Exhibit 10.44
================================================================================
COLLATERAL TRUST AGREEMENT
dated as of ________, 1999
between
BRADLEES STORES, INC.,
and
▇.▇. ▇▇▇▇▇▇▇ & ASSOCIATES, INC.,
as Trustee
================================================================================
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1. DEFINITIONS................................................... 3
SECTION 1.01 Certain Defined Terms.................................. 3
SECTION 1.02 Certain References..................................... 6
ARTICLE 2. ACCEPTANCE OF TRUST; EXECUTION AND DELIVERY
OF COLLATERAL DOCUMENTS AND
SUBORDINATION AGREEMENT.................................... 6
SECTION 2.01 Acceptance of Trust.................................... 6
SECTION 2.02 Execution and Delivery of Collateral Documents......... 6
SECTION 2.03 Execution and Delivery of Intercreditor Agreement...... 7
ARTICLE 3. DEFAULT NOTICE; RIGHTS AND REMEDIES........................... 7
SECTION 3.01 Events of Default...................................... 7
SECTION 3.02 Action Upon Receipt of Default Notice.................. 8
SECTION 3.03 Remedies Generally..................................... 8
SECTION 3.04 Appointment of a Receiver.............................. 9
SECTION 3.05 Exercise of Powers..................................... 9
SECTION 3.06 Remedies Not Exclusive................................. 9
SECTION 3.07 Limitation on Rights and Remedies in Respect of
Collateral............................................. 10
SECTION 3.08 Right to Initiate Judicial Proceedings, Etc. .......... 10
SECTION 3.09 Limitation on Trustee's Duties in Respect of
Collateral............................................. 10
SECTION 3.10 Limitation by Law...................................... 10
ARTICLE 4. DIRECTION BY TRADE COMMITTEE.................................. 11
SECTION 4.01 Direction by Trade Committee........................... 11
ARTICLE 5. NOTICE TO TRADE VENDORS....................................... 11
SECTION 5.01 Notice to Trade Vendors................................ 11
ARTICLE 6. PROCEEDS ACCOUNT.............................................. 12
SECTION 6.01 The Proceeds Account................................... 12
SECTION 6.02 Control of Proceeds Account............................ 13
SECTION 6.03 Investment of Funds Deposited in Proceeds Account...... 13
ARTICLE 7. APPLICATION OF PROCEEDS....................................... 13
SECTION 7.01 Application of Proceeds................................ 13
SECTION 7.02 Distribution of Proceeds............................... 14
i
ARTICLE 8. ABSOLUTE RIGHTS OF TRADE VENDORS.............................. 14
SECTION 8.01 Absolute Rights of Trade Vendors....................... 14
ARTICLE 9. AGREEMENTS WITH THE TRUSTEE................................... 15
SECTION 9.01 (a) Information as to Trade Vendors................... 15
(b) Confidentiality................................... 15
SECTION 9.02 Compensation and Expenses.............................. 16
SECTION 9.03 Stamp and Other Similar Taxes.......................... 16
SECTION 9.04 Filing Fees, Excise Taxes, Etc. ....................... 16
SECTION 9.05 Indemnification........................................ 16
SECTION 9.06 Further Assurances..................................... 17
SECTION 9.07 Notification of Event of Default Under Credit
Agreement.............................................. 18
ARTICLE 10. THE TRUSTEE................................................... 18
SECTION 10.01 Exculpatory Provisions................................. 18
SECTION 10.02 Delegation of Duties................................... 19
SECTION 10.03 Reliance by Trustee.................................... 19
SECTION 10.04 Limitations on Duties of Trustee....................... 19
SECTION 10.05 Moneys to be Held in Trust............................. 20
SECTION 10.06 Resignation & Removal of Trustee....................... 20
SECTION 10.07 Trustee Appointed Attorney-In-Fact..................... 21
SECTION 10.08 Reasonable Care........................................ 21
ARTICLE 11. MISCELLANEOUS................................................. 22
SECTION 11.01 Amendment or Waiver.................................... 22
SECTION 11.02 Subordination Agreement................................ 22
SECTION 11.03 Notices................................................ 23
SECTION 11.04 Headings............................................... 23
SECTION 11.05 Severability........................................... 23
SECTION 11.06 Claims Against Trustee................................. 24
SECTION 11.07 Binding Effect......................................... 24
SECTION 11.08 Governing Law.......................................... 24
SECTION 11.09 Counterparts........................................... 24
SECTION 11.10 Termination............................................ 24
SECTION 11.11 Termination Notice; Effect of Termination.............. 25
SECTION 11.12 Conflicts.............................................. 26
ii
EXHIBITS
--------
EXHIBIT A Default Notice
EXHIBIT B Individual Trade Vendor Notice
EXHIBIT C Public Trade Vendor Notice
iii
COLLATERAL TRUST AGREEMENT
This COLLATERAL TRUST AGREEMENT ("Agreement") is dated as of ________,
---------
1999 and is entered into between BRADLEES STORES, INC., a Massachusetts
corporation, with an office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ (the "Company") and ▇.▇. ▇▇▇▇▇▇▇ & ASSOCIATES, INC., a New York
-------
corporation, with an office at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as
trustee (the "Trustee"). Initially capitalized terms used and not otherwise
-------
defined herein shall have the meanings set forth in Article 1 hereof.
RECITALS
A. On June 23, 1995 the Company, its direct and indirect parent
companies and each of its five subsidiaries (collectively, the "Debtors") filed
-------
a voluntary petition for relief under Chapter 11 of the Bankruptcy Code with the
United States Bankruptcy Court for the Southern District of New York (the
"Bankruptcy Court"), which were jointly administered by the Bankruptcy Court as
-----------------
Case Nos. 95B 42777 through 95B 42784 (BRL) (collectively, the "Chapter 11
----------
Cases").
B. On January __, 1999 the Bankruptcy Court entered an order
confirming the Debtors' Second Amended Joint Plan of Reorganization dated
January __, 1999 (as so confirmed, the "Plan").
----
C. The Company has entered into, or is about to enter into, a
Revolving Credit and Guaranty Agreement with, among others, the banks and other
financial institutions from time to time party thereto (collectively, the
"Lenders"), BankBoston, N.A., as Issuing Bank (the "Issuing Bank") and as
-------- ------------
Administrative Agent (the "Administrative Agent") and as Tranche B Agent (the
--------------------
"Tranche B Agent"), BankBoston Retail Finance, Inc. ("BBRF"), as Collateral
---------------- ----
Agent (the "Collateral Agent"), and The CIT Group/Business Credit, Inc. and
----------------
Congress Financial Corporation (New England), each as Co-Agents (together with
the Administrative Agent, the Tranche B Agent and the Collateral Agent, the
"Agents") (as the same may from time to time hereafter be amended, modified,
-------
supplemented, amended and restated, refinanced or replaced, the "BankBoston
----------
Credit Agreement"), pursuant to which the Lenders have made and shall hereafter
----------------
make loans and other financial accommodations to the Company to facilitate
consummation of the Plan and provide working capital to the Company.
D. It is important to the success of the Company's business that,
from and after consummation of the Plan on or about the date hereof, the
Company's Trade Vendors (as defined below) sell and deliver goods needed by the
Company, and on credit terms, that will contribute to the Company's ability to
successfully operate its business.
E. In order to induce the Trade Vendors to continue to extend terms
to the Company and to continue to deliver to the Company the goods it needs to
operate its business, and in accordance with the provisions of the Plan, the
Company, as security for prompt payment and performance of the Trade Obligations
(as defined below) and the other Obligations (as
-----
defined below), has executed and delivered to the Trustee the Inventory Security
Agreement (as defined below), pursuant to which the Company has granted to the
Trustee, for the benefit of the Trade Vendors, liens upon and security interests
in all of the Company's now existing and hereafter acquired inventory as more
fully described in the Inventory Security Agreement (the "Collateral"), subject
----------
and subordinate to the senior liens therein of the Agent and the Lenders.
F. The Trustee's and the Trade Vendors' rights and remedies with
respect to the Collateral, and the Trustee's exercise of rights and remedies in
respect of the Inventory Security Agreement are subject in all respects and at
all times to the terms of the Subordination Agreement, dated as of the date
hereof (as the same may hereafter from time to time be amended, modified,
supplemented, amended and restated or replaced, the "Subordination Agreement")
-----------------------
between BBRF, as Collateral Agent for itself and the other Secured Parties (as
defined in the BankBoston Credit Agreement), and the Trustee.
G. This Agreement is intended to establish a trust under which (i)
the Inventory Security Agreement, (ii) all cash and non-cash proceeds
(including, without limitation, insurance proceeds) arising from the liquidation
of the Collateral from and after the date on which all "Obligations" under, and
as defined in, the BankBoston Credit Agreement (the "Senior Obligations") have
------------------
been accelerated and the Senior Obligations have been paid in full as a result
of the occurrence of an event of default thereunder (the "Proceeds") and (iii)
--------
the Proceeds Account (as defined below; and the right, title and interest of the
Trustee in and to the Collateral Documents, the Collateral, the Proceeds and the
Proceeds Account being herein collectively referred to as the "Trust Estate")
------------
will be held by the Trustee in trust for, and for the benefit of, the Trade
Vendors who have not been paid in full for goods delivered to the Company at any
time during the pendency of the Chapter 11 Cases and/or at any time from and
after the Effective Date of, and as defined in, the Plan and prior to the
termination of this Agreement (the "Effective Trade Lien Period").
