Exhibit 4.6
$300,000,000
TERM LOAN AGREEMENT
dated as of
October 27, 1999
among
Rite Aid Corporation,
The Banks from time to time
parties hereto
and
▇▇▇▇▇▇ Guaranty Trust Company of New York,
as Administrative Agent
------------------------------------
▇▇ ▇▇▇▇▇▇ Securities Inc.,
Lead Arranger and Book Runner
TABLE OF CONTENTS 1
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PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.......................................1
SECTION 1.02. Accounting Terms and Determinations..............16
SECTION 1.03. Other Definitional Provisions....................16
ARTICLE 2
THE CREDITS
SECTION 2.01. Initial Outstandings.............................17
SECTION 2.02. Notes............................................17
SECTION 2.03. Maturity of Loans................................18
SECTION 2.04. Interest Rates...................................18
SECTION 2.05. Method of Electing Interest Rates................19
SECTION 2.06. Reduction Events; Mandatory Prepayments..........21
SECTION 2.07. Optional Prepayments.............................22
SECTION 2.08. General Provisions as to Payments................23
SECTION 2.09. Funding Losses...................................24
SECTION 2.10. Computation of Interest..........................24
SECTION 2.11. Regulation D Compensation........................24
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness....................................25
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power....................26
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention....................................26
SECTION 4.03. Binding Effect...................................26
SECTION 4.04. Financial Information............................26
SECTION 4.05. Full Disclosure..................................27
SECTION 4.06. Litigation.......................................27
SECTION 4.07. Compliance with ERISA............................28
SECTION 4.08. Taxes............................................28
SECTION 4.09. Subsidiaries.....................................28
SECTION 4.10. Environmental Matters............................28
SECTION 4.11. Year 2000 Compliance.............................29
SECTION 4.12. Pledge Agreements................................29
ARTICLE 5
COVENANTS
SECTION 5.01. Information......................................29
SECTION 5.02. Payment of Obligations...........................32
SECTION 5.03. Maintenance of Property; Insurance...............32
SECTION 5.04. Conduct of Business and Maintenance of Existence.32
SECTION 5.05. Compliance with Laws.............................33
SECTION 5.06. Inspection of Property, Books and Records........33
SECTION 5.07. Restriction on Other Agreements..................33
SECTION 5.08. Restriction on Debt of Subsidiaries..............33
SECTION 5.09. Restriction on Sales with Leases Back............34
SECTION 5.10. Restriction on Liens.............................34
SECTION 5.11. Capital Expenditures.............................36
SECTION 5.12. Capitalization Leverage Ratio....................36
SECTION 5.13. Limitation on Debt...............................36
SECTION 5.14. Fixed Charge Coverage............................36
SECTION 5.15. Limitation on Investments and Acquisitions.......37
SECTION 5.16. Consolidations, Mergers and Sales of Assets......38
SECTION 5.17. Use of Proceeds..................................38
SECTION 5.18. Restricted Payments..............................38
SECTION 5.19. Synthetic Leases.................................38
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default................................38
SECTION 6.02. Notice of Default................................41
ARTICLE 7
THE ADMINISTRATIVE AGENT
SECTION 7.01. Appointment and Authorization....................41
SECTION 7.02. Administrative Agent and Affiliates..............41
SECTION 7.03. Action by Administrative Agent...................41
SECTION 7.04. Consultation with Experts........................41
SECTION 7.05. Liability of Administrative Agent................42
SECTION 7.06. Indemnification..................................42
SECTION 7.07. Credit Decision..................................42
SECTION 7.08. Successor Administrative Agent...................42
SECTION 7.09. Administrative Agent's Fees......................43
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate
or Unfair........................................43
SECTION 8.02. Illegality.......................................44
SECTION 8.03. Increased Cost and Reduced Return................44
SECTION 8.04. Taxes............................................46
SECTION 8.05. Base Rate Loans Substituted for Affected
Euro-Dollar Loans................................47
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices..........................................48
SECTION 9.02. No Waivers.......................................48
SECTION 9.03. Expenses; Indemnification........................49
SECTION 9.04. Sharing of Set-Offs..............................49
SECTION 9.05. Amendments and Waivers...........................50
SECTION 9.06. Successors and Assigns...........................50
SECTION 9.07. Governing Law; Submission to Jurisdiction........52
SECTION 9.08. Counterparts.....................................52
SECTION 9.09. WAIVER OF JURY TRIAL.............................52
Pricing Schedule
Exhibit A -Note
Exhibit B -Assignment and Assumption Agreement
TERM LOAN AGREEMENT
AGREEMENT dated as of October 27, 1999 among RITE AID CORPORATION,
the BANKS from time to time parties hereto and ▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK, as Administrative Agent.
RECITALS:
A. The Borrower (as this and other capitalized terms used in these
recitals but not defined in these recitals are defined in Section 1.01
below) is indebted to ▇▇▇▇▇▇ in the principal amount of $300,000,000, which
indebtedness is evidenced by the Borrower's Demand Promissory Note dated
June 16, 1999 (the "ORIGINAL DEMAND NOTE"), certain of the terms of which
were modified pursuant to a letter agreement dated October 25, 1999 between
the Borrower and ▇▇▇▇▇▇ (the "LETTER AGREEMENT", and the Original Demand
Note, as modified by the Letter Agreement, the "DEMAND NOTE").
B. Pursuant to the Letter Agreement, the Borrower has agreed to enter
into this Agreement so as to, among other things, facilitate assignments of
the indebtedness evidenced by the Demand Note;
C. The parties intend that, on and after the Effective Date, the
Demand Note shall be superseded by the terms of this Agreement and the
Notes issued hereunder, and that the indebtedness evidenced and governed by
the Demand Note shall on and after the Effective Date be evidenced and
governed by this Agreement and the Notes.
Therefore, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"ADMINISTRATIVE AGENT" means ▇▇▇▇▇▇ Guaranty Trust Company of New
York in its capacity as agent for the Banks under the Loan Documents, and
its successors in such capacity.
"ADMINISTRATIVE QUESTIONNAIRE" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative
Agent and submitted to the Administrative Agent (with a copy to the
Borrower) duly completed by such Bank.
"APPLICABLE LENDING OFFICE" means, with respect to any Bank, (i) in
the case of its Base Rate Loans, its Domestic Lending Office and (ii) in
the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"ASSET SALE" means any sale, lease or other disposition (including
any such transaction effected by way of merger or consolidation) by the
Borrower or any of its Subsidiaries of any asset, but excluding (i) any
sale, lease or other disposition by PCS or any of its Subsidiaries, (ii)
the sale or other disposition of capital stock of PCS (or of any non-cash
proceeds thereof), (iii) dispositions of inventory, cash, cash equivalents
and other cash management investments and obsolete, unused or unnecessary
equipment, in each case in the ordinary course of business, (iv)
dispositions to the Borrower or a Wholly-Owned Consolidated Subsidiary, (v)
any Sale and Leaseback Transaction and (vi) sales of accounts receivable
pursuant to the Rite Aid Funding LLC receivables securitization facility in
existence on the date hereof, or any successor receivables securitization
facility, if and to the extent that the amount of financing available
thereunder is not increased above that available on the date hereof.
"ASSIGNEE" has the meaning set forth in Section 9.06(c).
"ATTRIBUTABLE DEBT" means, as to any particular Sale and Leaseback
Transaction under which the Borrower or any Subsidiary is at the time
liable, at any date as of which the amount thereof is to be determined (i)
in the case of any such transaction involving a Capital Lease, the amount
on such date of the Capital Lease Obligation thereunder, or (ii) in the
case of any other Sale and Leaseback Transaction, the then present value of
the minimum rental obligations under such Sale and Leaseback Transaction
during the remaining term thereof (after giving effect to any extensions at
the option of the lessor) computed by discounting the respective rental
payments at the actual interest factor included in such payments or, if
such interest factor cannot be readily determined, at the rate of 14% per
annum. The amount of any rental payment required to be made under any such
Sale and Leaseback Transaction not involving a Capital Lease may exclude
amounts required to be paid by the lessee on account of maintenance and
repairs, insurance, taxes, assessments, utilities, operating and labor
costs and similar charges.
"BANK" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 9.06(c), and their
respective successors.
"BASE RATE" means, for any day, a rate per annum equal to the higher
of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"BASE RATE LOAN" means a Loan that bears interest at a rate per
annum, based on the Base Rate pursuant to the Notice of Borrowing, a Notice
of Interest Rate Election, the last sentence of Section 2.05(a) or Article 8.
"BASE RATE MARGIN" has the meaning specified in the Pricing
Schedule.
"BENEFIT ARRANGEMENT" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by
any member of the ERISA Group.
"BORROWER" means Rite Aid Corporation, a Delaware
corporation, and its successors.
"BORROWER'S 1999 FORM 10-K" means the Borrower's annual report on
Form 10-K for the fiscal year ended February 27, 1999, as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act
of 1934, as amended.
"BUSINESS ACQUISITION" means (i) an Investment by the Borrower or any
of its Subsidiaries in any other Person (including an Investment by way of
acquisition of securities of any other Person) pursuant to which such
Person shall become a Subsidiary or shall be merged into or consolidated
with the Borrower or any of its Subsidiaries or (ii) an acquisition by the
Borrower or any of its Subsidiaries of the property and assets of any
Person (other than the Borrower or any of its Subsidiaries) that constitute
substantially all the assets of such Person or any division or other
business unit of such Person.
"CAPITAL LEASE" means any lease of property which, in accordance with
generally accepted accounting principles, should be capitalized on the
lessee's balance sheet; and "CAPITAL LEASE OBLIGATION" means the amount of
the liability so capitalized in respect of a Capital Lease.
"CAPITAL MARKETS TRANSACTION" means the receipt by the Borrower or a
Subsidiary of proceeds of (a) an issuance in the public or private capital
markets of long-term debt securities, of equity securities or of
equity-linked (e.g., trust preferred) securities (other than the LPG
Transaction), (b) a Sale and Leaseback Transaction (other than a Sale and
Leaseback Transaction (i) between the Borrower and a Wholly-Owned
Consolidated Subsidiary or between Wholly- Owned Consolidated Subsidiaries
or (ii) entered into in respect of property acquired by the Borrower or a
Subsidiary if such Sale and Leaseback Transaction is entered into within 24
months from the date of such acquisition) or (c) bank borrowings under
facilities entered into after the date hereof, to the extent the aggregate
incremental financing available thereunder exceeds $200,000,000.
"COLLATERAL" means collateral subject to the Collateral
Documents.
"COLLATERAL DOCUMENTS" means the Pledge Agreements, any additional
pledge agreements required to be delivered pursuant to the Loan Documents
and any other instruments or agreements executed pursuant to the
foregoing.
"COMMITMENT SCHEDULE" means the Schedule attached hereto
identified as such.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate amount of expenditures by the Borrower and its Consolidated
Subsidiaries for plant, property and equipment during such period
(including any such expenditure by way of acquisition of a Person or by way
of assumption of indebtedness or other obligations of a Person, to the
extent reflected as plant, property and equipment), but excluding any such
expenditures made (i) for the replacement or restoration of assets to the
extent financed by condemnation awards or proceeds of insurance received
with respect to the loss or taking of or damage to the asset or assets
being replaced or restored and (ii) for assets acquired to the extent
financed by a Sale and Leaseback Transaction permitted by Section 5.09.
"CONSOLIDATED DEBT" means at any date the Debt of the Borrower and
its Consolidated Subsidiaries, determined on a consolidated basis as of
such date.
