Exhibit 4.8
U.S. $400,000,000
CREDIT AGREEMENT
Dated as of October 8, 1997
As amended and restated as of August 16, 2001
Among
SUPERVALU INC.,
as Borrower,
--------
and
THE LENDERS NAMED HEREIN,
as Lenders,
-------
and
THE CHASE MANHATTAN BANK,
as Agent,
-----
and
BANK ONE, NA,
as Syndication Agent,
-----------------
and
BANKERS TRUST COMPANY
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▇. ▇. ▇▇▇▇▇▇ SECURITIES INC.
and
BANC ONE CAPITAL MARKETS, INC.,
as Co-Lead Arrangers and Co-Bookrunners
------------------------------------
FIRST BANK NATIONAL ASSOCIATION,
THE FUJI BANK, LIMITED,
NATIONSBANK, N. A.
and
PNC BANK, NATIONAL ASSOCIATION,
as Co-Agents,
----------
BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION,
THE BANK OF NEW YORK,
BANK ONE, NA (FORMERLY KNOWN AS THE FIRST NATIONAL BANK OF CHICAGO),
FLEET NATIONAL BANK,
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK,
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Lead Managers
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms.........................................1
SECTION 1.02. Computation of Time Periods..................................21
SECTION 1.03. Accounting Terms.............................................21
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The A Advances...............................................22
SECTION 2.02. Making the A Advances........................................22
SECTION 2.03. The B Advances...............................................24
SECTION 2.04. Swingline Loans..............................................28
SECTION 2.05. Letters of Credit............................................28
SECTION 2.06. Fees.........................................................33
SECTION 2.07. Termination or Reduction of the Commitments or the
Swingline Commitment; Voluntary Reduction; Increase in
Aggregate Commitment.........................................33
SECTION 2.08. Repayment of A Advances, B Advances and Swingline Loans......34
SECTION 2.09. Interest on Advances and Swingline Loans.....................35
SECTION 2.10. Additional Interest on LIBOR Advances........................35
SECTION 2.11. Interest Rate Determination..................................36
SECTION 2.12. Voluntary Conversion of A Advances...........................37
SECTION 2.13. Prepayments of A Advances and Swingline Loans................38
SECTION 2.14. Increased Costs..............................................38
SECTION 2.15. Illegality...................................................39
SECTION 2.16. Payments and Computations....................................40
SECTION 2.17. Sharing of Payments, Etc.....................................41
SECTION 2.18. Taxes........................................................41
SECTION 2.19. Use of Proceeds..............................................44
SECTION 2.20. Termination Date Extensions..................................44
SECTION 2.21. Replacement of Lenders.......................................44
SECTION 2.22. Evidence of Debt.............................................45
ii
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to the Effectiveness of
Amendment and Restatement....................................45
SECTION 3.02. Conditions Precedent to Each A Borrowing, Swingline
Borrowing and Issuance of A Letter of Credit.................48
SECTION 3.03. Conditions Precedent to Each B Borrowing.....................49
ARTICLE IIIA
COLLATERAL AND MORTGAGES
SECTION 3A.01. Initial Post-Amendment and Restatement Effective Date
Collateral Requirements.....................................50
SECTION 3A.02. Security Event..............................................50
SECTION 3A.03. Further Assurances..........................................50
SECTION 3A.04. Information Regarding Collateral............................51
SECTION 3A.05. Additional Subsidiaries.....................................51
SECTION 3A.06. Authorization...............................................52
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower...............52
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants........................................57
SECTION 5.02. Negative Covenants...........................................61
SECTION 5.03. Restrictive Financial Covenants..............................68
ARTICLE VI
EVENTS OF DEFAULT
iii
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment..................................................73
SECTION 7.02. Nature of Duties.............................................73
SECTION 7.03. Exculpation, Rights Etc......................................74
SECTION 7.04. Reliance.....................................................74
SECTION 7.05. Indemnification..............................................74
SECTION 7.06. Agent In Its Individual Capacity, With respect to its
Advances, Swingline Loans, Commitment (and its
Percentage thereof)..........................................75
SECTION 7.07. Notice of Default............................................75
SECTION 7.08. Holders of Obligations.......................................75
SECTION 7.09. Resignation by the Agent.....................................75
SECTION 7.10. Removal of Agent.............................................76
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc..............................................77
SECTION 8.02. Notices, Etc.................................................77
SECTION 8.03. No Waiver; Remedies..........................................78
SECTION 8.04. Costs and Expenses...........................................78
SECTION 8.05. Right of Setoff..............................................79
SECTION 8.06. Binding Effect...............................................79
SECTION 8.07. Assignments and Participations...............................79
SECTION 8.08. Indemnification..............................................83
SECTION 8.09. Governing Law; Submission to Jurisdiction....................83
SECTION 8.10. Execution in Counterparts....................................83
SECTION 8.11. Confidentiality..............................................84
SECTION 8.12. WAIVER OF JURY TRIAL, ETC....................................84
SECTION 8.13. Effectiveness of the Amendment and Restatement; Original
Credit Agreement.............................................84
SECTION 8.14. Replacement of Agent.........................................84
Schedule I - Commitments
Schedule II - Applicable Lending Offices
Schedule III - Existing Debt
Schedule IV - Subsidiaries
Schedule V - Existing Liens
Schedule VI - Excluded Restrictive Agreements
Schedule VII - Structured Lease Transactions and Exchange Note Transactions
iv
Schedule VIII - Letters of Credit
Schedule IX - Permitted Amendments
Exhibit A-1 - Form of A Note
Exhibit A-2 - Form of B Note
Exhibit B-1 - Form of Notice of A Borrowing
Exhibit B-2 - Form of Notice of B Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Special Counsel for the
Borrower
Exhibit E - Form of Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, in-house Counsel of the
Borrower
Exhibit F - Form of Collateral and Guarantee Agreement
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CREDIT AGREEMENT
Dated as of October 8, 1997
As amended and restated as of August 16, 2001
SUPERVALU INC., a Delaware corporation (the "Borrower"), the lenders
(together with any other lender that hereafter becomes a party to this
Agreement, the "Lenders") listed on the signature pages hereof, THE CHASE
MANHATTAN BANK ("Chase"), as agent for the Lenders hereunder (the "Agent"), and
BANK ONE, NA, as syndication agent (the "Syndication Agent") FIRST BANK NATIONAL
ASSOCIATION, THE FUJI BANK, LIMITED, NATIONSBANK, N.A. and PNC BANK, NATIONAL
ASSOCIATION, each as a co-agent (the "Co-Agents"), and BANK OF AMERICA NATIONAL
TRUST & SAVINGS ASSOCIATION, THE BANK OF NEW YORK, BANK ONE, NA (formerly known
as THE FIRST NATIONAL BANK OF CHICAGO), FLEET NATIONAL BANK, ▇▇▇▇▇▇ GUARANTY
TRUST COMPANY OF NEW YORK and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, each
as a lead manager (the "Lead Managers") and BANKERS TRUST COMPANY, agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"A Advance" means an advance by a Lender to the Borrower as part of an
A Borrowing and refers to a Base Rate Advance or a LIBOR Advance.
"A Borrowing" means a borrowing consisting of simultaneous A Advances
of the same Type made by each of the Lenders pursuant to Section 2.01.
"A Note" means a promissory note of the Borrower payable to the order
of any Lender, in substantially the form of Exhibit A-1 hereto, evidencing the
aggregate indebtedness of the Borrower to such Lender resulting from the A
Advances made by such Lender.
"Accounts Receivable" means, for any date, accounts receivables and
notes receivables that would be reflected on a Consolidated balance sheet of the
Borrower and
its Subsidiaries (other than Foreign Subsidiaries) prepared as of such date in
accordance with GAAP.
"Advance" means an A Advance or a B Advance.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For the purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling", controlled by" and "under common control with") as used with
respect to any Person or group of Persons, shall mean possession directly or
indirectly of the power to direct or cause the direction of management policies
of such Person, whether through the ownership of voting securities, by contract
or otherwise.
"Amendment and Restatement Effective Date" means the date on which the
conditions specified in Section 3.01 have been satisfied.
"Applicable Facility Fee Rate" means, for any period a percentage per
annum equal to the percentage set forth below determined by reference to the
lower of (x) the rating of the Borrower's long-term, senior unsecured Debt from
S&P or (y) the rating of the Borrower's long-term, senior unsecured Debt from
▇▇▇▇▇'▇ in each case as in effect from time to time during such period:
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Borrower's
Long-Term Senior
Unsecured Debt Rating Applicable
S&P or ▇▇▇▇▇'▇ ("Level") Facility Fee Rate
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Level 1
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BBB+ or better, or Baa1 or better .150%
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Level 2
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BBB or Baa2 .200%
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Level 3
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BBB- or Baa3 .250%
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Level 4
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BBB- and Ba1, or BB+ and Baa3 .300%
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▇▇▇▇▇ ▇ .350%
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Worse than BB+ or worse than Ba1
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provided that if, at any time, no rating is available from S&P, ▇▇▇▇▇'▇ or any
other nationally recognized statistical rating organization designated by the
Borrower and approved in writing by the Majority Lenders, the Applicable
Facility Fee Rate shall be
2
.350%; and provided further that (i) upon the occurrence of a ratings
differential between S&P and ▇▇▇▇▇'▇ that corresponds to a differential of two
or more Levels, the Applicable Facility Fee Rate shall be based upon the Level
that is one Level above the Level corresponding to the lower rating and (ii) in
the event of a ratings differential corresponding to ▇▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇▇ ▇, the
Applicable Facility Fee Rate will be based upon Level 4.
"Applicable Interest Rate Margin" means, for each LIBOR Advance, for
any Interest Period, a percentage per annum equal to the percentage set forth
below determined by reference to the lower of (x) the rating of the Borrower's
long-term, senior unsecured Debt from S&P or (y) the rating of the Borrower's
long-term, senior unsecured Debt from ▇▇▇▇▇'▇, in each case for LIBOR Advances,
as in effect on the first day of such Interest Period:
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Borrower's
Long-Term Senior
Unsecured Debt Rating Applicable
S&P or ▇▇▇▇▇'▇ ("Level") Interest Rate Margin
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▇▇▇▇▇ ▇ .650%
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BBB+ or better, or Baa1 or better
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▇▇▇▇▇ ▇ .800%
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BBB or Baa2
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▇▇▇▇▇ ▇ 1.000%
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BBB- or Baa3
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▇▇▇▇▇ ▇ 1.325%
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BBB-and Ba1, or BB+ and Baa3
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▇▇▇▇▇ ▇ 1.400%
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Worse than BB+ or worse than Baa1
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provided that if, at any time, no rating is available from S&P, ▇▇▇▇▇'▇ or any
other nationally recognized statistical rating organization designated by the
Borrower and approved in writing by the Majority Lenders, the Applicable
Interest Rate Margin for LIBOR Advances for such Interest Period shall be 1.400%
and provided further that (i) upon the occurrence of a ratings differential
between S&P and ▇▇▇▇▇'▇ that corresponds to a differential of two or more
Levels, the Applicable Interest Rate Margin shall be based upon the Level that
is one Level above the Level corresponding to the lower rating and (ii) in the
event of a ratings differential between Level 4 and Level 5, the Applicable
Interest Rate Margin will be based upon Level 4.
3
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance, such
Lender's LIBOR Lending Office in the case of a LIBOR Advance and, in the case of
a B Advance, the office of such Lender notified by such Lender to the Agent as
its Applicable Lending Office with respect to such B Advance.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the Agent, in
substantially the form of Exhibit C hereto.
"Available LC Amount" means at any time an amount equal to the lesser
of (i) $150,000,000 and (ii) the excess, if any, of the aggregate amount of the
Commitments over the aggregate outstanding amount of A Advances plus B Advances
plus Swingline Loans at such time.
"B Advance" means an advance by a Lender to the Borrower as part of a B
Borrowing resulting from the auction bidding procedure described in Section
2.03.
"B Borrowing" means a borrowing consisting of simultaneous B Advances
from each of the Lenders whose offer to make one or more B Advances as part of
such borrowing has been accepted by the Borrower under the auction bidding
procedure described in Section 2.03.
"B Note" means a promissory note of the Borrower payable to the order
of any Lender, in substantially the form of Exhibit A-2 hereto, evidencing the
indebtedness of the Borrower to such Lender resulting from a B Advance made by
such Lender.
"B Reduction" has the meaning specified in Section 2.01.
"Bankers Trust" means Bankers Trust Company.
"Base Rate" means, for any day, a fluctuating interest rate per annum
in effect from time to time, which rate per annum shall be equal to the higher
of:
(a) the Prime Rate in effect on such day; and
(b)1/2 of one percent per annum above the Federal Funds Rate.
"Base Rate Advance" means an A Advance that bears interest as provided
in Section 2.09(a)(i).
"Borrowing" means an A Borrowing, a B Borrowing or a Swingline
Borrowing.
4
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City and London and, if the applicable
Business Day relates to any LIBOR Advances, on which dealings are carried on in
the London interbank market.
"Capital Lease" shall mean a lease meeting one or more of the criteria
set forth in paragraph 7 of the Statement of Financial Accounting Standards No.
13 of the Financial Accounting Standards Board (as in effect from time to time
or as set forth in a statement of GAAP superseding such paragraph 7).
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any Capital Lease and the amount of
such obligations shall be the capitalized amount thereof determined in
accordance with GAAP.
"Collateral" means any and all "Collateral", as defined in any Security
Document.
"Collateral and Guarantee Agreement" means the Collateral and Guarantee
Agreement among the Borrower, the Material Subsidiaries and the Agent
substantially in the form of Exhibit F.
"Collateral and Guarantee Requirement" means the requirement that:
(a) the Agent shall have received from each Loan Party either
(i) a counterpart of the Collateral and Guarantee Agreement duly
executed and delivered on behalf of such Loan Party or (ii) in the case
of any Person that becomes a Loan Party after the Amendment and
Restatement Effective Date, a supplement to the Collateral and
Guarantee Agreement, in the form specified therein, duly executed and
delivered on behalf of such Loan Party; and
(b) each Loan Party shall have obtained all consents and
approvals required to be obtained by it in connection with the
execution and delivery of all Security Documents (other than the
Mortgages) to which it is a party, the performance of its obligations
thereunder and the granting by it of the Liens thereunder.
"Collateral Filing Requirement" means the requirements that: (a) all
outstanding Equity Interests of each Subsidiary of the Borrower (other than (i)
any Immaterial Subsidiary, (ii) any Excluded Domestic Subsidiary and (iii) any
Subsidiary of the Borrower (A) that is not wholly owned, directly or indirectly,
by the Borrower or its other Subsidiaries, (B) the Equity Interests in which
cannot be pledged without violating the organizational documents of such
Subsidiary or any agreement to which the Borrower or any of its Subsidiaries is
a party and (C) identified on Schedule IV as an "Excluded Pledged Subsidiary"
owned by or on behalf of any Loan Party shall have been pledged
5
pursuant to the Collateral and Guarantee Agreement (except that the Loan Parties
shall not be required to pledge more than 65% of the outstanding voting Equity
Interests of any Foreign Subsidiary) and the Agent shall have received
certificates or other instruments representing all such Equity Interests,
together with stock powers or other instruments of transfer with respect thereto
endorsed in blank; and (b) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or reasonably requested by
the Agent to be filed, registered or recorded to create the Liens intended to be
created pursuant to the Collateral and Guarantee Requirement and perfect such
Liens to the extent required by, and with the priority required by, the
Collateral and Guarantee Agreement, shall have been:
(i) (A) if required by applicable law, executed by the
applicable Loan Parties and (B) delivered to the Agent pending filing,
registration or recording together with a completed Perfection
Certificate dated the date of such delivery and signed by an executive
officer or Financial Officer of the Borrower, together with all
attachments contemplated thereby, including the results of a search of
the Uniform Commercial Code (or equivalent) filings made with respect
to the Loan Parties in the jurisdictions contemplated by the Perfection
Certificate and copies of the financing statements (or similar
documents) disclosed by such search and evidence reasonably
satisfactory to the Agent that the Liens indicated by such financing
statements (or similar documents) are permitted by Section 5.02 or have
been released; and
(ii) duly filed and finally registered or recorded.
"Commercial Letters of Credit" means (i) the commercial Letters of
Credit issued by the LC Bank for the account of the Borrower pursuant to Section
2.05, and (ii) the commercial Letters of Credit previously issued by Wachovia
Bank of Georgia, National Association that (a) is outstanding on the date of
this Agreement and (b) is listed on Schedule IX hereto.
"Commitment" has the meaning specified in Section 2.01.
"Consolidated" refers to the consolidation of accounts of the Borrower
and its Subsidiaries in accordance with GAAP, including principles of
consolidation.
"Consolidated EBITDA" means, for any period, Consolidated Net Income
for such period plus (a) without duplication and to the extent deducted in
determining such Consolidated Net Income, the sum of (i) Consolidated Interest
Expense for such period, (ii) Consolidated income tax expense for such period,
(iii) all amounts attributable to depreciation and amortization for such period,
(iv) any extraordinary or unusual non-cash charges for such period, and (v) in
respect of the Borrower's fourth fiscal quarter of 2001 only, an amount not to
exceed $240,129,000 of restructuring and other charges taken in
6
such fiscal quarter that were announced in March 2001 and specified in the
Borrower's 2001 annual report and minus (b) without duplication and to the
extent included in determining such Consolidated Net Income, any extraordinary
gains for such period, all determined on a Consolidated basis in accordance with
GAAP.
"Consolidated Interest Expense" means, for any period (a) the interest
expense (including imputed interest expense in respect of Capital Lease
Obligations) minus (b) the interest income, in each case, of the Borrower and
its Subsidiaries for such period, determined on a Consolidated basis in
accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income or loss
of the Borrower and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income of any Person (other than the Borrower or any Subsidiary
of the Borrower) in which any other Person (other than the Borrower or any
Subsidiary or any director holding qualifying shares in compliance with
applicable law) owns an Equity Interest, except to the extent of the amount of
dividends or other distributions actually paid to the Borrower or any of its
Subsidiaries during such period, and (b) the income or loss of any Person
accrued prior to the date it becomes a Subsidiary of the Borrower or is merged
into or consolidated with the Borrower or any Subsidiary of the Borrower or the
date that such Person's assets are acquired by the Borrower or any Subsidiary of
the Borrower.
"Consolidated Rent Expense" means, for any period, all payment
obligations of the Borrower and its Subsidiaries during such period as lessee
under any leases other than Capital Leases (net of sub-lease income), as
determined on a Consolidated basis.
"Consolidated Tangible Assets" means at any date the sum of the
Tangible Assets of the Borrower and its Consolidated Subsidiaries after
eliminating intercompany items, all determined in accordance with GAAP,
including appropriate deductions for any minority interest in Tangible Assets of
such Consolidated Subsidiaries; provided that the Consolidated assets of the
Borrower and its Subsidiaries shall be determined by reference to the most
recent financial statements of the Borrower delivered pursuant to Section
5.01(d)(i)(x) or (y).
"Convert", "Conversion" and "Converted" each refers to a conversion of
Advances of one Type into Advances of another Type pursuant to Section 2.15 or
2.12.
"Debt" of any Person means (i) indebtedness of such Person for borrowed
money, (ii) all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments, (iii) all obligations of such Person to pay the
deferred purchase price of property or services, (iv) the present value of all
obligations of such Person as lessee under leases which shall have been or
should be, in accordance with GAAP, recorded as Capital Leases, (v) all
obligations under, or the net investments outstanding pursuant to,
7
any Permitted Receivables Financing, (vi) all Debt of others secured by (or for
which the holder of such Debt has an existing right, contingent or otherwise, to
be secured by any Lien or property owned or acquired by such Persons, (vii)
obligations of each Loan Party under each Hedging Agreement that (A) is in
effect on the Effective Date with a counterparty that is a Lender or an
Affiliate of a Lender as of the Effective Date or (B) is entered into after the
Effective Date with any counterparty that is a Lender or an Affiliate of a
Lender at the time such Hedging Agreement is entered into, and (viii) all
obligations of such Person under direct or indirect Guarantees in respect of,
and all obligations (contingent or otherwise) of such Person to purchase or
otherwise acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in clauses (i)
through (iv) above (and for the purposes only of Sections 5.02(e) and (f),
excluding any Guarantee by the Borrower or any of its Subsidiaries of any
obligations of any Person, other than the Borrower or any of its Subsidiaries,
which is existing as of the Amendment and Restatement Effective Date and of
which the Agent has been notified in writing by the Borrower on or before the
Amendment and Restatement Effective Date).
"Default" means any Event of Default or any event that would constitute
an Event of Default but for the requirement that notice be given or time elapse
or both.
"Domestic Lending Office" means, with respect to any Lender the office
of such Lender specified as its "Domestic Lending Office" opposite its name on
Schedule II hereto or in the Assignment and Acceptance pursuant to which it
became a Lender or in the agreement required by Section 2.07(b) pursuant to
which it became a Lender, or such other office of such Lender as such Lender may
from time to time specify to the Borrower and the Agent.
"Effective Date" means October 8, 1997.
"Eligible Accounts Receivable" means, for any date, Accounts Receivable
which are reflected on a Consolidated balance sheet of the Borrower and its
Subsidiaries (other than Foreign Subsidiaries) as current accounts receivable,
excluding (a) all Accounts Receivable that have been sold or purchased pursuant
to the Permitted Receivables Financing, or pursuant to any transaction permitted
by clause (iv) of Section 5.02(c), and (b) all Accounts Receivable that are
subject to a Lien pursuant to the Permitted Receivables Financing.
"Eligible Assignee" means (i) a commercial bank organized under the
laws of the United States, or any State thereof, and having total assets in
excess of $1,000,000,000; (ii) a savings and loan association or savings bank
organized under the laws of the United States, or any State thereof, and having
total assets in excess of $1,000,000,000; (iii) a commercial bank organized
under the laws of any other country which is a member of the OECD or has
concluded special lending arrangements with the International Monetary
8
Fund associated with its General Arrangements to Borrow, or a political
subdivision of any such country, and having total assets in excess of
$1,000,000,000, provided that such bank is acting through such bank's branch, or
agency, located in the United States; (iv) the central bank of any country which
is a member of the OECD; (v) a commercial finance company organized under the
laws of the United States, or any State thereof, and having total assets in
excess of $1,000,000,000; (vi) any Lender; or Affiliate of a Lender; (vii) any
entity (whether a corporation, partnership, trust or otherwise) that is engaged
in making, purchasing, holding or otherwise investing in bank loans and similar
extensions of credit in the ordinary course of its business, (viii) any fund
that invests in bank loans and similar extensions of credit, and (ix) such other
bank, company, financial institution or fund to which the Borrower shall
consent; provided, however, that notwithstanding anything to the contrary set
forth in this Agreement, no Person that is organized under the laws of a
jurisdiction outside the United States shall be an Eligible Assignee if, at the
time of an assignment pursuant to Section 8.07, such Person would be subject to
United States interest withholding tax at a rate greater than zero; provided
further, however, that neither the Borrower nor any Affiliate of the Borrower
shall qualify as an Eligible Assignee.
"Environmental Action" means any administrative, regulatory or judicial
action, suit, demand, demand letter, claim, notice of noncompliance or
violation, notice of liability or potential liability investigation, proceeding,
consent order or consent agreement relating to any Environmental Law,
Environmental Permit or Hazardous Materials or arising from alleged injury or
threat of injury to health, safety or the environment, including, without
limitation, (a) by any governmental or regulatory authority for enforcement,
cleanup, removal, response, remedial or other actions or damages and (b) by any
governmental or regulatory authority or any third party for damages,
contribution, indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign statute,
law, ordinance, rule, regulation, code, order, judgment, decree or judicial or
agency interpretation, policy or guidance relating to the environment, health,
safety or Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"Equity Interests" means shares of capital stock, partnership
interests, joint venture interests, membership interests in a limited liability
or unlimited liability company, beneficial interests in a trust or other equity
ownership interests in a Person (including, without limitation, Voting Stock) of
whatever nature and rights, warrant or options to acquire any of the foregoing.
9
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" of any Person means any other Person that for
purposes of Title IV of ERISA or Section 412 of the Internal Revenue Code of
1986, as amended from time to time, is a member of such Person's controlled
group, or under common control with such Person, within the meaning of Section
414 of the Internal Revenue Code of 1986, as amended from time to time.
"ERISA Event" with respect to any Person means (a) the occurrence of a
material reportable event, within the meaning of Section 4043 of ERISA, with
respect to any Plan of such Person or any of its ERISA Affiliates, unless the
30-day notice requirement with respect to such event has been waived by the
PBGC; (b) the application for a minimum funding waiver with respect to any Plan
of such Person or any of its ERISA Affiliates; (c) the provision by the
administrator of any Plan of such Person or any of its ERISA Affiliates of a
notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA); (d) the cessation of operations at a facility of such
Person or any of its ERISA Affiliates in the circumstances described in Section
4062(e) of ERISA; (e) the withdrawal by such Person or any of its ERISA
Affiliates from a Multiple Employer Plan during a plan year for which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Internal Revenue Code of 1986, as amended from
time to time, or Section 302 of ERISA), whether or not waived; (g) the adoption
of an amendment to a Plan of such Person or any of its ERISA Affiliates
requiring the provision of security to such Plan, pursuant to Section 307 of
ERISA; or (h) the institution by the PBGC of proceedings to terminate a Plan of
such Person or any of its ERISA Affiliates, pursuant to Section 4042 of ERISA,
or the occurrence of any event or condition described in Section 4042 of ERISA
that could constitute grounds for the termination of, or the appointment of a
trustee to administer such Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Events of Default" has the meaning specified in Section 6.01.
"Excluded Domestic Subsidiary" has the meaning assigned to the term
"Domestic Subsidiary" in the Existing Notes Indenture.
"Excluded Guarantee Subsidiary" means each Subsidiary of the Borrower
that (a) is prohibited by its organizational documents or any agreement to which
it is a party
10
from providing a Guarantee of the Obligations and (b) is identified as an
Excluded Guarantee Subsidiary on Schedule IV.
"Existing Notes Indenture" means the Indenture dated as of July 1, 1987
between the Borrower and Bankers Trust Company, as amended and supplemented as
of the Amendment and Restatement Effective Date.
"Existing 364-Day Credit Agreement" means the Credit Agreement dated
August 20, 1999 among the Borrower, the Lenders named therein, Citicorp USA,
Inc. as administrative agent, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. as lead arranger,
advisor and book manager, The Chase Manhattan Bank as syndication agent and
Deutsche Bank AG New York Branch as documentation agent, as amended.
"Federal Funds Rate" means, for any period, a current market interest
rate per annum equal for each day during such period to 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 for such day (or, if such day is
not a Business Day) for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day that is a
Business Day, the average (rounded upwards, if necessary, to the next 1/100 of
1%) of the quotations for such day on such transactions received by the Agent
from three Federal funds brokers of nationally recognized standing selected by
it.
"Financial Officer" means, for any Person, the chief executive officer,
the chief financial officer, the senior vice president-finance, the chief
accounting officer, the treasurer or the controller of such Person or any
assistant treasurer or any assistant controller of such Person previously
identified in writing to the Agent.
"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.
"GAAP" means generally accepted accounting principles in the United
States of America, consistently applied.
"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 Debt 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 Debt 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
11
property, securities or services for the purpose of assuring the owner of such
Debt 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 Debt or
other obligation or (d) as an account party in respect of any letter of credit
or letter of guaranty issued to support such Debt or obligation; provided, that
the term Guarantee shall not include endorsements for collection or deposit in
the ordinary course of business.
"Hazardous Materials" means petroleum and petroleum products,
byproducts or breakdown products, radioactive materials, asbestos-containing
materials, radon gas and any other chemicals, materials or substances
designated, classified or regulated as being "hazardous" or "toxic", or words of
similar import, under any federal, state, local or foreign statute, law,
ordinance, rule, regulation, code, order, judgment, decree or judicial or agency
interpretation policy or guidance.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Holding Account" means an interest-bearing deposit account belonging
to the Agent for the benefit of the Lenders into which the Borrower may be
required to make cash deposits pursuant to the provisions of this Agreement,
such account to be under the sole dominion and control of the Agent and not
subject to withdrawal by the Borrower, with any amounts therein to be held for
application toward payment of any outstanding Letters of Credit when drawn upon.
"Immaterial Subsidiary" means any Subsidiary that has less than
$5,000,000 in assets (excluding Equity Interests in such Subsidiary's
Subsidiaries), provided that the percentage of Inventory and Eligible Accounts
Receivable represented by the portion of Inventory and Eligible Accounts
Receivable attributable to the Immaterial Subsidiaries as a group will at no
time exceed 5%.
"Information Memorandum" means the Confidential Information Memorandum
dated July, 2001 with respect to the Borrower.
"Insufficiency" means, with respect to any Plan of the Borrower or any
of its ERISA Affiliates, the amount, if any, of "unfunded benefit liabilities"
(as defined in Section 4001(a)(18) of ERISA) for such Plan.
"Interest Period" means, for each LIBOR Advance comprising part of the
same A Borrowing, the period commencing on the date of such LIBOR Advance or the
date of the Conversion of any A Advance into such a LIBOR Advance and ending on
the last day of the period selected by the Borrower pursuant to the provisions
below and, thereafter,
12
each subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by the
Borrower pursuant to the provisions below. The duration of each such Interest
Period for a LIBOR Borrowing shall be 1, 2, 3 or 6 months and, if available to
all Lenders, 9 months, in each case as the Borrower may, upon notice received
by, the Agent not later than 11:00 A.M. (New York City time) on the third
Business Day, prior to the first day of such Interest Period, select; provided,
however, that:
(i) the duration of any Interest Period which commences before
the Termination Date and would otherwise end after such date shall end
on such date;
(ii) Interest Periods commencing on the same date for LIBOR
Advances comprising part of the same A Borrowing shall be of the same
duration;
(iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided that, if such extension would cause the last day
of such Interest Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the next preceding
Business Day; and
(iv) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months in
such Interest Period, such interest Period shall end on the last
Business Day of such succeeding calendar month.
"Inventory" means, for any date, inventory that is located in the
United States of America and would be reflected on a Consolidated balance sheet
of the Borrower and its Subsidiaries (other than Foreign Subsidiaries) prepared
as of such date in accordance with GAAP.
"LC Bank" means (i) such Lender as is designated as the LC Bank for any
Letter of Credit by written notice to the Agent from such Lender and the
Borrower and (ii) Wachovia Bank of Georgia, National Association for the Letters
of Credit listed in Schedule IX, in such Bank's capacity as LC Bank under the
letter of credit facility described in Section 2.05 and its successors in such
capacity.
"LC Exposure" means, at any time and for any Lender, an amount equal to
such Lender's Percentage of the aggregate amount of Letter of Credit Liabilities
in respect of all outstanding Letters of Credit at such time.
13
"Lender Affiliate" means, (a) with respect to any Lender, (i) an
Affiliate of such Lender or (ii) any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and is administered or managed by a Lender or an Affiliate of
such Lender and (b) with respect to any Lender that is a fund that invests in
bank loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.
"Lenders" means the banks and each Eligible Assignee that shall become
a party hereto pursuant to Section 2.07(b) or Section 8.07(c).
"Letter of Credit Liabilities" means, at any time and in respect of any
Letter of Credit, the sum, without duplication, of (i) the amount available for
drawing under such Letter of Credit plus (ii) the aggregate unpaid amount of all
Reimbursement obligations in respect of previous drawings made under such Letter
of Credit.
"Letters of Credit" means the Commercial Letters of Credit and the
Standby Letters of Credit.
"LIBOR" means, for any Interest Period for any LIBOR Advance comprising
part of the same A Borrowing, an interest rate per annum equal to the average
(rounded upward to the nearest whole multiple of 1/16 of 1% per annum, if such
average is not such a multiple) of the rate per annum at which deposits in U.S.
dollars are offered by the principal office of each of the Reference Banks in
London, England to prime banks in the London interbank market at 11:00 A.M.
(London time) two (2) Business Days before the first day of such Interest Period
in an amount substantially equal to the greater of (i) $1,000,000 and (ii) such
Reference Bank's LIBOR Advance comprising part of such A Borrowing, and for a
period equal to such Interest Period. The LIBOR for any Interest Period for each
LIBOR Advance comprising part of the same A Borrowing shall be determined by the
Agent on the basis of applicable rates furnished to and received by the Agent
from the Reference Banks two (2) Business Days before the first day of such
Interest Period, subject, however, to the provisions of Section 2.11.
