Effective Date are
those described in SCHEDULE 5.14(i).
(j) The Agent's Account shall at all times be under the sole dominion and
control of the Administrative Agent. Each Loan Party hereby acknowledges and
agrees that (i) such Loan Party has no right of withdrawal from the Agent's
Account, (ii) the funds on deposit in the Agent's Account shall at all times
continue to be collateral security for all of the Obligations, and (iii) the
funds on deposit in the Agent's Account shall be applied as provided in Section
2.11(m) or Section 7.03 of this Agreement, as applicable. In the event that,
notwithstanding the provisions of this Section 5.14, any Loan Party receives or
otherwise has dominion and control of any such proceeds or collections, such
proceeds and collections shall be held in trust by such Loan Party for the
Administrative Agent, shall not be commingled with any of such Loan Party's
other funds or deposited in any account of such Loan Party and shall, not later
than the Business Day after receipt thereof, be deposited into the Agent's
Account or dealt with in such other fashion as such Loan Party may be instructed
by the Administrative Agent.
(k) Any amounts received in the Agent's Account at any time when all of the
Obligations have been and remain fully repaid shall be remitted to the
Borrowers, if and as the Company may request.
(l) The following shall apply to deposits and payments under and pursuant
to this Agreement:
(i) Funds shall be deemed to have been deposited to the Agent's
Account on the Business Day on which deposited, provided that notice of
such deposit is available to the Administrative Agent by 12:00 noon,
Boston, Massachusetts time, on that Business Day;
(ii) Funds paid to the Administrative Agent other than by deposit to
the Agent's Account, shall be deemed to have been received on the Business
Day when they are good and collected funds, provided that notice of such
payment is available to the Administrative Agent by 12:00 noon, Boston,
Massachusetts time, on that Business Day;
(iii) If notice of a deposit to a Agent's Account or payment is not
available to the Administrative Agent until after 12:00 noon, Boston,
Massachusetts time, on a Business Day, such deposit or payment shall be
deemed to have been made at 9:00 a.m., Boston, Massachusetts time, on the
then next Business Day;
(iv) If any item deposited to the Agent's Account and credited to the
Loan Account is dishonored or returned unpaid for any reason, whether or
not such return is rightful or timely, the Administrative Agent shall have
the right to reverse such credit and charge the amount of such item to the
Loan Account and the Borrowers shall indemnify the Administrative Agent and
the Lenders against all claims and losses resulting from such dishonor or
return.
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SECTION 5.15 PRIORITY OF CLAIMS WAIVERS. Unless reserved for in
accordance with the provisions hereof, the Borrowers from time to time shall
promptly deliver, or cause to be promptly delivered, a Priority of Claims Waiver
from each vendor, landlord, public warehouse operator or other third party
bailee that has not provided a Priority of Claims Waiver in form and substance
satisfactory to the Administrative Agent for each third party storage facility
located in any Priming Jurisdiction.
SECTION 5.16 BENEFIT PLANS PAYMENTS. The Loan Parties, Subsidiaries and
all ERISA Affiliates shall make all required contributions under any Plans or
Multiemployer Plans which, if not made, could result in a Material Adverse
Effect unless such payment is being contested pursuant to Section Payment of
Obligations.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees and other Obligations payable hereunder have
been paid in full and all Letters of Credit have expired or terminated and all
L/C Disbursements shall have been reimbursed, each of the Borrowers covenants
and agrees with the Lenders that:
SECTION 6.01 INDEBTEDNESS; CERTAIN EQUITY SECURITIES.
(a) The Company will not, and will not permit any Subsidiary to, create,
incur, assume or permit to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) Indebtedness existing on the date hereof and set forth in
SCHEDULE 6.01 and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof
(except to the extent of any reasonable premiums, fees and expenses
incurred in connection with any such extensions, renewals and replacements)
or result in an earlier maturity date or decreased weighted average life
thereof;
(iii) Indebtedness of the Company to any Subsidiary and of any
Subsidiary to the Company or any other Subsidiary; PROVIDED that
Indebtedness of any Subsidiary that is not a Loan Party owing to any Loan
Party shall be subject to Section Investments, Loans, Advances, Guarantees
and Acquisitions;
(iv) Guarantees by the Company of Indebtedness of any Subsidiary and
by any Subsidiary of Indebtedness of the Company or any other Subsidiary;
PROVIDED that Guarantees by any Loan Party of Indebtedness of any
Subsidiary that is not a Loan Party shall be subject to Section
Investments, Loans, Advances, Guarantees and Acquisitions;
(v) Indebtedness of the Company or any Subsidiary incurred to finance
the acquisition, construction or improvement of any fixed or capital
assets, including Capital Lease Obligations (other than in respect of
leased real property) and any Indebtedness assumed in connection with the
acquisition of any such assets or secured by a Lien on
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any such assets prior to the acquisition thereof, and extensions, renewals
and replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof (except to the extent of any
reasonable premiums, fees and expenses incurred in connection with any such
extensions, renewals and replacements) or result in an earlier maturity
date or decreased weighted average life thereof; PROVIDED that (A) before
and after giving effect to the incurrence of such Indebtedness, no Default
or Event of Default shall have occurred and be continuing, (B) such
Indebtedness is incurred prior to or within 180 days after such acquisition
or the completion of such construction or improvement and (C) the aggregate
principal amount of Indebtedness incurred on or after the Effective Date
and permitted by this clause (v) and clause (vii) below, plus the aggregate
book value of all assets sold after the Effective Date pursuant to sale and
leaseback transactions permitted by clause (b) of Section Sale and
Leaseback Transactions shall not exceed $300,000,000;
(vi) Without duplication of Indebtedness described in clause (v)
hereof, Indebtedness of the Company or any Subsidiary incurred to finance
the acquisition by the Company or any Subsidiary after the Effective Date
of real property and improvements thereto (but not inventory or other
personal property located therein), and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof (except to the extent of any reasonable premiums,
fees and expenses incurred in connection with any such extensions, renewals
and replacements) or result in an earlier maturity date or decreased
weighted average life thereof; PROVIDED that (A) before and after giving
effect to the incurrence of such Indebtedness, no Default or Event of
Default shall have occurred and be continuing,(B) the terms of such
Indebtedness are commercially reasonable and (C) the secured recourse to
the Company or any Subsidiary of such Indebtedness shall be limited to the
value of the real property and improvements financed by such Indebtedness;
(vii) Indebtedness of the Company or any Subsidiary relating to
purchase money security interests (as defined in the New York Uniform
Commercial Code, as amended); PROVIDED that, (A) before and after giving
effect to the incurrence of such Indebtedness, no Default or Event of
Default shall have occurred and be continuing, and (B) the aggregate
principal amount of Indebtedness permitted by this clause (vii) shall be
subject to the limitation set forth in the proviso to clause (v) above.
(viii) Guarantees by the Company or any of its Subsidiaries of
Indebtedness of third parties given in connection with the acquisition or
improvement of real property for use in the business of the Company and its
Subsidiaries not exceeding $10,000,000 at any one time outstanding;
(ix) software licenses required to be reflected as indebtedness on the
Company's consolidated balance sheet in an aggregate amount not exceeding
$10,000,000;
(x) without duplication of any other Indebtedness permitted hereunder,
liabilities for leases of real property characterized as Indebtedness for
purposes of GAAP;
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(xi) other unsecured Indebtedness in an aggregate principal amount not
exceeding $50,000,000 at any time outstanding;
(xii) Indebtedness on account of the Series A Warrants issued to
Yucaipa Corporate Initiatives Fund I, L.P., Yucaipa American Alliance
(Parallel) Fund I, L.P. and Yucaipa American Alliance Fund I, L.P. in
connection with the Transactions to the extent that GAAP requires such
Warrants to be included as a liability on the Consolidated balance sheet of
the Company and its Subsidiaries; and
(xiii) Indebtedness of the Borrowers under the Junior Secured
Facilities and on account of the Convertible Notes, in an aggregate
principal amount not to exceed $500,000,000 outstanding at any time (or,
with respect to the Convertible Notes only, such greater amount as the
Administrative Agent, in its discretion, may agree).
(b) The Company will not, nor will the Company permit any Subsidiary to,
issue any preferred stock or other preferred Equity Interests, other than
Qualified Preferred Stock.
SECTION 6.02 LIENS. The Company will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(a) Liens created under the Loan Documents and the Blocked Account
Agreements;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of the Company or any Subsidiary set
forth in SCHEDULE 6.02; PROVIDED that (i) such Lien shall not apply to any asset
contained in the Tranche A Borrowing Base or the Tranche A-1 Borrowing Base,
(ii) such Lien shall not apply to any other property or asset of the Company or
any Subsidiary and (iii) such Lien shall secure only those obligations which it
secures on the date hereof and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof, the obligations
thereunder or the property or assets securing such obligations;
(d) any Lien existing on any property or asset prior to the acquisition
thereof by the Company or any Subsidiary; PROVIDED that (i) such Lien is not
created in contemplation of or in connection with such acquisition, (ii) such
Lien shall not apply to any other property or assets of the Company or any
Subsidiary and (iii) such Lien shall secure only those obligations which it
secures on the date of such acquisition and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof (except to the extent of any reasonable premiums, fees and expenses
incurred in connection with any such extensions, renewals and replacements);
(e) Liens on fixed or capital assets acquired, constructed or improved by
the Company or any Subsidiary; PROVIDED that (i) such security interests secure
Indebtedness permitted by clause (v) of Section 6.01(a), (ii) such security
interests and the Indebtedness secured thereby are incurred prior to or within
180 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed the
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cost of acquiring, constructing or improving such fixed or capital assets and
(iv) such security interests shall not apply to any other property or assets of
the Company or any Subsidiary;
(f) Liens on real properties and improvements thereto (but not inventory or
other personal property located therein) owned or leased by the Company or any
Subsidiary; PROVIDED that such Liens secure Indebtedness permitted by clause
(vi) of SECTION 6.01(a);
(g) Liens of sellers of goods to any Loan Party arising under the
provisions of Applicable Law similar to Article 2 of the UCC in the ordinary
course of business, covering only goods (other than Inventory and Equipment (as
defined in the Security Agreement) included in Tranche A Borrowing Base or the
Tranche A-1 Borrowing Base), and Liens that secure Indebtedness permitted by
clause (vii) of SECTION 6.01;
(h) Liens constituting leasehold interests made by a Loan Party as lessor
entered into in the ordinary course of business;
(i) Any right, title and interest of the landlord under any lease pursuant
to which a Loan Party has a leasehold interest in any property or assets and any
liens that by operation of law have been placed by such landlord on property
over which any Loan Party has any real property interest; and
(j) Liens securing the Indebtedness of the Company under the Junior Secured
Facilities; PROVIDED, HOWEVER, that the Liens securing the Indebtedness of the
Company under the Junior Secured Facilities shall be expressly subordinate to
the Liens on the Revolving Lender Priority Collateral in favor of the Collateral
Agent in accordance with the Intercreditor Agreement.
SECTION 6.03 FUNDAMENTAL CHANGES.
(a) The Company will not, nor will it permit any Subsidiary to, merge into
or consolidate or amalgamate with any other Person, or permit any other Person
to merge into or consolidate with it, or liquidate or dissolve, except that, if
at the time thereof and immediately after giving effect thereto no Default or
Event of Default shall have occurred and be continuing (i) any Subsidiary may
merge into or with the Company in a transaction in which the Company is the
surviving corporation, (ii) any Subsidiary may merge into any Subsidiary in a
transaction in which the surviving entity is a Subsidiary and (if any party to
such merger is a Loan Party) is a Loan Party (iii) any Subsidiary (other than a
Borrower) may liquidate or dissolve if the Company determines in good faith that
such liquidation or dissolution is in the best interests of the Company and the
Subsidiaries, taken as a whole, and is not materially disadvantageous to the
Lenders; (iv) any Immaterial Subsidiary may liquidate or dissolve, and (v) the
Company may cause the Merger as contemplated in the Merger Agreement to be
undertaken, provided that any such merger involving a Person that is not a
wholly owned Subsidiary immediately prior to such merger shall not be permitted
unless also permitted by Section Investments, Loans, Advances, Guarantees and
Acquisitions.