"CONSOLIDATED EBITDA" means, for any period, Consolidated Net Income
for such period, plus (a), to the extent deducted in determining
Consolidated Net Income for such period, the aggregate amount of (i)
Consolidated Interest Charges, (ii) provision for income taxes, (iii)
depreciation and amortization, (iv) LIFO Adjustments, (v) store closing
expenses and (vi) any other nonrecurring charge to the extent such
nonrecurring charge does not involve any cash expenditure during such
period, less (b), to the extent not deducted in determining Consolidated
Net Income for such period, the aggregate amount of (i) any cash
expenditure during such period in connection with which a nonrecurring
charge was taken in any prior period and (ii) LIFO Adjustments.
"CONSOLIDATED INTEREST CHARGES" means, for any period, the aggregate
amount of interest charges, whether expensed or capitalized, incurred or
accrued by the Borrower and its Consolidated Subsidiaries during such
period.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of the Borrower and its Consolidated Subsidiaries (exclusive of (a)
extraordinary items of gain or loss, (b) any gain or loss in connection
with any sale of assets other than sales of inventory in the ordinary
course of business, but in the case of loss only to the extent that such
loss does not involve any cash expenditure during such period and (c) the
Borrower's share of the net income (or loss) of ▇▇▇▇▇▇▇▇▇.▇▇▇), determined
on a consolidated basis for such period.
"CONSOLIDATED NET TANGIBLE ASSETS" means the total amount of assets
(less applicable reserves and other properly deductible items) which under
generally accepted accounting principles would be included on a
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries after deducting therefrom (i) all liabilities and liability
items, including amounts in respect of obligations or guarantees of
obligations under leases, which under generally accepted accounting
principles would be included on such balance sheet, except Funded Debt,
capital stock and surplus, surplus reserves and provisions for deferred
income taxes, and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, which in
each case under generally accepted accounting principles would be included
on such consolidated balance sheet.
"CONSOLIDATED NET WORTH" means at any date the consolidated
stockholders' equity of the Borrower and its Consolidated Subsidiaries
determined as of such date; provided that such consolidated stockholders'
equity shall be adjusted to exclude the effect of items which have been
excluded from Consolidated Net Income for any period commencing after
August 28, 1999 by reason of the parenthetical phrase contained in the
definition of such term. Consolidated Net Worth includes the Borrower's 8%
Convertible Pay-In-Kind Preferred Stock.
"CONSOLIDATED RENT" means, for any period, the consolidated rental
expense of the Borrower and its Consolidated Subsidiaries for such period,
and including in any event rental costs of closed stores for such period
whether or not reflected as an expense in the determination of Consolidated
Net Income for such period.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the
Borrower in its consolidated financial statements if such statements were
prepared as of such date.
"CREDIT EXPOSURE" means, with respect to any Bank, the aggregate
outstanding principal amount of such Bank's Loans.
"DEBT" of any Person means at any date, without duplication, (i) all
obligations 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, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee which are
capitalized in accordance with generally accepted accounting principles,
(v) all non-contingent obligations (and, for purposes of Section 5.10 and
the definitions of Material Debt and Material Financial Obligations, all
contingent obligations) of such Person to reimburse any bank or other
Person in respect of amounts paid under a letter of credit or similar
instrument, (vi) all Debt secured by a Lien on any asset of such Person,
whether or not such Debt is otherwise an obligation of such Person, and
(vii) all Debt of others Guaranteed by such Person.
"DEMAND NOTE" has the meaning set forth in the recitals hereto.
"DEFAULT" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"DERIVATIVES OBLIGATIONS" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including
any option with respect to any of the foregoing transactions) or any
combination of the foregoing transactions.
"DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized by law
to close.
"DOMESTIC LENDING OFFICE" means, as to each Bank, its office located
at its address set forth in its Administrative Questionnaire (or identified
in its Administrative Questionnaire as its Domestic Lending Office) or such
other office as such Bank may hereafter designate as its Domestic Lending
Office by notice to the Borrower and the Administrative Agent.
"▇▇▇▇▇▇▇▇▇.▇▇▇" means ▇▇▇▇▇▇▇▇▇.▇▇▇, inc., a Delaware corporation,
and its successors.
"▇▇▇▇▇▇▇▇▇.▇▇▇ PLEDGE AGREEMENT" means the ▇▇▇▇▇▇▇▇▇.▇▇▇ Pledge
Agreement dated as of October 25, 1997 between the Borrower and ▇▇▇▇▇▇
Guaranty Trust Company of New York, as agent thereunder.
"EFFECTIVE DATE" means the date this Agreement becomes effective in
accordance with Section 3.01.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
other governmental restrictions relating to the environment or to
emissions, discharges or releases of pollutants, contaminants, petroleum or
petroleum products, chemicals or industrial, toxic or hazardous substances
or wastes into the environment including, without limitation, ambient air,
surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes
or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA GROUP" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or
any Subsidiary, are treated as a single employer under Section 414 of the
Internal Revenue Code.
"EURO-DOLLAR BUSINESS DAY" means any Domestic Business Day on which
commercial banks are open for international business (including dealings
in dollar deposits) in London.
"EURO-DOLLAR LENDING OFFICE" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Euro-Dollar Lending Office
by notice to the Borrower and the Administrative Agent.
"EURO-DOLLAR LOAN" means a Loan that bears interest at a Euro-Dollar
Rate pursuant to a Notice of Interest Rate Election.
"EURO-DOLLAR MARGIN" has the meaning specified in the Pricing
Schedule.
"EURO-DOLLAR RATE" means a rate of interest determined pursuant to
Section 2.04(b) on the basis of a London Interbank Offered Rate.
"EURO-DOLLAR RESERVE PERCENTAGE" has the meaning set forth in Section
2.11.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such day is not
a Domestic Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Domestic Business Day as so
published on the next succeeding Domestic Business Day, and (ii) if no such
rate is so published on such next succeeding Domestic Business Day, the
Federal Funds Rate for such day shall be the average rate quoted to ▇▇▇▇▇▇
Guaranty Trust Company of New York on such day on such transactions as
determined by the Administrative Agent.
"FIXED CHARGE COVERAGE RATIO" means at any date, the ratio of (i)
Consolidated EBITDA plus Consolidated Rent to (ii) Consolidated Interest
Charges plus Consolidated Rent, in each case for the period of four
consecutive fiscal quarters most recently ended on or prior to such date.
"FUNDED DEBT" means any Debt maturing more than one year after the
date of determination thereof and any Debt, regardless of its term,
renewable pursuant to the terms thereof or of a revolving credit or similar
agreement effective for more than one year after the date of the creation
of such Debt, which would, in accordance with generally accepted accounting
practice, be classified as funded debt but shall not include:
(a) any Debt for the payment, redemption or satisfaction of which
money (or evidences of indebtedness, if permitted under the
instrument creating such indebtedness) in the necessary amount shall
have been deposited in trust with a trustee or proper depository
either at or before maturity or redemption date thereof; or
(b) guarantees arising in connection with the sale, discount,
guarantee or pledge of notes, chattel mortgages, leases, accounts
receivable, trade acceptances and other paper arising, in the
ordinary course of business, out of installment or conditional sales
to or by, or transactions involving title retention with,
distributors, dealers or other customers of merchandise, equipment or
services or guarantees other than guarantees of indebtedness for
borrowed money.
"GROUP OF LOANS" means, at any time, a group of Loans consisting of
(i) all Loans which are Base Rate Loans at such time and (ii) all
Euro-Dollar Loans having the same Interest Period at such time; provided
that, if a Loan of any particular Bank is converted to or made as a Base
Rate Loan pursuant to Article 8, such Loan shall be included in the same
Group or Groups of Loans from time to time as it would have been in if it
had not been so converted or made.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of
any other Person; provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
The term "GUARANTEE" used as a verb has a corresponding meaning.
"INDEMNITEE" has the meaning set forth in Section 9.03(b).
"INDENTURES" means (i) the Indenture dated as of December 21, 1998
between the Borrower and ▇▇▇▇▇▇ Trust and Savings Bank, as trustee, (ii)
the Indenture dated as of September 22, 1998 between the Borrower and
▇▇▇▇▇▇ Trust and Savings Bank, as trustee and (iii) the Indenture dated as
of August 1, 1993, between the Borrower and First Trust of New York,
National Association, as successor trustee.
"INFORMATION" means, collectively, (i) the information provided to
the Banks in connection with the waiver dated as of September 29, 1999 to
the Existing Credit Agreement and (ii) the information presented to the
Banks at meetings in New York City on October 4, 1999 and October 18, 1999
among the Borrower and certain financial institutions.
"INTEREST PERIOD" means, with respect to each Euro-Dollar Loan, the
period commencing on the date specified in an applicable Notice of Interest
Rate Election and ending one, two, three or six months thereafter, as the
Borrower may elect in the applicable notice; provided that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall, subject to clause (c) below, end on the
last Euro-Dollar Business Day of a calendar month; and
(c) no Interest Period may end after the Maturity Date.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"INVESTMENT" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, time deposit or otherwise. Any
repurchase by the Borrower of its own capital stock shall not constitute an
Investment for purposes of this Agreement. The amount of any Investment
shall be the original principal or capital amount thereof less all returns
of principal or equity thereon (and without adjustment by reason of the
financial condition of such other Person) and shall, if made by the
transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal, to the fair market
value of such property at the time of such transfer or exchange.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset. For the purposes of this Agreement, the Borrower or any Subsidiary
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional
sale agreement, Capital Lease or other title retention agreement relating
to such asset.
"LIFO ADJUSTMENTS" means, for any period, the net adjustment to costs
of goods sold for such period required by the Borrower's LIFO inventory
method, determined in accordance with generally accepted accounting
principles.
"LOAN" means a Base Rate Loan or a Euro-Dollar Loan and "LOANS" means
Base Rate Loans or Euro-Dollar Loans or any combination of the foregoing.
"LOAN DOCUMENTS" means this Agreement, the Notes and the Collateral
Documents.
"LONDON INTERBANK OFFERED RATE" has the meaning set forth in Section
2.04(b).
"LPG COMMITMENT" means the Commitment with Respect to Investment in
Rite Aid Corporation dated October 18, 1999 between the Borrower and Green
Equity Investors III.
"LPG TRANSACTION" means the purchase and sale of 3,000,000 shares of
8% Convertible Pay-In-Kind Preferred Stock of the Borrower for a purchase
price of $100.00 per share pursuant to the LPG Commitment.
"MATERIAL FINANCIAL OBLIGATIONS" means (i) a principal or face amount
of Debt (except Debt outstanding hereunder) and/or (ii) payment or
collateralization obligations in respect of Derivatives Obligations and/or
(iii) payment or collateralization obligations in respect of leases (other
than Capital Leases, which are Debt) of the Borrower and/or one or more of
its Subsidiaries, arising in one or more related or unrelated transactions,
exceeding in the aggregate $25,000,000.
"MATERIAL PLAN" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $25,000,000.
"MATURITY DATE" means November 1, 2000.
"▇▇▇▇▇▇" means ▇.▇. ▇▇▇▇▇▇ Ventures Corporation, a Delaware
corporation and its successors.
"▇▇▇▇▇▇ PRO RATA EXPOSURE" means the Loans.
"MULTIEMPLOYER PLAN" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member
of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made
contributions, including for these purposes any Person which ceased to be a
member of the ERISA Group during such five year period.
"NET CASH PROCEEDS" means, with respect to any Reduction Event, an
amount equal to the cash proceeds received by the Borrower or any of its
Subsidiaries from or in respect of such Reduction Event (including, when
received, any cash proceeds received as income or other proceeds of any
noncash proceeds of any Asset Sale), less (x) any investment banking and
underwriting fees and any other expenses reasonably incurred by such Person
in respect of such Reduction Event and (y) if such Reduction Event is an
Asset Sale, (I) the amount of any Debt secured by a Lien on any asset
disposed of in such Asset Sale and discharged from the proceeds thereof and
(II) any taxes actually paid or to be payable by such Person (as estimated
by a senior financial or accounting officer of the Borrower, giving effect
to the overall tax position of the Borrower) in respect of such Asset Sale.