"LIBOR Advance" means an A Advance that bears interest as provided in
Section 2.09(a)(ii).
"LIBOR Lending Office" means, with respect to any Lender, the office of
such Lender specified as its "LIBOR Lending Office" opposite its name on
Schedule II hereto or in the Assignment and Acceptance pursuant to which it
became a Lender (or, if no such office is specified, its Domestic Lending
Office) or in the agreement required by Section 2.07(b) pursuant to which it
became a Lender (or, if no such office is specified,
14
its Domestic Lending Office), or such other office of such Lender as such Lender
may from time to time specify to the Borrower and the Agent.
"LIBOR Reserve Percentage" of any Lender for any Interest Period for
any LIBOR Advance means the reserve percentage applicable during such Interest
Period (or if more than one such percentage shall be so applicable, the daily
average of such percentages for those days in such Interest Period during which
any such percentage shall be so applicable) under regulations issued from time
to time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve requirement)
for such Lender with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities having a term equal to such Interest Period.
"Lien" means any lien, security interest or other charge or encumbrance
of any kind, or any other type of preferential arrangement concerning property,
including, without limitation, the lien or retained security title of a
conditional vendor and any other encumbrance on title to real property to secure
repayment of a liability.
"Loan Documents" means this Agreement, the Notes, the Collateral and
Guarantee Agreement and each other Security Document.
"Loan Parties" means the Borrower and the Material Subsidiaries.
"Majority Lenders" means at any time Lenders holding at least 51% of
the then aggregate unpaid principal amount of the A Notes plus the then
aggregate unpaid amount of Reimbursement Obligations held by Lenders, or, if no
such principal amount is then outstanding, Lenders having at least 51% of the
Commitments (or if the aggregate Commitment has been terminated, Lenders holding
at least 51% of the then aggregate unpaid principal amount of the Notes plus the
then aggregate unpaid amount of Reimbursement Obligations).
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations or condition (financial or otherwise), of the
Borrower and its Subsidiaries taken as a whole, (b) the ability of any Loan
Party to perform any of its obligations under any Loan Document or (c) the
rights of or benefits available to the Lenders under any Loan Document.
"Material Subsidiary" means, at any time, any Subsidiary of the
Borrower which is not a wholly-owned limited liability company or a Foreign
Subsidiary or an Immaterial Subsidiary or an Excluded Guarantee Subsidiary.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
15
"Mortgage" means a mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the Obligations in each case in form and substance
reasonably satisfactory to the Agent.
"Mortgaged Property" means each parcel of real property and the
improvements thereto owned by a Loan Party and identified on a schedule
delivered to the Agent on or before the Effective Date (except as otherwise
expressly specified in such Schedule) or any supplement thereto which is
delivered to the Agent pursuant to Section 3A.07.
"Multiemployer Plan" of any Person means a multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, to which such Person or any of its ERISA
Affiliates is making or accruing an obligation to make contributions, or has
within any of the preceding five plan years made or accrued an obligation to
make contributions.
"Multiple Employer Plan" of any Person means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
such Person or any of its ERISA Affiliates and at least one Person other than
such Person and its ERISA Affiliates or (b) was so maintained and in respect of
which such Person or any of its ERISA Affiliates could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
"Note" means an A Note or a B Note.
"Notice of A Borrowing" has the meaning specified in Section 2.02(a).
"Notice of B Borrowing" has the meaning specified in Section 2.03(a).
"Notice of Swingline Borrowing" has the meaning specified in Section
2.04(b).
"Obligations" has the meaning assigned to such term in the Collateral
and Guarantee Agreement.
"OECD" means the Organization for Economic Cooperation and Development.
"Original 5-Year Credit Agreement" means the Credit Agreement dated as
of October 8, 1997 among the Borrower, the Lenders named therein, Bankers Trust
Company as agent, Citibank, N.A. as syndication agent, First Bank National
Association, The Fuji Bank, Limited, Nationsbank N.A. and PNC, National
Association as co-agents and Bank of America National Trust & Savings
Association, The Bank of New York, The First National Bank of Chicago (now known
as Bank One, NA), Fleet National Bank, ▇▇▇▇▇▇ Guaranty Trust Company of New York
and Norwest Bank Minnesota National Association as lead managers
16
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
entity thereto.
"Percentage" means, with respect to each Lender, the percentage equal
to a fraction the numerator of which is the amount of such Lender's Commitment
(or, in the event the Commitments have been terminated, such Lender's Commitment
as is in effect immediately prior to such termination) and the denominator of
which is the aggregate amount of the Commitments (or, in the event the
Commitments have been terminated, the aggregate amount of the Commitments as in
effect immediately prior to such termination) of the Lenders.
"Perfection Certificate" means a certificate in the form of the
relevant exhibit to the Collateral and Guarantee Agreement.
"Perfection Certificate Change" has the meaning assigned to such term
in Section 3A.04(b).
"Permitted Receivables Financing" means (a) the sale by the Borrower
and certain Subsidiaries of the Borrower of accounts receivable to the
Receivables Subsidiary pursuant to the Receivables Purchase Agreement, (b) the
sale of such accounts receivable (or participations therein) by the Receivables
Subsidiary to certain purchasers pursuant to the Receivables Transfer Agreement,
(c) any other accounts receivable financing having substantially similar effect
as the Permitted Receivables Financing referred to in paragraphs (a) and (b)
above and the terms of which are otherwise no more adverse to the Lenders than
the terms of the Permitted Receivables Financing referred to in paragraphs (a)
and (b) above.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan, but
does not include any such plan with a total projected benefit obligation (as
defined in Statement of Financial Accounting Standards 87) of less than
$20,000,000.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Real Property Collateral Requirement" means the requirement that:
17
(a) the Agent shall have received (i) counterparts of a
Mortgage with respect to each Mortgaged Property duly executed and
delivered by the record owner of such Mortgaged Property and a title
report or reports issued by a nationally recognized title insurance
company confirming, among other things, the legal description of the
Mortgaged Property described in each Mortgage, and (ii) a policy or
policies of title insurance issued by a nationally recognized title
insurance company insuring the Lien of each such Mortgage as a valid
first Lien on the Mortgaged Property described therein, free of any
other Liens except as expressly permitted by Section 5.02, together
with such endorsements, coinsurance and reinsurance as the Agent or the
Majority Lenders may reasonably request, provided that the Borrower
shall not be required to execute and deliver a Mortgage if, and to the
extent that, the Liens pursuant to such Mortgage would require the
granting of a pari passu security interest in favor of the Holders (as
defined in the Existing Notes Indenture); and
(b) the Agent shall have received such surveys, abstracts,
appraisals, legal opinions and other documents as the Agent or the
Majority Lenders may reasonably request with respect to any such
Mortgage or Mortgaged Property;
(c) the Mortgages shall have been duly registered or recorded
in such offices as necessary to perfect the first Lien on the Mortgaged
Property; and
(d) each Loan Party shall have obtained all consents and
approvals required to be obtained by it in connection with the
execution and delivery of all Mortgages to which it is a party, the
performance of the obligations thereunder and the granting by it of the
Liens thereunder.
"Receivables Purchase Agreement" means (a) each Purchase Agreement as
defined in the receivables purchase agreement referred to in paragraph (a) of
the definition of the term "Receivables Transfer Agreement" and (b) any
agreement replacing such Receivables Purchase Agreement, provided that such
replacing agreement contains terms that are substantially similar to such
Receivables Purchase Agreement and that are otherwise no more adverse to the
Lenders than the applicable terms of such Receivables Purchase Agreement.
"Receivables Subsidiary" means Supervalu Receivables Funding
Corporation, a Delaware corporation, and any other special-purpose,
bankruptcy-remote Subsidiary of the Borrower created and maintained solely to
effect a Permitted Receivables Financing.
"Receivables Transfer Agreement" means (a) the Receivables Purchase
Agreement dated as of August___, 2001 among the Receivables Subsidiary, the
Borrower as servicer, Delaware Funding Corporation as conduit purchaser, ▇▇▇▇▇▇
Guaranty Trust Company of New York as administrative agent and as facility agent
for certain persons,
18
Blue Ridge Asset Funding Corporation as a conduit purchaser, Wachovia Bank N.A.
as facility agent for certain persons and the other conduit purchasers,
alternate purchasers and facility agents party thereto and the Subsidiaries
party thereto, related to the Permitted Receivables Financing and (b) any
agreement replacing such Receivables Transfer Agreement, provided that such
replacing agreement contains terms that are substantially similar to such
Receivables Transfer Agreement and that are otherwise no more adverse to the
Lenders than the applicable terms of such Receivables Transfer Agreement.
"Reference Banks" means The Chase Manhattan Bank and Bank One, NA or
any successor Reference Bank appointed pursuant to Section 2.11(d).
"Register" has the meaning specified in Section 8.07(c).
"Reimbursement and Security Agreements" has the meaning assigned to the
term "Agreements" in the Third Amendment to LC Agreements.
"Reimbursement Obligations" means at any date the obligations of the
Borrower then outstanding under Section 2.05 to reimburse the LC Bank for the
amount paid by the LC Bank in respect of a drawing under a Letter of Credit.
"S&P" means Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc.
"Security Documents" means the Collateral and Guarantee Agreement, the
Mortgages and each other security agreement or other instrument or document
(including UCC financing statements) executed and delivered pursuant to Sections
3A.01 and 3A.02 to secure any of the Obligations.
"Security Event" means, at any time, (i) a reduction of the Borrower's
long-term senior unsecured debt rating from S&P to BB+ or worse or from Moody's
to Ba1 or worse, or (ii) neither S&P nor Moody's has in effect a rating of the
Borrower's long-term senior unsecured debt.
"Single Employer Plan" of any Person means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
such Person or any of its ERISA Affiliates and no Person other than such Person
and its ERISA Affiliates or (b) was so maintained and in respect of which such
Person or any of its ERISA Affiliates could have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.
"Standby Letter of Credit" means (i) any letter of credit, other than a
Commercial Letter of Credit, issued by an LC Bank for the account of the
Borrower pursuant to Section 2.05 and (ii) the letters of credit, other than
commercial Letters of Credit, issued
19
by Wachovia Bank of Georgia, National Association for the account of the
Borrower as listed in Schedule X.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock or other Equity
Interests having ordinary voting power to elect a majority of the Board of
Directors of such entity or organization (irrespective of whether at the time
capital stock or other Equity Interests of any other class or classes of such
entity or organization shall or might have voting power upon the occurrence of
any contingency), (b) the interest in the capital or profits of such entity or
organization or (c) the beneficial interest in such trust or estate is at the
time directly or indirectly owned or controlled by such Person, by such Person
and one or more of its other Subsidiaries or by one or more of such Person's
other Subsidiaries.
"Supermajority Lenders" means at any time Lenders holding greater than
662/3% of the then aggregate unpaid principal amount of the A Notes or, if no
such principal amount is then outstanding, Lenders having greater than 662/3% of
the Commitments (or if the aggregate Commitment has been terminated, Lenders
holding greater than 662/3% of the then aggregate unpaid principal amount of the
Notes).
"Swingline Borrowing" means a borrowing consisting of a Swingline Loan
made pursuant to Section 2.04.
"Swingline Commitment" means the obligation of the Swingline Lender to
make Swingline Loans to the Borrower in aggregate principal amount at any one
time outstanding not to exceed the lesser of (i) $10,000,000 and (ii) the
excess, if any, of the Swingline Lenders Commitment as a Lender over the sum of
(x) the aggregate outstanding principal amount of the Swingline Lender's A
Advances as a Lender plus (y) the Swingline Lenders LC Exposure as a Lender, in
each case at such time.
"Swingline Lender" means Bankers Trust, in its capacity as the
Swingline Lender under the Swingline facility described in Section 2.04, and its
successors in such capacity.
"Swingline Loan" means a loan made by the Swingline Lender pursuant to
Section 2.04.
"Tangible Assets" of any Person means, at any date, the gross book
value as shown by the accounting books and records of such Person (maintained in
accordance with GAAP) of all its property both real and personal less (i) the
net book value of all its licenses, patents, patent applications, copyrights,
trademarks, trade names, goodwill, non-compete agreements or organizational
expenses and other like intangibles, (ii) unamortized indebtedness discount and
expense, (iii) all reserves for depreciation, obsolescence, depletion and
amortization of its properties and (iv) all other proper
20
valuation reserves against assets which in accordance with GAAP should be
provided in connection with the business conducted by such Person.
"Teachers Consent Agreement" means the consent agreement dated as of
the date hereof between the Borrower and Teachers Insurance and Annuity
Association of America.
"Termination Date" means the earlier of the date which is the fifth
anniversary of the Effective Date (as the same may be extended pursuant to
Section 2.20 up to the eighth anniversary of the Effective Date) and the date of
termination in whole of the Commitments pursuant to Section 2.07 or 6.01.
"Third Amendment to LC Agreements" means the Third Amendment to Letter
of Credit Reimbursement and Security Agreements dated as of the date hereof
among the Borrower, Supervalu Holdings, Inc., Wettarau Finance Co. and Wachovia
Bank N.A.
"Type" when used in respect of any A Advance, shall mean Base Rate
Advance or LIBOR Advance.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even if the right so
to vote has been suspended by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(l) of
ERISA.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle
E of Title IV of ERISA.
"364-Day Credit Agreement" means the Credit Agreement dated as of the
date of this amendment and restatement of the Original 5-Year Credit Agreement
among the Borrower, the Lenders named therein, The Chase Manhattan Bank as
administrative agent and Bank One, NA as syndication agent, as amended.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistently applied.
21
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The A Advances. Each Lender severally agrees on the terms
and conditions hereinafter set forth, to make A Advances to the Borrower from
time to time on any Business Day during the period from the Effective Date until
the Termination Date in amounts such that the sum of (x) the aggregate principal
amount of A Advances by such Lender plus (y) such Lender's Percentage of the
aggregate principal amount of Swingline Loans plus (z) such Lender's LC Exposure
at any one time outstanding shall not exceed the amount set forth opposite such
Lender's name on Schedule I hereto or, if such Lender has entered into any
Assignment and Acceptance, the amount set forth for such Lender in such
Assignment and Acceptance or, if such Lender has entered into an agreement
required by Section 2.07(b), the amount set forth for such Lender in such
agreement (as each such amount may be reduced pursuant to Section 2.07) (such
amount, such Lender's "Commitment"); provided that the aggregate amount of the
Commitments of the Lenders shall be deemed used from time to time to the extent
of the aggregate amount of the B Advances then outstanding and such deemed use
of the aggregate amount of the Commitments shall be applied to the Lenders
ratably according to their respective Commitments (such deemed use of the
aggregate amount of the Commitments being a "B Reduction"); and provided further
that in no event shall the Swingline Lender be obligated to make any loan
hereunder if, after making such loan and giving effect to the application of any
funds made available at such time to prepay or repay any outstanding Swingline
Loan, the sum of (A) the aggregate principal amount of A Advances. Swingline
Loans and LC Exposure at such time outstanding exceeds an amount equal to (i)
the aggregate Commitment less (II) the aggregate B Reduction. Each A Borrowing
shall be in an aggregate amount not less than $20,000,000 or an integral
multiple of $1,000,000 in excess thereof (or, if less, an aggregate amount equal
to the difference between the aggregate amount of a proposed B Borrowing
requested by the Borrower and the aggregate amount of B Advances offered to be
made by the Lenders and accepted by the Borrower in respect of such B Borrowing,
if such B Borrowing is made on the same date as such A Borrowing) and shall
consist of A Advances of the same Type made on the same day by the Lenders
ratably according to their respective Commitments. Within the limits of each
Lender's Commitment, the Borrower may from time to time borrow under this
Section 2.01, prepay pursuant to Section 2.13(b) and reborrow under this Section
2.01.
SECTION 2.02. Making the A Advances. (a) Each A Borrowing shall be made
on notice, given not later than 11:00 A.M. (New York City time) (i) on the same
Business Day as the proposed A Borrowing in the case of an A Borrowing
consisting of Base Rate Advances or (ii) on the third Business Day prior to the
date of the proposed A Borrowing in the case of an A Borrowing consisting of
LIBOR Advances, by the
22
Borrower to the Agent, which shall give to each Lender prompt notice thereof by
telecopier, telex or cable. Each such notice of an A Borrowing (a "Notice of A
Borrowing") shall be by telecopier, or by telex or cable (confirmed immediately
in writing), in substantially the form of Exhibit B-1 hereto, specifying therein
the requested (i) date of such A Borrowing, (ii) Type of A Advances comprising
such A Borrowing, (iii) aggregate amount of such A Borrowing, and (iv) in the
case of an A Borrowing comprised of LIBOR Advances, the initial Interest Period
for each such A Advance. Each Lender shall, before 1:00 P.M. (New York City
time) on the date of such A Borrowing, make available for the account of its
Applicable Lending Office to the Agent at its address referred to in Section
8.02, in same day funds, such Lender's ratable portion of such A Borrowing.
After the Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article III, the Agent will make such funds available to
the Borrower at the Agent's aforesaid address not later than 2:00 P.M. (New York
city time) on such date.
(b) Anything in subsection (a) above to the contrary notwithstanding,
the Borrower may not select LIBOR Advances for any A Borrowing if the aggregate
amount of such A Borrowing is less than $20,000,000.
(c) Each Notice of A Borrowing shall be irrevocable and binding on the
Borrower. In the case of any A Borrowing that the related Notice of A Borrowing
specifies is to be comprised of LIBOR Advances, the Borrower shall indemnify
each Lender against any loss, cost or expense incurred by such Lender as a
result of any failure to fulfill on or before the date specified in such Notice
of A Borrowing for such A Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the A
Advance to be made by such Lender as part of such A Borrowing when such A
Advance, as a result of such failure, is not made on such date.
(d) Unless the Agent shall have received notice from a Lender (i) by
12:00 Noon on the date of any A Borrowing in the case of any A Borrowing
consisting of Base Rate Advances or (ii) by 12:00 Noon (New York City time) on
the Business Day prior to the date of any A Borrowing consisting of LIBOR
Advances that such Lender will not make available to the Agent such Lender's
ratable portion of such A Borrowing, the Agent may assume that such Lender has
made such portion available to the Agent on the date of such A Borrowing in
accordance with subsection (a) of this Section 2.02 and the Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Agent, such Lender and the Borrower
severally agree to repay to the Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such amount is
made available to the Borrower until the date such amount is repaid to the
Agent, at (i) in the case of the
23
Borrower, the interest rate applicable at the time to A Advances comprising such
A Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall repay to the Agent such corresponding amount, such amount so repaid
shall constitute such Lender's A Advance as part of such A Borrowing for
purposes of this Agreement.
(e) The failure of any Lender to make the A Advance to be made by it as
part of any A Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its A Advance on the date of such A Borrowing, but no
Lender shall be responsible for the failure of any other Lender to make the A
Advance to be made by such other Lender on the date of any A Borrowing.
SECTION 2.03. The B Advances. (a) Each Lender severally agrees that the
Borrower may make B Borrowings under this Section 2.03 from time to time on any
Business Day during the period from the Effective Date until the date occurring
15 days prior to the Termination Date in the manner set forth below; provided
that, following the making of each B Borrowing, the aggregate amount of the
Advances then outstanding shall not exceed an aggregate amount equal to (x) the
Commitments of the Lenders at such time (computed without regard to any B
Reduction) less (y) the aggregate LC Exposure at such time less (z) the
aggregate outstanding principal amount of Swingline Loans at such time.
(i) The Borrower may request a B Borrowing under this Section
2.03 by delivering to the Agent, by telecopier, telex or cable,
confirmed immediately in writing, a notice of a B Borrowing (a "Notice
of B Borrowing"), in substantially the form of Exhibit B-2 hereto,
specifying therein the date and aggregate amount of the proposed B
Borrowing, the maturity date for repayment of each B Advance to be made
as part of such B Borrowing (which maturity date may be (i) 14 to 180
days after the date of the B Borrowing in the case of fixed rate B
Borrowings and (ii) 30 to 180 days after the date of the B Borrowing in
the case of floating rate B Borrowings, but in either case may not be
later than the Termination Date), the interest payment date or dates
relating thereto, and any other terms to be applicable to such B
Borrowing, not later than 10:00 A.M. (New York City time) (A) at least
one (1) Business Day prior to the date of the proposed B Borrowing, if
the Borrower shall specify in the Notice of B Borrowing that the rates
of interest to be offered by the Lenders shall be fixed rates per annum
and (B) at least four (4) Business Days prior to the date of the
proposed B Borrowing, if the Borrower shall specify in the Notice of B
Borrowing that the rates of interest to be offered by the Lenders shall
be floating rates per annum. The Agent shall in turn promptly notify by
telecopier each Lender of each request for a B Borrowing received by it
from the Borrower by sending such Lender a copy of the related Notice
of B Borrowing.
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(ii) Each Lender may, if, in its sole discretion, it elects to
do so, irrevocably offer to make one or more B Advances to the Borrower
as part of such proposed B Borrowing at a rate or rates of interest
specified by such Lender in its sole discretion (but conforming to the
Borrower's Notice of B Borrowing in respect thereof), by notifying the
Agent (which shall give prompt notice thereof to the Borrower), before
10:00 A.M. (New York City time) (A) on the date of such proposed B
Borrowing, in the case of a Notice of B Borrowing delivered pursuant to
clause (A) of paragraph (i) above and (B) three (3) Business Days
before the date of such proposed B Borrowing, in the case of a Notice
of B Borrowing delivered pursuant to clause (B) of paragraph (i) above,
of the minimum amount and maximum amount of each B Advance which such
Lender would be willing to make as part of such proposed B Borrowing
(which amounts may exceed such Lender's Commitment), the rate or rates
of interest therefor and such Lender's Applicable Lending office with
respect to such B Advance; provided that, if the Agent in its capacity
as a Lender shall, in its sole discretion, elect to make any such
offer, it shall notify the Borrower of such offer before 9:00 A.M. (New
York City time) on the date on which notice of such election is to be
given to the Agent by the other Lenders. Unless the Agent shall have
received notice from a Lender before 10:00 A.M. in accordance with the
immediately preceding sentence, the Agent and the Borrower may assume
that such Lender has elected not to make such an offer pursuant to this
Section 2.03(a)(ii).
(iii) The Borrower shall (A) before 11:00 A.M. (New York City
time) on the date of such proposed B Borrowing, in the case of a Notice
of B Borrowing delivered pursuant to clause (A) of paragraph (i) above
and (B) before 1:00 P.M. (New York City time) on the Business Day that
is three (3) Business Days before the date of such proposed B
Borrowing, in the case of a Notice of B Borrowing delivered pursuant to
clause (B) of paragraph (i) above, either:
(x) cancel such B Borrowing by giving the Agent
notice to that effect; or
(y) accept one or more of the offers made by any
Lender or Lenders pursuant to paragraph (ii) above, in its
sole discretion, by giving notice to the Agent of the amount
of each B Advance (which amount shall be equal to or greater
than the minimum amount (subject, however, to the second
paragraph of this subsection (iii) below), and equal to or
less than the maximum amount, notified to the Borrower by the
Agent on behalf of such Lender for such B Advance pursuant to
paragraph (ii) above) to be made by each Lender as part of
such B Borrowing, and reject any remaining offers made by
Lenders pursuant to paragraph (ii) above by giving the Agent
notice to that effect.
25
The acceptance of offers by the Borrower pursuant to this
clause (B) shall be on the basis of ascending rates of interest
contained in the offers made by Lenders pursuant to paragraph (ii)
above; provided that, in the event that two or more of such offers
contain the same rate of interest for a greater aggregate principal
amount than the amount specified in such Notice of B Borrowing (less
the aggregate principal amount of all such offers containing lower
rates of interest that have been accepted by the Borrower pursuant to
this clause (B)), the Borrower shall allocate its acceptance of such
offers among such Lenders on a pro rata basis based on the maximum
amounts bid by such Lenders pursuant to subsection (ii) above.
(iv) If the Borrower notifies the Agent that such B Borrowing
is canceled pursuant to paragraph (iii)(x) above, the Agent shall give
prompt notice thereof to the Lenders and such B Borrowing shall not be
made.
(v) If the Borrower accepts one or more of the offers made by
any Lender or Lenders pursuant to paragraph (iii)(y) above, the Agent
shall in turn promptly notify (A) each Lender that has made an offer as
described in paragraph (ii) above, of the date and aggregate amount of
such B Borrowing and whether or not any offer or offers made by such
Lender pursuant to paragraph (ii) above have been accepted by the
Borrower, (B) each Lender that is to make a B Advance as part of such B
Borrowing, of the amount of each B Advance to be made by such Lender as
part of such B Borrowing and (C) each Lender that is to make a B
Advance as part of such B Borrowing, upon receipt, that the Agent has
received forms of documents appearing to fulfill the applicable
conditions set forth in Article III. Each Lender that is to make a B
Advance as part of such B Borrowing shall, before 12:00 noon (New York
City time) on the date of such B Borrowing specified in the notice
received from the Agent pursuant to clause (A) of the preceding
sentence or any later time when such Lender shall have received notice
from the Agent pursuant to clause (C) of the preceding sentence, make
available for the account of its Applicable Lending Office to the Agent
at its address referred to in Section 8.02 such Lender's portion of
such B Borrowing, in same day funds. Upon fulfillment of the applicable
conditions set forth in Article III and after receipt by the Agent of
such funds, the Agent will make such funds available to the Borrower at
the Agent's aforesaid address. Promptly after each B Borrowing the
Agent will notify each Lender of the amount of the B Borrowing, the
consequent B Reduction, and the dates upon which such B Reduction
commenced and will terminate.
(vi) If the Borrower notifies the Agent that it accepts one or
more of the offers made by any Lender or Lenders pursuant to paragraph
(iii)(y) above, such notice of acceptance shall be irrevocable and
binding on the Borrower. The Borrower shall indemnify each Lender
against any loss, cost or expense incurred
26
by such Lender as a result of any failure to fulfill on or before the
date specified in the related Notice of B Borrowing for such B
Borrowing the applicable conditions set forth in Article III,
including, without limitation, any loss (including loss of anticipated
profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund
the B Advance to be made by such Lender as part of such B Borrowing
when such B Advance, as a result of such failure, is not made on such
date.
(b) Each B Borrowing shall be in an aggregate amount not less than
$15,000,000 or an integral multiple of $1,000,000 in excess thereof and,
following the making of each B Borrowing, the Borrower shall be in compliance
with the limitation set forth in the proviso to the first sentence of subsection
(a) above.
(c) Within the limits and on the conditions set forth in this Section
2.03, the Borrower may from time to time borrow under this Section 2.03, repay
or prepay pursuant to subsection (d) below, and reborrow under this Section
2.03; provided that a B Borrowing shall not be made within three (3) Business
Days of the date of any other B Borrowing.
(d) The Borrower shall repay to the Agent for the account of each
Lender that has made a B Advance, or each other holder of a B Note, on the
maturity date of each B Advance (such maturity date being that specified by the
Borrower for repayment of such B Advance in the related Notice of B Borrowing
delivered pursuant to subsection (a)(i) above and provided in the B Note
evidencing such B Advance), the then unpaid principal amount of such B Advance.
The Borrower shall have no right to prepay any principal amount of a B Advance
unless, and then only on the terms, specified by the Borrower for such B Advance
in the related Notice of B Borrowing delivered pursuant to subsection (a)(i)
above and set forth in the B Note evidencing such B Advance.
(e) The Borrower shall pay interest on the unpaid principal amount of
each B Advance from the date of such B Advance to the date the principal amount
of such B Advance is repaid in full, at the rate of interest for such B Advance
specified by the Lender making such B Advance in its notice with respect thereto
delivered pursuant to subsection (a)(ii) above, payable on the interest payment
date or dates specified by the Borrower for such B Advance in the related Notice
of B Borrowing delivered pursuant to subsection (a)(i) above, as provided in the
B Note evidencing such B Advance.
(f) The indebtedness of the Borrower resulting from each B Advance made
to the Borrower as part of a B Borrowing shall be evidenced by a separate B Note
of the Borrower payable to the order of the Lender making such B Advance. Upon
the repayment in full of the indebtedness of Borrower resulting from such B
Advance, the holder of the B Note evidencing such indebtedness shall return such
B Note to the Borrower at its address specified pursuant to Section 8.02.
27
SECTION 2.04. Swingline Loans. (a) The Swingline Lender agrees, on the
terms and conditions set forth in this Agreement, to make loans to the Borrower
pursuant to this Section 2.04 from time to time on any Business Day during the
period from the Effective Date until the Termination Date in amounts such that
the aggregate principal amount of Swingline Loans at any one time outstanding
shall not exceed its Swingline Commitment. Each loan under this Section 2.04
shall be in a principal amount of at least $1,000,000 or any larger multiple of
$1,000,000. All Swingline Loans shall be made as Base Rate Advances. Within the
foregoing limits, the Borrower may borrow under this Section 2.04, repay
pursuant to Section 2.08(b), or to the extent permitted by Section 2.13(c),
prepay Swingline Loans and reborrow under this Section 2.04.
(b) Notice of Swingline Borrowing. The Borrower shall give the
Swingline Lender notice (a "Notice of Swingline Borrowing) not later than 1:00
P.M. (New York City time) on the date of each Swingline Borrowing, specifying
(i) the date of such Swingline Borrowing, which shall be a Business Day, and
(ii) the amount of such Borrowing.
(c) Conversion of Swingline Loans to A Advances. The Swingline Lender,
at any time in its sole and absolute discretion, may on behalf of the Borrower
(which hereby irrevocably directs the Swingline Lender to so act on its behalf)
notify each Lender (including the Swingline Lender) to make an A Advance to the
Borrower in a principal amount equal to such Lender's Percentage of the amount
of such Swingline Loan; provided, however that such notice shall be deemed to
have automatically been given upon the occurrence of an Event of Default under
Section 6.01(e). Upon notice from the Swingline Lender, each Lender (other than
the Swingline Lender) will immediately transfer to the Swingline Lender, in
immediately available funds, an amount equal to such Lender's Percentage of the
amount of such Swingline Loan so repaid. Each Lender's obligation to transfer
the amount of such A Advance to the Swingline Lender shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such Lender or any other Person may have against the Swingline Lender,
(ii) the occurrence or continuance of a Default or an Event of Default or the
termination of the Commitments, (iii) any adverse change in the condition
(financial or otherwise) of the Borrower or any other Person, (iv) any breach of
this Agreement by the Borrower or any other Lender or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
SECTION 2.05. Letters of Credit. (a) Commitment to Issue Letters of
Credit. Each LC Bank agrees subject to the terms and conditions hereof, to issue
Letters of Credit upon the request of the Borrower on a sight basis from time to
time on any Business Day during the period from the Effective Date until the
Termination Date; provided that immediately after each such Letter of Credit is
issued, the aggregate amount of the Letter of Credit Liabilities shall not
exceed the Available LC Amount. Each Letter
28
of Credit shall be issued in an amount equal to or greater than $100,000. Upon
the date of issuance by an LC Bank of a Letter of Credit, the LC Bank shall be
deemed, without further action by any party hereto, to have sold to each Lender,
and each Lender shall be deemed, without further action by any party hereto, to
have purchased from the LC Bank, a participation in such Letter of Credit and
the related Letter of Credit Liabilities in proportion to its Percentage. The
Borrower shall pay to the LC Bank issuance fees and other customary fees in the
amounts and at the times as agreed between the Borrower and the LC Bank.
(b) Request for Issuance. The Borrower shall give the LC Bank at least
three (3) Business Days' prior notice (effective upon receipt) of a request for
the issuance of a Letter of Credit specifying the date each Letter of Credit is
to be issued, and describing the proposed terms of such Letter of Credit and the
nature of the transactions proposed to be supported thereby. Upon issuance of or
amendments to a Standby Letter of Credit, the LC Bank shall promptly notify the
Agent, and the Agent shall promptly notify each Lender of the contents thereof
and of the amount of such Lender's participation in such Standby Letter of
Credit. The issuance by the LC Bank of each Letter of Credit shall, in addition
to the conditions precedent set forth in Article III, be subject to the
conditions precedent that such Letter of Credit shall be in such form and
contain such terms as shall be satisfactory to the LC Bank and that the Borrower
shall have executed and delivered such other instruments and agreements relating
to such Letter of Credit as the LC Bank shall have reasonably requested. No
Standby Letter of Credit (other than those listed in Schedule IX) shall have an
expiration date extending beyond three (3) days prior to the Termination Date.