(b) The Company will not, and will not permit any of its Subsidiaries to,
engage to any material extent in any business other than businesses of the type
conducted by the Company
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and its Subsidiaries on the date of execution of this Agreement and businesses
reasonably related thereto.
SECTION 6.04 INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS.
The Company will not, and will not permit any of its Subsidiaries to, purchase,
hold or acquire (including pursuant to any merger with any Person that was not a
wholly owned Subsidiary prior to such merger) any Equity Interests in or
evidence of indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, Guarantee any obligations of, or make or permit to exist
any investment or any other interest in, any other Person, or purchase or
otherwise acquire (in one transaction or a series of transactions) any assets of
any other Person constituting a business unit, except:
(a) Cash and Cash Equivalents;
(b) investments existing on the date hereof and set forth on Schedule 6.04
and any other investments from time to time not to exceed at any time
outstanding an aggregate principal amount in excess of the Net Proceeds received
from the disposition of investments permitted by this Section ERROR! NOT A VALID
BOOKMARK SELF-REFERENCE.;
(c) investments by the Company and its Subsidiaries in Equity Interests in
their respective Subsidiaries; provided that (i) any such Equity Interests held
by a Loan Party shall be pledged pursuant to the Pledge Agreement (excluding the
common stock of any Foreign Subsidiary), (ii) the aggregate amount of
investments by Loan Parties in, and loans and advances by Loan Parties to, and
Guarantees by Loan Parties of Indebtedness of, Subsidiaries that are not Loan
Parties (including all such investments, loans, advances and Guarantees existing
on the Effective Date) shall not exceed $20,000,000 at any time outstanding and
(iii) neither the Company nor any of the Subsidiaries will create or acquire any
Subsidiary after the Effective Date that is not a Loan Party;
(d) loans or advances made by the Company to any Subsidiary and made by any
Subsidiary to the Company or any other Subsidiary; PROVIDED that the amount of
such loans and advances made by Loan Parties to Subsidiaries that are not Loan
Parties shall be subject to the limitation set forth in clause (c) above;
(e) Guarantees constituting Indebtedness permitted by Section Indebtedness;
Certain Equity Securities; provided that the aggregate principal amount of
Indebtedness of Subsidiaries that are not Loan Parties that is Guaranteed by any
Loan Party shall be subject to the limitation set forth in clause (c) above;
(f) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(g) non-cash consideration received in connection with the sale, transfer,
lease or disposition of any asset in compliance with Sections Asset Sales and
Sale and Leaseback Transactions;
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(h) other investments made after the Effective Date; provided that at any
time there is any outstanding Exposure hereunder, (i) the aggregate amount of
such investments plus the aggregate amount of Restricted Payments made pursuant
to Section 6.08(a)(i) shall not exceed $150,000,000 in the aggregate and (ii)
immediately before and after giving effect to the making of any such
Investments, (A) Excess Availability shall be in an amount greater than twenty
percent (20%) of the Tranche A-1 Borrowing Base (or, if the Tranche A-1
Commitments have been terminated, the Tranche A Borrowing Base) then in effect,
and (B) no Default or Event of Default has occurred and is continuing; and
(i) earn-outs and other customary post-disposition obligations arising out
of Permitted Divestitures.
SECTION 6.05 ASSET SALES. The Company will not, and will not permit any
of its Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interest owned by it, nor will the Company permit any of
its Subsidiaries to issue any additional Equity Interest in such Subsidiary,
except:
(a) sales, transfers or other dispositions of inventory, used or surplus
equipment, or Cash or Cash Equivalents made pursuant to Section 6.04(a) or (h),
in each case in the ordinary course of business;
(b) sales, transfers and dispositions to the Company or a Subsidiary;
PROVIDED that any such sales, transfers or dispositions involving a Subsidiary
that is not a Loan Party shall be made in compliance with Section Transactions
with Affiliates;
(c) sales, transfers and other dispositions of assets that are not
permitted by any other clause of this Section; PROVIDED that immediately before
and after giving effect to such sale, transfer or disposition (i) the Loan
Parties, on a consolidated basis, are Solvent, and (ii) no Default or Event of
Default has occurred or is continuing; and PROVIDED further that the assets
sold, transferred or otherwise disposed of (including assets sold, transferred
or disposed of by means of the sale, transfer or disposition of any Equity
Interests) in reliance upon this clause (c) during any fiscal year of the
Company shall not exceed fifteen percent (15%) of the operating assets of the
Loan Parties as of the Effective Date;
(d) sales of assets pursuant to sale and leaseback transactions permitted
by Section Sale and Leaseback Transactions;
(e) leases or subleases of property (excluding sale and leaseback
transactions) by any Loan Party in the ordinary course of business;
(f) Permitted Divestitures, provided that any Net Proceeds received by the
Borrowers and the Subsidiaries in connection with any such Permitted Divestiture
shall be paid to the Administrative Agent for application to the Obligations in
accordance with the provisions of Section 2.11(m);
(g) the Borrowers and the Subsidiaries may enter into Asset Swaps, provided
that the aggregate fair market value of the stores or facilities transferred by
the Borrowers and the Subsidiaries pursuant to Asset Swaps in a year shall not
exceed $10,000,000;
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(h) (i) mergers and consolidations, and (ii) liquidations and dissolutions,
in each case in compliance with Section 6.03(a); and
(i) sales of assets or Equity Interests of Subsidiaries acquired by the
Company in its acquisition of Best Cellars, Inc. and the Subsidiaries of Best
Cellars, Inc.;
PROVIDED that all sales, transfers, leases and other dispositions permitted
hereby shall be made for fair value and at least 70% cash consideration (other
than those permitted by clauses (a), (b) and (h) above).
SECTION 6.06 SALE AND LEASEBACK TRANSACTIONS. The Company will not, and
will not permit any of its Subsidiaries to, enter into any arrangement, directly
or indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred, except (a) any such sale of any fixed or capital assets that is
made for consideration having a cash component in an amount not less than the
greater of (i) the fair market value of such fixed or capital asset, or (ii) the
amount, if any, of availability generated by such asset (without giving effect
to any amounts which have been advanced against such asset) under the Tranche
A-1 Borrowing Base (or if the Tranche A-1 Commitments have been terminated, the
Tranche A Borrowing Base) and, in each case, is consummated within 180 days
after the Company or such Subsidiary acquires or completes the construction of
such fixed or capital asset, and (b) any other such sale of fixed or capital
assets, provided that (i) any such sale of any fixed or capital assets that is
made for consideration having a cash component in an amount not less than the
amount, if any, of availability generated by such asset (without giving effect
to any amounts which have been advanced against such asset) under the Tranche
A-1 Borrowing Base (or if the Tranche A-1 Commitments have been terminated, the
Tranche A Borrowing Base), and (ii) the aggregate book value of all assets sold
after the Effective Date pursuant to this clause (b) shall be subject to the
limitation set forth in the proviso to clause (v) of Section 6.01(a).
SECTION 6.07 HEDGING AGREEMENTS. The Company will not, and will not
permit any of its Subsidiaries to, enter into any Hedging Agreement, other than
Hedging Agreements entered into in the ordinary course of business to hedge or
mitigate interest rate, currency or energy exposure to which the Company or any
Subsidiary is exposed in the conduct of its business.
SECTION 6.08 RESTRICTED PAYMENTS; CERTAIN PAYMENTS OF INDEBTEDNESS.
(a) The Company will not, nor will it permit any Subsidiary to, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
or incur any obligation (contingent or otherwise) to do so, except (i) the
Company may make any Restricted Payment provided that immediately before and
after giving effect to any such Restricted Payment (1) the Loan Parties, on a
consolidated basis, are Solvent, (2) Excess Availability on the date of any such
dividend and average monthly Excess Availability projected on a pro forma basis
for the following twelve months shall be in an amount greater than twenty
percent (20%) of Tranche A-1 Borrowing Base (or, if the Tranche A-1 Commitments
have been terminated, the then Tranche A Borrowing Base), and (3) no Default or
Event of Default has occurred and is continuing, (ii)
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the Company may declare and pay dividends with respect to its capital stock
payable solely in additional shares of its common stock and (iii) Subsidiaries
may declare and pay dividends ratably with respect to their capital stock.
(b) The Company will not, nor will it permit any Subsidiary to, make or
agree to pay or make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property) in respect of principal of, or
any payment or other distribution (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of,
(i) any Indebtedness of the Company or any Subsidiary that is scheduled to
mature after the Maturity Date, (ii) any other Indebtedness of the Company or
any Subsidiary provided that:
(i) except as provided in clauses (iv) and (v) below, the Loan Parties
may make regularly scheduled or mandatory repayments or redemptions of
Indebtedness permitted under Section 6.01 (including, without limitation,
payments of principal and interest as and when due);
(ii) the Company or any Subsidiary may make voluntary payments and
distributions in respect of any Indebtedness of the Company or any
Subsidiary, provided that immediately before and after giving effect to any
such distribution or payment (A) the Loan Parties, on a consolidated basis,
are Solvent, (B) Excess Availability on the date of such distribution or
payment and projected on a pro forma basis for the following twelve months
shall be in an amount greater than twenty percent (20%) of the Tranche A-1
Borrowing Base (or, if the Tranche A-1 Commitments have been terminated,
the then Tranche A Borrowing Base), and (C) no Default or Event of Default
has occurred and is continuing or would arise therefrom;
(iii) the Company may repay the Bridge Financing Facility (A) with the
proceeds of the Senior Notes and/or Convertible Notes, (B) in an amount
equal to the Net Proceeds received from any Permitted Divestiture (other
than with the proceeds of Collateral included in the Tranche A Borrowing
Base or the Tranche A-1 Borrowing Base) and (C) in an amount equal to any
Net Proceeds received from the disposition of any Collateral not
constituting Revolving Lender Priority Collateral;
(iv) the Company may make mandatory prepayments of principal due under
the Convertible Notes as long as immediately before and after giving effect
to any such distribution or payment (A) the Loan Parties, on a consolidated
basis, are Solvent, (B) Excess Availability on the date of such payment and
projected on a pro forma basis for the following twelve months shall be in
an amount greater than twenty percent (20%) of the Tranche A-1 Borrowing
Base (or, if the Tranche A-1 Commitments have been terminated, the then
Tranche A Borrowing Base), and (C) no Default or Event of Default has
occurred and is continuing or would arise therefrom;
(v) the Company may make mandatory prepayments of principal due under
the Senior Notes (i) in an amount equal to any Net Proceeds received from
the disposition of any Collateral not constituting Revolving Lender
Priority Collateral, and (ii) in all other circumstances, as long as
immediately before and after giving effect to any such
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distribution or payment (A) the Loan Parties, on a consolidated basis, are
Solvent, (B) Excess Availability on the date of such payment and projected
on a pro forma basis for the following twelve months shall be in an amount
greater than twenty percent (20%) of the Tranche A-1 Borrowing Base (or, if
the Tranche A-1 Commitments have been terminated, the then Tranche A
Borrowing Base), and (C) no Default or Event of Default has occurred and is
continuing or would arise therefrom; and
(vi) refinancings and refundings of such Indebtedness subject to and
in accordance with the terms of this Agreement.