---------------------------
H. This Agreement is further intended to set forth the terms and
conditions upon which the Trust Estate will be administered by the Trustee, the
rights and remedies of the Trade Vendors with respect to the Trust Estate and
certain other related matters.
DECLARATION OF TRUST
NOW, THEREFORE, in order to induce the Trade Vendors to provide retail
merchandise to the Company on credit terms which are at least as favorable to
the Company as the credit terms provided to the Company prior to the Effective
Date (as defined below) or, in the case of Trade Vendors that initially provide
retail merchandise after the Effective Date, on credit terms which are at least
as favorable to the Company as the credit terms initially provided by such Trade
Vendors to the Company, and to secure payment to such Trade Vendors of amounts
owed by the Company to the Trade Vendors in the amount of the unpaid invoiced
cost of goods sold and delivered to the Company by the Trade Vendors at any time
during the Effective Trade Lien Period (subject at all times to the terms and
conditions of the Subordination
2
Agreement), as shown from time to time on the books and records of the Company
or as otherwise determined in accordance with the procedures set forth herein
(the "Trade Obligations"), and in consideration of the premises and the mutual
-----------------
agreements set forth herein, the Company hereby confirms that it has caused the
Collateral Documents (as defined below) to be executed and delivered to the
Trustee, and the Trustee does hereby declare that it holds and will hold the
Collateral Documents as trustee in trust under this Agreement, and the Company
does hereby consent thereto.
TO HAVE AND TO HOLD, the Trust Estate unto the Trustee and its
successors in trust under this Agreement and unto its assigns and the assigns of
its successors in trust forever or until terminated in accordance with the terms
hereof;
IN TRUST NEVERTHELESS, under and subject to the terms and conditions
set forth herein for the benefit of the Trade Vendors and for the enforcement of
the payment of the Trade Obligations and the other Obligations (as defined
below), and for the performance of and compliance with the covenants and
conditions of this Agreement and the Collateral Documents (subject in each case
to the terms and conditions of the Subordination Agreement).
ARTICLE 1.
DEFINITIONS
SECTION 1.01 Certain Defined Terms. The following terms shall have
---------------------
the following meanings as used herein (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Agreement" has the meaning set forth in the preamble to this
---------
Agreement.
"Authorized Officer" means the Chairman, the President, any Vice
------------------
President, the Secretary or the Treasurer of a Person or any other officer
designated as an "Authorized Officer" by the Board of Directors (or equivalent
governing body) of such Person and shall include, with respect to the Trade
Committee, the counsel to the Trade Committee.
"BankBoston" has the meaning set forth in Paragraph C of the Recitals
----------
to this Agreement.
"BankBoston Credit Agreement" has the meaning set forth in Paragraph
---------------------------
C of the Recitals to this Agreement.
"Bankruptcy Code" means Title 11 of the United States Code, 11 U.S.C.
---------------
(S)(S) 101 et seq., as amended.
-- ---
3
"Bankruptcy Court" has the meaning set forth in Paragraph A of the
----------------
Recitals to this Agreement.
"Business Day" means a day other than a Saturday, Sunday or other day
------------
on which national banks are required or authorized by law to close.
"Chapter 11 Cases" has the meaning set forth in Paragraph A of the
----------------
Recitals to this Agreement.
"Collateral" has the meaning set forth in Paragraph E of the Recitals
----------
to this Agreement.
"Collateral Agent" has the meaning set forth in the BankBoston Credit
----------------
Agreement.
"Collateral Documents" means, collectively, the Inventory Security
--------------------
Agreement, all UCC-1 financing statements now or hereafter executed by the
Company, as debtor, in favor of the Trustee, as secured party, and all other
documents and agreements at any time executed with or in favor of the Trustee as
security for the Obligations, in each case in form and substance satisfactory to
the Collateral Agent and the Company, as the same may now exist or may from time
to time hereafter be (to the extent not prohibited by or inconsistent with the
terms and conditions of the Subordination Agreement) amended, modified,
supplemented, amended and restated, or replaced.
"Company" has the meaning set forth in the preamble to this Agreement.
-------
"Default Notice" has the meaning set forth in Section 3.01.
--------------
"Effective Date" has the meaning set forth in the Plan.
--------------
"Effective Trade Lien Period" has the meaning set forth in Paragraph G
---------------------------
of the Recitals to this Agreement.
"Event of Default" has the meaning set forth in Section 3.01(a).
----------------
"Individual Trade Vendor Notice" has the meaning set forth in
------------------------------
Section 5.01.
"Inventory Security Agreement" means the Inventory Security Agreement,
----------------------------
dated as of the date hereof, executed by the Company, as debtor, in favor of
Trustee, as secured party, as the same may from time to time hereafter be (to
the extent not prohibited by or inconsistent with the terms and conditions of
the Subordination Agreement) amended, supplemented, modified, amended and
restated or replaced.
"Lenders" has the meanings set forth in the BankBoston Credit
-------
Agreement.
4
"Obligations" means, at any time, the Trade Obligations, costs of
-----------
collection with respect thereto, the reasonable fees and expenses of the Trustee
hereunder and under the Collateral Documents, including the reasonable fees and
disbursements of counsel to the Trustee, and any indemnity obligations of the
Company to the Trustee.
"Permitted Investments" means (a) marketable securities issued or
---------------------
directly and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof having maturities of not more than three
months from the date of acquisition, (b) time deposits and certificates of
deposit of, or money market or similar accounts with, any domestic commercial
bank of recognized standing having capital and surplus in excess of U.S.
$100,000,000 and a ▇▇▇▇▇ Bank Watch Rating of C or better, with maturities of
not more than three months from the date of acquisition, (c) commercial paper
rated at least A-1 or the equivalent thereof by Standard & Poor's Corporation or
at least P-1 or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc. and in
each case maturing within three months after the date of acquisition, (d)
repurchase obligations with a term of not more than thirty days for underlying
securities of the types described in clauses (a), (b) and (c) entered into with
any bank meeting the qualifications specified in clause (b) above or with a
securities dealer acceptable to the Trustee.
"Person" means an individual, a partnership, a corporation, a business
------
trust, a joint stock company, a limited liability company, a trust, an
unincorporated association, a joint venture, a governmental entity or another
entity of whatever nature.
"Plan" has the meaning set forth in Paragraph A of the Recitals to
----
this Agreement.
"Proceeds" has the meaning set forth in Paragraph G of the Recitals to
--------
this Agreement.
"Proceeds Account" has the meaning set forth in Section 6.01.
----------------
"Public Trade Vendor Notice" has the meaning set forth in
--------------------------
Section 5.01.
"Senior Obligations" has the meaning set forth in Paragraph G of the
------------------
Recitals to this Agreement.
"Subordination Agreement" has the meaning set forth in Paragraph F of
-----------------------
the Recitals to this Agreement.
"Trade Committee" means the Committee of one or more financial
---------------
representatives appointed by the Creditors' Committee pursuant to Section 12.15
of the Plan, effective as of the Effective Date, to provide directions to the
Trustee pursuant to this Agreement on behalf of the Trade Vendors.
5
"Trade Obligations" has the meaning set forth in the Declaration of
-----------------
Trust made in the Recitals to this Agreement.
"Trade Vendors" means trade vendors of the Company who have extended
-------------
or who hereafter extend terms to the Company for or related to goods delivered
to the Company for resale, other than on consignment.
"Trade Vendor Information" has the meaning set forth in Section 9.01.
------------------------
"Trade Vendor Payable Amount" has the meaning set forth in
---------------------------
Section 5.01.
"Trust Estate" has the meaning set forth in Paragraph G of the
------------
Recitals to this Agreement.
"Trustee" has the meaning set forth in the preamble to this Agreement.
-------
SECTION 1.02 Certain References. The words "hereof", "herein" and
------------------
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Section, schedule and exhibit references are to this Agreement
unless otherwise specified. References to Persons include their respective
permitted successors and assigns or, in the case of governmental Persons,
Persons succeeding to the relevant functions of such Persons.
ARTICLE 2.
ACCEPTANCE OF TRUST; EXECUTION AND DELIVERY
OF COLLATERAL DOCUMENTS AND SUBORDINATION AGREEMENT
SECTION 2.01 Acceptance of Trust. The Trustee, for itself and its
-------------------
successors, hereby accepts the trust created by this Agreement upon the terms
and conditions hereof. Further, the Trustee, for itself and its successors,
does hereby declare that it will hold the Trust Estate for the benefit of the
Trade Vendors upon the trusts herein set forth.
SECTION 2.02 Execution and Delivery of Collateral Documents. On or
----------------------------------------------
about the date hereof the Company has executed in favor of and delivered to the
Trustee, for the benefit of the Trade Vendors, the Inventory Security Agreement
and UCC-1 financing statements executed by the Company, as debtor, in favor of
the Trustee, as secured party, for filing in such jurisdictions as the Trustee
deems necessary to perfect the security interests granted by the Company to the
Trustee in the Collateral. The Trustee hereby acknowledges receipt of the
Inventory Security Agreement and such UCC-1 financing statements and agrees to
hold the same in trust and for the benefit of the Trade Vendors upon the terms
and conditions set forth in this Agreement and in the Inventory Security
Agreement and subject to the terms and conditions of the Subordination
Agreement.