"1999 FACILITY" means the $1,300,000,000 Term Loan Agreement dated as
of the date of this Amended Agreement among Rite Aid Corporation, the banks
listed therein and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
administrative agent thereunder.
"1999 EXPOSURES" means the undrawn commitments and/or the outstanding
loans under the 1999 Facility.
"1999 LOAN DOCUMENTS" means the "Loan Documents" as defined in the
1999 Facility.
"NOTES" means promissory notes of the Borrower, substantially in the
form of Exhibit A hereto, evidencing the obligation of the Borrower to
repay the Loans, and "NOTE" means any one of such promissory notes issued
hereunder.
"NOTICE OF INTEREST RATE ELECTION" has the meaning set forth in
Section 2.07.
"PARENT" means, with respect to any Bank, any Person controlling such
Bank.
"PARTICIPANT" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PCS" means PCS Holding Corporation, a Delaware corporation, and its
successors.
"PCS EVENT" means (i) the sale or other disposition of capital stock
of PCS (or of any non-cash proceeds thereof) or (ii) any sale, lease or
other disposition by PCS or any of its Subsidiaries of any asset which
would constitute an Asset Sale but for clause (i) of the definition of such
term.
"PCS PLEDGE AGREEMENT" means the PCS Pledge Agreement dated as of
October 25, 1997 between the Borrower and ▇▇▇▇▇▇ Guaranty Trust Company of
New York, as agent thereunder.
"PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
"PLAN" means at any time an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Internal Revenue
Code and either (i) is maintained, or contributed to, by any member of the
ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed
to, by any Person which was at such time a member of the ERISA Group for
employees of any Person which was at such time a member of the ERISA Group.
"PLEDGE AGREEMENTS" means the ▇▇▇▇▇▇▇▇▇.▇▇▇ Pledge
Agreement and the PCS Pledge Agreement.
"PRICING SCHEDULE" means the Schedule attached hereto identified as
such.
"PRIME RATE" means the rate of interest publicly announced by ▇▇▇▇▇▇
Guaranty Trust Company of New York in New York City from time to time as
its Prime Rate.
"PRO RATA CREDIT AGREEMENT" means the $1,000,000,000 Amended and
Restated Credit Agreement dated as of July 19, 1996 and amended and
restated as of October 25, 1999 among the Borrower, the banks listed
therein and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as administrative
agent thereunder.
"PRO RATA EXPOSURES" means, collectively, the Pro Rata Credit
Agreement, the Prudential Pro Rata Exposure and the ▇▇▇▇▇▇ Pro Rata
Exposure.
"PRUDENTIAL PRO RATA EXPOSURE" means the 7.30% Senior Secured Notes
due February 28, 2002 issued by ▇▇▇▇▇, Inc. and guaranteed by the Borrower.
"QUARTERLY DATE" means the last day of each Quarterly Period.
"QUARTERLY PERIOD" means a three-month period consisting of (i)
February, March and April, (ii) May, June and July, (iii) August, September
and October or (iv) November, December and January.
"REDUCTION EVENT" means the receipt on or after October 15, 1999 by
the Borrower or a Subsidiary of proceeds of (i) a PCS Event, (ii) a Capital
Markets Transaction or (iii) an Asset Sale.
"REFERENCE BANKS" means the principal London offices of Citibank,
N.A., Bank of America, N. A. and ▇▇▇▇▇▇ Guaranty Trust Company of New York.
"REGULATION T, U OR X" means Regulation T, U or X of the Board of
Governors of the Federal Reserve System, as in effect from time to time.
"REQUIRED BANKS" means at any time Banks having more than 50% of the
aggregate amount of the Credit Exposures.
"RESTRICTED PAYMENT" means (i) any dividend or other distribution on
any shares of the Borrower's capital stock (except dividends payable solely
in shares of its capital stock) or (ii) any payment on account of the
purchase, redemption, retirement or acquisition of (a) any shares of the
Borrower's capital stock or (b) any option, warrant or other right to
acquire shares of the Borrower's capital stock (other than such payments in
connection with employee benefit plans in the ordinary course of business).
"SALE AND LEASEBACK TRANSACTION" has the meaning set forth in Section
5.09.
"SEC" means the Securities and Exchange Commission, or any Person
succeeding to its functions under the Securities Exchange Act of 1934, as
amended.
"SECURED DEBT" means Debt which is secured by a Lien on property of
the Borrower or any Subsidiary, but shall not include guarantees arising in
connection with the sale, discount, guarantee or pledge of notes, chattel
mortgages, leases, accounts receivable, trade acceptances and other papers
arising, in the ordinary course of business, out of installment or
conditional sales to or by, or transactions involving title retention with,
distributors, dealers or other customers, of merchandise, equipment or
services.
"SIGNIFICANT SUBSIDIARY" means at any time any Subsidiary or any
group of Subsidiaries having consolidated assets, individually or in the
aggregate, equal to or greater than 8% of the consolidated assets of the
Borrower and its Consolidated Subsidiaries at such time.
"SUBSIDIARY" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by the
Borrower.
"SUPER-MAJORITY BANKS" means at any time Banks having at least 90% of
the aggregate amount of the Credit Exposures.
"SYNTHETIC LEASE" means a lease which is treated as an operating
lease under generally accepted accounting principles but as ownership of
the leased asset by the lessee for purposes of the Internal Revenue Code.
"TEMPORARY CASH INVESTMENT" means any Investment in (i) direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, (ii) commercial
paper rated at least A-1 by S&P (as defined in the Pricing Schedule) and
P-1 by ▇▇▇▇▇'▇ (as defined in the Pricing Schedule), (iii) time deposits
with, including certificates of deposit issued by, any office located in
the United States of any bank or trust company which is organized or
licensed under the laws of the United States or any state thereof and has
capital, surplus and undivided profits aggregating at least $500,000,000,
(iv) repurchase agreements with respect to securities described in clause
(i) above entered into with an office of a bank or trust company meeting
the criteria specified in clause (iii) above, provided in each case that
such Investment matures within one year from the date of acquisition
thereof by the Borrower or a Subsidiary or (v) money market mutual funds at
least 90% the assets of which are held in Investments referred to in
clauses (i) through (iv) above (except that the maturities of certain
Investments held by any such money market funds may exceed one year so long
as the dollar-weighted average life of the Investments of such money market
mutual fund is less than one year).
"TOTAL CAPITAL" means, at any date, the sum of Consolidated Debt and
Consolidated Net Worth, each determined as of such date.
"UNFUNDED LIABILITIES" means, with respect to any Plan at any time,
the amount (if any) by which (i) the value of all benefit liabilities under
such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii)
the fair market value of all Plan assets allocable to such liabilities
under Title IV of ERISA (excluding any accrued but unpaid contributions),
all determined as of the then most recent valuation date for such Plan, but
only to the extent that such excess represents a potential liability of a
member of the ERISA Group to the PBGC or any other Person under Title IV of
ERISA.
"UNITED STATES" means the United States of America, including the
States and the District of Columbia, but excluding its territories and
possessions.
"WHOLLY-OWNED CONSOLIDATED SUBSIDIARY" means any Consolidated
Subsidiary all of the shares of capital stock or other ownership interests
of which (except directors' qualifying shares) are at the time directly or
indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted,
all accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from
time to time, applied on a basis consistent (except for changes concurred
in by the Borrower's independent public accountants) with the most recent
audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries delivered to the Banks; provided that, if the
Borrower notifies the Administrative Agent that the Borrower wishes to
amend any covenant in Article 5 to eliminate the effect of any change in
generally accepted accounting principles on the operation of such covenant
(or if the Administrative Agent notifies the Borrower that the Required
Banks wish to amend Article 5 for such purpose), then the Borrower's
compliance with such covenant shall be determined on the basis of generally
accepted accounting principles in effect immediately before the relevant
change in generally accepted accounting principles became effective, until
either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Banks.
SECTION 1.03. Other Definitional Provisions. References in this
Agreement to "Articles", "Sections", "Schedules" or "Exhibits" shall be to
Articles, Sections, Schedules or Exhibits of or to this Agreement unless
otherwise specifically provided. Any of the terms defined in Section 1.01
may, unless the context otherwise requires, be used in the singular or
plural depending on the reference. "Include" or "includes" and "including"
shall be deemed to be followed by "without limitation" whether or not they
are in fact followed by such words or words of like import. "Writing",
"written" and comparable terms refer to printing, typing and other means of
reproducing words in a visible form. References to any agreement or
contract are to such agreement or contract as amended, modified or
supplemented from time to time in accordance with the terms hereof and
thereof; provided that amendments, modifications or supplements to the 1999
Loan Documents or the Pro Rata Facilities shall be effective for purposes
of references thereto in the Loan Documents only if such amendments are
consented to in writing for such purpose by the Super-Majority Banks.
References to any Person include the successors and assigns of such Person.
References "from" or "through" any date mean, unless otherwise specified,
"from and including" or "through and including", respectively.
ARTICLE 2
THE CREDITS
SECTION 2.01. Initial Outstandings. On the date hereof, $300,000,000
principal amount is outstanding as a Base Rate Loan made by ▇▇▇▇▇▇. Neither
▇▇▇▇▇▇ nor any other Bank has any commitment hereunder to extend additional
credit, on a revolving basis or otherwise.
SECTION 2.02. Notes. (a) The Loans of each Bank shall be evidenced by
a single Note payable to the order of such Bank for the account of its
Applicable Lending Office in an amount equal to the aggregate unpaid
principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Administrative
Agent, request that its Loans of a particular type be evidenced by a
separate Note in an amount equal to the aggregate unpaid principal amount
of such Loans. Each such Note shall be in substantially the form of Exhibit
A hereto with appropriate modifications to reflect the fact that it
evidences solely Loans of the relevant type. Each reference in this
Agreement to the "NOTE" of such Bank shall be deemed to refer to and
include any or all of such Notes, as the context may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(d), the
Administrative Agent shall forward such Note to such Bank. Each Bank shall
record the date, amount and type of each Loan made by it and the date and
amount of each payment of principal made by the Borrower with respect
thereto, and may, if such Bank so elects in connection with any transfer or
enforcement of its Note, endorse on the schedule forming a part thereof
appropriate notations to evidence the foregoing information with respect to
each such Loan then outstanding; provided that the failure of any Bank to
make any such recordation or endorsement shall not affect the obligations
of the Borrower hereunder or under the Notes. Each Bank is hereby
irrevocably authorized by the Borrower so to endorse its Note and to attach
to and make a part of its Note a continuation of any such schedule as and
when required.
SECTION 2.03. Maturity of Loans. Each Loan shall mature, and the
principal amount thereof shall be due and payable, on the Maturity Date.
SECTION 2.04. Interest Rates. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the
date such Loan is made until it becomes due, at a rate per annum equal to
the sum of the Base Rate Margin plus the Base Rate for such day. Such
interest shall be payable monthly in arrears on the last day of each
calendar month and on the Maturity Date and, with respect to the principal
amount of any Base Rate Loan that is prepaid or converted to a Euro-Dollar
Loan, on the date of such prepayment or conversion. Any overdue principal
of or interest on any Base Rate Loan 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 otherwise applicable to Base Rate Loans for such day.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period
applicable thereto, at a rate per annum equal to the sum of the Euro-Dollar
Margin for such day plus the applicable London Interbank Offered Rate for
such Interest Period. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than
three months, at intervals of three months after the first day thereof.
The "LONDON INTERBANK OFFERED RATE" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher 1/16 of
1%) of the respective rates per annum at which deposits in dollars are
offered to each of the Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before
the first day of such Interest Period in an amount approximately equal to
the principal amount of the Euro-Dollar Loan of such Reference Bank to
which such Interest Period is to apply and for a period of time comparable
to such Interest Period.