SECTION 6.09 TRANSACTIONS WITH AFFILIATES. The Company will not, nor will
it permit any Subsidiary to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except (a) transactions in the ordinary course of business at prices and on
terms and conditions not less favorable to the Company or such Subsidiary than
could be obtained on an arm's-length basis from unrelated third parties, or (b)
transactions between or among the Loan Parties not involving any other
Affiliate.
SECTION 6.10 RESTRICTIVE AGREEMENTS. Except as set forth in SCHEDULE
6.10, the Company will not, nor will it permit any Subsidiary to, directly or
indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon (a) the
ability of the Company or any Subsidiary to create, incur or permit to exist any
Lien securing Obligations or any refinancing thereof upon any property or assets
actually owned by it, or (b) the ability of any Subsidiary to pay dividends or
other distributions with respect to any shares of its capital stock or to make
or repay loans or advances to the Company or any other Subsidiary or to
Guarantee Indebtedness of the Company or any other Subsidiary; PROVIDED that (i)
the foregoing shall not apply to restrictions and conditions imposed by law or
by any Loan Document, (ii) the foregoing shall not apply to customary provisions
included in licenses, contracts, leases, agreements and other instruments
restricting assignment and/or encumbrance, (iii) the foregoing shall not apply
to customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases
restricting the assignment thereof.
SECTION 6.11 AMENDMENT OF MATERIAL DOCUMENTS. The Company will not, nor
will it permit any Subsidiary to, amend, modify or waive any of (a) the
provisions of its certificate of incorporation, by-laws or other organizational
documents in a manner materially adverse to the Lenders (b) its rights and
obligations under other Material Contracts in a manner materially adverse to the
Lenders, (c) the terms of the Company's 9?% Senior Quarterly Interest Bonds due
2039 and any refinancings or replacements of any of the foregoing in a manner
materially adverse to the Lenders, or (d) the terms of the Junior Secured
Facilities or the Convertible Notes and any refinancings or replacements of any
of the foregoing, in the case of all of the foregoing, (i) to increase the
"Applicable Margin" or similar component of the interest
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rate applicable thereto by more than two percent (2%) per annum in the aggregate
(excluding increases resulting from (A) increases in the underlying reference
rates, (B) increases required under the credit agreement evidencing the Bridge
Financing Facility as in effect on the date hereof, (C) the accrual of interest
at the default rate and (D) in the case of any Senior Notes, the issuance
thereof at market rates in effect on the date of issuance); or (ii) shorten the
scheduled maturity date of the Junior Secured Facilities or the Convertible
Notes other than as the result of an acceleration after the occurrence of an
event of default thereunder; or (iii) increase the principal amount of the
Junior Secured Facilities or the Convertible Notes other than by the amount of
any accrued and unpaid interest, any premium or other amount paid in respect
thereof, and fees and expenses incurred in connection with such amendment,
restatement, supplement, replacement, refinancing, extension, consolidation,
restructuring or modification thereof; or (iv) change the prepayment, redemption
or defeasance provisions thereof in a manner adverse to any Loan Party; or (v)
is otherwise materially adverse to the Lenders.
SECTION 6.12 MINIMUM EXCESS AVAILABILITY. The Loan Parties shall not
permit Excess Availability, at any time, to be less than the lesser of (a) ten
percent (10%) of the then Tranche A-1 Borrowing Base (or if the Tranche A-1
Commitments have been terminated, the Tranche A Borrowing Base) and (b) ten
percent (10%) of the Aggregate Commitments.
SECTION 6.13 LIMITATION ON CHANGE IN FISCAL YEAR. The Company will not
permit its fiscal year to end on a date other than the last Saturday in the
month of February in each calendar year.
ARTICLE VII
Events of Default
SECTION 7.01 EVENTS OF DEFAULT. If any of the following events ("EVENTS
OF DEFAULT") shall occur:
(a) any Loan Party shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any L/C Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof (including, as required under Section 2.11) or otherwise;
(b) any Loan Party shall fail to pay any interest on any Loan or any fee or
any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement or any other Loan Document, when and as
the same shall become due and payable, and such failure shall continue
unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or on behalf of
any Borrower or any other Loan Party in or in connection with any Loan Document
or any amendment or modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with any Loan Document or any amendment or modification thereof or
waiver thereunder, shall prove to have been incorrect in any material respect
when made or deemed made;
(d) any Borrower shall (i) fail to observe or perform any covenant,
condition or agreement contained in Sections 5.01 (excluding clauses (a), (b),
(c) and (f) thereof), Notices of
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Material Events (other than Section 5.02(d)), Existence; Conduct of Business
(with respect to the existence of any Borrower), Use of Proceeds and Letters of
Credit or 5.14(f) or in Article Negative Covenants or (ii) fail to observe or
perform any covenant, condition or agreement contained in clauses (a), (b) or
(c) of Section 5.01, and such failure shall continue unremedied for a period of
fifteen (15) days (thirty (30) days if approved in writing by the Administrative
Agent in its discretion) or (iii) fail to observe or perform any covenant,
condition or agreement contained in clause (f) of Section 5.01 (subject to a
grace period of up to five (5) Business Days if approved in writing by the
Administrative Agent in its discretion) or (iv) fail to observe or perform any
covenant, condition or agreement contained in Section 5.07, and such failure
shall continue unremedied for a period of five (5) days or (v) fail to observe
or perform any covenant, condition or agreement contained in Section 5.09(b) and
such failure shall continue unremedied for a period of fifteen (15) days;
(e) any Loan Party shall fail to observe or perform any covenant, condition
or agreement contained in any Loan Document (other than those specified in
clause (a), (b) or (d) of this Article), and such failure shall continue
unremedied for a period of thirty (30) days after written notice thereof from
the Administrative Agent to the Company (which notice may be given at the
request of any Lender);
(f) the Company or any Subsidiary shall fail to make any payment (whether
of principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable;
(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (after
the giving of notice and/or the lapse of any applicable grace period) the holder
or holders of any Material Indebtedness or any trustee or agent on its or their
behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; PROVIDED that this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Company or any Subsidiary or its debts, or of a substantial part
of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Company or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;
(i) the Company or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Section 7.01, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Company or any Subsidiary or for a
substantial part of its assets, (iv) file an answer admitting the
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material allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors or (vi) take any action
for the purpose of effecting any of the foregoing;
(j) the Company or any Subsidiary shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate amount
in excess of $35,000,000 shall be rendered against the Company, any Subsidiary
or any combination thereof and the same shall remain undischarged for a period
of 30 consecutive days during which execution shall not be effectively stayed,
or any action shall be legally taken by a judgment creditor to attach or levy
upon any assets of the Company or any Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, when taken together with all
other ERISA Events that have occurred, could reasonably be expected to result in
a Material Adverse Effect;
(m) any Lien purported to be created under any Security Document shall
cease to be, or shall be asserted by any Loan Party not to be, a valid and
perfected Lien on any material portion of the Collateral, with the priority
required by the applicable Security Document, except (i) as a result of the sale
or other disposition of the applicable Collateral in a transaction permitted
under the Loan Documents, (ii) as a result of the Collateral Agent's failure (x)
to maintain possession of any stock certificates, promissory notes or other
instruments delivered to it under the Pledge Agreement or (y) to file any
document delivered by the Loan Parties to it for filing or (iii) as a result of
the Collateral Agent's failure to take any action that the Company reasonably
requests, in writing, the Collateral Agent to take;
(n) a Change in Control shall occur; or
(o) the occurrence of an event of default on the part of the Company or any
Loan Party under any Material Contract or Material Indebtedness to which the
Company or any Loan Party is a party or any indenture or other agreement
relating to any Material Indebtedness of the Company or any Loan Party;
(p) the determination by the Company or any Loan Party, to suspend the
operation of their business in the ordinary course, liquidate all or
substantially all of the Company's or such Loan Party's assets or employ an
agent or other third party to conduct a program of closings, liquidations or
"Going-Out-Of-Business" sales of all or substantially all of the business; or
(q) any Loan Document shall not be in full force and effect.
Solely for purposes of determining whether a Default or Event of
Default has occurred under clause (h), (i) or (j) of this Article Events of
Default, any reference in any such clause to any "Subsidiary" shall be deemed
not to include any Excluded Subsidiary.
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SECTION 7.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default
occurs and is continuing, the Administrative Agent may, or, at the request of
the Required Lenders shall, take any or all of the following actions:
(a) declare the Commitment of each Lender to make Loans and any obligation
of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Loan Parties;
(c) require that the Loan Parties cash collateralize the L/C Exposure;
(d) whether or not the maturity of the Obligations shall have been
accelerated pursuant hereto, may (and at the direction of the Required Lenders,
shall) proceed to protect, enforce and exercise all rights and remedies of the
Credit Parties under this Agreement, any of the other Loan Documents or
Applicable Law, including, but not limited to, by suit in equity, action at law
or other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in this Agreement and the other Loan Documents
or any instrument pursuant to which the Obligations are evidenced, and, if such
amount shall have become due, by declaration or otherwise, proceed to enforce
the payment thereof or any other legal or equitable right of the Credit Parties;
PROVIDED, HOWEVER, that upon the occurrence of any Event of Default under
Section 7.01(h) or (i), the obligation of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions shall automatically
terminate, the unpaid principal amount of all outstanding Loans and all interest
and other amounts as aforesaid shall automatically become due and payable, and
the obligation of the Loan Parties to cash collateralize the L/C Exposure as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender and without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived by
the Loan Parties.
No remedy herein is intended to be exclusive of any other remedy and each
and every remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute or any other provision of Law.
SECTION 7.03 APPLICATION OF FUNDS. After the exercise of remedies
provided for in SECTION 7.02 (or after the Loans have automatically become
immediately due and payable and the L/C Exposure have automatically been
required to be cash collateralized as set forth in the proviso to SECTION 7.02),
any amounts received on account of the Obligations shall be applied by the
Administrative Agent in the following order:
(a) ALL COLLATERAL OTHER THAN PRINCIPAL PROPERTIES:
FIRST, to payment of that portion of the Obligations (excluding the
Other Liabilities) constituting fees, indemnities, expenses and other
amounts (including fees,
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charges and disbursements of counsel to the Administrative Agent and the
Collateral Agent and amounts payable under ARTICLE II payable to the
Administrative Agent and the Collateral Agent), each in its capacity as
such;
SECOND, to payment of that portion of the Obligations (excluding the
Other Liabilities) constituting indemnities, expenses, and other amounts
(other than principal, interest and fees) payable to the Tranche A Lenders,
the Term Lenders and the Issuing Bank, ratably among them in proportion to
the amounts described in this clause Second;
THIRD, to the extent that Swingline Loans have not been refinanced by
a Loan, payment to the Swingline Lender of that portion of the Obligations
constituting accrued and unpaid interest on the Swingline Loans;
FOURTH, to payment of that portion of the Obligations (other than
Tranche A-1 Loans and L/C Exposure in which the Tranche A-1 Lenders
participate) constituting accrued and unpaid interest on the Loans, L/C
Exposure and such other Obligations, and fees (including Letter of Credit
Fees), ratably among the Tranche A Lenders, the Term Lenders and the
Issuing Bank in proportion to the respective amounts described in this
clause FOURTH payable to them;
FIFTH, to the extent that Swingline Loans have not been refinanced by
a Loan, to payment to the Swingline Lender of that portion of the
Obligations constituting unpaid principal of the Swingline Loans;
SIXTH, to payment of that portion of the Obligations constituting
unpaid principal of the Loans (other than Tranche A-1 Loans) unreimbursed
L/C Disbursements (other than those in which the Tranche A-1 Lenders
participate), ratably among the Tranche A Lenders, the Term Lenders and the
Issuing Bank in proportion to the respective amounts described in this
clause SEVENTH held by them;
SEVENTH, to the Administrative Agent for the account of the Issuing
Bank, to cash collateralize that portion of L/C Exposure comprised of the
aggregate undrawn amount of Letters of Credit (other than those in which
the Tranche A-1 Lenders participate);
EIGHTH, ratably to pay any fees, indemnities, expenses and other
amounts then due to the Tranche A-1 Lenders until paid in full;
NINTH, ratably to pay accrued and unpaid interest in respect of the
Tranche A-1 Loans until paid in full;
TENTH, ratably to pay principal due in respect of Tranche A-1 Loans
until paid in full;
ELEVENTH, to the Administrative Agent for the account of the Issuing
Bank, to cash collateralize that portion of L/C Exposure comprised of the
aggregate undrawn amount of Letters of Credit in which the Tranche A-1
Lenders participate;
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TWELFTH, to payment of all other Obligations (including without
limitation the cash collateralization of unliquidated indemnification
obligations, but excluding any Other Liabilities), ratably among the Credit
Parties in proportion to the respective amounts described in this clause
TWELFTH held by them
THIRTEENTH, to payment of that portion of the Obligations arising from
Cash Management Services, ratably among the Credit Parties in proportion to
the respective amounts described in this clause THIRTEENTH held by them;
FOURTEENTH, to payment of all other Obligations arising from Bank
Products, ratably among the Credit Parties in proportion to the respective
amounts described in this clause FOURTEENTH held by them; and
LAST, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Loan Parties or as otherwise required by
Applicable Law.