No Commercial Letter of Credit (other than those listed in Schedule IX) shall
have an expiration date extending beyond 180 days from the issuance date nor
have an expiration date less than 3 days prior to the Termination Date. In the
event that the LC Bank issuing any Letter of Credit is other than Bankers Trust,
such LC Bank will send by facsimile transmission to the Agent, promptly on the
first Business Day of each week, the daily aggregate amount available for
drawing under all Letters of Credit issued by such LC Bank for the previous
week. The Agent shall deliver to each Lender, upon the end of each calendar
month and upon each Letter of Credit fee payment, a report setting forth for
such period the daily aggregate amounts available for drawing under all Letters
of Credit issued by all ▇▇ ▇▇▇▇▇ and outstanding during such period.
(c) Reimbursement of Payments. Upon receipt from the beneficiary of any
Letter of Credit of any demand for payment or other drawing under such Letter of
Credit and finding such drawing in substantial compliance with the Letter of
Credit terms, the LC Bank shall notify the Borrower as to the amount to be paid
as a result of such demand or drawing and the respective payment date. If there
are at such time amounts on deposit in the Holding Account, the Borrower shall
notify the Agent thereof, and the Agent shall withdraw an amount equal to the
amount to be paid as a result of such demand or drawing or, if less, the amount
on deposit in the Holding Account, on the payment date and pay
29
such amount to the applicable LC Bank. Unless the applicable LC Bank is
reimbursed in full from amounts on deposit in the Holding Account, the Borrower
shall reimburse the LC Bank in an amount equal to the amount of such drawing by
1:00 P.M. (New York City time) on the day on which such drawing is paid in
immediately available funds. If the LC Bank is not reimbursed for the amount of
such drawing as provided in the preceding sentence, the LC Bank shall notify the
Agent, and the Agent shall notify each other Lender, thereof by 1:30 P.M. (New
York City time) on the date such drawing is paid. If at any time the LC Bank
shall make a payment to a beneficiary of a Letter of Credit in respect of a
drawing or in respect of an acceptance created in connection with a drawing
under such Letter of Credit and such drawing has not been paid by the Borrower,
each Lender will pay to the Agent, for the account of the LC Bank, immediately
upon the LC Bank's demand at any time during the period commencing after such
payment until reimbursement therefor in full by the Borrower, an amount equal to
such Lender's Percentage multiplied by the amount of such payment, together with
interest on such amount for each day from the date of the LC Bank's demand for
such payment (or, if such demand is made after 3:00 P.M. (New York City time) on
such date, from the next succeeding Business Day) to the date of payment by such
Lender of such amount at a rate of interest per annum equal to the Federal Funds
Rate for such period.
(d) Reimbursement Obligations Unconditional. The Borrower shall be
irrevocably and unconditionally obligated forthwith to reimburse the LC Bank for
any amounts paid by the LC Bank upon any drawing under any Letter of Credit on
the date of such payment by the LC Bank, without presentment, demand, protest or
other formalities of any kind; provided that the Borrower shall not hereby be
precluded from asserting any claim for direct (but not consequential) damages
suffered by the Borrower to the extent, but only to the extent, caused by (i)
the willful misconduct or gross negligence (as determined by a court of
competent jurisdiction) of the LC Bank in determining whether a request
presented under any Letter of Credit complied with the terms of such Letter of
Credit or (ii) the LC Bank's failure to pay under any Letter of Credit after the
presentation to it of a request strictly complying with the terms and conditions
of the Letter of Credit. All such amounts paid by the LC Bank and remaining
unpaid by the Borrower shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the sum of 2% plus the rate applicable
to Base Rate Advances for such day. The LC Bank will promptly pay to each Lender
ratably in accordance with its Percentage all amounts received from the Borrower
for application in payment, in whole or in part, of the Reimbursement obligation
in respect of any Letter of Credit, but only to the extent such Lender has made
payment to the LC Bank in respect of such Letter of Credit pursuant to Section
2.05(c).
(e) Indemnification. The Borrower hereby indemnifies and holds harmless
each Lender and the Agent from and against any and all claims and damages,
losses, liabilities, costs or expenses which such Lender or the Agent may incur
(or which way be claimed against such Lender or the Agent by any Person
whatsoever) by reason of or in
30
connection with the execution and delivery or transfer of or payment or failure
to pay under any Letter of Credit, including, without limitation, any claims,
damages, losses, liabilities, costs or expenses which the LC Bank may incur by
reason of or in connection with the failure of any other Lender to fulfill or
comply with its obligations to the LC Bank hereunder (but nothing herein
contained shall affect any rights the Borrower may have against such defaulting
Lender); provided that the Borrower shall not be required to indemnify any
Lender or the Agent for any claims, damages, losses, liabilities, costs or
expenses to the extent, but only to the extent, caused by (i) the willful
misconduct or gross negligence (as determined by a court of competent
jurisdiction) of the LC Bank, such Lender or the Agent in determining whether a
request presented under any Letter of Credit complied with the terms of such
Letter of Credit or (ii) the LC Bank's failure to pay under any Letter of Credit
after the presentation to it of a request strictly complying with the terms and
conditions of the Letter of Credit. Nothing in this Section 2.05(e) is intended
to limit the obligations of the Borrower under any other provision of this
Agreement.
(f) Limited Liability of the LC Bank. The Borrower assumes all risks of
the acts or omissions of any beneficiary and any transferee of any Letter of
Credit with respect to its use of such Letter of Credit. The Lenders, the LC
Bank and their respective officers and directors shall not be liable or
responsible for, and the obligations of each Lender to make payments, and of the
Borrower to reimburse the LC Bank for payments, pursuant to this Section 2.05
shall not be excused by, any action or inaction of any Lender or the LC Bank
related to any of: (i) the use which may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (ii)
the validity, sufficiency or genuineness of documents presented under any Letter
of Credit, or of any endorsements thereon, even if such documents should in fact
prove to be in any or all respects invalid, insufficient, fraudulent or forged;
(iii) payment by the LC Bank against presentation of documents to the LC Bank
which do not strictly comply with the terms of any Letter of Credit, including
failure of any documents to bear any reference or adequate reference to such
Letter of Credit, absent such LC Bank's gross negligence or willful misconduct;
or (iv) any other circumstances whatsoever in making or failing to make or
notifying or failing to notify the LC Bank that it is required to make any
payment under any Letter of Credit. Notwithstanding the foregoing, the Borrower
shall have a claim against the LC Bank and the LC Bank shall be liable to the
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential, damages suffered by the Borrower which were caused by (i) the LC
Bank's willful misconduct or gross negligence (as determined by a court of
competent jurisdiction) in determining whether documents presented under any
Letter of Credit comply with the terms thereof or (ii) the LC Bank's willful
failure to pay, or to notify any Lender that it is required to pay, under any
Letter of Credit after the presentation to the LC Bank by any beneficiary (or a
successor beneficiary to whom such Letter of Credit has been transferred in
accordance with its terms) of documents strictly complying with the terms and
conditions of such Letter of Credit. Subject to the preceding sentence, the LC
Bank may accept documents that appear on
31
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary unless any beneficiary
(or a successor beneficiary to whom such Letter of Credit has been transferred
in accordance with its terms) or the Borrower shall have notified the LC Bank
that such documents do not comply with the terms and conditions of such Letter
of Credit. Each Lender shall, ratably in accordance with its Percentage,
indemnify the LC Bank (to the extent not reimbursed by the Borrower) against any
cost, expense (including counsel fees and disbursements), claim, demand, action,
loss or liability (except such as result from the LC Bank's gross negligence or
willful misconduct) that the LC Bank may suffer or incur in connection with this
Agreement or any action taken or omitted by the LC Bank hereunder.
(g) Letters of Credit Outside Facility. Nothing in this Agreement shall
be construed as limiting the right of the Borrower to request, or of any Lender
to issue, letters of credit for the account of the Borrower that are not
"Letters of Credit" for purposes of this Agreement. No request by the Borrower
to any Lender for the issuance of a letter or credit shall be deemed a request
for the issuance of a Letter of Credit under this Agreement unless (i) the
Borrower's request for such letter of credit states in writing that such letter
of credit, when issued, shall be a Letter of Credit under this Agreement, or
(ii) such Lender conditions its agreement to issue such letter of credit, in
writing, on the Borrower's agreement that such letter of credit constitute a
Letter of Credit under this Agreement.
(h) If after giving effect to any reduction of the Commitments pursuant
to Section 2.07(a), the aggregate amount available to be drawn under all
outstanding Letters of Credit exceeds the aggregate amount of the Commitments,
the Borrower shall deposit into the Holding Account an amount in cash sufficient
to cause the amount deposited in the Holding Account to equal such excess. At
any time after such deposit is made, if an outstanding Letter of Credit expires
or is reduced without the full amount thereof having been drawn, the Agent shall
withdraw from the Holding Account and deliver to the Borrower an amount equal to
the amount by which the amount on deposit in the Holding Account exceeds the
aggregate amount by which the amount available to be drawn under outstanding
Letters of Credit (after giving effect to such expiration or reduction) exceeds
the aggregate amount of the Commitments.
(i) Pledged Bonds. Wachovia Bank, N.A. agrees with the Agent and the
Lenders that it will not exercise any of its rights, powers or remedies under
the Reimbursement and Security Agreements in respect of the Pledged Bonds (as
defined in the Third Amendment to LC Agreements) without the consent of the
Majority Lenders, and that any amounts received upon the exercise of such
rights, powers or remedies (whether in cash or other property) shall be held for
the benefit of the other Secured Parties (as defined in the Collateral and
Guarantee Agreement).
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SECTION 2.06. Fees. (a) Facility Fee. The Borrower agrees to pay to the
Agent for the account of each Lender a facility fee on the amount of such
Lender's Commitment (whether used or unused and without giving effect to any B
Reductions) from the Effective Date in the case of each Lender that is a
signatory hereto or, in the case of an assignee Lender, from the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender
or, in the case of a new Lender from the effective date specified in the
agreement entered into by such new Lender pursuant to Section 2.07(b) pursuant
to which it became a Lender, until the Termination Date, payable in arrears on
the on the last Business Day of each March, June, September and December during
the term of such Lender's Commitment, commencing December 31, 1997, and on the
Termination Date, at a rate per annum equal to the Applicable Facility Fee Rate
in effect from time to time.
(b) Letter of Credit Commission. The Borrower agrees to pay to the
Agent for the account of each Lender a Letter of Credit commission with respect
to each Letter of Credit, computed for each day from and including the date of
issuance of such Letter of Credit until the last day a drawing is available
under such Letter of Credit, at a rate per annum equal to the Applicable
Interest Rate Margin in effect from time to time on the undrawn amount of such
Letter of Credit on such day. Such commission shall be payable quarterly in
arrears on the last Business Day of each March, June, September and December
during the term of each Letter of Credit, and on the Termination Date.
(c) Agent's Fees. The Borrower shall pay to the Agent for its own
account such fees, and at such times, as set forth in the letter, dated August
16, 2001, between the Borrower and the Agent.
(d) LC Bank Fees. The Borrower hereby agrees to pay directly to an LC
Bank upon issuance of, drawing under, and/or amendment of, a Letter of Credit
issued by it such amount as shall at the time of such issuance, drawing or
amendment by the administrative charge which such LC Bank is customarily
charging for issuances of, drawings under or amendments of, letter of credit
issued by it.
SECTION 2.07. Termination or Reduction of the Commitments or the
Swingline Commitment; Voluntary Reduction; Increase in Aggregate Commitment. (a)
The Borrower shall have the right, upon at least three (3) Business Days' notice
to the Agent, to terminate in whole or reduce ratably in part the unused
portions of (x) the respective Commitments of the Lenders, or (y) the Swingline
Commitment; provided that the aggregate amount of the Commitments of the Lenders
shall not be reduced to an amount that is less than the sum of the aggregate
principal amount of the Advances and Swingline Loans then outstanding plus the
aggregate outstanding amount of the Letter of Credit Liabilities, and the
aggregate amount of the Swingline Commitment shall not be reduced to an amount
that is less than the aggregate principal amount of the Swingline Loans then
outstanding; and provided further that each partial reduction shall be in the
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aggregate amount of $25,000,000 ($1,000,000 in the case of the Swingline
Commitment) or an integral multiple of $1,000,000 ($1,000.000 in the case of the
Swingline Commitment) in excess thereof.
(b) Increase in the Commitment. The Borrower may, at its option, at any
time after the 90th day after the Effective Date, on a single occasion during
each fiscal year, seek to increase the Commitment up to a maximum Commitment
amount of $600,000,000 upon at least 30 days (but not more than 45 days) written
notice to the Agent, which notice shall specify the amount of any such increase
and shall be delivered at a time when (x) no Default or Event of Default has
occurred and is continuing and (y) no previous reduction to the Commitment has
been requested by the Borrower pursuant to Section 2.07(a). The Borrower shall,
after giving such notice, offer the increase in the Commitment (i) first on a
pro-rata basis to the Lenders, which Lenders may in their individual sole
discretion decline such offer, and (ii) then (A) on a non pro-rata basis to
Lenders and/or (B) to other banks or entities acceptable to the Agent and the
Company, provided that the minimum final allocated Commitment of each such bank
or other entity is equal to or in excess of $10,000,000. No increase in the
Commitment shall become effective until the existing or new Lender extending
such incremental commitment amount shall have delivered to the Agent a writing
in form reasonably satisfactory to the Agent pursuant to which such existing
Lender states the amount of its Commitment increase and any such new Lender
states its Commitment amount and agrees to assume and accept the obligation and
rights of a Lender hereunder. The Lenders (new or existing) shall accept an
assignment from the existing Lenders of an interest in each then outstanding A
Advance such that, after giving effect thereto, all A Advances are held ratably
by the Lenders in proportion to their respective Commitments. The Company shall
make any payments under Section 8.04(b) resulting from such assignments. The
minimum amount by which the Commitments may be increased on any one occasion
under this Section 2.07(b) is $50,000,000, and the Commitments may not be
increased to more than $600,000,000 pursuant to this Section 2.07(b).
SECTION 2.08. Repayment of A Advances, B Advances and Swingline Loans.
(a) The Borrower shall repay the principal amount of each A Advance made by each
Lender in accordance with the A Note to the order of such Lender.
(b) The Borrower shall repay the principal amount of each B Advance
made by each Lender in accordance with the B Note to the order of such Lender
evidencing such B Advance.
(c) On the last Business Day of each calendar quarter, the Borrower
shall repay all Swingline Loans in full and may not reborrow Swingline Loans
until the next succeeding Business Day.
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SECTION 2.09. Interest on Advances and Swingline Loans. (a) Ordinary
Interest on A Advances. The Borrower shall pay interest on the unpaid principal
amount of each A Advance made by each Lender from the date of such A Advance
until such principal amount shall be paid in full, at the following rates per
annum:
(i) Base Rate Advances. If such A Advance is a Base Rate
Advance, a rate per annum equal at all times to, from the Effective
Date to the Termination Date, the Base Rate in effect from time to
time, payable quarterly on the last Business Day of each March, June,
September and December.
(ii) LIBOR Advances. If such A Advance is a LIBOR Advance, a
rate per annum equal at all times during each Interest Period for such
A Advance to the sum of (x) the LIBOR for such Interest Period for such
A Advance plus (y) the Applicable Interest Rate Margin in effect on the
first day of such Interest Period, payable on the last day of such
Interest Period and, if such Interest Period has a duration of more
than three months, on each day that occurs during such Interest Period
every three months from the first day of such Interest Period and on
the date such LIBOR Advance shall be Converted or paid in full.
(b) Interest on Swingline Loans. The Borrower shall pay interest on the
unpaid principal amount of each Swingline Loan made by the Swingline Lender from
the date of such Swingline Loan until such principal amount shall be paid in
full at a rate per annum equal at all times to the Base Rate in effect from time
to time, payable quarterly on the last Business Day of each March, June,
September and December.
(c) Default Interest. The Borrower shall pay interest on the unpaid
principal amount of each Advance and Swingline Loan that is not paid when due
and on the unpaid amount of all interest, fees and other amounts payable
hereunder that is not paid when due, payable on demand, at a rate per annum
equal at all times to 2% per annum above the Base Rate in effect from time to
time.
SECTION 2.10. Additional Interest on LIBOR Advances. The Borrower shall
pay to each Lender, so long as such Lender shall be required under regulations
of the Board of Governors of the Federal Reserve System to maintain reserves
with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities, additional interest on the unpaid principal amount of each LIBOR
Advance of such Lender, from the date of such A Advance until such principal
amount is paid in full, at an interest rate per annum equal at all times to the
remainder obtained by subtracting (i) the LIBOR for the Interest Period for such
A Advance from (ii) the rate obtained by dividing such LIBOR by a percentage
equal to 100% minus the LIBOR Reserve Percentage of such Lender for such
Interest Period, payable on each date on which interest is payable on such A
Advance. Such additional interest shall be determined by such Lender and
notified in writing to the Borrower through the Agent.
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SECTION 2.11. Interest Rate Determination. (a) Each Reference Bank
agrees to furnish to the Agent timely information for the purpose of determining
each LIBOR. If any one or more of the Reference Banks shall not furnish such
timely information to the Agent for the purpose of determining any such interest
rate, the Agent shall determine such interest rate on the basis of timely
information furnished by the remaining Reference Banks.
(b) The Agent shall give prompt notice to the Borrower and the Lenders
of the applicable interest rate determined by the Agent for purposes of Section
2.09(a)(i) or (ii), and the applicable rate, if any, furnished by each Reference
Bank for the purpose of determining the applicable interest rate under Section
2.09(a)(ii).
(c) If fewer than two Reference Banks furnish timely information to the
Agent for determining the LIBOR for any LIBOR Advances, the LIBOR with respect
to such LIBOR Advance shall be determined by the Agent to be the offered rate
per annum at which deposits in dollars appear with respect to the relevant
Interest Period on the Dow ▇▇▇▇▇ Market Service Page 3750 (or any successor
page), or if such offered rate is not available, then the rate per annum at
which deposits in dollars appear with respect to such Interest Period on the
Reuters Screen LIBOR Page (or any successor page) in each case as of 11:00 a.m.
(London time), two Business Days prior to the beginning of such Interest Period
or in the event that the foregoing offered rates are not available then:
(i) the Agent shall forthwith notify the Borrower and the
Lenders that the interest rate cannot be determined for such LIBOR
Advances.
(ii) each such Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate
Advance (or if such Advance is then a Base Rate Advance, will continue
as a Base Rate Advance) and
(iii) the obligation of the Lenders to make, or to Convert A
Advances into, LIBOR Advances shall be suspended until the Agent shall
notify the Borrower and the Lenders that two or more Reference Banks
have furnished timely information to the Agent for the purpose of
determining the LIBOR.
(d) If any Reference Bank shall fail to furnish timely information to
the Agent pursuant to this Section 2.09 the Borrower may, with the consent of
the Agent (which consent shall not be unreasonably withheld), appoint another
Lender as a replacement for such Reference Bank.
(e) If, with respect to any LIBOR Advances, the Majority Lenders notify
the Agent that the LIBOR for any Interest Period for such Advances will not
adequately reflect the cost to such Majority Lenders of making, funding or
maintaining their
36
respective LIBOR Advances for such Interest Period, the Agent shall forthwith so
notify the Borrower and the Lenders, whereupon
(i) each LIBOR Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate
Advance and
(ii) the obligation of the Lenders to make, or to Convert A
Advances into, LIBOR Advances shall be suspended until the Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.
(f) If the Borrower shall fail to select a new Interest Period for any
outstanding LIBOR Advances in accordance with the provisions contained in the
definition of "Interest Period" in Section 1.01, the Agent will forthwith so
notify the Borrower and the Lenders and such Advances will automatically, on the
last day of the then existing Interest Period therefor, Convert into Base Rate
Advances.
(g) On the date on which the aggregate unpaid principal amount of A
Advances comprising any A Borrowing shall be reduced, by payment or prepayment
or otherwise, to less than $20,000,000, such A Advances shall, if they are LIBOR
Advances, automatically Convert into Base Rate Advances, and on and after such
date the right of the Borrower to Convert such A Advances into LIBOR Advances
shall terminate; provided, however that, if and so long as each such A Advance
shall be of the same Type and have the same Interest Period as A Advances
comprising another A Borrowing or other A Borrowings, and the aggregate unpaid
principal amount of all such A Advances shall equal or exceed $20,000,000, the
Borrower shall have the right to continue all such A Advances as, or to Convert
all such A Advances into, Advances of such Type having such Interest Period.
SECTION 2.12. Voluntary Conversion of A Advances. The Borrower may on
any Business Day, upon notice given to the Agent not later than 11:00 A.M. (New
York City time) on the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Sections 2.11 and 2.15, Convert all
A Advances of one Type comprising the same A Borrowing into A Advances of the
other Type; provided, however that any Conversion of any LIBOR Advances into
Base Rate Advances shall be made on, and only on, the last day of an Interest
Period for such LIBOR Advances and any Conversion of Base Rate Advances into
LIBOR Advances shall be in an amount not less than $20,000.000; and provided
further, however, that the Borrower shall not convert any Base Rate Advances
into LIBOR Advances if A Default has occurred and is continuing. Each such
notice of a Conversion shall, within the restrictions specified above, specify
(i) the date of such Conversion, (ii) the A Advances to be Converted and (iii)
if such Conversion is into LIBOR Advances, the duration of the initial Interest
Period for each such A Advance. Each notice of Conversion shall be irrevocable
and binding on the Borrower.
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SECTION 2.13. Prepayments of A Advances and Swingline Loans. (a) The
Borrower shall have no right to prepay any principal amount of any A Advances
other than as provided in subsection (b) below, or any principal amount of any
Swingline Loans other than as provided in subsection (c) below.
(b) The Borrower may, upon at least one (1) Business Day's notice in
the case of Base Rate Advances, and three (3) Business Days' notice in the case
of LIBOR Advances to the Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given the Borrower shall, prepay
the outstanding principal amounts of the A Advances comprising part of the same
A Borrowing in whole or ratably in part, together with accrued interest to the
date of such prepayment on the principal amount prepaid; provided, however, that
(x) each partial prepayment shall be in an aggregate principal amount not less
than $1,000,000 or an integral multiple thereof and (y) in the case of any such
prepayment of a LIBOR Advance, the Borrower shall be obligated to reimburse the
Lenders in respect thereof pursuant to Section 8.04(b). (c) The Borrower may,
upon notice to the Swingline Lender, prepay any Swingline Loan in whole by
paying the principal amount thereof.
SECTION 2.14. Increased Costs. (a) If, due to either (i) the
introduction of or any change (other than any change by way of imposition or
increase of reserve requirements included in the LIBOR Reserve Percentage) in or
in the interpretation of any law, regulation, rule or guideline promulgated or
made after the date this Agreement is executed and delivered by the Borrower or
(ii) the compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) promulgated or
made after the date this Agreement is executed and delivered by the Borrower,
there shall be any increase in the cost to any Lender of agreeing to make or
making, funding or maintaining LIBOR Advances, then the Borrower shall from time
to time, upon written demand by such Lender (with A copy of such written demand
to the Agent), pay to the Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost; provided
that the Borrower shall not be obligated to pay any such additional amounts that
are attributable to the period (the "Excluded Period") ending 90 days prior to
the Borrower's receipt of such written notice; provided further, however, that
to the extent such additional amounts accrue during the Excluded Period because
of the retroactive effect of the applicable law, rule, regulation, guideline or
request promulgated during the 90 day period prior to the Borrower's receipt of
such written notice, the limitation set forth in the foregoing proviso shall not
apply. A certificate, made in good faith and in reasonable detail, as to the
amount of such increased cost, submitted to the Borrower and the Agent by such
Lender, shall, except for demonstrable or calculation error, be conclusive and
binding for all purposes.
(b) If any Lender determines that compliance with any law or regulation
or any guideline or request from any central bank or other governmental
authority (whether
38
or not having the force of law) promulgated or made after the date this
Agreement is executed and delivered by the Borrower affects or would affect the
amount of capital required or expected to be maintained by such Lender or any
corporation controlling such Lender and that the amount of such capital is
increased by or based upon the existence of such Lender's commitment to lend
hereunder and other commitments of this type, then, within 30 days after written
notice and demand from such Lender (with A copy of such demand to the Agent),
the Borrower shall immediately pay to the Agent for the account of such Lender,
from time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender or such corporation in the light of such circumstances,
to the extent that such Lender reasonably determines such increase in capital to
be allocable to the existence of such Lender's commitment to lend hereunder;
provided that the Borrower shall not be obligated to pay any such additional
amounts that are attributable to the period (the "Excluded Period") ending 90
days prior to the Borrower's receipt of such written notice; provided further,
however, that to the extent such additional amounts accrue during the Excluded
Period because of the retroactive effect of the applicable law, rule,
regulation, guideline or request promulgated during the 90 day period prior to
the Borrower's receipt of such written notice, the limitation set forth in the
foregoing proviso shall not apply. A certificate, made in good faith and in
reasonable detail, as to such amounts submitted to the Borrower and the Agent by
such Lender shall, except for demonstrable or calculation error, be conclusive
and binding for all purposes.
(c) Any Lender claiming any additional amounts payable pursuant to this
Section 2.14 shall use reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions) to change the jurisdiction of its lending
office if the making of such A change would avoid the need for, or reduce the
amount of, any such additional amounts that may thereafter accrue and would not,
in the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.
SECTION 2.15. Illegality. Notwithstanding any other provision of this
Agreement, if any Lender shall notify the Agent that the introduction of or any
change in or in the interpretation of any law or regulation makes it unlawful,
or any central bank or other governmental authority asserts that it is unlawful,
for any Lender or its LIBOR Lending Office to perform its obligations hereunder
to make LIBOR Advances or to fund or maintain LIBOR Advances hereunder, (i) the
obligation of such Lender to make, or to Convert A Advances into, LIBOR Advances
shall be suspended until such Lender shall notify the Borrower and the Agent
that the circumstances causing such suspension no longer exist and (ii) the
Borrower shall, on the last day of the Interest Period then applicable thereto
or, if it is unlawful for such Lender to maintain such LIBOR Advances for the
balance of any such Interest Period, on the last day on which the Borrower has
been notified by such Lender that such LIBOR Advances may be lawfully
maintained, Convert all LIBOR Advances of such Lender then outstanding into Base
Rate Advances in accordance with Section 2.12.
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SECTION 2.16. Payments and Computations. (a) The Borrower shall make
each payment hereunder and under the Notes without setoff or counterclaim not
later than 12:00 Noon (New York City time) on the day when due in U.S. dollars
to the Agent at its address referred to in Section 8.02 in same day funds. The
Agent will promptly thereafter cause to be distributed like funds relating to
the payment of principal or interest or facility fees ratably (other than
amounts payable pursuant to Section 2.03, 2.10, 2.14, 2.18 or 8.04(b)) to the
Lenders for the account of their respective Applicable Lending Offices, and like
funds relating to the payment of any other amount payable to any Lender to such
Lender for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement. Upon its acceptance of
an Assignment and Acceptance and recording of the information contained therein
in the Register pursuant to Section 8.07(c), from and after the effective date
specified in such Assignment and Acceptance, the Agent shall make all payments
hereunder and under the Notes in respect of the interest assigned thereby to the
Lender assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods prior to
such effective date directly between themselves.
(b) All computations of interest based on the Base Rate shall be made
by the Agent on the basis of A year of 365 or 366 days, as the case may be, and
all computations of interest based on the LIBOR or the Federal Funds Rate (for
all purposes other than the calculation of the Base Rate) and of facility fees
shall be made by the Agent, and all computations of interest pursuant to Section
2.10 shall be made by A Lender, on the basis of A year of 360 days, in each case
for the actual number of days (including the first day but excluding the last
day) occurring in the period for which such interest or facility fees are
payable. Each determination by the Agent (or, in the case of Section 2.10, by A
Lender) of an interest rate hereunder shall be conclusive and binding for all
purposes, absent calculation or demonstrable error.
(c) Whenever any payment hereunder or under the Notes shall be stated
to be due on A day other than A Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or facility fee, as the case
may be; provided, however that if such extension would cause payment of interest
on or principal of LIBOR Advances to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.
(d) Unless the Agent shall have received notice from the Borrower prior
to the date on which any payment is due to the Lenders hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent that the Borrower shall not have so made such payment in full to the
Agent, each Lender shall repay to the Agent forthwith
40
on demand such amount distributed to such Lender together with interest thereon,
for each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Agent, at the Federal Funds Rate.
SECTION 2.17. Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the A Advances owing to it (other than
pursuant to Section 2.10, 2.14, 2.18 or 8.04(b)) in excess of its ratable share
of payments on account of the A Advances obtained by all the Lenders, such
Lender shall forthwith purchase from the other Lenders such participations in
the A Advances owing to them as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them, provided, however
that if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender, such purchase from each Lender shall be rescinded and
such Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery together with an amount equal to such Lender's ratable
share (according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Borrower agrees that any Lender so
purchasing A participation from another Lender pursuant to this Section 2.17
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.
SECTION 2.18. Taxes. (a) Any and all payments by the Borrower hereunder
or under the Notes shall be made, in accordance with Section 2.16, free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Agent, net income taxes
that are imposed by the United States and franchise taxes and net income taxes
that are imposed on such Lender or the Agent by the state or foreign
jurisdiction under the laws of which such Lender or the Agent (as the case may
be) is organized or any political subdivision thereof and, in the case of each
Lender, franchise taxes and net income taxes that are imposed on such Lender by
the state or foreign jurisdiction of such Lender's Applicable Lending Office or
any political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Lender or
the Agent, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.18) such Lender or the Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such
41
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
(b) In addition, the Borrower agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or under the other Loan
Documents or from the execution delivery or registration of, or otherwise with
respect to, this Agreement or the other Loan Documents (hereinafter referred to
as "Other Taxes").
(c) The Borrower will indemnify each Lender and the Agent for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section)
imposed on or paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant governmental authority.
This indemnification shall be made within 30 days from the date such Lender or
the Agent (as the case may be) makes written demand therefor. A certificate,
made in good faith and in reasonable detail, as to the amount of such payment or
liability delivered to the Borrower by a Lender, or by the Agent on its own
behalf on or behalf of a Lender, shall be conclusive absent manifest error.
(d) Each Lender shall, at the time of any written demand for
indemnification as set forth in subsection (c) above, provide to the Borrower A
receipt for, or other evidence of the imposition of or the payment of, Taxes or
Other Taxes to be indemnified under this Section 2.18.
(e) Within 30 days after the date of any payment of Taxes, the Borrower
will furnish to the Agent, at its address referred to in Section 8.02,
appropriate evidence of payment thereof.
(f) For purposes of this Section 2.18, the terms "United States" and
"United States person" shall have the meanings specified in Section 7701 of the
Internal Revenue Code of 1986, as amended from time to time.
(g) Each Lender organized under the laws of a jurisdiction outside the
United States shall, on or prior to the date of its execution and delivery of
this Agreement in the case of each Lender that is a signatory hereto, and on the
date of the Assignment and Acceptance pursuant to which it became A Lender in
the case of each other Lender, and from time to time thereafter if requested in
writing by the Borrower or the Agent (but only so long thereafter as such Lender
remains lawfully able to do so), provide the Agent and the Borrower with
Internal Revenue Service Form ▇-▇▇▇▇, ▇-▇▇▇▇ or W-9, as appropriate, or any
successor or other form prescribed by the Internal Revenue Service, certifying
that such Lender is exempt from or entitled to a reduced rate of United States
42
withholding tax on payments of interest pursuant to this Agreement or the Notes.
If the form provided by a Lender at the time such Lender first becomes a party
to this Agreement indicates a United States interest withholding tax rate in
excess of zero, withholding tax at such rate shall be considered excluded from
Taxes unless and until such Lender provides the appropriate form certifying that
a lesser rate applies, whereupon withholding tax at such lesser rate only shall
be considered excluded from Taxes for periods governed by such form; provided,
however, that, if at the date of the Assignment and Acceptance pursuant to which
a Lender assignee becomes a party to this Agreement, the Lender assignor was
entitled to payments under subsection (a) in respect of United States
withholding tax with respect to interest paid at such date, then, to the extent
such tax results in liability for such payments, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States interest withholding tax,
if any, applicable with respect to the Lender assignee on such date.