6
SECTION 2.03 Execution and Delivery of Subordination Agreement. On
-------------------------------------------------
or about the date hereof, the Trustee has executed and delivered to the
Collateral Agent the Subordination Agreement in the form approved, and as
directed, by the Trade Committee.
ARTICLE 3.
DEFAULT NOTICE; TRUSTEE'S RIGHTS AND REMEDIES
SECTION 3.01 Events of Default.
-----------------
(a) Events of Default. The occurrence of any one or more of the
-----------------
following events shall constitute an event of default (each, an "Event of
Default") under this Agreement:
(i) The occurrence of the termination in writing of the
Company's right to receive loans, advances and other
financial accommodations under the BankBoston Credit
Agreement accompanied by the acceleration and written
demand for payment in full of all Senior Obligations under
the BankBoston Credit Agreement and provided that,
subsequent to the occurrence of the foregoing, all Senior
Obligations shall have been paid in full in cash;
(ii) A case or proceeding under the Bankruptcy Code or under
any insolvency, reorganization, receivership, readjustment
of debt, dissolution or liquidation law or statute of any
jurisdiction now or hereafter in effect (whether at law or
in equity) is filed against the Company or all or any part
of its properties and such petition or application is not
dismissed within thirty (30) days after the date of its
filing or the Company shall file any answer admitting or
not contesting such petition or application or indicates
its consent to, acquiescence in or approval of, any such
action or proceeding or the relief requested is granted
sooner; or
(iii) A case or proceeding under the Bankruptcy Code or under
any insolvency, reorganization, receivership, readjustment
of debt, dissolution or liquidation law or statute of any
jurisdiction now or hereafter in effect (whether at a law
or equity) is filed by the Company or for all or any part
of its property.
7
(b) Default Notice. If an Event of Default shall have occurred, the
--------------
Trade Committee shall have the right to deliver to the Trustee at any time, at
its option, a written notice ("Default Notice"), substantially in the form
--------------
attached hereto as Exhibit A, stating that an Event of Default has occurred and
---------
directing the Trustee to take such action as therein requested by the Trade
Committee with respect to the Collateral Documents (subject to the terms and
conditions of the Subordination Agreement) and the Collateral (which action may
include, without limitation, subject to the terms and conditions of the
Subordination Agreement, the institution of any remedies provided by any of the
Collateral Documents, by law or by this Agreement).
SECTION 3.02 Action Upon Receipt of Default Notice. Upon receipt
-------------------------------------
of a Default Notice (or at such later time as shall be the first time when such
action is not prohibited to be taken by the Subordination Agreement), the
Trustee shall promptly take such action as is requested by the Trade Committee
in such Default Notice or any notice supplemental thereto authorized, or as the
Trustee shall deem necessary or appropriate in its sole discretion, to collect
the then unpaid Obligations.
SECTION 3.03 Remedies Generally. (a) Upon the occurrence of an
------------------
Event of Default, the Company shall be deemed to have, automatically, without
any further act by the Company, irrevocably constituted and appointed the
Trustee and any officer or agent of the Trustee with full power of substitution,
as its true and lawful attorney-in-fact (subject, however, to the terms and
conditions of the Subordination Agreement) with full power and authority in the
name of the Company or its own name, from time to time in the Trustee's
discretion for the purpose of carrying out the terms of the Collateral
Documents, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes hereof and thereof and, without limiting the generality of the
foregoing, hereby gives the Trustee the power and right on behalf of the
Company, without notice to or assent by the Company, to do (to the extent
permitted under the Collateral Documents and subject to the terms and conditions
of the Subordination Agreement) the following:
(i) to ask for, demand, ▇▇▇ for, collect, receive and give
acquittance for any and all moneys due or to become due upon or by virtue
hereof and thereof;
(ii) to receive, take, endorse, assign and deliver any and all
checks, notes, drafts, acceptances, documents and other negotiable and non-
negotiable instruments and chattel paper taken or received by the Trustee
in connection herewith and therewith;
(iii) to commence, file, prosecute, defend, settle, compromise
or adjust any claim, suit, action or proceeding with respect hereto and
thereto or in connection herewith and therewith;
8
(iv) to sell, transfer, assign, lease or rent all or any portion
of or otherwise deal in or with the Collateral or any part thereof as fully
and effectually as if the Trustee were the absolute owner thereof;
(v) to make demands, give consents and releases or partial
releases, and to exercise any other rights contemplated or permitted by the
Collateral Documents; and
(vi) to do, at its option and at the expense and for the account
of the Company, at any time and from time to time, all acts and things
which it deems necessary to protect or preserve and to realize upon the
Collateral.
SECTION 3.04 Appointment of a Receiver. If a receiver of the
-------------------------
Collateral shall be appointed in judicial proceedings, the Trustee may be
appointed as such receiver. Notwithstanding the appointment of a receiver, the
Trustee shall be entitled, subject to the terms of the Subordination Agreement,
to retain possession and control of all cash held by or deposited with it or its
agents in accordance with the terms of the Collateral Documents.
SECTION 3.05 Exercise of Powers. Subject to the provisions of
------------------
Section 3.10, all of the powers, remedies and rights of the Trustee as set forth
in this Agreement may be exercised by the Trustee in respect of the Collateral
Documents and the Collateral as though set forth at length therein and all the
rights, remedies and powers of the Trustee as set forth in the Collateral
Documents may be exercised from time to time as herein and therein specified;
provided, that, except as expressly set forth in the Subordination Agreement,
-------- ----
nothing in this Agreement shall be construed to impose a duty on the Trustee to
take any action without first receiving direction from the Trade Committee to do
the same.
SECTION 3.06 Remedies Not Exclusive. (a) No remedy conferred upon
----------------------
or reserved to the Trustee herein or in the Collateral Documents is intended to
be a limitation exclusive of any other remedy or remedies, but every such remedy
shall be cumulative and shall be in addition to every other remedy conferred
herein or in the Collateral Documents or now or hereafter existing at law or in
equity or by statute. All rights and remedies of the Trustee shall be subject,
however, to the terms and conditions of the Subordination Agreement.
(b) No delay or omission of the Trustee to exercise any right, remedy
or power accruing upon an Event of Default shall impair any such right, remedy
or power or shall be construed to be a waiver of such Event of Default or any
acquiescence therein; and every right, power and remedy given by this Agreement
or the Collateral Documents to the Trustee may be exercised from time to time
and as often as may be deemed expedient by the Trustee, subject to the terms and
conditions of the Subordination Agreement.
(c) The Company expressly agrees that all rights of action and rights
to assert claims upon or under any Collateral Document may be enforced by the
Trustee without the possession of any debt instrument or the production thereof
in any trial or other proceeding relative thereto, and any such suit or
proceeding instituted by the Trustee shall be brought in its name as Trustee and
any recovery or judgment shall be held as part of the Trust Estate.
9
SECTION 3.07 Limitation on Rights and Remedies in Respect of
-----------------------------------------------
Collateral. This Agreement does not enlarge or otherwise modify the rights that
----------
the Trustee holds for the benefit of the Trade Vendors with respect to the
Collateral under the Collateral Documents or under applicable law, and does not
confer any additional such rights, but rather is intended to provide a mechanism
for the Trustee, on behalf of the Trade Vendors, to enforce such rights. Without
limiting the generality of the foregoing, nothing in this Agreement shall permit
the Trustee to exercise any right or remedy with respect to the Collateral,
except to the extent specifically provided under the Collateral Documents, but
subject to the terms and conditions of the Subordination Agreement.
SECTION 3.08 Right to Initiate Judicial Proceedings, Etc. Upon the
--------------------------------------------
occurrence of an Event of Default, and subject in all events to the terms and
conditions of the Subordination Agreement, (a) the Trustee shall have the right
and power to institute and maintain such suits and proceedings as the Trustee
may deem appropriate to protect and enforce the rights vested in the Trustee by
this Agreement and the Collateral Documents, and (b) the Trustee may either
proceed by suit or suits at law or in equity to enforce such rights and to
foreclose upon the Collateral and to sell all or, from time to time, any of the
Collateral under the judgment or decree of a court of competent jurisdiction;
provided, that, nothing in this Agreement shall be construed to impose a duty on
-------- ----
the Trustee to take any discretionary action without first receiving direction
from the Trade Committee to do the same.
SECTION 3.09 Limitation on Trustee's Duties in Respect of
--------------------------------------------
Collateral. Beyond the duties set forth in this Agreement, the Trustee shall not
----------
have any duty to the Company or the Trade Committee as to any Collateral in the
Trustee's possession or control or in the possession or control of any agent or
nominee of it or as to any income thereon or as to the preservation of rights
against prior parties or any other rights pertaining thereto, except that the
Trustee shall be liable for its failure to exercise reasonable care in the
handling of moneys and securities actually received by it.
SECTION 3.10 Limitation by Law. All rights, remedies and powers
-----------------
provided to the Trustee by this Agreement may be exercised only to the extent
that the exercise thereof does not violate any applicable provision of law, and
all the provisions of this Agreement are intended to be subject to all
applicable mandatory provisions of law which may be controlling and to be
limited to the extent necessary so that they will not render this Agreement
invalid, unenforceable in whole or in part or not entitled to be recorded,
registered, or filed under the provisions of any applicable law.