Subject to SECTION 2.06, amounts used to cash collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clauses SEVENTH and ELEVENTH
above shall be applied to satisfy drawings under such Letters of Credit as they
occur. If any amount remains on deposit as cash collateral after all Letters of
Credit have either been fully drawn or expired, such remaining amount shall be
applied to the other Obligations, if any, in the order set forth above.
Any amounts received by the Term Lenders pursuant to Section 7.03(a) shall be
held as cash collateral for the Obligations relating to the Term Loans until (i)
the liquidation of the Principal Properties and application of the Net Proceeds
thereof to the Term Loans, or (ii) such earlier date that the Administrative
Agent and the Company shall otherwise agree.
(b) PRINCIPAL PROPERTIES
FIRST, to payment of fees, indemnities, expenses and other
amounts, including fees, charges and disbursements of counsel to the
Administrative Agent and the Collateral Agent, with respect to the
realization on the Principal Properties;
SECOND, to payment of accrued and unpaid interest on the Term
Loans, ratably among the Term Lenders in proportion to the respective
amounts described in this clause SECOND payable to them
THIRD, to payment of unpaid principal of the Term Loans ratably
among the the Term Lenders in proportion to the respective amounts
described in this clause THIRD held by them;
FOURTH, to payment of all other Obligations relating solely to
the Term Loan ratably among the Term Lenders in proportion to the
respective amounts described in this clause FOURTH held by them; and
LAST, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Loan Parties or as otherwise
required by Applicable Law.
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ARTICLE VIII
THE AGENTS
SECTION 8.01 APPOINTMENT AND ADMINISTRATION BY ADMINISTRATIVE AGENT.
Each Lender and each Issuing Bank hereby irrevocably designate Bank of
America as Administrative Agent under this Agreement and the other Loan
Documents. The general administration of the Loan Documents shall be by the
Administrative Agent. The Lenders and each Issuing Bank each hereby (a)
irrevocably authorizes the Administrative Agent (i) to enter into the Loan
Documents to which it is a party, and (ii) at its discretion, to take or refrain
from taking such actions as agent on its behalf and to exercise or refrain from
exercising such powers under the Loan Documents as are delegated by the terms
hereof or thereof, as appropriate, together with all powers reasonably
incidental thereto, and (b) agrees and consents to all of the provisions of the
Security Documents. The Administrative Agent shall have no duties or
responsibilities except as set forth in this Agreement and the other Loan
Documents, nor shall it have any fiduciary relationship with any other Credit
Party, and no implied covenants, responsibilities, duties, obligations, or
liabilities shall be read into the Loan Documents or otherwise exist against the
Administrative Agent.
SECTION 8.02 APPOINTMENT OF COLLATERAL AGENT.
Each Lender and each Issuing Bank hereby irrevocably designate Bank of
America as Collateral Agent under this Agreement and the other Loan Documents.
The Lenders and each Issuing Bank each hereby (a) irrevocably authorizes the
Collateral Agent (i) to enter into the Loan Documents to which it is a party,
and (ii) at its discretion, to take or refrain from taking such actions as agent
on its behalf and to exercise or refrain from exercising such powers under the
Loan Documents as are delegated by the terms hereof or thereof, as appropriate,
together with all powers reasonably incidental thereto, and (b) agrees and
consents to all of the provisions of the Security Documents. All Collateral
shall be held or administered by the Collateral Agent (or its duly-appointed
agent) for its own benefit and for the ratable benefit of the other Credit
Parties. Any proceeds received by the Collateral Agent from the foreclosure,
sale, lease or other disposition of any of the Collateral and any other proceeds
received pursuant to the terms of the Security Documents or the other Loan
Documents shall be paid over to the Administrative Agent for application as
provided in this Agreement and the other Loan Documents. The Collateral Agent
shall have no duties or responsibilities except as set forth in this Agreement
and the other Loan Documents, nor shall it have any fiduciary relationship with
any other Credit Party, and no implied covenants, responsibilities, duties,
obligations, or liabilities shall be read into the Loan Documents or otherwise
exist against the Collateral Agent.
SECTION 8.03 AGREEMENT OF APPLICABLE LENDERS.
Upon any occasion requiring or permitting an approval, consent, waiver,
election or other action on the part of the Lenders, action shall be taken by
the Administrative Agent, for and on behalf or for the benefit of all Credit
Parties upon the direction of the requisite percentage of Lenders, and any such
action shall be binding on all Credit Parties. No amendment, modification,
consent, or waiver shall be effective except in accordance with the provisions
of Waivers; Amendments.
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SECTION 8.04 LIABILITY OF AGENTS.
(a) The Agents, when acting on behalf of the Credit Parties, may execute
any of their respective duties under this Agreement by or through any of its
officers, agents and employees, and no Agent nor its respective directors,
officers, agents or employees shall be liable to any other Credit Party for any
action taken or omitted to be taken in good faith, or be responsible to any
other Credit Party for the consequences of any oversight or error of judgment,
or for any loss, except to the extent of any liability imposed by law by reason
of such Agent's own gross negligence, bad faith or willful misconduct. No Agent
or its respective directors, officers, agents and employees shall in any event
be liable to any other Credit Party for any action taken or omitted to be taken
by it pursuant to instructions received by it from the requisite percentage of
Lenders, or in reliance upon the advice of counsel selected by it. Without
limiting the foregoing, no Agent or any of its respective directors, officers,
employees, or agents shall be: (i) responsible to any other Credit Party for the
due execution, validity, genuineness, effectiveness, sufficiency, or
enforceability of, or for any recital, statement, warranty or representation in,
this Agreement, any other Loan Document or any related agreement, document or
order; (ii) required to ascertain or to make any inquiry concerning the
performance or observance by any Loan Party of any of the terms, conditions,
covenants, or agreements of this Agreement or any of the Loan Documents; (iii)
responsible to any other Credit Party for the state or condition of any
properties of the Loan Parties or any other obligor hereunder constituting
Collateral for the Obligations or any information contained in the books or
records of the Loan Parties; (iv) responsible to any other Credit Party for the
validity, enforceability, collectibility, effectiveness or genuineness of this
Agreement or any other Loan Document or any other certificate, document or
instrument furnished in connection therewith; or (v) responsible to any other
Credit Party for the validity, priority or perfection of any Lien securing or
purporting to secure the Obligations or for the value or sufficiency of any of
the Collateral.
(b) The Agents may execute any of their duties under this Agreement or any
other Loan Document by or through its agents or attorneys-in-fact, and shall be
entitled to the advice of counsel concerning all matters pertaining to its
rights and duties hereunder or under the other Loan Documents. The Agents shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
(c) None of the Agents nor any of their respective directors, officers,
employees, or agents shall have any responsibility to any Loan Party on account
of the failure or delay in performance or breach by any other Credit Party
(other than by each such Agent in its capacity as a Lender) of any of its
respective obligations under this Agreement or any of the other Loan Documents
or in connection herewith or therewith.
(d) The Agents shall be entitled to rely, and shall be fully protected in
relying, upon any notice, consent, certificate, affidavit, or other document or
writing believed by them to be genuine and correct and to have been signed, sent
or made by the proper person or persons, and upon the advice and statements of
legal counsel (including, without, limitation, counsel to the Loan Parties),
independent accountants and other experts selected by any Loan Party or any
Credit Party. The Agents shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless they shall
first receive such advice or concurrence of the requisite percentage of the
Lenders as it deems appropriate or they shall first
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be indemnified to its satisfaction by the other Credit Parties against any and
all liability and expense which may be incurred by them by reason of the taking
or failing to take any such action.
SECTION 8.05 NOTICE OF DEFAULT.
The Agents shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless such Agent has actual
knowledge of the same or has received notice from a Credit Party or Loan Party
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that an Agent
obtains such actual knowledge or receives such a notice, such Agent shall give
prompt notice thereof to each of the other Credit Parties. Upon the occurrence
of an Event of Default, the Administrative Agent shall (subject to the
provisions of Waivers; Amendments.) take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders. Unless and until the Administrative Agent shall have received such
direction, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to any such
Default or Event of Default as it shall deem advisable in the best interest of
the Credit Parties. In no event shall the Administrative Agent be required to
comply with any such directions to the extent that the Administrative Agent
believes that its compliance with such directions would be unlawful.
SECTION 8.06 CREDIT DECISIONS.
Each Credit Party (other than the Agents) acknowledges that it has,
independently and without reliance upon the Agents or any other Credit Party,
and based on the financial statements prepared by the Loan Parties and such
other documents and information as it has deemed appropriate, made its own
credit analysis and investigation into the business, assets, operations,
property, and financial and other condition of the Loan Parties and has made its
own decision to enter into this Agreement and the other Loan Documents. Each
Credit Party (other than the Agents) also acknowledges that it will,
independently and without reliance upon the Agents or any other Credit Party,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in determining whether or not
conditions precedent to closing any Loan hereunder have been satisfied and in
taking or not taking any action under this Agreement and the other Loan
Documents.
SECTION 8.07 REIMBURSEMENT AND INDEMNIFICATION.
Each Credit Party (other than the Agents) agrees to (i) reimburse the
Agents and their Affiliates for such Credit Party's Applicable Percentage of (x)
any expenses and fees incurred by any Agent for the benefit of Credit Parties
under this Agreement and any of the other Loan Documents, including, without
limitation, counsel fees and compensation of agents and employees paid for
services rendered on behalf of the Credit Parties, and any other expense
incurred in connection with the operations or enforcement thereof not reimbursed
by the Loan Parties and (y) any expenses of any Agent incurred for the benefit
of the Credit Parties that the Loan Parties have agreed to reimburse pursuant to
this Agreement or any other Loan Document and have failed to so reimburse and
(ii) indemnify and hold harmless each Agent and any of its Affiliates,
directors, officers, employees, or agents, on demand, in the amount of such
Credit
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Party's Applicable Percentage, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against it or any Credit Party in any way relating
to or arising out of this Agreement or any of the other Loan Documents or any
action taken or omitted by it or any of them under this Agreement or any of the
other Loan Documents to the extent not reimbursed by the Loan Parties,
including, without limitation, costs of any suit initiated by any Agent against
any Credit Party (except such as shall have been determined by a court of
competent jurisdiction by final and non-appealable judgment to have resulted
from the gross negligence, bad faith or willful misconduct of such Agent);
PROVIDED, HOWEVER, that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against such Credit Party in its capacity as such. The provisions of
this Reimbursement and Indemnification. shall survive the repayment of the
Obligations and the termination of the Commitments.