(h) For any period with respect to which a Lender has failed to provide
the Borrower with the appropriate form described in subsection (g) (other than
if such failure is due to A change in law occurring subsequent to the date on
which a form originally was required to be provided, or if such form otherwise
is not required under subsection (g)), such Lender shall not be entitled to
indemnification under subsection (a) or (c) with respect to Taxes imposed by the
United States by reason of such failure; provided, however, that, should a
Lender become subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as such Lender shall reasonably
request to assist such Lender to recover such Taxes.
(i) Any Lender claiming any additional amounts payable pursuant to this
Section 2.18 shall use reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions) to change the jurisdiction of its lending
office if the making of such a change would avoid the need for, or reduce the
amount of, any such additional amounts that may thereafter accrue and would not,
in the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.
(j) In the event the Borrower is required pursuant to this Section 2.18
to pay any amount to any Lender or the Agent or on the behalf of any of them to
any taxing authority, such Lender shall, if no Default has occurred and is
continuing, upon the request of the Borrower delivered to such Lender and the
Agent, assign, pursuant to and in accordance with the provisions of Section
8.07, all of its rights and obligations under this Agreement and under the Notes
to an Eligible Assignee selected by the Borrower in consideration for (i) the
payment by such assignee to the assigning Lender of the principal of, and
interest accrued and unpaid to the date of such assignment on, the Note or Notes
of such Lender, (ii) the payment by the Borrower to the assigning Lender of any
and all other amounts owing to such Lender under any provision of this Agreement
accrued and unpaid to the date of such assignment including any additional
amounts payable pursuant
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to this Section and (iii) the Borrower's release of the assigning Lender from
any further obligation or liability under this Agreement. The assignment fee
required under Section 8.07(a) for such assignment shall be paid by the
Borrower. Notwithstanding anything to the contrary in this Section 2.18(j), in
no event shall the replacement of any Lender result in a decrease or
reallocation of the aggregate Commitments without the written consent of the
Majority Lenders.
SECTION 2.19. Use of Proceeds. The proceeds of the Advances, Swingline
Loans and Letters of Credit shall be available, and the Borrower agrees that it
will use such proceeds, solely for the general corporate purposes of the
Borrower and its Subsidiaries, including, without limitation, acquisitions that
have been approved by the board of directors of the acquired entity and stock
repurchases.
SECTION 2.20. Termination Date Extensions. At any time after the second
anniversary of the Effective Date, the Borrower may make a written request to
the Agent, who shall forward a copy of each such request to each of the Lenders,
that the Termination Date then in effect be extended to the date which is one
year after such existing Termination Date; provided, however, that the Borrower
shall not be permitted to obtain more than three extensions pursuant to this
Section 2.20. Such request shall be accompanied by a certificate of a Financial
Officer of the Borrower stating that no Default or Event of Default has occurred
and is continuing. If, by the date (a "Response Date") which is 30 days after
the date of such request, Lenders holding at least 70% of the Commitments then
outstanding agree thereto in writing, the Termination Date of each Lender then
consenting, or that thereafter consents, to such extension (each, a "Continuing
Lender") shall be automatically extended to the first anniversary of the then
existing Termination Date. In the event that the Borrower has not obtained
agreement to the requested extension from the requisite percentage of Lenders to
permit an extension by the Response Date, the Borrower may extend the deadline
for obtaining such percentage to the thirtieth day following such Response Date
in order to take such actions, including those contemplated by Section 2.21,
with respect to any Lender that has not agreed to such extension (each, a
"Non-Continuing Lender"), as the Borrower deems appropriate in order to obtain
agreement to such extension from the requisite percentage of Lenders. If the
Borrower obtains agreement from the requisite percentage of the Lenders during
such thirty day period, the Termination Date shall be extended as to the
Continuing Lenders as provided in the second preceding sentence. The Agent shall
notify the Borrower and each Lender of the effectiveness of any such extension.
No Lender shall be obligated to agree to any extension pursuant to this Section
2.20, and the extension of the Termination Date as to any Lender shall be in its
sole discretion. The Termination Date shall not be extended pursuant to this
Section 2.20 for any Lender that is a Non-Continuing Lender.
SECTION 2.21. Replacement of Lenders. Any Lender claiming any
additional amounts payable pursuant to Section 2.14, invoking the provisions of
44
Section 2.15 or becoming a Non-Continuing Lender shall, if no Default has
occurred and is continuing, upon the request of the Borrower delivered to such
Lender and the Agent, assign, pursuant to and in accordance with the provisions
of Section 8.07, all of its rights and obligations under this Agreement and
under the other Loan Documents to an Eligible Assignee selected by the Borrower
in consideration for (i) the payment by such assignee to the assigning Lender of
the principal of, and interest accrued and unpaid to the date of such assignment
on, the Note or Notes of such Lender, (ii) the payment by the Borrower to the
assigning Lender of any and all other amounts owing to such Lender under any
provision of this Agreement accrued and unpaid to the date of such assignment
and (iii) the Borrower's release of the assigning Lender from any further
obligation or liability under this Agreement. The assignment fee required under
Section 8.07(a) for such assignment shall be paid by the Borrower.
Notwithstanding anything to the contrary in this Section 2.21, in no event shall
the replacement of any Lender result in A decrease or reallocation of the
aggregate Commitments without the written consent of the Majority Lenders.
SECTION 2.22. Evidence of Debt. (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Advance owing to
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder in respect of
Advances. The Borrower agrees that upon notice by any Lender to the Borrower
(with a copy of such notice to the Agent) to the effect that a Note is required
or appropriate in order for such Lender to evidence (whether for purposes of
pledge, enforcement or otherwise) the Advances owing to, or to be made by, such
Lender, the Borrower shall promptly execute and deliver to such Lender a Note
payable to the order of such Lender in a principal amount up to the Commitment
of such Lender.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to the Effectiveness of Amendment
and Restatement. The amendment and restatement of the Original 5-Year Agreement
by this Agreement is subject to the following conditions precedent:
(a) This Agreement (including all schedules, exhibits,
certificates and opinions delivered pursuant hereto), and each other
Loan Document (other than the Mortgages) shall have been duly executed
and delivered by or on behalf of the Loan Parties party hereto or
thereto and, in the case of this Agreement, by the Majority Lenders,
and the 364-Day Credit Agreement shall have been duly executed and
delivered by the parties thereto and this Agreement, each other Loan
45
Document (other than the Mortgages) and the Existing 364-Day Credit
Agreement shall be in full force and effect .
(b) There shall have occurred no material adverse change in
the condition (financial or otherwise) or results of operations of the
Borrower and its Subsidiaries, taken as a whole, since February 24,
2001.
(c) There shall exist no action, suit, investigation,
litigation or proceeding affecting the Borrower or any of its
Subsidiaries pending or threatened before any court, governmental
agency or arbitrator that (i) could reasonably be expected to result in
a material adverse change in the condition (financial or otherwise) or
results of operations or prospects of the Borrower and its
Subsidiaries, taken as a whole, or (ii) purports to affect the
legality, validity or enforceability of this Agreement or any other
Loan Document or the consummation of the transactions contemplated
hereby, and there shall have been no adverse change in the status, or
financial effect on the Borrower or any of its Subsidiaries.
(d) All governmental and third-party consents and approvals
necessary in connection with the transactions contemplated hereby shall
have been obtained (without the imposition of any conditions that are
not acceptable to the Lenders) and shall remain in effect, and no law
or regulation shall be applicable that restrains, prevents or imposes
materially adverse conditions upon the transactions contemplated
hereby.
(e) The Borrower shall have notified each Lender and the Agent
in writing as to the proposed Amendment and Restatement Effective Date.
(f) The Borrower shall have paid all accrued fees and expenses
of the Agent that have been billed (including the accrued fees and
expenses of counsel to the Agent).
(g) The Agent shall have received on or before the Amendment
and Restatement Effective Date the following, each dated such date, in
form and substance satisfactory to the Agent and (except for the Notes)
in sufficient copies for each Lender:
(i) certified copies of the resolutions of the Board
of Directors of each Loan Party approving this Agreement and
the other Loan Documents (to which it is a party), and of all
documents evidencing other necessary corporate action and
government approvals, if any, with respect to this Agreement
and the other Loan Documents (to which it is a party),
46
(ii) a certificate of the Secretary or an Assistant
Secretary of each Loan Party certifying the names and true
signatures of the officers of such Loan Party authorized to
sign this Agreement and the other Loan Documents (to which it
is a party) and the other documents to be delivered by such
Loan Party hereunder.
(iii) a copy of a certificate of the Secretary of
State of the jurisdiction of incorporation of each Loan Party
(as of a date reasonably near the Amendment and Restatement
Effective Date) that (A) attached thereto is a true and
correct copy of such Loan Party's charter and each amendment
thereto, (B) such amendments are the only amendments to such
Loan Party's charter on file in his office, (C) such Loan
Party has paid all franchise taxes to the date of such
certificate and (D) such Loan Party is duly incorporated and
in good standing under the laws of its jurisdiction of
incorporation,
(iv) a certificate of each Loan Party, signed by its
President or a Vice President and its Secretary or any
Assistant Secretary, dated the Amendment and Restatement
Effective Date, certifying (a) as to the absence of any
amendments to the charter of such Loan Party since the date of
the Secretary of State's certificate from its jurisdiction of
incorporation, (b) that attached is a true and correct copy of
the by-laws of such Loan Party as in effect on the Amendment
and Restatement Effective Date, (c) as to the due
incorporation and good standing of such Loan Party as a
corporation organized under the laws of its jurisdiction of
incorporation, and the absence of any proceeding for the
dissolution or liquidation of such Loan Party, (d) as to the
truth and correctness of the representations and warranties
contained in Section 4.01 of this Agreement as though made on
and as of the Amendment and Restatement Effective Date and (e)
as to the absence of any event occurring and continuing, or
resulting from the effectiveness of this Agreement or any
other Loan Document, if any, that constitutes a Default.
(v) a favorable opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP,
special counsel for the Loan Parties, substantially in the
form of Exhibit D hereto and as to such other matters as any
Lender through the Agent may reasonably request,
(vi) a favorable opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, in-house
Counsel of the Loan Parties, substantially in the form of
Exhibit E hereto and as to such other matters as any Lender
through the Agent may reasonably request,
47
(vii) evidence of the termination of the commitments
under the Existing 364-Day Credit Agreement,
(viii) evidence satisfactory to the Agent that (A)
the documents described in paragraphs (a) under the caption
"Exchange Note Transactions" and paragraph (e) under the
caption "Structured Lease Transactions", each under Schedule
VII, have been amended to permit the transactions contemplated
under this Agreement and the other Loan Documents, and (B) the
Teachers Consent Agreement has been duly executed and
delivered by the parties thereto, which agreement shall be in
form and substance acceptable to the Agent, and
(ix) such other approvals, opinions or documents as
any Lender, through the Agent, may reasonably request.
SECTION 3.02. Conditions Precedent to Each A Borrowing, Swingline
Borrowing and Issuance of A Letter of Credit. The obligation of each Lender to
make an A Advance on the occasion of each A Borrowing (including the initial A
Borrowing but other than an A Advance pursuant to section 2.04(c)) resulting in
an increase in the aggregate amount of outstanding A Advances, the obligation of
each LC Bank to issue a Letter of Credit on the occasion of a request therefor
by the Borrower (other than an extension of a maturing Letter of Credit that
provides for A drawing thereunder in the absence of such extension), and the
obligation of the Swingline Lender to make A Swingline Loan on the occasion of
each Swingline Borrowing shall be subject to the further conditions precedent
that on the date of such A Borrowing, the issuance of such Letter of Credit or
such Swingline Borrowing, as the case may be, the following statements shall be
true (and each of the giving of the applicable Notice of A Borrowing, request
for issuance of Letter of Credit or Notice of Swingline Borrowing, as the case
may be, and the acceptance by the Borrower of the proceeds of such A Borrowing
or Swingline Borrowing or benefits of the issuance of such Letter of Credit, as
the case may be, shall constitute a representation and warranty by the Borrower
that on the date of such A Borrowing, the issuance of such Letter of Credit or
such Swingline Borrowing, as the case may be, such statements are true):
(i) the representations and warranties contained in Section
4.01 are correct on and as of the date of such A Borrowing, the
issuance of such Letter of Credit or such Swingline Borrowing, as the
case may be before and after giving effect to such A Borrowing, the
issuance of such Letter of Credit or such Swingline Borrowing, as the
case may be, and to the application of the proceeds therefrom, as
though made on and as of such date, and
(ii) no event has occurred and is continuing, or would result
from such A Borrowing, the issuance of such Letter of Credit or such
Swingline Borrowing,
48
as the case may be, or from the application of the proceeds therefrom,
which constitutes a Default.
SECTION 3.03. Conditions Precedent to Each B Borrowing. The obligation
of each Lender that is to make a B Advance on the occasion of a B Borrowing
(including the initial B Borrowing) to make such B Advance as part of such B
Borrowing is subject to the conditions precedent that (i) the Agent shall have
received the written confirmatory Notice of B Borrowing with respect thereto,
(ii) (x) in the case of any B Borrowing (except as otherwise set forth in
subclause (y) below), on or before the date of such B Borrowing, but prior to
such B Borrowing, and (y) in the case of same day, fixed rate B Borrowings,
promptly after any such B Borrowing, the Agent shall have received a B Note
payable to the order of such Lender for each of the one or more B Advances to be
made by such Lender as part of such B Borrowing, in a principal amount equal to
the principal amount of the B Advance to be evidenced thereby and otherwise on
such terms as were agreed to for such B Advance in accordance with Section 2.03
and (iii) on the date of such B Borrowing the following statements shall be true
(and each of the giving of the applicable Notice of B Borrowing and the
acceptance by the Borrower of the proceeds of such B Borrowing shall constitute
a representation and warranty by the Borrower that on the date of such B
Borrowing such statements are true):
(a) the representations and warranties contained in Section
4.01 are correct on and as of the date of such B Borrowing, before and
after giving effect to such B Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date,
(b) no event has occurred and is continuing, or would result
from such B Borrowing or from the application of the proceeds
therefrom, which constitutes a Default and
(c) no event has occurred and no circumstance exists as a
result of which the information concerning the Borrower that has been
provided to the Agent and each Lender by the Borrower in connection
herewith would include an untrue statement of a material fact or omit
to state any material fact or any fact necessary, to make the
statements contained therein, in the light of the circumstances under
which they were made, not misleading.
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ARTICLE IIIA
COLLATERAL AND MORTGAGES
SECTION 3A.01. Initial Post-Amendment and Restatement Effective Date
Collateral Requirements. The Borrower will, on the earlier of the occurrence of
a Security Event and a date which occurs 60 days after the Amendment and
Restatement Effective Date, cause:
(a) paragraphs (a) and (b)(i) of the Collateral Filing Requirement to
be satisfied; and
(b) paragraphs (a)(i) and (d) of the Real Property Collateral
Requirement to be satisfied.
SECTION 3A.02. Security Event. If a Security Event occurs, the Borrower
will promptly notify the Agent and the Lenders in writing thereof and will:
(a) within 30 days after such Security Event occurs, cause paragraph
(b)(ii) of the Collateral Filing Requirement to be satisfied; and
(b) within 45 days after such Security Event occurs, if requested by
the Agent, cause paragraphs (a)(ii), (b) and (c) of the Real Property Collateral
Requirement to be satisfied with respect to any Mortgaged Property selected by
the Agent, and at any time thereafter, on any date on which the Borrower
notifies or is required to notify the Agent of a Perfection Certificate Change,
cause the Collateral Filing Requirement and, with respect to any Mortgaged
Property selected by the Agent, the Real Property Collateral Requirement to be
satisfied (as the case may be).
SECTION 3A.03. Further Assurances. The Borrower will, and will cause
each Material Subsidiary to, execute any and all further documents, financing
statements, agreements and instruments, and take all such further actions
(including, at any time after the occurrence of a Security Event, the filing and
recording of financing statements, fixture filings, mortgages, deeds of trust
and other documents), which may be required under any applicable law, or which
the Agent or the Majority Lenders may reasonably request, to cause the
Collateral and Guarantee Requirement and, with respect to any Mortgaged Property
selected by the Agent, the Real Property Collateral Requirement to be and remain
satisfied, all at the expense of the Loan Parties. The Borrower also agrees to
provide to the Agent, from time to time after the occurrence of a Security Event
upon request, evidence reasonably satisfactory to the Agent as to the perfection
and priority of the Liens and Mortgages created or intended to be created by the
Security Documents (other than Mortgages in respect of any Mortgaged Property
not selected by the Agent pursuant to Section 3A.02(b)).
50
SECTION 3A.04. Information Regarding Collateral. (a) The Borrower will
furnish to the Agent prompt written notice of any change (i) in any Loan Party's
corporate name or in any trade name used to identify it in the conduct of its
business or in the ownership of its properties, (ii) in the location of any Loan
Party's chief executive office, its principal place of business, any office in
which it maintains books or records relating to Collateral owned by it or any
office or facility at which Collateral owned by it is located (including the
establishment of any such new office or facility), (iii) in any Loan Party's
identity or corporate structure, (iv) in any Loan Party's Federal Taxpayer
Identification Number or (v) any change in any Loan Party's jurisdiction of
organization. The Borrower agrees not to effect or permit any change referred to
in the preceding sentence unless all filings under the Uniform Commercial Code
or otherwise that would be required in order for the Agent to continue at all
times following such change to have a valid, legal and perfected security
interest in all the Collateral have been duly executed and delivered by the
applicable Loan Party to the Agent. The Borrower also agrees promptly to notify
the Agent if any material portion of the Collateral is damaged or destroyed.
(b) At the time of delivery of financial statements pursuant to clause
(d)(i)(x) or (y) of Section 5.01, the Borrower shall deliver to the Agent a
certificate of a Financial Officer and the chief legal officer of the Borrower
(w) setting forth any change ("Perfection Certificate Change") in the
information contained in the Perfection Certificate delivered to the Agent on
the Amendment and Restatement Effective Date or the date of the most recent
certificate delivered pursuant to this paragraph (b) 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 paragraph (b) 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 if a Security Event has not occurred on or prior to the date of such
certificate, have been delivered to the Agent, (x) identifying all Subsidiaries
existing on the date of such certificate and indicating, for each such
Subsidiary, whether such Subsidiary is a Material Subsidiary and whether such
Subsidiary was formed or acquired since the end of the previous fiscal quarter,
and (y) identifying any transactions permitted under Section 5.02(b) that have
been consummated since the end of the previous fiscal quarter, including the
date on which such transaction was consummated and the consideration therefor.
SECTION 3A.05. Additional Subsidiaries. If any additional Material
Subsidiary is formed or acquired or any Immaterial Subsidiary becomes a Material
Subsidiary after the Amendment and Restatement Effective Date, the Borrower
will, (i) within ten Business Days after such Material Subsidiary is formed or
acquired or, on the last day of each fiscal quarter during which an Immaterial
Subsidiary becomes a Material Subsidiary, notify the Agent and the Lenders
thereof and cause the Collateral
51
and Guarantee Requirement to be satisfied with respect to such Subsidiary and
with respect to any Equity Interest in such Subsidiary (to the extent required
by paragraph (a) of the definition of the term Collateral Filing Requirement)
owned by or on behalf of any Loan Party, (ii) within 30 days after such
formation, acquisition or change, cause paragraphs (a) and (b)(i) of the
Collateral Filing Requirement to be satisfied, and (iii) if such formation,
acquisition or change occurs at any time after a Security Event has occurred,
within 30 days after such Security Event occurs, cause paragraph (b)(ii) of the
Collateral Filing Requirement to be satisfied.
SECTION 3A.06. Authorization. The Borrower hereby irrevocably consents
to the Agent's filing all documents and instruments which are required to be
filed pursuant to, and at the times specified in, this Section.
SECTION 3A.07. Additional Mortgaged Property. Within ten Business Days
of the end of each fiscal quarter, the Borrower shall deliver to the Agent a
written supplement the Schedule delivered to the Agent on or before the
Effective Date ("Mortgaged Property Schedule") which sets forth the address of
each parcel of real property and the improvements thereto that (i) is owned by a
Loan Party as at the Effective Date, (ii) is not described in the Mortgaged
Property Schedule as at the Amendment and Restatement Effective Date, or any
other supplement previously delivered to the Agent pursuant to this Section, and
(iii) has either a book value or a fair value (as reasonably determined by the
Borrower in good faith) equal to or greater than $2,000,000 and a book value of
less than $15,000,000 as of the last day of such fiscal quarter. Any supplement
delivered under this Section 3A.07 will, for all purposes of this Agreement, be
deemed to form part of the Mortgaged Property Schedule.
SECTION 3A.08. Certain Amendments, Etc. No amendment, waiver or consent
shall, unless the same shall be in writing and signed by all the Majority
Lenders, amend any Loan Document. No amendment, waiver or consent shall, unless
the same shall be in writing and signed by the Super Majority Lenders, amend any
provision of this Article IIIA. No amendment, waiver or consent shall, unless
the same shall be in writing and signed by all the Lenders, amend the definition
of the term Security Event or at any time after the occurrence of a Security
Event, release all or substantially all the Collateral (other than in connection
with a sale of Collateral permitted by this Agreement).
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Each Loan Party is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and, except where the failure to be so (individually or
in the aggregate) would not reasonably be expected to have a Material
Adverse Effect, is qualified to do business in, and is in good standing
in, every jurisdiction where such qualification is required.
(b) The execution, delivery and performance by each Loan Party
of this Agreement and the other Loan Documents (to which it is a
party), and the consummation of the transactions contemplated hereunder
and thereunder, are within such Loan Party's corporate powers, have
been duly authorized by all necessary corporate action, and do not (i)
contravene such Loan Party's charter or by-laws, (ii) violate any law,
rule, regulation, order, writ, judgment, determination or award binding
on or affecting any Loan Party except where such violation,
individually and together with all other such violations, would not
reasonably be expected to require payments by the Borrower and its
subsidiaries of $25,000,000 or more or have a Material Adverse Effect
or (iii) conflict with or result in the breach of, or constitute a
default under, any agreement or instrument binding on or affecting any
Loan Party except where such conflict, default or breach, individually,
and together with all other such conflicts, defaults or breaches, would
not reasonably be expected to require payments by the Borrower and its
subsidiaries of $25,000,000 or more or have a Material Adverse Effect.
(c) This Agreement has been, and each other Loan Document when
delivered hereunder will have been, duly executed and delivered by each
Loan Party. This Agreement is, and the other Loan Documents when
delivered hereunder will be, legal, valid and binding obligations of
each Loan Party thereto enforceable against each such Loan Party in
accordance with their respective terms.
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body, or any third party that is A party to any agreement or instrument
binding on any Loan Party is required for the due execution, delivery
or performance by any Loan Party of this Agreement or the other Loan
Document to which it is a party, or for the consummation of the
transactions contemplated by this Agreement or the other Loan
Documents.
53
(e) (i) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at February 24, 2001, and the related statements of
income and retained earnings of the Borrower and its Subsidiaries for
the fiscal year then ended, accompanied by an opinion of KPMG, LLP,
independent public accountants, and the Consolidated balance sheet of
the Borrower and its Subsidiaries as at June 16, 2001, and the related
statements of income and retained earnings of the Borrower and its
Subsidiaries for the fiscal quarter then ended, duly certified by a
Financial Officer of the Borrower, copies of which have been furnished
to each Lender, fairly present, subject, in the case of said balance
sheet as at June 16, 2001, and said statements of income and retained
earnings for the fiscal quarter then ended, to year-end audit
adjustments, the Consolidated financial condition of the Borrower and
its Subsidiaries as at such dates and the Consolidated results of the
operations of the Borrower and its Subsidiaries for the periods ended
on such dates, all in accordance with GAAP. Since June 16, 2001, there
has been no material adverse change in the business, operations or
condition (financial or otherwise) of the Borrower and its
Subsidiaries, taken as a whole; and (ii) except as disclosed in the
financial statements referred to above or the notes thereto or in the
Information Memorandum, none of the Borrower or its Subsidiaries has,
as of the Amendment and Restatement Effective Date, any material
contingent liabilities, long-term commitments that were not incurred by
the Borrower or its Subsidiaries in the ordinary course of their
business or unrealized losses.
(f) There is no pending or threatened action, suit,
investigation, litigation or proceeding, including, without limitation,
any Environmental Action, affecting the Borrower or any of its
Subsidiaries before any court, governmental agency or arbitrator, that
(i) is likely to result in a material adverse change in the condition
(financial or otherwise) or results of operations or prospects of the
Borrower and its Subsidiaries, taken as a whole, or (ii) purports to
affect the legality, validity or enforceability of this Agreement or
any other Loan Document or the consummation of the transactions
contemplated hereby.
(g) (i) No information, exhibit or report furnished by or on
behalf of the Borrower to the Agent or any Lender in connection with
the negotiation of the Loan Documents (including but not limited to the
Information Memorandum) or pursuant to the terms of the Loan Documents
contained any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements made therein not
misleading in light of the circumstances under which such statements
were made; and (ii) all financial projections that have been provided
by or on behalf of the Borrower to the Agent or any Lender were
prepared in good faith based on reasonable assumptions (it being
understood that such projections are subject to significant
uncertainties and contingencies beyond the Borrower's control, and that
no assurance can be given that the projections will be realized).
54
(h) Following application of the proceeds of each Advance,
Swingline Loan and Letter of Credit, not more than 25 percent of the
value of the assets (either of the Borrower only or of the Borrower and
its Subsidiaries on a Consolidated basis) subject to the provisions of
Section 5.02(a) or Section 5.02(c) or subject to any restriction
contained in any agreement or instrument between the Borrower and any
Lender or any Affiliate of any Lender relating to Debt and within the
scope of Section 8.01(d) will be margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal Reserve
System).
(i) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan of the Borrower or any of its ERISA
Affiliates that has resulted in or is reasonably likely to result in a
liability of the Borrower or any of its ERISA Affiliates in excess of
$25,000,000 in any one case or $50,000,000 in the aggregate.
(j) Schedule B (Actuarial Information) to the most recently
filed annual report (Form 5500 Series) for each Plan of the Borrower or
any of its ERISA Affiliates, copies of which have been filed with the
Internal Revenue Service and furnished to the Lenders to the extent
required under Section 5.01(d)(iv), is complete and accurate and fairly
presents the funding status of such Plan, and since the date of such
Schedule B there has been no material adverse change in such funding
status.
(k) Neither the Borrower nor any of its ERISA Affiliates has
incurred or is reasonably expected to incur any Withdrawal Liability to
any Multiemployer Plan in excess of $25,000,000 in any one case or
$50,000,000 in the aggregate.
(l) Neither the Borrower nor any of its ERISA Affiliates has
been notified by the sponsor of a Multiemployer Plan of the Borrower or
any of its ERISA Affiliates that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV
of ERISA, and no such Multiemployer Plan is reasonably expected to be
in reorganization or to be terminated, within the meaning of Title IV
of ERISA, if as a result thereof the Borrower or any of its ERISA
Affiliates would incur or would reasonably be expected to incur, any
liability in excess of $25,000,000 in any one case or $50,000,000 in
the aggregate.
(m) The fair market value of the assets of all Plans, as at
the Amendment and Restatement Effective Date, was not less than 90% of
the present value of all projected benefit obligations under such Plans
(based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87), as of the date of the most recent
financial statements reflecting such amounts.
55
(n) The aggregate annualized amount paid net of the retiree
annual contributions (including, without limitation, the cost of
insurance premiums) with respect to post-retirement benefits under
Welfare Plans for which the Borrower and its Subsidiaries are liable
does not exceed $8,000,000.
(o) Each of the Borrower and its Subsidiaries has filed or
caused to be filed all tax returns which are required to be filed, and
all taxes related to such returns and any assessments made against it
or any of its respective properties and all other taxes, fees or other
charges imposed on it or any of its respective properties by any
governmental authority (other than those the amount or validity of
which is contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on
the books of the Borrower or its Subsidiaries as the case may be) have
been paid, except to the extent the failure to make such filings or
payments would not reasonably be expected to have a Material Adverse
Effect.
(p) Neither the Borrower nor any of its Subsidiaries is (i) an
"investment company", or an "affiliated person" of, or "promotor" or
"principal underwriter" for an "investment company", as such terms are
defined in the investment Company Act of 1940, as amended, or (ii) a
"holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935, as amended.
(q) Except for such matters individually or in the aggregate
that would not reasonably be expected to have a Material Adverse
Effect: (i) the operations and properties of the Borrower and each of
its Subsidiaries comply with all Environmental Laws, all necessary
Environmental Permits have been obtained and are in effect for the
operations and properties of the Borrower and its Subsidiaries and the
Borrower and its Subsidiaries are in compliance with all such
Environmental Permits, and (ii) no circumstances exist that could be
reasonably likely to (x) form the basis of an Environmental Action
against the Borrower or any of its Subsidiaries or any of their
respective properties, or (y) cause any such property to be subject to
any restrictions on ownership, occupancy, use or transferability under
any Environmental Law.
(r) (i) Each of the Borrower and its Subsidiaries has good
title to, or valid leasehold interests in, all its real and personal
property material to its business (including its Mortgaged Properties),
except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted, to utilize such
properties for their intended purposes or which would not reasonably be
expected to have a Material Adverse Effect.
56
(ii) As at the Amendment and Restatement Effective
Date, the Mortgaged Property Schedule (as defined in Section
3A.07, sets forth the address of each parcel of real property
and the improvements thereto that is owned by a Loan Party and
has either a book value or a fair value (as reasonably
determined by the Borrower in good faith) equal to or greater
than $2,000,000 and a book value of less than $15,000,000 as
of the Amendment and Restatement Effective Date.
(iii) Each of the Borrower and its 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 Borrower and its
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.
(iv) As of the Amendment and Restatement Effective
Date, none of the Borrower or any of its Subsidiaries has
received notice of, or has knowledge of, any pending or
contemplated condemnation proceeding affecting any Mortgaged
Property or any sale or disposition thereof in lieu of
condemnation. Neither any Mortgaged Property nor any interest
therein is subject to any right of first refusal, option or
other contractual right to purchase such Mortgaged Property or
interest therein.
(s) Schedule IV sets forth the name of, and the ownership
interest of the Borrower and its applicable Subsidiaries in, each
Subsidiary of the Borrower and identifies each Subsidiary that is a
Material Subsidiary, an Excluded Domestic Subsidiary or an Excluded
Guarantee Subsidiary, in each case as of the Amendment and Restatement
Effective Date.
(t) There does not exist any agreement or other arrangement
that prohibits, restricts or imposes any condition upon the ability of
the Borrower or any of the Loan Parties to create, incur or permit to
exist any Lien contemplated to be incurred or created, or (as the case
may be) incurred or created, pursuant to the Security Documents.
ARTICLE V
COVENANTS OF THE BORROWER
57
SECTION 5.01. Affirmative Covenants. So long as any Note shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will,
unless the Majority Lenders shall otherwise consent in writing:
(a) Compliance with Laws, Payment of Taxes, Etc. Comply, and
cause each of its Subsidiaries to comply, except where such failure to
comply would not reasonably be expected to have a Material Adverse
Effect, with (i) all its payment obligations (other than in respect of
Debt and judgments or orders for the payment of money), and (ii) with
all applicable laws (including, without limitation, ERISA and
Environmental Laws), rules, regulations and orders, such compliance to
include, without limitation, paying and discharging before the same
become delinquent all taxes, assessments and governmental charges
imposed upon it or upon its property, except, in each case, where (A)
the validity or amount thereof is being contested in good faith by
appropriate proceedings, (B) the Borrower or such Subsidiary has set
aside on its books adequate reserves with respect thereto in accordance
with GAAP and (C) such contest effectively suspends collection of the
contested obligation and the enforcement of any Lien securing such
obligation, and (iii) all material contracts to which it or its
Subsidiaries is a party.
(b) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain,
its corporate existence, rights (charter and statutory) and franchises;
provided, however, that the Borrower and any Subsidiary may consummate
any merger, consolidation, liquidation or dissolution permitted under
Section 5.02(b), and provided further that the Borrower and its
Subsidiaries shall not be required to preserve any right or franchise
if the Borrower and the relevant Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of the
business of the Borrower and its Subsidiaries that the loss thereof is
not disadvantageous in any material respect to the Borrower and its
Subsidiaries.