(c) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day from and including the
date payment thereof was due to but excluding the date of actual payment,
at a rate per annum equal to the sum of 2% plus the higher of (i) the sum
of the Euro-Dollar Margin for such day plus the London Interbank Offered
Rate applicable to such Loan and (ii) the Euro-Dollar Margin for such day
plus the quotient obtained (rounded upward, if necessary, to the next
higher 1/100 of 1%) by dividing (x) the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective rates per annum
at which one day (or, if such amount due remains unpaid more than three
Euro-Dollar Business Days, then for such other period of time not longer
than six months as the Administrative Agent may select) deposits in dollars
in an amount approximately equal to such overdue payment due to each of the
Reference Banks are offered to such Reference Bank in the London interbank
market for the applicable period determined as provided above by (y) 1.00
minus the Euro-Dollar Reserve Percentage (or, if the circumstances
described in clause (a) or (b) of Section 8.01 shall exist, at a rate per
annum equal to the sum of 2% plus the rate applicable to Base Rate Loans
for such day).
(d) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give
prompt notice to the Borrower and the Banks of each rate of interest so
determined, and its determination thereof shall be conclusive in the
absence of manifest error.
(e) Each Reference Bank party hereto agrees to use its best efforts
to furnish quotations to the Administrative Agent as contemplated by this
Section. If any Reference Bank does not furnish a timely quotation, the
Administrative Agent shall determine the relevant interest rate on the
basis of the quotation or quotations furnished by the remaining Reference
Bank or Banks or, if none of such quotations is available on a timely
basis, the provisions of Section 8.01 shall apply.
SECTION 2.05. Method of Electing Interest Rates. (a) The Loans
included in each Group of Loans shall bear interest initially at the type
of rate specified by the Borrower in the Notice of Borrowing. Thereafter,
the Borrower may from time to time elect to change or continue the type of
interest rate borne by each Group of Loans (subject to Section 2.05(d) and
the provisions of Article 8), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect
to convert such Loans to Euro-Dollar Loans as of any Euro-Dollar
Business Day; and
(ii) if such Loans are Euro-Dollar Loans, the Borrower may
elect to convert such Loans to Base Rate Loans as of any Domestic
Business Day or may elect to continue such Loans as Euro-Dollar
Loans, as of the end of any Interest Period applicable thereto, for
an additional Interest Period, subject to Section 2.09 if any such
conversion is effective on any day other than the last day of an
Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a "NOTICE OF
INTEREST RATE ELECTION") to the Administrative Agent not later than 10:30
A.M. (New York City time) on the third Euro-Dollar Business Day before the
conversion or continuation selected in such notice is to be effective. A
Notice of Interest Rate Election may, if it so specifies, apply to only a
portion of the aggregate principal amount of the relevant Group of Loans;
provided that (i) such portion is allocated ratably among the Loans
comprising such Group and (ii) the portion to which such Notice applies,
and the remaining portion to which it does not apply, are each at least
$100,000,000 (unless such portion is comprised of Base Rate Loans). If no
such notice is timely received before the end of an Interest Period for any
Group of Euro-Dollar Loans, the Borrower shall be deemed to have elected
that such Group of Loans be converted to Base Rate Loans at the end of such
Interest Period.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation
selected in such notice is to be effective, which shall comply with
the applicable clause of Section 2.05(a);
(iii) if the Loans comprising such Group are to be converted,
the new type of Loans and, if the Loans resulting from such
conversion are to be Euro-Dollar Loans, the duration of the next
succeeding Interest Period applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans
for an additional Interest Period, the duration of such additional
Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election
shall comply with the provisions of the definition of Interest Period.
(c) Promptly after receiving a Notice of Interest Rate Election from
the Borrower pursuant to Section 2.05(a) the Administrative Agent shall
notify each Bank of the contents thereof and such notice shall not
thereafter be revocable by the Borrower.
(d) The Borrower shall not be entitled to elect to convert any Loans
to, or continue any Loans for an additional Interest Period as, Euro-Dollar
Loans if (i) the aggregate principal amount of any Group of Euro-Dollar
Loans created or continued as a result of such election would be less than
$100,000,000 or (ii) a Default shall have occurred and be continuing when
the Borrower delivers notice of such election to the Administrative Agent.
(e) If any Loan is converted to a different type of Loan, the Borrower
shall pay, on the date of such conversion, the interest accrued to such
date on the principal amount being converted.
SECTION 2.06. Reduction Events; Mandatory Prepayments. (a) In the
event that the Borrower or any of its Subsidiaries shall at any time, or
from time to time, receive any Net Cash Proceeds of any Reduction Event,
(x) the Borrower shall, not later than the Domestic Business Day following
the date of receipt of such Net Cash Proceeds, notify the Agent of such
fact and of the amount of such Net Cash Proceeds, (y) the Borrower shall,
not later than the Domestic Business Day following the date of receipt of
such Net Cash Proceeds, cause the same to be transferred to the
Administrative Agent to be held in an escrow account pending application in
accordance with the provisions of this Agreement, the Pro Rata Credit
Agreement and the 1999 Facility and (z) the Borrower shall, on the third
Euro-Dollar Business Day following the date of receipt of such Net Cash
Proceeds, apply an amount equal to the largest multiple of $1,000,000 which
does not exceed the amount of such Net Cash Proceeds to reduction of the
1999 Exposures and/or the Pro Rata Exposures in accordance with the
following provisions of this Section:
(i) if the amount of the Net Cash Proceeds in respect of any
Reduction Event is less than $5,000,000, then, unless the Required
Banks (as defined in the Pro Rata Credit Agreement) otherwise elect,
the application thereof shall be deferred until receipt of proceeds
such that, together with all other such amounts received and not
previously applied, the amount of such Net Cash Proceeds is equal to
at least $5,000,000;
(ii) if such Reduction Event is a PCS Event, such Net Cash
Proceeds shall FIRST be applied ratably to reduce the 1999 Exposures,
until the same shall have been reduced to zero, then SECOND shall be
applied ratably to reduce the Tranche A Exposures (as defined in the
Pro Rata Credit Agreement) until the Tranche A Exposures (as defined
in the Pro Rata Credit Agreement) shall have been reduced to zero and
then THIRD applied in accordance with paragraph (iv) below;
(iii) if such Reduction Event is a Capital Markets
Transaction, such Net Cash Proceeds shall first be applied ratably to
reduce the 1999 Exposures, subject to Section 2.09(a)(ii) of the 1999
Facility, until the same shall have been reduced to zero, and then
applied in accordance with paragraph (iv) below;
(iv) if such Reduction Event is not covered by paragraph (ii)
or (iii) above, or if there are Net Cash Proceeds in excess of those
applied in accordance with paragraphs (ii) and (iii) above, such Net
Cash Proceeds shall first be applied ratably to the Pro Rata
Exposures until the Pro Rata Exposures shall have been reduced to
zero, and then ratably to prepay loans outstanding under the 1999
Facility;
(v) the ratable application of Net Cash Proceeds to the Pro
Rata Credit Agreement based upon the full amount of the Credit
Exposures (as defined in the Pro Rata Credit Agreement) at the
relevant time; and
(vi) Net Cash Proceeds applied to the Credit Exposures
pursuant to paragraph (iv) above shall be applied ratably to prepay
the outstanding Loans of the Banks;
(b) Upon receipt from the Borrower of a notice pursuant to Section
2.06(a)(y) the Administrative Agent will promptly notify each Bank of the
contents thereof, and of the date of the related reduction required
hereunder. Any required prepayment shall be made together with accrued
interest on the amount prepaid, and shall be applied first to the Group of
Base Rate Loans and then to such outstanding Groups of Euro-Dollar Loans
the Borrower may elect in such notice, or failing such election as the
Administrative Agent may determine in its discretion.
(c) Amounts held by the Administrative Agent in escrow pending
application as contemplated by this Section 2.06 shall be invested upon the
instruction of the Borrower in Temporary Cash Investments for the account
of the Borrower.
(d) It is expressly understood and agreed that the provisions of this
Section 2.06 are not intended to, and do not, create a Lien in any Net Cash
Proceeds (except to the extent the same represent proceeds of
Collateral).
(e) Net Cash Proceeds of a Reduction Event received by the Borrower or
a Subsidiary prior to the date hereof shall be deemed for purposes of this
Section to have been received on the date hereof.
SECTION 2.07. Optional Prepayments. (a) Subject in the case of any
Euro-Dollar Loans to Section 2.09, the Borrower may (i) upon at least one
Domestic Business Day's notice to the Administrative Agent, prepay any Base
Rate Borrowing or (ii) upon at least three Euro-Business Days' notice to
the Administrative Agent, prepay any Euro-Dollar Borrowing, in each case in
whole at any time, or from time to time in part in amounts aggregating
$10,000,000 or any larger multiple of $1,000,000, by paying the principal
amount to be prepaid together with accrued interest thereon to the date of
prepayment. Each such optional prepayment shall be applied to prepay
ratably the Loans of the several Banks included in such Borrowing.
(b) Upon receipt of a notice of prepayment pursuant to this Section,
the Administrative Agent shall promptly notify each Bank of the contents
thereof and of such Bank's ratable share of such prepayment and such notice
shall not thereafter be revocable by the Borrower.
SECTION 2.08. General Provisions as to Payments. (a) The Borrower
shall make each payment of principal of, and interest on, the Loans and of
fees hereunder, not later than 12:00 Noon (New York City time) on the date
when due, in Federal or other funds immediately available in New York City,
to the Administrative Agent at its address referred to in Section 9.01. The
Administrative Agent will promptly distribute to each Bank its ratable
share of each such payment received by the Administrative Agent for the
account of the Banks. Whenever any payment of principal of, or interest on,
the Base Rate Loans or of fees shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended to
the next succeeding Domestic Business Day. Whenever any payment of
principal of, or interest on, the Euro-Dollar Loans shall be due on a day
which is not a Euro-Dollar Business Day, the date for payment thereof shall
be extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case the
date for payment thereof shall be the next preceding Euro-Dollar Business
Day. If the date for any payment of principal is extended by operation of
law or otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Banks
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to each Bank
on such due date an amount equal to the amount then due such Bank. If and
to the extent that the Borrower shall not have so made such payment, each
Bank shall repay to the Administrative Agent forthwith on demand such
amount distributed to such Bank together with interest thereon, for each
day from the date such amount is distributed to such Bank until the date
such Bank repays such amount to the Administrative Agent, at the Federal
Funds Rate.
SECTION 2.09. Funding Losses. If the Borrower makes any payment of
principal with respect to any Euro-Dollar Loan (pursuant to Article 2, 6 or
8 or otherwise) on any day other than the last day of the Interest Period
applicable thereto, or the end of an applicable period fixed pursuant to
Section 2.04(c) or if the Borrower fails to prepay, continue or convert any
Euro-Dollar Loans after notice has been given to any Bank in accordance
with Section 2.05(c), 2.06(b) or 2.07(b), the Borrower shall reimburse each
Bank within 15 days after demand for any resulting loss or expense incurred
by it (or by an existing or prospective Participant in the related Loan),
including (without limitation) any loss incurred in obtaining, liquidating
or employing deposits from third parties, but excluding loss of margin for
the period after any such payment or failure to borrow, prepay, continue or
convert, provided that such Bank shall have delivered to the Borrower a
certificate as to the amount of such loss or expense, which certificate
shall be conclusive in the absence of clearly demonstrable error.
SECTION 2.10. Computation of Interest. Interest based on the Prime
Rate hereunder shall be computed on the basis of a year of 365 days (or 366
days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest
shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the
last day).