SECTION 8.08 RIGHTS OF AGENTS.
It is understood and agreed that the Agents shall have the same rights and
powers hereunder (including the right to give such instructions) as the other
Lenders and may exercise such rights and powers, as well as their rights and
powers under other agreements and instruments to which they are or may be party,
and engage in other transactions with the Loan Parties, as though they were not
the Agents. Each Agent and its Affiliates may accept deposits from, lend money
to, and generally engage in any kind of commercial or investment banking, trust,
advisory or other business with the Loan Parties and their Affiliates as if it
were not an Agent hereunder.
SECTION 8.09 NOTICE OF TRANSFER.
The Administrative Agent may deem and treat a Lender party to this
Agreement as the owner of such Lender's portion of the Obligations for all
purposes, unless and until, and except to the extent, an Assignment and
Acceptance shall have become effective as set forth in Successors and Assigns.
SECTION 8.10 SUCCESSOR AGENTS.
Any Agent may resign at any time by giving thirty (30) Business Days'
written notice thereof to the other Credit Parties and the Company. Upon any
such resignation of an Agent, the Required Lenders shall have the right to
appoint a successor Agent, which, so long as there is no Event of Default, shall
be reasonably satisfactory to the Company (whose consent in any event shall not
be unreasonably withheld or delayed). If no successor Agent shall have been so
appointed by the Required Lenders and/or none shall have accepted such
appointment within thirty (30) days after the retiring Agent's giving of notice
of resignation, the retiring Agent may, on behalf of the other Credit Parties,
appoint a successor Agent which shall be a Person capable of complying with all
of the duties of such Agent hereunder (in the opinion of the retiring Agent and
as certified to the other Credit Parties in writing by such successor Agent)
which, so long as there is no Event of Default, shall be reasonably satisfactory
to the Company (whose consent shall not in any event be unreasonably withheld or
delayed). Upon the acceptance of any appointment as Agent by a successor Agent,
such successor Agent shall thereupon succeed to
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and become vested with all the rights, powers, privileges and duties of the
retiring Agent and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation
hereunder as such Agent, the provisions of this Article VIII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was such
Agent under this Agreement.
SECTION 8.11 RELATION AMONG THE LENDERS.
The Lenders are not partners or co-venturers, and no Lender shall be liable
for the acts or omissions of, or (except as otherwise set forth herein in case
of any Agent) authorized to act for, any other Lender.
SECTION 8.12 REPORTS AND FINANCIAL STATEMENTS.
By signing this Agreement, each Lender:
1) agrees to furnish the Administrative Agent on the first day of
each month with a summary of all Other Liabilities due or to
become due to such Lender;
2) is deemed to have requested that the Administrative Agent furnish
such Lender, promptly after they become available, copies of all
financial statements required to be delivered by the Company
hereunder (including, without limitation, those described in
Sections 5.01(a) through (f) hereof) and all commercial finance
examinations and appraisals of the Collateral received by the
Administrative Agent (collectively, the "Reports");
3) expressly agrees and acknowledges that the Administrative Agent
(i) makes no representation or warranty as to the accuracy of the
Reports, and (ii) shall not be liable for any information
contained in any Report;
4) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Administrative
Agent or any other party performing any audit or examination will
inspect only specific information regarding the Loan Parties and
will rely significantly upon the Loan Parties' books and records,
as well as on representations of the Loan Parties' personnel;
5) agrees to keep all Reports confidential in accordance with
Section 9.12; and
6) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold the
Administrative Agent and any such other Lender preparing a Report
harmless from any action the indemnifying Lender may take or
conclusion the indemnifying Lender may reach or draw from any
Report in connection with any Credit Extensions that the
indemnifying Lender has made or may make to the Borrowers, or the
indemnifying Lender's participation in, or the
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indemnifying Lender's purchase of, a Loan or Loans of the
Borrowers; and (ii) to pay and protect, and indemnify, defend,
and hold the Administrative Agent and any such other Lender
preparing a Report harmless from and against, the claims,
actions, proceedings, damages, costs, expenses, and other amounts
(including attorney costs) incurred by the Administrative Agent
and any such other Lender preparing a Report as the direct or
indirect result of any third parties who might obtain all or part
of any Report through the indemnifying Lender.
SECTION 8.13 AGENCY FOR PERFECTION.
Each Lender hereby appoints each other Lender as agent for the purpose of
perfecting Liens for the benefit of the Agents and the Lenders, in assets which,
in accordance with Article 9 of the UCC or any other Applicable Law of the
United States of America can be perfected only by possession. Should any Lender
(other than an Agent) obtain possession of any such Collateral, such Lender
shall notify the Administrative Agent thereof, and, promptly upon the
Administrative Agent's request therefor, shall deliver such Collateral to the
Collateral Agent or otherwise deal with such Collateral in accordance with the
Collateral Agent's instructions.
SECTION 8.14 DELINQUENT LENDER.
(a) If for any reason any Lender shall fail or refuse to abide by its
obligations under this Agreement, including without limitation its obligation to
make available to Administrative Agent its Applicable Percentage of any Loans,
expenses or setoff or purchase its Applicable Percentage of a participation
interest in the Swingline Loans or L/C Exposure (a "DELINQUENT LENDER") and such
failure is not cured within ten (10) days of receipt from the Administrative
Agent of written notice thereof, then, in addition to the rights and remedies
that may be available to the other Credit Parties, the Loan Parties or any other
party at law or in equity, and not at limitation thereof, (i) such Delinquent
Lender's right to participate in the administration of, or decision-making
rights related to, the Obligations, this Agreement or the other Loan Documents
shall be suspended during the pendency of such failure or refusal, and (ii) a
Delinquent Lender shall be deemed to have assigned any and all payments due to
it from the Loan Parties, whether on account of outstanding Loans, interest,
fees or otherwise, to the remaining non-delinquent Lenders for application to,
and reduction of, their proportionate shares of all outstanding Obligations
until, as a result of application of such assigned payments the Lenders'
respective Applicable Percentages of all outstanding Obligations shall have
returned to those in effect immediately prior to such delinquency and without
giving effect to the nonpayment causing such delinquency. The Delinquent
Lender's decision-making and participation rights and rights to payments as set
forth in clauses (i) and (ii) hereinabove shall be restored only upon the
payment by the Delinquent Lender of its Applicable Percentage of any
Obligations, any participation obligation, or expenses as to which it is
delinquent, together with interest thereon at the rate set forth in SECTION
2.13(c) hereof from the date when originally due until the date upon which any
such amounts are actually paid.
(b) The non-Delinquent Lenders shall also have the right, but not the
obligation, in their respective, sole and absolute discretion, to cause the
termination and assignment, without any further action by the Delinquent Lender
for no cash consideration (PRO RATA, based on the
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respective Commitments of those Lenders electing to exercise such right), of the
Delinquent Lender's Commitment to fund future Loans. Upon any such purchase of
the Applicable Percentage of any Delinquent Lender, the Delinquent Lender's
share in future Credit Extensions and its rights under the Loan Documents with
respect thereto shall terminate on the date of purchase, and the Delinquent
Lender shall promptly execute all documents reasonably requested to surrender
and transfer such interest, including, if so requested, an Assignment and
Acceptance.
(c) Each Delinquent Lender shall indemnify the Administrative Agent and
each non-delinquent Lender from and against any and all loss, damage or
expenses, including but not limited to reasonable attorneys' fees and funds
advanced by the Administrative Agent or by any non-delinquent Lender, on account
of a Delinquent Lender's failure to timely fund its Applicable Percentage of a
Loan or to otherwise perform its obligations under the Loan Documents.
SECTION 8.15 COLLATERAL AND GUARANTY MATTERS. The Lenders and the Issuing
Bank irrevocably authorize the Administrative Agent, at its option and in its
discretion,
(a) to release or direct the Collateral Agent to release any Lien on any
property granted to or held by the Collateral Agent or the Administrative Agent
under any Loan Document (i) upon termination of the Aggregate Commitments and
payment in full of all Obligations (other than contingent indemnification
obligations) and the expiration or termination of all Letters of Credit, (ii)
that is sold or to be sold as part of or in connection with any sale permitted
hereunder or under any other Loan Document, or (iii) if approved, authorized or
ratified in writing in accordance with Section 9.02;
(b) to release any Loan Party from its obligations under the Loan Documents
if such Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder; and
(c) to subordinate any Lien on any property granted to or held by the
Administrative Agent or the Collateral Agent under any Loan Document to the
holder of any Lien on such property that is permitted by Section 6.02.
Upon request by the Administrative Agent at any time, the Required Lenders
will confirm in writing the Administrative Agent's or the Collateral Agent's
authority, as applicable, to release or subordinate its interest in particular
types or items of property, or to release any Loan Party from its obligations
under the Loan Documents pursuant to this Section 8.14. In each case as
specified in this Section 8.14, the Administrative Agent and the Collateral
Agent will, at the Company's expense, execute and deliver to the applicable Loan
Party such documents as such Loan Party may reasonably request to evidence the
release of such item of Collateral from the assignment and security interest
granted under the Security Documents or to subordinate its interest in such
item, or to release such Loan Party from its obligations under the Loan
Documents, in each case in accordance with the terms of the Loan Documents and
this Section 8.15.
SECTION 8.16 SYNDICATION AGENT; DOCUMENTATION AGENT AND LEAD ARRANGER.
Notwithstanding the provisions of this Agreement or any of the other Loan
Documents, no Person who is or becomes a Syndication Agent or a Documentation
Agent nor the Lead
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Arranger shall have any powers, rights, duties, responsibilities or liabilities
with respect to this Agreement and the other Loan Documents.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 NOTICES.
(a) Except in the case of notices and other communications expressly
permitted to be given by telephone (and except as provided in subsection (b)
below), all notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopier as follows, and all notices
and other communications expressly permitted hereunder to be given by telephone
shall be made to the applicable telephone number, as follows:
(i) if to any Borrower, to it in care of the Company at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention of the Treasurer (Telecopy No.
(▇▇▇) ▇▇▇-▇▇▇▇) with a copy to the Company at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention of the Office of General Counsel (Telecopy No.
(▇▇▇) ▇▇▇-▇▇▇▇);
(ii) if to the Administrative Agent, the Collateral Agent or the
Swingline Lender to Bank of America, N.A., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (Telecopy No. (617)
790-1234), (E-Mail to ▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇), with a copy
to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, LLP, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇),
(E-Mail to ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇);
(iii) if to the Issuing Bank, to it at Letters of Credit Department,
Bank of America, N.A. ▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), (E-Mail to
▇▇▇▇▇▇▇.▇.▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇);
(iv) if to a Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
(b) Notices and other communications to the Lenders and the Issuing Bank
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, provided that the foregoing shall not apply to notices to
any Lender or the Issuing Bank pursuant to Article II if such Lender or the
Issuing Bank, as applicable, has notified the Administrative Agent that it is
incapable of receiving notices under such Article by electronic communication.
The Administrative Agent or the Company may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures
may be limited to particular notices or communications. Unless the
Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender's receipt of
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an acknowledgement from the intended recipient (such as by the "return receipt
requested" function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
(c) THE PLATFORM. THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE." THE
AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF
THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
shall the Agents or any of their Related Parties (collectively, the "AGENT
PARTIES") have any liability to any Loan Party, any Lender, the Issuing Bank or
any other Person for losses, claims, damages, liabilities or expenses of any
kind (whether in tort, contract or otherwise) arising out of the Loan Parties'
or the Administrative Agent's transmission of Borrower Materials through the
Internet, except to the extent that such losses, claims, damages, liabilities or
expenses are determined by a court of competent jurisdiction by a final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Agent Party; PROVIDED, HOWEVER, that in no event shall any
Agent Party have any liability to any Loan Party, any Lender, the Issuing Banks
or any other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages).