10
ARTICLE 4.
DIRECTION BY TRADE COMMITTEE
SECTION 4.01 Direction by Trade Committee. (a) Subject to Section
----------------------------
3.10 and the terms and conditions of the Subordination Agreement, if an Event of
Default shall have occurred and the Trustee shall have received a Default Notice
with respect thereto:
(i) in addition to taking such action as is required by Section
4.02, the Trustee shall take such other action as is necessary and
appropriate for the performance of and compliance with the covenants and
conditions of this Agreement as the Trade Committee shall request in
writing; and
(ii) the Trustee shall follow the written directions of the
Trade Committee with respect to the time, method and place of taking any
action required by the preceding paragraph (i), or, if no such direction is
provided, then the Trustee may take such action in the manner it deems
necessary and appropriate for the performance of and compliance with the
covenants and conditions of this Agreement, provided that nothing in this
--------
Agreement shall be construed to impose a duty on the Trustee to take any
discretionary action without first receiving a direction from the Trade
Committee to do the same.
(b) Nothing in this Section 4.01 shall impair the right of the
Trustee in its discretion to take or omit to take any action deemed proper by
the Trustee and which action or omission is not inconsistent with the direction
of the Trade Committee or the terms and conditions of the Subordination
Agreement; provided, however, the Trustee shall not be under any obligation to
-------- -------
take any action pursuant to any Collateral Documents without first being
provided adequate security and indemnity by the Company against the costs,
expenses and liabilities which may be incurred by it in complying with such
direction (except any cost, expense or liability caused by its own gross
negligence or willful misconduct or its failure to exercise reasonable care in
the handling of moneys and securities actually received by it), including such
reasonable advances for such cost and expenses as may be requested by the
Trustee.
ARTICLE 5.
NOTICE TO TRADE VENDORS
SECTION 5.01 Notice to Trade Vendors.
-----------------------
(a) Promptly after receipt of a Default Notice from the Trade
Committee pursuant to Section 3.01 and after receipt of Trade Vendor Information
from the Company pursuant to Section 9.01, the Trustee shall mail a notice (the
"Individual Trade Vendor Notice") in substantially the form attached hereto as
------------------------------
Exhibit B, to each of the Trade Vendors (i) notifying
---------
11
each of them (x) that an Event of Default has occurred (y) that the Trustee's
and the Trade Vendors' rights and remedies with respect to such Event of Default
are limited by and subject to the terms and conditions of the Subordination
Agreement, and as to any action taken by the Trustee with respect to the
Security, and (ii) based upon the Trade Vendor Information most recently
delivered by the Company to the Trustee pursuant to Section 9.01 hereof,
advising each of them of the amount of the Trade Obligations owing to each of
them, respectively, as of the date of such Individual Trade Vendor Notice (the
"Trade Vendor Payable Amount"). The Individual Trade Vendor Notice shall further
---------------------------
state that the Trade Vendor Payable Amount set forth therein shall be deemed
correct and shall be the amount used by the Trustee in calculating the
distributions to be made to the Trade Vendors pursuant to this Agreement, unless
within twenty (20) days of the mailing of the Individual Trade Vendor Notice, a
Trade Vendor shall provide to the Trustee and the Company contrary information
as to the Trade Vendor Payable Amount owed to it, in which case, the Trustee
shall reserve funds (to the extent available) in the Proceeds Account to provide
for any disputed amount until such dispute is resolved by the parties thereto.
(b) Substantially contemporaneously with the mailing of the Individual
Trade Vendor Notices to the Trade Vendors in accordance with subsection 5.01 (a)
above, the Trustee shall publish a notice (the "Public Trade Vendor Notice") in
--------------------------
substantially the form attached hereto as Exhibit C, which (i) shall be
---------
published once in The New York Times (National Edition), (ii) contains the same
------------------
information as is required to be contained in the Individual Trade Vendor
Notice, (iii) states that if any Trade Vendor has not received an Individual
Trade Vendor Notice, such Trade Vendor may notify the Trustee and the Company in
writing of the amount of the Trade Obligations then due and owing to it and (iv)
specifies a date, which shall be twenty (20) days after the date of first
publication of the Public Trade Vendor Notice, on or before which any Trade
Creditor who has not received an Individual Trade Vendor Notice shall, if it
wishes to receive a distribution under this Agreement, notify the Trustee and
the Company in writing of the amount of the Trade Obligations due and owing to
such Trade Vendor. In the event the Company shall have provided to the Trustee
contrary information with respect to any such Trade Vendor who delivers such
notice in compliance with the Public Trade Vendor Notice, the Trustee shall
reserve funds (to the extent available) in the Proceeds Account to provide for
any disputed amount until such dispute is resolved by the parties thereto.
ARTICLE 6.
PROCEEDS ACCOUNT
SECTION 6.01 The Proceeds Account. After receipt of a Default
--------------------
Notice and until the Proceeds (if and when received) have been fully distributed
in accordance with the terms of this Agreement and subject to the terms and
conditions of the Subordination Agreement, the Trustee shall establish and
maintain a bank account at a bank meeting the qualifications of a bank in which
Permitted Investments may be made as provided for herein, which bank account
shall be entitled the "Bradlees' Trade Vendor Account" (the "Proceeds Account").
----------------
All Proceeds (if
12
and when received and subject to the terms and conditions of the Subordination
Agreement) shall be promptly deposited in the Proceeds Account, held by the
Trustee as part of the Trust Estate and distributed by the Trustee as soon as
practicable thereafter in accordance with Section 7.01 and the other provisions
of this Agreement.
SECTION 6.02 Control of Proceeds Account. All right, title and
---------------------------
interest in and to the Proceeds shall vest in the Trustee and funds on deposit
in the Proceeds Account shall constitute part of the Trust Estate. The Proceeds
Account shall be subject to the exclusive dominion and control of the Trustee.
SECTION 6.03 Investment of Funds Deposited in Proceeds Account. To
-------------------------------------------------
the extent the Proceeds are on deposit in the Proceeds Account in accordance
with the terms of this Agreement, the Trustee shall invest and reinvest such
funds solely in Permitted Investments. All such investments and the interest
and income received thereon shall be held in the Proceeds Account as part of the
Trust Estate. The Trustee shall have no responsibility for any loss resulting
from a fluctuation in interest rates or the sale or other disposition of any
Permitted Investment prior to its maturity date or otherwise. The Trustee shall
have a reasonable period of time in which to reinvest the moneys on deposit in
the Proceeds Account. In addition to the payment of expenses incurred by the
Trustee pursuant to any other Section of this Agreement, the Trustee may deduct
from the funds on deposit in the Proceeds Account all of the actual and
reasonable costs and expenses that the Trustee may incur in connection with (a)
the exercise or enforcement of any of the rights and remedies of the Trustee
hereunder or under the Collateral Documents and (b) the custody or preservation
of Trust Estate.
ARTICLE 7.
APPLICATION OF PROCEEDS
SECTION 7.01 Application of Proceeds. Subject to the terms and
-----------------------
conditions of the Subordination Agreement, all Proceeds and all other moneys in
the Proceeds Account shall promptly be applied as follows:
FIRST: To the payment of (i) compensation due and payable to the
-----
Trustee for services hereunder pursuant to Section 9.02 hereof, and (ii)
all costs, expenses and liabilities incurred by the Trustee in connection
with the exercise or enforcement of the rights, duties and remedies of the
Trustee under this Agreement and the Collateral Documents, including,
without limitation, the reasonable fees and disbursements of counsel for
the Trustee;
SECOND: After payment in full of the outstanding obligations
------
described in subsection 7.01 FIRST, to the payment of all costs, expenses
and liabilities incurred by the Trade Committee in connection with the
exercise of its rights, duties or remedies under this Agreement, including,
without limitation, the reasonable fees and disbursements of counsel for
the Trade Committee;
13
THIRD: After payment in full of the outstanding obligations
-----
described in subsection 7.01 SECOND, to the ratable payment of the Trade
Obligations then due and owing to the Trade Vendors, as determined by the
Trustee in accordance with Section 5 above; and
FOURTH: After payment in full of all of the Trade Obligations
------
described in subsection 7.01 THIRD, to the Company or to its order, or as a
court of competent jurisdiction may otherwise direct.
SECTION 7.02 Distribution of Proceeds. All distributions required
------------------------
to be made hereunder to each of the Trade Vendors in respect of the Trade
Obligations shall be made directly to each of the Trade Vendors, at the
respective addresses for each of the Trade Vendors provided to the Trustee by
the Company pursuant to Section 9.01 of this Agreement or at such other more
current address of which the Trustee shall become aware. All such distributions
shall be (subject to any decree of any court of competent jurisdiction) final.
ARTICLE 8.