SECTION 2.11. Regulation D Compensation. Each Bank may require the
Borrower to pay, contemporaneously with each payment of interest on the
Euro- Dollar Loans, additional interest on the related Euro-Dollar Loan of
such Bank at a rate per annum determined by such Bank up to but not
exceeding the excess of (i) (A) the applicable London Interbank Offered
Rate divided by (B) one minus the Euro-Dollar Reserve Percentage over (ii)
the applicable London Interbank Offered Rate. Any Bank wishing to require
payment of such additional interest (x) shall so notify the Borrower and
the Administrative Agent, in which case such additional interest on the
Euro-Dollar Loans of such Bank shall be payable to such Bank at the place
indicated in such notice with respect to each Interest Period commencing at
least three Euro-Dollar Business Days after the giving of such notice, and
(y) shall notify the Borrower at least five Euro-Dollar Business Days prior
to each date on which interest is payable on the Euro-Dollar Loans of the
amount then due it under this Section.
"EURO-DOLLAR RESERVE PERCENTAGE" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the
Federal Reserve System in New York City with deposits exceeding five
billion dollars in respect of "Eurocurrency liabilities" (or in respect of
any other category of liabilities which includes deposits by reference to
which the interest rate on Euro-Dollar Loans is determined or any category
of extensions of credit or other assets which includes loans by a
non-United States office of any Bank to United States residents).
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall become effective on
the date that each of the following conditions shall have been satisfied
(or waived in accordance with Section 9.05):
(a) receipt by the Administrative Agent of counterparts hereof signed
by each of the parties hereto (or, in the case of any party as to which an
executed counterpart shall not have been received, receipt by the Agent in
form satisfactory to it of telegraphic, telex or other written confirmation
from such party of execution of a counterpart hereof by such party);
(b) receipt by the Administrative Agent for the account of each Bank
of a duly executed Note dated on or before the Effective Date complying
with the provisions of Section 2.02;
(c) receipt by the Administrative Agent of (i) a letter from Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special counsel for the Borrower,
permitting the Banks to rely on their opinion delivered pursuant to the Pro
Rata Credit Agreement and (ii) an opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, General
Counsel of the Borrower, covering such matters relating to the transactions
contemplated hereby as the Required Banks may be reasonably request;
(d) receipt by the Administrative Agent of an opinion of ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, special counsel for the Administrative Agent, covering such
matters relating to the transactions contemplated hereby as the Required
Banks may reasonably request; and
(e) receipt by the Administrative Agent of all documents it may
reasonably request relating to the existence of the Borrower, the corporate
authority for and the validity of this Agreement, the Pledge Agreements and
the Notes, and any other matters relevant hereto, all in form and substance
satisfactory to the Administrative Agent;
On and after the Effective Date, the Demand Note shall be
superseded by the terms of this Agreement and the Notes issued hereunder,
and the indebtedness evidenced and governed by the Demand Note shall on and
after the Effective Date be evidenced and governed by this Agreement and
the Notes.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware, and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of
the Loan Documents are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official
and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or
by-laws of the Borrower or of any agreement or instrument evidencing or
governing Debt of the Borrower or any Subsidiary or any other material
agreement, instrument, judgment, injunction, order or decree binding upon
the Borrower or any Subsidiary or result in the creation or imposition of
any Lien on any asset of the Borrower or any Subsidiary pursuant to any
such agreement, instrument, judgment, injunction, order or decree (other
than the Liens created by the Pledge Agreements).
SECTION 4.03. Binding Effect. This Agreement and each Pledge
Agreement constitutes a valid and binding agreement of the Borrower and
each Note, when executed and delivered in accordance with this Agreement,
will constitute a valid and binding obligation of the Borrower, in each
case enforceable in accordance with its terms.
SECTION 4.04. Financial Information. Except as disclosed in the
Information:
(a) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of February 27, 1999 and the related
consolidated statements of income and cash flows for the fiscal year then
ended, reported on by KPMG Peat Marwick LLP and set forth in the Borrower's
1999 Form 10-K, a copy of which has been delivered to each of the Banks,
fairly present, in conformity with generally accepted accounting
principles, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such fiscal year.
(b) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of May 29, 1999 and the related consolidated
statements of income and cash flows for the fiscal period then ended, set
forth in the Borrower's quarterly report on Form 10-Q for the fiscal
quarter then ended, a copy of which has been delivered to each of the
Banks, fairly present, in conformity with generally accepted accounting
principles applied on a basis consistent with the financial statements
referred to in subsection (a), the consolidated financial position of the
Borrower and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such fiscal period,
subject to normal year-end adjustments.
(c) Since May 29, 1999, there has been no material adverse change in
the business, financial position, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.05. Full Disclosure. All financial statements and other
documents furnished by the Borrower to the Banks in connection with this
Agreement, including the Information, do not and will not contain any
untrue statement of material fact or omit to state a material fact
necessary in order to make the statements contained therein not misleading.
The Borrower has disclosed to the Banks in writing any and all facts which
materially and adversely affect the business, operations or condition,
financial or otherwise, of the Borrower and its Subsidiaries or the
Borrower's ability to perform its obligations under this Agreement.
SECTION 4.06. Litigation. Except as disclosed in the Borrower's 1999
Form 10-K, there is no action, suit or proceeding pending against, or to
the knowledge of the Borrower threatened against or affecting, the Borrower
or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable
possibility of an adverse decision which could materially adversely affect
the business, consolidated financial position or consolidated results of
operations of the Borrower and its Consolidated Subsidiaries or which in
any manner draws into question the validity or enforceability of any Loan
Document.
SECTION 4.07. Compliance with ERISA. Each member of the ERISA Group
has fulfilled its obligations under the minimum funding standards of ERISA
and the Internal Revenue Code with respect to each Plan and is in
compliance in all material respects with the presently applicable
provisions of ERISA and the Internal Revenue Code with respect to each
Plan. No member of the ERISA Group has (i) sought a waiver of the minimum
funding standard under Section 412 of the Internal Revenue Code in respect
of any Plan, (ii) failed to make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has resulted or could
result in the imposition of a Lien or the posting of a bond or other
security under ERISA or the Internal Revenue Code or (iii) incurred any
liability under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA.
SECTION 4.08. Taxes. The Borrower and its Subsidiaries have filed all
United States Federal income tax returns, and the Borrower and its
Significant Subsidiaries have filed all other material tax returns, which
are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Borrower or any
Significant Subsidiary except where the payment of any such taxes is being
contested in good faith by appropriate proceedings. The charges, accruals
and reserves on the books of the Borrower and its Consolidated Subsidiaries
in respect of taxes or other governmental charges are, in the opinion of
the Borrower, adequate.
SECTION 4.09. Subsidiaries. Each of the Borrower's corporate
Significant Subsidiaries is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
SECTION 4.10. Environmental Matters. In the ordinary course of its
business, the Borrower conducts an ongoing review of the effect of
Environmental Laws on the business, operations and properties of the
Borrower and its Subsidiaries, in the course of which it identifies and
evaluates associated liabilities and costs (including, without limitation,
any capital or operating expenditures required for clean-up or closure of
properties presently or previously owned, any capital or operating
expenditures required to achieve or maintain compliance with environmental
protection standards imposed by law or as a condition of any license,
permit or contract, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility or reduction
in the level of or change in the nature of operations conducted thereat,
any costs or liabilities in connection with off-site disposal of wastes or
hazardous substances, and any actual or potential liabilities to third
parties, including employees, and any related costs and expenses). On the
basis of this review, the Borrower has reasonably concluded that such
associated liabilities and costs, including the costs of compliance with
Environmental Laws, are unlikely to have a material adverse effect on the
business, financial condition, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.11. Year 2000 Compliance. The Borrower has (i) initiated a
review and assessment of all areas within the business and operations of
the Borrower and each of its Subsidiaries (including those areas affected
by suppliers and vendors) that could be adversely affected by the "YEAR
2000 PROBLEM") (that is, the risk that computer applications used by it or
any of its Subsidiaries (or their respective supplier and vendors) may be
unable to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999), (ii)
developed a plan and timeline for addressing the Year 2000 Problem on a
timely basis and (iii) to date, implemented such plan in accordance with
such timetable. The Borrower reasonably believes that all computer
applications that are material to the business or operations of the
Borrower or any of its Subsidiaries will on a timely basis be able to
perform properly date-sensitive functions for all dates before and from and
after January 1, 2000, except to the extent that a failure to do so could
not reasonably be expected to have a material adverse effect on the
business, financial condition, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.12. Pledge Agreements. The representations and warranties
of the Borrower set forth in each Pledge Agreement are true and correct.
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any amount payable under any
Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of the
Banks:
(a) as soon as available and in any event within 90 days (or within
such longer period of time, not greater than 120 days, to which the SEC may
extend the filing deadline for the Borrower's Annual Report on Form 10-K)
after the end of each fiscal year of the Borrower, a consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as of the end of
such fiscal year and the related consolidated statements of income and cash
flows for such fiscal year, setting forth in each case in comparative form
the figures for the previous fiscal year, all reported on without material
qualification by KPMG Peat Marwick LLP or other independent public
accountants of nationally recognized standing;
(b) as soon as available and in any event within 45 days (or (x) in
the case of the fiscal quarter most recently ended prior to the date
hereof, within 65 days or (y) in the case of any subsequent fiscal quarter,
within such longer period of time, not greater than 60 days, to which the
SEC may extend the filing deadline for the Borrower's Quarterly Report on
Form 10-Q) after the end of each of the first three quarters of each fiscal
year of the Borrower, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such quarter and the related
consolidated statements of income and cash flows for such quarter and for
the portion of the Borrower's fiscal year ended at the end of such quarter,
setting forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of the Borrower's
previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, generally accepted accounting
principles and consistency by the chief financial officer or the chief
accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
chief financial officer or the chief accounting officer of the Borrower (i)
setting forth in reasonable detail the calculations required to establish
whether the Borrower was in compliance with the requirements of Sections
5.08 to 5.15, inclusive, on the date of such financial statements and (ii)
stating whether any Default exists on the date of such certificate and, if
any Default then exists, setting forth the details thereof and the action
which the Borrower is taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i)
whether anything has come to their attention to cause them to believe that
any Default existed on the date of such statements and (ii) confirming the
calculations set forth in the officer's certificate delivered
simultaneously therewith pursuant to clause (c) above;
(e) within five days after any officer of the Borrower obtains
knowledge of any Default, if such Default is then continuing, a certificate
of the chief financial officer or the chief accounting officer of the
Borrower setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) which the Borrower shall have filed with the SEC;
(h) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined
in Section 4043 of ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV of ERISA, or knows
that the plan administrator of any Plan has given or is required to give
notice of any such reportable event, a copy of the notice of such
reportable event given or required to be given to the PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV of ERISA
or notice that any Multiemployer Plan is in reorganization, is insolvent or
has been terminated, a copy of such notice; (iii) receives notice from the
PBGC under Title IV of ERISA of an intent to terminate, impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or
appoint a trustee to administer, any Plan, a copy of such notice; (iv)
applies for a waiver of the minimum funding standard under Section 412 of
the Internal Revenue Code, a copy of such application; (v) gives notice of
intent to terminate any Plan under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could
result in the imposition of a Lien or the posting of a bond or other
security, a certificate of the chief financial officer or the chief
accounting officer of the Borrower setting forth details as to such
occurrence and action, if any, which the Borrower or applicable member of
the ERISA Group is required or proposes to take; and
(i) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Administrative Agent, at the request of any Bank, may reasonably request.
Information required to be delivered pursuant to Section 5.01(a),
5.01(b), 5.01(f) or 5.01(g) above shall be deemed to have been delivered on
the date on which the Borrower provides notice to the Banks that such
information has been posted on the Borrower's website on the Internet at
the website address listed on the signature pages hereof, at
▇▇▇.▇▇▇/▇▇▇▇▇/▇▇▇▇▇▇▇▇.▇▇▇ or at another website identified in such notice
and accessible by the Banks without charge; provided that (i) such notice
may be included in a certificate delivered pursuant to Section 5.01(c) and
(ii) the Borrower shall deliver paper copies of the information referred to
in Section 5.01(a), 5.01(b), 5.01(f) or 5.01(g) to any Bank which requests
such delivery.