SECTION 9.02 WAIVERS; AMENDMENTS.
(a) No failure or delay by the Administrative Agent, the Collateral Agent,
the Issuing Bank or any Lender in exercising any right or power hereunder or
under any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Collateral Agent, the Issuing Bank
and the Lenders hereunder and under the other Loan Documents are cumulative and
are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of any Loan Document or consent to any departure by any
Loan Party therefrom shall in any event be effective unless the same shall be
permitted by clause (b) of this Section 9.02, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any Default
or Event of Default, regardless of whether the Administrative Agent, the
Collateral Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default or Event of Default at the time.
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(b) Neither this Agreement nor any other Loan Document nor any provision hereof
or thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrowers and the Required Lenders or, in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by the Agent that
is a party thereto and the Loan Party or Loan Parties that are parties thereto
(other than the Intercreditor Agreement as to which the agreement of the Loan
Parties to any amendment or modification shall not be required), in each case
with the consent of the Required Lenders; PROVIDED that no such agreement shall
(i) increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or unreimbursed L/C
Disbursement or reduce the rate of interest thereon, or reduce any fees payable
hereunder, without the written consent of each Lender affected thereby, (iii)
postpone the scheduled date of payment of the principal amount of any Loan under
Section Repayment of Loans; Evidence of Debt or the required date of
reimbursement of any L/C Disbursement, or any date for the payment of any
interest or fees payable hereunder, or reduce the amount of, waive or excuse any
such payment, or postpone the scheduled date of expiration of any Commitment,
without the written consent of each Lender affected thereby, (iv) change
Sections 2.11(l), 2.11(m), 2.11(n), If at any time insufficient funds are
received by and available to the Administrative Agent to pay fully all amounts
of principal, unreimbursed L/C Disbursements, interest and fees then due
hereunder in respect of Obligations, then such funds shall be applied in the
order and manner set forth in Section 7.03., 2.18If any Lender shall, by
exercising any right of set-off or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans or participations in
L/C Disbursements resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Loans and participations in L/C
Disbursements and accrued interest thereon than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the Loans and participations in L/C
Disbursements of other Lenders to the extent necessary so that the benefit of
all such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Loans
and participations in L/C Disbursements; PROVIDED that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by any Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in L/C Disbursements to any assignee or participant, other than to a Borrower or
any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). Each Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under Applicable Law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against any Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Borrower
in the amount of such participation. or 7.03, without the written consent of
each Lender, (v) change any of the provisions of this Section or the percentage
set forth in the definition of "Required Lenders" or any other provision of any
Loan Document specifying the number or percentage of Lenders required to waive,
amend or modify any rights thereunder or make any determination or grant any
consent thereunder, without the written consent of each Lender, (vi) directly or
indirectly (A) increase any of advance rates contained in
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the Tranche A Borrowing Base or the Tranche A-1 Borrowing Base (including,
without limitation, any increase to the Leasehold Cap or the percentages of
Eligible Scripts, Eligible Leaseholds and Eligible Real Estate which may
comprise the Tranche A Borrowing Base and the Tranche A-1 Borrowing Base)
without the written consent of each Lender, (B) add additional categories of
assets to the Tranche A Borrowing Base or the Tranche A-1 Borrowing Base (e.g.
intellectual property) without the written consent of each Lender, or (C) any
other provisions of the definitions of "Tranche A Borrowing Base", "Tranche ▇-▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇", "Eligible Inventory", "Eligible Coinstar Receivables",
"Eligible Credit Card Accounts Receivable", "Eligible Third Party Insurance
Provider Accounts Receivable", "Eligible Real Estate", "Eligible Leaseholds" or
"Scripts", in each case in a manner adverse to the interests of the Lenders or
in a manner that would make more credit available to the Borrowers, without the
written consent of the Required Lenders (calculated for the purpose of this
clause (B) as though the percentage specified in the definition of "Required
Lenders" were 66-2/3% instead of 50%), (vii) increase the total Commitments
(other than, with respect to the Tranche A Commitments, in accordance with
Section 2.02), without the written consent of each Lender, (viii) release any
Loan Party from its Guarantee under the Guaranty (except as expressly provided
in the Guaranty), or limit its liability in respect of such Guaranty, without
the written consent of each Lender or (ix) release (A) all or any substantial
part of the Collateral from the Liens of the Security Documents (except with
respect to sales or transfers of, and other transactions relating to, Collateral
permitted pursuant to the Loan Documents), without the written consent of each
Lender, or (B) the Principal Properties from the Liens of the Security Documents
(except with respect to sales or transfers of, and other transactions relating
to, the Principal Properties permitted pursuant to the Loan Documents), without
the written consent of each Term Lender and the Required Lenders (which, for
purposes of calculation, shall include the Term Lenders); PROVIDED FURTHER that
no such agreement shall (x) directly or indirectly change (A) any of advance
rates contained in the Tranche A-1 Borrowing Base without the written consent of
each Tranche A-1 Lender, (B) any other provisions of the definitions of "Tranche
▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇" in a manner adverse to the interests of the Tranche A-1
Lenders or in a manner that would make more credit available to the Borrowers
under the Tranche A-1 Borrowing Base, without the written consent of 66-2/3% of
the Tranche A-1 Lenders, or (C) any provisions relating to the conditions
precedent to the payment or prepayment of the Tranche A-1 Loans, the reduction
of termination of the Tranche A-1 Commitments, or the conditions to the making
of Tranche A-1 Loans under Section 2.01(f) hereof without the written consent of
the Tranche A-1 Lenders, or (y) amend, modify or otherwise affect the rights or
duties of the Administrative Agent or the Issuing Bank or the Collateral Agent
without the prior written consent of the Administrative Agent or the Issuing
Bank or the Collateral Agent, as the case may be. Notwithstanding the foregoing,
any provision of this Agreement may be amended by an agreement in writing
entered into between the Borrowers, the Required Lenders and the Administrative
Agent (and, if their rights or obligations are affected thereby, the Issuing
Bank) if (i) by the terms of such agreement, the Commitment and L/C Exposure of
each Lender not consenting to the amendment provided for therein shall, for such
Lender, terminate upon the effectiveness of such amendment and (ii) at the time
such amendment becomes effective, each Lender not consenting thereto receives
payment in full of the principal of and interest accrued on each Loan owed to it
and all other amounts owing to it or accrued for its account under this
Agreement.
SECTION 9.03 EXPENSES; INDEMNITY; DAMAGE WAIVER.
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(a) The Borrowers agree, jointly and severally, to pay (i) all fees and
reasonable out-of-pocket expenses (including, without limitation, the fees and
expenses incurred in connection with any field examination and any appraisal of
any of the Collateral) incurred by the Administrative Agent, the Collateral
Agent and their respective Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent and the Collateral
Agent, in connection with the syndication of the credit facilities provided for
herein, the preparation, execution, delivery and administration of the Loan
Documents or any amendments, supplements, modifications or waivers of the
provisions thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
(including the reasonable and documented fees, charges and disbursements of any
counsel for the Administrative Agent, the Collateral Agent, the Issuing Bank
and/or any Lender) incurred by the Issuing Bank in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender,
including the reasonable fees, charges and disbursements of any counsel for the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender, in
connection with the enforcement or protection of their rights in connection with
the Loan Documents, including their rights under this Section, or in connection
with the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses (including the reasonable fees, charges and disbursements
of any counsel for the Administrative Agent, the Collateral Agent, the Issuing
Bank or any Lender) incurred during any workout, restructuring or negotiations
in respect of such Loans or Letters of Credit, PROVIDED THAT the Lenders who are
not the Agents shall be entitled to reimbursement for no more than one counsel
representing all such Lenders (absent a conflict of interest in which case the
Lenders may engage and be reimbursed for additional counsel).
(b) The Borrowers agree, jointly and severally, to indemnify the Administrative
Agent, the Collateral Agent, the Issuing Bank and each Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an
"INDEMNITEE") against, and hold each Indemnitee harmless (on an after tax basis)
from, any and all losses, claims, causes of action, damages, liabilities,
settlement payments, costs and related expenses, including the reasonable fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of any Loan Document or any other
agreement or instrument contemplated hereby or thereby, the performance by the
parties to the Loan Documents of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated hereby
or thereby, (ii) any Loan or Letter of Credit or the use of the proceeds
therefrom (including any refusal by the Issuing Bank to honor a demand for
payment under a Letter of Credit if the documents presented in connection with
such demand do not strictly comply with the terms of such Letter of Credit),
(iii) any actual or alleged presence or release of Hazardous Materials on or
from any property currently or formerly owned or operated by the Company or any
of its subsidiaries, or any Environmental Liability related to the operations of
the Company or any of its subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; PROVIDED that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities, costs or related expenses are determined by a court of competent
jurisdiction by final judgment
133
to have resulted from the gross negligence, bad faith, or willful misconduct of
such Indemnitee, or relate to Hazardous Materials that first arise at any
property owned by a Borrower after such property is transferred to any
Indemnitee or its successors and assigns by foreclosure, deed in lieu of
foreclosure or similar transfer.
(c) To the extent that the Borrowers fail to pay any amount required to be
paid by them to the Administrative Agent, the Collateral Agent or the Issuing
Bank under paragraph (a) or (b) of this Section, each Lender severally agrees to
pay to the Administrative Agent, the Collateral Agent or the Issuing Bank, as
the case may be, such Lender's pro rata share (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; PROVIDED that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent, the Collateral Agent or the
Issuing Bank in its capacity as such. For purposes hereof, a Lender's "pro rata
share" shall be determined based upon its Applicable Percentage.
(d) To the extent permitted by Applicable Law, none of the Borrowers shall
assert, and each of the Borrowers hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after
written demand therefor.
(f) For the avoidance of doubt, this Section 9.03 shall not apply to Tax
matters, which shall be governed exclusively by Taxes.
SECTION 9.04 SUCCESSORS AND ASSIGNS.