ABSOLUTE RIGHTS OF TRADE VENDORS
SECTION 8.01 Absolute Rights of Trade Vendors. Notwithstanding any
--------------------------------
other provision of this Agreement or any provision of any of the Collateral
Documents to the contrary, but subject in all events to the terms and conditions
of the Subordination Agreement, the right of each Trade Vendor, which is
absolute and unconditional, to receive payment of the Trade Obligations owed to
such Trade Vendor on or after the due date thereof as set forth on the books and
records of the Company, to institute suit for the enforcement of such payment on
or after such due date, and to assert its position as a creditor in a case under
the Bankruptcy Code in which the Company is a debtor, and the obligation of the
Company, which is also absolute and unconditional, to pay the Trade Obligations
owed to such Trade Vendor in accordance with the terms and conditions of the
invoice(s) evidencing same, shall not be impaired or affected without the
written consent of such Trade Vendor. In addition, every right of each Trade
Vendor to receive payment or collateral security from sources other than the
Trust Estate shall not be, and is not hereby, impaired or affected. Without
limiting the generality of the foregoing, no Trade Vendor shall be hereby
obligated to share with any other Trade Vendor any proceeds of such collateral
security, any guaranty or right of setoff; nor shall any Trade Vendor's right to
receive its ratable share of proceeds of the Trust Estate or any part thereof
hereunder be diminished by or affected in any way by its right to receive
proceeds of any such other collateral, set-off, payment upon a guaranty or
payment from any other source. In no event shall any Trade Vendor have the
right to receive more than the amount of Trade Obligations owed to such Trade
Vendor.
14
ARTICLE 9.
AGREEMENTS WITH THE TRUSTEE
SECTION 9.0 (a) Information as to Trade Vendors. In connection with
-------------------------------
the distributions to be made by the Trustee after the occurrence of an Event of
Default pursuant to Section 7.01, the Company agrees that it shall promptly
deliver, or cause to be delivered, to the Trustee, from time to time, upon the
request of the Trustee or the Trade Committee, but not more than once each
month, a list setting forth the following (the "Trade Vendor Information"): (i)
------------------------
the aggregate outstanding amount of the Trade Obligations, (ii) the names and
addresses of all Trade Vendors, including the contact Person at each Trade
Vendor, and the unpaid principal amount and all other unpaid amounts in respect
of Trade Obligations known to the Company to be owing to each such Trade Vendor
and (iii) such other information regarding the Trade Vendors and the Trade
Obligations necessary to effectuate such distributions as the Trustee or the
Trade Committee may reasonably request. Unless otherwise specified herein, the
Trustee may for all purposes hereunder rely on such information provided by the
Company unless (x) the Trustee shall have actual knowledge of any inaccuracy or
(y) any Trade Vendor shall provide contrary information with respect to such
Trade Vendor, in which case the Trustee shall proceed as set forth in Section
5.01.
(b) Confidentiality. Except for (i) Trade Vendor Information
---------------
furnished by the Company to the Trustee pursuant to Section 9.01 which is
disclosed by the Trustee to the Trade Vendors in accordance with the terms of
this Agreement, and (ii) Trade Vendor Information which is or hereafter becomes
available to the public, the Trustee shall maintain the confidentiality of any
Trade Vendor Information designated by the Company as confidential (the
"Confidential Information") and the content of all such Confidential
-------------------------
Information, and shall not provide or reveal the Confidential Information or its
content to any Trade Vendor or other Person without the express written consent
of the Company. The Trustee shall not be permitted to use, and hereby agrees
not to use, any such Confidential Information for any purpose other than to
effectuate distributions of Proceeds of the Trust Estate to Trade Vendors
pursuant to this Agreement. In the event that the Trustee is requested or
required, by law or legal process, to disclose any of the Confidential
Information, the Trustee shall immediately notify the Company of any such
request, and, in any such event, the Company may seek and pursue any such
action, including, without limitation, the commencement of judicial or
administrative proceedings at law or in equity. In the event that, in the
absence of a protective order or the receipt of a written waiver from the
Company, the Trustee nonetheless, in the opinion of the Trustee's counsel, is
compelled by law to disclose Confidential Information concerning the Company or
else be liable for contempt or subject to other censure or penalty, the Trustee
shall be permitted to disclose such information without liability under this
Agreement only to the extent necessary to avoid such liability, censure or
penalty. The Trustee acknowledges and agrees that the Company shall be entitled
to enforce the provisions of this Section 9.01(b) by specific performance and
injunctive relief in the event of any breach thereof by the Trustee, any Trade
Vendor or any other Person. The Trustee's obligations under this Section
9.01(b) shall survive the termination of the other provisions of this Agreement.
15
SECTION 9.02 Compensation and Expenses. The Company agrees to pay
-------------------------
to the Trustee and any successor trustee appointed hereunder, as applicable,
from time to time upon demand, (i) reasonable compensation for the services of
the Trustee hereunder and for administering the Trust Estate pursuant to a
letter agreement, dated on or about the date hereof, between the Company and the
Trustee, as amended, supplemented or otherwise modified from time to time and
(ii) all the reasonable costs and expenses of the Trustee (including, without
limitation, the reasonable fees and disbursements of counsel to the Trustee and
such special counsel as the Trustee may from time to time elect to retain) (A)
arising in connection with the preparation, execution, delivery, modification
(as agreed to by the Company) and termination of this Agreement or the
enforcement of any of the provisions hereof or any Collateral Document.
including, without limitation, the maintenance and protection and continuation
of the perfection of the Trustee's security interest in all of the Collateral in
accordance with the Collateral Documents, or (B) from and after and during the
continuance of an Event of Default, incurred or required to be advanced in
connection with the administration of the Trust Estate, the sale or other
disposition of the Collateral or any part thereof and the exercise,
preservation, protection or defense of the Trustee's rights under this Agreement
and under the Collateral Documents and in and to the Trust Estate. The
Company's obligations incurred prior to termination of this Agreement under this
Section 9.02 shall survive the termination of the other provisions of this
Agreement.
SECTION 9.03 Stamp and Other Similar Taxes. The Company agrees to
-----------------------------
indemnify and hold harmless the Trustee from any present or future claim for
liability for any stamp or other similar tax and any penalties or interest with
respect thereto, which may be assessed, levied or collected by any jurisdiction
in connection with this Agreement, the Collateral Documents or the Collateral.
The obligations of the Company under this Section 9.03 shall survive the
termination of the other provisions of this Agreement.
SECTION 9.04 Filing Fees, Excise Taxes, Etc. The Company agrees to
-------------------------------
pay or reimburse the Trustee for any and all amounts in respect of all search,
filing, recording and registration fees, taxes, excise taxes and other similar
imposts which may be payable or determined to be payable in respect of the
execution, delivery, performance, enforcement and administration of this
Agreement and the Collateral Documents. The obligations of the Company under
this Section 9.04 shall survive the termination of the other provisions of this
Agreement.
SECTION 9.05 Indemnification. (a) In addition to, and not in
---------------
limitation of the provisions of Section 9.02 hereof, from and after the
occurrence and during the continuance of an Event of Default, the Company agrees
to pay, indemnify, and hold harmless the Trustee and each of its agents from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgements, suits, costs, expenses and disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and
16
administration of this Agreement, the Collateral Documents and the Trust Estate,
unless arising from the gross negligence or willful misconduct of the Trustee or
such agents thereof as are seeking indemnification or the failure of the Trustee
or any such agents to exercise reasonable care in the handling of moneys or
securities actually received by the Trustee or any such agents.
(b) From and after and during the continuance of an Event of Default,
in any suit, proceeding or action brought by the Trustee under or with respect
to any Collateral Document or any Collateral for any Obligations owing
thereunder or secured thereby, or to enforce any provision thereof, the Company
will save, indemnify and hold harmless the Trustee from and against all expense,
loss or damage suffered by reason of any defense, set-off, counterclaim,
recoupment or reduction of liability whatsoever of the obligee thereunder
arising out of a breach by the Company of any obligation thereunder or arising
out of any other agreement, indebtedness or liability at any time owing by the
Company to or in favor of such obligee or its successors and all such
obligations shall be and remain enforceable against and only against the Company
and shall not be enforceable against the Trustee, except, that, the Company
------ ----
shall not have such indemnification obligation with respect to any such expense,
loss or damage that is caused by the gross negligence or willful misconduct of
the Trustee, or the failure of the Trustee to (i) exercise reasonable care in
the handling of moneys and securities actually received by the Trustee or (ii)
comply with the provisions of Section 9.01(b) of this Agreement. The agreements
in this Section 9.05 shall survive the termination of the other provisions of
this Agreement.
SECTION 9.06 Further Assurances. (a) Each of the Company and the
------------------
Trustee agrees that it will promptly correct any defect or error that may be
discovered in this Agreement or any Collateral Document or in the execution,
acknowledgment or recordation thereof, as applicable.
(b) The Company agrees that from time to time it will, promptly, upon
reasonable request by the Trustee, and at its own expense, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register any and all
further financing statements and continuations thereof, notices of assignment,
transfers, certificates, assurances, and other instruments as the Trustee may
reasonably request from time to time in order (i) to carry out more effectively
the purposes of this Agreement and the Collateral Documents and (ii) to enable
the Trustee to exercise and enforce is rights and remedies hereunder and under
the Collateral Documents, (iii) to subject to the liens created by the
Collateral Documents any of the properties, rights or interests of the Company
covered or now or hereafter intended to be covered by the Collateral Documents,
(iv) to perfect and maintain the validity, effectiveness and priority of the
Collateral Documents and the liens intended to be created thereby, (v) to better
assure, convey, grant, assign, transfer, preserve, protect and confirm unto the
Trustee the rights granted or now or hereafter intended to be granted under the
Collateral Documents or under any other instrument executed in connection
therewith to which the Trustee is or may become a party, and (vi) to enable the
Trustee to exercise and enforce its respective rights and remedies hereunder
and under the Collateral Documents, provided, however, that this Section 9.06(b)
-------- -------
shall not be construed to require the Company to grant any lien other than
expressly provided for in the Plan and in this Agreement or affect the
limitations or the rights of the Trustee under the Subordination Agreement.
