CREDIT AGREEMENT
by and among
THE KROGER CO.,
THE LENDERS PARTY HERETO,
AND
THE BANK OF NEW YORK, AS AGENT
with
BNY CAPITAL MARKETS, INC., as Arranging Agent
________________
$110,000,000
________________
Dated as of December 13, 1996
CREDIT AGREEMENT, dated as of December 13, 1996,
by and among THE KROGER CO., an Ohio corporation (the
"Borrower"); the financial institutions listed on Schedule
2.01 (the "Lenders"); and THE BANK OF NEW YORK, a New York
banking corporation, as agent for the Lenders (in such
capacity, the "Agent").
The Borrower has requested that the Lenders extend
credit in order to enable the Borrower (such term and each
other capitalized term used but not defined in this
introductory statement having the meanings assigned to such
terms in Article 1) to borrow, at any time and from time to
time prior to the Termination Date, Advances in an aggregate
principal amount at any time outstanding not to exceed
$110,000,000.
The proceeds of the Borrowings will be used for
general corporate purposes of the Borrower, including but not
limited to funding the working capital requirements of the
Borrower and its Subsidiaries and the funding of the
Borrower's and its Subsidiaries' voluntary employees'
beneficiary association trusts.
Accordingly, the Borrower, the Lenders and the Agent
agree as follows:
ARTICLE 1. DEFINITIONS
SECTION 1.01. Defined Terms.
As used in this Agreement, the following terms shall have
the meanings specified below:
"Acquired EBITDA" means, for any period, with respect to
any Acquired Entity, (a) the sum of (i) Acquired Net Income
for such period, (ii) depreciation and amortization expense
for such period, (iii) interest expense net of interest income
for such period, (iv) Federal and state income taxes for such
period as determined in accordance with GAAP, (v)
extraordinary losses that have been included in the
calculation of Acquired Net Income for such period and (vi)
LIFO charges included in the calculation of Acquired Net
Income for such period minus (b) the sum of (i) extraordinary
gains that have been included in the calculation of Acquired
Net Income for such period and (ii) LIFO credits included in
the calculation of Acquired Net Income for such period.
"Acquired Entity" means any Person or the assets of any
Person to be invested in or acquired pursuant to Section
6.07(i) of the Existing Credit Agreement.
"Acquired Entity Fiscal Quarter" means, with respect to
any Acquired Entity, any fiscal quarter of such Acquired
Entity.
"Acquired Entity Fiscal Year" means, with respect to any
Acquired Entity, any fiscal year of such Acquired Entity.
"Acquired Entity Rolling Period" means, in respect of any
Acquired Entity Fiscal Quarter, such Acquired Entity Fiscal
Quarter and the three preceding Acquired Entity Fiscal
Quarters.
"Acquired Net Income" means, for any period, with respect
to any Acquired Entity, the net income of such Acquired Entity
for such period before the payment of dividends on all capital
stock, determined in accordance with GAAP.
"Adjusted Eurodollar Rate" means, with respect to each
day during each Interest Period for an Adjusted Eurodollar
Rate Advance, an interest rate per annum equal to the rate
per annum obtained by dividing (1) the "Eurodollar Rate" for
such Interest Period by (2) a percentage equal to 100% minus
the Adjusted Eurodollar Rate Reserve Percentage for such
Interest Period. The "Eurodollar Rate" for any Interest
Period shall be the rate of interest determined on the basis
of the rate for deposits in United States dollars for a period
equal to such Interest Period appearing on Page 3750 of the
Telerate screen as of 11:00 A.M., London time, two Business
Days prior to the beginning of such Interest Period. In the
event that such rate does not appear on Page 3750 of the
Telerate Service (or otherwise on such service), the
"Eurodollar Rate" for the purposes of this paragraph shall be
determined by reference to such other publicly available
service for displaying eurodollar rates as may be agreed upon
by the Agent and the Borrower or, in the absence of such
agreement, the "Eurodollar Rate" for the purposes of this
paragraph shall instead be an interest rate per annum equal to
the rate per annum determined by the Agent to be the average
(rounded upward to the nearest whole multiple of 1/100 of 1%
per annum, if such average is not such a multiple) of the rate
per annum at which deposits in U.S. dollars are offered by the
principal office of each of the Reference Banks in London,
England, to prime banks in the London interbank market at
11:00 a.m. (London time) two Business Days before the first
day of such Interest Period in an amount substantially equal
to such Reference Bank's Adjusted Eurodollar Rate Advance to
be outstanding during such Interest Period (or, if such
Reference Bank shall not have an Adjusted Eurodollar Rate
Advance that is to be outstanding during such Interest Period,
in an amount equal to $1,000,000) and for a period equal to
such Interest Period. The Adjusted Eurodollar Rate for an
Interest Period shall be determined by the Agent on the basis
of applicable rates furnished to and received by the Agent two
Business Days before the first day of such Interest Period,
subject, however, to the provisions of Section 2.07.
"Adjusted Eurodollar Rate Advance" means an Advance that
bears interest as provided in Section 2.06(b).
"Adjusted Eurodollar Rate Reserve Percentage" means, for
an Interest Period, the reserve percentage applicable two
Business Days before the first day of such Interest Period
under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement)
for a member bank of the Federal Reserve System in New York
City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any
other category of liabilities that includes deposits by
reference to which the interest rate on Adjusted Eurodollar
Rate Advances is determined) having a term equal to such
Interest Period.
"Administrative Questionnaire" means an Administrative
Questionnaire in the form of Exhibit C.
"Advance" has the meaning specified in Section 2.01(a)
and shall include Auction Bid Advances.
"Affiliate" means, with respect to any designated Person,
any other Person that has a relationship with the designated
Person whereby either of such Persons directly or indirectly
controls or is controlled by or is under common control with
the other of such Persons, or holds or beneficially owns 10%
or more of the equity interest in the other Person or 10% or
more of any class of voting securities of the other Person.
The term "control" means the possession, directly or
indirectly, of the power, whether or not exercised, to direct
or cause the direction of the management or policies of any
Person, whether through ownership of voting securities, by
contract or otherwise.
"Agent" means The Bank of New York in its capacity as
agent for the Lenders hereunder and any successors thereto
appointed in accordance with Article 8.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's Eurodollar Lending Office in
the case of an Adjusted Eurodollar Rate Advance and, in the
case of an Auction Bid Advance, the office of such Lender
specified in a notice of such Lender to the Agent as such
Lender's Applicable Lending Office with respect to such
Auction Bid Advance.
"Applicable Percentage" means at any time, with respect
to Adjusted Eurodollar Rate Advances and the Facility Fees,
the applicable percentage set forth below based upon (a) the
Senior Debt Ratings at such time or (b) the Applicable
Percentage Ratio at such time:
Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 5 Level 6
------- ------- ------- ------- ------- -------
Xxxxx'x/ Baa1 or Baa2 and Baa2 or Baa3 and Baa3 or Ba1 or
S&P better or BBB BBB BBB- BBB- BB+ or
BBB+ or lower
better
Applicable 5.25 to 1.0 4.75 to 4.0 to 1.0 3.5 to 1.0 3.0 to Lower than
Percentage or greater 1.0 or or greater or greater 1.0 or 3.0 to 1.0
Ratio greater greater
(spreads expressed in basis points per annum)
Adjusted 17.5 18.5 20.0 29.0 42.5 51.25
Eurodollar
Rate
Advances
Facility 7.5 9.0 9.0 11.0 12.5 18.75
Fees
For purposes of the foregoing, (a) the Applicable Percentages
shall be determined at any time by reference to the more
favorable to the Borrower of (i) the Senior Debt Ratings at
such time and (ii) the Applicable Percentage Ratio in effect
at such time, (b) if any rating established or deemed to have
been established by Xxxxx'x or S&P shall be changed (other
than as a result of a change in the rating system of either
Xxxxx'x or S&P), such change shall be effective as of the date
on which such change is first announced publicly by the rating
agency making such change, (c) any change in the Applicable
Percentages based on a change in the Applicable Percentage
Ratio shall be effective for all purposes on and after the
date of delivery to the Agent of an Officer's Certificate of
the Borrower with respect to the financial statements to be
delivered, as applicable, pursuant to Section 5.03 for the
most recently ended Fiscal Quarter (i) setting forth in
reasonable detail the calculation of the Applicable Percentage
Ratio for such Fiscal Quarter and (ii) stating that the signer
has reviewed the terms of this Agreement and has made, or
caused to be made under his or her supervision, a review in
reasonable detail of the transactions and condition of the
Borrower and its Subsidiaries during the accounting period
covered by the related financial statements and that such
review has not disclosed the existence during or at the end of
such accounting period, and that the signer does not have
knowledge of the existence as at the date of such Officer's
Certificate, of any condition or event that constitutes a
Default or an Event of Default and (d) notwithstanding the
foregoing provisions of clauses (a) and (b), no reduction in
the Applicable Percentages shall be effective if any Default
or Event of Default shall have occurred and be continuing. It
is understood that the foregoing Officer's Certificate shall
be permitted to be delivered prior to, but in no event later
than, the time of the actual delivery of the financial
statements required to be delivered pursuant to Section 5.03
for the applicable Fiscal Quarter. Any change in the
Applicable Percentages due to a change in the applicable Level
shall be effective on the effective date of such change in the
applicable Level and shall apply to all Adjusted Eurodollar
Rate Advances made or continued on or after the commencement
of the period (and to Base Rate Advances that are outstanding
at any time during the period) commencing on the effective
date of such change in the applicable Level and ending on the
date immediately preceding the effective date of the next such
change in applicable Level. If the rating system of either
Xxxxx'x or S&P shall change, the Borrower and the Lenders
shall negotiate in good faith to amend the references to
specific ratings in this definition to reflect such changed
rating system. If either Xxxxx'x or S&P shall cease to be in
the business of rating corporate debt obligations, the
borrower and the Lenders shall negotiate in good faith to
agree upon a substitute rating agency and to amend the
references to specific ratings in this definition to reflect
the ratings used by such substitute rating agency and, pending
such agreement, the Applicable Percentages shall be determined
on the basis of the ratings provided by the other rating
agency and the Applicable Percentage Ratio. The Applicable
Percentage for Base Rate Advances is zero.
"Applicable Percentage Ratio" means the ratio (determined
as of the last day of each Fiscal Quarter for the Rolling
Period ending on such day) of (a) Consolidated EBITDA for such
Rolling Period to (b) Consolidated Total Interest Expense for
such Rolling Period.
"Appropriate Lender" means (a) as to the Facility, a
Lender that has a Commitment for a portion of, or an Advance
under, the Facility, or (b) as to the Auction Bid Advances,
any Lender making an Auction Bid Advance.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an assignee and, to
the extent required by Section 9.04(b), accepted by the
Borrower and the Agent, in the form of Exhibit B or such other
form as shall be approved by the Agent.
"Auction Bid Advance" means an Advance by a Lender to the
Borrower as part of an Auction Bid Borrowing resulting from
the auction bidding procedure described in Section 2.01(b).
"Auction Bid Borrowing" means a Borrowing consisting of
simultaneous Auction Bid Advances from each of the Lenders
whose offer to make one or more Auction Bid Advances as part
of such Borrowing has been accepted by the Borrower under the
auction bidding procedure described in Section 2.01(b).
"Base Rate" means, on any date, a rate of interest per
annum equal to the higher of (i) the Federal Funds Rate in
effect on such date plus 1/2 of 1% or (ii) the BNY Rate in
effect on such date. Each change in the fluctuating interest
rate hereunder shall take effect simultaneously with the
corresponding change in the Base Rate.
"Base Rate Advance" means an Advance that bears interest
as provided in Section 2.06(a).
"BNY" means The Bank of New York.
"BNY Capital Markets" means BNY Capital Markets, Inc.
"BNY Rate" means a rate of interest per annum equal to
the rate of interest publicly announced in New York City by
BNY from time to time as its prime commercial lending rate,
such rate to be adjusted automatically (without notice) on the
effective date of any change in such publicly announced rate.
"Board" means the Board of Governors of the Federal
Reserve System of the United States of America.
"Borrowing" means a borrowing consisting of Advances of a
single Type made on the same day by the Appropriate Lenders
and as to which a single Interest Period is in effect.
"Borrower Common Stock" means the Borrower Common Stock,
par value $1.00 per share, of the Borrower.
"Business Day" means a day of the year on which banks are
not required or authorized to close in New York City or the
City of Chicago and, if the applicable Business Day relates to
any Adjusted Eurodollar Rate Advances, on which dealings are
carried on in the London interbank market.
"Capital Expenditures" of any Person means, for any
period, all expenditures of such Person during such period
(whether paid in cash or accrued as liabilities during such
period) that, in conformity with GAAP, are required to be
included in or reflected by the property, plant or equipment
or similar fixed asset accounts on the balance sheet of such
Person and, without duplication, equipment that is purchased
simultaneously with the trade-in of existing equipment owned
by such Person to the extent of the gross amount of the
purchase price of such purchased equipment less the book value
of the equipment being traded in at such time, but excluding
(a) expenditures made in connection with the replacement or
restoration of assets, to the extent such replacement or
restoration is financed out of (i) insurance proceeds paid on
account of the loss of or damage to the assets so replaced or
restored or (ii) awards of compensation arising from the
taking by condemnation or eminent domain of the assets so
replaced, (A)(b) any portion of Capital Lease Obligations that
is capitalized on such Person's balance sheet and (c) interest
capitalized during construction.
"Capital Lease Obligation" means, with respect to any
lessee, the obligations under any lease of property that, in
accordance with GAAP, should be capitalized on such lessee's
balance sheet.
"Change of Control" means any one or more of the
following events:
(a) the acquisition, by contract or otherwise
(including the entry into a contract or arrangement that
upon consummation will result in such acquisition), by
any Person or group (as such term is defined for purposes
of Section 13(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the rules and
regulations pertaining thereto), other than the trusts
for the employee benefit plans (as defined in Section 3(2) of
ERISA) maintained by the Borrower or any subsidiary of the
Borrower that is an ERISA Affiliate, of beneficial
ownership (within the meaning of Rule 13d-3, or any regulation
or ruling promulgated to replace or supplement Rule 13d-3, of the
General Rules and regulations under the Exchange Act), directly or
indirectly, of securities of the Borrower representing 20% or
more of the Voting Power of all securities of the Borrower, or
(b) during any period of up to 24 consecutive months, commencing
before or after the date of this Agreement, individuals who at
the beginning of such period were directors of the Borrower (together
with any new directors whose election by the Board of Directors or
whose nomination for election by the stockholders of the
Borrower was approved by a vote of at least 75% of the
directors then in office who either were directors at the
beginning of such period or whose election or nomination for
election was previously so approved) shall cease for any
reason to constitute at least 75% of the Board of Directors
of the Borrower.
"Code" means the Internal Revenue Code of 1986, or any
successor statute thereto, as the same may be amended from
time to time.
"Commercial Paper" means any unsecured promissory note
issued by a Borrower pursuant to any commercial paper program
(whether rated or unrated) with a maturity of not more than
nine months from the time of issuance, exclusive of grace
periods.
"Commitment" has the meaning specified in Section
2.01(a). The Commitments shall automatically and permanently
terminate on the Termination Date.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP, including principles of consolidation,
consistent with those applied in the preparation of the
Consolidated financial statements referred to in Section
3.05(b).
"Consolidated Cash Interest Expense" means, for any
period, interest expense net of interest income, whether paid
or accrued (including the interest component of Capital Lease
Obligations) on all Debt of the Borrower and its Subsidiaries
on a Consolidated basis for such period, including (a)
commissions and other fees and charges payable in connection
with Letters of Credit and Auction Bid LOCs as defined in and
issued under the Existing Credit Agreement, (b) net payments
payable in connection with all Interest Rate Agreements, (c)
interest capitalized during construction and (d) cash
dividends paid in respect of any preferred stock issued by the
Borrower, but excluding, however, the sum of (i) interest
expense not payable in cash and (ii) amortization of discount
and deferred debt expense, all as determined in conformity
with GAAP.
"Consolidated EBITDA" means, for any period, on a
Consolidated basis for the Borrower and its Subsidiaries, (a)
the sum of (i) Consolidated Net Income for such period, (ii)
depreciation and amortization expense for such period, (iii)
interest expense net of interest income for such period, (iv)
Federal and state income taxes for such period as determined
in accordance with GAAP, (v) extraordinary losses (and
any unusual losses in excess of $1,000,000 arising in or
outside of the ordinary course of business not included in
extraordinary losses (determined in accordance with GAAP) that
have been included in the calculation of Consolidated Net
Income) for such period and (vi) LIFO charges that have been
included in the calculation of Consolidated Net Income for
such period minus (b) the sum of (i) extraordinary gains (and
any unusual gains in excess of $1,000,000 arising in or
outside of the ordinary course of business not included in
extraordinary gains (determined in accordance with GAAP) that
have been included in the calculation of Consolidated Net
Income) for such period and (ii) LIFO credits that have been
included in the calculation of Consolidated Net Income for
such period.
"Consolidated Net Income" means, for any period, the net
income of the Borrower and its Consolidated Subsidiaries for
such period, before the payment of dividends on all capital
stock, determined in accordance with GAAP.
"Consolidated Rental Expense" means, for any period, the
aggregate rental expense (including any contingent or
percentage rental expense) of the Borrower and its
Subsidiaries on a Consolidated basis for such period
(excluding real estate taxes and common area maintenance
charges) in respect of all rent obligations under all
operating leases for real or personal property minus any
rental income of the Borrower and its Subsidiaries on a
Consolidated basis for such period, all as determined in
conformity with GAAP.
"Consolidated Total Interest Expense" means, for any
period, interest expense net of interest income, whether paid
or accrued (including the interest component of Capital Lease
Obligations) on all Debt of the Borrower and its Subsidiaries
on a Consolidated basis for such period, including (a)
commissions and other fees and charges payable in connection
with Letters of Credit and Auction Bid LOCs as defined in and
issued under the Existing Credit Agreement, (b) net payments
payable in connection with all Interest Rate Agreements, (c)
interest capitalized during construction and (d) cash
dividends paid in respect of any preferred stock issued by the
Borrower, but excluding, however, amortization of deferred
debt expense, all as determined in conformity with GAAP.
"Continuing Lenders" has the meaning specified in Section
2.16(b).
"Conversion", "Convert" and "Converted" each refers to a
conversion of Advances of one Type into Advances of the other
Type pursuant to Section 2.02(b), 2.07 or 2.08.
"Debt" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (including all
obligations, contingent or otherwise, of such Person in
connection with the Letters of Credit and Auction Bid LOCs as
defined in and issued under the Existing Credit Agreement,
letter of credit facilities, acceptance facilities or other
similar facilities and in connection with any agreement to
purchase, redeem, exchange into debt securities, convert into
debt securities or otherwise acquire for value (i) any capital
stock of such Person or (ii) any warrants, rights or options
to acquire such capital stock, now or hereafter outstanding),
(b) all obligations of such Person evidenced by bonds, notes,
debentures or other similar instruments, (c) all indebtedness
created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are
limited to repossession or sale of such property), (d) all
Capital Lease Obligations of such Person, (e) all Debt
referred to in clause (a), (b), (c) or (d) above secured by
(or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any lien, security
interest or other charge or encumbrance upon or in property
(including accounts and contract rights) owned by such Person,
even though such Person has not assumed or become liable for
the payment of such Debt, (f) all Guaranteed Debt of such
Person and (g) any preferred stock of such Person that is
classified as a liability on such Person's Consolidated
balance sheet.