(c) Keeping of Books. Keep, and cause each Subsidiary to keep,
proper books of record and account in which full and correct entries
shall be made of all financial transactions and the assets and business
of the Borrower and each Subsidiary in order to permit the Borrower to
prepare Consolidated financial statements of the Borrower in accordance
with GAAP.
(d) Reporting Requirements. Furnish to each Lender:
(i) (x) as soon as available and in any event within
45 days after the end of each of the first three quarters of
each fiscal year of the Borrower, the Consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of
such quarter and Consolidated statements of income and
retained earnings of the Borrower and its Subsidiaries for the
period
58
commencing at the end of the previous fiscal year and ending
with the end of such quarter, duly certified by a Financial
Officer of the Borrower as having been prepared in accordance
with GAAP;
(y) as soon as available and in any event within 90
days after the end of each fiscal year of the Borrower, a copy
of the Consolidated annual report for such year for the
Borrower and its Subsidiaries, containing Consolidated
financial statements for such year, certified in a manner
acceptable to the Majority Lenders by KPMG or other nationally
recognized independent public accountants; and
(z) together with each delivery of financial
statements required by clauses (x) and (y) above, a
certificate of a Financial Officer (A) stating that the signer
has reviewed or caused to be reviewed under his or her
supervision the terms of this Agreement and the other Loan
Documents and the transactions and condition of the Borrower
and its Subsidiaries during the accounting period covered by
such financial statements and that such review has not
disclosed the existence as at the date of such certificate of
any condition or event that constitutes a Default, and (B)
setting forth (except to the extent specifically set forth in
such financial statements) information in reasonable detail
necessary to demonstrate the Borrower's compliance as at the
end of such accounting period with Section 5.02(e), (f) and
(g) (including, but not limited to, a description of and
amounts comprising the elements of Consolidated Debt, each
determined in accordance with GAAP);
(ii) as soon as possible and in any event within five
(5) days after any Financial Officer of the Borrower has
knowledge of the occurrence of each Default continuing on the
date of such statement, a statement of a Financial Officer of
the Borrower setting forth the details of such Default and the
action which the Borrower has taken and proposes to take with
respect thereto;
(iii) promptly after the sending or filing thereof,
copies of all reports which the Borrower sends to its
shareholders, and copies of all reports and registration
statements which the Borrower or any Subsidiary files with the
Securities and Exchange Commission or any national securities
exchange;
(iv) promptly and in any event within 30 days after
the filing thereof with the Internal Revenue Service, copies
of each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) with respect to each Plan of the
Borrower or any of its ERISA Affiliates,
59
provided that this clause (iv) shall apply only to the extent
that the total "current liability" indicated on any such
Schedule B exceeds $8,000,000;
(v) promptly and in any event within 15 Business Days
after the Borrower or any of its ERISA Affiliates knows or has
reason to know that any ERISA Event has occurred, a statement
of a Financial Officer of the Borrower describing such ERISA
Event and the action, if any, which the Borrower or such ERISA
Affiliate proposes to take with respect thereto;
(vi) promptly and in any event within five Business
Days after receipt thereof by the Borrower or any of its ERISA
Affiliates, copies of each notice from the PBGC stating its
intention to terminate any Plan of the Borrower or any of its
ERISA Affiliates or to have a trustee appointed to administer
any Plan of the Borrower or any of its ERISA Affiliates;
(vii) promptly after commencement thereof, notice of
all actions and proceedings before any court, governmental
agency or arbitrator affecting the Borrower or any of its
Subsidiaries of the type described in Section 4.01(f); and
(viii) such other information respecting the
condition or operations, financial or otherwise, of the
Borrower or any of its Subsidiaries as any Lender through the
Agent may from time to time reasonably request.
(e) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which the
Borrower or such Subsidiary operates.
(f) Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve all of its
properties that are used or useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted;
provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to maintain or preserve any properties
if the Borrower determines, in its reasonable business judgment, that
the maintenance and preservation thereof is no longer desirable in the
conduct of the business of the Borrower or such Subsidiary, as the case
may be, and that the loss thereof is not disadvantageous in any
material respect to the Borrower or such Subsidiary.
(g) Visitation Rights. At any reasonable time upon the
occurrence and during the continuance of a Default while any Advance is
outstanding, permit the
60
Agent or any of the Lenders, or any agents or representatives thereof,
to examine and make copies of and abstracts from the records and books
of account of, and visit the properties of, the Borrower and any of its
Subsidiaries, and to discuss the affairs, finances and accounts of the
Borrower and any of its Subsidiaries with any of their officers and
with their independent certified public accountants.
(h) Certification of LLC. The Borrower will, on the earlier of
the occurrence of a Security Event and a date which occurs 60 days
after the Amendment and Restatement Effective Date, cause each interest
in any limited liability company or limited partnership controlled by
the Borrower or any of its Material Subsidiaries to be represented by
certificate, to be a "security" within the meaning of, and to be
governed by, Article 8 of the New York Uniform Commercial Code.
SECTION 5.02. Negative Covenants. So long as any Note shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will not,
without the written consent of the Majority Lenders:
(a) Liens, Etc. Create or suffer to exist, or permit any of
its Subsidiaries to create or suffer to exist, any Lien upon or with
respect to any of its properties, whether now owned or hereafter
acquired, or assign, or permit any of its Subsidiaries to assign, any
right to receive income, in each case to secure or provide for the
payment of any Debt of any Person, other than:
(i) in the case of the Borrower, purchase money Liens
to secure Debt incurred solely for the purpose of financing
the acquisition of any real property, fixtures or equipment
acquired by the Borrower with the proceeds of such Debt,
provided, that any such Liens attach only to the assets so
purchased and the Debt (including any extensions, renewals or
refinancings thereof) secured by any such Lien does not exceed
100% of the purchase price of the property being purchased, or
(ii) in the case of any Subsidiary of the Borrower,
purchase money Liens to secure Debt incurred by such
Subsidiary solely to finance the purchase price of real
property, fixtures or equipment to the extent
61
permitted pursuant to clause (ii) of Section 5.02(d), provided
that any such Liens attach only to the assets so purchased and
the Debt (including any extensions, renewals or refinancings
thereof) secured by any such Lien does not exceed 100%of the
purchase price of the property being purchased, or
(iii) in the case of any Subsidiary of the Borrower,
purchase money Liens to secure Debt assumed by such Subsidiary
solely in connection with the acquisition of real property,
fixtures or equipment to the extent permitted pursuant to
clause (iii) of Section 5.02(d), provided that any such Liens
attach only to the assets so purchased and the Debt (including
any extensions, renewals or refinancings thereof) secured by
any such Lien does not exceed 100% of the purchase price of
the property being purchased, or
(iv) in the case of any Subsidiary of the Borrower,
Liens to secure Debt assumed solely in connection with an
acquisition to the extent permitted pursuant to clause (iv) of
Section 5.02(d), provided that any such Liens attached only to
the assets so acquired and the assumption of such Debt
(including any extensions, renewals or refinancings thereof)
secured by any such Lien does not exceed 100% of the purchase
price of the asset being acquired, or
(v) in the case of the Borrower, Liens existing on
property at the time of the acquisition thereof by the
Borrower (other than any such Lien created in contemplation of
such acquisition that was not incurred to finance the
acquisition of such property), or
(vi) any extensions, renewals or replacements of any
of the Liens permitted by subclauses (i) through (v) above or
subclause (ix) below for the same or a lesser amount,
provided, however, that no such Liens shall extend to or cover
any properties not theretofore subject to the Lien being
extended, renewed or replaced, or
(vii) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings and for
which appropriate reserves have been made in accordance with
GAAP, or
(viii) Liens incidental to the conduct of its
business or the ownership of its property and assets which
were not incurred in connection with the borrowing of money or
the obtaining of advances or credit, and which do not in the
aggregate materially detract from the value of its
62
property or assets or materially impair the use thereof in the
operation of its business, or
(ix) Liens existing on the Amendment and Restatement
and set forth on Schedule V, or
(x) Liens incurred by the Receivables Subsidiary in a
Permitted Receivables Financing, or
(xi) Liens incurred pursuant to the Security
Documents, or
(xii) Liens not otherwise permitted by the foregoing
clauses of this Section 5.02(a) securing Debt, provided that
the aggregate principal amount of Debt secured by such Liens
at the time any such Lien is created (after giving effect to
such Lien) does not exceed 5% of Consolidated Tangible Assets
(determined by reference to the most recent balance sheet
submitted pursuant to Section 5.01(d)(i)); and provided
further that such Liens shall only apply to assets of
Subsidiaries of the Borrower if such Liens secure only Debt of
Subsidiaries of the Borrower that is permitted by Section
5.02(d)(viii).
Without limiting the generality of the foregoing, none of the Loan
Parties will incur, create or permit to exist any Lien on its
Inventory, Eligible Accounts Receivables or other Collateral other than
Liens created by statute and Liens incurred or created pursuant to the
Security Documents.
(b) Mergers, Etc. Merge or consolidate with or into, liquidate
or dissolve, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter
acquired) to any Person, or permit any of its Subsidiaries to do so,
except that:
(i) any Subsidiary of the Borrower may merge or
consolidate with or into the Borrower (provided that the
Borrower shall be the continuing or surviving corporation) or
with any one or more other Subsidiaries of the Borrower,
(ii) the Borrower or any Subsidiary of the Borrower
may sell, lease, transfer or otherwise dispose of any of its
assets to the Borrower or any Subsidiary of the Borrower, as
the case may be,
(iii) the Borrower or any Subsidiary of the Borrower
may merge with any other corporation, provided that the
Borrower or such Subsidiary
63
shall be the continuing or surviving corporation, and the
Borrower shall be in compliance on a pro forma basis after
giving effect to such merger, with the covenants contained in
Sections 5.02(e),(f) and (g) recomputed as at the last day of
the most recently ended fiscal quarter of the Borrower for
which financial statements are available, as if such merger
(and any related incurrence or repayment of Debt) had occurred
on the first day of each relevant period for testing such
compliance (provided that any merger that occurs prior to the
first testing period under such Sections shall be deemed to
have occurred after such first testing period),
(iv) the Borrower may engage in transactions
permitted by Section 5.02(c), and
(v) any Subsidiary may liquidate or dissolve if the
Borrower determines in good faith that such liquidation or
dissolution is in the best interests of the Borrower and is
not materially disadvantageous to the Lenders,
provided that, in the case of each transaction permitted under this Section
5.02(b), at the time of such proposed transaction and immediately after giving
effect to such proposed transaction, no Default shall have occurred and be
continuing.
(c) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer
or otherwise dispose of, its assets, or grant any option or other right
to purchase, lease or otherwise acquire its assets, other than:
(i) sales of inventory in the ordinary course of its
business,
(ii) any sale of assets in a transaction authorized
by subsections (b)(i), (ii), (iii) or (v) of this Section
5.02,
(iii) the sale of the Borrower's interest in any
Subsidiary engaged principally in manufacturing or production
businesses,
(iv) sales of rights to payment and the security
therefor to the extent such sales are accounted for as true
sales in accordance with GAAP,
(v) other sales, leases, transfers or other
dispositions of assets of the Borrower or any of its
Subsidiaries not to exceed in the aggregate 10% of the
Consolidated Tangible Assets (determined by reference to the
most recent balance sheet submitted pursuant to Section
5.01(e)(i)) for all such sales, leases, transfers or other
dispositions, and
64
(vi) sales pursuant to a Permitted Receivables
Financing.
(d) Subsidiary Debt. Permit any of its Subsidiaries to create,
incur, assume or suffer to exist any Debt, other than:
(i) Debt owed to the Borrower or to a wholly owned
Subsidiary of the Borrower,
(ii) Debt (including Capital Leases) incurred after
the Amendment and Restatement Effective Date to finance the
purchase price of real property, fixtures or equipment
acquired by such Subsidiary from a Person other than the
Borrower or any other Subsidiary of the Borrower, provided
that such real property, fixtures or equipment shall be
purchased on an arm's-length basis and at a fair market value
as reasonably determined at the time of such acquisition by
the authorized officers or the Board of Directors of the
Borrower, as the case may be, in a manner consistent with the
Borrower's standard procedures, and extensions, refinancings
and renewals of such Debt, provided further that the aggregate
principal amount of Debt (including Capital Leases) incurred
by all Subsidiaries pursuant to this clause (ii) or clause
(iii) below shall not exceed $150,000,000 at any one time
outstanding,
(iii) secured Debt assumed after the Amendment and
Restatement Effective Date by such Subsidiary in connection
with the acquisition of real property, fixtures or equipment
which Debt (x) is secured only by such property and (y) is
outstanding at the time of the acquisition of such property
and not incurred to finance the acquisition thereof, and
extensions, refinancings and renewals of such Debt, provided
that the aggregate principal amount of Debt (including Capital
Leases), incurred by all Subsidiaries pursuant to this clause
(iii) or clause (ii) above shall not exceed $150,000,000 at
any one time outstanding,
(iv) Debt of a Person that is acquired by such
Subsidiary, which Person will be, upon such acquisition, a
Subsidiary of the Borrower and which Debt (x) is secured, if
at all, only by the assets of such Person and (y) is
outstanding at the time of the acquisition of such Person and
not incurred to finance the acquisition thereof, provided that
the Borrower shall be in compliance on a pro forma basis after
giving effect to such acquisition with the covenants contained
in Sections 5.02(e),(f) and (g) recomputed as at the last day
of the most recently ended fiscal quarter of the Borrower for
which financial statements are available, as if such
acquisition (and any related incurrence or repayment of Debt)
had occurred on the first day of each relevant period for
testing such
65
compliance (provided that any such acquisition that occurs
prior to the first testing period under such Sections shall be
deemed to have occurred after such first testing period),
(v) indorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course
of business,
(vi) Debt existing on the Amendment and Restatement
Effective Date (all Debt of the Subsidiaries of the Borrower
for borrowed money in a principal amount of $5,000,000 or
greater existing on the Amendment and Restatement Effective
Date is described on Schedule III),
(vii) any extension, refinancing, or renewal of any
of the Debt specified in subclause (iv) and subclause (vi) of
this subsection (d) not resulting in an increase in the
principal amount of such Debt so extended, refinanced, or
renewed and
(viii) Debt of such Subsidiary not otherwise
permitted by the foregoing clauses of this Section 5.02(d),
provided that the aggregate principal amount of such Debt of
all Subsidiaries at any one time outstanding does not exceed
$10,000,000,
(ix) Debt incurred pursuant to the Loan Documents,
and
(x) Debt incurred by the Receivables Subsidiary in a
Permitted Receivables Financing.
(e) Interest Expense Coverage Ratio. Permit the ratio of (a)
Consolidated EBITDA plus Consolidated Rent Expense to (b) Consolidated
Interest Expense plus Consolidated Rent Expense, in each case for any
period of four consecutive fiscal quarters of the Borrower ending on
any date on or after the Amendment and Restatement Effective Date to be
less than 2.9 to 1.0.
(f) Leverage Ratio. Permit the ratio of (a) Consolidated Debt
any day to (b) Consolidated EBITDA for the period of four consecutive
fiscal quarters ending on, or most recently ended prior to, such day to
be greater than 3.6 to 1.0.
(g) Asset Coverage Ratio. Permit, on any day, the ratio of (i)
Consolidated Inventory plus Eligible Accounts Receivable on such day to
(ii) the sum of the aggregate principal amount of outstanding
Borrowings on such day plus the aggregate LC Exposure on such day and
the aggregate principal
66
amount of outstanding Borrowings under the 364-Day Credit Agreement on
such day plus the aggregate principal amount of Obligations incurred
pursuant to the transactions described under paragraphs (a), (b), (c)
and (d) under the caption "Structured Lease Transactions" in Schedule
VII on such day, to be less than 2.0 to 1.0.
(h) Sale and Leaseback Transactions. Enter into, or 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 for any
such sale or transfer of any real property, fixtures or equipment that
(i) is made for cash consideration in an amount not less than the cost
of such fixed or capital asset and is consummated within 90 days after
the Borrower or such Subsidiary acquires or completes the construction
of such real property, fixtures or equipment or (ii) is made for cash
consideration in an amount not less than the fair value (as reasonably
determined by the Borrower in good faith) of such fixed or capital
asset and is effected pursuant to Section 5.02(c)(v).
(i) Transactions with Affiliates. Sell, lease or otherwise
transfer, or permit any of its Subsidiaries 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 that are at prices and on terms and
conditions not less favorable to the Borrower or such Subsidiary than
could be obtained on an arm's-length basis from unrelated third parties
and (b) transactions between or among the Borrower and the Material
Subsidiaries not involving any other Affiliate.
(j) Business of Borrower and Subsidiaries. Engage, or permit
any of its Subsidiaries to engage, at any time, in any business or
business activity to the extent doing so would cause the predominant
business of the Borrower and its Subsidiaries (taken as a whole) at any
time to be a business that is not a business conducted by the Borrower
or its Subsidiaries on the date hereof or business activities
reasonably related or incidental thereto.
(k) Restrictive Agreements. Enter into, incur or permit to
exist, or permit any of its Material Subsidiaries to enter into, incur
or permit to exist, directly or indirectly, any agreement or other
arrangement that prohibits, restricts or imposes any condition upon (a)
the ability of the Borrower or any Material Subsidiary of the Borrower
to create, incur or permit to exist any Lien upon any of its property
or assets, or (b) the ability of any Material Subsidiary of the
Borrower to pay
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dividends or other distributions with respect to any shares of its
capital stock or to make or repay loans or advances to the Borrower or
any other Subsidiary of the Borrower or to Guarantee Debt of the
Borrower or any other Subsidiary of the Borrower; 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
restrictions and conditions existing on the Amendment and Restatement
Effective Date identified on Schedule VI (or to any extension or
renewal of, or any amendment or modification of, or any other
restrictions or conditions contained in agreements replacing or
refinancing the agreements imposing the restrictions and conditions
described in Schedule VI, in each case that do not expand the scope of
any such restriction or condition described in Schedule VI, except that
expansions of the scope of any such restrictions as a result of
provisions existing on the date hereof that automatically incorporate
changes to this Agreement shall be permitted), (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 Debt permitted by this
Agreement if such restrictions or conditions apply only to the property
or assets securing such Debt and (v) clause (a) of the foregoing shall
not apply to customary provisions in leases and other contracts
restricting the assignment thereof.
(l) Amendment of Material Documents. Amend, modify or waive,
or permit any of its Subsidiaries to amend, modify or waive in any
manner that is materially adverse to the Lenders, any of its rights
under (a) its certificate of incorporation, by-laws or other
organizational documents, (b) any documents or agreements entered into
in connection with a Permitted Receivables Financing, the Existing
Notes Indenture, the transactions described in Schedule VII (other than
as expressly permitted under Schedule IX), (c) the 364-Day Credit
Agreement, (d) the Teachers Consent Agreement and (e) any other
documents or agreements that are material to the Borrower and its
Subsidiaries taken as a whole.
(m) Debt of the Borrower. Allow the aggregate principal amount
of Debt (other than commercial paper and the obligations referred to in
clause (v) of the definition of the term "Debt") of the Borrower that
is created or incurred after the Amendment and Restatement Effective
Date and scheduled to amortize or mature prior to the date that is six
months after the Termination Date (as defined in the
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Existing Five-Year Credit Agreement) to exceed $50,000,000 at any one
time outstanding.
SECTION 5.03. Restrictive Financial Covenants. If the Borrower enters
into, incurs or permits to exist, or permits any of its Subsidiaries to enter
into, incur or permit to exist, directly or indirectly, any agreement or other
arrangement in respect of any Debt or other monetary obligations for an
aggregate amount of more than $25,000,000 that imposes any condition or covenant
measuring the Borrower's or such Subsidiary's financial performance or financial
standing which is more restrictive than the covenants in Section 5.02 (e), (f)
or (g), such condition or covenant shall be deemed to be incorporated into this
Agreement; provided that, this Section shall not apply in respect of the
covenant contained in Section 4.7(e) of the Indenture dated as of June 26, 1997
among Shoppers Food Warehouse Corp. as issuer, SFW Holding Corp. as guarantor
and Norwest Bank Minnesota, National Association as trustee, as amended as of
the Amendment and Restatement Effective Date.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) the Borrower shall fail to pay (i) any principal of any
Borrowings or Reimbursement obligation when the same becomes due and
payable; (ii) any interest on Borrowings or any other amount due
hereunder (other than as set forth in clause (iii) of this subsection
(a)), in each case within three (3) days of the date on which the same
becomes due and payable; or (iii) fees required to be paid pursuant to
Section 2.06, and amounts due under Section 8.08, in each case within
three (3) days of notice thereof by the Agent to the Borrower; or
(b) any written representation or warranty made at any time
prior to or on or after the Amendment and Restatement Effective Date by
a Loan Party (or any of its officers) herein or in any other Loan
Document or in connection with this Agreement or any other Loan
Document shall prove to have been incorrect in any material respect
when made; or
(c) the Borrower shall fail to perform or observe (i) any
term, covenant or agreement contained in Section 2.19, 3A.01, 3A.02,
3A.05, 5.01(b) (as to the Borrower's corporate existence), 5.01(d),
5.01(e) or 5.02, or (ii) any other term, covenant or agreement
contained in this Agreement on its part to be performed or observed if
the failure to perform or observe such other term, covenant or
69
agreement shall remain unremedied for thirty (30) days after the
earliest of: (i) the date written notice thereof shall have been given
to the Borrower by the Agent or any Lender; (ii) the date written
notice thereof shall have been given by the Borrower to the Agent or
any Lender; and (iii) the date by which the Borrower was required to
have delivered to the Lenders the statement required under Section
5.01(f)(ii); or
(d) the Borrower or any of its Subsidiaries shall fail to pay
any principal of or premium or interest on any Debt that is outstanding
in a principal amount of at least $25,000,000 individually or
$50,000,000 in the aggregate (but excluding Debt evidenced by the
Notes) of the Borrower or such Subsidiary (as the case may be), when
the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; or the
Borrower or any of its Subsidiaries shall fail to be in compliance with
any covenant under any agreement or instrument relating to any Debt
outstanding in a principal amount of at least $25,000,000 individually
or $50,000,000 in the aggregate (but excluding Debt evidenced by the
Notes) and such failure shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the
effect of such event or condition is to accelerate or to permit the
acceleration of, the maturity of such Debt; or any Debt outstanding in
a principal amount of at least $25,000,000 individually or $50,000,000
in the aggregate (but excluding Debt evidenced by the Notes) shall be
declared to be due and payable, or required to be prepaid (other than
by a required prepayment which does not arise because of a failure to
comply with any such covenant), redeemed, purchased or defeased, or an
offer to prepay, redeem, purchase or defease such Debt shall be
required to be made, in each case prior to the stated maturity thereof;
or
(e) the Borrower or any of its Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Borrower or any of its Subsidiaries
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee, custodian or other similar official for it or
for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of
sixty (60) days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other
similar official for, it
70
or for any substantial part of its property) shall occur; or the
Borrower or any of its Subsidiaries shall take any corporate action to
authorize any of the actions set forth above in this subsection (e); or
(f) any judgment or order for the payment of money in excess
of $25,000,000 or more in the case of any one judgment or order and
$50,000,000 or more in the aggregate for all such judgments and orders
(to the extent not covered by insurance), or otherwise materially
adverse to the business, condition (financial or otherwise), results of
operations or prospects of the Borrower and its Subsidiaries taken as a
whole shall be rendered against the Borrower or any of its Subsidiaries
and either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any period
of ten (10) consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; or
(g) any ERISA Event shall have occurred with respect to a Plan
of the Borrower or any of its ERISA Affiliates and the sum (determined
as of the date of occurrence of such ERISA Event) of the Insufficiency
of such Plan and the Insufficiency of any and all other Plans of the
Borrower and its ERISA Affiliates with respect to which an ERISA Event
shall have occurred and then exist (or the liability of the Borrower
and its ERISA Affiliates related to such ERISA Event) exceeds
$25,000,000 in any one case or $50,000,000 in the aggregate; or
(h) the Borrower or any of its ERISA Affiliates shall have
been notified by the sponsor of a Multiemployer Plan of the Borrower or
any of its ERISA Affiliates that it has incurred Withdrawal Liability
to such Multiemployer Plan in an amount that, when aggregated with all
other amounts required to be paid to Multiemployer Plans by the
Borrower and its ERISA Affiliates as Withdrawal Liability (determined
as of the date of such notification), exceeds $25,000,000 in any one
case or $50,000,000 in the aggregate; or
(i) the Borrower or any of its ERISA Affiliates shall have
been notified by the sponsor of a Multiemployer Plan of the Borrower or
any of its ERISA Affiliates that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV
of ERISA, and as a result of such reorganization or termination the
aggregate contributions of the Borrower and its ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated
have been or will be increased over the amounts otherwise required to
be contributed to such Multiemployer Plans by an amount exceeding
$25,000,000 in any one case or $50,000,000 in the aggregate;
(j) (i) Any Person or two or more Persons acting in concert
shall have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities
71
and Exchange Commission under the Securities Exchange Act of 1934),
directly or indirectly, of Voting Stock of the Borrower (or other
securities convertible into such Voting Stock) representing 20% or more
of the combined voting power of all Voting Stock of the Borrower; or
(ii) during any period of up to 24 consecutive months, commencing
before or after the date of this Agreement, individuals who at the
beginning of such 24-month period were directors of the Borrower shall
cease for any reason (other than due to death or disability) to
constitute a majority of the board of directors of the Borrower (except
to the extent that individuals who at the beginning of such 24-month
period were replaced by individuals (x) elected by 66-2/3% of the
remaining members of the board of directors of the Borrower or (y)
nominated for election by a majority of the remaining members of the
board of directors of the Borrower and thereafter elected as directors
by the shareholders of the Borrower); or (iii) any Person or two or
more Persons acting in concert shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement that,
upon consummation, will result in its or their acquisition of control
over Voting Stock of the Borrower (or other securities convertible into
such Voting Stock) representing 20% or more of the combined voting
power of all Voting Stock of the Borrower; or
(k) 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 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 or (ii) as a result of
the Agent's failure to maintain possession of any stock certificates,
promissory notes or other instruments delivered to it under the
Collateral Agreement; or
(l) any default or other event (other than expiration at the
end of the scheduled term thereof or in connection with a refinancing
thereof that is a Permitted Receivables Financing) shall have occurred
under the Receivables Transfer Agreement or any other document
governing any Permitted Receivables Financing if the effect of such
default or other event is to cause any Person (other than the Borrower
and its Subsidiaries) to terminate any purchases of accounts receivable
by such Person from the Borrower or any of the Borrower's Subsidiaries
pursuant to the Permitted Receivables Financing;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Majority Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Majority Lenders, by notice to the Borrower, declare the
Borrowings, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Borrowings, all such
interest and all such amounts shall become and be forthwith due and payable,
72
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower, and demand that the Borrower pay
into the Holding Account an amount of cash equal to the aggregate amount
available for drawing under all outstanding Letters of Credit; provided,
however, that, in the event of an actual or deemed entry of an order for relief
with respect to the Borrower under the Federal Bankruptcy Code, (A) the
obligation of each Lender to make Advances shall automatically be terminated,
(B) the Notes, all such interest and all such amounts shall automatically become
and be due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by the Borrower and (C) the
Borrower will pay to the Agent, for deposit in the Holding Account, an amount of
cash equal to the aggregate amount available for drawing under all outstanding
Letters of Credit.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment. The Lenders hereby appoint Chase as the
Agent to act as specified herein and in the other Loan Documents. Each Lender
hereby irrevocably authorizes and each holder of any Note by the acceptance of
such Note shall be deemed to irrevocably authorize the Agent to take such action
on its behalf under the provisions hereof, the Notes (including, without
limitation, to give notices and take such actions on behalf of the Majority
Lenders as are consented to in writing by the Majority Lenders) and any other
instruments, documents and agreements referred to herein or therein and to
exercise such powers hereunder and thereunder as are specifically delegated to
the Agent by the terms hereof and thereof and such other powers as are
reasonably incidental thereto. The Agent may perform any of its duties hereunder
and under the Notes, by or through its officers, directors, agents, employees or
affiliates, and the provisions of Sections 7.03 and 7.05 shall apply to such
officers, directors, agents, employees and affiliates.
SECTION 7.02. Nature of Duties. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement. The duties
of the Agent shall be mechanical and administrative in nature. EACH LENDER
HEREBY ACKNOWLEDGES AND AGREES THAT THE AGENT SHALL NOT HAVE, BY REASON OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENTS, A FIDUCIARY RELATIONSHIP TO OR IN RESPECT
OF ANY LENDER. Nothing in this Agreement or in any other Loan Documents,
expressed or implied, is intended to or shall be so construed as to impose upon
the Agent any obligations in respect of the Agreement or any other Loan
Documents except as expressly set forth herein or therein. The Agent shall not
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated by
73
the Loan Documents that the Agent is required to exercise in writing by the
Majority Lenders. Each Lender shall make its own independent investigation of
the financial condition and affairs of the Borrower in connection with the
making and the continuance of the Borrowings hereunder and shall make its own
appraisal of the credit worthiness of the Borrower, and the Agent shall have no
duty or responsibility, either initially or on a continuing basis, to provide
any Lender with any credit or other information with respect thereto, whether
coming into its possession before making of the Borrowings or at any time or
times thereafter (except as set forth in this Agreement). The Agent will
promptly notify each Lender at any time that the Majority Lenders have
instructed it to act or refrain from acting pursuant to Article VI. None of the
Syndication Agent or the Co-Lead Arrangers and Co-Bookrunners, shall have any
specified duties under this Agreement.
SECTION 7.03. Exculpation, Rights Etc. Neither the Agent nor any of its
officers, directors, agents, employees or affiliates shall be liable for any
action taken or omitted by them hereunder or under any Note, or in connection
herewith or therewith, unless caused by its or their gross negligence or willful
misconduct. The Agent shall not be responsible to any Lender for any recitals,
statements, representations or warranties herein or in any other Loan Document
or for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, or sufficiency of this Agreement or any other Loan Document or
any other document or the financial condition of the Borrower. The Agent shall
not be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any other Loan Document or any other document or the financial condition of the
Borrower, or the existence or possible existence of any Default or Event of
Default unless requested to do so by the Majority Lenders. The Agent may at any
time request instructions from the Lenders with respect to any actions or
approvals (including the failure to act or approve) which by the terms of this
Agreement or the other Loan Documents, the Agent is permitted or required to
take or to grant, and if such instructions are requested, the Agent shall be
absolutely entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any this Agreement
or the other Loan Documents until it shall have received such instructions from
the Majority Lenders. Without limiting the foregoing, no Lender shall have any
right of action whatsoever against the Agent as a result of the Agent acting,
approving or refraining from acting or approving under any of the Loan Documents
in accordance with the instructions of the Majority Lenders or, to the extent
required by Section 8.01, all of the Lenders.
SECTION 7.04. Reliance. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any notice, writing, resolution, notice,
statement, certificate, order or other document or any telephone, telex,
teletype or telecopier message believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person, and, with respect to all
matters pertaining herein or to any other Loan
74
Document and its duties hereunder or thereunder, upon advice of counsel selected
by the Agent.
SECTION 7.05. Indemnification. To the extent the Agent is not
reimbursed and indemnified by the Borrower, the Lenders will reimburse and
indemnify the Agent for and against any and all liabilities, obligations,
losses, damages, claims, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any action taken or omitted by
the Agent under this Agreement or any other Loan Document, in proportion to each
Lender's Percentage; provided, however, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, claims, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Agent's gross negligence or willful misconduct. The obligations of the Lenders
under this Section shall survive the payment in full of the Notes and the
termination of this Agreement or any other Loan Document.
SECTION 7.06. Agent In Its Individual Capacity, With respect to its
Advances, Swingline Loans, Commitment (and its Percentage thereof). Swingline
Commitment and Letters of Credit, the Agent shall have and may exercise the same
rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender or holder
of obligations hereunder. The terms "Lenders", "holder of obligations" or
"Majority Lenders" or any similar terms shall, unless the context clearly
otherwise indicates, include the Agent in its individual capacity as a Lender,
one of the Majority Lenders or a holder of obligations hereunder. The Agent may
accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with the Borrower or any Subsidiary or
Affiliate of the Borrower as if it were not acting as the Agent hereunder or
under the Notes, including, without limitation, the acceptance of fees or other
consideration for services without having to account for the same to any of the
Lenders.