17
(c) The Company hereby authorizes the Trustee to file one or more
financing or continuation statements, and amendments thereto, relative to the
Collateral without the signature of the Company where permitted by law. A
carbon, photographic or other reproduction of the Inventory Security Agreement
or any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
SECTION 9.07 Notification of Event of Default Under Credit
---------------------------------------------
Agreement. The Company shall promptly notify the Trustee of the Company's
---------
receipt of (a) notice of the occurrence of an "Event of Default" under and as
defined in the BankBoston Credit Agreement and/or (b) notice advising the
Company of the Collateral Agent's and/or any Lender's intention to commence
realization upon the "Collateral" (as defined in the BankBoston Credit
Agreement), or any portion thereof, as a result of the occurrence of any such
"Event of Default" under the BankBoston Credit Agreement.
ARTICLE 10.
THE TRUSTEE
SECTION 10.01 Exculpatory Provisions. (a) The Trustee shall not be
----------------------
responsible in any manner whatsoever for the correctness of any recitals,
statements, representations or warranties contained herein, all of which are
made solely by the Company. The Trustee makes no representation as to the value
or condition of the Trust Estate or any part thereof, or as to the title of the
Company to the Collateral or as to the validity, execution (except the Trustee's
own execution), enforceability, legality or sufficiency of this Agreement, any
of the Collateral Documents or any of the Trade Obligations and, except as
otherwise expressly provided for herein, the Trustee shall incur no liability or
responsibility in respect of any such matters. The Trustee shall not be
responsible for insuring the Trust Estate or the payment of any taxes, charges,
assessments or liens upon the Trust Estate or otherwise as to the maintenance of
the Trust Estate, except that in the event that the Trustee enters into
possession of a part or all of the Trust Estate, the Trustee shall preserve the
part in its possession.
(b) The Trustee shall not be required to ascertain or inquire as to
the performance by the Company of any of the covenants or agreements contained
herein, any Collateral Document or with respect to any of the Trade Obligations.
(c) The Trustee shall not be personally liable for any action taken
or omitted to be taken by the Trustee in accordance with this Agreement or any
Collateral Document, except for its own gross negligence or willful misconduct
and its failure to exercise reasonable care in the handling of moneys or
securities actually received by it.
18
SECTION 10.02 Delegation of Duties. The Trustee may execute any of
--------------------
the trusts hereof and perform any duty hereunder either directly or by or
through agents or attorneys-in-fact (which shall not include officers and
employees of the Company or any affiliate of the Company). The Trustee shall
not be responsible for the negligence or misconduct of any agents or attorneys-
in-fact reasonably selected by it in good faith.
SECTION 10.03 Reliance by Trustee. (a) Whenever in the
-------------------
administration of the trusts of this Agreement the Trustee shall deem it
necessary or desirable that a matter be proved or established in connection with
the taking, suffering or omitting any action hereunder or under any Collateral
Document unless otherwise provided herein or therein, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved or established by a certificate of an Authorized Officer
of the Company or the Trade Committee delivered to the Trustee, and such
certificate shall constitute a full warranty to the Trustee for any action
taken, suffered or omitted in reliance thereon unless the Trustee shall have
actual knowledge of an inaccuracy therein.
(b) The Trustee may consult with independent counsel (subject to the
provisions of Section 9.02 in respect of the Company's liability for the fees
and expenses of such counsel) and any opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken or suffered
by it hereunder in accordance therewith unless the Trustee has actual knowledge
of any invalidity or inaccuracy, or a reason to question the validity or
accuracy, of such opinion or of any assumption expressed therein as the basis
for such opinion. The Trustee shall have the right at any time to seek
instructions concerning the administration of the Trust Estate from any court of
competent jurisdiction.
(c) The Trustee may rely, and shall be fully protected in acting,
upon any resolution, statement, certificate, instrument, opinion, report,
notice, request, consent, order, bond, or other paper or document which it
reasonably believes to be genuine and to have been signed or presented by the
proper party or parties or, in the case of cables, telecopies and telexes, to
have been sent by the proper party or parties. In the absence of gross
negligence or willful misconduct, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee that conform to the
requirements of this Agreement.
SECTION 10.04 Limitations on Duties of the Trustee.
------------------------------------
(a) The Trustee undertakes to perform only the duties expressly set
forth herein.
(b) The Trustee may exercise the rights and remedies granted to it by
this Agreement and the Collateral Documents, but only pursuant to the terms
hereof and thereof and subject to the terms of the Subordination Agreement, and
the Trustee shall not be liable with respect to any action taken or omitted by
it in accordance with the direction of the Trade Committee subject to the terms
hereof, the Collateral Documents and the Subordination Agreement.
19
(c) Except as herein otherwise expressly provided, the Trustee shall
not be under any obligation to take any action which is discretionary with the
Trustee under the provisions hereof or any Collateral Documents, except upon the
written request of the Trade Committee. Subject to the provisions of Section
9.01(b) of this Agreement, the Trustee shall make available for inspection and
copying by the Trade Committee and each Trade Vendor, each certificate or other
paper furnished to the Trustee by the Company, by the Trade Committee, by any
Trade Vendor, or by any other Person, under or in respect of this Agreement, any
Collateral Document, or any of the Trust Estate.
SECTION 10.05 Moneys to Be Held in Trust. Subject to the terms and
--------------------------
conditions of the Subordination Agreement, all Proceeds and other moneys and
securities received by the Trustee under or pursuant to any provision of this
Agreement or any Collateral Document shall be held in trust in accordance with
the provisions of this Agreement and the Trustee shall exercise reasonable care
in the handling of any such Proceeds, other moneys and securities actually
received by it.
SECTION 10.06 Resignation and Removal of Trustee.
----------------------------------
(a) The Trustee may at any time, by giving thirty (30) days prior
written notice to the Company and the Trade Committee, resign and be discharged
of the responsibilities hereby created, such resignation to become effective
upon the appointment of a successor trustee by the Trade Committee and the
acceptance of such appointment by such successor trustee. The Trustee may be
removed at any time (with or without cause) and a successor trustee appointed by
the Trade Committee, provided that the Trustee shall be entitled to its fees and
--------
expenses to the date of removal. If no successor trustee shall be appointed and
approved within thirty (30) days from the date of the giving of the aforesaid
notice of resignation or within thirty (30) days from the date of such removal,
the Trustee shall, or the Trade Committee may, apply to any court of competent
jurisdiction to appoint a successor trustee to act until such time, if any, as a
successor trustee shall have been appointed as above provided. Any successor
trustee so appointed by such court shall immediately and without further act be
superseded by any successor trustee appointed by the Trade Committee as above
provided.
(b) If at any time the Trustee shall become incapable of acting, or
if at any time a vacancy shall occur in the office of the Trustee for any other
cause, a successor trustee shall be appointed by the Trade Committee and the
powers, duties, authority and title of the predecessor trustee terminated and
cancelled without procuring the resignation of such predecessor trustee, and
without any formality (except as may be required by applicable law) other than
the appointment and designation of a successor trustee in writing, duly
acknowledged, delivered to the predecessor trustee and the Company and filed for
record in each public office, if any, in which this Agreement is required to be
filed.
(c) The appointment and designation referred to in Section 10.06(b)
shall, after any required filing, be full evidence of the right and authority to
make the same and this Agreement shall vest in such successor trustee, without
any further act, deed or conveyance, all
20
of the estate and title of its predecessor, and upon such filing for record, if
any, the successor trustee shall become fully vested with all the estates,
properties, rights, remedies, trusts, duties, authority and title of its
predecessor; but such predecessor shall, nevertheless, on the written request of
the Trade Committee, the Company or its or their successor trustee, execute and
deliver an instrument transferring to such successor all the estates,
properties, rights, remedies, trusts, duties, authority and title of such
predecessor hereunder and shall deliver all moneys and securities held by it to
such successor trustee. If any deed, conveyance or other instrument in writing
from the Company is required by any successor trustee for more fully and
certainly vesting in such successor trustee or trustees the estate, properties,
rights, powers, trusts, duties, authority and title vested or intended to be
vested in the predecessor trustee, any and all such deeds, conveyances and other
instruments in writing shall, on request of such successor trustee, be granted,
acknowledged and delivered by the Company.
(d) Any required filing for record of the instrument appointing a
successor trustee as hereinabove provided shall be at the expense of the
Company. The resignation of any trustee and the instrument or instruments
removing any trustee, together with all other instruments, deeds and conveyances
provided for in this Article 10 shall, if permitted by law, be forthwith
recorded, registered and filed by and at the expense of the Company, wherever
this Agreement is recorded, registered and filed.