"Default" means any Event of Default or any event that
would constitute an Event of Default but for the requirement
that notice be given or time elapse or both.
"Domestic Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Domestic
Lending Office" opposite its name on Schedule 2.01 or in the
Assignment and Acceptance pursuant to which it became a
Lender, or such other office of such Lender as such Lender may
from time to time specify to the Borrower and the Agent.
"Effective Date" means December 13, 1996.
"Environmental Laws" means all current and future
Federal, state, local and foreign laws, rules or regulations,
codes, ordinances, orders, decrees, judgments or injunctions
issued, promulgated, approved or entered thereunder or other
requirements of Governmental Authorities or the common law,
relating to health, safety, or pollution or protection of the
environment, including laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances, or
wastes into the environment (including ambient air, surface
water, groundwater, land surface or subsurface strata) or
otherwise relating to the manufacture, processing,
distribution, use, generation, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals,
or industrial, toxic or hazardous substances, or wastes, or
underground storage tanks and emissions therefrom.
"ERISA" means the Employee Retirement Income Security Act
of 1974, or any successor statute, as the same may be amended
from time to time.
"ERISA Affiliate" means any trade or business (whether or
not incorporated) that, together with the Borrower, is treated
as a single employer under Section 414 of the Code.
"Eurocurrency Liabilities" has the meaning assigned to
that term in Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to each
Lender, the office of such Lender specified as its "Eurodollar
Lending Office" opposite its name on Schedule 2.01 or in the
Assignment and Acceptance pursuant to which it became a Lender
(or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender
may from time to time specify to the Borrower and the Agent.
"Event of Default" has the meaning specified in Section
7.01.
"Existing Credit Agreement" means the Senior Competitive
Advance and Revolving Credit Agreement, dated as of July 19,
1994, among the Borrower, the Subsidiary Borrowers party
thereto, the lenders party thereto, the swingline lenders
party thereto, the issuing banks party thereto, The Chase
Manhattan Bank, N.A. (successor by merger to Chemical Bank)
and Citibank, N.A., as administrative agents, The Chase
Manhattan Bank, N.A. (successor by merger to Chemical Bank),
as Collateral Agent, and Citibank, N.A., as Paying Agent, as
amended through the Effective Date without giving effect to
any amendment, waiver or termination thereof after the
Effective Date.
"Existing Loan Documents" means the Loan Documents as
defined in the Existing Credit Agreement, as each may be
amended to the Effective Date and without giving effect to
any amendment, waiver or termination thereof after the
Effective Date.
"Extension Consent Period" means the period beginning on
the 20th day after the receipt by the Agent of a Extension
Request and ending on the 25th day after such receipt,
provided, however, that if such 25th day falls on a day other
than a Business Day, such date shall be extended to the
Business Day immediately succeeding such Saturday, Sunday or
holiday.
"Extension Request" means a request by the Borrower for
an extension of the Commitment Period pursuant to Section
2.16, substantially in the form of Exhibit D.
"Facility" means the aggregate of the Commitments of all
Lenders without taking into account any reduction pursuant to
subsection (b) of Section 2.01.
"Facility Fee" has the meaning specified in Section
2.03(a).
"Facility Usage" means, at any time, the amount of
Advances outstanding at such time.
"Fair Market Value" means, with respect to any asset, the
value of the consideration obtainable in a sale of such asset
in the open market at a specific date assuming a sale by a
willing seller to a willing purchaser dealing at arm's length
and arranged in an orderly manner over a reasonable period of
time having regard to the nature and characteristics of such
asset, which value is, for any asset with a Fair Market Value
in excess of $25,000,000, either (a) determined in good faith
by the Board of Directors of the Borrower or (b) if such asset
shall have been the subject of a relatively contemporaneous
appraisal by an independent third party appraiser, the basic
assumptions underlying which appraisal have not materially
changed since its date, determined in such appraisal.
"Federal Funds Rate" means a fluctuating rate per annum
equal for each day to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for
such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by it.
"Fees" means the fees specified in Section 2.03.
"Financial Officer" means, with respect to any
corporation, the chief financial officer, principal accounting
officer, treasurer or controller of such corporation.
"Fiscal Quarter" means (a) with respect to the first
Fiscal Quarter of any Fiscal Year, the first 12 calendar weeks
of such Fiscal Year, (b) with respect to the second Fiscal
Quarter of such Fiscal Year, the next successive period of 12
calendar weeks in such Fiscal Year, (c) with respect to the
third Fiscal Quarter of any Fiscal Year, the next successive
period of 16 calendar weeks in such Fiscal Year and (d) with
respect to the last Fiscal Quarter of any Fiscal Year, the
period of time after the first three Fiscal Quarters of such
Fiscal Year through the last day of such Fiscal Year.
"Fiscal Year" means, with respect to the Borrower, a year
of 364 or 371 days, as the case may be, ending on the Saturday
closest to the 1st day of January in any calendar year, and
such Fiscal Year, when referred to from time to time herein by
reference to a calendar year shall be the Fiscal Year that
includes January 30th of such calendar year.
"Fixed Charge Coverage Ratio" means the ratio (determined
as of the last day of each Fiscal Quarter for the Rolling
Period ending on such day) of (a) the sum of (i) Consolidated
EBITDA for such Rolling Period and (ii) Consolidated Rental
Expense for such Rolling Period to (b) the sum of (i)
Consolidated Cash Interest Expense for such Rolling Period and
(ii) Consolidated Rental Expense for such Rolling Period.
"Fixed Rate" means, for the period for each Fixed Rate
Advance comprising part of the same Auction Bid Borrowing, the
fixed interest rate per annum determined for such Advance, as
provided in Section 2.01(b).
"Fixed Rate Advance" means an Auction Bid Advance that
bears interest at a fixed rate per annum determined as
provided in Section 2.01(b).
"Funded Debt" means the Debt resulting from the Advances
hereunder and all other Debt of the Borrower or its
Subsidiaries that (on the date of its incurrence or issuance)
matures more than one year from the date of determination or
matures within one year from such date but is renewable or
extendable, at the option of the debtor, to a date more than
one year from such date or arises under a revolving credit or
similar agreement that obligates the lender or lenders to
extend credit during a period of more than one year from such
date (in each case including amounts of Funded Debt required
to be paid or prepaid within one year from the date of
calculation).
"GAAP" means generally accepted accounting principles in
the United States of America, applied on a consistent basis.
"Governmental Authority" means any Federal, state, local
or foreign court or governmental agency, authority,
instrumentality or regulatory body.
"Guaranteed Debt" of any Person means all Debt referred
to in clause (a), (b), (c), (d) or (e) of the definition of
the term "Debt" in this Section guaranteed directly or indi-
rectly in any manner by such Person, or in effect guaranteed
directly or indirectly by such Person through an agreement (a)
to pay or purchase such Debt or to advance or supply funds for
the payment or purchase of such Debt, (b) to purchase, sell or
lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to
make payment of such Debt or to assure the holder of such Debt
against loss, (c) to supply funds to, or in any other manner
invest in, the debtor (including any agreement to pay for
property or services irrespective of whether such property is
received or such services are rendered) or (d) otherwise to
assure a creditor against loss, but excluding leases at a
rental at least as favorable to the Borrower as could be
obtained in an arm's-length transaction with a party that is
not an Affiliate.
"Hazardous Materials" has the meaning specified in
Section 3.17(d).
"Interest Period" means, for any Adjusted Eurodollar Rate
Advance, the period commencing on the date of such Advance or
the date of the Conversion of any Base Rate Advance into such
Advance and ending on the last day of the period selected by
the Borrower pursuant to the provisions below, and,
thereafter, each subsequent period commencing on the last day
of the immediately preceding Interest Period and ending on the
last day of the period selected by the Borrower pursuant to
the provisions below. The duration of each such Interest
Period shall be 1, 2, 3 or 6 months, in each case as the
Borrower may, upon notice received by the Agent not later than
11:00 A.M. (New York City time) on the third Business Day
prior to the first day of such Interest Period, select;
provided, however, that:
(a) the Borrower may not select any Interest Period for
any Adjusted Eurodollar Rate Advances that ends after the
Termination Date for the Facility; and
(b) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last
day of such Interest Period shall be extended to occur on the
next succeeding Business Day; provided that if such extension
would cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business
Day.
"Interest Rate Agreement" means any forward contract,
forward option, futures contract, futures option, interest
rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate floor agreement or other
similar agreement or arrangement entered into by the Borrower.
"Investment Grade Rating Condition" means with respect to
the Borrower at any date of determination, a Senior Debt
Rating of (i) BBB- or better in the case of S&P or (ii) Baa3
or better in the case of Moody's, provided, however, that at
such date there shall not be in effect a Senior Debt Rating of
(x) BB or lower in the case of S&P or (y) Ba2 or lower in the
case of Moody's.
"Lien" means, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, assignment for security
(whether collateral or otherwise), hypothecation, encumbrance,
lease, sublease, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention
agreement relating to such asset and (c) in the case of
securities, any purchase option, call or similar right of a
third party with respect to such securities.
"LIFO" means the pretax charge against income determined
by using the last-in-first-out method of valuing inventory.
"Majority Lenders" means, at any date of determination,
(i) if on such date the Commitments exist, Lenders having
Commitments greater than or equal to 51% of the Facility;
and (ii) if on such date the Commitments have been terminated
or otherwise no longer exist, Lenders having Advances with an
aggregate unpaid principal balance greater than or equal to
51% of the Facility.
"Margin Stock" has the meaning specified under Regulation
U.
"Material Adverse Effect" means (a) a materially adverse
effect on the business, assets, operations, properties,
prospects or condition (financial or otherwise) of the
Borrower and its Subsidiaries, taken as a whole, (b) material
impairment of the ability of the Borrower to perform any of
its obligations under this Agreement or (c) material
impairment of the rights of or benefits available to the Agent
or the Lenders under this Agreement.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Borrower
or any ERISA Affiliate (other than one considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Section
414 of the Code) is making or accruing an obligation to make
contributions, or has within any of the preceding five plan
years made or accrued an obligation to make contributions.
"Net Senior Debt" means, on a Consolidated basis for the
Borrower and its Subsidiaries as of any date, Net Total Debt
as of such date minus the sum as of such date of (a) the
aggregate outstanding amount of any Subordinated Debt of the
Borrower or any of the Subsidiary Guarantors (under and as
defined in the Existing Loan Documents), (b) the capitalized
amount of any Capitalized Lease Obligations of the Borrower or
any of its Subsidiaries and (c) the aggregate outstanding face
amount of any preferred stock of the Borrower that is
classified as a liability on the Borrower's Consolidated
balance sheet.
"Net Total Debt" means, on a Consolidated basis for the
Borrower and its Subsidiaries as of any date, (a) the sum as
of such date of (i) the aggregate outstanding amount of Funded
Debt including current maturities thereof, (ii) the aggregate
outstanding amount of Commercial Paper and (iii) the aggregate
outstanding amount of Subsidiary Commercial Paper minus (b)
the sum as of such date of (i) the aggregate outstanding face
amount of letters of credit included in Funded Debt, (ii) the
aggregate outstanding amount of Debt represented by
investments made by the Borrower pursuant to Section 6.07(n)
of the Existing Credit Agreement and (iii) the aggregate
amount of Permitted Investments in excess of $100,000,000.
"Non-Extending Lender" has the meaning specified in
Section 2.16(b).
"Notice of Auction Bid Borrowing" has the meaning
specified in Section 2.01(b).
"Notice of Borrowing" has the meaning specified in
Section 2.02(a).
"Obligations" means, with respect to any Person, all
obligations of such Person under or in respect of this
Agreement in respect of loans, advances, debts, liabilities,
covenants and indemnities of any kind or nature, current or
future, whether or not evidenced by any note, guaranty or
other instrument, whether or not for the payment of money,
whether arising by reason of an extension of credit, loan,
guaranty, letter of credit, indemnification, or in any other
manner, whether direct or indirect (including those acquired
by assignment), absolute or contingent, due or to become due,
now existing or hereafter arising and however acquired. With-
out limitation of the foregoing, the Obligations of the
Borrower under this Agreement include (a) all principal,
interest, charges, expenses, indemnities, fees, attorneys'
fees and disbursements and any other amounts payable or to
become payable by the Borrower under this Agreement and (b)
any amount in respect of any of the foregoing that any Lender,
in its sole discretion, may elect to advance on behalf of the
Borrower.
"Officer's Certificate" means, as applied to any
corporation, a certificate executed on behalf of such
corporation by its principal financial officer, principal
accounting officer or Treasurer, provided that every Officer's
Certificate with respect to the compliance with a condition
precedent to the making of any Credit Event hereunder shall
include (a) a statement that the officer making or giving such
Officer's Certificate has read such condition and any
definitions or other provisions contained in this Agreement
relating thereto, (b) a statement that, in the opinion of the
signer, he or she has made or has caused to be made such
examination or investigation as is necessary to enable him or
her to express an informed opinion as to whether or not such
condition has been complied with and (c) a statement as to
whether, in the opinion of the signer, such condition has been
complied with.
"PBGC" means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA or any successor thereto.
"Permitted Investments" means (a) cash, (b) readily
marketable securities issued or guaranteed by the government
of the United States of America or any agency thereof having
a maturity at the time of issuance not exceeding one year, (c)
commercial paper rated at least A-1 by S&P or P-1 by Moody's,
in each case having a maturity at the time of issuance not
exceeding one year, and (d) certificates of deposit of or time
deposits with any commercial bank, the long-term debt of which
has been assigned a rating of at least A- (or BBB in the case
of any Lender) by S&P or A3 by Moody's and which is a Lender
and is organized and existing under the laws of the United
States of America or any state thereof or the District of
Columbia or any province of Canada.
"Permitted Lien" means any of the following:
(a) liens for taxes, assessments or governmental charges
or levies not yet overdue;
(b) liens imposed by law, such as materialmen's,
mechanics', carriers', workmen's, employees' and repairmen's
liens and other similar liens arising in the ordinary course
of the Borrower's or any of its Subsidiaries' businesses
securing obligations that (i) have not remained unpaid for
more than 60 days from the date the same shall have become
due, (ii) are being contested in good faith after bonding in
the full amount thereof or (iii) are not in excess of $500,000
in the case of a single property or $10,000,000 in the
aggregate at any time;
(c) pledges or deposits to secure obligations under
workmen's compensation laws or similar legislation or to
secure public or statutory obligations of the Borrower or any
of its Subsidiaries or deposits of cash or United States
Government bonds to secure surety or appeal bonds to which
such Person is a party;
(d) minor survey exceptions, reciprocal easement
agreements, customary encumbrances, easements or reservations
of, or rights of others for, rights of way, sewers, electric
lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of
real properties or liens or agreements incidental to the
conduct of the business of the Borrower or any of its
Subsidiaries or to the ownership, development or operation of
its properties (other than liens referred to in subparagraph
(b) above) that were not incurred in connection with
indebtedness or other extensions of credit and which do not in
the aggregate materially adversely affect the value of said
properties or materially impair their use in the operation of
the business of such Person;
(e) (i) purchase money liens or purchase money security
interests upon or in any property, provided that the principal
amount of the Debt incurred that is secured by such purchase
money liens or purchase money security interests shall not, in
any event, exceed $25,000,000 in the aggregate in any Fiscal
Year, and provided further that any such lien shall be placed
on the property within two years following the purchase of
such property and any such purchase money security interest
shall be perfected within 20 days following the placement of
any such lien on such property; and (ii) liens and security
interests in connection with leases of land or buildings or
equipment that may be treated as Capital Lease Obligations;
provided, however, that no lien or security interest referred
to in this clause (e) shall extend to or cover any property
other than the related property being acquired or leased (as
the case may be) and the proceeds thereof; and provided
further that the deferred purchase price (not including
financing costs) relating to such purchase money liens or
purchase money security interest shall not be more than 80% of
the total price of the property being acquired;
(f) liens of the Borrower or its Subsidiaries listed on
Schedule 6.01 to the Existing Credit Agreement, a copy of
which Schedule is annexed hereto;
(g) liens to secure any extension, renewal or
replacement (or successive extensions, renewals or
replacements) as a whole, or in part, of any Debt secured by
any lien referred to in the foregoing clause (e) or (f),
provided that (i) such extended, renewed or replaced lien
shall be limited to all or a part of the same property that
secured the lien extended, renewed or replaced (plus
improvements on such property) and cash proceeds thereof and
(ii) the Debt secured by such lien at such time is not
increased except as otherwise permitted by this Agreement;
(h) liens resulting from the grant of franchises or
licenses as provided in the Existing Loan Documents;
(i) any other lien or agreement permitted by (x) the
Existing Credit Agreement, by the express terms thereof
without regard to any waiver, modification or amendment
thereof, or (y) by this Agreement, whether by the express
terms hereof or by any waiver, modification or amendment
hereof;
(j) liens securing Debt permitted by Section 6.02(k) and
6.02(o) of the Existing Credit Agreement and liens on assets
acquired or invested in pursuant to Section 6.07(f), 6.07(g)
or 6.07(i) of the Existing Credit Agreement and existing at
the time of such acquisition or investment;
(k) purchase money security interests or statutory liens
(other than as described in the foregoing clause (e)) upon or
in any inventory, equipment or other Property, including
proceeds thereof, acquired in the ordinary course of business
in favor of the vendors thereof or extensions, renewals or
replacements of any of the foregoing for the same or a lesser
amount;
(l) liens (other than liens described in the foregoing
clauses (a) through (k)) created after the Effective Date
that have been expressly approved by the Agent in writing,
provided that any such lien securing Debt in an aggregate
amount exceeding $50,000,000 from July 19, 1994 shall have
been expressly approved by the Majority Lenders in writing; or
(m) liens on accounts receivable granted by the Borrower
or any of its Subsidiaries in connection with any Receivables
Securitization; provided, however, that no lien in favor of
the PBGC shall, in any event, be a Permitted Lien.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or any other entity,
or a government (domestic or foreign) or any political
subdivision or any agency thereof.
"Plan" means any pension plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code that is maintained for current or
former employees, or any beneficiary thereof, of the Borrower
or any ERISA Affiliate.
"Property Held for Sale" means at any time Real Property
the book value of which is reflected in the item "Property
Held for Sale" on the Consolidated balance sheet of the
Borrower most recently delivered to the Lenders pursuant to
Section 5.03(a) or 5.03(b).
"Real Estate Capital Expenditures" means all Capital
Expenditures permitted pursuant to Section 6.08 of the
Existing Credit Agreement that are made in connection with (i)
the acquisition or development of real property (and related
fixtures and personal property) on which the Borrower or any
of its Subsidiaries intends to open new stores or other
facilities related to the Borrower's primary business, (ii)
the purchase of real property (and related fixtures and
personal property) currently being leased by the Borrower or
its Subsidiaries or (iii) the acquisition or development of
real property (and related fixtures and personal property)
permitting the expansion of existing stores or other
facilities related to the Borrower's line of primary business.