(a) SUCCESSORS AND ASSIGNS GENERALLY. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Loan Party
may assign or otherwise transfer any of its rights or obligations hereunder or
under any other Loan Document without the prior written consent of the
Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible
Assignee in accordance with the provisions of Section 9.04(b), (ii) by way of
participation in accordance with the provisions of subsection Section 9.04(d),
or (iii) by way of pledge or assignment of a security interest subject to the
restrictions of Section 9.04(f) (and any other attempted assignment or transfer
by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in Section 9.04(d) and, to the extent
expressly contemplated hereby, the Related Parties of each of the Credit
Parties) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
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(b) ASSIGNMENTS BY LENDERS. Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment(s) and the Loans
(including for purposes of this Section 9.04(b), participations in L/C Exposure
and in Swingline Loans) at the time owing to it); provided that any such
assignment shall be subject to the following conditions:
(i) MINIMUM AMOUNTS
(A) in the case of an assignment of the entire remaining amount
of the assigning Lender's Commitment and the Loans at the time owing
to it or in the case of an assignment to a Lender or an Affiliate of a
Lender or an Approved Fund with respect to a Lender, no minimum amount
need be assigned; and
(B) in any case not described in subsection (b)(i)(A) of this
Section, the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) or, if the Commitment
is not then in effect, the principal outstanding balance of the Loans
of the assigning Lender subject to each such assignment, determined as
of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent or, if "Trade
Date" is specified in the Assignment and Acceptance, as of the Trade
Date, shall not be less than $5,000,000 unless each of the
Administrative Agent and, so long as no Event of Default has occurred
and is continuing, the Company otherwise consents (each such consent
not to be unreasonably withheld or delayed); PROVIDED, HOWEVER, that
concurrent assignments to members of an Assignee Group and concurrent
assignments from members of an Assignee Group to a single Eligible
Assignee (or to an Eligible Assignee and members of its Assignee
Group) will be treated as a single assignment for purposes of
determining whether such minimum amount has been met;
(ii) PROPORTIONATE AMOUNTS. Each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender's rights
and obligations under this Agreement with respect to such Lender's Tranche
A Loans, Term Loans and Tranche A Commitment, except that this clause (ii)
shall not (A) apply to the Swingline Lender's rights and obligations in
respect of Swingline Loans, or (B) prohibit any Lender from assigning all
or any portion of its rights and obligations with respect to (1) its
Tranche A Commitment and Term Loan and (2) its Tranche A-1 Commitment on a
non-pro rata basis;
(iii) REQUIRED CONSENTS. No consent shall be required for any
assignment except to the extent required by subsection (b)(i)(B) of this
Section and, in addition:
(A) the consent of the Company (such consent not to be
unreasonably withheld or delayed) shall be required unless (1) an
Event of Default has occurred and is continuing at the time of such
assignment or (2) such assignment is to a Lender, an Affiliate of a
Lender or an Approved Fund of such Lender; and
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(B) the consent of the Administrative Agent (such consent not to
be unreasonably withheld or delayed) shall be required for assignments
in respect of any Commitment if such assignment is to a Person that is
not a Lender, an Affiliate of such Lender or an Approved Fund of such
Lender; and
(C) the consent of the Issuing Bank (such consent not to be
unreasonably withheld or delayed) shall be required for any assignment
that increases the obligation of the assignee to participate in
exposure under one or more Letters of Credit (whether or not then
outstanding); and
(D) the consent of the Swingline Lender (such consent not to be
unreasonably withheld or delayed) shall be required for any assignment
in respect of the assignment of any Commitment.
(iv) ASSIGNMENT AND ACCEPTANCE. The parties to each assignment (other
than assignments by a Lender to its Affiliate or an Approved Fund of such
Lender or pursuant to Sections 2.09, 2.19 or 9.04(f)) shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together
with a processing and recordation fee of $3,500, provided, however, that
the Administrative Agent may, in its sole discretion, elect to waive such
processing and recordation fee in the case of any assignment. The assignee,
if it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Acceptance, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of SECTIONS 2.15, 2.16, 2.17 and 9.03. with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Upon request, the Borrowers (at their expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
Section 9.04(d).
(c) REGISTER.
(i) The Administrative Agent, acting for this purpose as an agent
of the Borrowers, shall maintain at the Administrative Agent's Office
a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and principal and interest amounts of
the Loans and L/C Obligations owing to, each Lender pursuant to the
terms hereof from time to time (the "REGISTER"). The entries in the
Register shall be conclusive,
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absent manifest error, and the Loan Parties, the Administrative Agent
and the Lenders shall treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary.
The Register shall be available for inspection by the Company and any
Lender at any reasonable time and from time to time upon reasonable
prior notice.
(ii) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the
assignee's completed Administrative Questionnaire (unless the assignee
shall already be a Lender hereunder), the processing and recordation
fee referred to in Section 9.04(b) and any written consent to such
assignment required by Section 9.04(b), the Administrative Agent shall
accept such Assignment and Acceptance and record the information
contained therein in the Register. No assignment shall be effective
for purposes of this Assignment unless it has been recorded in the
Register as provided in this paragraph.
(d) PARTICIPATIONS. Any Lender may at any time, without the consent
of, or notice to, the Loan Parties or the Administrative Agent, sell
participations to any Person (other than a natural person or the Loan
Parties or any of the Loan Parties' Affiliates or Subsidiaries) (each, a
"PARTICIPANT") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitment and/or
the Loans (including such Lender's participations in L/C Obligations and/or
Swingline Loans) owing to it); provided that (i) such Lender's obligations
under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Loan Parties, the Administrative Agent, the
Collateral Agent, the Issuing Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that
such Lender shall retain the sole right to enforce the Loan Documents and
to approve any amendment, supplement, modification or waiver of any
provision of the Loan Documents; PROVIDED that such agreement or instrument
may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, supplement, modification or waiver
described in the first proviso to SECTION 9.02(b) that affects such
Participant. Subject to Section (c), each Borrower agrees that each
Participant shall be entitled to the benefits of SECTIONS 2.15, 2.16 and
2.17 (subject to the requirements and limitations of such Sections) to the
same extent as if it were a Lender and had acquired its interest by
assignment pursuant to SECTION 9.04(b). To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 9.08 as
though it were a Lender, provided such Participant agrees to be subject to
SECTION 2.18(c) as though it were a Lender.
(e) LIMITATIONS UPON PARTICIPANT RIGHTS. A Participant shall not be
entitled to receive any greater payment under SECTIONS 2.15 or 2.17 than
the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Company's prior written
consent. A Participant that would be a Foreign Lender if it were a Lender
shall not be entitled to the benefits of SECTION 2.17 unless the Company is
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrowers, to comply with SECTION 2.17(e) as
though it were a Lender. Each Lender that sells a participation shall,
acting solely for this purpose as a non-fiduciary agent of the Borrowers,
maintain a register on which it enters
137
the name and address of each participant and the principal and interest
amount of each participant's interest in the Loans held by it (the
"PARTICIPANT REGISTER"). The entries in the Participant Register shall be
conclusive, absent manifest error, and such Lender shall treat each person
whose name is recorded in the Participant Register as the owner of the
participation in question for all purposes of this Agreement
notwithstanding any notice to the contrary.
(f) CERTAIN PLEDGES. Any Lender may at any time grant, pledge,
hypothecate or assign a security interest in all or any portion of its
rights under this Agreement (including under its Note, if any) to secure
obligations of such Lender, including any grant, pledge, hypothecation or
assignment to secure obligations to a Federal Reserve Bank, and none of the
restrictions or conditions set forth in this SECTION 9.04 related to any
grant, pledge, hypothecation or assignment shall apply to any such grant,
pledge, hypothecation or assignment of a security interest; PROVIDED that
no such grant, pledge, hypothecation or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute
any such grantee, pledgee, hypothecatee or assignee for such Lender as a
party hereto.
(g) ELECTRONIC EXECUTION OF ASSIGNMENTS. The words "execution,"
"signed," "signature," and words of like import in any Assignment and
Acceptance shall be deemed to include electronic signatures or the keeping
of records in electronic form, each of which shall be of the same legal
effect, validity or enforceability as a manually executed signature or the
use of a paper-based recordkeeping system, as the case may be, to the
extent and as provided for in any Applicable Law, including the Federal
Electronic Signatures in Global and National Commerce Act, the New York
State Electronic Signatures and Records Act, or any other similar state
laws based on the Uniform Electronic Transactions Act.
(h) RESIGNATION AS ISSUING BANK OR SWINGLINE LENDER AFTER ASSIGNMENT.
Notwithstanding anything to the contrary contained herein, if at any time
Bank of America assigns all of its Commitments and Loans pursuant to
subsection (b) above, Bank of America may, (i) upon 30 days' notice to the
Company and the Lenders, resign as Issuing Bank and/or (ii) upon 30 days'
notice to the Company, resign as Swingline Lender. In the event of any such
resignation as Issuing Bank or Swingline Lender, the Company shall be
entitled to appoint from among the Lenders a successor Issuing Bank or
Swingline Lender hereunder; provided, however, that no failure by the
Company to appoint any such successor shall affect the resignation of Bank
of America as Issuing Bank or Swingline Lender, as the case may be. If Bank
of America resigns as Issuing Bank, it shall retain all the rights, powers,
privileges and duties of the Issuing Bank hereunder with respect to all
Letters of Credit outstanding as of the effective date of its resignation
as Issuing Bank and all L/C Obligations with respect thereto. If Bank of
America resigns as Swingline Lender, it shall retain all the rights of the
Swingline Lender provided for hereunder with respect to Swingline Loans
made by it and outstanding as of the effective date of such resignation,
including the right to require the Lenders to make Loans or fund risk
participations in outstanding Swingline Loans pursuant to SECTION 2.05.
Upon the appointment of a successor Issuing Bank and/or Swingline Lender,
(a) such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring Issuing Bank or
Swingline Lender, as the case may be, and (b) the successor Issuing Bank
shall issue letters of credit in substitution for the Letters of Credit, if
any, outstanding at the time of such succession or make other arrangements
satisfactory to Bank of America to effectively assume the obligations of
Bank of America with respect to such Letters of Credit.
138
SECTION 9.05 SURVIVAL. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the
Collateral Agent, the Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Sections Increased Costs, Break Funding
Payments, Taxes and Expenses; Indemnity; Damage Waiver and Article The Agents
shall survive and remain in full force and effect regardless of the consummation
of the transactions contemplated hereby, the repayment of the Loans, the
expiration or termination of the Letters of Credit and the Commitments or the
termination of this Agreement or any provision hereof.
SECTION 9.06 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section Effective Date, this Agreement shall
become effective when it shall have been executed by the Administrative Agent
and when the Administrative Agent shall have received counterparts hereof which,
when taken together, bear the signatures of each of the other parties hereto,
and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy or
electronic transmission shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 9.07 SEVERABILITY. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08 RIGHT OF SETOFF. If one or more Events of Default shall have
occurred and be continuing, each Lender shall have the right, in addition to and
not in limitation of any right which any such Lender may have under Applicable
Law or otherwise, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or its Affiliates to or for the credit or the
account of any of the Borrowers against any of and all the obligations of any of
the Borrowers now or hereafter existing under this Agreement and the other Loan
Documents held by such Lender, irrespective of whether or not such Lender shall
have made any demand under
139
this Agreement or such other Loan Document and although such obligations may be
unmatured. The rights of each Lender under this Section 9.08 are in addition to
other rights and remedies (including other rights of setoff) which such Lender
may have. No Credit Party will, or will permit its Participant to, exercise its
rights under this Section 9.08 without the consent of the Administrative Agent
or the Required Lenders. ANY AND ALL RIGHTS TO REQUIRE THE ADMINISTRATIVE AGENT
TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH
SECURES ANY OF THE OBLIGATIONS PRIOR TO THE EXERCISE THE RIGHT OF SETOFF UNDER
THIS SECTION ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
SECTION 9.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAW OF THE STATE OF NEW YORK (EXCEPT FOR THE CONFLICT OF LAWS RULES THEREOF,
BUT INCLUDING GENERAL OBLIGATIONS LAW SECTIONS 5-1401 AND 5-1402).
(b) Each of the Borrowers hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to any Loan Document, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right that
the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or any other Loan Document against any of the Borrowers or their respective
properties in the courts of any jurisdiction.
(c) Each of the Borrowers hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section Notices. Nothing in this Agreement
or any other Loan Document will affect the right of any party to this Agreement
to serve process in any other manner permitted by law.