SECTION 7.07. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received written notice from a Lender or the
Borrower 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 the
Agent receives such a notice, the Agent shall give prompt notice thereof to the
Lenders.
SECTION 7.08. Holders of Obligations. The Agent may deem and treat the
payee of any obligation hereunder as reflected on the books and records of the
Agent as the owner thereof for all purposes hereof unless and until a written
notice of the assignment or transfer thereof shall have been filed with the
Agent pursuant to Section 8.07(c). Any request, authority or consent of any
Person who, at the time of making such
75
request or giving such authority or consent, is the holder of any obligation
hereunder shall be conclusive and binding on any subsequent holder, transferee
or assignee of such obligation or of any obligation or obligations granted in
exchange therefor.
SECTION 7.09. Resignation by the Agent. (a) The Agent may resign from
the performance of all its functions and duties hereunder at any time by giving
thirty (30) Business Days' prior written notice to the Borrower and the Lenders.
Such resignation shall take effect upon the acceptance by a successor Agent of
appointment pursuant to clauses (b) and (c) below or as otherwise provided
below.
(b) Upon any such notice of resignation, the Majority Lenders shall
appoint a successor Agent who shall be satisfactory to the Borrower and shall be
an incorporated bank or trust company.
(c) If a successor Agent shall not have been so appointed within said
thirty (30) Business Day period, the Agent, with the consent of the Borrower,
shall then appoint a successor Agent who shall serve as the Agent until such
time, if any, as the Majority Lenders, with the consent of the Borrower, appoint
a successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to clause (b) and
if the Borrower has not provided the necessary consent pursuant to clause (c) by
the thirty-fifth (35th) Business Day after the date such notice of resignation
was given by Agent, Agent's resignation shall become effective and the Majority
Lenders shall thereafter perform all the duties of Agent hereunder until such
time, if any, as the Majority Lenders, with the consent of Borrower, appoint a
successor Agent as provided above.
SECTION 7.10. Removal of Agent. (a) The Majority Lenders may, at any
time, remove the Agent by giving thirty (30) Business Days' prior written notice
to the Agent and the Borrower. The Borrower shall have the right to remove the
Agent by written notice to the Agent if (i) the Agent is adjudged bankrupt or
insolvent, (ii) a receiver or other public officer takes charge of the Agent or
its property, (iii) the Agent is in material breach of its obligations hereunder
or (v) the Agent otherwise becomes incapable of acting. Such removal shall take
effect upon the appointment of a successor Collateral Agent pursuant to
paragraph (b) or (c) below or as otherwise provided below.
(b) Upon any such notice of removal, the Majority Lenders shall appoint
a successor Agent who shall be satisfactory to the Borrower and shall be an
incorporated bank or trust company.
(c) If a successor Agent shall not have been so appointed within said
thirty (30) Business Day period, the Borrower shall then appoint a successor
Agent who
76
shall serve as the Agent until such time, if any, as the Majority Lenders, with
the consent of the Borrower, appoint a successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to clause (b) and
if the Borrower has not provided the necessary consent pursuant to clause (c) by
the thirty-fifth (35th) Business Day after the date such notice of removal was
given to the Agent, the Majority Lenders shall thereafter perform all the duties
of Agent hereunder until such time, if any, as the Majority Lenders, with the
consent of Borrower, appoint a successor Agent as provided above.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or the A Notes nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Majority Lenders (and, if the rights or duties of the Agent,
any LC Bank or the Swingline Lender are affected thereby, by the Agent, such LC
Bank or the Swingline Lender, as the case may be)), and then such waiver,
consent or other agreement shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by all the Lenders
affected thereby, do any of the following: (a) waive any of the conditions
specified in Section 3.01, 3.02 or 3.03, (b) increase the Commitments of the
Lenders or subject the Lenders to any additional obligations other than pursuant
to Section 2.07(b), (c) reduce the principal of, or interest on, the Notes or
any fees or other amounts payable hereunder, (d) postpone any date fixed for any
payment of principal of, or interest on, the Notes or any fees or other amounts
payable hereunder, (e) reduce the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number of Lenders, that
shall be required for the Lenders or any of them to take any action hereunder,
(f) extend the Termination Date except as provided pursuant to Section 2.20, (g)
extend the expiration date of any Letter of Credit to a date beyond the latest
possible Termination Date then in effect under this Agreement, or (h) amend this
Section 8.01; and provided further that no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Lenders required
above to take such action, affect the rights or duties of the Agent under this
Agreement or any Note.
SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic,
telex or cable communication) and mailed, transmitted, telegraphed, telexed,
cabled or delivered, if to the Borrower, at its address at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Treasurer with a copy to the Corporate
Secretary of the Borrower, at the
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aforesaid address, if to any Lender, at its Domestic Lending Office specified
opposite its name on Schedule II hereto; if to any other Lender, at its Domestic
Lending Office specified in the Assignment and Acceptance or in the agreement
entered into by such Lender pursuant to Section 2.07(b), pursuant to which it
became a Lender; and if to the Agent, The Chase Manhattan Bank, Loan and Agency
Services Group, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to The
Chase Manhattan Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ (Telecopy No. (212) 270- 7594); or as to the Borrower or the Agent, at
such other address as shall be designated by such party in a written notice to
the other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the Agent. All
such notices and communications shall, when mailed, transmitted, telegraphed,
telexed or cabled, be effective when deposited in the mails, telecopied,
delivered to the telegraph company, confirmed by telex answerback or delivered
to the cable company, respectively, except that notices and communications to
the Agent pursuant to Article II or VII shall not be effective until received by
the Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any Lender
or the Agent to exercise, and no delay in exercising, any right hereunder or
under any other Loan Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on
demand all reasonable out-of-pocket costs and expenses of the Agent and the
Co-Lead Arrangers and Co-Bookrunners in connection with the negotiation,
preparation, execution, syndication, delivery, administration, modification and
amendment of this Agreement, the other Loan Documents and the other documents to
be delivered hereunder, including, without limitation, the reasonable fees and
expenses of counsel for the Agent with respect thereto and with respect to
advising the Agent as to its rights and responsibilities under this Agreement.
The Borrower further agrees to pay on demand all reasonable costs and expenses,
if any (including, without limitation, reasonable counsel fees and expenses) of
the Agent and the Lenders, in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the other Loan
Documents and the other documents to be delivered hereunder, including, without
limitation, reasonable counsel fees and expenses in connection with the
enforcement of rights under this Section 8.04(a).
(b) If any payment of principal of, or Conversion of, any LIBOR
Advance, or any B Advance which bears interest based on a rate per annum at
which deposits in U.S. dollars are offered to prime banks in the London
interbank market, is made by the Borrower to or for the account of a Lender
other than on the last day of the Interest Period
78
for such Advance, as a result of a payment or Conversion pursuant to Section
2.11(g), 2.13 or 2.15 or acceleration of the maturity of the Notes pursuant to
Section 6.01 or for any other reason, the Borrower shall, upon written demand by
such Lender (with a copy of such demand to the Agent), pay to the Agent for the
account of such Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses that it may reasonably incur as a result of
such payment or Conversion, including, without limitation, any loss (including
loss of anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any Lender to
fund or maintain such Advance.
(c) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
Section 2.18 shall survive the payment in full of principal and interest
hereunder and under the Notes.
SECTION 8.05. Right of Setoff. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of Section 6.01,
each Lender and the Agent are hereby authorized at any time and from time to
time, to the fullest extent permitted by law to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender or the Agent to or
for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement and
any Note held by such Lender or the Agent, whether or not such Lender or the
Agent shall have made any demand under this Agreement or such Note and although
such obligations may be unmatured. Each Lender and the Agent agree promptly to
notify the Borrower after any such setoff and application made by such Lender or
the Agent, provided that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of each Lender and the Agent
under this Section 8.05 are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which such Lender and the Agent may
have.
SECTION 8.06. Binding Effect. This Agreement shall become effective
(other than Sections 2.01 and 2.03, which shall only become effective upon
satisfaction of the conditions set forth in Section 3.01) when it shall have
been executed by the Borrower and the Agent and when the Agent shall have been
notified by each Lender that is a signatory hereto that such Lender has executed
it and thereafter shall be binding upon and inure to the benefit of the
Borrower, the Agent and each Lender and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Lenders.
79
SECTION 8.07. Assignments and Participations. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Borrower may
not assign or otherwise transfer any of its rights under this Agreement without
the prior written consent of all Lenders.
(b) Any Lender may at any time grant to one or more lenders or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its A Advances. In the event of any such grant by a Lender of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Lender shall remain responsible for the performance
of its obligations hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement pursuant to which any
Lender may grant such a participating interest shall provide that such Lender
shall retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such participation agreement may provide that such Lender will not agree to
any modification, amendment or waiver of this Agreement described in clause (c)
or (d) or (g) of Section 8.01 without the consent of the Participant. The
Borrower agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Article VII with respect
to its participating interest. An assignment or other transfer which is not
permitted by subsection (c) or (d) below shall be given effect for purposes of
this Agreement only to the extent of a participating interest granted in
accordance with this subsection (b).
(c) Any Lender may at any time and, so long as no Default shall have
occurred and be continuing, if demanded by the Borrower pursuant to Section 2.21
upon at least five Business Days' notice to such Lender and the Agent, will
assign to one or more Eligible Assignees (each an "Assignee") all, or a
proportionate part (such portion to be in an amount equal to all of such
Lender's Commitment or equal to or greater than $5,000,000 or an integral
multiple of $1,000,000 in excess thereof), unless otherwise agreed to by the
Borrower and the Agent) of all, of its rights and obligations under this
Agreement and the other Loan Documents, and such Assignee shall assume such
rights and obligations, pursuant to an assignment and acceptance in
substantially the form of Exhibit C hereto (an "Assignment and Acceptance")
executed by such Assignee and such transferor Lender, with (and subject to) the
subscribed consent of the Borrower and the Agent, such consents not to be
unreasonably withheld; provided that if an Assignee is a Lender Affiliate of
such transferor Lender or another Lender, neither the Borrower's nor the Agent's
consent shall be required and, if any Event of Default shall have occurred and
be continuing, the Borrower's consent shall not be required; and provided
further that such assignment may, but need not, include rights of the transferor
Lender in respect of outstanding B Advances. Notwithstanding the foregoing, no
assigning Lender shall, after
80
giving effect to any such assignment, and as determined on the effective date of
the Assignment and Acceptance with respect thereto, retain a Commitment
hereunder of less than $5,000,000 (unless otherwise agreed to by the Borrower
and the Agent). Upon execution of an Assignment and Acceptance and the payment
of a nonrefundable assignment fee of $3,500 in immediately available funds to
the Agent in connection with each such assignment, written notice thereof by
such transferor Lender to the Agent and the recording by the Agent of such
assignment in the register (the "Register") maintained by the Agent and the
resulting effect upon the Advances of the assigning Lender and the Assignee, the
Assignee shall have, to the extent of such assignment, the same rights and
benefits as it would have if it were a Lender hereunder and the holder of a Note
(provided that the Borrower and the Agent shall be entitled to continue to deal
solely and directly with the assignor Lender in connection with the interests so
assigned to the Assignee until written notice of such assignment, together with
payment instructions, addresses and related information with respect to the
Assignee, shall have been given to the Borrower and the Agent by the assignor
Lender and the Assignee) and, if the Assignee has expressly assumed, for the
benefit of the Borrower, some or all of the transferor Lender's obligations
hereunder, such transferor Lender shall be relieved of its obligations hereunder
to the extent of such assignment and assumption. If the Assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall, prior to the date it becomes a Lender under this Agreement, deliver to
the Borrower and the Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance with Section
2.18. Each Assignee shall take such Advances and Commitment subject to the
provisions of this Agreement and to any request made, waiver or consent given or
other action taken hereunder, prior to the receipt by the Agent and the Borrower
of written notice of such transfer, by each previous holder of such Advances and
Commitment. Such Assignment and Acceptance shall be deemed to amend this
Agreement and Schedule I hereto, to the extent, and only to the extent,
necessary to reflect the addition of such Assignee as a Lender and the resulting
adjustment of all or a portion of the rights and obligations of such transferor
Lender under this Agreement, the determination of its Percentage (in each case,
rounded to twelve decimal places), the Advances and any new Notes to be issued,
at the Borrower's expense, to such Assignee, and no further consent or action by
the Borrower or the Lenders shall be required to effect such amendments.
(d) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time pledge or assign all or any portion of its rights
under this Agreement and the other documents executed and delivered in
connection herewith (including, without limitation, the Note held by it) to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to any Federal Reserve Bank in accordance with Regulation A of the
Federal Reserve Board without notice to, or the consent of, the Borrower or the
Agent and this Section shall not apply to any such pledge or assignment of a
security interest; provided that no such pledge or assignment of a
81
security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
(e) No Assignee. Participant or other transferee of any Lender's rights
shall be entitled to receive any greater payment under Section 2.14 than such
Lender would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 2.14 or 2.15 requiring such
Lender to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
(f) Notwithstanding anything to the contrary contained herein, any
Lender (a "Designating Lender"):
(i) may grant to one or more special purpose funding vehicles
(each, an "SPV"), identified as such in writing from time to time by
the Designating Lender to the Agent and the Borrower, the option to
provide to the Borrower all or any part of any Advance that such
Designating Lender would otherwise be obligated to make to the Borrower
pursuant to this Agreement; provided that (A) nothing herein shall
constitute a commitment by any SPV to make any Advance; (B) if an SPV
elects not to exercise such option or otherwise fails to provide all or
any part of such Advance, the Designating Lender shall be obligated to
make such Advance pursuant to the terms hereof and (C) the Designating
Lender shall remain liable for any indemnity or other payment
obligation with respect to its Commitment hereunder. The making of an
Advance by an SPV hereunder shall utilize the Commitment of the
Designating Lender to the same extent, and as if, such Advance were
made by such Designating Lender.
(ii) As to any Advances or portion thereof made by it, each
SPV shall have all the rights that a Lender making such Advances or
portion thereof would have had under this Agreement; provided, however,
that each SPV shall have granted to its Designating Lender an
irrevocable power of attorney, to deliver and receive all
communications and notices under this Agreement and any other Loan
Documents and to exercise on such SPV's behalf, all of such SPV's
voting rights under this Agreement. No Note shall be required to
evidence the Advances or portion thereof made by an SPV; and the
related Designating Lender shall be deemed to hold its Note (if such
Note is requested by the Designated Lender under this Agreement) as
agent for such SPV to the extent of the Advances or portion thereof
funded by such SPV. In addition, any payments for the account of any
SPV shall be paid to its Designating Lender as agent for such SPV.
(iii) Each party hereto hereby agrees that no SPV shall be
liable for any indemnity or payment under this Agreement for which a
Lender would otherwise
82
be liable. In furtherance of the foregoing, each party hereto hereby
agrees (which agreements shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after
the payment in full of all outstanding commercial paper or other senior
indebtedness of any SPV, it will not institute against, or join any
other person in instituting against, such SPV any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings
under the laws of the United States or any State thereof.
(iv) In addition, notwithstanding anything to the contrary
contained in this Section 8.07(f) or otherwise in this Agreement, any
SPV may (A) at any time and without paying any processing fee therefor,
assign or participate all or a portion of its interest in any Advances
to the Designating Lender or to any financial institutions providing
liquidity and/or credit support to or for the account of such SPV to
support the funding or maintenance of Advances and (B) disclose on a
confidential basis any non-public information relating to its Advances
to any rating agency, commercial paper dealer or provider of any
surety, guarantee or credit or liquidity enhancements to such SPV. This
Section 8.07(f) may not be amended without the written consent of any
Designating Lender affected thereby.
SECTION 8.08. Indemnification. The Borrower agrees to indemnify and
hold harmless the Agent, each Lender and each of their Affiliates and their
respective directors, officers, employees, agents, advisors and representatives
(each, an "Indemnified Party"), from and against, and to promptly reimburse them
and each of them, for any and all liabilities, obligations, losses, damages,
actions, judgments, suits, claims, costs, out-of-pocket expenses and
disbursements (including, without limitation, interest, penalties and all
reasonable attorneys' fees and expenses) and settlement costs that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of, or in connection with the
preparation for a defense of, any litigation or proceeding or governmental
action or investigation (administrative or judicial), arising out of, related to
or in connection with the actual or proposed use of the proceeds of the Advances
or arising out of this Agreement or any other Loan Document, whether or not such
investigation, litigation or proceeding is brought by the Borrower, its
directors, shareholders or creditors or an Indemnified Party or any other Person
or any Indemnified Party is otherwise a party thereto or is otherwise required
to respond thereto, provided that the Borrower shall not be liable hereunder to
the extent such claim, damage, loss, liability, or expense (i) arises out of any
settlement made without the Borrower's consent, which consent shall not
unreasonably be withheld, (ii) arises out of any proceeding brought against any
Indemnified Party by a security holder of such Indemnified Party based upon
rights afforded such security holder solely in its capacity as such, (iii)
arises solely from disputes among two or more Indemnified Parties, (iv) is found
in a final, non-appealable judgment of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such Indemnified
Party or (v) is found in a final, non-appealable judgment of a court of
83
competent jurisdiction to have resulted solely from such Indemnified Party's
breach of its obligations under the Loan Documents.
SECTION 8.09. Governing Law; Submission to Jurisdiction. This Agreement
and the Notes shall be governed by, and construed in accordance with, the laws
of the State of New York. The Borrower hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York City for purposes
of all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby.
SECTION 8.10. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page by telecopier shall be
effective as delivery of an original executed counterpart of this Agreement.
SECTION 8.11. Confidentiality. Except to the extent permitted by this
Section, the Lenders shall keep confidential all non-public information obtained
by them from the Borrower pursuant to this Agreement that has been identified as
such by the Borrower; provided, however, that Lenders may make such disclosure
thereof as is required or requested by any governmental agency or
self-regulatory organization or representative thereof with supervisory
jurisdiction over it or pursuant to legal process, or as may otherwise be
required by law or court order; provided further, however, that, unless
specifically prohibited by applicable law or court order, each Lender shall
notify the Borrower of any request received by it from any governmental agency
or self-regulatory organization or representative thereof (other than any such
request in connection with an examination of such Lender by a governmental
agency or self-regulatory organization with supervisory jurisdiction over it)
for disclosure of any such non-public information prior to disclosure of such
information so that the Borrower may seek an appropriate protective order. The
Borrower authorizes each Lender to disclose to any of its Affiliates, attorneys,
auditors and accountants and any prospective Lender or participant any and all
information in such Lender's possession concerning the Borrower and any
Subsidiary of the Borrower that has been delivered to such Lender by or on
behalf of the Borrower pursuant to Section 5.01(f), provided that each such
Person shall agree to keep such information confidential in accordance with this
Section 8.11. In no event shall any Lender be obligated or required to return
any materials furnished by or on behalf of the Borrower or any of its
Subsidiaries. Notwithstanding the foregoing, this Section 8.11 shall not apply
to any information that is or becomes generally available to the public or any
Lender other than as a result of the disclosure by (a) the Borrower to any
Lender or (b) any Lender, participant, prospective Lender or participant or
their respective representatives.
84
SECTION 8.12. WAIVER OF JURY TRIAL, ETC. EACH OF THE BORROWER, THE
AGENT, THE SYNDICATION AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS, THE ADVANCES OR THE ACTIONS OF THE AGENT, THE SYNDICATION AGENT OR
ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
SECTION 8.13. Effectiveness of the Amendment and Restatement; Original
Credit Agreement. This Agreement shall become effective on the Amendment and
Restatement Effective Date, and thereafter shall be binding upon and inure to
the benefit of the parties hereto and the parties to the Original Credit
Agreement and their respective successors and assigns. Until this Agreement
becomes effective as provided in this Section 8.13, the Original Credit
Agreement shall remain in full force and effect and shall not be affected
hereby. After the Amendment and Restatement Effective Date, all obligations of
the Borrower under the Original Credit Agreement shall become obligations of the
Borrower hereunder, secured by the Liens granted under the Security Documents,
and the provisions of the Original Credit Agreement shall be superseded by the
provisions hereof. Except as otherwise expressly stated hereunder, the term of
this Agreement is for all purposes deemed to have commenced on the Effective
Date.
SECTION 8.14. Replacement of Agent. The parties agree and acknowledge
that, or an from the date of this agreement, the Agent replaces Bankers Trust
Company as administrative agent under and on the terms set out in this
agreement.
(Signature Page Follows)
85
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
SUPERVALU INC.
By:
--------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Agent
By:
--------------------------------------
Name:
Title:
BANK ONE, NA,
as Syndication Agent
By:
--------------------------------------
Name:
Title:
86
EXHIBIT F
FORM OF COLLATERAL AND GUARANTEE AGREEMENT
COLLATERAL AND GUARANTEE AGREEMENT
Dated as of August 16, 2001
Among
SUPERVALU INC.,
and
THE SUBSIDIARIES NAMED HEREIN,
and
THE CHASE MANHATTAN BANK,
as Collateral Agent
and
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
and
SUNTRUST BANK
and
TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA
Table of Contents
Page
----
ARTICLE I
Definitions and Effectiveness
SECTION 1.01. Credit Agreement...............................................1
SECTION 1.02. Other Defined Terms............................................1
SECTION 1.03. Effectiveness..................................................4
ARTICLE II
Guarantee
SECTION 2.01. Guarantee......................................................5
SECTION 2.02. Guarantee of Payment...........................................5
SECTION 2.03. No Limitations, Etc............................................5
SECTION 2.04. Reinstatement..................................................6
SECTION 2.05. Agreement To Pay; Subrogation..................................6
SECTION 2.06. Information....................................................6
ARTICLE III
Pledge of Securities
SECTION 3.01. Pledge.........................................................6
SECTION 3.02. Delivery of the Pledged Collateral.............................7
SECTION 3.03. Representations, Warranties and Covenants......................7
SECTION 3.04. Certification of Limited Liability Company and Limited
Partnership Interests................................................8
SECTION 3.05. Registration in Nominee Name; Denominations....................9
SECTION 3.06. Voting Rights; Dividends and Interest, etc.....................9
ARTICLE IV
Security Interests in Personal Property
SECTION 4.01. Security Interest.............................................10
SECTION 4.02. Representations and Warranties................................11
SECTION 4.03. Covenants.....................................................12
SECTION 4.04. Other Actions.................................................15
i
ARTICLE V
Remedies
SECTION 5.01. Remedies upon Default.........................................16
SECTION 5.02. Application of Proceeds.......................................17
SECTION 5.03. Securities Act, etc...........................................18
SECTION 5.04. Registration, etc.............................................19
ARTICLE VI
Indemnity and Subrogation
SECTION 6.01. Indemnity and Subrogation.....................................19
SECTION 6.02. Contribution and Subrogation..................................20
SECTION 6.03. Subordination.................................................20
ARTICLE VII
Miscellaneous
SECTION 7.01. Notices.......................................................20
SECTION 7.02. Security Interest Absolute....................................20
SECTION 7.03. Survival of Agreement.........................................21
SECTION 7.04. Binding Effect; Several Agreement.............................21
SECTION 7.05. Successors and Assigns........................................21
SECTION 7.06. Collateral Agent's Fees and Expenses; Indemnification.........21
SECTION 7.07. Collateral Agent Appointed Attorney-in-Fact...................22
SECTION 7.08. GOVERNING LAW.................................................23
SECTION 7.09. Waivers; Amendment............................................23
SECTION 7.10. WAIVER OF JURY TRIAL..........................................23
SECTION 7.11. Severability..................................................24
SECTION 7.12. Counterparts..................................................24
SECTION 7.13. Headings......................................................24
SECTION 7.14. Jurisdiction; Consent to Service of Process...................24
SECTION 7.15. Termination or Release........................................25
SECTION 7.16. Additional Subsidiaries.......................................25
ii
COLLATERAL AND GUARANTEE AGREEMENT dated as of August __, 2001, among
SUPERVALU INC., a Delaware corporation ("Supervalu"), the Subsidiaries
identified in Schedule I herein, THE CHASE MANHATTAN BANK, as Collateral Agent
(the "Collateral Agent"), THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, TEACHERS
INSURANCE AND ANNUITY ASSOCIATION OF AMERICA and SUNTRUST BANK in its capacity
as Agent under the SunTrust Credit Documents (as defined below).
Reference is made to (a) the Credit Agreement dated as of August , 2001
(as amended, supplemented or otherwise modified from time to time, the "364-Day
Credit Agreement"), among Supervalu (the "364-Day Borrower"), the lenders party
thereto (the "364-Day Lenders") and The Chase Manhattan Bank, as Agent (the
"364-Day Agent"), and (b) the Amended and Restated Credit Agreement dated as of
August , 2001 (as amended, supplemented or otherwise modified from time to time,
the "5-Year Credit Agreement"), among Supervalu (the "5-Year Borrower"), the
lenders party thereto (the "5-Year Lenders") and The Chase Manhattan Bank, as
Agent (the "5-Year Agent") (c) the Prudential Exchange Agreement (as defined
below), (d) the SunTrust Master Lease Agreement (as defined below), (e) the
Teachers Exchange Agreement (as defined below), and (f) the Designated
Obligations Documents (as defined below). The 364-Day Lenders and the 5-Year
Lenders have agreed to extend credit to Supervalu as 364-Day Borrower and as
5-Year Borrower (respectively) subject to the terms and conditions set forth in
the 364-Day Credit Agreement and the 5-Year Credit Agreement (respectively). The
obligations of the Lenders under the Credit Agreements to extend such credit are
conditioned upon, among other things, the execution and delivery of this
Agreement. In addition, credit has been extended to the Borrower under the
Prudential Exchange Agreement, SunTrust Master Lease Agreement and the Teachers
Exchange Agreement (collectively, the "Credit Documents"). The Subsidiary
Parties are affiliates of the Borrower, will derive, and have derived,
substantial benefits from the extensions of credit to the Borrower pursuant to
the Credit Agreements and the Credit Documents and are willing to execute and
deliver this Agreement in order to induce the Lenders under the Credit
Agreements to extend such credit and the parties to the Credit Documents to take
certain actions. Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions and Effectiveness
SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this
Agreement and not otherwise defined herein have the meanings specified in the
Credit Agreements. All terms defined in the New York UCC (as defined herein) and
not defined in this Agreement have the meanings specified therein; the term
"instrument" shall have the meaning specified in Article 9 of the New York UCC.
(b) The rules of construction specified in Article I of the Credit
Agreement also apply to this Agreement.
2
SECTION 1.02. Other Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"Account Debtor" means any Person who is or who may become
obligated to any Grantor under, with respect to or on account of an
Account.
"Agents" mean the 364-Day Agent and the 5-Year Agent.
"Borrower" means Supervalu in each of its capacities as
364-Day Borrower and 5-Year Borrower.
"Collateral" has the meaning assigned to such term in Section
4.01.
"Credit Agreements" means the 364-Day Credit Agreement and the
5-Year Credit Agreement.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Designated Obligations" means the due and punctual payment by
the Borrower of the principal of and interest (including interest
accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed
or allowable in such proceeding) on Debt (as defined in the Credit
Agreements) owed by the Borrower to a Designated Secured Party.
"Designated Obligation Document" means any document, agreement
or instrument identified to the Collateral Agent in writing on or prior
to the Effective Date under which the Borrower owes a Designated
Secured Party any Designated Obligations.
"Designated Secured Party" means any of the Persons named as
lessor in the documents referred to under the caption "Structured Lease
Transactions" in Schedule VIII of the Credit Agreements that (a) is
designated by the Borrower as a Designated Secured Party by written
notice delivered to the Collateral Agent and (b) executes an Assumption
Agreement in the form of Annex IV hereof.
"Effective Date" has the meaning assigned to that term in the
364-Day Credit Agreement and the 5-Year Credit Agreement.
"Events of Default" has the meaning specified in Section 6.01
of the Credit Agreements.
"Excluded Accounts Receivables" means (x) all Accounts
Receivable that have been sold pursuant to the Permitted Receivables
Financing or pursuant to any transaction permitted by clause (iv) of
Section 5.02(c) of the 364-Day Credit Agreement and clause 5.02(c) of
the 5-Year Credit Agreement, and (y) all Accounts Receivable that are
subject to a Lien pursuant to the Permitted Receivables Financing.
"Federal Securities Laws" has the meaning assigned to such
term in Section 5.03.
"Grantors" means the Borrower and the Subsidiary Parties.
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"Guarantors" means the Subsidiary Parties.
"Hedging Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price
protection agreement or other interest or currency exchange rate or
commodity price hedging arrangement.
"Indemnified Parties" has the meaning assigned to that term in
Section 8.08 of the 364-Day Credit Agreement and Section 8.08 of the
5-Year Credit Agreement and also includes the Secured Parties and their
respective directors, officers, employees, agents, advisors and
representatives.
"Lenders" means the 364-Day Lenders and the 5-Year Lenders.
"Loan Documents" means the "Loan Documents" as defined in the
364-Day Credit Agreement, the "Loan Documents" as defined in the 5-Year
Credit Agreement, the Prudential Exchange Agreement, the Teachers
Exchange Agreement and the "Loan Documents" as defined in the SunTrust
Master Lease Agreement.
"Majority Secured Parties" means at any time Secured Parties
holding greater than 51% of the then aggregate unpaid principal amount
of the Obligations.
"Mortgage" shall mean a mortgage, deed of trust, assignment of
leases and rents, leasehold mortgage or other security document
granting a Lien on any Mortgaged Property to secure the Obligations in
each case in form and substance reasonably satisfactory to the Agent.
"Mortgaged Property" means each parcel of real property and
the improvements thereto owned by a Loan Party on a schedule delivered
to the Agents on or before the Effective Date (except as otherwise
expressly specified in such Schedule) or any supplement thereto which
is delivered to the Agents pursuant to Section 3A.07 of the Credit
Agreements.
"New York UCC" means the Uniform Commercial Code as from time
to time in effect in the State of New York.
"Obligations" means (a) the due and punctual payment by the
Borrower of (i) the principal of and interest (including interest
accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed
or allowable in such proceeding) on the Borrowings under the 364-Day
Agreement and the Loans under the 5-Year Credit Agreement, when and as
due, whether at maturity, by acceleration, upon one or more dates set
for prepayment or otherwise, and (ii) each payment required to be made
by the Borrower under the 5-Year Credit Agreement in respect of any
Letter of Credit, when and as due, including payments in respect of
reimbursement of disbursements, interest thereon and obligations to
provide cash collateral, (b) the due and punctual performance of all
other obligations of the Borrower under or pursuant to the Credit
Agreements and each of the other Loan Documents, (c) the due and
punctual payment and performance of all the obligations of each other
Pledgor under or pursuant to this Agreement and each of the other Loan
Documents, (d) the due and punctual payment and performance of all
obligations of each Loan Party under each Hedging Agreement that (i) is
in effect on the Effective Date with a counterparty that is a Lender or
an Affiliate of a Lender as of the Effective Date or (ii) is
4
entered into after the Effective Date with any counterparty that is a
Lender or an Affiliate of a Lender at the time such Hedging Agreement
is entered into, (e) the due and punctual payment by the Borrower of
the principal, make-whole premium, if any, and of the interest
(including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding) on the Prudential
Notes, (f) the due and punctual payment by the Borrower of the
principal, make-whole premium, if any, and of the interest (including
interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding) on the Teachers Notes and due
and punctual payment by the Guarantor (as defined in the Teachers
Exchange Agreement) in respect of its guarantee of such obligation, (g)
the due and punctual payment by the Borrower of the SunTrust Loans and
all obligations under the SunTrust Master Lease Agreement in respect of
its guarantee of such obligations, (h) all other monetary obligations
of the Borrower to any of the Secured Parties under the Loan Documents,
including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed
or allowable in such proceeding), and (i) due and punctual payment by
the Borrower of any Designated Obligations.
"Perfection Certificate" means a certificate substantially in
the form of Annex 2, completed and supplemented with the schedules and
attachments contemplated thereby, and duly executed by a Financial
Officer and the chief legal officer of the Borrower. "Pledged
Collateral" has the meaning assigned to such term in Section 3.01.