"Real Property" means all the Borrower's and its
Subsidiaries' rights, title and interest in and to land,
improvements and fixtures.
"Receivables Securitization" means any securitization by
the Borrower or any of its Subsidiaries of accounts
receivables of the Borrower or any of its Subsidiaries
yielding gross cash proceeds to the Borrower and its
Subsidiaries not in excess of $250,000,000.
"Reference Banks" means BNY and Bank of Montreal.
"Register" has the meaning specified in Section 9.04(d).
"Regulation G" means Regulation G of the Board as from
time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Regulation U" means Regulation U of the Board as from
time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Regulation X" means Regulation X of the Board as from
time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Related Documents" means the Subordinated Debt Documents
and the Senior Debt Documents.
"Reportable Event" means any reportable event as defined
in Section 4043(b) of ERISA or the regulations issued
thereunder with respect to a Plan (other than a Plan
maintained by an ERISA Affiliate that is considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Section
414 of the Code).
"Responsible Officer" of any corporation means any
executive officer or Financial Officer of such corporation and
any other officer or similar official thereof responsible for
the administration of the obligations of such corporation in
respect of this Agreement.
"Rolling Period" means, in respect of any Fiscal Quarter,
such Fiscal Quarter and the three preceding Fiscal Quarters.
"Senior Debt Ratings" means at any time (a) if any Senior
Notes are outstanding at such time, the ratings of Moody's and
S&P in effect at such time with respect to the Senior Notes,
(b) if no Senior Notes are outstanding at such time, the
ratings of Moody's and S&P in effect at such time with respect
to other senior unsecured non-credit-enhanced long-term debt
of the Borrower and (c) if no senior unsecured
non-credit-enhanced long-term debt of the Borrower is
outstanding at such time, the ratings of Moody's and S&P that
would be in effect at such time with respect to outstanding
Advances under the Facility, as determined by the Agent in
good faith at any time from the most senior unsecured
non-credit-enhanced long-term debt of the Borrower outstanding
at such time.
"Senior Debt Documents" means the Senior Note Indentures
and any other indentures, loan agreements or other agreements,
notes or similar instruments relating to Senior Notes, as such
indentures, loan agreements or other agreements, notes or
similar instruments may be amended, supplemented or otherwise
modified from time to time after the date of such issuance in
compliance with Section 6.09 and any other indentures,
agreements or instruments pursuant to which any Senior Notes
are issued or refinanced from time to time.
"Senior Note Indentures" means (a) the Indenture, dated
as of January 1, 1993, between the Borrower, as issuer, and
IBJ Xxxxxxxx Bank & Trust Company, as trustee, (b) the
Indenture, dated as of July 1, 1993, between the Borrower, as
issuer, and Star Bank, National Association, as trustee, and
(c) the Indenture, dated as of July 15, 1996, between the
Borrower, as issuer, and Comerica Bank, as trustee, in each
case relating to the Senior Notes, as such Indentures may be
amended, supplemented or otherwise modified hereafter from
time to time in compliance with Section 6.09.
"Senior Notes" means the Borrower's 9-1/4% Senior Secured
Debentures due 2005, the Borrower's 8-1/2% Senior Secured
Debentures due 2003 and the Borrower's 8.15% Senior Notes due
2006.
"S&P" means Standard & Poor's Corporation.
"Subordinated Debt" means Debt of the Borrower that is
subordinated to all Obligations of the Borrower from time to
time under this Agreement.
"Subordinated Debt Documents" means the Subordinated Note
Indentures and any other indentures, loan agreements or other
agreements, notes or similar instruments relating to
Subordinated Notes, as such indentures, loan agreements or
other agreements, notes or similar instruments may be amended,
supplemented or otherwise modified from time to time after
the date of such issuance in compliance with Section 6.09 and
any other indentures, agreements or instruments pursuant to
which any Subordinated Notes are issued or refinanced from
time to time.
"Subordinated Note Indentures" means (a) the Indenture
dated as of March 15, 1992, between the Borrower, as issuer,
and Xxxxxx Trust and Savings Bank, as trustee, pursuant to
which the Borrower issued its 9-3/4% Senior Subordinated
Debentures due February 15, 2004, (b) the First Supplemental
Indenture dated as of April 1, 1992, between the Borrower, as
issuer, and Xxxxxx Trust and Savings Bank, as trustee,
pursuant to which the Borrower issued its 9-3/4% Senior
Subordinated Debentures due February 15, 2004, Series B, (c)
the Fourth Supplemental Indenture dated as of August 1, 1992,
between the Borrower, as issuer, and Xxxxxx Trust and Savings
Bank, as trustee, pursuant to which the Borrower issued its
9-7/8% Senior Subordinated Xxxxxxxxxx xxx Xxxxxx 0, 0000,
(x) the Sixth Supplemental Indenture, as amended and
restated, dated as of April 8, 1993, between the Borrower, as
issuer, and Xxxxxx Trust and Savings Bank, as trustee,
pursuant to which the Borrower issued its General Term Notes,
Series A, (e) the First Supplemental Indenture dated as of
October 15, 1993, between the Borrower, as issuer, and Star
Bank, N.A., as trustee, pursuant to which the Borrower issued
its General Term Notes, Series B and (f) the Second
Supplemental Indenture dated as of May 1, 1992, between the
Borrower, as issuer, and Xxxxxx Trust and Savings Bank, as
trustee, pursuant to which the Borrower issued its 10% Senior
Subordinated Notes due May 1, 1999, as such Indentures may be
amended, supplemented or otherwise modified hereafter from
time to time in compliance with Section 6.09.
"Subordinated Notes" means the Borrower's 9-3/4% Senior
Subordinated Debentures due February 15, 2004, 9-3/4% Senior
Subordinated Debentures due February 15, 2004, Series B,
9-7/8% Senior Subordinated Debentures due August 1, 2002, 10%
Senior Subordinated Notes due May 1, 1999, General Term Notes,
Series A and General Term Notes, Series B.
"Subsidiary" of any Person means any corporation,
partnership, joint venture, trust or estate of which (or in
which) more than 50% of (a) the outstanding capital stock
having Voting Power to elect a majority of the Board of
Directors of such corporation (irrespective of whether at the
time capital stock of any other class or classes of such
corporation shall or might have Voting Power upon the
occurrence of any contingency), (b) the interest in the
capital or profits of such partnership or joint venture or
(c) the beneficial interest of such trust or estate, is at
the time directly or indirectly owned by such Person, by such
Person and one or more of its other Subsidiaries or by one or
more of such Person's other Subsidiaries.
"Termination Date" means December 11, 1997, as the same
may be extended from time to time in accordance with Section
2.16, or such earlier date on which the Advances shall become
due and payable, whether by acceleration or otherwise.
"Transactions" has the meaning assigned to such term in
Section 3.02.
"Type" means, with respect to any Advance, a Base Rate
Advance or an Adjusted Eurodollar Rate Advance.
"U.S. dollars" or "$" means lawful money of the United
States of America.
"Withdrawal Liability" means liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally.
The definitions in Section 1.01 shall apply equally to
both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include
the corresponding masculine, feminine and neuter forms. The
words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". All references
herein to Articles, Sections, Exhibits and Schedules shall be
deemed to be references to Articles and Sections of, and
Exhibits and Schedules to, this Agreement unless the context
shall otherwise require. 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 GAAP as in effect from time to
time, applied on a basis consistent with the application used
in the financial statements referred to in Section 3.05(b);
provided, however, that for purposes of making any determina-
tion required by Article 6, all accounting terms used herein
shall be interpreted and all accounting determinations
hereunder shall be made in accordance with GAAP as applied by
the Borrower on January 1, 1993.
ARTICLE 2. THE ADVANCES
SECTION 2.01. The Advances
(a) The Advances. Each Lender severally agrees, on the
terms and subject to the conditions set forth in this
agreement, to make one or more advances (such advances,
together with Auction Bid Advances as provided in subsection
(b) of this Section 2.01 to the extent any Lender elects to
make them, being the "Advances") to the Borrower from time to
time on any Business Day during the period from the Effective
Date to but excluding the Termination Date in an aggregate
amount not to exceed at any time outstanding the amount set
forth opposite such Lender's name on Schedule 2.01 or, if such
Lender has entered into one or more Assignments and
Acceptances, set forth for such Lender in the Register
maintained by the Agent pursuant to Section 9.04(d) (such
amount, as it shall be reduced or terminated pursuant to this
Section 2.01 or pursuant to Section 2.04, being such Lender's
"Commitment"); provided, however, that the Facility Usage
shall not exceed the Facility. Notwithstanding anything
herein to the contrary, for purposes of determining the amount
of a Lender's Commitment in respect of an Advance (other than
an Auction Bid Advance) requested by the Borrower, the
outstanding amount of any Auction Bid Advances made by such
Lender shall be disregarded. Each Borrowing consisting of
Adjusted Eurodollar Rate Advances shall have the same Interest
Period and shall be in an aggregate amount not less than
$1,000,000. Each Borrowing consisting of Base Rate Advances
shall be in an aggregate amount not less than $1,000,000.
Within the limits of the foregoing, the Borrower may borrow
under this Section 2.01(a), repay pursuant to Section 2.05(a)
or prepay pursuant to Section 2.09(a) and reborrow under this
Section 2.01(a).
(b) The Auction Bid Advances. (i) Each Lender severally
agrees that the Borrower may make Auction Bid Borrowings under
this Section 2.01(b)(i) from time to time on any Business Day
during the period from the Effective Date until the date that
is five Business Days prior to the Termination Date, in the
manner set forth below, provided that, immediately after
giving effect to each such Auction Bid Advance, Facility Usage
shall not exceed the Facility:
(A) The Borrower, either directly or through the
Agent, may request an Auction Bid Borrowing or Auction
Bid Borrowings under this Section 2.01(b) by delivering
to the Agent and some or all of the Lenders, by
telephone, telex or cable, confirmed immediately in writing
or by telecopier, a notice of an Auction Bid Borrowing or
Borrowings (a "Notice of Auction Bid Borrowing"), in
substantially the form of Exhibit A-2 or in such other form as the
Agent and the Borrower may agree upon specifying the date and
aggregate amount of the proposed Auction Bid Borrowing, the maturity
date for repayment of each Auction Bid Advance to be made as part
of such Auction Bid Borrowing (which maturity date may
not be earlier than the date that is seven days after the
date of such Auction Bid Borrowing may not be later than
the date that is 90 days after the date of such Auction
Bid Borrowing and in any case may not be later than the
Termination Date), whether the Lenders should offer to
make Fixed Rate Advances or Adjusted Eurodollar Rate
Advances, the interest payment date or dates relating
thereto and any other terms to be applicable to such
Auction Bid Borrowing, not later than (1) 12:00 noon (New
York City time) on the same Business Day as any proposed
Auction Bid Borrowing consisting of Fixed Rate Advances
and (2) 12:00 noon (New York City time) at least three
Business Days, or, if through the Agent, 10:00 a.m. (New
York City time) at least four Business Days prior to the
date of a proposed Auction Bid Borrowing consisting of
Adjusted Eurodollar Rate Advances.
(B) Each Lender so notified may, if, in its sole
discretion, it elects to do so, irrevocably offer to make
one or more Auction Bid Advances (which Auction Bid
Advances may, subject to the provisos to the first
sentence to this Section 2.01(b)(i), have a principal amount
exceeding such Lender's Commitment) to the Borrower as
part of such proposed Auction Bid Borrowing at a Fixed Rate
or Rates or a margin or margins relative to the Adjusted
Eurodollar Rate, as requested by the Borrower. Each Lender
electing to make such an offer shall do so by notifying
the Borrower or the Agent before such time and date as is
specified in the Notice of Auction Bid Borrowing in
subparagraph (A) above, of the minimum amount and maximum
amount of each Auction Bid Advance that such Lender would
be willing to make as part of such proposed Auction Bid
Borrowing (which amount may exceed such Lender's
Commitment), the Fixed Rate or Rates or margin or margins
relative to the Adjusted Eurodollar Rate, as requested by
the Borrower, that such Lender would be willing to accept
for such Auction Bid Advance and such Lender's Applicable
Lending Office with respect to such Auction Bid Advance,
provided that, if the Agent in its capacity as a Lender
shall, in its sole discretion, elect to make any such offer,
it shall notify the Borrower of such offer before 15
minutes prior to the Borrower's deadline specified in
paragraph (A) above on the date on which notice of such
election is to be given to the Agent by the other Lenders.
If any Lender shall elect not to make such an offer, such Lender
shall so notify the Agent, before such time as is specified in the
Notice of Auction Bid Borrowing on the date on which
notice of such election is to be given to the Borrower or
the Agent, as the case may be, by the other Lenders, and
such Lender shall not be obligated to, and shall not,
make any Auction Bid Advance as part of such Auction Bid
Borrowing, provided that the failure by any Lender to
give such notice shall not cause such Lender to be
obligated to make any Auction Bid Advance as part of such
proposed Auction Bid Borrowing.
(C) The Borrower (either directly or through the
Agent) shall, in turn, before such time and date as is
specified in the Notice of Auction Bid Borrowing, either
(x) cancel such Auction Bid Borrowing by giving
the Lenders who received notice pursuant to
paragraph (A) above notice to that effect, or
(y) accept one or more of the offers (or
portions of such offers) made by any Lender or
Lenders pursuant to paragraph (B) above, in its sole
discretion, by giving notice to the applicable Lender
or Lenders of the amount of each Auction
Bid Advance to be made by each Lender as part of
such Auction Bid Borrowing, with simultaneous notice
thereof to the Agent, and reject any remaining
offers made by Lenders pursuant to paragraph (B)
above by giving them notice to that effect.
(D) If the Borrower notifies the Agent that such
Auction Bid Borrowing is canceled pursuant to paragraph
(C)(x) above, the Borrower or the Agent, as the case
may be, shall give prompt notice thereof to the Lenders
and such Auction Bid Borrowing shall not be made.
(E) If the Borrower accepts one or more of the
offers (or portions of such offers) made by any Lender or
Lenders pursuant to paragraph (C)(y) above, the Borrower
or the Agent, as the case may be, shall in turn promptly
notify each Lender that is to make an Auction Bid Advance
as part of such Auction Bid Borrowing, of the amount of
each Auction Bid Advance to be made by such Lender as
part of such Auction Bid Borrowing.
(ii) Each Lender that is to make an Auction Bid
Advance as part of an Auction Bid Borrowing shall, before
12:00 noon (New York City time) on the date of such Auction
Bid Borrowing specified in the Notice of Auction Bid Borrowing
relating thereto, make available for the account of its
Applicable Lending Office to the Agent in immediately
available funds, such Lender's ratable portion of such Auction
Bid Borrowing. Upon fulfillment of the applicable conditions
set forth in Article 4 and after receipt by the Agent of such
funds, the Agent will make such funds available to the
Borrower in like funds as received. Promptly after each
Auction Bid Borrowing, the Agent will notify each Lender of
the amount of the Auction Bid Borrowing.
(iii) Each Auction Bid Borrowing shall be in an
aggregate principal amount of not less than $1,000,000.
Following the making of each Auction Bid Borrowing, the
Borrower shall be in compliance with the limitations set forth
in the proviso to the first sentence of subsection (i) above.
(iv) Within the limits and on the conditions set
forth in this Section 2.01(b), the Borrower may from time to
time borrow under this Section 2.01(b), repay or prepay pur-
suant to subsection (v) below, and reborrow under this Section
2.01(b).
(v) The Borrower shall repay to the Agent for the
account of each Lender that has made, or holds the right to
repayment of, an Auction Bid Advance on the maturity date of
each Auction Bid Advance (such maturity date being that
specified by the Borrower for repayment of such Auction Bid
Advance in the related Notice of Auction Bid Borrowing
delivered pursuant to subsection (ii)(A) above) the
then-unpaid principal amount of such Auction Bid Advance. The
Borrower shall not have any right to prepay any principal
amount of any Auction Bid Advance unless, and then only on the
terms, specified by the Borrower for such Auction Bid Advance
in the related Notice of Auction Bid Borrowing delivered
pursuant to subsection (ii)(A) above.
(vi) The Borrower shall pay interest on the unpaid
principal amount of each Auction Bid Advance from and
including the date of such Auction Bid Advance to but
excluding the date the principal amount of such Auction Bid
Advance is repaid in full, at the rate of interest for such
Auction Bid Advance (including any rate specified for past due
amounts) specified by the Lender making such Auction Bid
Advance in its notice with respect thereto delivered pursuant
to subsection (i)(B) above, payable on the interest payment
date or dates specified by the Borrower for such Auction Bid
Advance in the related Notice of Auction Bid Borrowing
delivered pursuant to subsection (i)(A) above.
(vii) In respect of any Auction Bid Borrowing
accepted by the Borrower, the Borrower shall indemnify each
Lender whose bid has been accepted, in whole or in part,
against any loss, cost or expense incurred by such Lender
solely as a result of any failure by the Borrower to borrow on
the date specified in the Auction Bid Notice of Borrowing for
such Auction Bid Borrowing, including any loss (including loss
of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund such Auction Bid Borrowing
when such Auction Bid Borrowing to be made by such Lender,
solely as a result of such failure, is not made on such date.
Without prejudice to the survival of any other provision of
this Agreement, the provisions of this paragraph shall survive
any termination of this Agreement.
SECTION 2.02. Making the Advances.
(a) Each Borrowing (other than an Auction Bid Borrowing)
consisting of Advances (a "Borrowing") shall be made on notice
(a "Notice of Borrowing"), given by the Borrower to the Agent
not later than 11:00 a.m. (New York City time) on (i) if such
Advances are Adjusted Eurodollar Rate Advances, the third
Business Day prior to the date of the proposed Borrowing or
(ii) if such Advances are Base Rate Advances, the Business Day
prior to the date of the proposed Borrowing. The Agent shall
give to each Lender prompt notice thereof by telex, telecopier
or cable, confirmed promptly thereafter in writing. Such
Notice of Borrowing shall be by telex, telecopier or cable, in
substantially the form of Exhibit A-1 or in such other form as
the Agent and the Borrower may agree upon, specifying therein
the Borrower and the requested (A) date of the proposed
Borrowing, (B) Type of Advances comprising the proposed
Borrowing, (C) amount of the proposed Borrowing, (D) Interest
Period for the proposed Borrowing if such Borrowing is
comprised of Adjusted Eurodollar Rate Advances and (E)
additional information set forth in Exhibit A-1, as the case
may be. If the proposed Borrowing is comprised of Adjusted
Eurodollar Rate Advances, the Agent shall promptly notify the
Borrower and each Lender of the applicable interest rate under
Section 2.06. Each Lender shall, before 11:00 a.m. (New York
City time) on the date of the Borrowing, make available for
the account of its Applicable Lending Office to the Agent at
the Agent's address referred to in Section 9.01, or at such
other address and account as shall be designated by the Agent
in writing to the Lenders, in immediately available funds,
such Lender's ratable portion of the Borrowing. After the
Agent's receipt of such funds and upon fulfillment of the
conditions set forth in Article 4, the Agent will make such
funds available to the Borrower at the Agent's aforesaid
address in like funds as received.