SECTION 10.07 Trustee Appointed Attorney-in-Fact. Upon the
----------------------------------
occurrence of an Event of Default, the Company shall thereupon be deemed to have
automatically, without any further act by the Company, irrevocably constituted
and appointed the Trustee and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full power and
authority in the name of the Company or its own name and in the place and stead
of the Company, from time to time at the direction of the Trade Committee, to
take, subject to Section 4.01(b) and to the terms and conditions of the
Subordination Agreement, any action and to execute any instrument which the
Trade Committee may deem necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation, to receive, endorse and collect
all instruments made payable to the Company representing payment, rents, issues
or profits or other distribution in respect of the Collateral, or any part
thereof and to give full discharge for the same.
SECTION 10.08 Reasonable Care. The Trustee shall be deemed to have
---------------
exercised reasonable care in the custody and preservation of the Trust Estate if
the Trust Estate is accorded treatment substantially equal to that which the
Trustee accords its own property and reasonable care is exercised by the Trustee
in handling any moneys or securities in its possession, it being understood that
the Trustee shall not have any responsibility for taking any steps to preserve
rights against any parties with respect to the Collateral, except as expressly
provided for by or in accordance with this Agreement.
21
ARTICLE 11.
MISCELLANEOUS
SECTION 11.01 Amendment or Waiver. (a) None of the terms and
-------------------
conditions of this Agreement or any Collateral Document may be changed, waived,
modified or varied in any manner whatsoever unless in writing duly signed by the
Company and the Trustee with the consent of the Trade Committee and provided
that the terms and conditions of such writing are not prohibited or inconsistent
with the terms and conditions of the Subordination Agreement. Any such
amendment, waiver or modification shall be binding upon the Company, the Trade
Committee, the Trade Vendors, and the Trustee and their respective successors
and assigns.
(b) Notwithstanding the provisions of subsection 11.01(a), the
Trustee and the Company may, at any time and from time to time, without the
consent of the Trade Committee, but subject to the prior written consent of the
Collateral Agent, enter into one or more agreements supplemental hereto or to
any Collateral Document, in form and substance satisfactory to the Trustee and
the Collateral Agent (and which written consent thereto by the Collateral Agent
shall not be unreasonably withheld or delayed, provided such agreements are not
prohibited by or inconsistent with the terms and conditions of the Subordination
Agreement or the BankBoston Credit Agreement), (i) to add to the covenants of
the Company, for the benefit of the Trade Vendors, or to surrender any right or
power herein conferred upon the Company, or (ii) to mortgage, pledge or grant a
security interest in favor of the Trustee, as additional security for the Trade
Obligations, any property or assets which are required to be mortgaged or
pledged, or in which a security interest is required to be granted, to the
Trustee pursuant to the Plan or the Collateral Documents.
SECTION 11.02 Subordination Agreement. Notwithstanding any
-----------------------
provision of this Agreement to the contrary:
(a) the Trustee shall comply with the terms and conditions of the
Subordination Agreement and any direction of the Collateral Agent given to the
Trustee thereunder in accordance with the terms thereof and shall not require
the consent of the Trade Committee or any Trade Vendor to comply with any
provision of the Subordination Agreement; and
(b) by their acceptance of the benefits hereof and of the Collateral
Documents, the Trade Committee and the Trade Vendors agree, for the benefit of
the Trustee and the Collateral Agent, (i) to the provisions of Section 11.02(a)
above, (ii) to be bound by those provisions of the Subordination Agreement that
are applicable to the security interest granted to the Trustee, for the benefit
of the Trade Vendors, or are otherwise applicable to the Trade Vendors, and to
take no action to cause the Trustee to breach any provisions of the
Subordination Agreement, (iii) that they, individually or as a group, may not
take any action with respect to the Collateral, any such action or assertion to
be taken solely by the Trustee, subject at all times to the terms and conditions
of the Subordination Agreement, (iv) to take such further action, at the
22
expense of the Company, as is reasonably required by the Collateral Agent and
the Trustee to effectuate the provisions and intent of the Subordination
Agreement, and (v) that in the event of any conflict between the provisions of
this Agreement or any Collateral Document, on the one hand, and the
Subordination Agreement, on the other hand, the provisions of the Subordination
Agreement shall govern.
SECTION 11.03 Notices. All notices, requests, demands and other
-------
communications provided for or permitted hereunder shall, unless otherwise
stated herein, be in writing (including telex and telecopy communications) and
shall be sent by registered or certified mail, return receipt requested, telex,
telecopier or hand delivery;
(a) If to the Company, to ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer and General Counsel, or
at such other address as shall be designated by it in a written notice to the
Trustee and the Trade Committee;
(b) If to the Trustee, to its address at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, or at such other address as
shall designated by it in a written notice to the Company and the Trade
Committee;
(c) If to any Trade Vendor, to it at the address specified from time
to time in the list provided by the Company to the Trustee pursuant to Section
9.01.
(d) If to the Trade Committee, c/o Mattel Toys, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇ Attention: ▇▇. ▇▇▇▇▇▇ Fee,
Assistant Controller, or at such other address as shall be designated by it in a
written notice to the Company and the Trustee, with a copy delivered
-----------
simultaneously therewith to: Otterbourg, Steindler, Houston & ▇▇▇▇▇, P.C., ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq., counsel to
the Trade Committee, or at such other address as shall be designated by such
firm to the Company and the Trustee.
All such notices, requests, demands and communications shall be deemed to have
been duly given or made, (i) when delivered by hand, immediately upon delivery
(ii) five (5) Business Days after being deposited in the United States mail,
postage prepared, (iii) when telexed, immediately upon sending, with answer back
received, (iv) when telecopied, immediately upon sending, with receipt
acknowledged or (v) one (1) Business Day after sending when deposited with a
nationally recognized overnight courier service with instructions to deliver the
next Business Day.
SECTION 11.04 Headings. Section, subsection and other headings
--------
used in this Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.
SECTION 11.05 Severability. Any provision of this Agreement which
------------
is prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
23
SECTION 11.06 Claims Against Trustee. This Agreement is made for
----------------------
the benefit of the Trade Vendors, and the Trade Committee may from time to time
enforce the rights of the Trade Vendors as explicit beneficiaries hereunder.
Any claims or causes of action which the Trade Vendors or the Company shall have
against the Trustee shall survive the termination of this Agreement and the
termination of the Trust Estate hereunder.
SECTION 11.07 Binding Effect. This Agreement shall be binding upon
--------------
and inure to the benefit of each of the parties hereto and, additionally, shall
inure to the benefit of the Trade Committee and its successors and assigns and
the Trade Vendors and their respective successors and assigns and, subject to
the rights of the Collateral Agent hereunder (if any) and under the
Subordination Agreement, nothing herein is intended or shall be construed to
give any other Person any right, remedy or claim under, to or in respect of this
Agreement or the Trust Estate or any part thereof. In addition to and not in
limitation of the foregoing, and notwithstanding anything to the contrary
contained in this Agreement or in any Collateral Document, in the event any
Trade Vendor at any time sells, assigns, pledges, disposes of or otherwise
tranfers to any Person (a "Transferee") all or any portion of the Trade
Obligations at any time owing to such Trade Vendor, the Transferee shall in no
event be entitled to any of the rights and benefits of such Trade Vendor under
this Agreement or under any Collateral Document, including, without limitation,
with respect to the security interests granted by the Company to the Trustee in
the Collateral, unless the Transferee shall have executed and delivered to the
Collateral Agent, in form and substance satisfactory to the Collateral Agent, an
assumption and ratification agreement, pursuant to which, among other things,
the Transferee agrees that the rights and benefits it has acquired hereunder and
under the Collateral Documents are subject to all of the terms and conditions of
the Subordination Agreement and that the Transferee agrees to be bound by all of
the terms and provisions of the Subordination Agreement to the extent applicable
to Trade Vendors.
SECTION 11.08 Governing Law. This Agreement and the rights and
-------------
obligations hereunder of the Trade Committee and the Trade Vendors shall be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to the conflicts of laws principles of such State.
SECTION 11.09 Counterparts. This Agreement may be executed in
------------
several counterparts, each of which when executed shall be an original and all
of which taken together shall constitute one and the same instrument.
SECTION 11.10 Termination. This Agreement and the Collateral
-----------
Documents shall terminate upon the earliest to occur of:
(a) midnight on that date that is two (2) years from the date hereof;
24
(b) at the sole option of the Company or the Collateral Agent on
behalf of the Company, on such date on which the Company has delivered notice to
the Trustee, the Trade Committee and all of the Trade Vendors that, with respect
to the three (3)-fiscal month period most recently ended, the average of the
Accounts Payable/Inventory Ratio (as hereinafter defined) measured on each of
the three Measurement Dates (as hereinafter defined) in such three (3)-fiscal
month period is more than five (5) percentage points less than such average
ratio calculated in the same manner on a comparable store basis for the same
three (3)-fiscal month period in the immediately preceding calendar year, all as
determined in accordance with generally accepted accounting principles,
consistently applied, and which notice to the Trustee and the Trade Committee
shall be accompanied by such information as the Trustee and/or the Trade
Committee shall reasonably request with respect to the Company's calculation of
such ratios. For the purposes of this Section 11.10(b) (i), the "Accounts
Payable/Inventory Ratio" is the ratio as of any Measurement Date of (x) the
aggregate amount of all accounts payable of the Company as of such Measurement
Date to (y) the value (computed on a cost basis) of all inventory owned by the
Company as of such Measurement Date; and (ii) "Measurement Date" means and
refers to the last day of each of the three (3)-fiscal months in any relevant
three (3)-fiscal month period.
(c) immediately upon the Company's consummation of a transaction
pursuant to which Reorganized BI (as defined in the Plan) or the Company merges
or consolidates with any other Person(s);
(d) at the sole option of the Company, or the Collateral Agent on
behalf of the Company, solely as to a Trade Vendor specifically identified in a
notice delivered by the Company to the Trustee, the Trade Committee and such
Trade Vendor as to whom the Company intends to terminate this Agreement pursuant
to this subsection 11.10(d) (the "Terminated Trade Vendor"), (i) if such
-----------------------
Terminated Trade Vendor commences selling its goods to the Company after the
Effective Date (as defined in the Plan) on credit terms which are more
restrictive than the most restrictive credit terms under which such Terminated
Trade Vendor sold goods to the Company at any time during the twelve (12)-month
period immediately preceding the Effective Date, or (ii) in the event such
Terminated Trade Vendor did not sell any of its goods to the Company in the
twelve (12)-month period immediately preceding the Effective Date, then if such
Terminated Trade Vendor commences selling its goods to the Company on credit
terms which are not as favorable as the credit terms made available by such
Terminated Trade Vendor to the Company in connection with the goods first sold
by such Terminated Trade Vendor to the Company after the Effective Date; and
(e) after the occurrence of an Event of Default and the Trustee's
exercise of its rights and remedies hereunder and under the Collateral
Documents, (i) the sale or other disposition of all of the Collateral and the
final disposition of all Proceeds or (ii) the indefeasible payment in full of
the Obligations.
SECTION 11.11 Termination Notice; Effect of Termination.
-----------------------------------------
Notwithstanding anything to the contrary contained in Section 11.10, (a) if this
Agreement is terminated pursuant to subsection 11.10(b) or (c), such termination
shall not be effective until thirty (30) days after
25
the Company has given notice of such termination to the Trustee and has
published notice of such termination, for the benefit of Trade Vendors
generally, in the New York Times (National Edition), advising the Trade Vendors
--------------
of its intent to terminate this Agreement as a result of its satisfaction of the
conditions precedent to such termination set forth in such subsection 11.10(b)
or (c) (as applicable) and (b) if the Agreement is terminated as to a Terminated
Trade Vendor pursuant to subsection 11.10(d), such termination shall not be
effective until the Company shall have delivered notice to the Trustee and the
Terminated Trade Vendor(s) of the Company's exercise of its option pursuant to
such subsection to terminate this Agreement as to such Terminated Trade
Vendor(s), provided, however, that (i) in the case of termination of this
-------- -------
Agreement pursuant to subsection 11.10 (a)(b), (c) or (e), no such termination
shall relieve or discharge the Company of its duties, obligations or covenants
under this Agreement or the other Collateral Documents until all Trade
Obligations incurred prior to such termination and all other Obligations at any
time incurred in connection with the collection of such Trade Obligations have
been fully and finally discharged and paid, and the Trustee's liens upon and
security interests in the Collateral and the rights and remedies of the Trustee
under the Agreement, the other Collateral Documents and applicable law shall
remain in full force and effect until all such Trade Obligations and other
Obligations have been fully and finally paid, and (ii) in the case of
termination of this Agreement as to a Terminated Trade Vendor pursuant to
subsection 11.10(d), such termination shall be effective solely as to such
Terminated Trade Vendor (and no other Trade Vendor) and solely with respect to
any goods sold and delivered by such Terminated Trade Vendor subsequent to the
date on which this Agreement has been terminated as to such Terminated Trade
Vendor and such termination shall not otherwise limit, impair or affect in any
manner whatsoever either (A) this Agreement and the Collateral Documents as to
the Trustee and all other Trade Vendors (exclusive of such Terminated Trade
Vendor) or (B) the rights of the Terminated Trade Vendor arising under this
Agreement and the Collateral Documents prior to the effective date of the
termination hereof as to such Terminated Trade Vendor.
SECTION 11.12 Conflicts. In the event of any conflict between any
---------
term or provision of this Agreement and any term or provision of any Collateral
Document, the term or provision of this Agreement shall govern and control.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be duly executed by their respective officers thereunto
duly authorized as of the day and year first above written.
▇.▇. ▇▇▇▇▇▇▇ & ASSOCIATES, INC.
as Trustee
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------
Title: Vice President
-----------------------------
26
BRADLEES STORES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Title: Vice President-Treasurer
-----------------------------
27
EXHIBIT A
---------
TRADE COMMITTEE OF BRADLEES STORES, INC.
_________________________
____________________________
___________________________
DEFAULT NOTICE
______________, 1999 [200_]
▇.▇. ▇▇▇▇▇▇▇ & Associates, Inc.,
Trustee
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Gentlemen:
Reference is made to the Collateral Trust Agreement, dated as of
________, 1999 between Bradlees Stores, Inc. and ▇.▇. ▇▇▇▇▇▇▇ & Associates, as
Trustee (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "Trust Agreement"). Initially capitalized terms used and
----- ---------
not otherwise defined herein shall have their respective meanings as set forth
in the Trust Agreement.
Pursuant to the terms of the Trust Agreement, the Trade Committee hereby
notifies the Trustee that an Event of Default has occurred under the Trust
Agreement and hereby irrevocably directs the Trustee, subject to the terms and
conditions of the Subordination Agreement, to take such action as requested by
the Trade Committee with respect to the Collateral Documents and the Collateral.
Very truly yours,
TRADE COMMITTEE OF
BRADLEES STORES, INC.
By: [____________________]
By:
---------------------------
Name:
-------------------------
Title:
------------------------
cc: Bradlees Stores, Inc.
Att: Chief Financial Officer
28
EXHIBIT B
---------
TRADE COMMITTEE OF BRADLEES STORES, INC.
_________________________
_____________________________
Attention: ______________
INDIVIDUAL TRADE VENDOR NOTICE
______________, 199_ [200_]
[Name and Address
of Individual Trade Vendor]
Attn: [Contact Person]
Gentlemen:
Reference is made to the Collateral Trust Agreement, dated as of ________,
1999 between Bradlees Stores, Inc. and ▇.▇. ▇▇▇▇▇▇▇ & Associates, as Trustee (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Trust Agreement"). Initially capitalized terms used and not
---------------
otherwise defined herein shall have their respective meanings as set forth in
the Trust Agreement.
Pursuant to the terms of the Trust Agreement, the Trustee hereby (i)
notifies you that (x) an Event of Default has occurred under the Trust
Agreement, (y) the Trustee's and the Trade Vendors' rights and remedies with
respect to such Event of Default are limited by and subject to the terms and
conditions of the Subordination Agreement, and (z) the Trustee has taken the
following action with respect to the Collateral and (ii) advises you that the
books and records of the Company show that as of ___________, 19__ [200_] the
unpaid amount of Trade Obligations due and payable to you is $_________ (the
"Trade Vendor Payable Amount").
----------------------------
The Trade Vendor Payable Amount shall be deemed correct and shall be the
amount used by the Trustee in calculating the distribution to be made to you
pursuant to the Trust Agreement unless, within twenty (20) days of the mailing
of this Individual Trade Vendor Notice, you shall provide to the Trustee and the
Company contrary information as to the Trade Payable Amount owed to you, in
which case, the Trustee shall reserve, to the extent available, funds in the
Proceeds Account to provide for any disputed amount until such dispute is
resolved.
Very truly yours,
▇.▇. ▇▇▇▇▇▇▇ & ASSOCIATES, INC.,
Trustee
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
29
EXHIBIT C
---------
[▇.▇. ▇▇▇▇▇▇▇ & ASSOCIATES, INC.]
Trustee
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
PUBLIC TRADE VENDOR NOTICE
______________, 199_ [200_]
TO: THE TRADE VENDORS
OF BRADLEES STORES, INC.
Reference is made to the Collateral Trust Agreement, dated as of ________
__, 1999, between Bradlees Stores, Inc. and ▇.▇. ▇▇▇▇▇▇▇ & Associates, as
Trustee (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "Trust Agreement"). Initially capitalized terms used and
---------------
not otherwise defined herein shall have their respective meanings as set forth
in the Trust Agreement.
Pursuant to the terms of the Trust Agreement, the Trustee hereby (i)
notifies you that (x) an Event of Default has occurred under the Trust
Agreement, (y) the Trustee's and the Trade Vendors' rights and remedies with
respect to such Event of Default are limited by and subject to the terms and
conditions of the Subordination Agreement, and (z) the Trustee has [taken the
following action with respect to the Collateral and (ii) advises you that if you
have not received an Individual Trade Vendor Notice, then, if you wish to
receive any distribution made under the Trust Agreement, you must, on or before
______________, 20 days after the date of the first publication of the Public
Payment Notice, notify the Trustee and the Company in writing of the amount of
Trade Obligations owed to you.
In the event the Trustee and the Company shall have received contrary
information from the Company as to the amount of Trade Obligations owed to you,
the Trustee shall reserve, to the extent available, funds in the Proceeds
Account to provide for any disputed amount until such dispute is resolved.
Very truly yours,
▇.▇. ▇▇▇▇▇▇▇ & ASSOCIATES, INC.,
Trustee
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
30