"Pledged Securities" means any stock certificates or other
securities now or hereafter included in the Pledged Collateral,
including all certificates, instruments or other documents representing
or evidencing any Pledged Collateral.
"Pledged Stock" has the meaning assigned to such term in
Section 3.01.
"Pledgors" means the Borrower and the Subsidiary Parties.
"Proceeds" has the meaning specified in Section 9-102 of the
New York UCC.
"Prudential Exchange Agreement" means the Exchange Agreement
dated as of May 26, 1994 between the Borrower and The Prudential
Insurance Company of America in respect of $24,917,019.57 in original
principal amount of 9.96 % Senior Notes due November 1, 2005, as
amended as of the date hereof.
"Prudential Notes" means the Notes as defined in the
Prudential Exchange Agreement.
"Secured Parties" means (a) the Lenders, (b) the Collateral
Agent, (c) the Issuing Bank, (d) each counterparty to any Hedging
Agreement with a Loan Party that either (i) is in effect on the
Effective Date if such counterparty is a Lender or an Affiliate of a
Lender as of the Effective Date or (ii) is entered into after the
Effective Date if such counterparty is a Lender or an Affiliate of a
Lender at the time such Hedging Agreement is entered into, (e) the
364-Day Agent for itself and on behalf of the 364-Day Lenders,
5
(f) the 5-Year Agent for itself and on behalf of the 5-Year Lenders,
(g) the beneficiaries of each indemnification obligation undertaken by
any Grantor or Pledgor under any Loan Document, (h) the holders of the
Prudential Notes outstanding pursuant to the Prudential Exchange
Agreement), (i) the holders of the Teachers Notes outstanding pursuant
to the Teachers Exchange Agreement, (j) the Lenders, the Lessor and the
Agent (each as defined in the SunTrust Master Lease Agreement), (k)
each Designated Secured Party, and (l) the successors and assigns of
each of the foregoing.
"Security Event" means, at any time, (i) a reduction of the
Borrower's long-term senior unsecured debt rating from S&P to BB+ or
worse or from ▇▇▇▇▇'▇ to Ba1 or worse, or (ii) neither S&P nor ▇▇▇▇▇'▇
has in effect a rating of the Borrower's long-term senior unsecured
debt.
"Security Interest" has the meaning assigned to such term in
Section 4.01.
"Subsidiary Parties" means (a) the Subsidiaries identified on
Schedule I and (b) each other Subsidiary that becomes a party to this
Agreement as contemplated by Section 7.16.
"SunTrust Loans" means the Loans as defined in the SunTrust
Master Lease Agreement.
"SunTrust Master Lease Agreement" means (i) the Master
Agreement dated as of April 20, 1998 among Super Rite Foods, Inc. as
lessee, Richfood Holdings, Inc. as guarantor, Atlantic Financial Group,
Ltd as lessor, certain financial institutions party thereto and
SunTrust Bank (formerly known as SunTrust Bank, Atlanta) as agent, as
amended as of the date hereof, (ii) the Lease Agreement dated April 20,
1998 between Atlantic Financial Group, Ltd as lessor and Super Rite
Foods, Inc. as lessee, as amended as of the date hereof .
"Teachers Exchange Agreement" means the Exchange Agreement
dated as of February 10, 1994 between the Borrower and Teachers
Insurance and Annuity Association of America in respect of
$22,791,850.99 in original principal amount of 9.46% Senior Notes,
Series A due January 30, 2010 and $3,601,949.21 in original principal
amount of 8.28% Senior Notes, Series B due January 30, 2010, as amended
as of the date hereof.
"Teachers Notes" means the Notes as defined in the Teachers
Exchange Agreement.
SECTION 1.03. Effectiveness. Articles II, III (other than Sections 3.03
and 3.04), IV (other than Sections 4.02 and 4.03), V and VI will, automatically
and without any further action by any Person, become effective upon, and only
upon, the occurrence of a Security Event, as evidenced by publication by S&P or
▇▇▇▇▇'▇ (as the case may be) of the change in, or removal of, the Borrower's
long-term senior unsecured debt rating as of the day of such Security Event.
ARTICLE II
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Guarantee
SECTION 2.01. Guarantee. Each Guarantor unconditionally guarantees,
jointly with the other Guarantors and severally, as a primary obligor and not
merely as a surety, the due and punctual payment and performance of the
Obligations. Each of the Guarantors further agrees that the Obligations may be
extended or renewed, in whole or in part, without notice to or further assent
from it, and that it will remain bound upon its guarantee notwithstanding any
extension or renewal of any Obligation. Each of the Guarantors waives
presentment to, demand of payment from and protest to the Borrower or any other
Pledgor of any of the Obligations, and also waives notice of acceptance of its
guarantee and notice of protest for nonpayment.
SECTION 2.02. Guarantee of Payment. Each of the Guarantors further
agrees that its guarantee hereunder constitutes a guarantee of payment when due
and not of collection, and waives any right to require that any resort be had by
the Collateral Agent or any other Secured Party to any security held for the
payment of the Obligations or to any balance of any deposit account or credit on
the books of the Collateral Agent or any other Secured Party in favor of the
Borrower or any other Person.
SECTION 2.03. No Limitations, Etc. (a) Except for termination of a
Guarantor's obligations hereunder as expressly provided in Section 8.15, the
obligations of each Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to any defense or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
each Guarantor hereunder shall not be discharged or impaired or otherwise
affected by (i) the failure of the Collateral Agent or any other Secured Party
to assert any claim or demand or to enforce any right or remedy under the
provisions of any Loan Document or otherwise; (ii) any rescission, waiver,
amendment or modification of, or any release from any of the terms or provisions
of, any Loan Document or any other agreement, including with respect to any
other Guarantor under this Agreement; (iii) the release of any security held by
the Collateral Agent or any other Secured Party for the Obligations or any of
them; (iv) any default, failure or delay, willful or otherwise, in the
performance of the Obligations; or (v) any other act or omission that may or
might in any manner or to any extent vary the risk of any Guarantor or otherwise
operate as a discharge of any Guarantor as a matter of law or equity (other than
the indefeasible payment in full in cash of all the Obligations). Each Guarantor
expressly authorizes the Secured Parties to take and hold security for the
payment and performance of the Obligations and this Agreement, to exchange,
waive or release any or all such security (with or without consideration), to
enforce or apply such security and direct the order and manner of any sale
thereof in their sole discretion or to release or substitute any one or more
other guarantors or obligors upon or in respect of the Obligations, all without
affecting the obligations of any Guarantor hereunder.
(b) To the fullest extent permitted by applicable law, each Guarantor
waives any defense based on or arising out of any defense of the Borrower or any
other Pledgor or the unenforceability of the Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the Borrower
or any other Pledgor, other than the indefeasible payment in full in cash of all
the Obligations. The Collateral Agent and the other Secured Parties may, at
their election, foreclose on any security held by one
7
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 the Borrower or any
other Pledgor or exercise any other right or remedy available to them against
the Borrower or any other Pledgor, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the Obligations have
been fully and indefeasibly paid in full in cash. To the fullest extent
permitted by applicable law, each Guarantor 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 Guarantor against the Borrower or any other
Pledgor, as the case may be, or any security.
SECTION 2.04. Reinstatement. Each of the Guarantors agrees that its
guarantee hereunder shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by the Collateral Agent or any other
Secured Party upon the bankruptcy or reorganization of the Borrower, any other
Pledgor or otherwise.
SECTION 2.05. Agreement To Pay; Subrogation. In furtherance of the
foregoing and not in limitation of any other right that the Collateral Agent or
any other Secured Party has at law or in equity against any Guarantor by virtue
hereof, upon the failure of the Borrower or any other Pledgor to pay any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Collateral Agent
for distribution to the applicable Secured Parties in cash the amount of such
unpaid Obligation. Upon payment by any Guarantor of any sums to the Collateral
Agent as provided above, all rights of such Guarantor against the Borrower or
any other Guarantor arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subject to Article VI.
SECTION 2.06. Information. Each Guarantor assumes all responsibility
for being and keeping itself informed of the Borrower's and each other Pledgor's
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder, and agrees that none of
the Collateral Agent or the other Secured Parties will have any duty to advise
such Guarantor of information known to it or any of them regarding such
circumstances or risks.
ARTICLE III
Pledge of Securities
SECTION 3.01. Pledge. As security for the payment or performance, as
the case may be, in full of the Obligations, each Pledgor hereby assigns and
pledges to the Collateral Agent, its successors and assigns, for the benefit of
the Secured Parties, and hereby grants to the Collateral Agent, its successors
and assigns, for the benefit of the Secured Parties, a security interest in, all
of such Pledgor's right, title and interest in, to and under (a) the shares of
capital stock and other Equity Interests (listed on Schedule II) of each
Subsidiary of the Borrower (other than (i) any Immaterial Subsidiary, (ii) any
8
Excluded Domestic Subsidiary and (iii) any Subsidiary of the Borrower (A) that
is not wholly owned, directly or indirectly, by the Borrower or its other
Subsidiaries, (B) the Equity Interests in which cannot be pledged without
violating the organizational documents of such Subsidiary or any agreement to
which the Borrower or any of its Subsidiaries is a Party and (C) identified on
Schedule V of the Credit Agreements as an "Excluded Pledged Subsidiary"),
including the Receivables Subsidiary, and the certificates representing all such
Equity Interests (the "Pledged Stock"); provided that the Pledged Stock shall
not include more than 65% of the issued and outstanding voting Equity Interests
of any Foreign Subsidiary; (b) all other property that may be delivered to and
held by the Collateral Agent pursuant to the terms of this Section; (c) subject
to Section 3.06, all payments of dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of,
in exchange for or upon the conversion of, and all other Proceeds received in
respect of, the securities referred to in clause (a) above; (d) subject to
Section 3.06, all rights and privileges of such Pledgor with respect to the
securities and other property referred to in clauses (a), (b) and (c) above; and
(e) all Proceeds of any of the foregoing (the items referred to in clauses (a)
through (e) above being collectively referred to as the "Pledged Collateral").
TO HAVE AND TO HOLD the Pledged Collateral, together with all right,
title, interest, powers, privileges and preferences pertaining or incidental
thereto, unto the Collateral Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, forever; subject, however, to the terms,
covenants and conditions hereinafter set forth.
SECTION 3.02. Delivery of the Pledged Collateral. (a) Each Pledgor
agrees to deliver or cause to be delivered to the Collateral Agent any and all
Pledged Securities in accordance with Article IIIA of the 364-Day Credit
Agreement and Article IIIA of the 5-Year Credit Agreement
(b) Upon delivery to the Collateral Agent, (i) any Pledged Securities
shall be accompanied by stock powers duly executed in blank or other instruments
of transfer satisfactory to the Collateral Agent and by such other instruments
and documents as the Collateral Agent may reasonably request and (ii) all other
property comprising part of the Pledged Collateral shall be accompanied by
proper instruments of assignment duly executed by the applicable Pledgor and
such other instruments or documents as the Collateral Agent may reasonably
request. Each delivery of Pledged Securities shall be accompanied by a schedule
describing the securities, which schedule shall be attached hereto as Schedule
II and made a part hereof; provided that failure to attach any such schedule
hereto shall not affect the validity of such pledge of such Pledged Securities.
Each schedule so delivered shall supplement any prior schedules so delivered.
SECTION 3.03. Representations, Warranties and Covenants. The Pledgors
jointly and severally represent, warrant and covenant to and with the Collateral
Agent, for the benefit of the Secured Parties, that:
(a) Schedule II (as amended from time to time by written
notice from the Borrower to the Agent) correctly sets forth the
percentage of the issued and outstanding shares of each class of the
capital stock of the issuer thereof represented by such Pledged Stock;
(b) the Pledged Stock has been duly and validly authorized and
issued by the issuers thereof and are fully paid and nonassessable;
9
(c) except for the security interests granted hereunder, each
of the Pledgors (i) is and will continue to be the direct owner,
beneficially and of record, of the Pledged Securities indicated on
Schedule II as owned by such Pledgor, (ii) holds the same free and
clear of all Liens, (iii) will make no assignment, pledge,
hypothecation or transfer of, or create or permit to exist any security
interest in or other Lien on, the Pledged Collateral, other than
pursuant hereto, and (iv) subject to Section 3.06, will cause any and
all Pledged Collateral, whether for value paid by the Pledgor or
otherwise, to be forthwith deposited with the Collateral Agent and
pledged or assigned hereunder;
(d) except for restrictions and limitations imposed by the
Loan Documents or securities laws generally, the Pledged Collateral is
and will continue to be freely transferable and assignable, and none of
the Pledged Collateral is or will be subject to any option, right of
first refusal, shareholders agreement, charter or by- law provisions or
contractual restriction of any nature that might prohibit, impair,
delay or otherwise affect the pledge of such Pledged Collateral
hereunder, the sale or disposition thereof pursuant hereto or the
exercise by the Collateral Agent of rights and remedies hereunder;
(e) each of the Pledgors (i) has the power and authority to
pledge the Pledged Collateral pledged by it hereunder in the manner
hereby done or contemplated and (ii) will defend its title or interest
thereto or therein against any and all Liens (other than the Lien
created by this Agreement), however arising, of all Persons whomsoever;
(f) no consent or approval of any Governmental Authority, any
securities exchange or any other Person was or is necessary to the
validity of the pledge effected hereby (other than such as have been
obtained and are in full force and effect);
(g) by virtue of the execution and delivery by the Pledgors of
this Agreement, when any Pledged Securities are delivered to the
Collateral Agent in accordance with this Agreement, the Collateral
Agent will, subject to Section 1.03, obtain a legal, valid and
perfected first priority lien upon and security interest in such
Pledged Securities as security for the payment and performance of the
Obligations; and
(h) the pledge effected hereby is effective to vest in the
Collateral Agent, for the benefit of the Secured Parties, the rights of
the Collateral Agent in the Pledged Collateral as set forth herein.
SECTION 3.04. Certification of Limited Liability Company and Limited
Partnership Interests. Each interest in any limited liability company or limited
partnership controlled by any Grantor and pledged hereunder shall be represented
by a certificate, shall be a "security" within the meaning of Article 8 of the
New York UCC and shall be governed by Article 8 of the New York UCC.
SECTION 3.05. Registration in Nominee Name; Denominations. The
Collateral Agent, on behalf of the Secured Parties, shall have the right (in its
sole and absolute discretion) to hold the Pledged Securities in its own name as
pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the
applicable Pledgor,
10
endorsed or assigned in blank or in favor of the Collateral Agent. Each Pledgor
will promptly give to the Collateral Agent copies of any notices or other
communications received by it with respect to Pledged Securities registered in
the name of such Pledgor. The Collateral Agent shall at all times have the right
to exchange the certificates representing Pledged Securities for certificates of
smaller or larger denominations for any purpose consistent with this Agreement.
SECTION 3.06. Voting Rights; Dividends and Interest, etc. (a) Unless
and until an Event of Default shall have occurred and be continuing and the
Collateral Agent shall have notified the Pledgors that their rights under this
Section are being suspended:
(i) Each Pledgor shall be entitled to exercise any and all
voting and/or other consensual rights and powers inuring to an owner of
Pledged Securities or any part thereof for any purpose consistent with
the terms of this Agreement, the Credit Agreements and the other Loan
Documents; provided that such rights and powers shall not be exercised
in a manner that would be reasonably likely to materially and adversely
affect the rights inuring to a holder of any Pledged Securities or the
rights and remedies of any of the Collateral Agent or the other Secured
Parties under this Agreement or the Credit Agreements or any other Loan
Document or the ability of the Secured Parties to exercise the same.
(ii) The Collateral Agent shall execute and deliver to each
Pledgor, or cause to be executed and delivered to such Pledgor, all
such proxies, powers of attorney and other instruments as such Pledgor
may reasonably request for the purpose of enabling such Pledgor to
exercise the voting and/or consensual rights and powers it is entitled
to exercise pursuant to subparagraph (i) above.
(iii) Each Pledgor shall be entitled to receive and retain any
and all dividends and other distributions paid on or distributed in
respect of the Pledged Securities to the extent and only to the extent
that such dividends and other distributions are permitted by, and
otherwise paid or distributed in accordance with, the terms and
conditions of the Credit Agreements, the other Loan Documents and
applicable laws; provided that any noncash dividends or other
distributions that would constitute Pledged Stock, whether resulting
from a subdivision, combination or reclassification of the outstanding
capital stock of the issuer of any Pledged Securities or received in
exchange for Pledged Securities or any part thereof, or in redemption
thereof, or as a result of any merger, consolidation, acquisition or
other exchange of assets to which such issuer may be a party or
otherwise, shall be and become part of the Pledged Collateral, and, if
received by any Pledgor, shall not be commingled by such Pledgor with
any of its other funds or property but shall be held separate and apart
therefrom, shall be held in trust for the benefit of the Collateral
Agent and shall be forthwith delivered to the Collateral Agent in the
same form as so received (with any necessary endorsement).
(b) Upon the occurrence and during the continuance of an Event of
Default, after the Collateral Agent shall have notified the Pledgors of the
suspension of their rights under paragraph (a)(iii) of this Section, then all
rights of any Pledgor to dividends or other distributions that such Pledgor is
authorized to receive pursuant to paragraph (a)(iii) of this Section shall
cease, and all such rights shall thereupon become
11
vested in the Collateral Agent, which shall have the sole and exclusive right
and authority to receive and retain such dividends or other distributions. All
dividends or other distributions received by any Pledgor contrary to the
provisions of this Section shall be held in trust for the benefit of the
Collateral Agent, shall be segregated from other property or funds of such
Pledgor and shall be forthwith delivered to the Collateral Agent upon demand in
the same form as so received (with any necessary endorsement). Any and all money
and other property paid over to or received by the Collateral Agent pursuant to
the provisions of this paragraph (b) shall be retained by the Collateral Agent
in an account to be established by the Collateral Agent upon receipt of such
money or other property and shall be applied in accordance with the provisions
of Section 5.02. After all Events of Default have been cured or waived, the
Collateral Agent shall, within five Business Days after all such Events of
Default have been cured or waived, repay to each Pledgor (without interest) all
dividends or other distributions that such Pledgor would otherwise be permitted
to retain pursuant to the terms of paragraph (a)(iii) of this Section and that
remain in such account.
(c) Upon the occurrence and during the continuance of an Event of
Default, after the Collateral Agent shall have notified the Pledgors of the
suspension of their rights under paragraph (a)(i) of this Section, then all
rights of any Pledgor to exercise the voting and consensual rights and powers it
is entitled to exercise pursuant to paragraph (a)(i) of this Section, and the
obligations of the Collateral Agent under paragraph (a)(ii) of this Section,
shall cease, and all such rights shall thereupon become vested in the Collateral
Agent, which shall have the sole and exclusive right and authority to exercise
such voting and consensual rights and powers; provided that, unless otherwise
directed by the Majority Secured Parties, the Collateral Agent shall have the
right from time to time following and during the continuance of an Event of
Default to permit the Pledgors to exercise such rights.
(d) Any notice given by the Collateral Agent to the Pledgors suspending
their rights under paragraph (a) of this Section (i) may be given by telephone
if promptly confirmed in writing, (ii) may be given to one or more of the
Pledgors at the same or different times and (iii) may suspend the rights of the
Pledgors under paragraph (a)(i) or paragraph (a)(iii) in part without suspending
all such rights (as specified by the Collateral Agent in its sole and absolute
discretion) and without waiving or otherwise affecting the Collateral Agent's
rights to give additional notices from time to time suspending other rights so
long as an Event of Default has occurred and is continuing.
ARTICLE IV
Security Interests in Personal Property
SECTION 4.01. Security Interest. (a) As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor hereby
assigns and pledges to the Collateral Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, and hereby grants to the Collateral
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, a security interest (the "Security Interest"), in all right, title or
interest now owned or at any time hereafter acquired by such Grantor or in which
such Grantor now has or at any time in the future may acquire any right, title
or interest in the following (collectively, the "Collateral"):
12
(i) all Accounts (excluding Excluded Accounts Receivables);
(ii) all Chattel Paper;
(iii) all Inventory;
(iv) all books and records pertaining to the Collateral; and
(v) to the extent not otherwise included, all Proceeds
(excluding Excluded Accounts Receivable) and products of any and all of
the foregoing and all collateral security and guarantees given by any
Person with respect to any of the foregoing.
(b) Each Grantor hereby irrevocably authorizes the Collateral Agent, in
accordance with Section 3A.02 of the 364-Day Credit Agreement and Section 3A.02
of the 5-Year Credit Agreement and, after the dates specified therein, at any
time and from time to time to file in any relevant jurisdiction any initial
financing statements (including fixture filings) and amendments thereto that
contain the information required by Article 9 of the Uniform Commercial Code of
each applicable jurisdiction for the filing of any financing statement or
amendment, including whether the Grantor is an organization, the type of
organization and any organizational identification number issued to the Grantor.
The Grantor agrees to provide such information to the Collateral Agent promptly
upon request.
(c) The Security Interest is granted as security only and shall not
subject the Collateral Agent or any other Secured Party to, or in any way alter
or modify, any obligation or liability of any Grantor with respect to or arising
out of the Collateral.
SECTION 4.02. Representations and Warranties. The Grantors jointly and
severally represent and warrant to the Collateral Agent and the Secured Parties
that:
(a) each Grantor has good and valid rights in and title to the
Collateral with respect to which it has purported to grant a Security
Interest hereunder and has full power and authority to grant to the
Collateral Agent the Security Interest in such Collateral pursuant
hereto and to execute, deliver and perform its obligations in
accordance with the terms of this Agreement, without the consent or
approval of any other Person other than any consent or approval that
has been obtained;
(b) when delivered pursuant to the Credit Agreements, the
Perfection Certificate will be duly prepared, completed and executed
and the information set forth therein, including the exact legal name
of such Grantor, will be correct and complete. Fully executed Uniform
Commercial Code financing statements (including fixture filings, as
applicable) or other appropriate filings, recordings or registrations
containing a description of the Collateral will, when required to be
delivered pursuant to the Credit Agreements, be delivered to the
Collateral Agent for filing in each governmental, municipal or other
office specified in Schedule I to the Perfection Certificate, which
will be all the filings, recordings and registrations that are
necessary to publish notice of and protect the validity of and to
establish a legal, valid and perfected security interest in favor of
the Collateral Agent (for the ratable benefit of the Secured Parties)
in respect of all Collateral in
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which the Security Interest may be perfected by filing, recording or
registration in the United States (or any political subdivision
thereof) and its territories and possessions, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration will be necessary in any such jurisdiction, except as
provided under applicable law with respect to the filing of
continuation statements;
(c) the Security Interest will, upon the occurrence of a
Security Event, constitute (i) a legal and valid security interest in
all the Collateral securing the payment and performance of the
Obligations, and (ii) subject to the filings described in Section
4.02(b), will become a perfected security interest in all Collateral in
which a security interest may be perfected by filing, recording or
registering a financing statement or analogous document in the United
States (or any political subdivision thereof) and its territories and
possessions pursuant to the Uniform Commercial Code or other applicable
law in such jurisdictions. The Security Interest is and shall be prior
to any other Lien on any of the Collateral, other than Liens expressly
permitted to be prior to the Security Interest pursuant to Section 5.02
of the 364-Day Credit Agreement and Section 5.02 of the 5-Year Credit
Agreement ; and
(d) the Collateral is owned by the Grantors free and clear of
any Lien, except for Liens expressly permitted pursuant to Section 5.02
of the 364-Day Credit Agreement, Section 5.02 of the 5-Year Credit
Agreement, Section 5B.1 of the Prudential Exchange Agreement, Section
5.2 of the SunTrust Master Lease Agreement and Section 5.3 of the
Teachers Exchange Agreement. None of the Grantors has filed or
consented to the filing of (i) any financing statement or analogous
document under the Uniform Commercial Code or any other applicable laws
covering any Collateral, or (ii) any assignment in which any Grantor
assigns any Collateral or any security agreement or similar instrument
covering any Collateral with any foreign governmental, municipal or
other office, which financing statement or analogous document,
assignment, security agreement or similar instrument is still in
effect, except, in each case, for Liens expressly permitted pursuant to
Section 5.02 of the 364-Day Credit Agreement, Section 5.02 of the
5-Year Credit Agreement, Section 5B.1 of the Prudential Exchange
Agreement Section 5.2 of the SunTrust Master Lease Agreement and
Section 5.03 of the Teachers Exchange Agreement.
SECTION 4.03. Covenants. (a) Each Grantor agrees to maintain, at its
own cost and expense, such complete and accurate records with respect to the
Collateral owned by it as is consistent with its current practices and in
accordance with such prudent and standard practices used in industries that are
the same as or similar to those in which such Grantor is engaged, but in any
event to include complete accounting records indicating all payments and
proceeds received with respect to any part of the Collateral, and, at such time
or times as the Collateral Agent may reasonably request, promptly to prepare and
deliver to the Collateral Agent a duly certified schedule or schedules in form
and detail satisfactory to the Collateral Agent showing the identity, amount and
location of any and all Collateral.
(b) Each Grantor shall, at its own expense, take any and all actions
necessary to defend title to the Collateral against all Persons and to defend
the Security Interest of the Collateral Agent in the Collateral and the priority
thereof against any Lien
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not expressly permitted pursuant to Section 5.02 of the 364-Day Credit Agreement
and Section 5.02 of the 5-Year Credit Agreement, Section 5B.1 of the Prudential
Exchange Agreement, Section 5.2 of the SunTrust Master Lease Agreement and
Section 5.3 of the Teachers Exchange Agreement.
(c) Each Grantor agrees, at its own expense, to execute, acknowledge,
deliver and, after the occurrence of a Security Event, cause to be duly filed
all such further instruments and documents and take all such actions as the
Collateral Agent may from time to time reasonably request to better assure,
preserve, protect and perfect the Security Interest and the rights and remedies
created hereby, including the payment of any fees and taxes required in
connection with the execution and delivery of this Agreement, the granting of
the Security Interest and the filing of any financing statements (including
fixture filings) or other documents in connection herewith or therewith. If any
amount payable under or in connection with any of the Collateral shall be or
become evidenced by any promissory note or other instrument, such note or
instrument shall be immediately pledged and delivered to the Collateral Agent,
duly endorsed in a manner satisfactory to the Collateral Agent.
(d) At any reasonable time upon the occurrence, and during the
continuance, of a Default or upon the occurrence, and during the continuance, of
any event which with the giving of notice or with the lapse of time would give
rise to a Default, the Collateral Agent and such Persons as the Collateral Agent
may reasonably designate shall have the right upon reasonable notice to the
Grantor, to inspect the Collateral, all records related thereto (and to make
extracts and copies from such records) and the premises upon which any of the
Collateral is located and to verify under reasonable procedures the validity,
amount, quality, quantity, value, condition and status of, or any other matter
relating to, the Collateral, including, in the case of Accounts or Collateral in
the possession of any third person, by contacting Account Debtors or the third
person possessing such Collateral for the purpose of making such a verification.
The Collateral Agent shall have the absolute right to share any information it
gains from such inspection or verification with any Secured Party. Except for
any one such inspection or verification each year from the date hereof which
shall be at the Grantor's own cost and expense, any such inspection or
verification by the Collateral Agent or its designee shall be at the Collateral
Agent's cost and expense.
(e) At its option at any time after the occurrence of a Security Event,
the Collateral Agent may discharge past due taxes, assessments, charges, fees,
Liens, security interests or other encumbrances at any time levied or placed on
the Collateral and not permitted pursuant to Section 5.02 of the 364-Day Credit
Agreement, Section 5.02 of the 5-Year Credit Agreement, Section 5B.1 of the
Prudential Exchange Agreement, Section 5.2 of the SunTrust Master Lease
Agreement or Section 5.3 of the Teachers Exchange Agreement and may pay for the
maintenance and preservation of the Collateral to the extent any Grantor fails
to do so as required by the Credit Agreements or this Agreement, and each
Grantor jointly and severally agrees to reimburse the Collateral Agent on demand
for any payment made or any expense incurred by the Collateral Agent pursuant to
the foregoing authorization; provided, however, that nothing in this Section
4.03(e) shall be interpreted as excusing any Grantor from the performance of, or
imposing any obligation on the Collateral Agent or any Secured Party to cure or
perform, any covenants or other promises of any Grantor with respect to taxes,
assessments, charges, fees, liens, security interests or other encumbrances and
maintenance as set forth herein or in the other Loan Documents.
15
(f) If at any time any Grantor shall take a security interest in any
property of an Account Debtor or any other person to secure payment and
performance of an Account, such Grantor shall promptly assign such security
interest to the Collateral Agent with effect on and from the occurrence of a
Security Event. Such assignment need not be filed of public record unless
necessary to continue the perfected status of the security interest against
creditors of and transferees from the Account Debtor or other person granting
the security interest.
(g) Each Grantor shall remain liable to observe and perform all the
conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Collateral, all in accordance
with the terms and conditions thereof, and each Grantor jointly and severally
agrees to indemnify and hold harmless the Collateral Agent and the Secured
Parties from and against any and all liability for such performance.
(h) None of the Grantors shall make or permit to be made an assignment,
pledge or hypothecation of the Collateral or shall grant any other Lien in
respect of the Collateral, except as expressly permitted by Section 5.02 of the
364-Day Credit Agreement, Section 5.02 of the 5-Year Credit Agreement, Section
5B.1 of the Prudential Exchange Agreement, Section 5.2 of the SunTrust Master
Lease Agreement and Section 5.3 of the Teachers Exchange Agreement. None of the
Grantors shall make or permit to be made any transfer of the Collateral except
as expressly permitted hereunder and each Grantor shall remain at all times in
possession of the Collateral owned by it, except that unless and until the
Collateral Agent shall notify the Grantors that an Event of Default shall have
occurred and be continuing and that during the continuance thereof the Grantors
shall not sell, convey, lease, assign, transfer or otherwise dispose of any
Collateral (which notice may be given by telephone if promptly confirmed in
writing), the Grantors may use and dispose of the Collateral in any lawful
manner not inconsistent with the provisions of this Agreement, the Credit
Agreements or any other Loan Document. Without limiting the generality of the
foregoing, each Grantor agrees that it shall not permit any Inventory to be in
the possession or control of any warehouseman, bailee, agent or processor at any
time unless such warehouseman, bailee, agent or processor shall have been
notified of the Security Interest and shall have acknowledged in writing, in
form and substance satisfactory to the Collateral Agent, that such warehouseman,
bailee, agent or processor holds the Inventory for the benefit of the Collateral
Agent subject to the Security Interest and shall act upon the instructions of
the Collateral Agent without further consent from the Grantor, and that such
warehouseman, agent, bailee or processor further agrees to waive and release any
Lien held by it with respect to such Inventory, whether arising by operation of
law or otherwise.
(i) None of the Grantors will, without the Collateral Agent's prior
written consent, grant any extension of the time of payment of any Accounts
included in the Collateral, compromise, compound or settle the same for less
than the full amount thereof, release, wholly or partly, any person liable for
the payment thereof or allow any credit or discount whatsoever thereon, other
than extensions, credits, discounts, compromises or settlements granted or made
in the ordinary course of business and consistent with its current practices and
in accordance with such prudent and standard practice used in industries that
are the same as or similar to those in which such Grantor is engaged.
16
(j) The Grantors, at their own expense, shall maintain or cause to be
maintained insurance covering physical loss or damage to the Inventory in
accordance with Section 5.01(e) of the 364-Day Credit Agreement, Section 5.01(e)
of the 5-Year Credit Agreement, Section 5B.1 of the Prudential Exchange
Agreement, Section 5.2 of the SunTrust Master Lease Agreement and Section 5.9 of
the Teachers Exchange Agreement. Each Grantor irrevocably makes, constitutes and
appoints the Collateral Agent (and all officers, employees or agents designated
by the Collateral Agent) as such Grantor's true and lawful agent (and
attorney-in-fact) for the purpose, during the continuance of an Event of Default
and after the occurrence of a Security Event, of making, settling and adjusting
claims in respect of Collateral under policies of insurance, endorsing the name
of such Grantor on any check, draft, instrument or other item of payment for the
proceeds of such policies of insurance and for making all determinations and
decisions with respect thereto. In the event that any Grantor at any time or
times shall fail to obtain or maintain any of the policies of insurance required
hereby or to pay any premium in whole or part relating thereto, the Collateral
Agent may, without waiving or releasing any obligation or liability of the
Grantors hereunder or any Event of Default, in its sole discretion, obtain and
maintain such policies of insurance and pay such premium and take any other
actions with respect thereto as the Collateral Agent deems advisable. All sums
disbursed by the Collateral Agent in connection with this Section 4.03(j),
including reasonable attorneys' fees, court costs, expenses and other charges
relating thereto, shall be payable, upon demand, by the Grantors to the
Collateral Agent and shall be additional Obligations secured hereby.