SECTION 5.02. Payment of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, pay and discharge, as the same shall
become due and payable, (i) all material claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like Persons prior
to the time such claims or demands give rise to a Lien upon any of its
property or assets, and (ii) all material taxes, assessments and
governmental charges or levies upon it or its property or assets, except
where any of the items in clause (i) or (ii) above may be contested in good
faith by appropriate proceedings, and the Borrower or such Subsidiary, as
the case may be, shall have set aside on its books, in accordance with
generally accepted accounting principles, appropriate reserves, if any, for
the accrual of any such items.
SECTION 5.03. Maintenance of Property; Insurance. (a) The Borrower
will keep, and will cause each Subsidiary to keep, all property useful and
necessary in its business in good working order and condition, ordinary
wear and tear excepted.
(b) The Borrower will, and will cause each of its Subsidiaries to,
maintain (either in the name of the Borrower or in such Subsidiary's own
name) with financially sound and responsible insurance companies, insurance
on all their respective properties in at least such amounts and against at
least such risks (and with such risk retention) as are usually insured
against in the same general area by companies of established repute engaged
in the same or a similar business; and will furnish to the Banks, upon
request from the Administrative Agent, information presented in reasonable
detail as to the insurance so carried.
SECTION 5.04. Conduct of Business and Maintenance of Existence.
Except as otherwise permitted in this Agreement, the Borrower will
continue, and will cause each Significant Subsidiary to continue, to engage
in business of the same general type as now conducted by the Borrower and
its Significant Subsidiaries, and will preserve, renew and keep in full
force and effect, and will cause each Significant Subsidiary (except where
such Significant Subsidiary merges into the Borrower or any other
Subsidiary) to preserve, renew and keep in full force and effect their
respective legal existences and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business.
SECTION 5.05. Compliance with Laws. The Borrower will comply, and
cause each Subsidiary to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws
and ERISA and the rules and regulations thereunder) except where the
necessity of compliance therewith is contested in good faith by appropriate
proceedings or where the failure to comply would not have a material
adverse effect on the business, financial position or results of operations
of the Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 5.06. Inspection of Property, Books and Records. The Borrower
will keep, and will cause each Subsidiary to keep, proper books of record
and account in which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and activities; and
will permit, and will cause each Subsidiary to permit, representatives of
any Bank at such Bank's expense to visit and inspect any of their
respective properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective affairs,
finances and accounts with their respective officers, employees and
independent public accountants, all at such reasonable times and as often
as may reasonably be desired.
SECTION 5.07. Restriction on Other Agreements. The Borrower will not,
and will not permit any Subsidiary to, enter into any agreement which
imposes a limitation on incurrence by the Borrower and its Subsidiaries of
Liens that is more restrictive than the limitation on Liens set forth in
this Agreement (other than agreements with respect to Debt secured by Liens
permitted by Section 5.10(a) containing restrictions on the ability to
transfer or grant Liens on the assets securing such Debt and other than
customary restrictions contained in purchase and sale agreements limiting
the transfer of the subject assets pending closing and customary
non-assignment provisions in leases and other contracts entered into in the
ordinary course of business) or which imposes other covenants more
restrictive than those set forth in this Agreement.
SECTION 5.08. Restriction on Debt of Subsidiaries. The Borrower will
not permit any Subsidiary to create, issue, incur, assume, or in any other
way become liable for any unsecured Debt unless immediately prior thereto
the Borrower would be entitled under Section 5.10(e) to create Secured Debt
not specifically permitted under Section 5.10 but for subsection (e)
thereof in an amount equal to such Debt; provided that the foregoing
restriction shall not prevent (i) any Subsidiary from becoming liable to
the Borrower or to a Wholly-Owned Consolidated Subsidiary for Debt or (ii)
the extension, renewal or refunding of any Debt of any Subsidiary so long
as Consolidated Debt is not thereby increased.
SECTION 5.09. Restriction on Sales with Leases Back. Except for a
sale or transfer by a Subsidiary to the Borrower or a Wholly-Owned
Consolidated Subsidiary, the Borrower will not, and will not permit any
Subsidiary to, sell or transfer any manufacturing plant, warehouse, retail
store or equipment now or hereafter owned and operated by the Borrower or a
Subsidiary, with the intention that the Borrower or any Subsidiary take
back a lease thereof, except a lease for a period, including renewals, not
exceeding 24 months, by the end of which period it is intended that the use
of such property or equipment by the lessee will be discontinued (any such
transaction being herein referred to as a "SALE AND LEASEBACK
TRANSACTION"); provided that, notwithstanding the foregoing, the Borrower
or any Subsidiary may enter into a Sale and Leaseback Transaction if the
Borrower or a Subsidiary would be entitled under Section 5.10(e) to create
Secured Debt not specifically permitted under Section 5.10 but for Section
5.10(e) in an amount equal to the Attributable Debt respecting such Sale
and Leaseback Transaction; provided further that, notwithstanding the
foregoing, the Borrower or any Subsidiary may enter into a Sale and
Leaseback Transaction if entered into in respect of property acquired by
the Borrower or a Subsidiary if such Sale and Leaseback Transaction is
entered into within 24 months from the date of such acquisition; and
provided still further that, notwithstanding the foregoing, the Borrower or
any Subsidiary may enter into a Sale and Leaseback Transaction so long as
the Net Cash Proceeds thereof are applied as contemplated by Section 2.06.
SECTION 5.10. Restriction on Liens. The Borrower will not, and will
not permit any Subsidiary to, create, issue, incur, assume or guarantee any
Secured Debt; provided that the foregoing covenant shall not apply to the
following:
(a) (i) Any Lien on any property acquired or constructed by the
Borrower or a Subsidiary and created contemporaneously with, or within 24
months after, such acquisition or the completion of such construction and
commencement of full operation of such property, whichever is later, to
secure or provide for the payment of any part of the purchase or
construction price of such property, or (ii) the acquisition by the
Borrower or a Subsidiary of property subject to any Lien upon such property
existing at the time of acquisition thereof, whether or not assumed by the
Borrower or such Subsidiary, or (iii) any conditional sales agreement or
other title retention agreement with respect to any property hereafter
acquired; provided that the Lien does not spread to other property except
unimproved real property previously owned upon which any new construction
has taken place and subsequent additions to such acquired or constructed
property;
(b) Any Lien created for the sole purpose of extending, renewing or
refunding, in whole or part, any Lien permitted by this Section 5.10 or any
Lien securing the Debt of the Borrower or of any Subsidiary on the date of
this Agreement or of a corporation at the time such corporation becomes a
Subsidiary, or any extensions, renewals or refundings of any such Lien;
provided that the principal amount of Debt secured thereby shall not exceed
the principal amount of Debt so secured at the time of such extension,
renewal or refunding and that such extension, renewal or refunding Lien
shall be limited to all or that part of the same property which secured the
Debt so extended, renewed or refunded;
(c) Any Secured Debt of a Subsidiary owing to the Borrower or a
Wholly-Owned Consolidated Subsidiary;
(d) Any Lien created by the Loan Documents, the Pro Rata Credit
Agreement or the 1999 Loan Documents; and
(e) Secured Debt of the Borrower and its Subsidiaries which would
otherwise be prohibited by the foregoing restrictions (not including
Secured Debt permitted to be secured under subsections (a) through (d)
above) so long as the sum of any such Secured Debt hereafter incurred and
outstanding at the time plus Attributable Debt of the Borrower and any
Subsidiaries in respect of Sale and Leaseback Transactions hereafter
entered into and outstanding at the time (excluding Attributable Debt
incurred in respect of any Sale and Leaseback Transaction (i) entered into
in respect of property acquired by the Borrower or a Subsidiary not more
than 24 months prior to the date such Sale and Leaseback Transaction is
entered into or (ii) if the Borrower, within 120 days before or after such
Sale and Leaseback Transaction is entered into applies an amount equal to
the greater of (A) the net proceeds of the sale of the property so sold and
leased back or (B) the fair market value of such property at the date such
arrangement is entered into to the retirement of Secured Debt (other than
at maturity or pursuant to any mandatory payment provision) or to reduction
of the Commitments) plus unsecured Debt of any Subsidiary hereafter
incurred and outstanding at the time (excluding unsecured Debt incurred
through the extension, renewal or refunding of Debt of such Subsidiary
where Consolidated Debt was not thereby increased and excluding any Debt
owed to the Borrower or a Wholly-Owned Consolidated Subsidiary) does not at
the time exceed 5% of Consolidated Net Tangible Assets.
SECTION 5.11. Capital Expenditures. The aggregate amount of
Consolidated Capital Expenditures for any period set forth below shall not
exceed the amount set forth below opposite such period:
FISCAL YEAR ENDING ON AMOUNT
OR CLOSEST TO
February 29, 2000 $620,000,000
February 28, 2001 $295,000,000
SECTION 5.12. Capitalization Leverage Ratio. At no time shall the
ratio of (i) Consolidated Debt at such time to (ii) Total Capital at such
time, exceed 0.695; provided that upon any sale of the capital stock of
PCS, such maximum ratio shall be reset at the level which produces the
result that the amount of additional Debt that the Borrower may incur
within the limits of this ratio immediately after giving effect to such
sale and the repayment of any Debt required in connection therewith is
equal to the amount of additional Debt that the Borrower could incur within
the limits of this ratio immediately before giving effect to such sale and
the repayment of any Debt required in connection therewith.
SECTION 5.13. Limitation on Debt. The Borrower will not, and will not
permit any of its Subsidiaries to, incur or at any time be liable with
respect to any Debt except:
(a) Debt under this Agreement, the Pro Rata Credit
Agreement or the 1999 Facility;
(b) Debt outstanding on December 2, 1999;
(c) Debt incurred to refinance Debt referred to in clause
(a) or clause (b) above, provided that the amount thereof that
is at the time outstanding or committed is not increased and
the maturity thereof is not shortened; and
(d) Debt not permitted by clauses (a), (b) and (c) above
in an aggregate principal amount at any time outstanding not to
exceed $25,000,000.
SECTION 5.14. Fixed Charge Coverage. At no time during any period set
forth below shall the Fixed Charge Coverage Ratio be less than the ratio
set forth below opposite such period:
FISCAL QUARTER ENDING
ON OR CLOSEST TO RATIO
November 30, 1999 1.35
February 29, 2000 1.30
May 31, 2000 and 1.25
thereafter
SECTION 5.15. Limitation on Investments and Acquisitions. (a) Neither
the Borrower nor any Consolidated Subsidiary will make or acquire any
Investment in any Person other than:
(i) Investments in Consolidated Subsidiaries; provided, that
Investments (exclusive of inter-company payables owing to the
Borrower or a Subsidiary arising from cash management transactions in
the ordinary course of business) in PCS, whether existing on the date
hereof or hereafter made, may be made only by the Borrower and only
in the form of a contribution to the capital of PCS and without
issuance of additional shares of capital stock therefor, and provided
further that no such Investment may be made in any Subsidiary of PCS
except by PCS or another Subsidiary of PCS;
(ii) Temporary Cash Investments;
(iii) Investments received as consideration for sale or other
disposition of the capital stock of PCS or ▇▇▇▇▇▇▇▇▇.▇▇▇ permitted by
Section 5.16;
(iv) Investments in ▇▇▇▇▇▇▇▇▇.▇▇▇ existing on the date
hereof; and
(v) Any Investment not otherwise permitted by the foregoing
clauses of this Section if, immediately after such Investment is made
or acquired, the aggregate net book value of all Investments
permitted by this clause (c) does not exceed 10% of Consolidated Net
Worth.