(b) Anything in Section 2.08 to the contrary
notwithstanding:
(i) if the Adjusted Eurodollar Rate is then being
determined by reference to rates affected by the
Reference Banks and if fewer than two Reference Banks
furnish timely information to the Agent for determining
the Adjusted Eurodollar Rate for any Adjusted Eurodollar
Rate Advances,
(A) the Agent shall forthwith notify the Borrower
and the Lenders that the interest rate cannot be
determined for such Adjusted Eurodollar Rate Advances;
(B) each such Advance will automatically, on the
last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance (or if such Advance is
then a Base Rate Advance, will continue as a Base Rate
Advance); and
(C) the obligations of the Lenders to make, or to
Convert Advances into, Adjusted Eurodollar Rate Advances
shall be suspended until the Agent shall notify the
Borrower and the Lenders that the circumstances causing
such suspension no longer exist;
(ii) if, with respect to any Adjusted Eurodollar
Rate Advances, Majority Lenders shall notify the Agent
that the Adjusted Eurodollar Rate for any Interest Period
for such Adjusted Eurodollar Rate Advances will not
adequately reflect the cost to such Lenders of making or
funding their respective Adjusted Eurodollar Rate
Advances for such Interest Period, the Agent shall
forthwith so notify the Borrower and the Lenders,
whereupon
(A) each such Adjusted Eurodollar Rate Advance will
automatically, on the last day of the then-existing
Interest Period therefor, Convert into a Base Rate Advance
(or, if such Advance is then a Base Rate Advance, will
continue as a Base Rate Advance), and
(B) the obligations of the Lenders to make, or to
Convert Advances into, Adjusted Eurodollar Rate Advances
shall be suspended until the Agent shall notify the
Borrower and the Lenders that the circumstances causing
such suspension no longer exist; and
(iii) if the Borrower shall select an Interest
Period of six months for any Adjusted Eurodollar Rate
Advances and any Lender shall notify the Agent that the
Adjusted Eurodollar Rate for such Interest Period will
not adequately reflect the cost to such Lender of making or
funding its Adjusted Eurodollar Rate Advance for such
Interest Period, the Agent shall forthwith so notify the
Borrower and the Lenders, whereupon
(A) each such Adjusted Eurodollar Rate Advance will
automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance
(or, if such Advance is then a Base Rate Advance, will
continue as a Base Rate Advance), and,
(B) the obligations of the Lenders to make, or to
Convert Advances into, Adjusted Eurodollar Rate Advances
having an Interest Period of six months shall be
suspended until the Agent shall notify the Borrower and
such Lenders that the circumstances causing such suspension
no longer exist.
(c) Each Notice of Borrowing shall be irrevocable and
binding on the Borrower and, in respect of any Borrowing
comprised of or including Adjusted Eurodollar Rate Advances
specified in such Notice of Borrowing, the Borrower shall
indemnify each Lender against any loss, cost or expense
incurred by such Lender solely as a result of any failure by
the Borrower to borrow on the date specified in the Notice of
Borrowing for such Borrowing, including any loss (including
loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other
funds acquired by such Lender to fund the Adjusted Eurodollar
Rate Advance to be made by such Lender as part of such
Borrowing when such Adjusted Eurodollar Rate Advance, solely
as a result of such failure, is not made on such date.
Without prejudice to the survival of any other provision of
this Agreement, the provisions of this paragraph shall survive
any termination of this Agreement.
(d) Unless the Agent shall have received notice from a
Lender prior to the date of any Borrowing (other than an
Auction Bid Borrowing) that such Lender will not make
available to the Agent such Lender's ratable portion of such
Borrowing, the Agent may assume that such Lender has made such
portion available to the Agent on the date of such Borrowing
in accordance with this Section 2.02 and the Agent may, in
reliance on such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent such
Lender shall not have made available to the Agent on the date
of any Borrowing such Lender's ratable portion of such
Borrowing, such Lender agrees, and the Borrower agrees, to pay
or repay to the Agent forthwith on demand such amount together
with interest thereon, for each day from the date such amount
is made available to the Borrower until the date such amount
is paid or repaid to the Agent, at (in the case of such
Lender) the Federal Funds Rate and (in the case of the
Borrower) the Base Rate plus the Applicable Percentage
(provided that such payment at the Federal Funds Rate or the
Base Rate (plus the Applicable Percentage) with respect to any
Adjusted Eurodollar Rate Advance shall not affect the status
of such Advance as an Adjusted Eurodollar Rate Advance). If
such Lender shall pay to the Agent such amount, the amount so
paid shall constitute such Lender's Advance as part of such
Borrowing for purposes of this Agreement from and including
the date of such Borrowing.
(e) The failure of any Lender to make the Advance to be
made by it as part of any Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its
Advance on the date of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the date of any
Borrowing.
SECTION 2.03. Fees
(a) Facility Fees. The Borrower agrees to pay to the
Agent for distribution to each Lender a facility fee (the
"Facility Fee") with respect to such Lender's Commitment, at a
rate per annum equal to the Applicable Percentage from time to
time in effect on the aggregate amount of such Lender's
Commitment, regardless of usage. The Facility Fees will
commence to accrue on the date of execution of this Agreement
and will be payable in arrears on (i) on the third day of each
January, April, July and October and (ii) on the Termination
Date.
(b) Agent's Fees. The Borrower agrees to pay to the
Agent the annual Agent's fees set forth in the separate letter
from the Agent to the Borrower dated October 15, 1996.
SECTION 2.04. Termination or Reduction of Facilities.
(a) The Commitments shall be automatically terminated on
the Termination Date.
(b) The Borrower shall have the right, upon at least
three Business Days' prior written notice to the Agent, to
terminate in whole, or reduce ratably in part (in minimum
principal amounts of $1,000,000 and in integral multiples of
$1,000,000 in excess thereof), the unused portion of the
Facility (such unused portion having been determined after
subtracting the Facility Usage from the Facility).
SECTION 2.05. Repayment of Advances.
(a) Advances. The Borrower shall repay to the Agent for
the account of the Lenders the aggregate principal amount of
the Advances (other than Auction Bid Advances) then
outstanding on the Termination Date.
(b) Auction Bid Advances. The Borrower shall repay the
aggregate principal amount of the Auction Bid Advances to the
applicable Lenders in accordance with the provisions of
Section 2.01(b)(v).
SECTION 2.06. Interest.
The Borrower shall pay interest on the unpaid principal
amount of each Advance made by each Lender from the date of
such Advance until such principal amount shall be paid in
full, at the following rates per annum:
(a) Base Rate Advances. During such periods as such
Advance is a Base Rate Advance, a rate per annum equal at all
times to the Base Rate in effect from time to time plus the
Applicable Percentage, payable quarterly in arrears on the
third day of each January, April, July and October and on the
date such Base Rate Advance shall be Converted into an
Adjusted Eurodollar Rate Advance or paid in full; provided
that commencing on the date and during the continuance of any
Event of Default the applicable interest rate for all
outstanding Base Rate Advances shall be a rate per annum equal
at all times to 2% per annum above the rate otherwise in
effect for such Base Rate Advances pursuant to this Section
2.06(a) from time to time and such interest shall be payable
on demand.
(b) Adjusted Eurodollar Rate Advances. During such
periods as such Advance is an Adjusted Eurodollar Rate
Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the Adjusted Eurodollar
Rate for such Interest Period plus the Applicable Percentage,
payable on the last day of each Interest Period and, if such
Interest Period has a duration of six months, on each day that
occurs during such Interest Period every three months from the
first day of such Interest Period, provided that commencing on
the date and during the continuance of any Event of Default
the applicable interest rate for all outstanding Adjusted
Eurodollar Rate Advances shall be a rate per annum equal at
all times to 2% per annum above the rate otherwise in effect
for such Adjusted Eurodollar Rate Advances pursuant to this
Section 2.06(b) and such interest shall be payable on demand.
SECTION 2.07. Interest Rate Determination.
(a) In the event that the Adjusted Eurodollar Rate is
then being determined by reference to rates offered by the
Reference Banks, each Reference Bank agrees to furnish to the
Agent timely information for the purpose of determining each
Adjusted Eurodollar Rate. If any one or more of the Reference
Banks shall not furnish such timely information to the Agent
for the purpose of determining any such interest rate (but at
least two Reference Banks shall have furnished such
information), the Agent shall determine such interest rate on
the basis of timely information furnished by the remaining
Reference Banks.
(b) The Agent shall give prompt notice to the Borrower
and the Lenders of the applicable interest rate determined by
the Agent for purposes of Section 2.06(a) or (b), and the
applicable rate, if any, furnished by each Reference Bank for
the purpose of determining the applicable interest rate under
Section 2.06(b).
(c) If the Borrower shall fail to select the duration of
any Interest Period for any Adjusted Eurodollar Rate Advances
in accordance with the provisions contained in the definition
of the term "Interest Period" in Section 1.01, the Agent will
forthwith so notify the Borrower and the Lenders and such
Advances will automatically, on the last day of the then
existing Interest Period therefor, Convert into Base Rate
Advances (or, if such Advances are then Base Rate Advances,
will continue as Base Rate Advances).
SECTION 2.08. Conversion of Advances.
(a) The Borrower may on any Business Day, upon notice
given to the Agent not later than 11:00 a.m. (New York City
time) on the third Business Day prior to the date of the
proposed Conversion, and subject to the provisions of Sections
2.02(c), 2.06, 2.07, 2.08(d) and 2.10(c), Convert all or any
Advances (except Auction Bid Advances) of one Type into Ad-
vances of the other Type; provided, however, that (i) except
as provided in Section 2.10(c), any Conversion of any Adjusted
Eurodollar Rate Advances into Base Rate Advances shall be made
on, and only on, the last day of an Interest Period for such
Adjusted Eurodollar Rate Advances and (ii) the Borrower may
not Convert any Base Rate Advances into Adjusted Eurodollar
Rate Advances unless such Base Rate Advances are in an
aggregate amount not less than $1,000,000. Each such notice
of a Conversion shall, within the restrictions specified
above, specify (i) the date of such Conversion, (ii) the Type
and aggregate amount of Advances to be Converted and (iii) if
such Conversion is into Adjusted Eurodollar Rate Advances, the
duration of the Interest Period for such Advances.
(b) Each notice of Conversion shall be irrevocable and
binding on the Borrower and, in respect of any notice of
Conversion to Adjusted Eurodollar Rate Advances, the Borrower
shall indemnify each Lender against any loss, cost or expense
incurred by such Lender solely as a result of any failure to
Convert on the date specified in such notice, including any
loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the
Adjusted Eurodollar Rate Advance to be made by such Lender as
part of such Conversion when such Adjusted Eurodollar Rate
Advance, solely as a result of such failure, is not made on
such date. Without prejudice to the survival of any other
provision of this Agreement, the provisions of this paragraph
shall survive any termination of this Agreement
(c) On the date on which the aggregate unpaid principal
amount of Adjusted Eurodollar Rate Advances having the same
Interest Period shall be reduced, by payment or prepayment or
otherwise, to less than $1,000,000, such Advances shall
automatically Convert into Base Rate Advances.
(d) Upon the occurrence of any Default and so long as
such Default shall continue, the right of the Borrower to
Convert any Advance into an Adjusted Eurodollar Rate Advance
shall be suspended.
SECTION 2.09. Prepayments.
(a) Optional Prepayment. The Borrower may, upon at least
three Business Days' notice in the case of Adjusted Eurodollar
Rate Advances, and upon at least one Business Day's notice in
the case of Base Rate Advances, to the Agent stating the
proposed date and aggregate principal amount of the
prepayment, (and if such notice is given the Borrower shall)
prepay the outstanding principal amounts of the Advances in
whole or ratably in part, together with accrued interest to
the date of such prepayment on the principal amount prepaid
and all fees, costs and expenses otherwise payable by the
Borrower under this Agreement with respect to the principal
amount prepaid; provided, however, that:
(i) each prepayment pursuant to this Section 2.09(a)
shall be in an aggregate principal amount of not less than
$1,000,000 or, if less, the outstanding principal amount
of such Advances; and
(ii) in the case of any such prepayment of an Adjusted
Eurodollar Rate Advance, such prepayment shall either be made
on the last day of an Interest Period for such Adjusted
Eurodollar Rate Advance or shall be made together with the
payment of all amounts required pursuant to Section 9.05(c).
(b) Mandatory Prepayments. (i) The Borrower shall, on
each Business Day, prepay Advances comprising part of the same
Borrowings in an aggregate principal amount equal to the
amount by which (A) the Facility Usage exceeds (B) the
Facility.
(ii) All prepayments by the Borrower under this
subsection (b) shall be made together with accrued interest to
the date of such prepayment on the principal amount prepaid
and shall be applied first against the Advances to be prepaid
under the Facility that are Base Rate Advances and thereafter
against the Advances to be prepaid under the Facility that are
Eurodollar Advances having Interest Periods ending as close as
possible to the date of such Prepayment.
SECTION 2.10. Increased Costs; Illegality.
(a) If, due to either (i) the introduction of or any
change (other than any change by way of imposition or increase
of reserve requirements included in the Adjusted Eurodollar
Rate Reserve Percentage) in or change in the interpretation of
any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other
Governmental Authority (whether or not having the force of
law), there shall be any increase in the cost to any Lender of
agreeing to make or making, funding or maintaining Adjusted
Eurodollar Rate Advances, then the Borrower shall from time to
time, upon demand by such Lender (with a copy of such demand
to the Agent), pay to the Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for
such increased cost. A certificate as to the amount of such
increased cost, submitted to the Borrower and the Agent by
such Lender, shall be conclusive and binding for all purposes,
absent manifest error.
(b) If any Lender determines that compliance with any
law or regulation or any guideline or request from any central
bank or other Governmental Authority (whether or not having
the force of law) affects or would affect the amount of
capital required or expected to be maintained by such Lender
or any corporation controlling such Lender and that the amount
of such capital is increased by or based upon the existence of
such Lender's commitment to lend hereunder and other
commitments of this type, then, upon demand by such Lender
(with a copy of such demand to the Agent), the Borrower shall
pay to the Agent for the account of such Lender, from time to
time as specified by such Lender, additional amounts
sufficient to compensate such Lender in the light of such
circumstances, to the extent that such Lender reasonably
determines such increase in capital to be allocable to the
existence of such Lender's commitment to lend hereunder. A
certificate as to such amounts, submitted to the Borrower and
the Agent by such Lender, shall be conclusive and binding for
all purposes, absent manifest error.
(c) Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the
interpretation of any law or regulation shall make it
unlawful, as determined by any Lender, or any central bank or
other Governmental Authority shall assert that it is unlawful,
for such Lender or its Eurodollar Lending Office to perform
its obligations hereunder to make Adjusted Eurodollar Rate
Advances or to continue to fund or maintain Adjusted
Eurodollar Rate Advances hereunder, then, on notice thereof
and demand therefor by such Lender to the Borrower through the
Agent, (i) the obligation of such Lender to make Adjusted
Eurodollar Rate Advances and to Convert Advances into Adjusted
Eurodollar Rate Advances shall terminate and (ii) the Borrower
shall forthwith Convert all Adjusted Eurodollar Rate Advances
of such Lender then outstanding into Base Rate Advances in
accordance with Section 2.08, except that such Conversion may
occur, notwithstanding Section 2.08, other than on the last
day of the respective Interest Periods for such Adjusted
Eurodollar Rate Advances, if the Borrower has paid all amounts
payable under Section 9.05(c).
SECTION 2.11. Payments and Computations.
(a) The Borrower shall make each payment hereunder
without set-off or counterclaim not later than Noon (New York
City time) on the day when due in U.S. dollars to the Agent at
Xxx Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, in immediately
available funds. the Agent will promptly thereafter cause to
be distributed (i) like funds relating to the payment of
principal, interest or Facility Fees ratably (other than
amounts payable (A) to a Lender in respect of any Auction Bid
Advance, or (B) pursuant to Sections 2.03(b), 2.10, 2.13 or
9.05) to the Lenders for the account of their Applicable
Lending Offices and (ii) like funds relating to the payment of
any other amount payable to any Lender to such Lender for the
account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement.
(b) The Borrower hereby authorizes each Lender, if and
to the extent payment is not made when due hereunder, to
charge from time to time against any or all of the Borrower's
accounts with such Lender any amount so due to such Lender
prior to any sharing under Section 2.12. Nothing contained in
this subsection (b) shall impair the obligations of any lender
under Section 2.12, the rights of the Agent or any Lender
under Section 9.06 or any other rights and remedies (including
other rights of set-off) that the Agent or such Lender may
have.
(c) All computations of interest based on the Base Rate,
the Adjusted Eurodollar Rate, any Fixed Rate or the Federal
Funds Rate, and of Facility Fees shall be made by the Agent on
the basis of a year of 360 days, in each case for the actual
number of days (including the first day but excluding the last
day) occurring in the period for which such interest or fees
are payable; provided, however, that all computations of
interest based on the Base Rate when the Base Rate is
determined by reference to the BNY Rate shall be made by the
Agent on the basis of a year of 365 or 366 days, as
applicable, in each case for the actual number of days
(including the first day but excluding the last day) occurring
in the period for which such interest is payable. Each
determination by the Agent of an interest rate or fee
hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(d) Whenever any payment hereunder shall be stated to be
due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of
payment of interest or fees, as the case may be; provided,
however, that if such extension would cause payment of
interest on or principal of Adjusted Eurodollar Rate Advances
to be made in the next following calendar month, such payment
shall be made on the next preceding Business Day.
(e) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the
Lenders hereunder that the Borrower will not make such payment
in full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date and the Agent may,
in reliance upon such assumption, cause to be distributed to
each Lender on such due date an amount equal to the amount
then due such Lender.
If and to the extent the Borrower shall not have so
made such payment in full to the Agent, each Lender shall
repay to the Agent forthwith on demand such amount distributed
to such Lender together with interest thereon, for each day
from the date such amount is distributed to such Lender until
the date such Lender repays such amount to the Agent, at the
Federal Funds Rate.
SECTION 2.12. Sharing of Payments, Etc.
If any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Advances made by it
(other than pursuant to Sections 2.03(b), 2.10, 2.13 or 9.05
and other than amounts payable to a Lender in respect of an
Auction Bid Advance) in excess of its ratable share of
payments on account of the Advances obtained by all the
Lenders, such Lender shall forthwith purchase from the other
Lenders such participations in the Advances made by the other
Lenders as shall be necessary to cause such purchasing Lender
to share the excess payment ratably with each of them;
provided, however, that, if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender,
such purchase from each Lender shall be rescinded and each
such other Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an
amount equal to such other Lender's ratable share (according
to the proportion of (a) the amount of such Lender's required
repayment to (b) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total
amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to
this Section 2.12 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of
setoff) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount
of such participation.
SECTION 2.13. Taxes.
(a) Any and all payments by the Borrower hereunder shall
be made, in accordance with Section 2.11, free and clear of
and without deduction for any and all current or future taxes,
levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto (including interest,
additions to tax, and penalties thereon) imposed by the United
States of America or any political subdivision thereof (or, in
the event that the Borrower assigns any of its rights or
obligations or any interest hereunder, by any foreign country
and its political subdivisions in which the assignee is
incorporated or is resident), excluding, in the case of each
Lender and the Agent, taxes imposed on or measured by its net
income, and franchise taxes imposed on it, by the jurisdiction
under the laws of which the Agent or such Lender (as the case
may be) is organized or any political subdivision thereof and,
in the case of each Lender, taxes imposed on or measured by
its net income, and franchise taxes imposed on it, by the
jurisdiction of such Lender's Applicable Lending Office or any
political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the
Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder to any Lender or the
Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section 2.13) such Lender or the Agent (as the case
may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any current
or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies that arise from any
payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement
(hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and the
Agent for the full amount of Taxes or Other Taxes (including
any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.13) paid by such Lender
or the Agent (as the case may be) and any liability (including
interest, expenses, additions to tax, and penalties) arising
therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. Payments
under this indemnification shall be made within 30 days from
the date such Lender or the Agent (as the case may be) makes
written demand therefor. However, in the case of any Taxes
not required by law to be deducted by the Borrower from or in
respect of any sum payable hereunder to any Lender or the
Agent, payment under this indemnification must be made by the
Borrower only if such written demand has been made within 60
days from the date on which such Lender or the Agent, as the
case may be, makes payment of the Taxes to the relevant taxing
authority.
(d) Within 30 days after the reasonable request therefor
by th Agent in connection with any payment of Taxes or Other
Taxes, the Borrower will furnish to the Agent, at its address
referred to in, or determined pursuant to, Section 9.01, the
original or a certified copy of an official receipt from the
jurisdiction to which payment is made evidencing payment
thereof or, if unavailable, a certificate from the Borrower's
treasurer or responsible officer that states that such payment
has been made and that sets forth the date and amount of such
payment.
(e) Prior to or on the Effective Date in the case of
each Lender that is a Lender on the Effective Date, and on the
date of the Assignment and Acceptance pursuant to which it
became a Lender in the case of each other Lender, and from
time to time thereafter if reasonably requested by the
Borrower or the Agent, each Lender organized under the laws of
a foreign jurisdiction that is exempt from United States
Federal withholding tax, or that is subject to such tax at a
reduced rate under an applicable treaty, with respect to
payments under this Agreement has provided or is herewith
providing the Borrower or the Agent with an Internal Revenue
Form 4224 or Form 1001 or other certificate or document
required under United States law to establish entitlement to
such exemption or reduced rate. Such form, certificate or
document will be provided by each such Lender from time to
time after the Effective Date as reasonably requested by the
Borrower or the Agent. A determination of whether a Lender is
exempt from United States Federal withholding tax or is
subject to such tax at a reduced rate shall be within the
reasonable judgment of the Lender.
(f) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 2.13
shall survive the payment in full of principal and interest
hereunder.
SECTION 2.14. Evidence of Debt Under This Agreement.
(a) Lender's Records. Each Lender will note on its
----------------
internal records with respect to each Advance made by it: (i)
the date and amount of such Advance, (ii) the character of
such Advance, as a Base Rate Advance, a Eurodollar Advance or
an Auction Bid Advance, (iii) the Interest Period and the
interest rate (without regard to the Applicable Margin)
applicable to Eurodollar Advances or Auction Bid Advances and
(iv) each payment and prepayment of the principal of each
Advance.
(b) Agent's Records. The Agent shall keep records
---------------
regarding the Advances and this Agreement in accordance with
its customary procedures for agented credits.
(c) Prima Facie Evidence. The entries made in the
--------------------
records maintained pursuant to subsections (a) and (b) above
shall be, to the extent not prohibited by applicable law,
prima facie evidence of the existence and amount of the
obligations of the Borrower recorded therein absent manifest
error; provided that the failure of the Agent or any Lender to
make any notation on its records shall not affect the
Borrower's obligations in respect of the Advances or this
Agreement.
(d) Notes. Upon the request of any Lender (in connection
-----
with a proposed assignment to a Federal Reserve Bank as
contemplated by Section 9.04(g)) to the Agent and the
Borrower, the Borrower agrees, at its expense, to execute and
deliver to the Agent for the account of such Lender one or
more promissory notes evidencing the Advance or Advances of
such Lender to the Borrower, substantially in the form of
Exhibit G hereto.
SECTION 2.15. Use of Proceeds.
The proceeds of the Advances shall be used by the
Borrower to finance the working capital needs of the Borrower
and its Subsidiaries and for other general corporate purposes
of the Borrower (including the funding of the Borrower's and
its Subsidiaries' voluntary employees' beneficiary association
trusts).
SECTION 2.16. Extensions
(a) Provided that no Default or Event of Default exists
during the periods set forth below, the Borrower may request
that the Termination Date be extended for additional 364 day
periods by delivering an Extension Request to the Agent during
the period not more than 90 days but not less than 30 days
prior to the then applicable Termination Date, and, upon the
receipt of such notice, the Agent shall promptly notify each
Lender thereof. If each Lender consents to an Extension
Request during the Extension Consent Period by giving written
notice thereof to the Borrower and the Agent, then, effective
on the first day of the Extension Consent Period, the then
applicable Termination Date shall be extended by 364 days from
and including such first day of such Extension Consent Period,
provided, however, that if the 364th day falls on a day other
than a Business Day, such extended Termination Date shall be
the Business Day immediately preceding such 364th day. Subject
to subsection (b) below, in the event that any Lender shall
not have granted its consent to an Extension Request, the then
current Termination Date shall remain in effect. Each Lender
shall endeavor to respond to each Extension Request during the
Extension Consent Period, provided that each Lender which
shall have failed so to respond by such time shall be deemed
not to have consented thereto. In the event that the Agent
receives notice from a Lender that such Lender declines to
grant an Extension Request, the Agent shall notify the
Borrower thereof.
(b) Notwithstanding any provision of subsection (a)
above to the contrary, in the event Lenders having Commitments
equal to or more than 66 2/3% of the Facility desire to extend
the Termination Date pursuant to subsection (a) above (the
"Continuing Lenders"), the Borrower shall have the right,
provided no Event of Default shall have occurred and be con-
tinuing, to replace or remove any Lender that does not desire
to extend the Termination Date (a "Non-Extending Lender") by
giving the Agent notice, no later than 20 days after the last
day of the applicable Extension Consent Period, of its intent
to extend the Termination Date. On or prior to the then
current Termination Date, the Borrower shall, with respect to
each Non-Extending Lender, either (i) reduce the Facility to
an amount equal to the amount of the Commitments of the
Continuing Lenders but not below $50,000,000 and pay to the
Agent for the account of such Non-Extending Lender all
principal and interest and other amounts owing to such
Non-Extending Lender under this Agreement (in which case the
Commitment of such Non-Extending Lender shall automatically
terminate), or (ii) replace such Non-Extending Lender. In
the event of a replacement of a Non-Extending Lender, such
Non-Extending Lender agrees to assign all of its rights and
obligations under this Agreement to an assignee selected by
the Borrower with the consent of the Agent (which consent
shall not be unreasonably withheld) upon payment by such
assignee to such Non-Extending Lender of all principal and
interest and other amounts owing to such Non-Extending Lender
under this Agreement and to execute and deliver such documents
evidencing such assignment as shall be necessary or reasonably
requested by the Borrower and reasonably satisfactory to such
Non-Extending Lender. In the event that Continuing Lenders
having Commitments equal to or more than 66 2/3% have elected
to extend the Termination Date and, after giving effect to any
reductions under clause (i) of the preceding sentence the
Facility would be greater than or equal to $50,000,000, the
then existing Termination Date shall be extended to the day
which is 364 days after the first day of the Extension Consent
Period.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the
Lenders and the Agent that:
SECTION 3.01. Organization; Powers.
The Borrower (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Ohio, (b) has all requisite power and authority to own its
property and assets and to carry on its business as now
conducted, (c) is qualified to do business in every
jurisdiction where such qualification is required by the
nature of its business, the character and location of its
property, business or customers, or the ownership or leasing
of its properties, except for such jurisdictions in which the
failure so to qualify, in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect, and (d)
has the corporate power and authority to execute, deliver and
perform its obligations under this Agreement or in connection
with the Transactions and to borrow hereunder.
SECTION 3.02. Authorization.
The execution, delivery and performance by the Borrower
of this Agreement, the Borrowings hereunder, the use of the
proceeds of the Advances, and the other transactions
contemplated by this Agreement (all the foregoing,
collectively, the "Transactions") (a) have been duly
authorized by all requisite corporate and, if required,
stockholder action and (b) will not (i) violate (A) any
provision of law, statute, rule or regulation, the certificate
of incorporation or other constitutive documents or by-laws of
the Borrower or (B) any order of any Governmental Authority,
(ii) be in conflict with, result in a breach of or constitute
(alone or with notice or lapse of time or both) a default
under any contractual obligation of the Borrower or (iii)
result in or require the creation or imposition of any Lien
upon or with respect to any property or assets now owned or
hereafter acquired by the Borrower.
SECTION 3.03. Enforceability.
This Agreement has been duly executed and delivered by
the Borrower and constitutes a legal, valid and binding
obligation of the Borrower enforceable against it in
accordance with its terms except as enforcement may be limited
by bankruptcy, insolvency or similar laws affecting creditors'
rights generally or equitable principles relating to or
limiting creditors' rights generally.
SECTION 3.04. Governmental Approvals.
No action, consent or approval of, registration or filing
with or any other action by any Governmental Authority is or
will be required in connection with the Transactions, except
for such actions, consents, approvals, registrations and
filings as have been made or obtained and are in full force
and effect.
SECTION 3.05. Financial Statements.
(a) The Borrower has heretofore delivered to the Lenders
its unaudited Consolidated balance sheet as of the Fiscal
Quarter ended October 5, 1996. Neither the Borrower nor any
of its Subsidiaries has any material contingent obligation,
material contingent liability or material liability for taxes,
long-term lease or unusual forward or long-term commitment or
obligations to retired employees for medical or other employee
benefits that is not reflected in the foregoing financial
statements, the notes thereto or the most recent financial
statements, if any, delivered pursuant to Section 5.03.
(b) The Borrower has delivered to the Lenders its
audited consolidated financial statements for the Fiscal Year
ended December 30, 1995, together with its annual report on
Form 10-K, filed with the Securities and Exchange Commission.
Such financial statements were prepared in conformity with
GAAP and fairly present the Consolidated financial position of
the Borrower and its Subsidiaries as at the date thereof and
the Consolidated results of operations and changes in
financial position of the Borrower and its Subsidiaries for
each of the periods covered thereby. Except as disclosed in
such financial statements, neither the Borrower nor any of its
Subsidiaries had, at the date of such financial statements or
as of the date of this Agreement or on the Effective Date, as
the case may be, any material contingent obligation, material
contingent liability or material liability for taxes,
long-term lease or unusual forward or long-term commitment or
obligations to retired employees for medical or other employee
benefits that is not reflected in the foregoing financial
statements or the notes thereto.
SECTION 3.06. No Material Adverse Change.
There has been no material adverse change in the
business, assets, operations, properties, prospects or
condition (financial or otherwise) of the Borrower and its
Subsidiaries, taken as a whole, since December 30, 1995.
SECTION 3.07. Title to Properties; Possession Under Leases.
(a) The Borrower and its Subsidiaries have good and
marketable title to, or valid leasehold interests in, all
their material properties and assets, except where the failure
to have such title or leasehold interests, individually or in
the aggregate, could not reasonably be expected to result in a
Material Adverse Effect. All such title to, or leasehold
interest in, material properties and assets are free and clear
of Liens, other than Permitted Liens.
(b) Each of the Borrower and its Subsidiaries has
complied with all obligations under all leases to which it is
a party and enjoys peaceful and undisturbed possession under
all such leases necessary in any respect for the operation of
their respective properties and assets, except where the
failure so to comply, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.08. Subsidiaries.
Schedule 3.08 sets forth as of the Effective Date a list of
all the Subsidiaries of the Borrower, their jurisdiction of
organization and the percentage ownership interest of each of
them and any other Subsidiary therein. The capital stock of
each of the Subsidiaries is duly authorized, validly issued,
fully paid and nonassessable and, except as set forth on
Schedule 3.08, is owned free and clear of all Liens. No
authorized but unissued treasury shares of capital stock of
the Borrower or any such Subsidiary are subject to any option,
warrant, right to call or commitment of any kind or character
except as set forth on Schedule 3.08.
SECTION 3.09. Litigation; Compliance with Laws.
(a) Except as set forth in Schedule 3.09, there are not
any actions, suits, proceedings or arbitrations at law or in
equity or by or before any Governmental Authority now pending
or, to the knowledge of the Borrower, threatened against or
affecting the Borrower or any of its Subsidiaries or any
business or property of any such Person that (i) involve this
Agreement or the Transactions or (ii) could reasonably be
expected to, individually or in the aggregate, result in a
Material Adverse Effect.
(b) Neither the Borrower nor any of its Subsidiaries nor
any of their respective properties or assets is (i) in
violation of, nor will the continued operation of their
properties and assets as currently conducted violate, any law,
rule, regulation, statute (including any zoning, building,
environmental and safety law, ordinance, code or approval or
any building permits) or any restrictions of record or
agreements affecting such properties or assets, where such
violations could reasonably be expected to have a material
adverse effect on the value, use or operation of any such
property or asset, or (ii) in default with respect to any
judgment, writ, injunction, decree or order of any
Governmental Authority, where such defaults, individually or
in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.10. Agreements.
Neither the Borrower nor any of its Subsidiaries is in
default with respect to any contractual obligation of it or by
which it or any of its properties or assets are or may be
bound, where such default could reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.11. Federal Reserve Regulations.
(a) Neither the Borrower nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing
or carrying Margin Stock.
(b) No part of the proceeds of any Advance will be used,
whether directly or indirectly, and whether immediately,
incidentally or ultimately, (i) to purchase or carry Margin
Stock or to extend credit to others for the purpose of
purchasing or carrying Margin Stock or to refund indebtedness
originally incurred for such purpose or (ii) for any purpose
that entails a violation of, or is inconsistent with, the
provisions of the Regulations of the Board, including
Regulation G, U or X.
SECTION 3.12. Investment Company Act; Public Utility Holding
Company Act.
Neither the Borrower nor any of its Subsidiaries (a) is
an "investment company" as defined in, or is subject to
regulation under, the Investment Company Act of 1940 or (b) is
a "holding company" as defined in, or is subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION 3.13. Use of Proceeds.
The Borrower will use the proceeds of the Advances only
for the purposes specified in Section 2.15.
SECTION 3.14. Tax Returns.
Each of the Borrower and its Subsidiaries has filed or
caused to be filed all Federal, state and local income and
other material tax returns required to have been filed by it
or with respect to it and has paid or caused to be paid all
taxes shown to be due and payable on such returns or on any
assessments received by it or with respect to it, except taxes
that are being contested in good faith by appropriate
proceedings and for which it has set aside on its books
adequate reserves in accordance with GAAP.
SECTION 3.15. No Material Misstatements.
The representations and warranties contained herein and
such other materials, documents and written information that
the Borrower or any of its Affiliates may have furnished to
the Lenders, taken as a whole, was, as of the date such
representations and warranties were made or such materials,
documents and written information were provided, accurate in
all material respects and does not contain any untrue
statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading,
provided that to the extent any such information therein was
based upon or constitutes a forecast or projection, the
Borrower represents only that it acted in good faith and
utilized reasonable assumptions, due and careful consideration
and the information actually known to Responsible Officers at
the time in the preparation of such information.
SECTION 3.16. Employee Benefit Plans.
Each of the Borrower and its ERISA Affiliates is in
compliance in all material respects with the applicable
provisions of ERISA and the Code and the regulations and
published interpretations thereunder. No Reportable Event has
occurred in respect of any Plan of the Borrower or any ERISA
Affiliate. As of the Effective Date, the present value of all
benefit liabilities under each Plan (based on those
assumptions used to fund such Plan) did not, as of the last
annual valuation date applicable thereto, exceed the value of
the assets of such Plan. Neither the Borrower nor any ERISA
Affiliate has incurred any Withdrawal Liability that
materially adversely affects the financial condition of the
Borrower and its ERISA Affiliates taken as a whole. Neither
the Borrower nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization
or has been terminated within the meaning of Title IV of
ERISA, and no Multiemployer Plan is reasonably expected to be
in reorganization or to be terminated, where such
reorganization or termination has resulted or could reasonably
be expected to result in an increase in the contributions
required to be made to such Plan that would materially and
adversely affect the financial condition of the Borrower and
its ERISA Affiliates taken as a whole.
SECTION 3.17. Environmental and Safety Matters.
Except as set forth on Schedule 3.17:
(a) The Borrower and each of its Subsidiaries has
obtained and is in compliance with all permits, licenses and
other authorizations that are required and material with
respect to the operation of the business under any
Environmental Law, and each such permit, license and
authorization is in full force and effect.
(b) The Borrower and each of its Subsidiaries is in
compliance with all limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations,
schedules and timetables contained in any Environmental Law
applicable and material to it and its business, assets,
operations and properties, including those arising under the
Resource Conservation and Recovery Act of 1976, as amended,
the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986 ("CERCLA"), the Federal Water
Pollution Control Act, as amended, the Federal Clean Air Act,
as amended, the Occupational, Safety and Health Act and the
Toxic Substances Control Act and any analogous or comparable
state laws, except where the failure so to comply could not
reasonably be expected to result in a Material Adverse Effect.
(c) There is no civil, criminal or administrative
action, suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter or request
for information pending or, to the knowledge of the Borrower
or any of its Subsidiaries, after reasonable inquiry,
threatened against the Borrower or any of its Subsidiaries
under any Environmental Law, except to the extent that the
same could not reasonably be expected to result in a Material
Adverse Effect.
(d) Neither the Borrower nor any of its Subsidiaries has
received notice that it has been identified as a potentially
responsible party under CERCLA or any comparable state law,
nor has any such Person received any notification that any
hazardous substances or any pollutant or contaminant, as
defined in CERCLA and its implementing regulations, or any
toxic substance, hazardous waste, hazardous constituents,
hazardous materials, asbestos or asbestos containing material,
polychlorinated biphenyls, petroleum, including crude oil and
any fractions thereof, or other wastes, chemicals, substances
or materials regulated by any Environmental Laws (collectively
"Hazardous Materials") that it or any of their respective
predecessors in interest has used, generated, stored, treated,
handled, transported or disposed of, has been found at any
site at which any Governmental Authority or private party is
conducting a removal action, remedial investigation or other
action pursuant to any Environmental Law, except to the extent
that the same could not reasonably be expected to result in a
Material Adverse Effect.
(e) There have been no releases or threatened releases
(in each case as defined in CERCLA) of Hazardous Materials by
the Borrower or any of its Subsidiaries on, upon, into or from
any of their respective facilities or operations that could
reasonably be expected to result in a Material Adverse Effect.
To the best knowledge of the Borrower and each of its
Subsidiaries, there have been no such releases or threatened
releases on, upon, under or into any real property in the
vicinity of any of their respective facilities or operations
that, through soil, surface water or groundwater migration or
contamination, may be located on, in or under such facilities
or operations and that could reasonably be expected to result
in a Material Adverse Effect.
(f) There is no asbestos in, on, or at any of the
facilities or operations of the Borrower or any of its
Subsidiaries, except to the extent that the presence of such
material could not reasonably be expected to result in a
Material Adverse Effect.
(g) To the best knowledge of the Borrower and each of
its Subsidiaries after reasonable inquiry, none of the
material properties or assets of the Borrower or any of its
Subsidiaries is (i) listed or proposed for listing on the
National Priorities List under CERCLA or (ii) listed in the
Comprehensive Environmental Response, Compensation,
Liability Information System List promulgated pursuant to
CERCLA, or on any comparable list maintained by any
Governmental Authority.
(h) There are no past or current events, conditions,
circumstances, activities, practices, incidents, actions or
plans that could reasonably be anticipated to interfere with
or prevent compliance with any Environmental Law, or which may
give rise to liability under any Environmental Law, or
otherwise form the basis of any claim, action, demand, suit,
proceeding, hearing or notice of violation, study or
investigation, based on or related to the manufacture,
processing, distribution, use, generation, treatment, storage,
disposal, transport, shipping or handling, or the emission,
discharge, release or threatened release into the environment,
of any Hazardous Material that could reasonably be expected to
result in a Material Adverse Effect.
(i) No Lien in favor of any Person relating to or in
connection with any liability under any Environmental Law has
been filed or has been attached to any property or asset of
the Borrower or any of its Subsidiaries, except to the extent
that the same could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.18. Labor Matters.
There are no strikes, lockouts or slowdowns against the
Borrower or any of its Subsidiaries pending or, to the
knowledge of the Borrower threatened, except where such
strikes, lockouts or slowdowns could not reasonably be
expected to, individually or in the aggregate, result in a
Material Adverse Effect. The hours worked by and payment made
to employees of the Borrower or any of its Subsidiaries have
not been in violation of the Fair Labor Standards Act or any
other applicable Federal, state, local or foreign law dealing
with such matters, where such violations could reasonably be
expected, individually or in the aggregate, to result in a
Material Adverse Effect. The consummation of the Transactions
will not give rise to a right of termination or right of
renegotiation on the part of any union under any collective
bargaining agreement to which the Borrower or any of its
Subsidiaries is a party or by which the Borrower or any of its
Subsidiaries is bound.
SECTION 3.19. Reserved
SECTION 3.20. Patents, Trademarks, etc.
Each of the Borrower and each of its Subsidiaries owns,
or is licensed to use, all patents, trademarks, trade names,
copyrights, technology, know-how and processes, service marks
and rights with respect to the foregoing that are (a) used in
or necessary for the conduct of their respective businesses as
currently conducted and (b) material to the business, assets,
operations, properties, prospects or condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a
whole. The use of such patents, trademarks, trade names,
copyrights, technology, know-how, processes and rights with
respect to the foregoing by the Borrower and its Subsidiaries
does not infringe on the rights of any Person. To the best
knowledge of the Borrower, its rights and the rights of its
Subsidiaries to sell, franchise or license under such brand
names then being used may be transferred in connection with
any sale of assets or stock of the related business by the
Borrower or any of its Subsidiaries.
SECTION 3.21. Status as Senior Debt
The Debt hereunder ranks senior to the Debt under each of
the Subordinated Debt Documents and pari passu with the Debt
under each of the Senior Debt Documents.
ARTICLE 4. CONDITIONS OF LENDING AND EFFECTIVENESS.
SECTION 4.01. Conditions of All Borrowings.
The obligation of each Lender to make Advances hereunder
are subject to the satisfaction on the Effective Date of the
Conditions to Effectiveness set forth in Section 4.02 and the
satisfaction on the date of each Borrowing of the following
conditions:
(a) The Agent shall have received a Notice of Borrowing
as required by Section 2.02.
(b) The representations and warranties set forth in
Article 3 shall be true and correct in all material respects
on and as of the date of such Borrowing with the same effect
as though made on and as of such date, except to the extent
that such representations and warranties expressly relate to
an earlier date.
(c) At the time of and immediately after such Borrowing,
no Default or Event of Default shall have occurred and be
continuing.
The giving of each Notice of Borrowing and the receipt of the
proceeds of each Advance referred to therein, shall each
constitute a representation and warranty by the Borrower as to
the matters specified in paragraphs (b) and (c) of this
Section 4.01.
SECTION 4.02. Conditions to Effectiveness.
The effectiveness of this Agreement and the obligation of
each Lender to make the Advances to be made by it on the first
Business Day on which Advances are made, shall be subject to
the satisfaction of the following additional conditions
precedent:
(a) The Lenders shall have received a written opinion of
Xxxx X. Xxxxxxx, Vice President, Secretary and General Counsel
of the Borrower, substantially to the effect set forth in
Exhibit E (i) dated the Effective Date, (ii) addressed to the
Agent and the Lenders and (iii) covering such other matters
relating to this Agreement and the Transactions as the Agent
shall reasonably request. The Borrower hereby instructs such
counsel to deliver such opinion.
(b) All legal matters incident to this Agreement and the
Borrowings hereunder shall be satisfactory to the Lenders and
to Xxxxx, Xxxxxx & Xxxxxx, LLP, counsel for the Agent.
(c) The Lenders shall have received (i) a copy of the
certificate of incorporation, including all amendments
thereto, of the Borrower, certified as of a recent date by the
Secretary of State of the state of its organization, and a
certificate as to the good standing of the Borrower as of a
recent date, from such Secretary of State; (ii) a certificate
of the Secretary or Assistant Secretary of the Borrower dated
the Effective Date and certifying (A) that attached thereto is
a true and complete copy of the by-laws or regulations of the
Borrower, as in effect on the Effective Date and at all times
since a date prior to the date of the resolutions described in
clause (B) below, (B) that attached thereto is a true and
complete copy of resolutions duly adopted by the Borrower,
authorizing the execution, delivery and performance of this
Agreement and, in the case of the Borrower, the borrowings
hereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect as of
the Effective Date, (C) that the certificate of incorporation
of the Borrower has not been amended since the date of the
last amendment thereto shown on the certificate of good
standing furnished pursuant to clause (i) above and (D) as to
the incumbency and specimen signature of each officer
executing this Agreement or any other document delivered in
connection herewith on behalf of the Borrower; (iii) a
certificate of another officer as to the incumbency and
specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to (ii) above; and (iv)
such other documents as the Lenders or Xxxxx, Xxxxxx & Xxxxxx,
LLP, counsel for the Agent, may reasonably request.
(d) The Lenders shall have received a certificate, dated
the Effective Date and signed by a Financial Officer of the
Borrower, confirming compliance with the conditions precedent
set forth in paragraphs (b) and (c) of Section 4.01.
(e) The Lenders shall have received a copy of the
amendment to the Existing Credit Agreement permitting the
execution and delivery of this Agreement and the borrowing
hereunder.
(f) All (i) Fees and other amounts due and payable on or
prior to the Effective Date, to the Agent and (ii) fees and
disbursements of Xxxxx, Xxxxxx & Xxxxxx, LLP, counsel to the
Agent, for the period through the Effective Date, shall have
been paid.
ARTICLE 5. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with each Lender and
the Agent that, so long as any obligation hereunder shall
remain unpaid or any Lender shall have any Commitment
hereunder, unless the Majority Lenders shall otherwise consent
in writing, the Borrower will and will cause its Subsidiaries
to:
SECTION 5.01. Compliance with Laws.
Perform and promptly comply in all material respects with
all:
(a) current and future laws, ordinances, rules,
regulations, orders and requirements (including ERISA and
zoning ordinances, building codes and Environmental Laws) of
every duly constituted governmental, regulatory, licensing or
quasi-Governmental Authority or agency applicable to the
Borrower, any such Subsidiary or any of their respective
properties, as the case may be;
(b) similarly applicable orders, rules and regulations
of any regulatory, licensing, accrediting, insurance
underwriting or rating organization or other body exercising
similar functions having jurisdiction over the Borrower, its
Subsidiaries or their respective properties, as the case may
be; and
(c) similarly applicable duties or obligations of any
kind imposed under any certificate of occupancy, or otherwise
by law, covenant, conditions, agreement or easement, public or
private binding upon the Borrower, its Subsidiaries or their
respective properties, as the case may be; in each case unless
(i) the applicability of any such laws, ordinances, rules,
regulations, orders, requirements, duties or obligations is
being contested by the Borrower or any of its Subsidiaries in
good faith and by proper proceedings and with respect to which
proper reserves are being maintained in accordance with GAAP
or (ii) the failure to so comply or to cause property to be
maintained, used or operated would not result in a Material
Adverse Effect.
SECTION 5.02. Preservation of Corporate Existence
(a) Preserve and maintain its corporate existence,
corporate rights (charter and statutory) and corporate
franchises, except (i) in connection with the sale of any
assets permitted to be sold pursuant to Section 6.05 or (ii)
as permitted by Section 6.04.
(b) Do or cause to be done all things necessary to
preserve, renew and keep in full force and effect the rights,
licenses, permits, trademarks, trade names, privileges and
franchises material to its business; maintain and operate such
business in substantially the manner in which it is currently
conducted and operated; and at all times keep all property
useful and necessary in its business in good, working order
and condition to the extent required by sound business
practices.
SECTION 5.03. Reporting Requirements.
Furnish to each Lender the following:
(a) As soon as available and in any event within 50 days
after the end of each of the first three Fiscal Quarters of
each Fiscal Year of the Borrower, (i) a copy of the Borrower's
quarterly report on Form 10-Q (or any successor report), (ii)
a consolidating statement of income, substantially in the form
of Exhibit F, and (iii) a schedule in form satisfactory to the
Agent of the computation used by the Borrower in determining
compliance with the covenants contained in Sections 6.14, 6.15
(when applicable) and 6.16, all accompanied by an Officer's
Certificate certifying as to all the foregoing;
(b) As soon as available and in any event within 100
days after the end of each Fiscal Year, (i) a copy of the
Borrower's annual report on Form 10-K (or any successor
report) certified in a manner reasonably acceptable to the
Agent by a nationally recognized independent public accounting
firm, together with (ii) a certificate of such accounting firm
stating that in the course of the regular audit of the
business of the Borrower and its Subsidiaries, which audit was
conducted by such accounting firm in accordance with generally
accepted auditing standards, such accounting firm has obtained
no knowledge that a Default has occurred and is continuing,
or, if, in the opinion of such accounting firm, a Default has
occurred and is continuing, a statement as to the nature
thereof, (iii) a schedule in form satisfactory to the Agent of
the computations used by such accountants in determining, as
of the end of such Fiscal Year, compliance with the covenants
contained in Sections 6.14, 6.15 (when applicable) and 6.16
and (iv) a consolidating statement of income substantially in
the form of Exhibit F, accompanied by an Officer's Certificate
certifying to such statement of income;
(c) Reserved
(d) As soon as possible and in any event within three
Business Days after the Borrower becomes aware of the
occurrence of each Default continuing on the date of such
statement, a statement of the chief financial officer of the
Borrower setting forth details of such Default and the action
that the Borrower has taken and proposes to take with respect
thereto;
(e) Promptly after any significant change in accounting
policies or reporting practices permitted under Section 6.11,
notice and a description in reasonable detail of such change;
(f) Promptly after the sending or filing thereof, copies
of all proxy statements, financial statements and reports that
the Borrower or any of its Subsidiaries sends to its
stockholders generally, and copies of all regular, periodic
and special reports, that the Borrower or any of its
Subsidiaries files with the Securities and Exchange Commis-
sion or any Governmental Authority that may be substituted
therefor, or with any national securities exchange; and
(g) Such other information respecting the business,
properties, operations, performance, prospects or condition
(financial or otherwise) of the Borrower or any of its
Subsidiaries as any Lender through the Agent may from time to
time reasonably request.
SECTION 5.04. Visitation Rights.
At any reasonable time and from time to time during
normal business hours, upon reasonable prior notice, permit
the Agent or any of the Lenders or any agents or
representatives thereof to examine and make copies of and
abstracts from the records and books of account of, and visit
the properties of, the Borrower and any of its Subsidiaries,
and to discuss the affairs, finances and accounts of the
Borrower and any of its Subsidiaries with any of their
officers or directors and with their independent certified
public accountants and advise such accountants that the Agent
and the Lenders have been authorized to exercise all rights of
the Borrower or any such Subsidiary to require such
accountants to disclose any and all financial statements and
other information of any kind that they may have with respect
to the Borrower or any such Subsidiary and direct such
accountants to comply with any reasonable request of the Agent
or any Lenders for such information so long as such reasonable
request is stated with particularity. The chief financial
officer of the Borrower or his or her designee shall be
notified by the Agent of, and be afforded an opportunity to be
present at, any meeting of the Agent or the Lenders and such
accountants but the inability of such officer(s) to attend
such meeting or absence of any such officer(s) therefrom shall
in no way interfere with the occurrence of any such meeting as
planned.
SECTION 5.05. Keeping of Books.
Keep proper books of record and account, in which proper
entries shall be made of all financial transactions and the
assets and business of the Borrower and each of such Sub-
sidiaries in accordance with GAAP.
SECTION 5.06. Payment of Taxes, Etc.
Pay and discharge before the same shall become
delinquent, (a) all taxes, assessments and governmental chages
or levies imposed upon it or upon its property and (b) all
lawful claims that, if unpaid, might by law become a lien
(other than a Permitted Lien) upon their property; provided,
however, that neither the Borrower nor any of its Subsidiaries
shall be required to pay or discharge any such tax,
assessment, charge or claim (i) that is being contested in
good faith and by proper proceedings, as long as such
proceedings could not subject the Agent or any Lender to any
civil or criminal penalty or liability, except for payments of
cash that are the subject of such proceedings and (ii) against
which proper reserves are being maintained in accordance with
GAAP.
SECTION 5.07. Maintenance of Properties, Etc.
Maintain and preserve all of its properties in good
working order and condition, ordinary wear and tear excepted,
and maintain all necessary licenses and permits if, in each
case, failure to so maintain and preserve would result in a
Material Adverse Effect.
SECTION 5.08. Maintenance of Insurance.
Maintain insurance with responsible and reputable
insurance companies or associations in such amounts and
covering such risks as is usually carried by companies engaged
in similar businesses and owning similar properties in the
same general areas in which the Borrower or such Subsidiary
operates.
SECTION 5.09. Arm's-Length Transactions.
Conduct all transactions permitted under this Agreement,
other than transactions permitted pursuant to Sections 6.07(b)
and 6.07(m) of the Existing Credit Agreement, with any of its
Affiliates on terms that are fair and reasonable and (a) for
transactions between the Borrower and any Affiliate thereof,
no less favorable to the Borrower than the Borrower would
obtain in a comparable arm's-length transaction with a Person
not an Affiliate of the Borrower and (b) for transactions
between a Subsidiary of the Borrower and another Affiliate of
the Borrower, no less favorable to such Subsidiary than it
would obtain in a comparable arm's-length transaction with a
Person not an Affiliate of the Borrower.
SECTION 5.10. Maintenance of Leases.
Take all necessary actions to keep the leases on all Real
Property in full force and effect; provided, however, that the
Borrower and any of its Subsidiaries may terminate or fail to
renew any such leases in the ordinary course of business of
the Borrower and its Subsidiaries.
SECTION 5.11. Reserved
SECTION 5.12. Environmental Compliance Program.
(a) Promptly give notice to the Agent upon becoming
aware of (i) any material violation of any Environmental Law,
(ii) any claim, inquiry, proceeding, investigation or other
action, including a request for information or a notice of
potential environmental liability, by or from any Governmental
Authority or any third party claimant, to the extent that any
of the foregoing could reasonably be expected to result in a
Material Adverse Effect or (iii) the discovery of the release
of any Hazardous Material at, on, under or from any of its
properties in excess of reportable or allowable standards,
threshold amounts or levels in a manner or amount that could
reasonably be expected to result in material liability under
any Environmental Law.
(b) Upon discovery of the presence on any of the
properties or assets of the Borrower or its Subsidiaries of
any Hazardous Material that is in violation of, or that could
reasonably be expected to result in material liability under,
any Environmental Law, take all necessary steps to initiate
and expeditiously complete all investigative, remedial,
corrective and other action to eliminate any such adverse
effect, and keep the Agent informed of such actions and the
results thereof.
ARTICLE 6. NEGATIVE COVENANTS
The Borrower covenants and agrees with each Lender and
the Agent that, so long as any obligation hereunder shall
remain unpaid or any Lender shall have any Commitment
hereunder, unless the Majority Lenders shall otherwise consent
in writing, the Borrower will not and will not cause its
Subsidiaries to:
SECTION 6.01. Liens, Etc.
Create or suffer to exist any lien, security interest or other
charge or encumbrance (including the lien or retained security
title of a conditional vendor) of any kind, or any other type
of preferential arrangement, upon or with respect to any of
its properties of any character (including accounts), whether
now owned or hereafter acquired, or assign any right to
receive income, or sign or file under the Uniform Commercial
Code or any comparable statute of any jurisdiction a financing
statement that names the Borrower or any such Subsidiary as
debtor, or sign any security agreement authorizing any secured
party thereunder to file such financing statement with respect
to the Borrower or any such Subsidiary, excluding, however,
from the operation of the foregoing restrictions Permitted
Liens.
SECTION 6.02. Reserved.
SECTION 6.03. Reserved.
SECTION 6.04. Mergers, Etc.
Merge or consolidate with or into, or convey, transfer,
lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all its
assets (whether now owned or hereafter acquired) to, or
acquire all or substantially all the assets of, any Person,
except that (a) the Borrower or any Subsidiary may merge with
or acquire substantially all the assets of any Person in
connection with Capital Expenditures permitted by Section 6.08
of the Existing Credit Agreement or acquisitions or
investments permitted by Section 6.07(g) or (i) of the
Existing Credit Agreement, so long as the Borrower or such
Subsidiary is the surviving corporation in any such merger,
(b) any wholly owned Subsidiary of the Borrower may merge or
consolidate with the Borrower, so long as the Borrower is the
surviving corporation in any such merger or consolidation, (c)
any wholly owned Subsidiary of the Borrower may merge or
consolidate with any other wholly owned Subsidiary of the
Borrower and (d) any Subsidiary of the Borrower may be
dissolved so long as, prior to such dissolution (or as a
result thereof), the assets owned by the dissolved Subsidiary
prior to such dissolution are owned by the Borrower or one of
its wholly owned Subsidiaries.
SECTION 6.05. Sales, Etc. of Assets.
Sell, lease, transfer or otherwise dispose of any assets
(including substantially all assets constituting the business
of a division, branch or other operating unit), except that,
if immediately after giving effect thereto no Default or Event
of Default shall have occurred and be continuing:
(a) the Borrower or any of its Subsidiaries may sell or
lease inventory in the ordinary course of business;
(b) the Borrower or any of its Subsidiaries may sell (i)
any Real Property (and related fixtures and personal property)
acquired, developed or purchased between January 21, 1992, and
July 19, 1994, (ii) any Real Property (and related fixtures
and personal property) acquired, developed or purchased with
Real Estate Capital Expenditures and (iii) Property Held for
Sale, in each case pursuant to sale-leaseback transactions for
not less than the Fair Market Value of such assets;
(c) the Borrower or any of its Subsidiaries may sell,
lease, transfer or otherwise dispose of any of its assets
(including substantially all assets constituting the business
of a division, branch or other operating unit) for not less
than the Fair Market Value of such assets, provided that the
aggregate value of such assets sold, leased, transferred or
otherwise disposed of during the term of this Agreement shall
not be greater than 10% of the total assets of the Borrower
and its Subsidiaries on a Consolidated basis as of January 1,
1994;
(d) the Borrower or any of its Subsidiaries may sell,
lease, transfer or otherwise dispose of any of its assets for
less than the Fair Market Value of such assets, provided that
the aggregate value of such assets sold, leased, transferred
or otherwise disposed of during any Fiscal Year pursuant to
this paragraph (d) shall not be greater than $5,000,000;
(e) the Borrower or any of its Subsidiaries may make
charitable donations in the ordinary course of business
consistent with past practices;
(f) the Borrower or any of its Subsidiaries may transfer
assets to wholly owned Subsidiaries of the Borrower, in each
case in existence on the Effective Date or permitted to be
formed under Section 6.06;
(g) the Borrower or any of its Subsidiaries may
terminate leases to the extent permitted by Section 5.10; and
(h) the Borrower or any of its Subsidiaries may sell
accounts receivables (or interests therein) in connection with
any Receivables Securitization.
SECTION 6.06. Maintenance of Ownership and Formation of
Subsidiaries.
Except as permitted by Section 6.05 and Section 6.06 of
the Existing Credit Agreement, sell or otherwise dispose of,
or commit to sell or otherwise dispose of, any shares of
capital stock of any of its Subsidiaries, or permit any of its
Subsidiaries to issue, sell or otherwise dispose of, or commit
to issue, sell or otherwise dispose of, any shares of their
capital stock or capital stock of any other Subsidiary, or
create, or permit any of its Subsidiaries to create, any new
Subsidiary except that the Borrower or any of its Subsidiaries
may create new wholly owned Subsidiaries.
SECTION 6.07. Reserved.
SECTION 6.08. Reserved.
SECTION 6.09. Amendment, Etc. of Certain Agreements.
(a) Except in connection with any prepayment,
redemption, defeasance or repurchase, cancel or terminate any
term or provision of any of the Related Documents or (b)
amend or otherwise modify, or waive any breach of or default
under, or take any other action in connection with, any term
or provision of the Subordinated Debt Documents or the Senior
Debt Documents, except that the Borrower may amend, modify or
waive any breach of or default under the Subordinated Debt
Documents if the Borrower would be permitted under Section
6.02 of the Existing Credit Agreement to issue the Debt
represented by such documents as so amended, modified or
waived.
SECTION 6.10. Change in Business.
Make any material change in the nature or conduct of
their respective businesses as carried on at the Effective
Date except in connection with the sale of assets permitted
pursuant to Section 6.05.
SECTION 6.11. Accounting Changes.
Make or permit any significant change in accounting
policies (including a change of its Fiscal Year) or reporting
practices, except for any such change required by GAAP.
SECTION 6.12. Charter and By-Laws.
Amend, modify or change in any manner the certificate of
incorporation or by-laws or regulations of the Borrower or any
Subsidiary of the Borrower in any manner that could result in
a Material Adverse Effect.
SECTION 6.13. Issuance and Sale of Stock.
Issue or sell any of its stock without the prior written
consent of the Majority Lenders, except, in the case of the
Borrower, (a) Borrower Common Stock or (b) preferred stock
having an aggregate face amount not in excess of $500,000,000.
SECTION 6.14. Fixed Charge Coverage Ratio.
Permit the Fixed Charge Coverage Ratio (determined as of the
last day of any Fiscal Quarter for the Rolling Period ending
on such day) to be lower than 1.7 to 1.0.
SECTION 6.15. Ratio of Net Senior Debt to Consolidated
EBITDA.
Permit at any time the ratio (determined as of the last
day of any Fiscal Quarter for the Rolling Period ending on
such day) of (a) Net Senior Debt on such day to (b) the sum of
(i) Consolidated EBITDA for such Rolling Period and (ii) from
and after the making of any investment or acquisition pursuant
to Section 6.07(i)(C) of the Existing Credit Agreement, the
Acquired EBITDA for any Acquired Entity so invested in or
acquired (but only to the extent that such Acquired EBITDA has
been calculated pursuant to Section 6.07(i)(C) of the Existing
Credit Agreement with respect to any Acquired Entity Fiscal
Quarter ending during such Rolling Period) to be greater than
3.00 to 1.00. Notwithstanding anything in this Agreement to
the contrary, the covenant set forth in this Section 6.15
shall cease to be applicable for any purpose from and after
the date on which the Borrower satisfies the Investment Grade
Rating Condition.
SECTION 6.16. Ratio of Net Total Debt to Consolidated EBITDA.
Permit the ratio (determined as of the last day of each
Fiscal Quarter for the Rolling Period ending on such day) of
(a) Net Total Debt on such day to (b) the sum of (i)
Consolidated EBITDA for such Rolling Period and (ii) from and
after the making of any investment or acquisition pursuant to
Section 6.07(i)(C) of the Existing Credit Agreement, the
Acquired EBITDA for any Acquired Entity so invested in or
acquired (but only to the extent that such Acquired EBITDA has
been calculated pursuant to Section 6.07(i)(C) of the Existing
Credit Agreement with respect to any Acquired Entity Fiscal
Quarter ending during such Rolling Period) to be greater than
3.65 to 1.00.
ARTICLE 7. EVENTS OF DEFAULT
SECTION 7.01. Events of Default.
In case of the happening and during the continuation of
any of the following events ("Events of Default"):
(a) any representation or warranty made or deemed made
in this Agreement, or any representation, warranty, statement
or information contained in any report, certificate, financial
statement or other instrument furnished pursuant to this
Agreement, shall prove to have been false or misleading in any
material respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any
principal of any Advance, or any other amount payable under
this Agreement with respect to any Auction Bid Advance, in
each case when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for
prepayment thereof, by acceleration thereof or otherwise;
(c) default shall be made in the payment of (i) any
interest on any Advance or Auction Bid Advance or (ii) any Fee
or any other amount (other than an amount referred to in
paragraph (b) above) due under this Agreement, in each case,
when and as the same shall become due and payable, and such
default shall continue unremedied for a period of three
Business Days after written notice thereof from the Agent or
any Lender to the Borrower;
(d) default shall be made in the due observance or
performance by the Borrower of any covenant, condition or
agreement contained in Section 5.02(a), 5.03(d) or in Article
6;
(e) default shall be made in the due observance or
performance by the Borrower of any covenant, condition or
agreement contained in this Agreement (other than those
defaults specified in paragraph (b), (c) or (d) above) and
such default shall continue unremedied for a period of 30 days
after written notice thereof from the Agent or any Lender to
the Borrower;
(f) (i) the Borrower shall fail to pay any principal or
interest, regardless of amount, due in respect of any Debt in
a principal amount in excess of $30,000,000, when and as the
same shall become due and payable at maturity, by acceleration
or otherwise (after giving effect to any applicable grace
period), or (ii) there shall occur any default in respect of
any other term, covenant, condition or agreement contained in
any agreement or instrument evidencing or governing any such
Debt (after giving effect to any applicable grace period), if
the effect of any failure referred to in this clause (ii) is
to cause, or to permit the holder or holders of such Debt or a
trustee on its or their behalf to cause, such Debt to become
due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Borrower, or
of a substantial part of the property or assets of the
Borrower, under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal, state
or foreign bankruptcy, insolvency, receivership or similar
law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower
or for a substantial part of the property or assets of the
Borrower or (iii) the winding-up or liquidation of the
Borrower; and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered;
(h) the Borrower shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11
of the United States Code, as now constituted or hereafter
amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate
manner, any proceeding or the filing of any petition described
in paragraph (g) above, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or for a
substantial part of the property or assets of the Borrower,
(iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors, (vi) become
unable, admit in writing its inability or fail generally to
pay its debts as they become due or (vii) take any action for
the purpose of effecting any of the foregoing;
(i) one or more judgments or orders for the payment of
money aggregating in excess of $30,000,000 shall be rendered
against the Borrower or any of its Subsidiaries, and either
(i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be
any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect;
(j) a Reportable Event or Reportable Events, or a
failure to make a required installment or other payment
(within the meaning of Section 412(n)(l) of the Code), shall
have occurred with respect to any Plan or Plans that
reasonably could be expected to result in liability of the
Borrower or any of its Subsidiaries to the PBGC or to a Plan
in an aggregate amount exceeding $30,000,000 and, within 30
days after the Borrower has provided written notice of any
such Reportable Event to the Agent, the Agent shall have
notified the Borrower in writing that (i) the Majority Lenders
have determined that, on the basis of such Reportable Event or
Reportable Events or the failure to make a required payment,
there are reasonable grounds (A) for the termination of such
Plan or Plans by the PBGC, (B) for the appointment by the
appropriate United States District Court of a trustee to
administer such Plan or Plans or (C) for the imposition of a
lien in favor of a Plan and (ii) as a result thereof an Event
of Default exists hereunder; or a trustee shall be appointed
by a United States District Court to administer any such Plan
or Plans; or the PBGC shall institute proceedings (including
giving notice of intent thereof) to terminate any Plan or
Plans;
(k)(i) the Borrower or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that it
has incurred Withdrawal Liability to such Multi-employer Plan,
(ii) the Borrower or such ERISA Affiliate does not have
reasonable grounds for contesting such Withdrawal Liability or
is not in fact contesting such Withdrawal Liability in a
timely and appropriate manner and (iii) the amount of the
Withdrawal Liability specified in such notice, when aggregated
with all other amounts required to be paid to Multiemployer
Plans in connection with Withdrawal Liabilities (determined
as of the date or dates of such notification), either (A)
exceeds $100,000,000 or requires payments exceeding
$30,000,000 in any year or (B) is less than $100,000,000 but
any Withdrawal Liability payment remains unpaid 30 days after
such payment is due (unless such Withdrawal Liability is being
contested in good faith by the Borrower or any ERISA
Affiliate);
(l) the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, if solely
as a result of such reorganization or termination the
aggregate contributions of the Borrower and its ERISA
Affiliates to all Multiemployer Plans that are then in
reorganization or have been or are being terminated have been
or will be increased over the amounts required to be con-
tributed to such Multiemployer Plans for their most recently
completed plan years by an amount exceeding $30,000,000;
(m) there shall have occurred a Change in Control; or
(n) this Agreement shall not be for any reason, or shall
be asserted by the Borrower (except as otherwise expressly
provided in this Agreement) not to be, in full force and
effect and enforceable in all material respects in accordance
with its terms; then, and in every such event (other than an
event described in paragraph (g) or (h) above), the Agent (i)
shall at the request, or may with the consent, of the Majority
Lenders by notice to the Borrower declare the obligation of
each Lender to make Advances to be terminated, whereupon the
same shall forthwith terminate, and (ii) shall at the request,
or may with the consent, of the Majority Lenders declare the
Advances, all interest thereon and all other amounts payable
under this Agreement to be forthwith due and payable,
whereupon the Advances, all such interest and all such amounts
shall become and be forthwith due and payable, without
presentment, demand, protest, prior notice of intention to
accelerate or any other notice, all of which are hereby
expressly waived by the Borrower; and in any event described
in paragraph (g) or (h) above, (A) the obligation of each
Lender to make Advances shall automatically be terminated and
(B) the Advances, all such interest and all such amounts shall
automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.
ARTICLE 8. THE AGENT.
In order to expedite the transactions contemplated by
this Agreement, BNY is hereby appointed to act as Agent for
the Lenders. Each of the Lenders hereby irrevocably
authorizes the Agent to take such actions on their behalf and
to exercise such powers as are specifically delegated to the
Agent by the terms and provisions hereof, together with such
actions and powers as are reasonably incidental thereto. The
Agent is hereby expressly authorized by the Lenders, without
hereby limiting any implied authority, (i) to receive this
Agreement and all closing documents on the Effective Date,
(ii) to receive on behalf of the Lenders all payments of
principal of and interest on the Advances and all other
amounts due to the Lenders hereunder, and promptly to
distribute to each Lender its proper share of each payment so
received, (iii) to give notice on behalf of each of the
Lenders to the Borrower of any Event of Default specified in
this Agreement of which the Agent have actual knowledge
acquired in connection with its agency hereunder and (iv) to
distribute to each Lender copies of all notices, financial
statements and other materials delivered by the Borrower
pursuant to this Agreement as received by the Agent (including
notices of an occurrence of any Event of Default).
Neither the Agent, BNY Capital Markets nor any of their
respective directors, officers, employees or agents shall be
liable as such for any action taken or omitted by any of
them except for its, his or her own gross negligence or wilful
misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document
delivered in connection herewith, or be required to ascertain
or to make any inquiry concerning the performance or
observance by Borrower of any of the terms, conditions,
covenants or agreements contained in this Agreement. Neither
the Agent nor BNY Capital Markets shall not be responsible to
the Lenders for the due execution, genuineness, validity,
enforceability or effectiveness of this Agreement or any other
instruments or agreements. The Agent shall in all cases be
fully protected in acting, or refraining from acting, in
accordance with written instructions signed by the Majority
Lenders and, except as otherwise specifically provided herein,
such instructions and any action or inaction pursuant thereto
shall be binding on all the Lenders. The Agent shall, in the
absence of knowledge to the contrary, be entitled to rely on
any instrument or document believed by it in good faith to be
genuine and correct and to have been signed or sent by the
proper Person or Persons. Neither the Agent nor any of its
directors, officers, employees or agents shall have any
responsibility to the Borrower on account of the failure of or
delay in performance or breach by any Lender of any of its
obligations hereunder or to any Lender on account of the
failure of or delay in performance or breach by any other
Lender or the Borrower's or any of their respective
obligations hereunder or in connection herewith or therewith.
The Agent may execute any and all duties hereunder by or
through agents or employees and shall be entitled to rely upon
the advice of legal counsel selected by it with respect to all
matters arising hereunder and shall not be liable for any
action taken or suffered in good faith by it in accordance
with the advice of such counsel.
The Lenders hereby acknowledge that the Agent shall be
under no duty to take any discretionary action permitted to be
taken by it pursuant to the provisions of this Agreement
unless it shall be requested in writing to do so by the
Majority Lenders.
Subject to the appointment and acceptance of a successor
Agent as provided below, the Agent may resign at any time by
notifying the Lenders and the Borrower. Upon any such
resignation, the Majority Lenders shall have the right to
appoint a Lender as the successor. If no successor shall have
been so appointed by the Majority Lenders and shall have
accepted such appointment within 30 days after the retiring
Agent gives notice of its resignation, then the retiring Agent
may, on behalf of the Lenders, appoint a successor Agent,
which shall be a bank with an office in New York, New York,
having a combined capital and surplus of at least $500,000,000
or an Affiliate of any such bank. Upon the acceptance of any
appointment as Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent
and the retiring Agent shall be discharged from its duties and
obligations hereunder. After the Agent's resignation
hereunder, the provisions of this Article and Section 9.05
shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting
as Agent.
With respect to the Advances made by it hereunder, the
Agent, in its individual capacity and not as Agent shall have
the same rights and powers as any other Lender and may
exercise the same as though it were not the Agent and the
Agent and its Affiliates may accept deposits from, lend money
to and generally engage in any kind of business with the
Borrower or its Affiliates as if it were not the Agent.
Each Lender agrees (a) to reimburse the Agent, on demand,
in the amount of such Lender's pro rata share (based on its
Commitment hereunder) of any expenses incurred for the benefit
of the Lenders by the Agent, including fees, disbursements and
other charges of counsel and compensation of agents paid for
services rendered on behalf of the Lenders, that shall not
have been reimbursed by the Borrower and (b) to indemnify and
hold harmless the Agent and any of its directors, officers,
employees or agents, on demand, in the amount of such pro rata
share, from and against any and all liabilities, taxes,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by or asserted
against it in its capacity as the Agent, or any of them in any
way relating to or arising out of this Agreement or any action
taken or omitted by it under this Agreement, to the extent the
same shall not have been reimbursed by the Borrower, provided
that no Lender shall be liable to the Agent for any portion of
such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or wilful misconduct of
the Agent or any of its directors, officers, employees or
agents.
Each Lender acknowledges that it has, independently and
without reliance upon the Agent or any other Lender, 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 Lender also acknowledges that
it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information
as it shall from time to time deem appropriate, continue to
make its own decisions in taking or not taking action under or
based upon this Agreement, any related agreement or any
document furnished hereunder.
ARTICLE 9. MISCELLANEOUS
SECTION 9.01. Notices.
Except as otherwise expressly permitted herein, notices
and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier
service, mailed or sent by telecopy, as follows:
(a) If to the Borrower, to it at The Kroger Co., 0000
Xxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000, Attention of Xx. Xxxxxxxx
X. Xxxxxx (Telecopy No. (000) 000-0000); with a copy to Xx.
Xxxx X. Xxxxxxx (Telecopy No. (000) 000-0000).
(b) If to BNY in its capacity as the Agent, to it at One
Wall Street, Agency Function Administration 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention of Xxxxxxx Xxxx (Telecopy No.
(000) 000-0000 or 6366 or 6367); with a copy to The Bank of
New York, Xxx Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention
of Xxxxx X. XxXxxxxx, Vice President (Telecopy No. (212)
635-1483).
(c) If to a Lender, at its address (or telecopy number)
set forth on Schedule 2.01 or in the Assignment and Acceptance
pursuant to which such Lender shall have become a party
hereto.
All notices and other communications given to any party
hereto in accordance with the provisions of this Agreement
shall be deemed to have been given on the date of receipt if
delivered by hand or overnight courier service or sent by
telecopy, or on the date five Business Days after dispatch by
certified or registered mail if mailed, in each case
delivered, sent or mailed (properly addressed) to such party
as provided in this Section 9.01 or in accordance with the
latest unrevoked direction from such party given in accordance
with this Section 9.01. The Agent shall deliver to the
Borrower a copy of each Administrative Questionnaire received
by it.
SECTION 9.02. Survival of Agreement.
All covenants, agreements, representations and warranties
made by the Borrower herein and in the certificates or other
instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been
relied upon by the Lenders and shall survive the making by the
Lenders of the Advances, regardless of any investigation made
by the Lenders, and shall continue in full force and effect as
long as the principal of or any accrued interest on any
Advance or any Fee or any other amount payable under this
Agreement is outstanding and unpaid and so long as the
Commitments have not been terminated in full.
SECTION 9.03. Binding Effect.
This Agreement shall become effective when it shall have
been executed by the Borrower and the Agent and when the Agent
shall have received copies hereof that, when taken together,
bear the signatures of each Lender, and thereafter shall be
binding upon and inure to the benefit of the Borrower, the
Agent and each Lender and their respective successors and
assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the
prior written consent of all the Lenders (and any attempted
assignment by the Borrower shall be void).
SECTION 9.04. Successors and Assigns.
(a) Subject to Section 9.03, whenever in this Agreement
any of the parties hereto is referred to, such reference shall
be deemed to include the successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of
the Borrower, the Agent or the Lenders that are contained in
this Agreement shall bind and inure to the benefit of their
respective successors and assigns.
(b) Each Lender may assign to one or more assignees all
or a portion of its interests, rights and obligations under
this Agreement (including all or a portion of its Commitments
and the Advances at the time owing to it); provided, however,
that (i) except in the case of an assignment to a Lender or an
Affiliate of a Lender, each of the Agent and the Borrower must
give its prior written consent to such assignment (which
consent shall not be unreasonably withheld); provided further,
however, the consent of the Borrower shall not be required if
a Default or an Event of Default has occurred and is
continuing on the date of the Assignment and Acceptance, (ii)
except in the case of an assignment to a Lender or an
Affiliate of a Lender, the amount of the Commitment of the
assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to
such assignment is delivered to the Agent) shall not be less
than $5,000,000 (or an amount equal to the remaining balance
of such Lender's Commitment), (iii) the parties to each such
assignment shall execute and deliver to the Agent an
Assignment and Acceptance, together with a processing and
recordation fee of $3,500, and (iv) the assignee, if it shall
not be a Lender, shall deliver to the Agent an Administrative
Questionnaire. Each assignment shall be of a constant, and not
a varying, percentage of the assigning Lender's Commitment.
Upon acceptance and recording pursuant to paragraph (e) of
this Section 9.04, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall
be at least five Business Days after the execution thereof and
in no event shall precede the date of such recording, (i) the
assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Acceptance,
shall have the rights and obligations of a Lender under this
Agreement and (ii) the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall
cease to be a party hereto, but shall continue to be entitled
to the benefits of Sections 2.10, 2.13 and 9.05, as well as to
any Fees accrued for its account and not yet paid).
Notwithstanding the foregoing, (i) any Lender assigning its
rights and obligations under this Agreement may retain any
Auction Bid Advances made by it which are outstanding at such
time, and in such case shall retain its rights hereunder in
respect of any Auction Bid Advances so retained until such
Auction Bid Advances have been repaid in full in accordance
with this Agreement.
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each
other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of
any adverse claim and that its Commitment, and the outstanding
balances of its Advances, in each case without giving effect
to assignments thereof that have not become effective, are as
set forth in such Assignment and Acceptance; (ii) except as
set forth in clause (i) above, such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made
in or in connection with this Agreement, or the execution,
legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or any other instrument or document
furnished pursuant hereto, or the financial condition of the
Borrower or the performance or observance by the Borrower of
any of its obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such
assignee represents and warrants that it is legally authorized
to enter into such Assignment and Acceptance; (iv) such
assignee confirms that it has received a copy of this
Agreement, together with copies of any amendments or consents
entered into prior to the date of such Assignment and
Acceptance and copies of the most recent financial statements
delivered pursuant to Section 5.03 and such other documents
and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Acceptance; (v) such assignee will independently and without
reliance upon the Agent, such assigning Lender or any other
Lender 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 action under this Agreement;
(vi) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Agent by the
terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all the
obligations that by the terms of this Agreement are required
to be performed by it as a Lender.
(d) The Agent shall maintain at its address referred to
in, or determined pursuant to, Section 9.01 a copy of each
Assignment and Acceptance delivered to and accepted by it and
a register (the "Register") for the recordation of the names
and addresses of the Lenders and the Commitment of, and
principal amount of the Advances owing to, each Lender from
time to time and whether such Lender is a Lender on the
Effective Date, or the assignee of such a Lender. The entries
in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agent
and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee,
together with an Administrative Questionnaire completed in
respect of the assignee (unless the assignee shall already be
a Lender hereunder), the processing and recordation fee
referred to in paragraph (b) above and the written consent (to
the extent required under paragraph (b) above), of the Agent
and the Borrower to such assignment, the Agent shall (i)
accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give
prompt notice thereof to the Lenders. No assignment shall be
effective unless it has been recorded in the Register as
provided in this paragraph (e).
(f) Each Lender may, without the consent of the Borrower
and the Agent, sell participations to one or more banks or
other entities in all or a portion of its rights and obliga-
tions under this Agreement (including all or a portion of its
Commitment and the Advances owing to it); provided, however,
that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of
such obligations, (iii) the participating banks or other
entities shall be entitled to the benefit of the cost
protection provisions contained in Sections 2.10, 2.13 and
9.05 to the same extent as if they were Lenders (provided that
the Borrower shall not be required to reimburse the
participating banks or other entities pursuant to Section
2.10, 2.13 or 9.05 in an amount that exceeds the amount that
would have been payable thereunder to such Lender had such
Lender not sold such participation) and (iv) the Borrower, the
Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, and such Lender
shall retain the sole right to enforce the obligations of the
Borrower under this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement
(provided that the participating bank or other entity may be
provided with the right to approve amendments, modifications
or waivers affecting it with respect to (A) any decrease in
the Fees payable hereunder with respect to Advances in which
the participating bank or other entity has purchased a
participation, (B) any change in the amount of principal of,
or decrease in the rate at which interest is payable on, the
Advances in which the participating bank or other entity has
purchased a participation, or (C) any extension of the final
scheduled maturity of any Advance in which the participating
bank or other entity has purchased a participation. Each
participation shall be of a constant, and not a varying,
percentage of the Lender's Commitment.
(g) Notwithstanding the limitations set forth in
paragraph (b) above, any Lender may at any time assign all or
any portion of its rights under this Agreement to a Federal
Reserve Bank without the prior written consent of the Borrower
or the Agent, provided that no such assignment shall release a
Lender from any of its obligations hereunder or substitute any
such Bank for such Lender as a party hereto. In order to
facilitate such an assignment to a Federal Reserve Bank, the
Borrower shall, at the request of the assigning Lender, duly
execute and deliver to the assigning Lender a promissory note
or notes evidencing the Advances made to the Borrower, by the
assigning Lender hereunder.
(h) The Borrower may, with the prior written consent of
the Agent, replace any of the Lenders with one or more
assignees, provided (i) that the Lender being replaced has
been paid in full for all Advances made by such Lender and all
other amounts accrued or due to such Lender hereunder, (ii)
that the full amount of the Commitments remain unchanged and
(iii) that the percentages of the total Commitments allocated
to the Lenders (other than any replaced Lenders) remain
unchanged unless prior written consent from any such affected
Lenders has been obtained. Upon any such replacement, such
Lender shall cease to be a party hereto but shall continue to
be entitled to the benefits of Sections 2.10, 2.13 and 9.05,
as well as to any Fees accrued for its account under
Section 2.03 and not yet paid.
(i) In the event that:
(i) any Lender shall have refused (and shall not
have retracted such refusal) to make available any
Advance on its part to be made available hereunder, other
than solely as a result of the failure of any condition
set forth in Article 4 to be satisfied (such condition
not having been effectively waived in accordance with the
terms hereof);
(ii) any Lender shall have notified either the Agent
or the Borrower (and shall not have retracted such
notification) that it does not intend to comply with any of
its obligations hereunder, other than solely as a result
of the failure of any condition set forth in Article
4 to be satisfied (such condition not having been
effectively waived in accordance with the terms hereof);
(iii) (A) a receiver, trustee, conservator or other
custodian shall have been appointed with respect to any
Lender or its property at the direction or request of any
Governmental Authority or (B) an order, action, process
or proceeding of the type contemplated by paragraph (g)
or (h) of Section 7.01 shall be commenced by or against
such Lender (or such Lender shall have consented to the
entry of any such order, action, process or proceeding);
or
(iv) any Lender shall have made demand upon the
Borrower for any amount pursuant to Section 2.10 or 2.13;
the Borrower shall have the right, at its own expense, upon
notice to such Lender and the Agent (A) to require such
Lender, and such Lender hereby agrees, to use commercially
reasonable efforts to transfer and assign without recourse (in
accordance with and subject to the restrictions contained in
Section 9.04(b)) all the interests, rights and obligations of
such Lender to an assignee; provided, however, that (1) no
such assignment shall conflict with any law, rule or
regulation or order of any Governmental Authority and (2) the
Borrower or such assignee, as the case may be, shall pay to
such Lender in same day funds on the date of such assignment
the principal of and interest accrued on the date of payment
on the Advances made by such Lender hereunder and all other
amounts accrued for such Lender's account or owed to it
hereunder or (B) to replace such Lender with one or more
assignees, provided, in the case of this clause (B), (1) that
the Lender being replaced has been paid in full for all
Advances made by such Lender and all other amounts accrued or
due to such Lender hereunder, (2) that the full amount of the
Commitments remains unchanged and (3) that the percentage of
the total Commitments allocated to the Lenders (other than any
replaced Lenders) remains unchanged unless prior written
consent from such Lenders has been obtained. Upon any
assignment, such Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of Sections
2.10, 2.13 and 9.05, as well as to any fees accrued for its
account under Section 2.03 and not yet paid.
SECTION 9.05. Expenses; Indemnity.
(a) The Borrower agrees to pay (i) the reasonable fees,
disbursements and other charges of counsel for the Agent and
BNY Capital Markets incurred in connection with the
preparation of this Agreement or in connection with any
amendments, modifications or waivers of the provisions hereof
or thereof (whether or not the transactions hereby
contemplated shall be consummated) and (ii) all reasonable
out-of-pocket expenses incurred by the Agent or any Lender in
connection with the enforcement or protection of their rights
in connection with this Agreement or in connection with the
Advances made hereunder, including the reasonable fees,
disbursements and other charges of Xxxxx, Xxxxxx & Xxxxxx,
LLP, counsel for the Agent, in connection with any such
enforcement or protection and the reasonable fees, disburse-
ments and other charges of any other counsel for the Agent or
any Lender. The Borrower further agrees that it shall
indemnify the Agent and the Lenders from, and hold them
harmless against, any documentary taxes, assessments or
similar charges made by any Governmental Authority by reason
of the execution and delivery of this Agreement.
(b) The Borrower agrees to indemnify the Agent, BNY
Capital Markets and each Lender and each of their respective
directors, officers, employees and agents (each such person
being called an "Indemnitee") against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable counsel
fees, disbursements and other charges, incurred by or asserted
against any Indemnitee arising out of, in any way connected
with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby
or thereby, the performance by the parties hereto or thereto
of their respective obligations hereunder or thereunder or the
consummation of the Transactions and the other transactions
contemplated hereby or thereby, (ii) the use of the proceeds
of the Advances or (iii) any claim, litigation, investigation
or proceeding relating to any of the foregoing, whether or not
any Indemnitee is a party thereto, provided that such
indemnity shall not, as to any Indemnitee, be available to the
extent that such losses, claims, damages, liabilities or
related expenses have resulted from the gross negligence or
wilful misconduct of such Indemnitee.
(c) If any payment of principal of any Adjusted
Eurodollar Rate Advance or any Auction Bid Advance is made
other than on the last day of the Interest Period for such
Advance, as a result of any Conversion, payment pursuant to
Section 2.05, prepayment pursuant to clause (ii) of the
proviso to Section 2.09(a) or acceleration of the maturity of
the Advances pursuant to Section 7.01 or for any other reason,
the Borrower shall, upon demand by any Lender (with a copy of
such demand to the Agent), pay to the Agent for the account of
such Lender any amounts required to compensate such Lender for
any additional losses, costs or expenses that such Lender may
incur as a result of such payment, including any loss
(excluding loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or
maintain such Advance.
(d) The provisions of this Section 9.05 shall remain
operative and in full force and effect regardless of the
expiration of the term of this Agreement, the consummation of
the transactions contemplated hereby, the repayment of any of
the Advances, the invalidity or unenforceability of any term
or provision of this Agreement, or any investigation made by
or on behalf of the Agent or any Lender. All amounts due under
this Section 9.05 shall be payable on written demand therefor.
SECTION 9.06. Right of Setoff.
If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized, in addition to
any other right or remedy that any Lender may have by opera-
tion of law or otherwise, at any time and from time to time,
without notice to the Borrower (any such notice being
expressly waived by the Borrower), to exercise its banker's
lien or right of setoff and apply any and all deposits
(general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such
Lender to or for the credit or the account of the Borrower
against any of and all the obligations of the Borrower now or
hereafter existing under this Agreement held by such Lender,
irrespective of whether such Lender shall have made any demand
under this Agreement and although such obligations may be un-
matured.
SECTION 9.07. Applicable Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendments.
(a) No failure or delay on the part of the Agent or any
Lender in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or
discontinuation of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise
of any other right or power. The rights and remedies of the
Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise
have. No waiver of any provision of this Agreement or consent
to any departure by the Borrower therefrom shall in any event
be effective unless the same shall be permitted by paragraph
(b) below, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which
given. No notice or demand on the Borrower in any case shall
entitle the Borrower to any other or further notice or demand
in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may
be waived, amended or modified except pursuant to an agreement
or agreements in writing entered into by the Borrower and the
Majority Lenders, provided, however, that no such agreement
shall (A) change the principal amount of any Advance, extend
the final scheduled maturity of any Advance, extend the
scheduled date for payment (but not prepayments) of principal
of or interest on any Advance, forgive any such payment or any
part thereof or reduce the rate of interest on any Advance, in
each case without the prior written consent of each Lender
affected thereby, (B) increase the amount or extend the
termination date of the Commitment of any Lender or reduce
or extend the date for payment of the Fees of any Lender, in
each case without the prior written consent of such Lender,
(C) amend or modify the provisions of this Section 9.08(b) or
the definition of the term "Majority Lenders" without the
prior written consent of each Lender, and provided further,
that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Agent, without the prior written
consent of the Agent.
SECTION 9.09. Interest Rate Limitation.
Notwithstanding anything herein to the contrary, if at
any time the applicable interest rate, together with all fees
and charges that are treated as interest under applicable law
(collectively, the "Charges"), as provided for herein or in
any other document executed in connection herewith, or
otherwise contracted for, charged, received, taken or reserved
by any Lender shall exceed the maximum lawful rate (the
"Maximum Rate") that may be contracted for, charged, taken,
received or reserved by such Lender in accordance with
applicable law, the rate of interest payable to such Lender
hereunder, together with all Charges payable to such Lender,
shall be limited to the Maximum Rate.
SECTION 9.10. Entire Agreement.
This Agreement and the letter referred to in Section
2.03(b) constitute the entire contract between the parties
relative to the subject matter hereof. Any previous agreement
among the parties with respect to the subject matter hereof is
superseded by this Agreement.
Nothing in this Agreement, expressed or implied, is
intended to confer upon any party other than the parties
hereto and thereto any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
SECTION 9.11. Waiver of Jury Trial.
Each party hereto hereby waives, to the fullest extent
permitted by applicable law, any right it may have to a trial
by jury in respect of any litigation directly or indirectly
arising out of, under or in connection with this Agreement.
Each party hereto (a) certifies that no representative, agent
or attorney of any other party has represented, expressly or
otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver and (b)
acknowledges that it and the other parties hereto have been
induced to enter into this Agreement by, among other things,
the mutual waivers and certifications in this Section 9.11.
SECTION 9.12. Severability.
In the event any one or more of the provisions contained
in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and en-
forceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby. The
parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid
provisions, the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 9.13. Counterparts.
This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but
all of which when taken together shall constitute but one
contract, and shall become effective as provided in Section
9.03.
SECTION 9.14. Headings.
Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction
of, or to be taken into consideration in interpreting, this
Agreement.
SECTION 9.15. Confidentiality.
Unless otherwise agreed to in writing by the Borrower,
the Agent and each Lender hereby agree to keep all Proprietary
Information (as defined below) confidential and not to
disclose or reveal any Proprietary Information to any Person
other than the Agent's or such Lender's directors, officers,
employees, Affiliates and agents and to actual or potential
assignees and participants, and then only on a confidential
basis; provided, however, that the Agent or any Lender may
disclose Proprietary Information (a) as required by law, rule,
regulation or judicial process or in connection with any
litigation or other proceeding relating to this Agreement
(provided that the applicable Person shall give the Borrower
notice of such disclosure on the same day on which it
determines such disclosure to be necessary and in any event
prior to such disclosure), (b) to its attorneys and
accountants or (c) as requested or required by any state, or
Federal or foreign authority or examiner regulating banks or
banking. For purposes of this Agreement, the term
"Proprietary Information" shall include all information about
the Borrower or any of its Affiliates that has been furnished
by the Borrower or any of its Affiliates, whether furnished
before or after the Effective Date, and regardless of the
manner in which it is furnishes; provided, however, that
Proprietary Information does not include information that (i)
is or becomes generally available to the public other than as
a result of a disclosure by the Agent or any Lender not
permitted by this Agreement, (ii) was available to the Agent
or any Lender on a nonconfidential basis prior to its
disclosure by the Agent or such Lender by the Borrower or any
of its Affiliates or (iii) becomes available to the Agent or
any Lender on a nonconfidential basis from a Person other than
the Borrower or its Affiliates who, to the best knowledge of
the Agent or such Lender, as the case may be, is not otherwise
bound by a confidentiality agreement with the Borrower or any
of its Affiliates, or is not otherwise prohibited from
transmitting the information to the Agent or such Lender.
SECTION 9.16. Jurisdiction; Consent to Service of Process.
(a) The Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or Federal court
of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement, or
for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State
or, to the extent permitted by law, in such Federal court.
Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in
any other manner provided by law. Nothing in this Agreement
shall affect any right that any Lender may otherwise have to
bring any action or proceeding relating to this Agreement
against the Borrower or its properties in the courts of any
jurisdiction.
(b) The Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection that it may now
or hereafter have to the laying of venue of any suit, action
or proceeding arising out of or relating to this Agreement in
any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such
court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in
Section 9.01. Nothing in this Agreement will affect the right
of any party to this Agreement to serve process in any other
manner permitted by law.
IN WITNESS WHEREOF, each of the Borrower, the Agent and
the Lenders have caused this Agreement to be duly executed by
their respective authorized officers as of the day and year
first above written.
THE KROGER CO.
By:___________________
Name:_________________
Title:_________________
THE BANK OF NEW YORK,
individually and as Agent
By:_____________________
Name:___________________
Title:__________________
FIRST UNION NATIONAL
BANK OF NORTH CAROLINA
By:____________________
Name:__________________
Title:_________________
BANK OF MONTREAL
By:___________________
Name:_________________
Title:________________
BANK ONE, COLUMBUS, N.A.
By:___________________
Name:_________________
Title:________________
THE TOKAI BANK, LTD.,
CHICAGO BRANCH
By:____________________
Name:__________________
Title:_________________
CIBC, INC.
By:___________________
Name:_________________
Title:_________________