140
SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11 HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12 CONFIDENTIALITY. Each of the Administrative Agent, the
Collateral Agent, the Issuing Bank and the Lenders agrees to maintain the
confidentiality of the Information (as defined below) except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors, and funding
sources (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (b) to the extent requested by any
regulatory authority, (c) to the extent required by Applicable Law or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section,
to any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (g) with
the consent of the Company or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii)
becomes available to the Administrative Agent, the Collateral Agent, the Issuing
Bank or any Lender on a nonconfidential basis from a source other than the
Borrowers. For the purposes of this Section, "INFORMATION" means all information
received from any of the Borrowers relating to the Borrowers or their business,
other than any such information that is available to the Administrative Agent,
the Collateral Agent, the Issuing Bank or any Lender on a nonconfidential basis
prior to disclosure by any of the Borrowers; PROVIDED that, in the case of
information received from a Borrower after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
SECTION 9.13 INTEREST RATE LIMITATION. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges
141
and other amounts which are treated as interest on such Loan under Applicable
Law (collectively, the "CHARGES"), shall exceed the maximum lawful rate (the
"Maximum Rate") which may be contracted for, charged, taken, received or
reserved by the Lender holding such Loan in accordance with Applicable Law, the
rate of interest payable in respect of such Loan hereunder, together with all
Charges payable in respect thereof, shall be limited to the Maximum Rate and, to
the extent lawful, the interest and Charges that would have been payable in
respect of such Loan but were not payable as a result of the operation of this
Section shall be cumulated and the interest and Charges payable to such Lender
in respect of other Loans or periods shall be increased (but not above the
Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall have
been received by such Lender.
SECTION 9.14 PATRIOT ACT.
Each Lender hereby notifies the Borrowers that pursuant to the requirements
of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the "Act"), it is required to obtain, verify and record information that
identifies the Borrowers, which information includes the name and address of
each Borrower and other information that will allow such Lender to identify such
Borrower in accordance with the Act. Each Borrower is in compliance, in all
material respects, with the Patriot Act. No part of the proceeds of the Loans
will be used by the Borrowers, directly or indirectly, for any payments to any
governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper
advantage, in violation of the United States Foreign Corrupt Practices Act of
1977, as amended.
SECTION 9.15 FOREIGN ASSET CONTROL REGULATIONS.
Neither of the advance of the Loans nor the use of the proceeds of any
thereof will violate the Trading With the Enemy Act (50 U.S.C. ss. 1 et seq., as
amended) (the "TRADING WITH THE ENEMY ACT") or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) (the "FOREIGN ASSETS CONTROL REGULATIONS") or any
enabling legislation or executive order relating thereto (which for the
avoidance of doubt shall include, but shall not be limited to (a) Executive
Order 13224 of September 21, 2001 Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg.
49079 (2001)) (the "EXECUTIVE ORDER") and (b) the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (Public Law 107-56)). Furthermore, none of the Borrowers
or their Affiliates (a) is or will become a "blocked person" as described in the
Executive Order, the Trading With the Enemy Act or the Foreign Assets Control
Regulations or (b) knowingly engages or will engage in any dealings or
transactions, or be otherwise associated, with any such "blocked person" or in
any manner violative of any such order.
SECTION 9.16 ADDITIONAL WAIVERS.
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(a) The Obligations are the joint and several obligation of each Loan
Party. To the fullest extent permitted by Applicable Law, the obligations of
each Loan Party hereunder shall not be affected by (i) the failure of the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender to
assert any claim or demand or to enforce or exercise any right or remedy against
any other Loan Party under the provisions of this Agreement, any other Loan
Document or otherwise, (ii) any rescission, waiver, amendment or modification
of, or any release of any Loan Party from, any of the terms or provisions of,
this Agreement, any other Loan Document, or (iii) the failure to perfect any
security interest in, or the release of, any of the Collateral or other security
held by or on behalf of the Administrative Agent, the Collateral Agent the
Issuing Bank or any Lender.
(b) The obligations of each Loan Party to pay the Obligations in full
hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason (other than the payment in full in cash of the
Obligations and termination of the Commitments), including any claim of waiver,
release, surrender, alteration or compromise of any of the Obligations and shall
not be subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of any of
the Obligations or otherwise. Without limiting the generality of the foregoing,
the obligations of each Loan Party hereunder shall not be discharged or impaired
or otherwise affected by the failure of the Administrative Agent, the Collateral
Agent, the Issuing Bank or any Lender to assert any claim or demand or to
enforce any remedy under this Agreement, any other Loan Document or any other
agreement, by any waiver or modification of any provision of any thereof, any
default, failure or delay, willful or otherwise, in the performance of any of
the Obligations, or by any other act or omission that may or might in any manner
or to any extent vary the risk of any Loan Party or that would otherwise operate
as a discharge of any Loan Party as a matter of law or equity (other than the
payment in full in cash of all the Obligations and termination of the
Commitments).
(c) To the fullest extent permitted by Applicable Law, each Loan Party
waives any defense based on or arising out of any defense of any other Loan
Party or the unenforceability of the Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of any other Loan Party,
other than the payment in full in cash of all the Obligations and termination of
the Commitments. The Administrative Agent, the Collateral Agent, the Issuing
Bank and the Lenders may, at their election, foreclose on any security held by
one or more of them by one or more judicial or nonjudicial sales, accept an
assignment of any such security in lieu of foreclosure, compromise or adjust any
part of the Obligations, make any other accommodation with any other Loan Party,
or exercise any other right or remedy available to them against any other Loan
Party, without affecting or impairing in any way the liability of any Loan Party
hereunder except to the extent that all the Obligations have been indefeasibly
paid in full in cash and performed in full and the Commitments terminated.
Pursuant to Applicable Law, each Loan Party waives any defense arising out of
any such election even though such election operates, pursuant to Applicable
Law, to impair or to extinguish any right of reimbursement or subrogation or
other right or remedy of such Loan Party against any other Loan Party, as the
case may be, or any security.
(d) Each Loan Party hereby agrees to keep each other Loan Party fully
apprised at all times as to the status of its business, affairs, finances, and
financial condition, and its ability to
143
perform its Obligations under the Loan Documents and in particular as to any
adverse developments with respect thereto. Each Loan Party hereby agrees to
undertake to keep itself apprised at all times as to the status of the business,
affairs, finances, and financial condition of each other Loan Party, and of the
ability of each other Loan Party to perform its Obligations under the Loan
Documents, and in particular as to any adverse developments with respect to any
thereof. Each Loan Party hereby agrees, in light of the foregoing mutual
covenants to inform each other, and to keep themselves and each other informed
as to such matters, that the none of the Administrative Agent, the Collateral
Agent, the Issuing Bank or any Lender shall have any duty to inform any Loan
Party of any information pertaining to the business, affairs, finances, or
financial condition of any other Loan Party, or pertaining to the ability of any
other Loan Party to perform its Obligations under the Loan Documents, even if
such information is adverse, and even if such information might influence the
decision of one or more of the Loan Parties to continue to be jointly and
severally liable for, or to provide Collateral for, Obligations of one or more
of the other Loan Parties. To the fullest extent permitted by Applicable Law,
each Loan Party hereby expressly waives any duty of the Administrative Agent,
the Collateral Agent, the Issuing Bank or any Lender to inform any Loan Party of
any such information.
SECTION 9.17 NO ADVISORY OR FIDUCIARY RESPONSIBILITY.
In connection with all aspects of each transaction contemplated hereby, the Loan
Parties each acknowledge and agree that: (i) the credit facility provided for
hereunder and any related arranging or other services in connection therewith
(including in connection with any amendment, waiver or other modification hereof
or of any other Loan Document) are an arm's-length commercial transaction
between the Loan Parties, on the one hand, and the Agents, the Issuing Bank and
the Lenders, on the other hand, and each of the Loan Parties is capable of
evaluating and understanding and understands and accepts the terms, risks and
conditions of the transactions contemplated hereby and by the other Loan
Documents (including any amendment, waiver or other modification hereof or
thereof); (ii) in connection with the process leading to such transaction, the
each Agent, Issuing Bank and Lender is and has been acting solely as a principal
and is not the financial advisor, agent or fiduciary, for the Loan Parties or
any of their respective Affiliates, stockholders, creditors or employees or any
other Person; (iii) none of the Agent, Issuing Bank or Lenders has assumed or
will assume an advisory, agency or fiduciary responsibility in favor of the Loan
Parties with respect to any of the transactions contemplated hereby or the
process leading thereto, including with respect to any amendment, waiver or
other modification hereof or of any other Loan Document (irrespective of whether
any of the Agents, Issuing Bank or Lenders has advised or is currently advising
any Loan Party or any of its Affiliates on other matters) and none of the Agent,
Issuing Bank or Lenders has any obligation to any Loan Party or any of its
Affiliates with respect to the transactions contemplated hereby except those
obligations expressly set forth herein and in the other Loan Documents; (iv) the
Agent, Issuing Bank and Lenders and their respective Affiliates may be engaged
in a broad range of transactions that involve interests that differ from those
of the Loan Parties and their respective Affiliates, and none of the Agent,
Issuing Bank or Lenders has any obligation to disclose any of such interests by
virtue of any advisory, agency or fiduciary relationship; and (v) none of the
Agent, Issuing Bank and Lenders have provided or will provide any legal,
accounting, regulatory or tax advice with respect to any of the transactions
contemplated hereby (including any amendment, waiver or other modification
hereof or of any other Loan Document) and each of the Loan Parties has consulted
its own legal, accounting, regulatory and tax advisors
144
to the extent it has deemed appropriate. Each of the Loan Parties hereby waives
and releases, to the fullest extent permitted by law, any claims that it may
have against each of the Agents, Issuing Bank and Lenders with respect to any
breach or alleged breach of agency or fiduciary duty.
SECTION 9.18 PRESS RELEASES.
The Company agrees that neither it nor its Affiliates will in the future issue
any press releases or other public disclosure using the name of Administrative
Agent or its Affiliates or referring to this Agreement or the other Loan
Documents without at least two (2) Business Days' prior notice to Administrative
Agent and without the prior written consent of Administrative Agent unless (and
only to the extent that) Company is required to do so under Applicable Law
(including, without limitation, under the reporting requirements of the
Securities and Exchange Commission or other Governmental Authority). Each Loan
Party consents to the publication by Administrative Agent or any Lender of
advertising material relating to the financing transactions contemplated by this
Agreement using any Loan Party's name, product photographs, logo or trademark.
Administrative Agent or such Lender shall provide a draft at least five (5)
Business Days in advance of any advertising material to the Company for review
and comment prior to the publication thereof. Administrative Agent reserves the
right to provide to industry trade organizations information necessary and
customary for inclusion in league table measurements.
[SIGNATURE PAGES FOLLOW]
145
[Credit Agreement]
THE GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC., AS A BORROWER
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President and Treasurer
EACH OF THE BORROWERS LISTED
ON ANNEX A HERETO
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
EACH OF THE BORROWERS LISTED
ON ANNEX B HERETO
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Senior Vice President
ANNEX A
APW SUPERMARKETS, INC.
COMPASS FOODS, INC.
FOOD BASICS, INC.
HOPELAWN PROPERTY I, INC.
▇▇▇▇▇▇ AVENUE PLAZA CORP.
SHOPWELL, INC.
SUPER FRESH FOOD MARKETS, INC.
SUPER FRESH/SAV-A-CENTER, INC.
SUPER MARKET SERVICE CORP.
SUPER PLUS FOOD WAREHOUSE, INC.
▇▇▇▇▇▇▇▇▇ FOODS OF CONN., INC.
▇▇▇▇▇▇▇▇, INC.
ANNEX B
PATHMARK STORES, INC.
AAL REALTY CORP.
MACDADE BOULEVARD STUART, LLC
BERGEN STREET PATHMARK, INC.
BRIDGE STUART INC.
EAST BRUNSWICK STUART INC.
LANCASTER ▇▇▇▇ ▇▇▇▇▇▇, LLC
PLAINBRIDGE LLC
UPPER ▇▇▇▇▇ ▇▇▇▇▇▇, LLC
LO-LO DISCOUNT STORES, INC., as a
Borrower
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
BANK OF AMERICA, N.A., as
Administrative Agent, as Collateral
Agent, and as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
BURDALE FINANCIAL LIMITED, as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
NATIONAL CITY BUSINESS CREDIT, INC.,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
TEXTRON FINANCIAL CORPORATION, as a
Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Account Executive