(b) The Borrower will not, and will not permit any Subsidiary to,
consummate any Business Acquisition to the extent that the aggregate
consideration paid or payable by the Borrower or any Subsidiary in
connection with all such Business Acquisitions on or after the Closing Date
would exceed $15,000,000.
SECTION 5.16. Consolidations, Mergers and Sales of Assets. The
Borrower will not (i) consolidate or merge with or into any other Person,
(ii) sell, lease or otherwise transfer, directly or indirectly, all or any
substantial part of the assets of the Borrower and its Subsidiaries, taken
as a whole, to any other Person or (iii) sell, lease or otherwise transfer
any Collateral to any other Person; provided that (x) the Borrower may
merge with another Person if (A) the Borrower is the corporation surviving
such merger and (B) immediately after giving effect to such merger, no
Default shall have occurred and be continuing and (y) the Borrower may sell
or otherwise dispose of the capital stock of PCS or ▇▇▇▇▇▇▇▇▇.▇▇▇, in whole
but not in part, so long as the consideration therefor is not less than the
fair market value of such capital stock and shall consist solely of a
combination of cash and publicly traded securities payable and deliverable
at the closing of such sale.
SECTION 5.17. Use of Proceeds. The proceeds of the Loans outstanding
under this Agreement were used by the Borrower for its general corporate
purposes. No such use of proceeds was or will be, directly or indirectly,
for the purpose, whether immediate, incidental or ultimate, of buying or
carrying any "MARGIN STOCK" within the meaning of Regulation U.
SECTION 5.18. Restricted Payments. After the date hereof, neither the
Borrower nor any Subsidiary will declare or make any Restricted Payment.
SECTION 5.19. Synthetic Leases. Neither the Borrower nor any
Subsidiary will enter into any Synthetic Lease if, after giving effect
thereto, the aggregate amount financed under all Synthetic Leases entered
into in any period of twelve consecutive calendar months commencing after
the date hereof would exceed $35,000,000.
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("EVENTS OF DEFAULT") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any
Loan, or shall fail to pay within five days of the due date thereof any
interest, fees or other amount payable hereunder;
(b) the Borrower shall fail to observe or perform (i) any covenant
contained in Sections 5.08 to 5.19, inclusive or (ii) any covenant
contained in Section 3(b) or 5(b) of the Pledge Agreement;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in the Loan Documents (other than those covered by
clause (a) or (b) above) for 30 days after written notice thereof has been
given to the Borrower by the Administrative Agent at the request of any
Bank;
(d) any material representation, warranty, certification or statement
made (or deemed made) by the Borrower in any Loan Document or in any
certificate, financial statement or other document delivered pursuant to
any Loan Document shall prove to have been incorrect in any material
respect when made (or deemed made);
(e) the Borrower or any Subsidiary shall fail to make any payment in
respect of any Material Financial Obligations when due or within any
applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Financial Obligations or
enables (or, if such event or condition does not otherwise give rise to a
Default hereunder, which with the giving of notice or lapse of time or both
would enable) the holder of such Material Financial Obligations or any
Person acting on such holder's behalf to accelerate the maturity thereof;
(g) the Borrower or any Significant Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it,
or shall make a general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Significant Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief shall be entered
against the Borrower or any Significant Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $5,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to
terminate a Material Plan shall be filed under Title IV of ERISA by any
member of the ERISA Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA
to terminate, to impose liability (other than for premiums under Section
4007 of ERISA) in respect of, or to cause a trustee to be appointed to
administer, any Material Plan; or a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree adjudicating that any
Material Plan must be terminated; or there shall occur a complete or
partial withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which
could cause one or more members of the ERISA Group to incur a current
payment obligation in excess of $25,000,000;
(j) a judgment or order for the payment of money in excess of
$25,000,000 shall be rendered against the Borrower or any Subsidiary and
such judgment or order shall continue unsatisfied and unstayed for a period
of 30 days;
(k) any Lien created by either Pledge Agreement shall at any time
fail to constitute a valid and (to the extent required by such Pledge
Agreement) perfected Lien on all of the Collateral purported to be subject
thereto, securing the obligations purported to be secured thereby, with the
priority required by the Loan Documents, or the Borrower shall so assert in
writing; or
(l) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated
by the SEC under said Act) of 20% or more of the outstanding shares of
common stock of the Borrower; or, during any period of 12 consecutive
calendar months, individuals who were directors of the Borrower on the
first day of such period shall cease to constitute a majority of the board
of directors of the Borrower; then, and in every such event, the
Administrative Agent shall if requested by Banks holding Notes evidencing
more than 50% in aggregate principal amount of the Loans, by notice to the
Borrower declare the Notes (together with accrued interest thereon) to be,
and the Notes (together with accrued interest thereon) shall thereupon
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower;
provided that in the case of any of the Events of Default specified in
clause (g) or (h) above with respect to the Borrower, without any notice to
the Borrower or any other act by the Administrative Agent or the Banks, the
Notes (together with accrued interest thereon) shall become immediately due
and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Administrative Agent shall give
notice to the Borrower under Section 6.01(c) promptly upon being requested
to do so by any Bank and shall thereupon notify all the Banks thereof.
ARTICLE 7
THE ADMINISTRATIVE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Administrative Agent to take such action as
Administrative Agent on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Administrative Agent by the terms
thereof, together with all such powers as are reasonably incidental
thereto.
SECTION 7.02. Administrative Agent and Affiliates. ▇▇▇▇▇▇ Guaranty
Trust Company of New York shall have the same rights and powers under the
Loan Documents as any other Bank and may exercise or refrain from
exercising the same as though it were not the Administrative Agent, and
▇▇▇▇▇▇ Guaranty Trust Company of New York and its affiliates may accept
deposits from, lend money to, and generally engage in any kind of business
with the Borrower or any Subsidiary or affiliate of the Borrower as if it
were not the Administrative Agent.
SECTION 7.03. Action by Administrative Agent. The obligations of the
Administrative Agent under the Loan Documents are only those expressly set
forth therein. Without limiting the generality of the foregoing, the
Administrative Agent shall not be required to take any action with respect
to any Default, except as expressly provided in Article 6 and in the Pledge
Agreement.
SECTION 7.04. Consultation with Experts. The Administrative Agent may
consult with legal counsel (who may be counsel for the Borrower),
independent public accountants and other experts selected by it and shall
not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or
experts.
SECTION 7.05. Liability of Administrative Agent. Neither the
Administrative Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be liable for any action
taken or not taken by it or any of them in connection herewith (i) with the
consent or at the request of the Required Banks (or such other number or
percentage of Banks as may be specified in the Loan Documents for
particular purposes) or (ii) in the absence of its or their own gross
negligence or willful misconduct. Neither the Administrative Agent nor any
of its affiliates nor any of their respective directors, officers, agents
or employees shall be responsible for or have any duty to ascertain,
inquire into or verify (i) any statement, warranty or representation made
in connection with this Agreement or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or agreements of the
Borrower; (iii) the satisfaction of any condition specified in Article 3,
except receipt of items required to be delivered to the Administrative
Agent; or (iv) the validity, effectiveness or genuineness of this
Agreement, the Notes or any other instrument or writing furnished in
connection herewith. The Administrative Agent shall not incur any liability
by acting in reliance upon any notice, consent, certificate, statement, or
other writing (which may be a bank wire, telex or similar writing) believed
by it to be genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in accordance
with its Credit Exposure, indemnify the Administrative Agent, its
affiliates and their respective directors, officers, agents and employees
(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 such indemnitees' gross negligence or
willful misconduct) that such indemnitees may suffer or incur in connection
with this Agreement or any action taken or omitted by such indemnitees
hereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Bank, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking any
action under this Agreement.
SECTION 7.08. Successor Administrative Agent. The Administrative
Agent may resign at any time by giving notice thereof to the Banks and the
Borrower. Upon any such resignation, the Required Banks shall have the
right, with (so long as no Default shall have occurred and be continuing)
the consent of the Borrower, to appoint a successor Administrative Agent.
If no successor Administrative Agent shall have been so appointed by the
Required Banks, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent gives notice of resignation, then
the retiring Administrative Agent may, on behalf of the Banks, appoint a
successor Administrative Agent, which shall be a commercial bank organized
or licensed under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $50,000,000.
Upon the acceptance of its appointment as Administrative Agent by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights and duties of
the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations under the Loan
Documents. After any retiring Administrative Agent's resignation hereunder
as Administrative Agent, the provisions of this Article shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent.
SECTION 7.09. Administrative Agent's Fees. The Borrower shall pay to
the Administrative Agent for its own account fees in the amounts and at the
times previously agreed upon between the Borrower and the Administrative
Agent.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any
Euro-Dollar Loan:
(a) the Administrative Agent is advised by the Reference Banks that
deposits in dollars (in the applicable amounts) are not being offered
to the Reference Banks in the London interbank market for such
Interest Period, or
(b) Banks having 50% or more of the aggregate amount of the Credit
Exposures advise the Administrative Agent that the London Interbank
Offered Rate as determined by the Administrative Agent will not
adequately and fairly reflect the cost to such Banks of funding their
Euro-Dollar Loans for such Interest Period,
the Administrative Agent shall forthwith give notice thereof to the
Borrower and the Banks, whereupon until the Administrative Agent notifies
the Borrower that the circumstances giving rise to such suspension no
longer exist, the obligations of the Banks to continue or convert
outstanding Loans as or into Euro-Dollar Loans shall be suspended, and each
outstanding Euro-Dollar Loan shall be converted into a Base Rate Loan on
the last day of the then current Interest Period applicable thereto.
SECTION 8.02. Illegality. (a) If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Euro-Dollar
Lending Office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency
shall make it unlawful or impossible for any Bank (or its Euro-Dollar
Lending Office) to make, maintain or fund its Euro-Dollar Loans and such
Bank shall so notify the Administrative Agent, the Administrative Agent
shall forthwith give notice thereof to the other Banks and the Borrower,
whereupon until such Bank notifies the Borrower and the Administrative
Agent that the circumstances giving rise to such suspension no longer
exist, the obligation of such Bank to convert outstanding Loans into
Euro-Dollar Loans or continue outstanding Loans as Euro-Dollar Loans shall
be suspended. Before giving any notice to the Administrative Agent pursuant
to this Section, such Bank shall designate a different Euro-Dollar Lending
Office if such designation will avoid the need for giving such notice and
will not, in the judgment of such Bank, be otherwise disadvantageous to
such Bank.
(b) If such notice is given, each Euro-Dollar Loan of such Bank then
outstanding shall be converted to a Base Rate Loan either (a) on the last
day of the then current Interest Period applicable to such Euro-Dollar Loan
if such Bank may lawfully continue to maintain and fund such Loan as a
Euro-Dollar Loan to such day or (b) immediately if such Bank shall
determine that it may not lawfully continue to maintain and fund such Loan
as a Euro-Dollar Loan to such day. Interest and principal on any such Base
Rate Loan shall be payable on the same dates as, and on a pro rata basis
with, the interest and principal payable on the related Euro-Dollar Loans
of the other Banks.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after
the date hereof, the adoption of any applicable law, rule or regulation, or
any change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable
Lending Office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency
shall impose, modify or deem applicable any reserve (including, without
limitation, any such requirement imposed by the Board of Governors of the
Federal Reserve System, but excluding any such requirement with respect to
which such Bank is entitled to compensation for the relevant Interest
Period under Section 2.11), special deposit, insurance assessment or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Bank (or its Applicable Lending Office) or shall
impose on any Bank (or its Applicable Lending Office) or on the London
interbank market any other condition affecting its Euro-Dollar Loans or its
Note and the result of any of the foregoing is to increase the cost to such
Bank (or its Applicable Lending Office) of making or maintaining any
Euro-Dollar Loan, or to reduce the amount of any sum received or receivable
by such Bank (or its Applicable Lending Office) under this Agreement or
under its Note with respect thereto, by an amount deemed by such Bank to be
material, then, within 15 days after demand by such Bank (with a copy to
the Administrative Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such
increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change
in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or any request or directive
regarding capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on capital of such Bank (or its
Parent) as a consequence of such Bank's obligations hereunder to a level
below that which such Bank (or its Parent) could have achieved but for such
adoption, change, request or directive (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by such Bank
to be material, then from time to time, within 15 days after demand by such
Bank (with a copy to the Administrative Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will compensate such Bank
(or its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring
after the date hereof, which will entitle such Bank to compensation
pursuant to this Section and will designate a different Applicable Lending
Office if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
clearly demonstrable error. In determining such amount, such Bank may use
any reasonable averaging and attribution methods.
SECTION 8.04. Taxes. (a) Any and all payments by the Borrower to or
for the account of any Bank or the Administrative Agent hereunder or under
any Note shall be made free and clear of and without deduction for any and
all present or future taxes, duties, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Bank and the Administrative Agent, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction under the
laws of which such Bank or the Administrative Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each
Bank, taxes imposed on its income, and franchise or similar taxes imposed
on it, by the jurisdiction of such Bank's Applicable Lending Office or any
political subdivision thereof (all such non-excluded taxes, duties, 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 Bank or the Administrative Agent, (i) the sum payable
shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable
under this Section 8.04) such Bank or the Administrative 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 deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law and
(iv) the Borrower shall furnish to the Administrative Agent, at its address
referred to in Section 9.01, the original or a certified copy of a receipt
evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or
charges or similar levies which arise from any payment made hereunder or
under any Note or from the execution or delivery of, or otherwise with
respect to, any Loan Document (hereinafter referred to as "OTHER TAXES").
(c) The Borrower agrees to indemnify each Bank and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 8.04) paid by such Bank
or the Administrative Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be made within 15 days from the
date such Bank or the Administrative Agent (as the case may be) makes
demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of
this Agreement in the case of each Bank listed on the signature pages
hereof and on or prior to the date on which it becomes a Bank in the case
of each other Bank, and from time to time thereafter if requested in
writing by the Borrower (but only so long as such Bank remains lawfully
able to do so), shall provide the Borrower with Internal Revenue Service
Form 1001 or 4224, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Bank is entitled to benefits
under an income tax treaty to which the United States is a party which
reduces the rate of withholding tax on payments of interest or certifying
that the income receivable pursuant to this Agreement is effectively
connected with the conduct of a trade or business in the United States. If
the form provided by a Bank at the time such Bank 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" as defined in Section 8.04(a).
(e) For any period with respect to which a Bank has failed to provide
the Borrower with the appropriate form pursuant to Section 8.04(d) (unless
such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which a form originally was required to be
provided), such Bank shall not be entitled to indemnification under Section
8.04(a) with respect to Taxes imposed by the United States; provided,
however, that should a Bank, which is otherwise exempt from or subject to a
reduced rate of withholding tax, become subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower shall take such
steps as such Bank shall reasonably request to assist such Bank to recover
such Taxes.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Bank pursuant to this Section 8.04, then such Bank will
change the jurisdiction of its Applicable Lending Office so as to eliminate
or reduce any such additional payment which may thereafter accrue if such
change, in the judgment of such Bank, is not otherwise disadvantageous to
such Bank.
SECTION 8.05. Base Rate Loans Substituted for Affected Euro-Dollar
Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has demanded
compensation under Section 8.03 or 8.04 with respect to its Euro-Dollar
Loans and the Borrower shall, by at least five Euro-Dollar Business Days'
prior notice to such Bank through the Administrative Agent, have elected
that the provisions of this Section shall apply to such Bank, then, unless
and until such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer exist:
(a) all Loans of such Bank which would otherwise be continued as or
converted into Euro-Dollar Loans shall instead be Base Rate Loans (on
which interest and principal shall be payable contemporaneously with
the related Euro-Dollar Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans has been converted to a Base
Rate Loan, all payments of principal which would otherwise be applied
to repay such Euro-Dollar Loans shall be applied to repay its Base
Rate Loans instead.
If such Bank notifies the Borrower that the circumstances giving rise to
such suspension or demand for compensation no longer exist, the principal
amount of each such Base Rate Loan shall be converted into a Euro-Dollar
Loan on the first day of the next succeeding Interest Period applicable to
the related Euro-Dollar Loans of the other Banks.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telex,
facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Borrower or the Administrative Agent, at its
address or telex number set forth on the signature pages hereof, (y) in the
case of any Bank, at its address or telex number set forth in its
Administrative Questionnaire or (z) in the case of any party, such other
address or telex number as such party may hereafter specify for the purpose
by notice to the Administrative Agent and the Borrower. Each such notice,
request or other communication shall be effective (i) if given by telex,
when such telex is transmitted to the telex number specified in this
Section and the appropriate answerback is received, (ii) if given by mail,
72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid or (iii) if given by any
other means, when delivered at the address specified in this Section;
provided that notices to the Administrative Agent under Article 2 or
Article 8 shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the Administrative
Agent or any Bank in exercising any right, power or privilege under any
Loan Document shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and
remedies provided in the Loan Documents shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 9.03. Expenses; Indemnification. (a) The Borrower shall pay
(i) all reasonable out-of-pocket expenses of the Administrative Agent,
including fees and disbursements of special counsel for the Administrative
Agent, in connection with the preparation and administration of the Loan
Documents, any waiver or consent thereunder or any amendment thereof or any
Default or alleged Default hereunder and (ii) if an Event of Default
occurs, all out-of-pocket expenses incurred by the Administrative Agent and
each Bank, including fees and disbursements of counsel, in connection with
such Event of Default and collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Administrative Agent and
each Bank, their respective affiliates and the respective directors,
officers, agents and employees of the foregoing (each an "INDEMNITEE") and
hold each Indemnitee harmless from and against any and all liabilities,
losses, damages, costs and expenses of any kind, including, without
limitation, the reasonable fees and disbursements of counsel, which may be
incurred by such Indemnitee in connection with any administrative or
judicial proceeding (whether or not such Indemnitee shall be designated a
party thereto) brought or threatened relating to or arising out of this
Agreement or any actual or proposed use of proceeds of Loans hereunder;
provided that no Indemnitee shall have the right to be indemnified
hereunder for such Indemnitee's own gross negligence or willful misconduct
as determined by a court of competent jurisdiction.
SECTION 9.04. Sharing of Set-Offs. Each Bank agrees that if it shall,
by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest
due with respect to any Note held by it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of
principal and interest due with respect to any Note held by such other
Bank, the Bank receiving such proportionately greater payment shall
purchase such participations in the Notes held by the other Banks, and such
other adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to the Notes held by the
Banks shall be shared by the Banks pro rata; provided that nothing in this
Section shall impair the right of any Bank to exercise any right of set-off
or counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes. The Borrower agrees, to the fullest extent it
may effectively do so under applicable law, that any holder of a
participation in a Note acquired pursuant to the foregoing arrangements may
exercise rights of set-off or counterclaim and other rights with respect to
such participation as fully as if such holder of a participation were a
direct creditor of the Borrower in the amount of such participation.
SECTION 9.05. Amendments and Waivers. (a) Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the
Required Banks (and, if the rights or duties of the Administrative Agent
are affected thereby, by the Administrative Agent); provided that no such
amendment or waiver shall, unless signed by all the Banks, (i) subject any
Bank to any additional obligation, (ii) reduce the principal of or rate of
interest on any Loan or any fees hereunder, (iii) postpone the date fixed
for any payment of principal of or interest on any Loan or any fees
hereunder, (iv) change Section 9.04 or (v) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, or
the number of Banks, which shall be required for the Banks or any of them
to take any action under this Section or any other provision of this
Agreement,
(b) ▇▇▇▇▇▇ Guaranty Trust Company of New York agrees that it will not
enter into any amendment or waiver of any Collateral Document except with
the consent of the Required Banks; provided that no such amendment or
waiver shall, unless consented to by all the Banks, (i) alter in a manner
adverse to the Banks the priorities specified in Section 13 of either
Pledge Agreement or (ii) effect or permit a release of all or substantially
all of the Collateral under either Pledge Agreement. Notwithstanding the
foregoing, Collateral shall be released from the Lien of either of the
Pledge Agreement from time to time as necessary to effect any sale of
Collateral permitted by the Loan Documents, and the Administrative Agent
shall execute and deliver all release documents reasonably requested to
evidence such release; provided that arrangements satisfactory to the
Administrative Agent shall have been made for application of the cash
proceeds thereof in accordance with Section 2.06 hereof and for the pledge
of any non-cash proceeds thereof pursuant to the Collateral Documents.
SECTION 9.06. Successors and Assigns. (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 Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "PARTICIPANT") participating interests in its
Commitment or any or all of its Loans. In the event of any such grant by a
Bank of a participating interest to a Participant, whether or not upon
notice to the Borrower and the Administrative Agent, such Bank shall remain
responsible for the performance of its obligations hereunder, and the
Borrower and the Administrative Agent shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. Any agreement pursuant to which any Bank
may grant such a participating interest shall provide that such Bank 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 Bank will
not agree to any modification, amendment or waiver of this Agreement
described in clause (i), (ii) or (iii) of Section 9.05(a) 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 8 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 Bank may at any time assign to one or more banks or other
institutions (each an "ASSIGNEE") all, or a proportionate part of all, of
its rights and obligations under this Agreement and the Notes, and such
Assignee shall assume such rights and obligations, pursuant to an
Assignment and Assumption Agreement in substantially the form of Exhibit B
hereto executed by such Assignee and such transferor Bank, with (and
subject to) notice to, and the subscribed consent of, the Borrower, so long
as no Default shall have occurred and be continuing, and the Administrative
Agent (such consent of the Borrower and the Administrative Agent not to be
unreasonably withheld); provided that (i) if an Assignee is an affiliate of
such transferor Bank or is a Bank prior to giving effect to such
assignment, such notice shall be given but no such consent shall be
required. Upon execution and delivery of such instrument and payment by
such Assignee to such transferor Bank of an amount equal to the purchase
price agreed between such transferor Bank and such Assignee, such Assignee
shall be a Bank party to this Agreement and shall have all the rights and
obligations of a Bank as set forth in such instrument of assumption, and
the transferor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall
be required. Upon the consummation of any assignment pursuant to this
subsection (c), the transferor Bank, the Administrative Agent and the
Borrower shall make appropriate arrangements so that, if required, a new
Note is issued to the Assignee. In connection with any such assignment, the
transferor Bank shall pay to the Administrative Agent an administrative fee
for processing such assignment in the amount of $2,500. If the Assignee is
not incorporated under the laws of the United States of America or a state
thereof, it shall, prior to the first date on which interest or fees are
payable hereunder for its account, deliver to the Borrower and the
Administrative Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance with
Section 8.04.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations
hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 8.03 than
such Bank 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 8.02, 8.03 or 8.04
requiring such Bank 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.
SECTION 9.07. Governing Law; Submission to Jurisdiction. This
Agreement and each Note 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. The
Borrower irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient
forum.
SECTION 9.08. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
SECTION 9.09. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
RITE AID CORPORATION
By:___________________________________
Name:
Title:
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Website: ▇▇▇.▇▇▇▇▇▇▇.▇▇▇
▇.▇. ▇▇▇▇▇▇ VENTURES CORPORATION
By:___________________________________
Name:
Title:
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF
NEW YORK, as Administrative Agent
By:___________________________________
Name:
Title:
Address: ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇
Attention: Loan Department
Telex number: 177615