(k) On and from the occurrence of a Security Event, each Grantor shall
legend, in form and manner satisfactory to the Collateral Agent, its Chattel
Paper and its books, records and documents evidencing or pertaining thereto with
an appropriate reference to the fact that such Chattel Paper have been assigned
to the Collateral Agent for the benefit of the Secured Parties and that the
Collateral Agent has a security interest therein.
SECTION 4.04. Other Actions. In order to further insure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Collateral Agent's security interest in the Collateral, each Grantor agrees,
in each case at such Grantor's own expense, to take the following actions with
respect to the following Collateral within 30 days after the date on which a
Security Event occurs:
(a) Tangible Chattel Paper. If any Grantor shall at any time
hold or acquire any Tangible Chattel Paper, such Grantor shall
forthwith endorse, assign and deliver the same to the Collateral Agent,
accompanied by such instruments of transfer or assignment duly executed
in blank as the Collateral Agent may from time to time specify.
(b) Electronic Chattel Paper and Transferable Records. If any
Grantor at any time holds or acquires an interest in any electronic
chattel paper or any "transferable record," as that term is defined in
Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act, or in ss. 16 of the Uniform Electronic Transactions Act
as in effect in any relevant jurisdiction, such Grantor shall promptly
notify the Collateral Agent thereof and, at the request of the
Collateral Agent, shall take such action as the Collateral Agent may
reasonably request to vest in the Collateral Agent control under UCC
ss.9-105 of such electronic chattel paper or control under Section 201
of the Federal
17
Electronic Signatures in Global and National Commerce Act or, as the
case may be, ss.16 of the Uniform Electronic Transactions Act, as so in
effect in such jurisdiction, of such transferable record. The
Collateral Agent agrees with such Grantor that the Collateral Agent
will arrange, pursuant to procedures satisfactory to the Collateral
Agent and so long as such procedures will not result in the Collateral
Agent's loss of control, for the Grantor to make alterations to the
electronic chattel paper or transferable record permitted under UCC
ss.9-105 or, as the case may be, Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act or ss.16 of the Uniform
Electronic Transactions Act for a party in control to allow without
loss of control, unless an Event of Default has occurred and is
continuing or would occur after taking into account any action by such
Grantor with respect to such electronic chattel paper or transferable
record.
ARTICLE V
Remedies
SECTION 5.01. Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Grantor agrees to deliver each item of
Collateral to the Collateral Agent on demand, and it is agreed that the
Collateral Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with or without legal process and
with or without prior notice or demand for performance, to take possession of
the Collateral and without liability for trespass to enter any premises where
the Collateral may be located for the purpose of taking possession of or
removing the Collateral and, generally, to exercise any and all rights afforded
to a secured party under the Uniform Commercial Code or other applicable law.
Without limiting the generality of the foregoing, each Grantor agrees that the
Collateral Agent shall have the right, subject to the mandatory requirements of
applicable law, to sell or otherwise dispose of all or any part of the
Collateral or Pledged Collateral, at public or private sale or at any broker's
board or on any securities exchange, for cash, upon credit or for future
delivery as the Collateral Agent shall deem appropriate. The Collateral Agent
shall be authorized at any such sale (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to persons who will represent and
agree that they are purchasing the Collateral or Pledged Collateral for their
own account for investment and not with a view to the distribution or sale
thereof, and upon consummation of any such sale the Collateral Agent shall have
the right to assign, transfer and deliver to the purchaser or purchasers thereof
the Collateral or Pledged Collateral so sold. Each such purchaser at any such
sale shall hold the property sold absolutely, free from any claim or right on
the part of any Grantor or Pledgor, and the Grantors and Pledgors hereby waive
(to the extent permitted by law) all rights of redemption, stay and appraisal
which such Grantor or Pledgor now has or may at any time in the future have
under any rule of law or statute now existing or hereafter enacted.
The Collateral Agent shall give the applicable Grantors and Pledgors 10
days' written notice (which each Grantor or Pledgor agrees is reasonable notice
within the meaning of Section 9-504(3) of the Uniform Commercial Code as in
effect in the State of New York or its equivalent in other jurisdictions) of the
Collateral Agent's intention to make any sale of Collateral. Such notice, in the
case of a public sale, shall state the time and place for such sale and, in the
case of a sale at a broker's board or on a
18
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral or Pledged Collateral, or portion
thereof, will first be offered for sale at such board or exchange. Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as the Collateral Agent may fix and state in the
notice (if any) of such sale. At any such sale, the Collateral or Pledged
Collateral, or portion thereof, to be sold may be sold in one lot as an entirety
or in separate parcels, as the Collateral Agent may (in its sole and absolute
discretion) determine. The Collateral Agent shall not be obligated to make any
sale of any Collateral or Pledged Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral or Pledged
Collateral shall have been given. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. In case any sale of all or any part of the
Collateral or Pledged Collateral is made on credit or for future delivery, the
Collateral or Pledged Collateral so sold may be retained by the Collateral Agent
until the sale price is paid by the purchaser or purchasers thereof, but the
Collateral Agent shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral or Pledged
Collateral so sold and, in case of any such failure, such Collateral or Pledged
Collateral may be sold again upon like notice. At any public (or, to the extent
permitted by law, private) sale made pursuant to this Section, any Secured Party
may bid for or purchase, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of any Grantor or Pledgor
(all said rights being also hereby waived and released to the extent permitted
by law), the Collateral or Pledged Collateral or any part thereof offered for
sale and may make payment on account thereof by using any claim then due and
payable to such Secured Party from any Grantor or Pledgor as a credit against
the purchase price, and such Secured Party may, upon compliance with the terms
of sale, hold, retain and dispose of such property without further
accountability to any Grantor or Pledgor therefor. For purposes hereof, a
written agreement to purchase the Collateral or Pledged Collateral or any
portion thereof shall be treated as a sale thereof; the Collateral Agent shall
be free to carry out such sale pursuant to such agreement and no Grantor or
Pledgor shall be entitled to the return of the Collateral or Pledged Collateral
or any portion thereof subject thereto, notwithstanding the fact that after the
Collateral Agent shall have entered into such an agreement all Events of Default
shall have been remedied and the Obligations paid in full. As an alternative to
exercising the power of sale herein conferred upon it, the Collateral Agent may
proceed by a suit or suits at law or in equity to foreclose this Agreement and
to sell the Collateral or Pledged Collateral or any portion thereof pursuant to
a judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the
provisions of this Section shall be deemed to conform to the commercially
reasonable standards as provided in Section 9- 504(3) of the Uniform Commercial
Code as in effect in the State of New York or its equivalent in other
jurisdictions.
SECTION 5.02. Application of Proceeds. The Collateral Agent shall apply
the proceeds of any collection in respect of a Guarantee under this Agreement,
any collection or sale of Collateral or Pledged Collateral, as well as any
Collateral or Pledged Collateral consisting of cash and any sale or other
disposition of Mortgaged Property as follows:
19
FIRST, to the payment of all reasonable costs and expenses
incurred by the Collateral Agent in connection with such collection or
sale or otherwise in connection with this Agreement, any other Loan
Document or any of the Obligations, including all court costs and the
reasonable fees and expenses of its agents and legal counsel, the
repayment of all advances made by the Collateral Agent hereunder or
under any other Loan Document on behalf of any Grantor or Pledgor and
any other reasonable costs or expenses incurred in connection with the
exercise of any right or remedy hereunder or under any other Loan
Document;
SECOND, to the payment in full of the Obligations (the amounts
so applied to be distributed among the Secured Parties pro rata in
accordance with the amounts of the Obligations owed to them on the date
of any such distribution); and
THIRD, to the Grantors and Pledgors, their successors or
assigns, or as a court of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral or Pledged Collateral by the Collateral
Agent (including pursuant to a power of sale granted by statute or under a
judicial proceeding), the receipt of the Collateral Agent or of the officer
making the sale shall be a sufficient discharge to the purchaser or purchasers
of the Collateral or Pledged Collateral so sold and such purchaser or purchasers
shall not be obligated to see to the application of any part of the purchase
money paid over to the Collateral Agent or such officer or be answerable in any
way for the misapplication thereof.
SECTION 5.03. Securities Act, etc. In view of the position of the
Pledgors in relation to the Pledged Collateral, or because of other current or
future circumstances, a question may arise under the Securities Act of 1933, as
now or hereafter in effect, or any similar statute hereafter enacted analogous
in purpose or effect (such Act and any such similar statute as from time to time
in effect being called the "Federal Securities Laws") with respect to any
disposition of the Pledged Collateral permitted hereunder. Each Pledgor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Collateral, and might
also limit the extent to which or the manner in which any subsequent transferee
of any Pledged Collateral could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Collateral under applicable
Blue Sky or other state securities laws or similar laws analogous in purpose or
effect. Each Pledgor recognizes that in light of such restrictions and
limitations the Collateral Agent may, with respect to any sale of the Pledged
Collateral, limit the purchasers to those who will agree, among other things, to
acquire such Pledged Collateral for their own account, for investment, and not
with a view to the distribution or resale thereof. Each Pledgor acknowledges and
agrees that in light of such restrictions and limitations, the Collateral Agent,
in its sole and absolute discretion (a) may proceed to make such a sale whether
or not a registration statement for the purpose of registering such Pledged
Collateral or part thereof shall have been filed under the Federal Securities
Laws and (b) may approach and negotiate with a single potential purchaser to
effect such sale. Each Pledgor acknowledges and agrees that any such sale might
result in prices and other terms less favorable to the seller than if such
20
sale were a public sale without such restrictions. In the event of any such
sale, the Collateral Agent shall incur no responsibility or liability for
selling all or any part of the Pledged Collateral at a price that the Collateral
Agent, in its sole and absolute discretion, may in good ▇▇▇▇▇ ▇▇▇▇ reasonable
under the circumstances, notwithstanding the possibility that a substantially
higher price might have been realized if the sale were deferred until after
registration as aforesaid or if more than a single purchaser were approached.
The provisions of this Section will apply notwithstanding the existence of a
public or private market upon which the quotations or sales prices may exceed
substantially the price at which the Collateral Agent sells.
SECTION 5.04. Registration, etc. Each Pledgor agrees that, upon the
occurrence and during the continuance of an Event of Default, if for any reason
the Collateral Agent desires to sell any of the Pledged Collateral of the
Borrower at a public sale, it will, at any time and from time to time, upon the
written request of the Collateral Agent, use its best efforts to take or to
cause the issuer of such Pledged Collateral to take such action and prepare,
distribute and/or file such documents, as are required or advisable in the
reasonable opinion of counsel for the Collateral Agent to permit the public sale
of such Pledged Collateral. Each Pledgor further agrees to indemnify, defend and
hold harmless the Collateral Agent, each other Secured Party, any underwriter
and their respective officers, directors, affiliates and controlling persons
from and against all loss, liability, expenses, costs of counsel (including,
reasonable fees and expenses to the Collateral Agent of legal counsel), and
claims (including the costs of investigation) that they may incur insofar as
such loss, liability, expense or claim arises out of or is based upon any
alleged untrue statement of a material fact contained in any prospectus (or any
amendment or supplement thereto) or in any notification or offering circular, or
arises our of or is based upon any alleged omission to state a material fact
required to be stated therein or necessary to make the statements in any thereof
not misleading, except insofar as the same may have been caused by any untrue
statement or omission based upon information furnished in writing to such
Pledgor or the issuer of such Pledged Collateral by the Collateral Agent or any
other Secured Party expressly for use therein. Each Pledgor further agrees, upon
such written request referred to above, to use its best efforts to qualify, file
or register, or cause the issuer of such Pledged Collateral to qualify, file or
register, any of the Pledged Collateral under the Blue Sky or other securities
laws of such states as may be requested by the Collateral Agent and keep
effective, or cause to be kept effective, all such qualifications, filings or
registrations. Each Pledgor will bear all costs and expenses of carrying out its
obligations under this Section. Each Pledgor acknowledges that there is no
adequate remedy at law for failure by it to comply with the provisions of this
Section and that such failure would not be adequately compensable in damages,
and therefore agrees that its agreements contained in this Section may be
specifically enforced.
ARTICLE VI
Indemnity and Subrogation
SECTION 6.01. Indemnity and Subrogation. In addition to all such rights
of indemnity and subrogation as the Guarantors may have under applicable law
(but subject to Section 6.03), the Borrower agrees that (a) in the event a
payment shall be made by any Guarantor under this Agreement, the Borrower shall
indemnify such Guarantor for the full amount of such payment and such Guarantor
shall be subrogated to the rights of the Person to whom such payment shall have
been made to the extent of such
21
payment and (b) in the event any assets of any Guarantor shall be sold pursuant
to any Security Document to satisfy a claim of any Secured Party, the Borrower
shall indemnify such Guarantor in an amount equal to the greater of the book
value or the fair market value of the assets so sold.
SECTION 6.02. Contribution and Subrogation. Each Guarantor (a
"Contributing Guarantor") agrees (subject to Section 6.03) that, in the event a
payment shall be made by any other Guarantor under this Agreement or assets of
any other Guarantor shall be sold pursuant to any Security Document to satisfy a
claim of any Secured Party and such other Guarantor (the "Claiming Guarantor")
shall not have been fully indemnified by the Borrower as provided in Section
6.01, the Contributing Guarantor shall indemnify the Claiming Guarantor in an
amount equal to the amount of such payment or the greater of the book value or
the fair market value of such assets, as the case may be, in each case
multiplied by a fraction of which the numerator shall be the net worth of the
Contributing Guarantor on the date hereof and the denominator shall be the
aggregate net worth of all the Guarantors on the date hereof (or, in the case of
any Guarantor becoming a party hereto pursuant to Section 7.16, the date of the
Supplement hereto executed and delivered by such Guarantor). Any Contributing
Guarantor making any payment to a Claiming Guarantor pursuant to this Section
6.02 shall (subject to Section 6.03) be subrogated to the rights of such
Claiming Guarantor under Section 6.01 to the extent of such payment.
SECTION 6.03. Subordination. Notwithstanding any provision of this
Agreement to the contrary, all rights of the Guarantors under Sections 6.01 and
6.02 and all other rights of indemnity, contribution or subrogation under
applicable law or otherwise shall be fully subordinated to the indefeasible
payment in full in cash of the Obligations. No failure on the part of the
Borrower or any Guarantor to make the payments required by Sections 6.01 and
6.02 (or any other payments required under applicable law or otherwise) shall in
any respect limit the obligations and liabilities of any Guarantor with respect
to its obligations hereunder, and each Guarantor shall remain liable for the
full amount of the obligations of such Guarantor hereunder.
ARTICLE VII
Collateral Agent
SECTION 7.01. Nature of Duties. The Collateral Agent shall have no
duties or responsibilities except those expressly set forth in this Agreement.
The duties of the Collateral Agent shall be mechanical and administrative in
nature. EACH SECURED PARTY HEREBY ACKNOWLEDGES AND AGREES THAT THE COLLATERAL
AGENT SHALL NOT HAVE, BY REASON OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS, A
FIDUCIARY RELATIONSHIP TO OR IN RESPECT OF ANY SECURED PARTY. Nothing in this
Agreement or in any other Loan Documents, expressed or implied, is intended to
or shall be so construed as to impose upon the Collateral Agent any obligations
in respect of the Agreement or any other Loan Documents except as expressly set
forth herein or therein. The Collateral Agent shall not have any duty to take
any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents.
The Collateral Agent shall take any action under or with respect to this
Agreement that is required by the Majority Secured Parties and that
22
is not inconsistent with or contrary to the provisions of this Agreement or the
other Loan Documents. Each Secured Party shall make its own independent
investigation of the financial condition and affairs of the Borrower and its
Subsidiaries and shall make its own appraisal of the credit worthiness of the
Borrower and its Subsidiaries, and the Collateral Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any
Secured Party with any credit or other information with respect thereto,
regardless of the time of its coming into its possession (except as set forth in
this Agreement).
SECTION 7.02. Instructions Etc. The Collateral Agent may at any time
request instructions from the Secured Parties with respect to any actions or
approvals (including the failure to act or approve) which by the terms of this
Agreement or the other Loan Documents, the Collateral Agent is permitted or
required to take or to grant, and if such instructions are requested, the
Collateral Agent shall be absolutely entitled to refrain from taking any action
or to withhold any approval and shall not be under any liability whatsoever to
any Person for refraining from any action or withholding any approval under any
this Agreement or the other Loan Documents until it shall have received such
instructions from the Majority Secured Parties. Without limiting the foregoing,
no Secured Party shall have any right of action whatsoever against the
Collateral Agent as a result of the Collateral Agent acting, approving or
refraining from acting or approving under any of the Loan Documents in
accordance with the instructions of the Majority Secured Parties or, to the
extent required by this Section, all of the Secured Parties.
SECTION 7.03. Indemnification. To the extent the Collateral Agent is
not reimbursed and indemnified by the Borrower and its Subsidiaries, each
Secured Party will reimburse and indemnify the Collateral Agent, in an amount
equal to its pro rata share (based upon the amount of the Obligations owed to
it), for and against any and all liabilities, obligations, losses, damages,
claims, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Collateral Agent in any way relating to or arising out of
this Agreement or any other Loan Document or any action taken or omitted by the
Collateral Agent under this Agreement or any other Loan Document; provided,
however, that no Secured Party shall be liable for any portion of such
liabilities, obligations, losses, damages, claims, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Collateral
Agent's gross negligence or willful misconduct. The obligations of the Secured
Parties under this Section shall survive the payment in full of the Obligations
and the termination of this Agreement or any other Loan Document.
SECTION 7.04. Resignation by the Collateral Agent. (a) The Collateral
Agent may resign from the performance of all its functions and duties hereunder
at any time by giving thirty (30) Business Days' prior written notice to the
Borrower and the Secured Parties. Such resignation shall take effect upon the
acceptance by a successor Collateral Agent of appointment pursuant to clauses
(b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Majority Secured Parties
shall appoint a successor Collateral Agent who shall be satisfactory to the
Borrower and shall be an incorporated bank or trust company.
(c) If a successor Collateral Agent shall not have been so appointed
within said thirty (30) Business Day period, the Collateral Agent, with the
consent of the
23
Borrower, shall then appoint a successor Collateral Agent who shall serve as the
Collateral Agent until such time, if any, as the Majority Secured Parties, with
the consent of the Borrower, appoint a successor Collateral Agent as provided
above.
(d) If no successor Collateral Agent has been appointed pursuant to
clause (b) and if the Borrower has not provided the necessary consent pursuant
to clause (c) by the thirty-fifth (35th) Business Day after the date such notice
of resignation was given by Collateral Agent, Collateral Agent's resignation
shall become effective and the Majority Secured Parties shall thereafter perform
all the duties of Collateral Agent hereunder until such time, if any, as the
Majority Secured Parties, with the consent of Borrower, appoint a successor
Collateral Agent as provided above.
ARTICLE VIII
Miscellaneous
SECTION 8.01. Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in the relevant provision for notices contained in the respective Loan
Documents. All communications and notices hereunder to any Subsidiary Party
shall be given to it at its address or telecopy number set forth on Schedule I,
with a copy to the Borrower.
SECTION 8.02. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the Security Interest, the grant of a security interest in the
Pledged Collateral and all obligations of each Grantor and Pledgor hereunder
shall be absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit Agreements, any other Loan Document, any agreement
with respect to any of the Obligations or any other agreement or instrument
relating to any of the foregoing, (b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreements, any other Loan Document or any other agreement or instrument, (c)
any exchange, release or non-perfection of any Lien on other collateral, or any
release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Obligations, or (d) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, any Grantor or Pledgor in respect of the Obligations or this
Agreement.
SECTION 8.03. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Pledgors 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 Collateral Agent, the LC 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.
24
SECTION 8.04. Binding Effect; Several Agreement. This Agreement shall,
subject to Section 1.02, become effective as to any Pledgor when a counterpart
hereof executed on behalf of such Pledgor shall have been delivered to the
Collateral Agent and a counterpart hereof shall have been executed on behalf of
the Collateral Agent, and thereafter shall be binding upon such Pledgor and the
Collateral Agent and their respective successors and assigns, and shall inure to
the benefit of such Pledgor, the Collateral Agent and the other Secured Parties
and their respective successors and assigns, except that no Pledgor shall have
the right to assign or transfer its rights or obligations hereunder or any
interest herein or in the Collateral or Pledged Collateral (and any such
assignment or transfer shall be void) except as expressly contemplated by this
Agreement or the Credit Agreements. This Agreement shall be construed as a
separate agreement with respect to each Pledgor and may be amended, modified,
supplemented, waived or released with respect to any Pledgor without the
approval of any other Pledgor and without affecting the obligations of any other
Pledgor hereunder.
SECTION 8.05. Successors and Assigns. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
successor and assigns of such party; and all covenants, promises and agreements
by or on behalf of any Grantor or the Collateral Agent that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
SECTION 8.06. Collateral Agent's Fees and Expenses; Indemnification.
(a) Each Grantor and each Pledgor jointly and severally agrees to pay upon
demand to the Collateral Agent the amount of any and all reasonable expenses,
including the reasonable fees, disbursements and other charges of its counsel
and of any experts or agents, that the Collateral Agent may incur in connection
with (i) the administration of this Agreement (including the customary fees and
charges of the Collateral Agent for any audits conducted by it or on its behalf
with respect to the Accounts or Inventory), (ii) the custody or preservation of,
or the sale of, collection from or other realization upon any of the Collateral
or Pledged Collateral, (iii) the exercise, enforcement or protection of any of
the rights of the Collateral Agent hereunder or (iv) the failure of any Grantor
or Pledgor to perform or observe any of the provisions hereof.
(b) Without limitation of its indemnification obligations under the
other Loan Documents, each Grantor and each Pledgor jointly and severally agrees
to indemnify the Collateral Agent and the other Indemnified Parties against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities 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, the
execution, delivery or performance of this Agreement or any claim, litigation,
investigation or proceeding relating hereto or to the Collateral or Pledged
Collateral, whether or not 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 or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section shall remain operative and in full force and effect regardless
of the termination of this Agreement or any other Loan Document, the
consummation of the transactions
25
contemplated hereby, the repayment of any of the Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Collateral Agent or
any other Secured Party. All amounts due under this Section shall be payable on
written demand therefor.
SECTION 8.07. Collateral Agent Appointed Attorney-in-Fact. Each Grantor
and each Pledgor hereby appoints the Collateral Agent the attorney-in-fact of
such Grantor or Pledgor for the purpose of carrying out the provisions of this
Agreement and taking any action and executing any instrument that the Collateral
Agent may deem reasonably necessary or advisable to accomplish the purposes
hereof, which appointment is irrevocable and coupled with an interest. Without
limiting the generality of the foregoing, the Collateral Agent shall have the
right, upon the occurrence and during the continuance of an Event of Default at
any time after the occurrence of a Security Event, with full power of
substitution either in the Collateral Agent's name or in the name of such
Grantor or Pledgor (a) in the case of a Grantor (i) to receive, endorse, assign
and/or deliver any and all notes, acceptances, checks, drafts, money orders or
other evidences of payment relating to the Collateral or any part thereof; (ii)
to demand, collect, receive payment of, give receipt for and give discharges and
releases of all or any of the Collateral; (iii) to sign the name of any Grantor
on any invoice or ▇▇▇▇ of lading relating to any of the Collateral; (iv) to send
verifications of Accounts to any Account Debtor; (v) to commence and prosecute
any and all suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect or otherwise realize on all or any of the
Collateral or to enforce any rights in respect of any Collateral; (vi) to
settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (vii) to notify, or to require any
Grantor to notify, Account Debtors to make payment directly to the Collateral
Agent; and (viii) to use, sell, assign, transfer, pledge, make any agreement
with respect to or otherwise deal with all or any of the Collateral, and to do
all other acts and things necessary to carry out the purposes of this Agreement,
as fully and completely as though the Collateral Agent were the absolute owner
of the Collateral for all purposes; and (b) in the case of a Pledgor (i) to ask
for, demand, ▇▇▇ for, collect, receive and give acquittance for any and all
moneys due or to become due under and by virtue of any Pledged Collateral; (ii)
to endorse checks, drafts, orders and other instruments for the payment of money
payable to the Pledgor representing any interest or dividend or other
distribution payable in respect of the Pledge Collateral or any part thereof or
on account thereof and to give full discharge of the same; (iii) to settle,
compromise, prosecute or defend any action, claim or proceeding with respect
thereto; and (iv) to sell, assign, endorse, pledge, transfer and to make any
agreement respecting, or otherwise deal with, the same; provided, however, that
nothing herein contained shall be construed as requiring or obligating the
Collateral Agent to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by the Collateral Agent, or to present or
file any claim or notice, or to take any action with respect to the Collateral
or the Pledged Collateral or any part thereof or the moneys due or to become due
in respect thereof or any property covered thereby. The Collateral Agent and the
other Secured Parties shall be accountable only for amounts actually received as
a result of the exercise of the powers granted to them herein, and neither they
nor their officers, directors, employees or agent shall be responsible to any
Grantor or Pledgor for any act or failure to act hereunder, except for their own
gross negligence or wilful misconduct.
SECTION 8.08. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
26
SECTION 8.09. Waivers; Amendment. (a) No failure or delay by the
Collateral Agent or any other Secured Party 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 Collateral Agent and the other
Secured Parties 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 this Agreement or consent to any departure by any
Pledgor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, 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, regardless of whether the Collateral Agent or any other Secured Party
may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified without the written consent of the Majority Secured Parties;
provided, however, that no waiver, amendment or modification shall without the
written consent of each Secured Party affected thereby (i) diminish the rights
of any Secured Party as compared to the rights of the other Secured Parties,
(ii) increase the obligations of a Secured Party beyond their obligations as
determined on a pro rata basis, (iii) amend the definition of "Obligations",
(iv) amend the definition of the terms "Secured Parties" and "Security Event" or
(v) amend Sections 5.02, 8.09(b), 8.15, 8.17 and 8.18; provided, further,
however that no waiver, amendment or consent shall, without the written consent
of the Collateral Agent in addition to the Secured Parties required to take such
action, affect the rights or duties of the Collateral Agent hereunder. No
amendment shall be effective without the written consent of the Borrower and the
Subsidiary Parties.
SECTION 8.10. 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 8.11. 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.
27
SECTION 8.12. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute a single contract (subject to Section 8.04), and shall
become effective as provided in Section 8.04 (subject to Section 1.02). Delivery
of an executed signature page to this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.
SECTION 8.13. Headings. Article and Section headings used herein are
for the purpose of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 8.14. Jurisdiction; Consent to Service of Process. (a) Each of
the Pledgors hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the United States District Court
for the Southern District of New York and of any New York State court sitting in
New York City for purposes of all legal proceedings arising out of or relating
to any Loan Document or the transactions contemplated thereby. 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 Collateral Agent or any
other Secured Party may otherwise have to bring any action or proceeding
relating to this Agreement or any other Loan Document against any Grantor or its
properties in the courts of any jurisdiction.
(b) Each of the Pledgors 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 (a) 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.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 8.01. 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.
SECTION 8.15. Termination or Release. (a) This Agreement, the
Guarantees, the Security Interest and all other security interests granted
hereby shall terminate with respect to all Obligations when all amounts owing
under the Credit Agreements have been paid in full and the Lenders have no
further commitment to lend under the Credit Agreements, the LC Exposure has been
reduced to zero and the LC Bank has no further obligations to issue Letters of
Credit under the 5-Year Credit Agreement.
(b) A Guarantor shall automatically be released from its obligations
hereunder and the Security Interest in the Collateral and Pledged Collateral of
such Guarantor shall be automatically released in the event that all the capital
stock of such Guarantor shall be sold, transferred or otherwise disposed of to a
person that is not the Borrower or an Affiliate of the Borrower in accordance
with the terms of the Credit Agreements; provided that the Majority Lenders
under each of the 364-Day Credit Agreement and the 5-Year Credit Agreement shall
have consented to such sale, transfer
28
or other disposition (to the extent required by the Credit Agreements) and the
terms of such consent did not provide otherwise.
(c) Upon any sale or other transfer by any Pledgor of any Pledged
Collateral that is permitted under the Credit Agreements to any person that is
not the Borrower or a Material Subsidiary, or, upon the effectiveness of any
written consent by the Lenders to the release of any Guarantee or the security
interest granted hereby in any Pledged Collateral pursuant to Section 8.01 of
the 364-Day Credit Agreement and Section 3A.08 of the 5-Year Credit Agreement,
the Guarantee or the security interest in such Pledged Collateral (as the case
may be) shall be automatically released.
(d) Upon any sale or other transfer by any Grantor of any Collateral
that is permitted under the Credit Agreements to any person that is not the
Borrower or a Material Subsidiary, or upon any financing of Accounts pursuant to
a Permitted Receivables Financing, or upon the effectiveness of any written
consent by the Lenders to the release of the security interest granted hereby in
any Collateral or the release of any Lien granted pursuant to a Mortgage
pursuant to Section 8.01 of the 364-Day Credit Agreement and Section 3A.08 of
the 5-Year Credit Agreement, the security interest in such Collateral or such
Mortgage shall be automatically released.
(e) In connection with any termination or release pursuant to paragraph
(a), (b), (c) or (d) of this Section, the Collateral Agent shall execute and
deliver to any Grantor or Pledgor, as the case may be, at such Grantor's or
Pledgor's expense, all documents that such Grantor or Pledgor shall reasonably
request to evidence such termination or release. Any execution and delivery of
documents pursuant to this Section 8.15 shall be without recourse to or warranty
by the Collateral Agent. The Secured Parties acknowledge that the Lenders, if
all of them so agree, may release and terminate any and all Security Interests
and Guarantees created pursuant to Mortgages in favor of the Collateral Agent
without the consent of the other Secured Parties.
SECTION 8.16. Additional Subsidiaries. Pursuant to Section 3A.05 of the
364-Day Credit Agreement and Section 3A.05 of the 5-Year Credit Agreement, each
Material Subsidiary of the Borrower that was not in existence or not a Material
Subsidiary of the Borrower on the date of the Credit Agreements is required to
enter in this Agreement (a) as a Subsidiary Guarantor, (b) as a Grantor if such
Subsidiary owns or possesses property of a type that would be considered
Collateral hereunder and (c) as a Pledgor if such Subsidiary owns or possesses
property of a type that would be considered Pledged Collateral hereunder. Upon
execution and delivery by the Collateral Agent and a Subsidiary of the Borrower
of an instrument in the form of Annex I hereto, such Subsidiary shall become a
Pledgor hereunder with the same force and effect as if originally named as a
Pledgor herein. The execution and delivery of any such instrument shall not
require the consent of any Pledgor hereunder. The rights and obligations of each
Pledgor hereunder shall remain in full force and effect notwithstanding the
addition of any new Pledgor as a party to this Agreement.
SECTION 8.17. Put Rights. Anything contained herein or in any Loan
Document or any other related document to the contrary notwithstanding, neither
this Agreement nor any other Loan Document or other related agreement shall be
deemed or construed to prohibit a Secured Party from exercising any put right
contained in any of the Loan Documents as of the date hereof or with Supervalu
complying with its obligations in respect of such put right.
29
SECTION 8.18. Mortgage Liens. The Liens created pursuant to the
Mortgages granted in favor of the Collateral Agent by the Borrower or any
Subsidiary Party as required by the terms of the Credit Agreements shall secure
the Obligations equally and ratably. The definition of "Obligations" specified
in each such Mortgage shall be the definition used herein
[Remainder of page intentionally left blank]
30
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
SUPERVALU INC.,
by
-------------------------------
Name:
Title:
EACH OF THE SUBSIDIARIES
LISTED ON SCHEDULE I HERETO,
by
-------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
Collateral Agent,
by
-------------------------------
Name:
Title:
31
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
by
-------------------------------
Name:
Title:
32
SUNTRUST BANK
as Agent
by
-------------------------------
Name:
Title:
33
TEACHERS INSURANCE AND
ANNUITY ASSOCIATION OF AMERICA
by
-------------------------------
Name:
Title: