COMPETITIVE ADVANCE AND
REVOLVING CREDIT FACILITIES AGREEMENT
Dated as of June 10, 1997
among
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
and
THE GREAT ATLANTIC & PACIFIC COMPANY OF CANADA, LIMITED
as Borrowers
and
THE BANKS NAMED HEREIN,
THE CHASE MANHATTAN BANK,
as U.S. Agent
and
THE CHASE MANHATTAN BANK OF CANADA,
as Canadian Agent
and
COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK BRANCH
as Documentation Agent
and
THE BANK OF NEW YORK, THE BANK OF NOVA SCOTIA,
CITIBANK, N.A., CORESTATES BANK, N.A., FLEET NATIONAL BANK
NATIONSBANK, N.A. and ROYAL BANK OF CANADA,
as Co-Agents
[CS&M Ref. No. 6700-541]
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Defined Terms ........................................... 1
SECTION 1.02. Terms Generally ......................................... 14
ARTICLE II
Loans
SECTION 2.01. Commitments ............................................. 14
SECTION 2.02. Competitive Bid Procedure ............................... 15
SECTION 2.03. Committed Borrowing Procedure ........................... 17
SECTION 2.04. Refinancings ............................................ 17
SECTION 2.05. Loans ................................................... 18
SECTION 2.06. Evidence of Debt; Repayment of Loans .................... 19
SECTION 2.07. Interest ................................................ 19
SECTION 2.08. Fees .................................................... 20
SECTION 2.09. Termination, Reduction or Reallocation of Commitments ... 21
SECTION 2.10. Interest on Overdue Amounts ............................. 23
SECTION 2.11. Alternate Rate of Interest .............................. 23
SECTION 2.12. Prepayment of Loans ..................................... 24
SECTION 2.13. Reserve Requirements; Change in Circumstances ........... 24
SECTION 2.14. Change In Legality ...................................... 26
SECTION 2.15. Indemnity ............................................... 26
SECTION 2.16. Money of Account, etc. .................................. 27
SECTION 2.17. Pro Rata Treatment, etc. ................................ 27
SECTION 2.18. Taxes ................................................... 28
SECTION 2.19. Duty to Mitigate; Assignment of Commitments
Under Certain Circumstances ........................... 30
SECTION 2.20. Letters of Credit ....................................... 31
SECTION 2.21. Acceptances ............................................. 34
SECTION 2.22. Currency Fluctuations, etc. ............................. 37
SECTION 2.23. Consolidation of Credit Facilities ...................... 38
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Corporate Powers .......................... 40
SECTION 3.02. Authorization and Enforceability ........................ 40
SECTION 3.03. Approvals ............................................... 40
SECTION 3.04. Financial Statements .................................... 40
SECTION 3.05. No Material Adverse Change .............................. 41
SECTION 3.06. Subsidiaries ............................................ 41
SECTION 3.07. Litigation; Compliance with Laws ........................ 41
SECTION 3.08. Tax Returns ............................................. 41
SECTION 3.09. Employee Benefit Plans .................................. 42
SECTION 3.10. Foreign Employee Benefit Matters ........................ 42
SECTION 3.11. Investment Company Act .................................. 42
SECTION 3.12. Federal Reserve Regulations ............................. 42
SECTION 3.13. Agreements .............................................. 42
SECTION 3.14. No Material Misstatements ............................... 43
SECTION 3.15. Environmental and Safety Matters
Contents, p.2
Page
ARTICLE IV
Conditions of Lending
SECTION 4.01. All Borrowings, etc. .................................... 43
SECTION 4.02. Effectiveness ........................................... 44
ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence ............................................... 45
SECTION 5.02. Insurance ............................................... 46
SECTION 5.03. Obligations and Taxes ................................... 46
SECTION 5.04. Financial Statements; Reports, etc. ..................... 46
SECTION 5.05. Litigation and Other Notices ............................ 47
SECTION 5.06. ERISA ................................................... 48
SECTION 5.07. Access to Premises and Records .......................... 48
SECTION 5.08. Additional Guarantors ................................... 48
SECTION 5.09. Ownership of A&P Canada ................................. 49
ARTICLE VI
Negative Covenants
SECTION 6.01. Minimum Consolidated Tangible Net Worth ................. 49
SECTION 6.02. Ratio of Consolidated Indebtedness to
Consolidated Tangible Net Worth ....................... 49
SECTION 6.03. Interest Expense Coverage Ratio ......................... 49
SECTION 6.04. Liens ................................................... 50
SECTION 6.05. Prohibition of Fundamental Changes ...................... 51
SECTION 6.06. Transactions with Affiliates and Others ................. 51
SECTION 6.07. Subsidiary Indebtedness ................................. 52
SECTION 6.08. Sale and Leaseback Transactions ......................... 52
ARTICLE VII
Events of Default ....................................................... 53
ARTICLE VIII
The Agent ............................................................... 55
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices ................................................. 57
SECTION 9.02. Waivers; Amendment ...................................... 58
SECTION 9.03. Payments on Business Days ............................... 59
SECTION 9.04. GOVERNING LAW ........................................... 59
SECTION 9.05. Expenses; Documentary Taxes ............................. 59
SECTION 9.06. Survival of Agreements; Representations and
Warranties, etc. ...................................... 59
Contents p.3
Page
SECTION 9.07. Successors and Assigns .................................. 60
SECTION 9.08. Cash Collateralization .................................. 62
SECTION 9.09. Sharing of Setoffs ...................................... 63
SECTION 9.10. Representations of Banks ................................ 63
SECTION 9.11. Waiver of Jury Trial .................................... 63
SECTION 9.12. Severability ............................................ 63
SECTION 9.13. Cover Page; Table of Contents and Sections Headings ..... 64
SECTION 9.14. Counterparts ............................................ 64
SECTION 9.15. Entire Agreement ........................................ 64
SECTION 9.16. Jurisdiction; Consent to Service of Process ............. 64
Contents p.4
Exhibits
--------
Exhibit A - Assignment and Acceptance
Exhibit B-1 - Competitive Bid Request
Exhibit B-2 - Standby Borrowing Request
Exhibit B-3 - Canadian Borrowing Request
Exhibit C - Notice of Competitive Bid Request
Exhibit D - Competitive Bid
Exhibit E - Indemnity, Subrogation and Contribution
Agreement
Exhibit F-1 - Opinion of the Company
Exhibit F-2 - Opinion of Xxxxxx Xxxxxx & Xxxxxxx
Exhibit F-3 - Opinion of Blake, Xxxxxxx & Xxxxxxx
Exhibit G - Guarantee Agreement
Exhibit H - Discount Note
Exhibit I - Notice of Drawing
Schedules
---------
Schedule 1.01 - Existing Bankers' Acceptances
Schedule 2.01 - Banks
Schedule 3.06 - Subsidiaries
COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITIES AGREEMENT
dated as of June 10, 1997, among THE GREAT ATLANTIC & PACIFIC TEA
COMPANY, INC., a Maryland corporation (hereinafter called the
"Company"), THE GREAT ATLANTIC & PACIFIC COMPANY OF CANADA, LIMITED, a
Canadian corporation ("A&P Canada" and, together with the Company, the
"Borrowers"), the banks listed in Schedule 2.01 hereto (hereinafter
each called a "Bank" and collectively called the "Banks"), THE CHASE
MANHATTAN BANK, a New York banking corporation, as agent for the U.S.
Banks (hereinafter in such capacity called the "U.S. Agent"), and THE
CHASE MANHATTAN BANK OF CANADA, a Canadian chartered bank, as agent
for the Canadian Banks (hereinafter in such capacity called the
"Canadian Agent").
The Company has requested the U.S. Banks to extend credit to the Company in
order to enable it to borrow on a revolving credit basis at any time and from
time to time prior to the Termination Date a principal amount not in excess of
U.S.$465,000,000 at any time outstanding. The Company has also requested the
U.S. Banks to provide a procedure pursuant to which the Company may invite them
to bid on an uncommitted basis, up to the amount of the Total U.S. Commitment,
on short-term borrowings by the Company. The proceeds of such loans are to be
used for general corporate purposes, including, without limitation, capital
expenditures, acquisitions and working capital. The Company also has requested
the U.S. Issuing Bank to issue Letters of Credit, in an aggregate face amount at
any time outstanding not in excess of U.S.$100,000,000, to support payment
obligations incurred in the ordinary course of business by the Company and its
Subsidiaries.
A&P Canada has requested the Canadian Banks to extend credit in order to
enable A&P Canada to borrow on a revolving credit basis at any time and from
time to time prior to the Termination Date, in Canadian Dollars or U.S. Dollars,
an aggregate principal amount not in excess of Cdn.$50,000,000. The proceeds of
such loans are to be used for general corporate purposes, including, without
limitation, capital expenditures, acquisitions and working capital. A&P Canada
also has requested the Canadian Issuing Bank to issue Letters of Credit, in an
aggregate face amount at any time outstanding not in excess of Cdn.$35,000,000,
to support payment obligations incurred in the ordinary course of business by
A&P Canada and its Subsidiaries.
The U.S. Banks are severally, and not jointly, willing to extend such
credit to the Company and the Canadian Banks are severally, and not jointly,
willing to extend such credit to A&P Canada, in each case on the terms and
conditions hereinafter set forth. Accordingly, the Borrowers, the Agents and the
Banks agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following words
and terms shall have the meanings specified below:
"Acceptance" shall mean a Draft drawn by A&P Canada on a Canadian Bank
conforming to the requirements of Section 2.21 and accepted by such Canadian
Bank in accordance with Section 2.21(c). As the context shall require,
"Acceptance" shall also have the meaning ascribed to it in Section 2.21(j).
"Acceptance Equivalent Loan" means an advance made under this Agreement by
a Canadian Bank evidenced by a Discount Note.
"Acceptance Fee" shall have the meaning assigned to it in Section 2.08(d).
"Acceptance Obligation" shall mean, in respect of each Acceptance, the
obligation of A&P Canada to pay to the Canadian Bank that issued such Acceptance
the face amount thereof as required by Section 2.21.
"Administrative Fees" shall have the meaning assigned to it in Section
2.08(b).
2
"Affiliate" shall mean any person (other than a Subsidiary) that directly
or indirectly through one or more intermediaries controls, or is controlled by,
or is under common control with, the Company; provided, however, that
"Affiliate" shall not be deemed to include any person who holds such stock or
equity interest solely as a nominee in respect thereof. The term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person, whether through the
ownership of voting securities, by contract or otherwise.
"Agents" shall mean the U.S. Agent and the Canadian Agent.
"Agreement" shall mean this Credit Agreement, as the same shall be amended
from time to time.
"Alternate Base Loan" shall mean any Loan with respect to which the
applicable Borrower shall have selected an interest rate based on the Alternate
Base Rate in accordance with the provisions of Article II.
"Alternate Base Rate" shall mean for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/100 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on such day
plus 1% and (c) the Federal Funds Effective Rate in effect for such day plus 1/2
of 1%. "Prime Rate" shall mean (i) in respect of Alternate Base Loans provided
by U.S. Banks, the rate per annum publicly announced from time to time by the
U.S. Agent as its prime rate in effect at its principal office in New York City
and (ii) in respect of Alternate Base Loans provided by Canadian Banks, the rate
per annum announced from time to time by the Canadian Agent as its U.S. base
rate in effect at its office in Toronto; each change in the Prime Rate shall be
effective on the date such change is publicly announced. "Base CD Rate" shall
mean the sum of (a) the product of (i) the Three-Month Secondary CD Rate and
(ii) Statutory Reserves and (b) the Assessment Rate. "Three-Month Secondary CD
Rate" shall mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such day (or, if such day
shall not be a U.S. Business Day, the next preceding U.S. Business Day) by the
Board through the public information telephone line of the Federal Reserve Bank
of New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day), or, if such rate shall not be so reported on such day or
such next preceding U.S. Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 a.m., New York City time, on
such day (or, if such day shall not be a U.S. Business Day, on the next
preceding U.S. Business Day) by the U.S. Agent from three New York City
negotiable certificate of deposit dealers of recognized standing selected by it.
"Federal Funds Effective Rate" shall mean, for any day, 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 on the next
succeeding U.S. Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a U.S. Business Day, the
average of the quotations for the day of such transactions received by the U.S.
Agent from three Federal funds brokers of recognized standing selected by it. If
for any reason the U.S. Agent shall have determined (which determination shall
be conclusive absent manifest error) that it is unable to ascertain the Base CD
Rate or the Federal Funds Effective Rate or both for any reason, including the
inability or failure of the U.S. Agent to obtain sufficient quotations in
accordance with the terms hereof, the Alternate Base Rate shall be determined
without regard to clause (b) or (c), or both, of the first sentence of this
definition, as appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a change
in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in the
Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds Effective
Rate, respectively.
"Applicable Facility Fee Percentage" shall mean on any date the applicable
percentage set forth below opposite the applicable Ratings:
S&P/Xxxxx'x Rating Facility Fee
------------------ ------------
Category 1 0.0700
A-/A3 or higher
Category 2 0.0850
BBB+ or BBB/Baa1 or Baa2
Category 3 0.1000
BBB-/Baa3
3
Category 4 0.1500
BB+/Ba1
Category 5 0.2250
BB/Ba2
Category 6 0.3000
BB-/Ba3 or lower
For purposes of the foregoing, (i) if the Ratings established or deemed to
have been established by Xxxxx'x and S&P shall fall within different categories,
the Applicable Facility Fee Percentage shall be determined by reference to the
Rating in the superior (numerically lower) category; (ii) if neither Xxxxx'x nor
S&P shall have in effect a Rating (other than because such rating agencies shall
no longer be in the business of rating corporate debt obligations), then such
rating agencies will be deemed to have established a Rating in Category 6; and
(iii) 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
Xxxxx'x or S&P) such change shall be effective as of the date on which it is
first announced by the applicable rating agency. Each change in the Applicable
Facility Fee Percentage shall apply during the period commencing on the
effective date of such change and ending on the date immediately preceding the
effective date of the next such change. If the rating system of Xxxxx'x or S&P
shall change, or if either such rating agency shall cease to be in the business
of rating corporate debt obligations or shall no longer have in effect a Rating
for any reason, the Borrowers and the Banks shall negotiate in good faith to
amend the references to specific ratings in this definition to reflect such
changed rating system or the non-availability of ratings from such rating agency
or to select a substitute rating agency (and pending or in the absence of any
agreement the Applicable Facility Fee Percentage will be determined by reference
to the single available Rating, if any, or, in the absence of any Rating, in
accordance with clause (ii) above).
"Applicable Margin" shall mean on any date the applicable spread set forth
below opposite the applicable Ratings:
S&P/Xxxxx'x Rating Spread
------------------ ------
Category 1 0.1550
A-/A3 or higher
Category 2 0.1650
BBB+ or BBB/
Baa1 or Baa2
Category 3 0.2000
BBB-Baa3
Category 4 0.3000
BB+/Ba1
Category 5 0.4000
BB/Ba2
Category 6 0.5750
BB-/Ba3 or lower
For the purposes of the foregoing, (i) if the Ratings established or deemed
to have been established by Xxxxx'x and S&P shall fall within different
categories, the Applicable Margin shall be determined by reference to the Rating
in the superior (numerically lower) category; (ii) if neither Xxxxx'x nor S&P
shall have in effect a Rating (other than because such rating agencies shall no
longer be in the business of rating corporate debt obligations), then such
rating agencies will be deemed to have established a Rating in Category 6; and
(iii) 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
Xxxxx'x or S&P) such change shall be effective as of the date on which it is
first announced by the applicable rating agency. Each change in the Applicable
Margin shall apply during the period commencing on the effective date of such
change and ending on the date immediately preceding the effective date of the
next such change. If the rating system of Xxxxx'x or S&P shall change, or if
either such rating agency shall cease to be in the business of rating corporate
debt obligations or shall no longer have in effect a Rating for any reason, the
Borrowers and the
4
Banks shall negotiate in good faith to amend the references to specific ratings
in this definition to reflect such changed rating system or the non-availability
of ratings from such rating agency or to select a substitute rating agency (and
pending or in the absence of any agreement the Applicable Margin will be
determined by reference to the single available Rating, if any, or, in the
absence of any Rating, in accordance with clause (ii) above).
"Assessment Rate" shall mean, for any calendar year, the net annual
assessment rate (rounded upwards, if necessary, to the next higher 1/100 of 1%)
actually charged to the U.S. Agent by the Federal Deposit Insurance Corporation
(or any successor) for insurance by such Corporation (or such successor) of time
deposits made in U.S. Dollars at the U.S. Agent's domestic offices. The U.S.
Agent's determination of the Assessment Rate shall be conclusive and binding on
the Borrowers.
"Assignment and Acceptance" shall mean an assignment and acceptance entered
into by a Bank and an assignee, and accepted by the applicable Agent, the
Company and A&P Canada, in the form of Exhibit A hereto.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States.
"Borrowing" shall mean a Competitive Borrowing, a Standby Borrowing or a
Canadian Borrowing.
"Business Day" shall mean, as the context shall require, a U.S. Business
Day, a Canadian Business Day, or both.
"Calculation Date" shall mean the last U.S. Business Day of each calendar
week.
"Canadian Bank" shall mean a Bank that has a Canadian Commitment.
"Canadian Borrowing" shall mean a borrowing consisting of simultaneous
Canadian Loans from each of the Canadian Banks distributed ratably among the
Canadian Banks in accordance with their respective Canadian Commitments.
"Canadian Borrowing Request" shall mean a request made pursuant to Section
2.03 in the form of Exhibit B-3.
"Canadian Business Day" shall mean any day not a Saturday, Sunday or legal
holiday in the Province of Ontario on which banks are open for business in
Toronto; provided, however, that when used in connection with a Eurodollar Loan,
the term "Canadian Business Day" shall also exclude any day on which banks are
not open for dealings in U.S. Dollar deposits in the London Interbank Market.
"Canadian Commitment" shall mean, with respect to each Bank, the
commitment, if any, of such Bank hereunder to extend credit to A&P Canada as set
forth in Schedule 2.01, as the same may be increased or decreased from time to
time pursuant to Section 2.09 or 2.23.
"Canadian Dollars" and the symbol "Cdn.$" shall mean the lawful currency of
Canada.
"Canadian Dollar Equivalent" shall mean, with respect to an amount of U.S.
Dollars on any date, the amount of Canadian Dollars that may be purchased with
such amount of U.S. Dollars at the Exchange Rate with respect to U.S. Dollars on
such date.
"Canadian Holding Subsidiary" shall mean The Great Atlantic and Pacific Tea
Company, Limited, a Canadian company.
"Canadian Issuing Bank" shall mean The Chase Manhattan Bank of Canada (or
any affiliate thereof) or any other Canadian Bank that may become a Canadian
Issuing Bank pursuant to Section 2.20(i), in each case with respect to Letters
of Credit issued by it.
"Canadian L/C Exposure" shall mean at any time the sum of (a) the aggregate
undrawn amount of all outstanding Canadian Letters of Credit at such time plus
(b) the aggregate principal amount of all L/C Disbursements made pursuant to
Canadian Letters of Credit that have not yet been reimbursed at such time. If
the Canadian L/C Exposure is to be expressed in Canadian Dollars, then any
portion thereof denominated in U.S. Dollars shall be expressed at the Canadian
Dollar Equivalent. If the Canadian L/C
5
Exposure is to be expressed in U.S. Dollars, then any portion thereof
denominated in Canadian Dollars shall be expressed at the U.S. Dollar
Equivalent. The Canadian L/C Exposure of any Bank at any time shall mean its Pro
Rata Percentage of the aggregate Canadian L/C Exposure at such time.
"Canadian Letter of Credit" shall mean a letter of credit issued pursuant
to Section 2.20 for the account of A&P Canada.
"Canadian Loan" shall have the meaning assigned to it in Section 2.01. A
Canadian Loan must be a Canadian Prime Loan if denominated in Canadian Dollars
or an Alternate Base Loan or Eurodollar Loan if denominated in U.S. Dollars.
"Canadian Prime Loan" shall mean any Canadian Loan with respect to which
A&P Canada shall have selected an interest rate based on the Canadian Prime Rate
in accordance with the provisions of Article II.
"Canadian Prime Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/100 of 1%) equal to the higher of (i) the
rate per annum publicly announced from time to time by The Chase Manhattan Bank
of Canada as its prime rate in effect at its principal office in Toronto and
(ii) the CDOR Rate plus 100 basis points per annum. The term "CDOR Rate" shall
mean, on any day, the annual rate of interest which is the rate determined as
being the arithmetic average of the "BA 1 month" rates applicable to Canadian
Dollar bankers' acceptances displayed and identified as such on the "Reuters'
Screen CDOR Page" at approximately 10:00 a.m. on such day for Schedule I
chartered banks, or if such day is not a Canadian Business Day then on the
immediately preceding Canadian Business Day (as adjusted by a Canadian Bank
after 10:00 a.m. to reflect any error in a posted rate of interest or in the
posted average annual rate of interest). Each change in the Canadian Prime Rate
shall be effective on the date such change is publicly announced.
"Capitalized Lease Obligations" of any person shall mean the obligations of
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real and/or personal property which
obligations are required to be classified and accounted for as a capital lease
on a balance sheet under GAAP and, for the purposes hereof, the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Closing Date" shall mean the date of the execution of this Agreement.
"Code" shall mean the United States Internal Revenue Code of 1986, as the
same may be amended from time to time.
"Commitment" shall mean a U.S. Commitment or a Canadian Commitment, or
both, as the context requires. The Commitments shall be deemed permanently
terminated on the Termination Date.
"Competitive Bid" shall mean an offer by a U.S. Bank to make a Competitive
Loan pursuant to Section 2.02.
"Competitive Bid Rate" shall mean, as to any Competitive Bid made by a U.S.
Bank pursuant to Section 2.02(b), (i) in the case of a Eurodollar Competitive
Loan, the Margin and (ii) in the case of a Fixed Rate Loan, the fixed rate of
interest offered by the U.S. Bank making such Competitive Bid.
"Competitive Bid Request" shall mean a request made pursuant to Section
2.02 in the form of Exhibit B-1 hereto.
"Competitive Borrowing" shall mean a borrowing consisting of concurrent
Competitive Loans from each of the Banks whose Competitive Bid as a part of such
borrowing has been accepted by the Company under the bidding procedure described
in Section 2.02.
"Competitive Loan" shall mean a Loan from a U.S. Bank to the Company
pursuant to the bidding procedure described in Section 2.02. Each Competitive
Loan shall be a Eurodollar Competitive Loan or a Fixed Rate Loan.
"Consolidated" shall mean, as applied to any financial or accounting term,
such term determined on a consolidated basis for the Company and the
Subsidiaries in accordance with GAAP, including
6
principles of consolidation, consistent with those applied in the preparation of
the Consolidated financial statements referred to in Section 3.04.
"Consolidation Date" shall have the meaning assigned to it in Section 2.23.
"Discount Note" means a non-interest bearing, non-negotiable promissory
note of A&P Canada denominated in Canadian Dollars, issued by A&P Canada to a
Canadian Bank, substantially in the form of Exhibit I.
"Draft" shall mean a xxxx of exchange, payable in Canadian Dollars, in the
form used from time to time by each Canadian Bank, respectively, in connection
with the creation of bankers' acceptances in accordance with the provisions of
Section 2.21.
"EBITDA" shall mean, for any period, Consolidated Income from Operations
for such period plus, to the extent deducted in determining such Consolidated
Income from Operations, depreciation expense, amortization expense and other
nonrecurring noncash items reducing such Consolidated Income from Operations
(less the amount of any nonrecurring noncash items increasing such Consolidated
Income from Operations), all as determined in accordance with GAAP on a
consolidated basis for the Company and the Subsidiaries.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that is (a) a member of a group of which the Company is a member
and (b) treated as a single employer under Section 414 of the Code.
"Eurodollar Competitive Loan" shall mean any Competitive Loan bearing
interest at a rate determined by reference to the LIBO Rate in accordance with
provisions of Article II hereof.
"Eurodollar Loan" shall mean any Eurodollar Competitive Loan or any U.S.
Loan, or any Canadian Loan denominated in U.S. Dollars, during any Interest
Period with respect to which the Company or A&P Canada, as the case may be,
shall have elected an interest rate based on the LIBO Rate in accordance with
the provisions of Article II hereof.
"Event of Default" shall have the meaning assigned to it in Article VII
hereof.
"Exchange Rate" shall mean, on any day, (a) with respect to Canadian
Dollars in relation to U.S. Dollars, the spot rate at which U.S. Dollars are
offered on such day by The Chase Manhattan Bank in New York City for Canadian
Dollars at approximately 12:00 p.m. (New York City time), and (b) with respect
to U.S. Dollars in relation to Canadian Dollars, the spot rate at which Canadian
Dollars are offered on such day by The Chase Manhattan Bank in New York City for
U.S. Dollars at approximately 12:00 p.m. (New York City time), as quoted
generally to customers of The Chase Manhattan Bank.
"Executive Officer" shall mean an executive officer who is (or would be but
for the fact that the entity of which he is an executive officer does not have a
class of securities registered pursuant to Section 12 of the Securities Exchange
Act of 1934) subject to Item 401 of Regulation S-K adopted by the Securities and
Exchange Commission.
"Facility Fee" shall have the meaning assigned to it in Section 2.08(a).
"Federal Reserve Bank" shall mean any of the Federal Reserve Banks referred
to in the Federal Reserve Act (12 U.S.C. ss.221 et seq.), as amended.
"Fees" shall mean the Facility Fees, the Administrative Fees, the L/C
Participation Fees, the Issuing Bank Fees and the Acceptance Fees.
"Financial Officer" shall mean the Chief Financial Officer, Treasurer, any
Vice President-Finance, -Financial Services or -Treasury Services, or Controller
of the Company.
"Fixed Rate" shall mean fixed rate of interest applicable to a Fixed Rate
Loan.
7
"Fixed Rate Loan" shall mean any Competitive Loan made by a U.S. Bank
pursuant to Section 2.02 based upon an actual percentage rate per annum offered
by such Bank, expressed as a decimal (to no more than four decimal places), and
accepted by the Company. "Foreign Employee Benefit Plans" shall mean any
employee benefit plan as defined in Section 3(3) of ERISA which is maintained or
contributed to for the benefit of the employees of A&P Canada or any Subsidiary,
but which is not covered by ERISA pursuant to Section 4(b)(4) of ERISA.
"Foreign Pension Plan" shall mean any Foreign Employee Benefit Plan which
under local law, is required to be funded through a trust or other funding
vehicle other than a trust or funding vehicle maintained by a governmental
authority.
"GAAP" shall mean generally accepted accounting principles, applied on a
consistent basis.
"Guarantee" shall mean any obligation, contingent or otherwise, of any
person guaranteeing or having the economic effect of guaranteeing any
Indebtedness of any other person (the "primary obligor") in any manner, whether
directly or indirectly, and including, without limitation, any obligation of
such person, direct or indirect, (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or to purchase (or to
advance or supply funds for the purchase of) any security for the payment of
such Indebtedness, (ii) to purchase property, securities, or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness, (iii) to maintain working capital, equity capital or other
financial statement condition of the primary obligor so as to enable the primary
obligor to pay such Indebtedness, or (iv) entered into for the purpose of
assuring in any manner the owner of such Indebtedness of the payment of such
indebtedness or to protect such owner against loss in respect thereof; provided,
however, that the term Guarantee shall not include (a) endorsements for
collection or deposit, in either case in the ordinary course of business or (b)
Guarantees in an aggregate amount not to exceed $30,000,000. The amount of any
Guarantee by a person shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such person is required to perform
thereunder) as determined by such person in good faith.
"Guarantee Agreement" shall mean the Guarantee Agreement, substantially in
the form of Exhibit G.
"Guarantors" shall have the meaning assigned to it in the Guarantee
Agreement.
"Income from Operations" shall mean, for any period, with respect to any
person the aggregate income (or loss) from operations of such person for such
period, computed in accordance with GAAP.
"Indebtedness" of any person shall mean at any time, without duplication,
(i) all obligations of such person for borrowed money, (ii) all obligations of
such person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such person upon which interest charges are customarily
paid (other than accounts payable incurred in the ordinary course of business),
(iv) all obligations of such person issued or assumed as the deferred purchase
price of property (other than accounts payable incurred in the ordinary course
of business), (v) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any lien or security interest on property owned or acquired by such
person, whether or not the obligations secured thereby have been assumed, (vi)
all Guarantees by such person of Indebtedness of others and (vii) all
Capitalized Lease Obligations of such person.
"Indemnity, Subrogation and Contribution Agreement" shall mean the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit E.
"Interest Expense" shall mean, for any period, the gross interest expense
of the Company and the Subsidiaries for such period determined on a Consolidated
basis in accordance with GAAP.
"Interest Payment Date" shall mean, with respect to any Loan, the last day
of the Interest Period applicable thereto and (i) in the case of a Eurodollar
Loan with an Interest Period of 6 months, the day that would have been the
Interest Payment Date for such Loan had an Interest Period of 3 months been
applicable to such Loan, and (ii) in the case of a Fixed Rate Loan with an
Interest Period of more than 90 days, each day within such Interest Period that
would have been an Interest Payment Date had such Loan been a series of
consecutive Loans with 90-day Interest Periods.
8
"Interest Period" shall mean: (i) as to any Eurodollar Loan, the period
commencing on the date of such Loan and ending on the numerically corresponding
day (or if there is no corresponding day, the last day) in the calendar month
that is 1, 2, 3, or 6 months thereafter, as the relevant Borrower may elect, and
thereafter, each period commencing on the last day of the next preceding
Interest Period for such Eurodollar Loan and ending on the numerically
corresponding day (or if there is no corresponding day, the last day) in the
calendar month that is 1, 2, 3 or 6 months thereafter, as the relevant Borrower
may elect, (ii) as to any Alternate Base Loan, a period commencing on the date
of such Alternate Base Loan and ending on the earlier of the date 90 days
thereafter or the date on which such Alternate Base Loan is repaid or prepaid,
(iii) as to any Fixed Rate Loan, the period commencing on the date of such Loan
and ending on the date specified in the Competitive Bid in which the offer to
make the Fixed Rate Loan was extended (it being understood that any such
Interest Period in respect of a Fixed Rate Loan may not be less than 7 days nor
more than 360 days) and (iv) as to any Canadian Prime Loan, a period commencing
on the date of such Canadian Prime Loan and ending on the earlier of the last
Canadian Business Day of each calendar month or the date on which such Canadian
Prime Loan is repaid or prepaid; provided, however, that (i) if any Interest
Period would end on a day which shall not be an applicable Business Day, such
Interest Period shall be extended to the next succeeding applicable Business Day
unless, with respect to Eurodollar Loans only, such next succeeding applicable
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding applicable Business Day, (ii) no Interest
Period with respect to any Loan shall end later than the Termination Date and
(iii) interest shall accrue from and including the first day of an Interest
Period to but excluding the last day of such Interest Period.
"Issuing Bank" shall mean, as the context may require, the U.S. Issuing
Bank, the Canadian Issuing Bank, or both.
"Issuing Bank Fees" shall have the meaning assigned to such term in Section
2.08(c).
"L/C Disbursement" shall mean a payment or disbursement made by an Issuing
Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean the Canadian L/C Exposure and the U.S. L/C
Exposure.
"L/C Participation Fee" shall have the meaning assigned to such term in
Section 2.08(c).
"Letter of Credit" shall mean, as the context may require, a U.S. Letter of
Credit or a Canadian Letter of Credit.
"LIBO Rate" shall mean, with respect to any Eurodollar Loan, the rate
(rounded upwards, if not already a whole multiple of 1/100 of 1%, to the next
higher 1/100 of 1%) equal to the offered rate for U.S. Dollar deposits for a
period equal to the Interest Period for such Eurodollar Loan appearing on page
3750 of the Telerate Service (or such other page as may replace such page on the
Telerate Service) as of 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period. If more than one such offered rate appears
on such page of the Telerate Service, then the "LIBO Rate" shall be the
arithmetic average of such offered rates (rounded upwards, if not already a
whole multiple of 1/100 of 1%, to the next higher 1/100 of 1%). If such rate is
not available on the Telerate Service, then the "LIBO Rate" shall be determined
by reference to such other publicly available financial information service as
may be agreed by the U.S. Agent and the Company or, as the case may be, the
Canadian Agent and A&P Canada. If no such service is available or agreeable, the
"LIBO Rate" shall be the rate (rounded upwards, if necessary, to the next 1/100
of 1%) at which U.S. Dollar deposits approximately equal in principal amount to
(i) in the case of a Standby Borrowing, the U.S. Agent's portion of such
Eurodollar Loan and (ii) in the case of a Canadian Borrowing, the Canadian
Agent's portion of such Eurodollar Loan, and for a maturity comparable to such
Interest Period are offered to the principal London office of the applicable
Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period. The applicable Agent shall determine the
applicable LIBO Rate and such determination shall be conclusive absent manifest
error.
"Loan" shall mean a Canadian Loan or a U.S. Loan.
"Loan Documents" shall mean this Agreement, the Letters of Credit, the
Guarantee Agreement and the Indemnity, Subrogation and Contribution Agreement.
"Loan Parties" shall mean the Borrowers and the Guarantors.
9
"Margin" shall mean, as to any Eurodollar Competitive Loan, the margin
(expressed as a percentage rate per annum in the form of a decimal to no more
than four decimal places) to be added to or subtracted from the LIBO Rate in
order to determine the interest rate applicable to such Loan, as specified in
the Competitive Bid relating to such Loan.
"Margin Stock" shall have the meaning assigned to it in Regulation U.
"Material Adverse Change" shall mean a material adverse change in the
business, assets or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole.
"Material Subsidiary" shall mean any Subsidiary which at the time of any
determination thereof has Tangible Net Worth exceeding 5% of Consolidated
Tangible Net Worth.
"Moody's" shall mean Xxxxx'x Investors Service, Inc and its successors.
"Multiemployer Plan" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which the Company 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 Income" shall mean, for any period, the aggregate net income (or net
deficit) of the Company for such period, computed on a Consolidated basis in
accordance with GAAP.
"OECD" shall mean the Organization for Economic Cooperation and
Development.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor thereto.
"person" shall mean any natural person, corporation, division of a
corporation, business trust, joint venture, association, company, partnership or
government, or any agency or political subdivision thereof.
"Plan" shall mean any pension plan (other than a Multiemployer Plan) with
assets equal to or greater than $10,000,000 that is subject to the provisions of
Title IV of ERISA or Section 412 of the Code and is maintained for employees of
the Company or any ERISA Affiliate.
"Pro Rata Percentage" of any Bank at any time shall mean (i) in the case of
any determination in respect of a Canadian Commitment or any extension of credit
thereunder, the percentage of the Total Canadian Commitment that is represented
by such Bank's Canadian Commitment, or (ii) in the case of any determination in
respect of a U.S. Commitment or any extension of credit thereunder, the
percentage of the Total U.S. Commitment that is represented by such Bank's U.S.
Commitment.
"Ratings" shall refer to the ratings of Moody's and S&P applicable to the
Company's senior unsecured non-credit enhanced long-term debt obligations.
"Register" shall have the meaning assigned to it in Section 9.07(d).
"Regulation G" shall mean Regulation G of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation U" shall mean Regulation U of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation X" shall mean Regulation X of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Rent Expense" shall mean, for any period, the rent expense (net of
sub-lease income) of the Company and the Subsidiaries for such period for leases
of real and personal property, determined on a Consolidated basis in accordance
with GAAP (excluding any such expense that is included in Consolidated Interest
Expense for such period).
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"Reportable Event" shall mean any reportable event as defined in Section
4043 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).
"Required Banks" shall mean, at any time, (a) Banks having Commitments
representing at least 51% of the sum of all Commitments at such time, (b) for
purposes of acceleration pursuant to clause (ii) of the last paragraph of
Article VII, Banks having Loans, L/C Exposure, Acceptances and unused
Commitments representing at least 51% of the sum of all Loans outstanding, L/C
Exposure, Acceptances and unused Commitments or (c) if the Commitments have
terminated, Banks having Loans, L/C Exposure, and Acceptances representing at
least 51% of the sum of all Loans outstanding, L/C Exposure, and Acceptances.
For purposes of determining the Required Banks, any amounts denominated in
Canadian Dollars shall be translated into the U.S. Dollar Equivalent at the
Exchange Rate in effect on the Closing Date.
"Responsible Officer" of any corporation shall mean any executive officer
(including in the case of the Company, any 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.
"S&P" shall mean Standard & Poor's Ratings Group and its successors.
"Sale and Leaseback Transaction" shall mean, with respect to any person
(herein referred to as the "seller"), any arrangement, direct or indirect,
whereby the seller shall sell or transfer any property, real or personal, and
used or useful in its business, to another person (herein referred to as the
"buyer"), and thereafter shall rent or lease from the buyer such property or
other property that the seller intends to use for substantially the same purpose
or purposes as the property being sold or transferred; provided, however, that
such definition shall not include any sale and leaseback transaction with
respect to (i) any supermarket which supermarket is sold or otherwise
transferred to the buyer in connection with such sale and leaseback transaction
within 18 months after such supermarket commences operations or (ii) any other
real or personal property of the Company or any Subsidiary which real or
personal property was purchased, constructed or otherwise acquired by the
Company or such Subsidiary within the one-year period immediately prior to the
sale or other transfer of such real or personal property by the Company or such
Subsidiary to the buyer in connection with such sale and leaseback transaction.
"Standby Borrowing" shall mean a borrowing consisting of simultaneous
Standby Loans from each of the U.S. Banks distributed ratably among the U.S.
Banks in accordance with their respective U.S. Commitments.
"Standby Borrowing Request" shall mean a request made pursuant to Section
2.03 in the form of Exhibit B-2.
"Standby Loan" shall have the meaning assigned to it in Section 2.01.
"Statutory Reserves" shall mean a fraction (expressed as a decimal) the
numerator of which is the number one and the denominator is the number one minus
the aggregate of the reserve percentages (including, without limitation, any
marginal, special, emergency, or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority to which the U.S. Agent
is subject for new negotiable nonpersonal time deposits in U.S. Dollars of over
U.S.$100,000 with maturities approximately equal to the applicable Interest
Period. Statutory Reserves shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"subsidiary" shall mean, with respect to any person (herein referred to as
the "parent"), any corporation, association or other business entity of which
more than 50% of the securities or other ownership interests having ordinary
voting power is, at the time as of which any determination is being made, owned
or controlled, directly or indirectly, by the parent or one or more subsidiaries
of the parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" shall mean a subsidiary of the Company, including, without
limitation, A&P Canada.
"Tangible Net Worth" of any person shall mean the excess of the total
assets over total liabilities of such person, total assets and total liabilities
each to be determined in accordance with GAAP, excluding, however, from the
determination of total assets (a) except as otherwise provided in the proviso
hereto, all
11
assets which would be classified as intangibles under GAAP, including goodwill
(whether representing the excess of cost over book value of assets acquired or
otherwise), organizational expenses, trademarks, trade names, copyrights,
patents, patent applications, licenses and rights in any thereof and (b)
treasury stock held as an asset; provided, however, that there shall be included
in the determination of total assets hereunder all licenses acquired by such
person in the ordinary course of business.
"Termination Date" shall mean the fifth anniversary of the Closing Date.
"Total Canadian Commitment" shall mean at any time the aggregate amount of
the Banks' Canadian Commitments, as in effect at such time.
"Total Canadian Exposure" shall mean at any time the sum of the aggregate
principal amount of outstanding Canadian Loans and Acceptances at such time plus
the Canadian L/C Exposure at such time plus the aggregate face amount of the
bankers' acceptances and letters of credit identified in Schedule 1.01
outstanding at such time. If the Total Canadian Exposure is to be expressed in
Canadian Dollars, then any portion thereof denominated in U.S. Dollars shall be
expressed at the Canadian Dollar Equivalent. If the Total Canadian Exposure is
to be expressed in U.S. Dollars, then any portion thereof denominated in
Canadian Dollars shall be expressed at the U.S. Dollar Equivalent.
"Total U.S. Commitment" shall mean at any time the aggregate amount of the
Banks' U.S. Commitments, as in effect at such time.
"Total U.S. Exposure" shall mean at any time the sum of the aggregate
principal amount of outstanding Standby Loans and Competitive Loans at such time
plus the U.S. L/C Exposure at such time.
"Transactions" shall have the meaning assigned to such term in Section
3.02.
"U.S. Bank" shall mean a Bank that has a U.S. Commitment.
"U.S. Business Day" shall mean any day not a Saturday, Sunday or legal
holiday in the State of New York on which banks are open for business in New
York City; provided, however, that when used in connection with a Eurodollar
Loan, the term "U.S. Business Day" shall also exclude any day on which banks are
not open for dealings in U.S. Dollar deposits in the London Interbank Market.
"U.S. Commitment" shall mean, with respect to each Bank, the commitment, if
any, of such Bank hereunder to extend credit to the Company as set forth in
Schedule 2.01, as the same may be increased or decreased from time to time
pursuant to Section 2.09 or 2.23.
"U.S. Dollars" and the symbol "U.S.$" shall mean the lawful currency of the
United States.
"U.S. Dollar Equivalent" shall mean, with respect to an amount of Canadian
Dollars on any date, the amount of U.S. Dollars that may be purchased with such
amount of Canadian Dollars at the Exchange Rate with respect to Canadian Dollars
on such date.
"U.S. Issuing Bank" shall mean The Chase Manhattan Bank (or any affiliate
thereof) or any other U.S. Bank that may become a U.S. Issuing Bank pursuant to
Section 2.20(i), in each case with respect to Letters of Credit issued by it.
"U.S. Loan" shall mean any Loan made to the Company hereunder. A U.S. Loan
must be either a Competitive Loan (in which case such Loan must be a Eurodollar
Competitive Loan or a Fixed Rate Loan) or a Standby Loan (in which case such
Loan must be either an Alternate Base Loan or a Eurodollar Loan).
"U.S. L/C Exposure" shall mean at any time the sum of (a) the aggregate
undrawn amount of all outstanding U.S. Letters of Credit at such time plus (b)
the aggregate principal amount of all L/C Disbursements made pursuant to U.S.
Letters of Credit that have not yet been reimbursed at such time. The U.S. L/C
Exposure of any Bank at any time shall mean its Pro Rata Percentage of the
aggregate U.S. L/C Exposure at such time.
"U.S. Letter of Credit" shall mean a letter of credit issued pursuant to
Section 2.20 for the account of the Company.
12
"Wholly Owned Subsidiary" shall mean any Subsidiary of which all the
securities or other ownership interests having ordinary voting power are, at the
time as of which any determination is being made, owned or controlled by the
Company or one or more Wholly Owned Subsidiaries or by the Company and one or
more Wholly Owned Subsidiaries.
"Withdrawal Liability" shall mean 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 references
to Articles and Sections of, and Exhibits and Schedules to, this Agreement
unless the context shall otherwise require. Except as otherwise expressly
provided herein, (a) any reference in this Agreement to any Loan Document shall
mean such document as amended, restated, supplemented or otherwise modified from
time to time and (b) all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided,
however, that, for purposes of determining compliance with any covenant set
forth in Article VI, such terms shall be construed in accordance with GAAP as in
effect on the date of this Agreement applied on a basis consistent with the
application used in preparing the Company's audited financial statements
referred to in Section 3.04.
ARTICLE II
LOANS
SECTION 2.01. Commitments. Subject to the terms and conditions and relying
upon the representations and warranties herein set forth, (a) each U.S. Bank,
severally and not jointly, agrees to make standby revolving credit loans in U.S.
Dollars ("Standby Loans") to the Company, at any time and from time to time on
and after the date hereof and until the earlier of the Termination Date and the
termination of the U.S. Commitment of such Bank in accordance with the terms
hereof and (b) each Canadian Bank, severally and not jointly, agrees to make
revolving credit loans in Canadian Dollars or U.S. Dollars ("Canadian Loans") to
A&P Canada, at any time and from time to time on and after the date hereof and
until the earlier of the Termination Date and the termination of the Canadian
Commitment of such Bank in accordance with the terms hereof; provided, however,
that (i) after giving effect to any Standby Loan, the Total U.S. Exposure shall
not exceed the Total U.S. Commitment, (ii) after giving effect to any Canadian
Loan, the Total Canadian Exposure (expressed in Canadian Dollars) shall not
exceed the Total Canadian Commitment, (iii) after giving effect to any Standby
Loan or Canadian Loan, the sum of the Total U.S. Exposure plus the Total
Canadian Exposure (expressed in U.S. Dollars) shall not exceed U.S.$500,000,000,
(iv) at all times the outstanding aggregate principal amount of all Standby
Loans made by a U.S. Bank shall equal its Pro Rata Percentage of the outstanding
aggregate principal amount of all Standby Loans made by all U.S. Banks except as
a result of the failure of any Bank to make a Standby Loan and (v) at all times
the outstanding aggregate principal amount of all Canadian Loans made by a
Canadian Bank shall equal its Pro Rata Percentage of the outstanding aggregate
principal amount of all Canadian Loans made by all Canadian Banks. Each Bank's
Commitment is set forth on Schedule 2.01 to this Agreement. Such Commitments may
be terminated or reduced from time to time pursuant to Section 2.09 or increased
pursuant to Section 2.09 or Section 2.23. Within the foregoing limits, the
Company and A&P Canada may borrow, repay and reborrow hereunder on or after the
date hereof and prior to the Termination Date, subject to the terms, provisions
and limitations set forth herein.
SECTION 2.02. Competitive Bid Procedure. (a) In order to request
Competitive Bids, the Company shall give the U.S. Agent written or telecopy
notice (or telephone notice promptly confirmed in writing) of the information
requested by the form of Competitive Bid Request attached as Exhibit B-1 hereto
to be received by the U.S. Agent (i) in the case of a Eurodollar Competitive
Loan, not later than 10:00 a.m., New York City time, four U.S. Business Days
before a proposed Competitive Borrowing and (ii) in the case of a Fixed Rate
Loan, not later than 10:00 a.m., New York City time, one U.S. Business Day
before a proposed Competitive Borrowing, and shall confirm such information by
hand delivering or telecopying to the U.S. Agent a duly completed Competitive
Bid Request substantially in the form of Exhibit B-1 hereto, to be received by
the U.S. Agent not later than 5:00 p.m., New York City time, one U.S. Business
Day before a proposed Competitive Borrowing. No Alternate Base Loan shall be
requested
13
in, or made pursuant to, a Competitive Bid Request. A Competitive Bid Request
that does not conform substantially to the format of Exhibit B-1 may be rejected
in the U.S. Agent's reasonable discretion, and the U.S. Agent shall promptly
notify the Company of such rejection. Such request shall in each case refer to
this Agreement and specify (x) the date of such Loans (which shall be a U.S.
Business Day) and the aggregate principal amount thereof (which shall be in U.S.
Dollars and shall not be less than U.S.$10,000,000 or greater than the Total
U.S. Commitment and shall be an integral multiple of U.S.$1,000,000), (y) the
Interest Period with respect thereto (which may not end after the Termination
Date) and (z) whether the Borrowing then being requested is to be a Eurodollar
Borrowing or a Fixed Rate Borrowing. In addition, no Competitive Borrowing shall
be allowed in an amount that, after giving effect to such borrowing and the
application of the proceeds therefrom, would result in the Total U.S. Exposure
exceeding the Total U.S. Commitment. Promptly after its receipt of a Competitive
Bid Request that is not rejected as aforesaid, the U.S. Agent shall invite (in
the form substantially as set forth in Exhibit C hereto) the U.S. Banks to bid,
on the terms and conditions of this Agreement, to make Competitive Loans
pursuant to such Competitive Bid Request.
(b) Each U.S. Bank may, in its sole discretion, make a Competitive Bid to
the Company responsive to the Competitive Bid Request. Each Competitive Bid by a
U.S. Bank must be received by the U.S. Agent via hand delivery or telecopy,
substantially in the form of Exhibit D hereto (i) in the case of a Eurodollar
Competitive Loan, not later than 9:30 a.m., New York City time, three U.S.
Business Days before a proposed Competitive Borrowing and (ii) in the case of
Fixed Rate Borrowing, not later than 9:30 a.m., New York City time, on the U.S.
Business Day of the proposed Competitive Borrowing. Competitive Bids that do not
conform substantially to the format of Exhibit D may be rejected by the U.S.
Agent after conferring with, and upon the instruction of, the Company, and the
U.S. Agent shall notify the applicable Bank of such rejection as soon as
practicable. Each Competitive Bid shall refer to this Agreement and specify (x)
the principal amount (which shall be in U.S. Dollars and shall be in a minimum
principal amount of U.S.$1,000,000 and in an integral multiple of U.S.$1,000,000
and which may equal the entire aggregate principal amount of the Competitive
Borrowing requested by the Company) of the Competitive Loan that the U.S. Bank
submitting such Competitive Bid is willing to make to the Company and (y) the
Competitive Bid Rate at which such Bank is prepared to make the Competitive
Loan. A Competitive Bid submitted by a U.S. Bank pursuant to this paragraph (b)
shall be irrevocable.
(c) The U.S. Agent shall promptly notify the Company by written or telecopy
notice of all the Competitive Bids made, the Competitive Bid Rate and the
principal amount of each Competitive Loan in respect of which a Competitive Bid
was made and the identity of the U.S. Bank that made each bid. The U.S. Agent
shall send a copy of all Competitive Bids to the Company for its records as soon
as practicable after completion of the bidding process set forth in this Section
2.02.
(d) The Company may in its sole and absolute discretion, subject only to
the provisions of this paragraph (d), accept or reject any Competitive Bid
referred to in paragraph (c) above. The Company shall give the U.S. Agent
telephonic notice whether and to what extent it has decided to accept or reject
any of or all the bids referred to in paragraph (c) above not later than 10:30
a.m., New York City time, on the U.S. Business Day of the proposed Competitive
Borrowing, confirmed by written or telecopy notice not later than the later of
(i) 1:30 p.m., New York City time, on the U.S. Business Day of the proposed
Competitive Borrowing and (ii) one hour after delivery of notice by the U.S.
Agent to the Company of all Competitive Bids; provided, however, that (i) the
failure by the Company to give such notice shall be deemed to be a rejection of
all the bids referred to in paragraph (c) above, (ii) the Company shall not
accept a bid made at a particular Competitive Bid Rate if the Company has
decided to reject a bid made at a lower Competitive Bid Rate, (iii) the
aggregate amount of the Competitive Bids accepted by the Company shall not
exceed the principal amount specified in the Competitive Bid Request, (iv) if
the Company shall accept a bid or bids made at a particular Competitive Bid Rate
but the amount of such bid or bids shall cause the total amount of bids to be
accepted by the Company to exceed the amount specified in the Competitive Bid
Request, then the Company shall accept a portion of such bid or bids in an
amount equal to the amount specified in the Competitive Bid Request less the
amount of all other Competitive Bids accepted with respect to such Competitive
Bid Request, which acceptance, in the case of multiple bids at such Competitive
Bid Rate, shall be made pro rata in accordance with the amount of each such bid
at such Competitive Bid Rate, and (v) no bid shall be accepted for a Competitive
Loan unless such Competitive Loan is in a minimum principal amount of
U.S.$1,000,000 and an integral multiple of U.S.$1,000,000; provided further,
however, that if a Competitive Loan must be in an amount less than
U.S.$1,000,000 because of the provisions of clause (iv) above, such Competitive
Loan may be for a minimum of U.S.$1,000,000 or any integral multiple thereof,
and in calculating the pro rata allocation of acceptances of portions of
multiple bids at a particular Competitive Bid Rate pursuant to clause (iv) the
amounts shall be rounded to integral
14
multiples of U.S.$1,000,000 in a manner which shall be in the discretion of the
Company. A notice given by the Company pursuant to this paragraph (d) shall be
irrevocable.
(e) The U.S. Agent shall promptly notify the U.S. Banks whether or not
their Competitive Bids have been accepted (and if so, in what amount and at what
Competitive Bid Rate) by written or telecopy notice sent by the U.S. Agent, and
each successful bidder will thereupon become bound, subject to the other
applicable conditions hereof, to make the Competitive Loan in respect of which
its bid has been accepted.
(f) A Competitive Borrowing shall not be made within five U.S. Business
Days of the date of any other Competitive Borrowing, unless the Company and the
U.S. Agent shall mutually agree otherwise.
(g) If the U.S. Agent shall elect to submit a Competitive Bid in its
capacity as a U.S. Bank, it shall submit such bid to the Company one quarter of
an hour earlier than the latest time at which the other U.S. Banks are required
to submit their bids to the U.S. Agent pursuant to paragraph (b) above.
(h) All notices required by this Section 2.02 shall be made in accordance
with Section 9.01.
SECTION 2.03. Committed Borrowing Procedure. In order to effect a Standby
Borrowing or a Canadian Borrowing, the applicable Borrower shall give the U.S.
Agent (in the case of a Standby Borrowing) or the Canadian Agent (in the case of
a Canadian Borrowing) telephonic notice of the information requested by the form
of Standby Borrowing Request attached as Exhibit B-2 hereto or the Canadian
Borrowing Request attached as Exhibit B-3 hereto, as applicable, (i) in the case
of Eurodollar Loans, not later than 12:00 noon, New York City time, three
Business Days before a proposed Standby Borrowing or Canadian Borrowing, as the
case may be, (ii) in the case of Alternate Base Loans, not later than 11:00
a.m., New York City time, on the Business Day of a proposed Standby Borrowing or
Canadian Borrowing, as the case may be, and (iii) in the case of Canadian Prime
Loans, not later than 11:00 a.m., Toronto time, on the Canadian Business Day of
a proposed Canadian Borrowing (in the case of a proposed Canadian Borrowing that
consists of Canadian Prime Loans in an aggregate principal amount that is less
than Cdn.$25,000,000) and not later than 12:00 noon, Toronto time, one Canadian
Business Day before a proposed Canadian Borrowing (in the case of a proposed
Canadian Borrowing that consists of Canadian Prime Loans in an aggregate
principal amount that is equal to or greater than Cdn.$25,000,000), confirmed in
each case by written or telecopy notice substantially in the form of Exhibit B-2
(other than with respect to clause (iii)) or B-3 hereto. No Fixed Rate Loan
shall be requested or made pursuant to a Standby Borrowing Request. Such notice
shall be irrevocable and shall in each case refer to this Agreement and specify
(x) whether the Loans then being requested are to be Eurodollar Loans, Alternate
Base Loans or Canadian Prime Loans, (y) the date of such Loans (which shall be a
Business Day), the currency in which the Loans are to be denominated (which
shall be either U.S. Dollars or Canadian Dollars) and the aggregate amount
thereof (which shall not be less than U.S.$5,000,000 or Cdn.$5,000,000, as
applicable, and shall be an integral multiple of U.S.$1,000,000 or
Cdn.$1,000,000, as applicable) and (z) the Interest Period with respect thereto
(which shall not end later than the Termination Date). If no Interest Period
with respect to any Eurodollar Loan is specified in any such notice, then the
relevant Borrower shall be deemed to have selected an Interest Period of one
month's duration. The applicable Agent shall promptly advise the applicable
Banks of any notice given pursuant to this Section 2.03 and of each Bank's
portion of the requested Standby Borrowing or Canadian Borrowing by written or
telecopy notice. Each Standby Borrowing or Canadian Borrowing shall consist of
Loans of the same type made as of the same day and having the same Interest
Period. As used in this Section 2.03, the term "Business Day" refers to a U.S.
Business Day when used in respect of a Standby Borrowing, or a Canadian Business
Day when used in respect of a Canadian Borrowing.
SECTION 2.04. Refinancings. A Borrower may refinance all or any part of any
Loan to it with a Loan of the same or a different type made to it pursuant to
Section 2.02 or Section 2.03, subject to the conditions and limitations set
forth herein and elsewhere in this Agreement, including, without limitation,
refinancings of Competitive Loans with Standby Loans and Standby Loans with
Competitive Loans; provided, however, that U.S. Loans shall not be refinanced
with Canadian Loans and Canadian Loans shall not be refinanced with U.S. Loans.
Any Loan or part thereof so refinanced shall be deemed to be repaid in
accordance with Section 2.06 with the proceeds of a new borrowing hereunder and
the proceeds of the new Loan, to the extent they do not exceed the principal
amount of the Loan being refinanced, shall not be paid by the applicable Banks
to the applicable Agent (except to the extent necessary to allocate funds among
the applicable Banks in the case of a refinancing of a Competitive Loan with a
Standby Loan or a refinancing of a Standby Loan with a Competitive Loan) or by
the applicable Agent to the applicable Borrower pursuant to Section 2.05(c).
15
SECTION 2.05. Loans. (a) Except as provided in Section 2.02, each Borrowing
made by a Borrower on any date shall be in an integral multiple of
U.S.$1,000,000 and in a minimum aggregate principal amount of U.S.$5,000,000
(or, in the case of a Borrowing of Canadian Prime Loans, an integral multiple of
Cdn.$1,000,000 and in a minimum aggregate principal amount of Cdn.$5,000,000).
Competitive Loans shall be made by the U.S. Banks in accordance with Section
2.02(d); and Standby Loans and Canadian Loans shall be made by the Banks ratably
in accordance with their respective U.S. Commitments or Canadian Commitments, as
the case may be, on the date of the related Standby Borrowing or Canadian
Borrowing; provided, however, that the failure of any Bank to make any Loan
shall not in itself relieve any other Bank of its obligation to lend hereunder.
(b) Each Competitive Loan shall be a Eurodollar Competitive Loan or a Fixed
Rate Loan; each Standby Loan shall be a Eurodollar Loan or an Alternate Base
Loan; each Canadian Loan denominated in Canadian Dollars shall be a Canadian
Prime Loan; and each Canadian Loan denominated in U.S. Dollars shall be an
Alternate Base Loan or a Eurodollar Loan, in each case as the applicable
Borrower may request subject to and in accordance with Section 2.02 or Section
2.03, as applicable. Each Bank may at its option make any Eurodollar Loan by
causing a foreign branch or affiliate of such Bank to make such Loan; provided,
however, that any exercise of such option shall not affect the obligation of the
relevant Borrower to repay such Loan in accordance with the terms of this
Agreement or such Bank to make such Loan; and provided further, that the
exercise of such option shall not result in an increase in additional amounts
payable by a Borrower pursuant to Section 2.18 (other than as the result of the
application of Section 2.23). Loans of more than one interest rate option may be
outstanding at the same time; provided, however, that the Borrower shall not be
entitled to request any Loan which, if made, would result in an aggregate of
more than 15 Borrowings being outstanding hereunder at any one time. For
purposes of the foregoing, Loans having different Interest Periods, regardless
of whether they commence on the same date, shall be considered separate Loans.
(c) Subject to Section 2.04, (i) each U.S. Bank shall make its portion of
each Competitive Borrowing and each Standby Borrowing on the proposed date
thereof by paying the amount required to the U.S. Agent in New York, New York in
immediately available funds not later than 12:00 noon, New York City time, and
the U.S. Agent shall by 2:00 p.m., New York City time, credit the amounts so
received to the general deposit account of the Company with the U.S. Agent or,
if Loans are not made on such date because any condition precedent to a
Borrowing herein specified shall not have been met, return the amounts so
received to the respective U.S. Banks as soon as practicable; and (ii) each
Canadian Bank shall make its portion of each Canadian Borrowing on the proposed
date thereof by paying the amount required to the Canadian Agent in immediately
available funds not later than 12:00 noon, Toronto time, and the Canadian Agent
shall by 2:00 p.m., Toronto time, credit the amounts so received to the general
deposit account of A&P Canada with the Canadian Agent or, if Loans are not made
on such date because any condition precedent to a Borrowing herein specified
shall not have been met, return the amounts so received to the respective
Canadian Banks as soon as practicable.
(d) If an Issuing Bank makes an L/C Disbursement in respect of a Letter of
Credit and shall not have received from the applicable Borrower the payment
required to be made by such Borrower pursuant to Section 2.20(e) within the time
specified in such Section, such Issuing Bank will promptly notify the U.S.
Agent, in the case of a U.S. Letter of Credit, or the Canadian Agent, in the
case of a Canadian Letter of Credit, of the L/C Disbursement and such Agent will
promptly notify each Bank that has a participation in such Letter of Credit of
such L/C Disbursement and its Pro Rata Percentage thereof. Each such Bank shall
pay by wire transfer of immediately available funds to such Agent not later than
2:00 p.m., New York City time (or, in the case of a Canadian Letter of Credit,
Toronto time) on such date (or, if such Bank shall have received such notice
later than 12:00 (noon), New York City (or, in the case of a Canadian Letter of
Credit, Toronto time) on any day, not later than 10:00 a.m. New York City time
(or, in the case of a Canadian Letter of Credit, Toronto time) on the
immediately following Business Day), an amount equal to such Bank's Pro Rata
Percentage of such L/C Disbursement, and such Agent will promptly pay to the
applicable Issuing Bank amounts so received by it from such Banks. The
applicable Agent will promptly pay to the applicable Issuing Bank any amounts
received by it from the applicable Borrower pursuant to Section 2.20(e) prior to
the time that any Bank makes any payment pursuant to this paragraph (f); any
such amounts received by the applicable Agent thereafter will be promptly
remitted by such Agent to the Banks that shall have made such payments and to
such Issuing Bank, as their interests may appear. If any Bank shall not have
made its Pro Rata Percentage of such L/C Disbursement available to the
applicable Agent as provided above, such Bank and the applicable Borrower
severally agree to pay interest on such amount, for each day from and including
the date such amount is required to be paid in accordance with this paragraph to
but excluding the date such amount is paid, to such Agent at (i) in the case of
a Borrower, a rate per annum equal to the interest rate applicable to overdue
Alternate Base Loans (or, in the case of amounts
16
payable in Canadian Dollars, the interest rate applicable to overdue Canadian
Prime Loans) pursuant to Section 2.10, and (ii) in the case of such Bank, for
the first such day, the Federal Funds Effective Rate, and for each day
thereafter, the Alternate Base Rate (or, in the case of amounts payable in
Canadian Dollars, the Canadian Prime Rate).
SECTION 2.06. Evidence of Debt; Repayment of Loans. (a) The outstanding
principal amount of each Loan shall be payable on the last day of the Interest
Period applicable to such Loan.
(b) Each Bank shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Bank
resulting from each Loan made by such Bank from time to time, including the
amounts of principal and interest payable and paid such Bank from time to time
under this Agreement.
(c) Each of the Agents shall maintain accounts in which it will record (i)
the amount of each U.S. Loan (in the case of the U.S. Agent) or Canadian Loan
(in the case of the Canadian Agent) made hereunder, the type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the applicable Borrower to
each relevant Bank hereunder and (iii) the amount of any sum received by such
Agent hereunder from either Borrower or any Guarantor and each relevant Bank's
share thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs (b)
and (c) above shall be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any Bank or
either Agent to maintain such accounts or any error therein shall not in any
manner affect the obligations of either Borrower to repay its Loans in
accordance with their terms.
(e) Notwithstanding any other provision of this Agreement, in the event any
Bank shall request and receive (which it shall be entitled to do at any time in
its sole discretion) a promissory note payable to such Bank and its registered
assigns, the interests represented by such note shall at all times (including
after any assignment of all or part of such interests pursuant to Section 9.07)
be represented by one or more promissory notes payable to the payee named
therein or its registered assigns.
SECTION 2.07. Interest. (a) Subject to the provisions of Sections 2.10 and
2.11, each Eurodollar Loan shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal
to the LIBO Rate plus the Applicable Margin. Interest on each Eurodollar Loan
shall be payable on each applicable Interest Payment Date.
(b) Subject to the provisions of Section 2.10, each Alternate Base Loan
shall bear interest (computed on the basis of the actual number of days elapsed
over a year of 365 or 366 days, as the case may be, if the Alternate Base Rate
is based on the Prime Rate, or a year of 360 days, if the Alternate Base Rate is
based on the Base CD Rate or the Federal Funds Effective Rate) at a rate per
annum equal to the Alternate Base Rate. Interest on each Alternate Base Loan
shall be payable on each applicable Interest Payment Date.
(c) Subject to the provisions of Section 2.10, each Fixed Rate Loan shall
bear interest at a rate per annum (computed or the basis of the actual number of
days elapsed over a year of 360 days) equal to the fixed rate of interest
offered by the U.S. Bank making such Loan and accepted by the Company pursuant
to Section 2.02. Interest on each Fixed Rate Loan shall be payable on each
applicable Interest Payment Date.
(d) Subject to the provisions of Section 2.10, each Canadian Prime Loan
shall bear interest (computed on the basis of the actual number of days elapsed
over a year of 365 days) at a rate per annum equal to the Canadian Prime Rate.
Interest on each Canadian Prime Loan shall be payable on each applicable
Interest Payment Date.
(e) With respect to Canadian Loans and fees relating thereto, unless
otherwise stated herein, wherever reference is made to a rate of interest "per
annum" or a similar expression, such interest shall be calculated on the basis
of a calendar year of 365 days or 366 days, as the case may be, and using the
nominal rate method of calculation, and shall not be calculated using the
effective rate method of calculation or on any other basis that gives effect to
the principle of deemed reinvestment of interest.
17
(f) For the purposes of the Interest Act (Canada) and disclosure
thereunder, whenever interest to be paid with respect to Canadian Loans or fees
relating thereto, is to be calculated on the basis of a year of 360 days or any
other period of time that is less than a calendar year, the yearly rate of
interest to which the rate determined pursuant to such calculation is equivalent
is the rate so determined multiplied by the actual number of days in the
calendar year in which the same is to be ascertained and divided by either 360
or such other period of time, as the case may be.
SECTION 2.08. Fees. (a) The Company agrees to pay to each U.S. Bank and A&P
Canada agrees to pay to each Canadian Bank, in each case through the applicable
Agent for such Bank, in arrears on the first day of March, June, September and
December in each year, and on the date on which the applicable Commitment of
such Bank shall be terminated as provided herein, a facility fee (a "Facility
Fee") at a rate per annum equal to the Applicable Facility Fee Percentage from
time to time in effect on the principal amount of the U.S. Commitment of such
U.S. Bank or the Canadian Commitment of such Canadian Bank, as the case may be,
from time to time during the preceding quarter (or shorter period commencing
with the date hereof or ending with the Termination Date or the date on which
the applicable Commitment of such Bank shall be terminated). The Facility Fee
due to each Bank shall commence to accrue on the Closing Date and shall cease to
accrue on the date on which the applicable Commitment of such Bank shall be
terminated as provided herein. Facility Fees in respect of U.S. Commitments
shall be payable in U.S. Dollars and shall be computed on the basis of the
actual number of days elapsed in a year of 360 days. Facility Fees in respect of
Canadian Commitments shall be payable in Canadian Dollars and shall be computed
on the basis of the actual number of days elapsed in a year of 365 days or 366
days, as the case may be.
(b) The Company agrees to pay to the U.S. Agent administrative fees and
other amounts ("Administrative Fees") as specified in a separate letter
agreement between the U.S. Agent and the Company.
(c) Each of the Borrowers agrees to pay (i) to the Issuing Banks with
respect to each Letter of Credit, the standard fronting, issuance and drawing
fees specified from time to time by the relevant Issuing Bank (the "Issuing Bank
Fees") and (ii) the fees with respect to each Letter of Credit (the "L/C
Participation Fees") described below. The Company shall pay to each U.S. Bank,
through the U.S. Agent, a fee calculated on such U.S. Bank's Pro Rata Percentage
of the average daily aggregate undrawn amount of all outstanding U.S. Letters of
Credit during the preceding quarter (or shorter period commencing with the date
hereof or ending with the Termination Date or the date on which all U.S. Letters
of Credit have been canceled, cash collateralized or have expired and the U.S.
Commitment shall have been terminated) at a rate equal to the Applicable Margin.
A&P Canada shall pay to each Canadian Bank, through the Canadian Agent, a fee in
U.S. Dollars calculated on such Canadian Bank's Pro Rata Percentage of the
average daily aggregate undrawn amount of all outstanding Canadian Letters of
Credit denominated in U.S. Dollars during the preceding quarter (or shorter
period commencing with the date hereof or ending with the Termination Date or
the date on which all Canadian Letters of Credit have been canceled, cash
collateralized or have expired and the Canadian Commitment shall have been
terminated) at a rate equal to the Applicable Margin. A&P Canada shall also pay
to each Canadian Bank, through the Canadian Agent, a fee in Canadian Dollars
calculated on such Canadian Bank's Pro Rata Percentage of the average daily
aggregate undrawn amount of all outstanding Canadian Letters of Credit
denominated in Canadian Dollars during the preceding quarter (or shorter period
commencing with the date hereof or ending with the Termination Date or the date
on which all Canadian Letters of Credit have been canceled, cash collateralized
or have expired and the Canadian Commitment shall have been terminated) at a
rate equal to the Applicable Margin. All Issuing Bank Fees and L/C Participation
Fees shall be computed on the basis of the actual number of days elapsed in a
year of 360 days (or, in the case of Issuing Bank Fees and L/C Participation
Fees payable to Canadian Banks, 365 days or 366 days, as the case may be) and
shall be payable on the first day of March, June, September and December of each
year and on the date on which the Commitment of the relevant Bank shall be
terminated as provided herein.
(d) A&P Canada agrees pay to each Canadian Bank a fee (the "Acceptance
Fee") in advance, at a rate per annum equal to the Applicable Margin, on the
date of issue of each Acceptance. All Acceptance Fees shall be calculated on the
face amount of the Acceptance issued and computed on the basis of the actual
number of days in the term thereof and a year of 365 or 366 days, as the case
may be. The Acceptance Fee shall be in addition to any other fees payable to
each Canadian Bank in connection with the issuance or discounting of such
Acceptance. The discount rate for Acceptance Fees shall be calculated under
terms customary to the practice of the Canadian Banks and shall be based upon a
year of 365 or 366 days, as the case may be.
18
(e) All Fees shall be paid on the dates due, in immediately available
funds, to the applicable Agent for distribution, if and as appropriate, among
the applicable Banks, except that the Issuing Bank Fees shall be paid directly
to the Issuing Banks. Fees will be payable to the U.S. Agent, the U.S. Banks and
the U.S. Issuing Bank in U.S. Dollars and to the Canadian Agent, the Canadian
Banks and the Canadian Issuing Bank in Canadian Dollars; provided, however, that
L/C Participation Fees payable to Canadian Banks in respect of Canadian Letters
of Credit denominated in U.S. Dollars shall be payable in U.S. Dollars. Except
to the extent otherwise agreed with respect to Administrative Fees in the
letters described in (b) above, once paid, none of the Fees shall be refundable
under any circumstances.
SECTION 2.09. Termination, Reduction or Reallocation of Commitments. (a)
The Company may in full permanently terminate, or from time to time in part
permanently reduce, the Total U.S. Commitment, in each case upon at least three
U.S. Business Days' irrevocable written or telecopy notice to the U.S. Agent;
provided, however, that (i) the Company may not terminate or partially reduce
the Total U.S. Commitment to an amount less than the sum of all Competitive
Loans then outstanding, (ii) if the Total U.S. Commitment is terminated or
reduced to an amount less than the sum of all Competitive Loans then outstanding
plus the U.S. L/C Exposure, then the Company shall, as a condition to such
termination or reduction, provide cash collateral in accordance with Section
9.08 in an amount equal to the shortfall and (iii) the Company shall not
terminate or reduce the Total U.S. Commitment unless A&P Canada concurrently
terminates, or ratably reduces, as the case may be, the Total Canadian
Commitment in accordance with paragraph (b) below. Each partial reduction of the
Total U.S. Commitment shall be in an integral multiple of U.S.$1,000,000 and in
a minimum aggregate principal amount of U.S.$5,000,000. Each reduction in the
Total U.S. Commitment pursuant to this paragraph shall be made ratably among the
U.S. Banks in accordance with each U.S. Bank's Pro Rata Percentage of the Total
U.S. Commitment.
(b) A&P Canada may in full permanently terminate, or from time to time in
part permanently reduce, the Total Canadian Commitment, in each case upon at
least three Canadian Business Days' irrevocable written or telecopy notice to
the Canadian Agent; provided, however, that if the Total Canadian Commitment is
terminated or reduced to an amount less than the sum of the Canadian L/C
Exposure and the amount of outstanding Acceptances, then A&P Canada shall, as a
condition to such termination or reduction, provide cash collateral in
accordance with Section 9.08 in an amount equal to the shortfall. Each reduction
in the Total Canadian Commitment pursuant to this paragraph shall be made
ratably among the Canadian Banks in accordance with each Canadian Bank's Pro
Rata Percentage of the Total Canadian Commitment.
(c) The applicable Borrower shall pay to the applicable Agent for the
account of the applicable Banks, on the date of each termination or reduction
(and such Agent shall notify such Banks of such termination or reduction), the
Facility Fees on the amount of the Commitments so terminated or reduced accrued
to the date of such termination or reduction.
(d) Subject to the satisfaction of the conditions set forth in paragraph
(e) below, the Borrowers may reallocate all or a portion of a Bank's Commitment
in accordance with the following procedures; provided that no such reallocation
shall be permitted that would have the effect, together with any previous
reallocations hereunder, of increasing or decreasing the Total U.S. Commitment
to an amount that is U.S.$50,000,000 or more above or below, as the case may be,
the amount thereof that would have been in effect at the time if no such
reallocations had been made hereunder. In the case of any such reallocation, the
Total U.S. Commitment (in the case of a reallocation of a U.S. Commitment) or
the Total Canadian Commitment (in the case of a reallocation of a Canadian
Commitment), as the case may be, shall be reduced by the amount of the
reallocated Commitment (the "Reallocated Commitment") and the Total Canadian
Commitment (if the Reallocated Commitment was a U.S. Commitment) or the Total
U.S. Commitment (if the Reallocated Commitment was a Canadian Commitment) shall
be increased by an amount equal to (i) in the case of an increase in the Total
U.S. Commitment, the U.S. Dollar Equivalent (calculated on the basis of the
Exchange Rate determined by the U.S. Agent on the Closing Date) of the
Reallocated Commitment and (ii) in the case of an increase in the Total Canadian
Commitment, the Canadian Dollar Equivalent (calculated on the basis of the
Exchange Rate determined by the U.S. Agent on the Closing Date) of the
Reallocated Commitment. Any such reallocation shall be subject to execution of
documentation with respect thereto by the Borrowers, the Agents, the Bank whose
Commitment is reduced pursuant to such reallocation (the "Reduced Bank") and the
Bank that will assume the increased Commitment resulting from such reallocation,
which may be the Reduced Bank or an affiliate thereof (the "Increased Bank").
The Agents shall notify the Banks of any such reallocation. Any such
reallocation shall not require any consent or approval of any Bank other than
the Reduced Bank and the Increased Bank, but the amounts of the respective
Commitments of such other Banks shall not be changed by any such reallocation.
In the event of any such reallocation (i) the credit facility comprised of the
Reallocated
19
Commitment, the other Commitments to the same Borrower and the Loans and other
extensions of credit hereunder to the Borrower in respect of such Commitments is
referred to herein as the "Reduced Facility", and (ii) the credit facility
comprised of the Commitment of the Increased Bank, the other Commitments to the
same Borrower and the Loans and other extensions of credit hereunder in respect
of such Commitments is referred to herein as the "Increased Facility".
(e) The consummation of any reallocation pursuant to paragraph (d) above
shall be subject to satisfaction of the following conditions on the date of such
consummation:
(i) the conditions to borrowing set forth in Section 4.01 shall be
satisfied at the time;
(ii) each of the Agents, each Issuing Bank, the Reduced Bank and the
Increased Bank shall have consented in writing to such reallocation;
(iii) the Borrower in respect of the Reduced Facility will prepay
outstanding Standby Loans or Canadian Loans, as applicable, in such amounts
as shall be necessary in order that, after giving effect to the
reallocation of Commitments and to such prepayments, the aggregate
outstanding principal amount of such Standby Loans or Canadian Loans are
held by the Banks ratably in accordance with their Commitments in respect
of the Reduced Facility;
(iv) the Borrower in respect of the Increased Facility will prepay all
outstanding Canadian Loans or Standby Loans, as applicable (without
prejudice to such Borrower's right to borrow on such date);
(v) the participations in Letters of Credit, and the Canadian L/C
Exposure and the U.S. L/C Exposure represented thereby, shall be adjusted
so that, after giving effect to the reallocation of Commitments, the
Canadian L/C Exposure of each Canadian Bank shall equal its Pro Rata
Percentage of the aggregate Canadian L/C Exposure at the time and the U.S.
L/C Exposure of each U.S. Bank shall equal its Pro Rata Percentage of the
aggregate U.S. L/C Exposure at the time; and, if there are any unreimbursed
L/C Disbursements at the time, the applicable Borrower shall pay the same
in full together with accrued interest, if any, thereon; and
(vi) such reallocation shall not result in the prepayment of any
Competitive Loan or any Acceptance Obligation and, after giving effect to
such reallocation and the satisfaction of the conditions specified above,
(A) the Total U.S. Exposure shall not exceed the Total U.S. Commitment, (B)
the Total Canadian Exposure (expressed in Canadian Dollars) shall not
exceed the Total Canadian Commitment, (C) the sum of the Total U.S.
Exposure plus the Total Canadian Exposure (expressed in U.S. Dollars) shall
not exceed U.S.$500,000,000, (D) the outstanding principal amount of all
Standby Loans of each U.S. Bank shall equal its Pro Rata Percentage of the
outstanding aggregate principal amount of all Standby Loans of all U.S.
Banks and (E) the outstanding principal amount of all Canadian Loans of
each Canadian Bank shall equal its Pro Rata Percentage of the outstanding
aggregate principal amount of all Canadian Loans of all Canadian Banks.
SECTION 2.10. Interest on Overdue Amounts. If either Borrower shall default
in the payment of the principal of or interest on any Loan or any other amount
becoming due from it hereunder or under any other Loan Document, such Borrower
shall on demand from time to time pay interest, to the extent permitted by law,
on such defaulted amount up to (but not including) the date of actual payment
(after as well as before judgment) at a rate per annum (computed on the basis of
the actual number of days elapsed over a year of 360 days) equal to (a) in the
case of amounts payable in U.S. Dollars, 2% above the Alternate Base Rate and
(b) in the case of amounts payable in Canadian Dollars, 2% above the Canadian
Prime Rate.
SECTION 2.11. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Loan, the U.S. Agent (in the case of a U.S.
Loan) or the Canadian Agent (in the case of a Canadian Loan) shall have
determined that U.S. Dollar deposits in the amount of the principal amount of
such Eurodollar Loan are not generally available in the London Interbank Market,
or that the rate at which such U.S. Dollar deposits are being offered will not
adequately and fairly reflect the cost to the applicable Banks of making or
maintaining the principal amount of such Eurodollar Loan during such Interest
Period, or reasonable means do not exist for ascertaining the LIBO Rate, then
such Agent shall, as soon as practicable thereafter, give written or telecopy
notice of such determination to the relevant Borrower and the relevant Banks. In
the event of any such determination, any request by a Borrower for the making or
refinancing of a Eurodollar Loan pursuant to Section 2.03 or 2.04 shall be
deemed to be a request for an Alternate Base Loan;
20
provided, however, that the relevant Borrower may, by telephonic notice
(confirmed in writing) given to the relevant Agent not later than one hour
following its receipt of such notice from such Agent, elect to cancel its
request for such Loan, notwithstanding anything to the contrary in Section 2.03
or 2.04. After such notice shall have been given by an Agent and until the
circumstances giving rise to such notice no longer exist, each request for a
Eurodollar Loan shall be deemed to be a request for an Alternate Base Loan. Each
determination by an Agent hereunder shall be conclusive absent manifest error.
SECTION 2.12. Prepayment of Loans. (a) The Company shall have the right at
any time and from time to time to prepay any Standby Borrowing, and A&P Canada
shall have the right at any time and from time to time to prepay any Canadian
Borrowing, in whole or in part, subject to the requirements of Section 2.15 but
otherwise without premium or penalty, upon giving (i) three U.S. Business Days
(or, in the case of prepayment of Eurodollar Loans that are part of a Canadian
Borrowing, three Canadian Business Days) prior to prepayment, in the case of
Eurodollar Loans and (ii) one Canadian Business Day prior to prepayment, in the
case of Canadian Prime Loans or Alternate Base Loans (or, in the case of
prepayment of Alternate Base Loans that are part of a U.S. Borrowing, one U.S.
Business Day) written or telecopy notice to the applicable Agent; provided,
however, that each such partial prepayment shall be in an integral multiple of
U.S.$1,000,000 and in a minimum aggregate principal amount of at least
U.S.$5,000,000 (or, in the case of a Canadian Borrowing denominated in Canadian
Dollars, an integral multiple of Cdn.$1,000,000 and in a minimum aggregate
principal amount of at least Cdn.$5,000,000). Such Agent shall thereafter
promptly give such notice to the applicable Banks. The Company shall not have
the right to prepay any Competitive Borrowing.
(b) On the date of any termination or reduction of the Commitment of any
Bank pursuant to Section 2.09, the relevant Borrower shall pay or repay so much
of the Standby Loans or Canadian Loans, as applicable, of such Bank as shall be
necessary in order that the aggregate principal amount of the Standby Loans or
Canadian Loans, as applicable, of such Bank outstanding will not exceed the
Commitment of such Bank following such termination or reduction. Subject to the
foregoing, any such payment or prepayment shall be applied to such Borrowing or
Borrowings as the relevant Borrower shall select. All prepayments under this
paragraph shall be subject to Section 2.15.
(c) Each notice of prepayment shall specify the prepayment date and the
aggregate principal amount of each Standby Loan or Canadian Loan, as applicable,
to be prepaid, shall be irrevocable and shall commit the relevant Borrower to
prepay such Standby Loan or Canadian Loan, as applicable, by the amount stated
therein. All prepayments under this Section shall be accompanied by accrued
interest on the principal amount being prepaid to the date of prepayment.
Amounts prepaid pursuant to this Section shall be available to be reborrowed
from the Banks hereunder in accordance with the terms hereof to the extent such
reborrowings do not cause the Total U.S. Exposure to exceed the then outstanding
Total U.S. Commitment or cause the Total Canadian Exposure (expressed in
Canadian Dollars) to exceed the then outstanding Total Canadian Commitment.
Section 2.13. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision herein, if after the date of this Agreement
any change in applicable law or regulation or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Bank or Issuing Bank
of the principal of or interest on any Eurodollar Loan or Fixed Rate Loan made
by such Bank or any Fees or other amounts payable hereunder (other than changes
in respect of taxes imposed on the overall net income of such Bank or Issuing
Bank by the jurisdiction in which such Bank or Issuing Bank has its principal
office or by any political subdivision or taxing authority therein), or shall
impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of or credit
extended by any Bank or Issuing Bank or shall impose on such Bank or Issuing
Bank or the London interbank market any other condition affecting this Agreement
or Eurodollar Loans or Fixed Rate Loans made by such Bank or any Letter of
Credit or participation therein, and the result of any of the foregoing shall be
to increase the cost to such Bank or Issuing Bank of making or maintaining any
Eurodollar Loan or Fixed Rate Loan or increase the cost to any Bank or Issuing
Bank of issuing or maintaining any Letter of Credit or purchasing or maintaining
a participation therein or to reduce the amount of any sum, received or
receivable by such Bank or Issuing Bank hereunder (whether of principal,
interest or otherwise) by an amount deemed by such Bank or Issuing Bank, in its
reasonable judgment, to be material, then the relevant Borrower will pay to such
Bank or Issuing Bank, as the case may be, upon demand such additional amount or
amounts as will compensate such Bank or Issuing Bank, as the case may be, for
such additional costs incurred or reduction suffered.
21
(b) If any Bank or Issuing Bank shall have determined, after the date
hereof, that the applicability of any law, rule, regulation, agreement or
guideline adopted pursuant to or arising out of the July 1988 report of the
Basle Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards", or the
adoption after the date hereof of any other law, rule, regulation, agreement or
guideline regarding capital adequacy, or any change in any of the foregoing
(regardless of whether such change in such law, rule, regulation, agreement or
guideline has been adopted) or in the interpretation or administration of any of
the foregoing by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Bank (or any lending office of such Bank) or Issuing Bank or any Bank's or
Issuing Bank's holding company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Bank's or Issuing Bank's capital or on the capital of such Bank's
or Issuing Bank's holding company, if any, as a consequence of this Agreement or
the Loans made or participations in Letters of Credit purchased by such Bank
pursuant hereto or any Letter of Credit issued by such Issuing Bank pursuant
hereto to a level below that which such Bank or Issuing Bank or such Bank's or
Issuing Bank's holding company could have achieved but for such applicability,
adoption, change or compliance (taking into consideration such Bank's or Issuing
Bank's policies and the policies of such Bank's or Issuing Bank's holding
company with respect to capital adequacy) by an amount deemed by such Bank or
Issuing Bank to be material, then from time to time the relevant Borrower shall
pay to such Bank or Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Bank or Issuing Bank or such Bank's or Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of each Bank or Issuing Bank setting forth such amount or
amounts as shall be necessary to compensate such Bank or Issuing Bank or its
holding company as specified in paragraph (a) or (b) above, as the case may be,
and (ii) an explanation in reasonable detail of the manner in which such amount
or amounts shall have been determined shall be delivered to the relevant
Borrower and shall be conclusive absent manifest error. The relevant Borrower
shall pay each Bank or Issuing Bank the amount shown as due on any such
certificate delivered by it within 10 days after its receipt of the same.
(d) Except as provided in this Section 2.13, failure on the part of any
Bank or Issuing Bank to demand compensation for any increased costs or reduction
in amounts received or receivable or reduction in return on capital with respect
to any period shall not constitute a waiver of such Bank's or Issuing Bank's
right to demand compensation with respect to such period or any other period.
The protection of this Section 2.13 shall be available to each Bank and Issuing
Bank regardless of any possible contention of the invalidity or inapplicability
of the law, rule, regulation, guideline or other change or condition which shall
have occurred or been imposed. No Bank or Issuing Bank shall be entitled to
compensation under this Section 2.13 for any costs incurred or reductions
suffered with respect to any date unless it shall have notified the relevant
Borrower that it will demand compensation for such costs or reductions not more
than 180 days after the later of (i) such date and (ii) the date on which it
shall have become aware of such costs or reductions.
SECTION 2.14. Change in Legality. (a) Notwithstanding anything to the
contrary contained elsewhere in this Agreement, if any change after the date
hereof in law or regulation or in the interpretation thereof (including, without
limitation, any request, guideline or policy not having the force of law) by any
governmental authority charged with the administration thereof shall make it
unlawful for any Bank to make or maintain a Eurodollar Loan or to give effect to
its obligations as contemplated hereby with respect to a Eurodollar Loan, then,
by written notice to the relevant Borrower and Agent, such Bank may:
(i) declare that Eurodollar Loans will not thereafter be made by such Bank
hereunder, whereupon the relevant Borrower shall be prohibited from requesting
Eurodollar Loans from such Bank hereunder unless and until such declaration is
subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Loans made by it be converted
to Alternate Base Loans, whereupon all such Eurodollar Loans shall be
automatically converted to Alternate Base Loans as of the effective date of such
notice as provided in paragraph (b) below (notwithstanding the provisions of
Section 2.04).
(b) For purposes of this Section, a notice to the relevant Borrower by any
Bank pursuant to paragraph (a) above shall be effective with respect to
outstanding Eurodollar Loans, if lawful, on the last day of the then current
Interest Period; in all other cases, such notice shall be effective on the date
of receipt by the relevant Borrower.
22
SECTION 2.15. Indemnity. Each Borrower shall indemnify each Bank against
any actual loss or expense which such Bank sustains or incurs as a direct
consequence of any failure by such Borrower to fulfill on the date of any
borrowing hereunder the applicable conditions set forth in Article IV, any
failure by such Borrower to borrow hereunder after notice of borrowing, or
drawing, as the case may be, pursuant to Article II has been given with respect
to Standby Loans, Drafts or Canadian Loans or after Competitive Bids have been
accepted with respect to Competitive Loans, any payment, prepayment or
conversion of a Eurodollar Loan or Acceptance required by any other provision of
this Agreement or otherwise made on a date other than the last day of the
applicable Interest Period or maturity date, as applicable, any default in the
payment, prepayment or repayment of the principal amount of any Loan or
Acceptance or any part thereof or interest accrued thereon, as and when due and
payable (at the due date thereof, by irrevocable notice of prepayment or
otherwise), or the occurrence of any Event of Default, including, but not
limited to, any loss or reasonable expense sustained or incurred or to be
sustained or incurred in liquidating or employing deposits from third parties
acquired to effect or maintain such Loan or any part thereof as a Eurodollar
Loan or Competitive Loan. Such loss or reasonable expense shall include, without
limitation, an amount equal to the excess, if any, as reasonably determined by
each Bank of (i) its cost of obtaining the funds for the Loan being paid,
prepaid or converted or not borrowed (based on the LIBO Rate or, in the case of
a Competitive Loan, the fixed rate of interest, applicable thereto) for the
period from the date of such payment, prepayment or conversion or failure to
borrow to the last day of the Interest Period for such Loan (or, in the case of
a failure to borrow, the Interest Period for such Loan which would have
commenced on the date of such failure to borrow) over (ii) the amount of
interest (as reasonably determined by such Bank) that would be realized by such
Bank in reemploying the funds so paid, prepaid or converted or not borrowed for
such period or Interest Period, as the case may be. A certificate of each Bank
setting forth any amount or amounts which such Bank is entitled to receive
pursuant to this Section shall be delivered to the applicable Borrower and shall
be conclusive absent manifest error. The applicable Borrower shall pay all such
amounts within 30 days after receipt of such certificate.
SECTION 2.16. Money of Account, etc. This is an international loan
transaction in which the specification of U.S. Dollars or Canadian Dollars is of
the essence, and U.S. Dollars or Canadian Dollars, as specified herein, shall be
the currency of account and of payment in all events. The payment obligations of
the Borrowers and the other Loan Parties shall not be discharged by an amount
paid in another currency, whether pursuant to a judgment or otherwise, to the
extent that the amount so paid on prompt conversion to U.S. Dollars or, as the
case may be, Canadian Dollars under normal banking procedures shall not yield
the amount of U.S. Dollars or Canadian Dollars, as the case may be, due
hereunder. In the event that any payment made in a currency other than U.S.
Dollars or Canadian Dollars, as the case may be, whether pursuant to a judgment
or otherwise, upon conversion shall not yield such amount of U.S. Dollars or
Canadian Dollars, the applicable Banks shall be entitled to demand immediate
payment of, and shall have a separate cause of action for, the U.S. Dollar or
Canadian Dollar deficiency. All amounts payable by either Borrower hereunder and
under any other Loan Document shall be paid in U.S. Dollars (other than
principal of and interest on Loans and L/C Disbursements denominated in Canadian
Dollars, Acceptance Fees, Facility Fees in respect of Canadian Commitments and
L/C Participation Fees in respect of Canadian Letters of Credit denominated in
Canadian Dollars, as well as indemnification and expense reimbursement
obligations to the extent invoiced or otherwise claimed in Canadian Dollars, all
of which shall be paid in Canadian Dollars) in immediately available funds at
the office of the U.S. Agent at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, by 12:00
noon New York time (or, in the case of amounts payable to the Canadian Banks,
the Canadian Issuing Bank or the Canadian Agent, at the office of the Canadian
Agent, One First Canadian Place, 000 Xxxx Xxxxxx Xxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxx X0X 0X0, by 12:00 noon, Toronto time) on the date on which such payment
shall be due; provided, however, that Issuing Bank Fees shall be paid directly
to the applicable Issuing Bank. Should the principal, or any installment of the
principal of or interest on any of the Borrowings or any Fee payable hereunder
or under any other Loan Document, become due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day, and, in the case of principal or an installment of principal,
interest shall be payable thereon at the rate herein specified during any such
extension; provided, however, with respect only to any such payment of principal
of or interest on any Eurodollar Loan, that if such next succeeding Business Day
would fall in the next calendar month, the maturity of such Loan shall be
shortened to the next preceding Business Day. Interest in respect of any Loan
hereunder shall accrue from and including the date of such Loan to but excluding
the date on which such Loan is paid.
SECTION 2.17. Pro Rata Treatment, etc. (a) All payments of Facility Fees
shall be made pro rata among the Banks in accordance with their respective
Commitments, except in each case (i) as otherwise expressly contemplated hereby
and (ii) as required to give effect to the provisions of Sections 2.09(d) and
(e), 2.13 and 2.14.
23
(b) Except as permitted under or required by Sections 2.09(d) and (e), 2.13
and 2.14, (i) each payment or prepayment of principal and each payment of
interest with respect to any single Competitive Borrowing or any single Standby
Borrowing or any single Canadian Borrowing shall be made pro rata among the
Banks in accordance with the respective principal amounts of the Loans extended
by each Bank, if any, with respect to such Competitive Borrowing or Standby
Borrowing or Canadian Borrowing, (ii) refinancings of Standby Loans with Standby
Loans of any type, or of Canadian Loans with Canadian Loans of any type, shall
be made pro rata among the Banks in accordance with the respective principal
amount of credit extended by each Bank, if any, with respect to the Standby
Borrowing or Canadian Borrowing, as the case may be, being refinanced, (iii)
refinancings of Competitive Loans with Standby Loans and advances of Standby
Loans or Canadian Loans which are not refinancings of other Loans shall be made
pro rata among the Banks in accordance with their respective U.S. Commitments
(in the case of Standby Loans) or Canadian Commitments (in the case of Canadian
Loans), and (iv) each reduction of the Commitments shall be made pro rata among
the Banks in accordance with their respective Commitments. Each Bank agrees that
in computing such Bank's portion of any Borrowing to be made hereunder, the
relevant Agent may, in its discretion, round each Bank's percentage of such
Borrowing, computed in accordance with Schedule 2.01, to the next higher or
lower whole dollar amount.
SECTION 2.18. Taxes. (a) Any and all payments by or on behalf of a Borrower
or any other Loan Party hereunder and under any other Loan Document shall be
made, in accordance with Section 2.16, 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, excluding (i) income
taxes imposed on the net income of any Bank, Agent or Issuing Bank (or any
transferee or assignee thereof, including a participation holder (any such
entity a "Transferee")) and (ii) franchise taxes imposed on the net income of
any Bank, Agent or Issuing Bank (or Transferee), in each case by the
jurisdiction under the laws of which such Bank, Agent or Issuing Bank (or
Transferee), as the case may be, is organized, in which its lending office is
located, or in which it is doing business on the dated hereof, or any political
subdivision thereof (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities, collectively or individually, "Taxes").
If a Borrower or any other Loan Party shall be required to deduct any Taxes from
or in respect of any sum payable hereunder or under any other Loan Document to
any Bank or Issuing Bank (or any Transferee) or an Agent, (i) the sum payable
shall be increased by the amount (an "additional amount") necessary so that
after making all required deductions (including deductions applicable to
additional amounts payable under this Section 2.18) such Bank, Issuing Bank (or
Transferee) or Agent (as the case may be) shall receive an amount equal to the
sum it would have received had no such deductions been made, (ii) such Borrower
or other Loan Party shall make such deductions and (iii) the Borrower or such
other Loan Party shall pay the full amount deducted to the relevant governmental
authority in accordance with applicable law. If any Taxes are required to be
deducted in respect of any payment made to a Bank as a result of the application
of Section 2.23 (including any payment made by a Bank to another Bank in respect
of that Bank's participating interest pursuant to Section 2.23(b)), the Company
(in the case of Taxes required to be deducted by the United States or any
political subdivision thereof) or A&P Canada (in the case of Taxes required to
be deducted by Canada or any political subdivision thereof) shall pay an
additional amount in respect thereof so that after making all required
deductions (including deductions applicable to additional amounts required under
this Section 2.18(a)) such Bank, Issuing Bank or Agent shall receive an amount
equal to the sum it would have received had no such deductions been made.
(b) In addition, the Borrowers agree to pay to the relevant governmental
authority in accordance with applicable law 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 under any other Loan
Document or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or any other Loan Document ("Other Taxes").
(c) The Borrowers will indemnify each Bank, Issuing Bank (or Transferee)
and Agent for the full amount of Taxes and Other Taxes paid by such Bank,
Issuing Bank (or Transferee) or Agent, as the case may be, and any liability
(including penalties, interest and expenses (including reasonable attorney's
fees and expenses)) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted by the relevant
governmental authority. A certificate as to the amount of such payment or
liability prepared by a Bank, Issuing Bank (or Transferee) or Agent on its
behalf, absent manifest error, shall be final, conclusive and binding for all
purposes. Such indemnification shall be made within 30 days after the date any
Bank, Issuing Bank (or Transferee) or Agent, as the case may be, makes written
demand therefor.
24
(d) If a Bank, Issuing Bank (or Transferee) or Agent shall become aware
that it is entitled to claim a refund from a governmental authority in respect
of Taxes or Other Taxes as to which it has been indemnified by a Borrower, or
with respect to which a Borrower or any other Loan Party has paid additional
amounts pursuant to this Section 2.18, it shall promptly notify the Borrowers of
the availability of such refund claim and shall, within 30 days after receipt of
a request by a Borrower, make a claim to such governmental authority for such
refund at such Borrower's expense. If a Bank (or Transferee) or an Agent
receives a refund (including pursuant to a claim for refund made pursuant to the
preceding sentence) in respect of any Taxes or Other Taxes as to which it has
been indemnified by a Borrower or with respect to which a Borrower or any other
Loan Party has paid additional amounts pursuant to this Section 2.18, it shall
within 30 days from the date of such receipt pay over such refund to such
Borrower or other Loan Party (but only to the extent of indemnity payments made,
or additional amounts paid, by such Borrower or other Loan Party under this
Section 2.18 with respect to the Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of such Bank (or Transferee) or Agent
and without interest (other than interest paid by the relevant governmental
authority with respect to such refund); provided, however, that such Borrower or
other Loan Party, upon the request of such Bank (or Transferee) or Agent, agrees
to repay the amount paid over to such Borrower or other Loan Party (plus
penalties, interest and other charges) to such Bank, Issuing Bank (or
Transferee) or Agent in the event such Bank, Issuing Bank (or Transferee) or
Agent is required to repay such refund to such governmental authority.
(e) As soon as practicable after the date of any payment of Taxes or Other
Taxes by a Borrower to the relevant governmental authority, such Borrower will
deliver to the relevant Agent, at its address referred to in Section 9.01, the
original or a certified copy of a receipt issued by such governmental authority
evidencing payment thereof.
(f) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.18 shall
survive the payment in full of the principal of and interest on all Loans,
Acceptances and L/C Disbursements made hereunder.
(g) The U.S. Agent and each Bank (or Transferee) that is either (i) an
individual that is not a U.S. person or (ii) organized under the laws of a
jurisdiction other than the United States, any State thereof or the District of
Columbia (in each case, a "Non-U.S. Bank") shall deliver to the Company and such
Agent two copies of either United States Internal Revenue Service Form 1001 or
Form 4224, or, in the case of a Non-U.S. Bank claiming exemption from U.S.
Federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest", a Form W-8, or any subsequent versions
thereof or successors thereto (and, if such Non-U.S. Bank delivers a Form W-8, a
certificate representing that such Non-U.S. Bank is not a bank for purposes of
Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning
of Section 871(h)(3)(B) of the Code) of the Company and is not a controlled
foreign corporation related to the Company (within the meaning of Section
864(d)(4) of the Code)), properly completed and duly executed by such Non-U.S.
Bank claiming complete exemption from, or reduced rate of, U.S. Federal
withholding tax on payments by the Company under this Agreement and the other
Loan Documents. Such forms shall be delivered by each Non-U.S. Bank on or before
the date it becomes a party to this Agreement or becomes a Transferee by virtue
of any assignment hereunder) and on or before the date, if any, such Non-U.S.
Bank changes its applicable lending office by designating a different lending
office (a "New Lending Office"). In addition, each Non-U.S. Bank shall deliver
such forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Bank. Notwithstanding any other provision of this
Section 2.18(g), a Non-U.S. Bank shall not be required to deliver any form
pursuant to this Section 2.18(g) that such Non-U.S. Bank is not legally able to
deliver.
(h) The Company shall not be required to indemnify any Non-U.S. Bank
(except for any Bank that is organized under the laws of a jurisdiction other
than the United States, any State thereof or the District of Columbia that
becomes a U.S. Bank pursuant to Section 2.23(a) and any Bank that becomes
subject to U.S. withholding tax pursuant to the application of Section 2.23(b)),
or to pay any additional amounts to any such Non-U.S. Bank, in respect of United
States Federal withholding tax pursuant to paragraph (a) or (c) above to the
extent that (i) the obligation to withhold amounts with respect to United States
Federal withholding tax existed on the date such Non-U.S. Bank became a party to
this Agreement (or became a Transferee by virtue of any assignment hereunder)
or, with respect to payments to a New Lending Office, the date such Non-U.S.
Bank designated such New Lending Office with respect to a Loan; provided,
however, that this clause (i) shall not apply to any Transferee or New Lending
Office that becomes a Transferee or New Lending Office as a result of an
assignment, participation, transfer or designation made at the request of the
Company; and provided further, however, that this clause (i) shall not apply to
the extent the indemnity payment or additional amounts any Transferee, or Bank
(or Transferee) through a New Lending Office, would be entitled to receive
(without regard to this clause (i))
25
do not exceed the indemnity payment or additional amounts that the person making
the assignment, participation or transfer to such Transferee, or Bank (or
Transferee) making the designation of such New Lending Office, would have been
entitled to receive in the absence of such assignment, participation, transfer
or designation or (ii) the obligation to pay such additional amounts would not
have arisen but for a failure by such Non-U.S. Bank to comply with the
provisions of paragraph (g) above.
(i) Neither the Company nor A&P Canada shall be required to indemnify
any Bank that is incorporated under the laws of a jurisdiction other than Canada
or any province thereof (except for any Bank that is incorporated under the laws
of a jurisdiction other than Canada or any province thereof that becomes subject
to Canadian federal withholding tax pursuant to the application of Section
2.23(b)) (each a "Non-Canadian Bank"), or pay additional amounts to any such
Non-Canadian Bank in respect of, Canadian federal withholding tax pursuant to
paragraph (a) or (c) above to the extent that (i) the obligation to withhold
amounts with respect to Canadian federal withholding tax existed on the date
such Non-Canadian Bank became a party to this Agreement (or became a Transferee
by virtue of any assignment or participation hereunder) or, with respect to
payments to a New Lending Office, the date such Non-Canadian Bank designated
such New Lending Office, with respect to a Loan; provided, however, that this
clause (i) shall not apply to any Transferee or New Lending Office that becomes
a Transferee or New Lending Office as a result of an assignment, participation,
transfer or designation made at the request of the Company; and provided
further, however, that this clause (i) shall not apply to the extent the
indemnity payment or additional amounts any Transferee, or Bank (or Transferred)
through a New Lending Office, would be entitled to receive (without regard to
this clause (i)) do not exceed the indemnity payment or additional amounts that
the person making the assignment, participation or transfer to such Transferee,
or Bank (or Transferee) making the designation or such New Lending Office, would
have been entitled to receive in the absence of such assignment, participation,
transfer or designation.
(j) Nothing contained in this Section 2.18 shall require any Bank, Issuing
Bank (or Transferee) or Agent to make available any of its tax returns (or any
other information that it deems to be confidential or proprietary).
SECTION 2.19. Duty to Mitigate; Assignment of Commitments Under Certain
Circumstances. (a) Any Bank (or Transferee) claiming or receiving any additional
amounts payable pursuant to Section 2.13 or Section 2.18 or exercising its
rights under Section 2.14 shall use reasonable efforts (consistent with legal
and regulatory restrictions) to file any certificate or document requested by
the relevant Borrower or to change the jurisdiction of its applicable lending
office if the making of such a filing or change would avoid the need for or
reduce the amount of any such additional amounts which may thereafter accrue or
avoid the circumstances giving rise to such exercise and would not, in the sole
determination of such Bank (or Transferee), be otherwise disadvantageous to such
Bank (or Transferee).
(b) In the event that any Bank shall have delivered a notice or certificate
pursuant to Section 2.13 or 2.14, or a Borrower shall be required to make
additional payments to any Bank under Section 2.18, such Borrower shall have the
right, at its own expense, upon notice to such Bank and the U.S. Agent (or, if
such Bank is a Canadian Bank, the Canadian Agent), to require such Bank to
transfer and assign without recourse (in accordance with and subject to the
restrictions contained in Section 9.07) all interests, rights and obligations
under this Agreement to another financial institution approved by such Agent and
the Issuing Banks (which approvals shall not be unreasonably withheld) which
shall assume such obligations; provided that (i) no such assignment shall
conflict with any law, rule or regulation or order of any governmental authority
and (ii) the assignee (or the Borrower, in the case of amounts other than those
payable to Banks ratably) shall pay to the affected Bank in immediately
available funds on the date of such assignment the principal of and interest
accrued to the date of payment on the Loans made by it hereunder and
participations in L/C Disbursements of such Bank plus all Fees and other amounts
accrued for the account of or owed to such Bank hereunder.
SECTION 2.20. Letters of Credit. (a) General. A Borrower may request the
issuance of a Letter of Credit, in a form reasonably acceptable to the U.S.
Agent (in the case of a U.S. Letter of Credit) or the Canadian Agent (in the
case of a Canadian Letter of Credit) and the applicable Issuing Bank,
appropriately completed, for the account of such Borrower, at any time and from
time to time while the Commitments to such Borrower remain in effect. This
Section shall not be construed to impose an obligation upon an Issuing Bank to
issue any Letter of Credit that is inconsistent with the terms and conditions of
this Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
In order to request the issuance of a Letter of Credit (or to amend, renew or
extend an existing Letter of Credit), the
26
Borrower requesting such Letter of Credit shall hand deliver or telecopy to the
applicable Issuing Bank and the applicable Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice requesting
the issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, the date of issuance, amendment, renewal or
extension, the date on which such Letter of Credit is to expire (which shall
comply with paragraph (c) below), the amount of such Letter of Credit, whether
such Letter of Credit is to be denominated in U.S. Dollars or Canadian Dollars
(provided that each U.S. Letter of Credit must be denominated in U.S. Dollars),
the name and address of the beneficiary thereof and such other information as
shall be necessary to prepare such Letter of Credit. Following receipt of such
notice and prior to the issuance of the requested Letter of Credit or the
applicable amendment, renewal or extension, the applicable Agent shall calculate
(if the Letter of Credit is a Canadian Letter of Credit) its U.S. Dollar
Equivalent and, after consulting with the other Agent, shall notify the
Borrowers and the Issuing Bank of the results of the tests described below after
giving effect to (i) the issuance, amendment, renewal or extension of such
Letter of Credit, (ii) the issuance or expiration of any other Letter of Credit
that is to be issued or will expire prior to the requested date of issuance of
such Letter of Credit and (iii) the borrowing or repayment of any Loans that
(based upon notices delivered to either Agent by either Borrower) are to be
borrowed or repaid prior to the requested date of issuance of such Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only
if, and upon issuance, amendment, renewal or extension of each Letter of Credit
the relevant Borrower shall be deemed to represent and warrant that, after
giving effect to such issuance, amendment, renewal or extension (A) in the case
of a Canadian Letter of Credit, the Canadian L/C Exposure (expressed in Canadian
Dollars) shall not exceed Cdn.$35,000,000 and the Total Canadian Exposure
(expressed in Canadian Dollars) shall not exceed the Total Canadian Commitment,
(B) in the case of a U.S. Letter of Credit, the U.S. L/C Exposure shall not
exceed U.S.$100,000,000 and the Total U.S. Exposure shall not exceed the Total
U.S. Commitment, and (C) in the case of any Letter of Credit, the sum of the
Total U.S. Exposure plus the Total Canadian Exposure (expressed in U.S. Dollars)
shall not exceed U.S.$500,000,000.
(c) Expiration Date. Each Letter of Credit shall expire at the close of
business on the earlier of the date one year after the date of the issuance of
such Letter of Credit and the date that is five U.S. Business Days (or, in the
case of a Canadian Letter of Credit, five Canadian Business Days) prior to the
Termination Date, unless such Letter of Credit expires by its terms on an
earlier date.
(d) Participations. By the issuance of a Letter of Credit and without any
further action on the part of the applicable Issuing Bank or the Banks, the
Issuing Bank in respect of such Letter of Credit hereby grants to each U.S. Bank
(in the case of a U.S. Letter of Credit) or Canadian Bank (in the case of a
Canadian Letter of Credit), and each such Bank hereby acquires from such Issuing
Bank, a participation in such Letter of Credit equal to such Bank's Pro Rata
Percentage of the aggregate amount available to be drawn under such Letter of
Credit, effective upon the issuance of such Letter of Credit. In consideration
and in furtherance of the foregoing, each such Bank hereby absolutely and
unconditionally agrees to pay to the applicable Agent, for the account of such
Issuing Bank, such Bank's Pro Rata Percentage of each L/C Disbursement made by
such Issuing Bank under such Letter of Credit and not reimbursed by the relevant
Borrower (or, if applicable, another party pursuant to its obligations under any
other Loan Document) forthwith on the date due as provided in Section 2.05(d),
in the same currency in which such L/C Disbursement is denominated. Each Bank
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including the
occurrence and continuance of an Event of Default (or any event or condition
which upon notice, lapse of time or both would constitute an Event of Default),
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank in respect of a Letter of Credit
shall make any L/C Disbursement in respect of such Letter of Credit, the
relevant Borrower shall pay to the applicable Agent an amount equal to such L/C
Disbursement, in the same currency in which such L/C Disbursement is
denominated, not later than two hours after such Borrower shall have received
notice from such Issuing Bank that payment of such draft will be made, or, if
such Borrower shall have received such notice later than 10:00 a.m., New York
City time (or, in the case of a Canadian Letter of Credit, Toronto time), on any
Business Day, not later than 10:00 a.m., New York City time (or, in the case of
a Canadian Letter of Credit, Toronto time), on the immediately following
Business Day.
(f) Obligations Absolute. Each Borrower's obligations to reimburse L/C
Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed
27
strictly in accordance with the terms of this Agreement, under any and all
circumstances whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit or
any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Letter of Credit or any Loan Document;
(iii) the existence of any claim, setoff, defense or other right that
the relevant Borrower, any other party guaranteeing, or otherwise obligated
with, the relevant Borrower, any Subsidiary or other Affiliate thereof or
any other person may at any time have against the beneficiary under any
Letter of Credit, the relevant Issuing Bank, the relevant Agent or any Bank
or any other person, whether in connection with this Agreement, any other
Loan Document or any other related or unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect;
(v) payment by the relevant Issuing Bank under a Letter of Credit
against presentation of a draft or other document that does not comply with
the terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the
relevant Issuing Bank, the Banks, the relevant Agent or any other person or
any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of the relevant Borrower's
obligations hereunder.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of each
Borrower hereunder to reimburse L/C Disbursements will not be excused by the
gross negligence or wilful misconduct of the relevant Issuing Bank. However, the
foregoing shall not be construed to excuse the relevant Issuing Bank from
liability to such Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by such
Borrower to the extent permitted by applicable law) suffered by such Borrower
that are caused by such Issuing Bank's gross negligence or wilful misconduct in
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof; it is understood that an Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any Letter of
Credit (i) an Issuing Bank's exclusive reliance on the documents presented to it
under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute wilful misconduct or gross negligence of
the Issuing Bank.
(g) Disbursement Procedures. An Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit issued by it. Such Issuing Bank shall as
promptly as possible give telephonic notification, confirmed by telecopy, to the
U.S. Agent (or, in the case of a Canadian Letter of Credit, the Canadian Agent)
and the relevant Borrower of such demand for payment and whether such Issuing
Bank has made or will make an L/C Disbursement thereunder; provided that any
failure to give or delay in giving such notice shall not relieve such Borrower
of its obligation to reimburse such Issuing Bank and the relevant Banks with
respect to any such L/C Disbursement. The applicable Agent shall promptly give
notice thereof to each Bank with a participation in such Letter of Credit.
(h) Interim Interest. If the Issuing Bank in respect of a Letter of Credit
shall make any L/C Disbursement under such Letter of Credit, then, unless the
relevant Borrower shall reimburse such L/C Disbursement in full on such date,
the unpaid amount thereof shall bear interest for the account of such
28
Issuing Bank, for each day from and including the date of such L/C Disbursement,
to but excluding the earlier of the date of payment by such Borrower or the date
on which interest shall commence to accrue thereon as provided in Section
2.05(d), at the rate per annum that would apply to such amount if such amount
were an Alternate Base Loan or, if such amount is denominated in Canadian
Dollars, a Canadian Prime Loan.
(i) Resignation or Removal of the Issuing Bank. An Issuing Bank may resign
at any time by giving 180 days' prior written notice to the applicable Agent,
the Banks and the relevant Borrower, and may be removed at any time by the
Borrowers by notice to such Issuing Bank, the applicable Agent and the Banks.
Subject to the next succeeding paragraph, upon the acceptance of any appointment
as an Issuing Bank hereunder by a Bank that shall agree to serve as a successor
Issuing Bank, such successor shall succeed to and become vested with all the
interests, rights and obligations of the retiring Issuing Bank (other than with
respect to outstanding Letters of Credit previously issued by it) and the
retiring Issuing Bank shall be discharged from its obligations to issue
additional Letters of Credit hereunder. At the time such removal or resignation
shall become effective, the relevant Borrower shall pay all accrued and unpaid
fees due to such Issuing Bank pursuant to Section 2.08(c)(ii). The acceptance of
any appointment as an Issuing Bank hereunder by a successor Bank shall be
evidenced by an agreement entered into by such successor, in a form satisfactory
to the Borrowers and the applicable Agent, and, from and after the effective
date of such agreement, (i) such successor Bank shall have all the rights and
obligations of the previous Issuing Bank under this Agreement and the other Loan
Documents (other than with respect to outstanding Letters of Credit previously
issued by it) and (ii) references herein and in the other Loan Documents to the
term "Canadian Issuing Bank" (if the retiring Issuing Bank is a Canadian Issuing
Bank) or "U.S. Issuing Bank" (if the retiring Issuing Bank is a U.S. Issuing
Bank) and the term "Issuing Bank" shall be deemed to refer to such successor or
to any previous Issuing Bank, or to such successor and all previous Issuing
Banks, as the context shall require. After the resignation or removal of an
Issuing Bank hereunder, the retiring Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement and the other Loan Documents with respect to Letters of
Credit issued by it prior to such resignation or removal, but shall not be
required to issue additional Letters of Credit.
SECTION 2.21. Acceptances. (a) Acceptance Commitment. Subject to the terms
and conditions hereof, each Canadian Bank severally agrees, that A&P Canada may
issue Acceptances denominated in Canadian Dollars, in minimum denominations of
Cdn.$100,000 or a whole multiple thereof and in minimum aggregate amounts of
Cdn.$5,000,000 or any greater whole multiple of Cdn.$100,000, each in accordance
with the provisions of this Section 2.21 from time to time until the Termination
Date in an aggregate face amount at any one time outstanding not to exceed such
Canadian Bank's Canadian Commitment less the aggregate principal amount of
Canadian Loans made by such Bank then outstanding; provided, however, that after
giving effect to all Acceptances requested to be created by a Notice of Drawing,
(i) the Total Canadian Exposure (expressed in Canadian Dollars) shall not exceed
the Total Canadian Commitment, (ii) the sum of the Total U.S. Exposure plus the
Total Canadian Exposure (expressed in U.S. Dollars) shall not exceed
U.S.$500,000,000 and (iii)) at all times the outstanding aggregate face amount
of all Acceptances made by a Canadian Bank shall equal its Pro Rata Percentage
of the outstanding aggregate face amount of all Acceptances made by all Canadian
Banks. For purposes of this Agreement, the full face value of an Acceptance,
without discount, shall be used when calculations are made to determine the
outstanding amount of a Canadian Bank's Acceptances; provided that in computing
the face amount of Acceptances outstanding, the face amount of an Acceptance in
respect of which the Acceptance Obligation has been prepaid by A&P Canada and
received by the Canadian Bank that created the same in accordance with the terms
of this Agreement shall not be included.
(b) Terms of Acceptance. Each Draft shall be accepted by a Canadian Bank,
upon the written request of A&P Canada given in accordance with paragraph (c),
by the completion and acceptance by such Canadian Bank of a Draft (i) payable in
Canadian Dollars, drawn by A&P Canada on the Canadian Bank in accordance with
this Agreement, to the order of the Canadian Bank and (ii) maturing prior to the
Termination Date on a Canadian Business Day not less than 14 days nor more than
180 days after the date of such Draft, excluding days of grace all as specified
in the relevant Notice of Drawing; provided, however, that no Acceptance shall
have a tenor in excess of the period of time which is usual and reasonably
necessary to finance transactions of similar character.
(c) Notice of Drawing and Discount of Acceptances.
(i) With respect to each requested acceptance of Drafts, A&P Canada
shall give the Canadian Agent a Notice of Drawing, substantially in the
form of Exhibit H annexed hereto (which shall be
29
irrevocable and may be by telephone confirmed in writing within one
Canadian Business Day) to be received prior to (x) in the case of a Draft
with an aggregate face amount less than Cdn.$10,000,000, 10 a.m., Toronto
time, on the Canadian Business Day of the requested acceptance, (y) in the
case of a Draft with an aggregate face amount that is greater than or equal
to Cdn.$10,000,000 and less than Cdn.$25,000,000, at least one Canadian
Business Day prior to the date of the requested acceptance, and (z) in the
case of a Draft with an aggregate face amount that is greater than or equal
to Cdn.$25,000,000, at least two Canadian Business Days prior to the date
of the requested acceptance, specifying:
(A) the date on which such Drafts are to be accepted;
(B) the aggregate face amount of such Drafts;
(C) the maturity date of such Acceptances;
(D) whether the Canadian Banks must sell the Acceptances; and
(E) such additional information as the Canadian Agent or any
Canadian Bank may reasonably from time to time request to be included
in such notices.
(ii) Upon receipt of a Notice of Drawing the Canadian Agent shall
promptly notify each Canadian Bank of the contents thereof and of such
Canadian Bank's ratable share of the Acceptances requested thereunder. The
aggregate face amount of the Drafts to be accepted by a Canadian Bank shall
be determined by the Canadian Agent by reference to the respective Canadian
Commitments of the Canadian Banks. Not later than 2:00 p.m., Toronto time,
on the date of such notification each Canadian Bank shall give telegraphic
or telex notice to the Canadian Agent's Lending Office of whether such Bank
will accept the Draft or Drafts pursuant to the Notice of Drawing. (iii)
Not later than 10:00 a.m., Toronto time, on the date of the acceptance of a
Draft, each Canadian Bank shall notify the Canadian Agent of the discount
rate at which such Bank will discount the Draft or Drafts to be accepted by
such Canadian Bank hereunder on such date and the Canadian Agent shall as
soon as practicable thereafter advise A&P Canada of each such discount
rate. Not later than 2:00 p.m., Toronto time, on such date each Canadian
Bank shall, subject to the fulfillment of the applicable conditions
precedent specified in Section 4.01 and subject to the provisions of
paragraph (f)(ii) of this Section, (a) on the basis of the information
supplied by the Canadian Agent, as aforesaid, complete a Draft or Drafts of
A&P Canada by filling in the amount, date and maturity date thereof in
accordance with the applicable Notice of Drawing, (b) duly accept such
Draft or Drafts, (c) discount such Acceptance or Acceptances, (d) give the
Canadian Agent telegraphic or telex notice of such Canadian Bank's
acceptance of such Draft or Drafts and of its discount thereof, confirming
the discount rate at which it discounted the Acceptance or Acceptances and
the amount paid to the Canadian Agent for the account of A&P Canada and (e)
remit to the Canadian Agent in Canadian Dollars in immediately available
funds an amount equal to the proceeds of such discount. Upon receipt by the
Canadian Agent of such sums from the Canadian Banks, the Canadian Agent
shall make the aggregate amount thereof available to A&P Canada.
(iv) Each extension of credit hereunder through the acceptance of
Drafts shall be made simultaneously and pro rata by the Canadian Banks in
accordance with their respective Canadian Commitments.
(d) Sale of Acceptances. A&P Canada shall have the right to sell any
Acceptance; provided, however, that if so specified in the Notice of Drawing the
Canadian Banks shall sell any or all of the Acceptances in the market. Where an
Acceptance cannot be sold by A&P Canada or the applicable Canadian Bank, the
accepting Canadian Bank shall purchase promptly, and in any event, no later than
one Canadian Business Day following written notice by A&P Canada to such
Canadian Bank and the Canadian Agent, from A&P Canada at such Canadian Bank's
discount rate such Acceptances accepted by it and provide to the Canadian Agent
the discount proceeds for the account of A&P Canada. The Acceptance Fee in
respect of such Acceptances may, at the option of the Canadian Bank, be set off
against the discount proceeds payable by such Canadian Bank hereunder.
(e) Acceptance Obligation. A&P Canada is obligated, and hereby
unconditionally agrees, to pay to each Canadian Bank the face amount of each
Acceptance created by such Bank in accordance with a Notice of Drawing pursuant
to paragraph (c) on the maturity date thereof, or on such earlier date as may be
30
required pursuant to provisions of this Agreement. With respect to each
Acceptance which is outstanding hereunder, A&P Canada shall notify the Canadian
Agent prior to 11:00 a.m. three Canadian Business Days prior to the maturity
date of such Acceptance (which notice shall be irrevocable) of A&P Canada's
intention to issue Acceptances on such maturity date to provide for the payment
of such maturing Acceptance and shall deliver a Notice of Drawing to the
Canadian Agent. Any repayment of an Acceptance must be made at or before 2:00
p.m. (Toronto time) on the maturity date of such Acceptance. If any Acceptance
Obligation is not paid when due, it shall bear interest, payable on demand, at a
rate per annum equal to 2% over the Canadian Prime Rate in effect from time to
time, from the due date thereof to the date of payment thereof. A&P Canada
waives presentment for payment and any other defense to payment of any amounts
due to a Canadian Bank in respect of any Acceptances accepted by such Canadian
Bank under this Agreement which might exist solely by reason of those
Acceptances being held, at the maturity thereof, by that Canadian Bank in its
own right and A&P Canada agrees not to claim any days of grace if that Canadian
Bank, as holder, sues A&P Canada on those Acceptances for payment of the amounts
payable by A&P Canada thereunder.
(f) Supply of Drafts. To enable the Canadian Banks to accept Drafts in the
manner specified in this Section 2.21, A&P Canada shall supply to each Canadian
Bank upon the execution of this Agreement and thereafter from time to time
forthwith upon request by such Canadian Bank a sufficient number of blank Drafts
conforming with the requirements of this Agreement and duly executed on behalf
of A&P Canada, which such Canadian Bank shall hold in safekeeping. A&P Canada
hereby authorizes and requests each Canadian Bank in accordance with each Notice
of Drawing received from A&P Canada pursuant to paragraph (c) to take the
measures with respect with a Draft or Drafts of A&P Canada then in possession of
such Bank specified in paragraph (c)(2). In case any authorized signatory of A&P
Canada whose signature shall appear on any Draft shall cease to have such
authority before the acceptance of a Draft with respect to such Draft, the
obligations of A&P Canada hereunder and under such Acceptance shall nevertheless
be valid for all purposes as if such authority had remained in force until such
creation. The Canadian Agent and each Canadian Bank shall be fully protected in
relying upon any instructions received from A&P Canada (orally or otherwise)
without any duty to make inquiry as to the genuineness of such instructions. The
Canadian Agent and each Canadian Bank shall be entitled to rely on instructions
received from any person identifying himself (orally or otherwise) as a duly
authorized officer of A&P Canada and shall not be liable for any errors,
omissions, delays or interruptions in the transmission of such instructions.
(g) No Canadian Bank shall be responsible or liable for its failure to
accept a Draft if the cause of such failure is, in whole or in part, due to the
failure of A&P Canada to provide the Drafts described in paragraph (f) above to
such Canadian Bank on a timely basis nor shall any Canadian Bank be liable for
any damage, loss or other claim arising by reason of any loss or improper use of
any such Draft except loss or improper use arising by reason of the negligence
or wilful misconduct of such Canadian Bank.
(h) Rights of Canadian Bank as to Acceptances. Neither the Canadian Agent
nor any Canadian Bank shall have any responsibility as to the application of the
proceeds by A&P Canada of any discount of any Acceptances. For greater
certainty, each Canadian Bank may, at any time, purchase Acceptances issued by
A&P Canada and may at any time and from time to time hold, sell, rediscount or
otherwise dispose of any or all Acceptances accepted and/or purchased by it.
(i) Acceptance Equivalent Loans. Whenever A&P Canada delivers a Notice of
Drawing to the Canadian Agent under this Agreement requesting the Canadian Banks
to accept Drafts, a Canadian Bank may at its option, in lieu of accepting
Drafts, make an Acceptance Equivalent Loan. On each date on which Drafts are to
be accepted, subject to the same terms and conditions applicable to the
acceptance of Drafts, any Canadian Bank that elects to make an Acceptance
Equivalent Loan, upon delivery by A&P Canada of an executed Discount Note
payable to the order of such Canadian Bank, will remit to the Canadian Agent in
immediately available funds for the account of A&P Canada the Acceptance
equivalent discount proceeds in respect of the Discount Notes issued by A&P
Canada to the Canadian Bank.
(j) Terms Applicable to Discount Notes. The term "Acceptance" when used in
this Agreement shall be construed to include Discount Notes and all terms of
this Agreement applicable to Acceptances shall apply equally to Discount Notes
evidencing Acceptance Equivalent Loans with such changes as may
31
in the context be necessary (except that no Discount Note may be sold,
rediscounted or otherwise disposed of by the Canadian Bank making Acceptance
Equivalent Loans). For greater certainty:
(i) a Discount Note shall mature and be due and payable on the same
date as the maturity date for Acceptances specified in the applicable
Notice of Drawing;
(ii) an Acceptance Fee will be payable in respect of a Discount Note
and shall be calculated at the same rate and in the same manner as the
Acceptance Fee in respect of an Acceptance; and
(iii) an Acceptance Equivalent Loan made by a Canadian Bank will be
considered to be part of a Canadian Bank's outstanding Acceptances for all
purposes of this Agreement.
(k) Prepayment of Acceptances and Discount Notes. No Acceptance or Discount
Note may be repaid or prepaid prior to the maturity date of such Acceptance or
Discount Note, except in accordance with the provisions of Article VII.
SECTION 2.22. Currency Fluctuations, etc. (a) Not later than 1:00 p.m., New
York City time, on each Calculation Date, the U.S. Agent shall determine the
Exchange Rate as of such Calculation Date. Except as otherwise provided in
Section 2.09 and Section 2.23, the Exchange Rate so determined shall become
effective on the first U.S. Business Day immediately following the relevant
Calculation Date (a "Reset Date") and shall remain effective until the next
succeeding Reset Date.
(b) Not later than 5:00 p.m., New York City time, on each Reset Date, the
U.S. Agent shall consult with the Canadian Agent and the Agents shall determine
the Total Canadian Exposure (both in U.S. Dollars and in Canadian Dollars) and
the Total U.S. Exposure.
(c) If, on any Reset Date, the sum of the Total U.S. Exposure and the Total
Canadian Exposure (expressed in U.S. Dollars) exceeds U.S.$510,000,000, then (i)
the Agents shall give notice thereof to the Banks and the Borrowers and (ii) the
Borrowers shall, within two U.S. Business Days thereafter, repay or prepay Loans
(other than Competitive Loans) in accordance with this Agreement in an aggregate
principal amount sufficient to reduce the sum of the Total U.S. Exposure and the
Total Canadian Exposure to U.S. $500,000,000.
(d) If, on any Reset Date, the Total Canadian Exposure (expressed in
Canadian Dollars) exceeds an amount equal to 113.5% of the Total Canadian
Commitment, then (i) the Canadian Agent shall give notice thereof to A&P Canada
and the Canadian Banks and (ii) within two Canadian Business Days thereafter,
A&P Canada shall repay or prepay Canadian Loans in accordance with this
Agreement in an aggregate principal amount such that, after giving effect
thereto, the Total Canadian Exposure (expressed in Canadian Dollars) shall not
exceed the Total Canadian Commitment.
(e) To the extent the repayments and prepayments referenced in paragraph
(c) do not result in a sum of the Total U.S. Exposure and the Total Canadian
Exposure (expressed in U.S. Dollars) that is less than or equal to
U.S.$500,000,000 and/or the repayments and prepayments referenced in paragraph
(d) do not result in a Total Canadian Exposure (expressed in Canadian Dollars)
that is less than or equal to the Total Canadian Commitment, then the Borrowers
shall provide cash collateral in accordance with Section 9.08 to the extent
required to obtain such results.
SECTION 2.23. Consolidation of Credit Facilities. (a) Notwithstanding
noncompliance with the conditions precedent set forth in Article IV, if (i) an
Event of Default pursuant to Section 7(h) or (i) shall occur, (ii) the
Commitments shall have been terminated and/or the Loans shall have been declared
immediately due and payable pursuant to Article VII, or (iii) the Consolidated
Tangible Net Worth of A&P Canada shall be less than Cdn.$4,000,000 and, in the
case of this clause (iii), a majority in interest of the Canadian Banks
(determined based upon their respective Canadian Commitments) shall have given
notice thereof to the Agents requesting that this Section 2.23 apply, then, at
10:00 A.M., New York City time, on the second U.S. Business Day (the
"Consolidation Date") immediately succeeding (x) the date on which such Event of
Default occurs (in the case of clause (i) above), (y) the date on which such
termination and/or declaration occurs (in the case of clause (ii) above), or (z)
the date on which such notice is received by the Agents (in the case of clause
(iii) above), subject to Section 2.23(b), the following shall occur:
(1) the Company, in its capacity as a Guarantor, shall repay all
outstanding Canadian Loans and all unreimbursed L/C Disbursements under
Canadian Letters of Credit, provide the cash collateral contemplated in
Section 9.08 in respect of the face amount of all outstanding Acceptances
and pay all
32
accrued Fees payable by A&P Canada and, in its capacity as a Borrower,
shall repay all outstanding Standby Loans and all unreimbursed L/C
Disbursements under U.S. Letters of Credit and pay all accrued Fees payable
by it hereunder (without prejudice to the Company's right to finance such
repayments by borrowing Standby Loans in accordance with this Agreement
after giving effect to the adjustment of Commitments as provided below, if
the U.S. Commitments remain in effect);
(2) if, as of the Consolidation Date, the U.S. Commitments remain in
effect, then:
(A) the Total U.S. Commitment shall increase by the U.S. Dollar
Equivalent of the Total Canadian Commitment, but without increasing
the U.S. Commitment of any U.S. Bank;
(B) each Canadian Bank (or an affiliate thereof designated by
such Canadian Bank) shall become a U.S. Bank with a U.S. Commitment
equal to the U.S. Dollar Equivalent of its former Canadian Commitment,
and its Canadian Commitment shall terminate, if not previously
terminated; and
(3) the Company shall become the account party in respect of all
Letters of Credit (with the result that each Canadian Letter of Credit
shall become a U.S. Letter of Credit) and the Banks' participations in
Letters of Credit shall be adjusted so that, as of the Consolidation Date,
the U.S. L/C Exposure of each Bank shall equal its Pro Rata Percentage of
the aggregate U.S. L/C Exposure at the time (determined as though
Commitments had been consolidated as U.S. Commitments as provided in clause
(2) above, even if such Commitments have been terminated).
The foregoing actions shall result in, and the parties hereto shall take
such actions as shall be necessary to result in, all Canadian Banks becoming
U.S. Banks, all Canadian Letters of Credit becoming U.S. Letters of Credit, all
Canadian Loans being repaid, cash collateral being provided for the satisfaction
of all obligations in respect of outstanding Acceptances and any and all Standby
Loans and U.S. L/C Exposure being held by the Banks ratably in accordance with
their U.S. Commitments (or, if the Commitments have terminated, in accordance
with their ratable interests as though the Commitments had not terminated and
had been converted to U.S. Commitments as provided above). After giving effect
to the foregoing, in the event that any L/C Disbursement is made in Canadian
Dollars, any payment required to be made by the Borrowers or the Banks hereunder
in respect of such L/C Disbursement shall be payable in U.S. Dollars in an
amount equal to the U.S. Dollar Equivalent (based on the Exchange Rate
determined by the U.S. Agent on the U.S. Business Day immediately preceding such
payment date) of the amount otherwise payable in Canadian Dollars. For purposes
of this Section 2.23(a) (other than in the immediately preceding sentence), the
U.S. Dollar Equivalent shall be determined based upon the Exchange Rate in
effect on the Closing Date.
(b) If any event described in clause (i), (ii) or (iii) of paragraph (a)
above occurs and either the Required Banks (in the case of an occurrence of an
event described in clause (i) or (ii) of paragraph (a) above) elect to apply the
provisions of this paragraph (b) in lieu of the provisions of paragraph (a)
above, or (in the case of any such event) for any reason the actions specified
in paragraph (a) above cannot be taken or accomplished, then the following
provisions shall apply:
(1) all Commitments shall terminate;
(2) each U.S. Bank shall purchase a participation in each Canadian
Loan, outstanding Acceptance and unreimbursed L/C Disbursement of each
Canadian Bank, and each Canadian Bank shall purchase a participation in
each Standby Loan and unreimbursed L/C Disbursement of each U.S. Bank, and
each Bank having issued such an Acceptance or holding such a Loan or
unreimbursed L/C Disbursement agrees to sell such participations therein,
in each case in such amount as shall be necessary so that the Standby Loans
and participations therein, the Canadian Loans and participations therein,
the Acceptances and participations therein and the L/C Disbursements and
participations therein, are held ratably by the Banks (it being understood
that the ratable interests of the Banks shall be determined by the Agents
on the basis of the U.S. Dollar Equivalent of their respective Commitments
at the time of termination thereof); and
(3) the Banks' participations in Letters of Credit shall be adjusted
so that the U.S. L/C Exposure and the Canadian L/C Exposure of each Bank
shall be ratable (determined as provided in clause (2) above).
33
The foregoing actions shall result in, and the Banks shall take such
actions as shall be necessary to result in, any and all Standby Loans, Canadian
Loans, Acceptances, U.S. L/C Exposure and Canadian L/C Exposure being held,
directly or indirectly (through participations) by the Banks ratably on the
basis of the U.S. Dollar Equivalent of their respective Commitments at the time
of termination thereof. For purposes of this Section 2.23(b), (i) the U.S.
Dollar Equivalent shall be determined based upon the Exchange Rate in effect on
the Closing Date, (ii) the purchase and sale of participations shall be at a
price calculated on the basis of the principal amount thereof but without
interest (it being understood that any recovery of interest accrued thereon
prior to the date of sale of such participations shall be for the account of the
Bank selling such participation) and (iii) the purchase and sale of
participations pursuant to clause (2) above shall be made in the same currency
in which the applicable Loan, L/C Disbursement or Acceptance is denominated;
provided, however, that if a U.S. Bank is unable for any reason (including lack
of participation by such U.S. Bank in foreign exchange markets) to obtain or
apply Canadian Dollars to purchase participations in Loans, L/C Disbursements or
Acceptances that are denominated in Canadian Dollars, as required by clause (2)
above, such U.S. Bank shall be permitted to make such purchase payments in U.S.
Dollars in an amount equal to the U.S. Dollar Equivalent of the amount otherwise
payable in Canadian Dollars hereunder. The provisions of this Section 2.23(b)
are solely for the benefit of the Banks, shall not be enforceable by either
Borrower and, notwithstanding any contrary provisions herein, may be amended,
modified or waived by agreement among the Banks without any consent or approval
of either Borrower.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of the Borrowers represents and warrants to each of the Issuing Banks
and the Banks that:
SECTION 3.01. Organization; Corporate Powers. Each of the Borrowers and the
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has the corporate power
and authority to own its property and to carry on its business as now conducted,
(c) is qualified to do business in every jurisdiction where such qualification
is necessary except where the failure to so qualify would not have a materially
adverse effect on the condition, financial or otherwise, of the Company and the
Subsidiaries taken as a whole, and (d) has the corporate power and authority to
execute, deliver and perform its obligations under each of the Loan Documents
and each other agreement or instrument contemplated hereby to which it is or
will be a party and, in the case of the Borrowers, to borrow hereunder.
SECTION 3.02. Authorization and Enforceability. The execution, delivery and
performance by each Loan Party of each of the Loan Documents to which it is or
will be a party and, in the case of the Borrowers, the borrowings hereunder
(collectively, the "Transactions") (a) have been duly authorized by all
requisite corporate action and (b) will not (i) violate (A) any provision of law
or the articles of incorporation or by-laws of either of the Borrowers or any
Subsidiary, (B) any applicable order of any court or other agency of government
or (C) any material indenture, any material agreement for borrowed money, any
material bond, note or other similar instrument or any other material agreement
to which either of the Borrowers or any Subsidiary is a party or by which either
of the Borrowers or any Subsidiary or any of their respective property is bound,
(ii) be in conflict with, result in a breach of or constitute (with due notice
or lapse of time or both) a default under any such indenture, agreement, bond,
note, instrument or other agreement or (iii) result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
property or assets of either of the Borrowers or any Subsidiary. This Agreement
constitutes a legal, valid and binding obligation of each Borrower enforceable
against such Borrower in accordance with its terms, and each other Loan Document
when executed and delivered by each Loan Party that will be a party thereto will
constitute a legal, valid and binding obligation of such Loan Party enforceable
against such Loan Party in accordance with its terms (except as enforcement may
be affected by bankruptcy laws or other similar laws for the relief of debtors
and except as the remedy of specific performance may be affected by the
equitable powers of a court of competent jurisdiction).
SECTION 3.03. Approval. No action, consent or approval of, or registration
or filing with, or any other action by, any governmental agency, bureau,
commission or court, or any other person, is required in connection with the
Transactions.
SECTION 3.04. Financial Statements. The Company has heretofore furnished to
each of the Banks the Consolidated balance sheets of the Company and the
Subsidiaries as of February 22, 1997, and
34
the related statements of Consolidated operations and retained earnings, of
Consolidated shareholders' equity and of Consolidated cash flows for the fiscal
year then ended, certified by Deloitte & Touche, independent public accountants,
and the Consolidated balance sheets of the Company and the Subsidiaries as of
February 22, 1997, and the related statements of Consolidated operations and of
Consolidated cash flows for the fiscal quarter then ended. A&P Canada has
heretofore furnished to each of the Banks the Consolidated balance sheets of A&P
Canada and its Subsidiaries as of February 22, 1997, and the related statements
of Consolidated operations and retained earnings, of Consolidated shareholders'
equity and of Consolidated cash flows for the fiscal year then ended, certified
by Deloitte & Touche, independent public accountants. Such financial statements
fairly present the financial condition of the Company, A&P Canada and their
Subsidiaries as of the dates thereof and the results of the operations of the
Company, A&P Canada and their Subsidiaries for the periods then ended (subject,
in the case of the unaudited statements, to normal year-end audit adjustments).
All such financial statements were prepared in accordance with GAAP.
SECTION 3.05. No Material Adverse Change. There has been no Material
Adverse Change since February 22, 1997.
SECTION 3.06. Subsidiaries. (a) Set forth in Schedule 3.06 hereto is a
complete and accurate list of all the Subsidiaries as of the date hereof,
showing as of the date hereof (as to each Subsidiary) the jurisdiction of its
organization and the percentage of the Company's ownership interest in such
Subsidiary, and the number of shares of capital stock of any Subsidiary covered
by options, warrants, rights of conversion or purchase and similar rights at the
date hereof. All the outstanding capital stock of each of the Subsidiaries (x)
has been validly issued, is fully paid and nonassessable and (y) to the extent
owned by the Company or one or more of the Subsidiaries is owned free and clear
of all mortgages, deeds of trust, pledges, liens, security interests and other
charges or encumbrances. A&P Canada is a Wholly Owned Subsidiary.
(b) Each Material Subsidiary is a Guarantor under the Guarantee Agreement.
The Subsidiaries that are not Guarantors under the Guarantee Agreement do not,
in the aggregate, account for more than 10% of the Company's Consolidated
Tangible Net Worth.
SECTION 3.07. Litigation; Compliance with Laws. (a) There are no actions,
suits or proceedings at law or in equity or by or before any governmental
instrumentality or other agency now pending or, to the knowledge of either of
the Borrowers, threatened against or affecting either of the Borrowers or any of
the Subsidiaries which, individually or in the aggregate, (i) is likely to
materially impair the right of the Company and the Subsidiaries taken as a whole
to carry on business substantially as now being conducted or would result in any
Material Adverse Change; or (ii) challenges the validity or enforceability of
any Loan Document.
(b) None of the Borrowers or any of the Subsidiaries is in violation of any
law, rule or regulation, or in default with respect to any judgment, writ,
injunction or decree of any governmental authority, where such violation or
default is likely to materially impair the right of the Company and the
Subsidiaries taken as a whole to carry on business substantially as now being
conducted or would result in any Material Adverse Change.
(c) No exchange control law or regulation materially restricts any Loan
Party from complying with its obligations under any Loan Document.
SECTION 3.08. Tax Returns. Each of the Borrowers and the Subsidiaries has
filed or caused to be filed all Federal, state and local tax returns which, to
the knowledge of either Borrower, are required to be filed and have paid or
caused to be paid all taxes as shown on such returns or on any assessment
received by it or by any of them to the extent that such taxes have become due,
except (a) taxes the amount, applicability or validity of which are being
contested in good faith by appropriate proceedings and with respect to which the
relevant Borrower or such Subsidiary, as the case may be, shall have set aside
on its books reserves reasonably deemed adequate by it with respect thereto and
(b) taxes, assessments and returns relating thereto which, in the aggregate, are
not material to the Company and the Subsidiaries, taken as a whole.
SECTION 3.09. Employee Benefit Plans. The Company and each of 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 insofar as they apply to the Plans. No Reportable
Event has occurred in respect of any Plan. The present value of all benefit
liabilities under each Plan
35
(based on those assumptions used to fund such Plan) did not, as of the last
annual valuation date applicable thereto, exceed by more than U.S.$5,000,000 the
value of the assets of such Plan. Neither the Company nor any ERISA Affiliate
has incurred any Withdrawal Liability that materially adversely affects the
financial condition of the Company and its ERISA Affiliates taken as a whole.
Neither the Company 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 can 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 Company and its ERISA Affiliates
taken as a whole.
SECTION 3.10. Foreign Employee Benefit Matters. Each Foreign Employee
Benefit Plan is in compliance in all material respects with all requirements of
the governing documents for such Plan and all applicable laws (including funding
and fiduciary obligations). The greater of the going concern liabilities and the
solvency liabilities under any Foreign Pension Plan does not exceed the current
fair market value of the assets held in trust or other funding vehicle for such
Plan by an amount in excess of the sum of (i) Cdn.$20,000,000 and (ii) the
amount of Indebtedness at such time that may be incurred without violating
Section 6.04(m). With respect to any Foreign Employee Benefit Plan (other than a
Foreign Pension Plan), reasonable reserves have been established in accordance
with prudent business practice or where required by ordinary accounting
practices in the jurisdiction in which such Plan is maintained. The aggregate
unfunded liabilities, after giving effect to any reserves for such liabilities,
with respect to such Plans are not material. There are no actions, suits or
claims (other than routine claims for benefits) pending or threatened with
respect to any Foreign Employee Benefit Plan that would subject the Borrowers or
an ERISA Affiliate to a liability in excess of Cdn.$5,000,000.
SECTION 3.11. Investment Company Act. None of the Loan Parties is an
"investment company" as that term is defined in, or is otherwise subject, to
regulation under the Investment Company Act of 1940.
SECTION 3.12. Federal Reserve Regulations. (a) None of the Borrowers and
the 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 the Loans or any Acceptance or Letter of
Credit 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
which entails a violation of, or which is inconsistent with, the provisions of
the Regulations of the Board, including, without limitation, Regulations G, U or
X thereof.
SECTION 3.13. Agreements. None of the Borrowers and the Subsidiaries is a
party to any agreement or instrument or subject to any charter or other
corporate restriction materially and adversely affecting its business,
properties or assets, operations or condition (financial or otherwise). None of
the Borrowers and the Subsidiaries is in default in the performance, observance
or fulfillment of any of the obligations, covenants or conditions contained in
any agreement or instrument to which it is a party in any manner which would
materially and adversely affect the business, properties or assets, operations
or condition (financial or otherwise) of the Company and the Subsidiaries taken
as a whole.
SECTION 3.14. No Material Misstatements. To the best knowledge of each of
the Borrowers, no information, report, financial statement, exhibit or schedule
furnished by or on behalf of any Loan Party to an Agent or any Bank in
connection with the negotiation of any Loan Document or included herein or
delivered pursuant hereto (including the Confidential Information Memorandum of
the Borrower dated May, 1997, it being recognized, however, that projections
contained therein as to future events are not to be viewed as fact and that
actual results during the period or periods covered by any such projections may
differ from the projected results and that the differences may be material)
contained, contains or will contain any material misstatement of fact or
omitted, omits or will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were, are
or will be made, not misleading.
SECTION 3.15. Environmental and Safety Matters. Each of the Borrowers and
the Subsidiaries has complied with all laws and regulations relating to the
protection of the environment or to employee health or safety (collectively,
"Environmental and Safety Laws") to the extent that the failure to comply
36
could reasonably be expected to result in a Material Adverse Change. None of the
Borrowers and the Subsidiaries has received notice of any failure so to comply.
The plants and facilities of each of the Borrowers and the Subsidiaries do not
manage any hazardous substances in violation of any Environmental and Safety
Laws where such violations, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Change. Neither Borrower is aware of
any events, conditions or circumstances involving environmental pollution or
contamination or employee health or safety that could reasonably be expected to
result in a Material Adverse Change.
ARTICLE IV
CONDITIONS OF LENDING
The obligations of the Banks to make Loans or to create an Acceptance and
of the Issuing Banks to issue Letters of Credit hereunder are subject to the
satisfaction of the conditions to the effectiveness of this Agreement set forth
in Section 4.02 and to the conditions to borrowing and issuance set forth in
Section 4.01.
SECTION 4.01. All Borrowings, etc. On the date of each borrowing (including
each refinancing pursuant to Section 2.04) hereunder, on the date of issuance of
each Letter of Credit and on the date of issuance of each Acceptance:
(a) The applicable Agent shall have received a notice of such borrowing as
required by Section 2.02 or 2.03, as applicable, or, in the case of the issuance
of a Letter of Credit, the Issuing Bank and the applicable Agent shall have
received a notice requesting the issuance of such Letter of Credit as required
by Section 2.20(b), or, in the case of the issuance of an Acceptance, the
Canadian Agent shall have received a notice of drawing as required by Section
2.21(c).
(b) Except in the case of (i) any refinancing of Standby Loans or Canadian
Loans pursuant to Section 2.04 which does not result in an increase in the
aggregate outstanding principal amount of the Loans of any Bank or (ii) any
borrowing of Standby Loans made on the Consolidation Date in an aggregate
principal amount not exceeding the payments made by the Company (solely as a
result of the occurrence of the event described in clause (iii) of Section
2.23(a)) on the Consolidation Date pursuant to clause (1) of Section 2.23(a),
the representations and warranties set forth in Article III herein and in each
other Loan Document shall be true and correct in all material respects on and as
of such date with the same effect as though such representations and warranties
had been made on and as of such date, except to the extent that such
representations and warranties expressly relate to an earlier date.
(c) Except in the case of (i) any refinancing of Standby Loans or Canadian
Loans pursuant to Section 2.04 which does not result in an increase in the
aggregate outstanding principal amount of the Loans of any Bank or (ii) any
borrowing of Standby Loans made on the Consolidation Date in an aggregate
principal amount not exceeding the payments made by the Company (solely as a
result of the occurrence of the event described in clause (iii) of Section
2.23(a)) on the Consolidation Date pursuant to clause (1) of Section 2.23(a),
each of the Borrowers and the other Loan Parties shall be in compliance with all
the terms and provisions set forth herein and in each other Loan Document on its
part to be observed or performed, and immediately after such borrowing or the
issuance of such Letter of Credit or Acceptance, as the case may be, no Event of
Default specified in Article VII hereof, nor any event which upon notice or
lapse of time or both would constitute an Event of Default, shall have occurred
and be continuing.
Each borrowing hereunder or issuance of a Letter of Credit or Acceptance
hereunder shall be deemed to be a representation and warranty by the Borrowers
on the date of such borrowing or the issuance of such Letter of Credit or
Acceptance, as the case may be, as to the matters specified in this Section.
SECTION 4.02. Effectiveness. The effectiveness of this Agreement is subject
to the following additional conditions precedent:
(a) Each Bank shall have received the favorable written opinion of (i)
Xxxxxx X. Xxxxxx, Esq., Senior Vice President and General Counsel of the
Company, (ii) Xxxxxx Xxxxxx & Xxxxxxx, U.S. counsel for the Borrowers and (iii)
Blake, Xxxxxxx & Xxxxxxx, counsel for A&P Canada, each dated
37
the date hereof and addressed to the Issuing Banks and the Banks, substantially
in the form of, respectively, Exhibit F-1, F-2 and F-3 hereto.
(b) All legal matters incident to this Agreement and the other Loan
Documents shall be satisfactory to the Banks, to the Issuing Banks and to
Cravath, Swaine & Xxxxx, U.S. counsel for the U.S. Agent, and XxXxxxxx Binch,
Canadian counsel for the Canadian Agent.
(c) The Agents shall have received (i) a copy of the certificate or
articles of incorporation, including all amendments thereto, of each Loan Party,
certified as of a recent date by the Secretary of State (or similar official) of
the jurisdiction of its organization; (ii) a certificate of such Secretary of
State (or similar official), dated as of a recent date, as to the good standing
and charter documents of each such Loan Party on file in the office of such
Secretary of State (or similar official); (iii) a certificate of the Secretary
or an Assistant Secretary of each Loan Party dated the date hereof and
certifying (A) that attached thereto is a true and complete copy of the by-laws
of such Loan Party as in effect on the date of such certification, (B) that
attached thereto is a true, correct and complete copy of resolutions adopted by
the Board of Directors of such Loan Party authorizing the execution, delivery
and performance of the Loan Documents to which such Loan Party is or will be a
party and, in the case of the Borrowers, the borrowings hereunder, and that said
resolutions have not been amended or revoked and are in full force and effect on
the date of such certificate, (C) that the certificate of incorporation (or
similar organizational document) of such Loan Party has not been amended since
the date of the last amendment thereto indicated on the certificate of good
standing furnished pursuant to clause (ii) above and (D) as to the incumbency
and specimen signature of each officer executing any Loan Document or any other
document delivered in connection herewith or therewith on behalf of such Loan
Party and a certification by another officer of such Loan Party as to the
incumbency and signature of the officer signing the certificate referred to in
this clause (iii); and (iv) such other documents as any Issuing Bank or any Bank
or its counsel may reasonably request.
(e) The Competitive Advance and Revolving Credit Facility Agreement dated
as of December 12, 1995, as amended, among the Company, the banks listed
therein, and the U.S. Agent and the Canadian Agent shall have been terminated
and all obligations thereunder discharged except with respect to bankers
acceptances that are identified on Schedule 1.01 attached hereto, the U.S. Agent
shall have received satisfactory evidence of such termination and discharge.
(f) The Agents shall have received copies of the Guarantee Agreement duly
executed by the Guarantors and the Indemnity, Subrogation and Contribution
Agreement duly executed by the Borrowers and the Guarantors.
(g) The Agents shall have received a certificate, dated the date hereof and
signed by a Financial Officer, confirming compliance with the conditions
precedent set forth in paragraphs (b) and (c) of Section 4.01.
(h) The Agents shall have received all Fees and other amounts due and
payable on or prior to the date hereof.
(i) Each of the Agents shall have received such further information,
certificates and documents as such Agent or its counsel may reasonably request.
ARTICLE V
AFFIRMATIVE COVENANTS
Each of the Borrowers covenants and agrees with the Banks that, so long as
this Agreement shall remain in effect and until the Commitments have been
terminated and the principal of and interest on each Loan, any Acceptance
Obligation, all Fees and all other expenses or amounts payable under any Loan
Document shall have been paid in full and all Letters of Credit have been
canceled, cash collateralized or have expired and all amounts drawn thereunder
have been reimbursed in full, unless the Required Banks shall otherwise consent
in writing, it will, and will cause each of the Subsidiaries to:
SECTION 5.01. Existence. Do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence, material
rights, licenses, permits and franchises, comply in all material respects with
all lawful laws and regulations (including those relating to employee health and
38
safety and to the protection of the environment) applicable to it and conduct
its business in substantially the same manner as heretofore conducted or as at
the time permitted under applicable law; at all times maintain, preserve and
protect all franchises and trade names and maintain and preserve all property
used or useful in the conduct of its business and keep the same in good repair,
working order and condition, and from time to time make, or cause to be made,
all needful and proper repairs, renewals and replacements, betterments and
improvements thereto, so that the business carried on in connection therewith
may be properly and advantageously conducted at all times; provided, however,
that nothing contained in this Section 5.01 shall prevent either Borrower or any
Subsidiary from ceasing or omitting to exercise, or selling, abandoning,
terminating or allowing to expire, any rights, licenses, permits or franchises
(including, in the case of a Subsidiary only (other than A&P Canada), the legal
existence thereof) which in the judgment of the Company can no longer be
advantageously exercised or prevent either Borrower or any Subsidiary from
ceasing to keep in repair or selling, abandoning or otherwise disposing of any
property, the retention of which in the judgment of the Company is inadvisable
to, or which are no longer used or useful in, the business of such Borrower or
any Subsidiary, or prevent any liquidation of any Subsidiary (other than A&P
Canada) or any merger or consolidation or sale expressly permitted by the
provisions of Article VI hereof.
SECTION 5.02. Insurance. Maintain or cause to be maintained, with
responsible and reputable insurers, insurance with respect to its properties and
business and the properties and business of the Subsidiaries against such
casualties and contingencies (including public liability) and in such types and
in such amounts as are customarily maintained or caused to be maintained by
persons engaged in the same or a similar business in the same territories under
similar conditions; provided, however, that in lieu of or supplementing any such
insurance in whole or in part, the Company may adopt or cause to be adopted some
other method or plan of protection at least equal in protection, in the judgment
of the Company, to the method or plan of protection against loss or damage to
property adopted by such other persons.
SECTION 5.03. Obligations and Taxes. (a) Pay and discharge or cause to be
paid and discharged all of its indebtedness and obligations promptly and in
accordance with their terms and (b) pay and discharge or cause to be paid and
discharged promptly all lawful taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become in default, as well as all lawful claims
for labor, materials and supplies or otherwise which, if unpaid, might become a
lien or charge upon such properties or any part thereof; provided, however, that
neither the Company nor any of the Subsidiaries shall be required to pay and
discharge or to cause to be paid and discharged any such indebtedness,
obligation, tax, assessment, charge, levy or claim so long as the validity,
applicability or amount thereof shall be contested in good faith by appropriate
proceedings and the Company or such Subsidiary, as the case may be, shall have
set aside on its books reserves reasonably deemed adequate by it with respect
thereto.
SECTION 5.04. Financial Statements; Reports, etc. In the case of the
Company, furnish to each of the Banks:
(a) (i) within 90 days after the end of each fiscal year of the Company
(being the last Saturday in February in each calendar year), the Consolidated
balance sheets of the Company and the Subsidiaries and the related statements of
Consolidated operations and retained earnings, of Consolidated shareholders'
equity and of Consolidated cash flows for the fiscal year then ended; and (ii)
within 90 days after the end of each fiscal year of A&P Canada, the Consolidated
balance sheets of A&P Canada and its Subsidiaries and the related statements of
Consolidated operations and retained earnings, of Consolidated shareholders'
equity and of Consolidated cash flows for the fiscal year then ended; in each
case, all the foregoing Consolidated financial statements to be reported on by
Deloitte & Touche, or other independent certified public accountants of
nationally recognized standing reasonably acceptable to the Required Banks;
(b) within 45 days after the end of each of the first three fiscal quarters
of each fiscal year, the unaudited Consolidated balance sheets and statements of
Consolidated operations and retained earnings, of Consolidated shareholders'
equity and of changes in Consolidated cash flows for the period then ended,
certified by a Financial Officer as presenting fairly the financial position and
results of operations of the Company and the Subsidiaries and as having been
prepared in accordance with generally accepted accounting principles
consistently applied in each case subject to normal year-end audit adjustments;
(c) concurrently with (a) above, a certificate of the independent
accountants referred to therein (which certificate may be limited to accounting
matters and disclaim responsibility for legal inter-
39
pretations to the extent such accountants are then permitted to issue such
certificates) certifying that during the course of their examination nothing
came to their attention that caused them to believe that any Event of Default,
or any event which with notice or lapse of time or both would constitute an
Event of Default, has occurred, or, if an Event of Default or event has
occurred, specifying the nature and extent thereof; and concurrently with (a)
and (b) above, a certificate of a Financial Officer (i) certifying that no Event
of Default, nor any event which with notice or lapse of time or both would
constitute such an Event of Default, has occurred, or, if such an Event of
Default or event has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto, and (ii)
setting forth computations and/or facts showing compliance (y) by the Company
and the Subsidiaries with the provisions of Sections 6.01, 6.02, 6.03, 6.04,
6.07, 6.08 and 6.09 and (z) by A&P Canada with the provisions of Section
2.23(a)(iii);
(d) promptly after the sending or filing thereof, and to the extent not
required to be furnished by any other provision of this Section, (i) copies of
all proxy statements, financial statements, and reports that the Company sends
to its stockholders and (ii) copies of all regular, periodic and special
reports, and all registration statements relating to transactions requiring a
vote of stockholders of the Company or filed on under the Securities Act of
1933, which the Company or any Subsidiary files with the Securities and Exchange
Commission, or any governmental authority which may be substituted therefore or
with any national securities exchange;
(e) promptly after the occurrence thereof, notice of a change in the
Ratings; and
(f) promptly, from time to time, such other information regarding the
operations, business affairs and condition (financial or otherwise) of the
Company and the Subsidiaries, or compliance with the terms of any Loan Document,
as any of the Banks may reasonably request which are not otherwise required to
be delivered pursuant to this Section.
SECTION 5.05. Litigation and Other Notices. Give each Agent, each Issuing
Bank and each of the Banks prompt written notice of the following:
(a) any Event of Default and any event which with notice or lapse of time
or both would constitute an Event of Default;
(b) all events of default or any event that would become an event of
default upon notice or lapse of time or both under any of the terms or
provisions of any note, agreement or other instrument evidencing or securing or
relating to any Indebtedness of either Borrower or any of the Subsidiaries
exceeding U.S.$10,000,000 (or its equivalent);
(c) levy of an attachment, execution or other process against any of the
property or assets, real or personal, of either Borrower or any Subsidiary,
which property and assets in the aggregate have a book value in excess of
U.S.$10,000,000 (or its equivalent);
(d) the filing or commencement of any action, suit or proceeding by or
before any court or any Federal, state, municipal or other governmental
department, commission, instrumentality or agency which (i) is likely to
materially impair the right of either Borrower or the Company and the
Subsidiaries taken as a whole to carry on its or their business substantially as
now conducted or would materially adversely affect the business, operations,
properties, assets or condition (financial or otherwise) of either Borrower or
the Company and the Subsidiaries taken as a whole or (ii) challenges the
validity or enforceability of any Loan Document;
(e) promptly upon the sale, lease, transfer or other disposition (other
than sales in the ordinary course of business and intercompany transfers) of any
of a Borrower's or any Subsidiary's real or tangible personal property, notice
of such sale, lease, transfer or disposition; provided that no such notice need
be given unless the aggregate book value of such sales, leases, transfers or
dispositions in any fiscal year exceeds 5% of Consolidated total assets of the
Company and the Subsidiaries as of the end of the immediately preceding fiscal
year; and
(f) any matter (other than those specified above as to which the Banks have
received due notice) which has resulted in, or which either Borrower reasonably
believes will result in, a materially adverse change in the financial condition
or operations of either Borrower or the Company or and the Subsidiaries taken as
a whole.
40
SECTION 5.06. ERISA. (a) Comply in all material respects with the
provisions of ERISA and the Code applicable to the Plans and with all applicable
laws with respect to any Foreign Employee Benefit Plan and (b) furnish to the
U.S. Agent (i) as soon as possible after, and in any event within 30 days after
any Responsible Officer of the Company or any ERISA Affiliate knows or has
reason to know, that, any Reportable Event has occurred that alone or together
with any other Reportable Event could reasonably be expected to result in
liability of the Company to the PBGC in an aggregate amount exceeding
U.S.$5,000,000, a statement of a Financial Officer setting forth details as to
such Reportable Event and the action that the Company proposes to take with
respect thereto, together with a copy of the notice, if any, of such Reportable
Event given to the PBGC, (ii) promptly after receipt thereof, a copy of any
notice that the Company or any ERISA Affiliate may receive from the PBGC
relating to the intention of the PBGC to terminate any Plan or Plans (other than
a Plan maintained by an ERISA Affiliate that is considered an ERISA Affiliate
only pursuant to subsection (m) or (o) of Code Section 414) or to appoint a
trustee to administer any such Plan, (iii) within 30 days after the due date for
filing with the PBGC pursuant to Section 412(n) of the Code a notice of failure
to make a required installment or other payment with respect to a Plan, a
statement of a Financial Officer setting forth details as to such failure and
the action that the Company proposes to take with respect thereto, together with
a copy of any such notice given to the PBGC and (iv) promptly and in any event
within 30 days after receipt thereof by the Company or any ERISA Affiliate from
the sponsor of a Multiemployer Plan, a copy of each notice received by the
Company or any ERISA Affiliate concerning (A) the imposition of Withdrawal
Liability by a Multiemployer Plan in an amount exceeding U.S.$10,000,000 or (B)
a determination that a Multiemployer Plan is, or is expected to be, terminated
or in reorganization, both within the meaning of Title IV of ERISA, and which,
in each case, is expected to result in an increase in annual contributions of
the Company or an ERISA Affiliate to such Multiemployer Plan in an amount
exceeding U.S.$2,000,000.
SECTION 5.07. Access to Premises and Records. Maintain financial records in
accordance with generally accepted accounting principles, and permit
representatives of any Bank to have reasonable access to such financial records
and the premises of each of the Borrowers and the Subsidiaries at reasonable
times and places and to make such excerpts from such records as such
representatives deem necessary.
SECTION 5.08. Additional Guarantors. (a) Cause each Subsidiary (other than
a Canadian Holding Subsidiary) that is a Material Subsidiary to be a Guarantor
under the Guarantee Agreement and cause such other Subsidiaries (other than a
Canadian Holding Subsidiary) to be Guarantors under the Guarantee Agreement to
the extent necessary so that the Subsidiaries that are not Guarantors under the
Guarantee Agreement do not, in the aggregate, account for more than 10% of the
Company's Consolidated Tangible Net Worth. Each of the Borrowers shall cause
each Subsidiary that pursuant to this Section becomes a Guarantor under the
Guarantee Agreement to become at the same time a party to the Indemnity,
Subrogation and Contribution Agreement. Each of the Guarantee Agreement and the
Indemnity, Subrogation and Contribution Agreement, as well as any other document
delivered in connection therewith, shall be reasonably satisfactory to the U.S.
Agent and its counsel with respect to the validity and enforceability thereof
after giving effect to the transactions contemplated in this Section 5.08.
(b) Upon the occurrence of an event described in clause (i), (ii) or (iii)
of Section 2.23(a), either (i) cause A&P Canada to enter into a guarantee
agreement substantially similar to the Guarantee Agreement or (ii) cause the
Guarantee Agreement to be amended to incorporate A&P Canada as a party thereto,
in each case to effect an unconditional guarantee by A&P Canada of the
obligations of the Company and the Subsidiaries to the U.S. Agent, the U.S.
Issuing Bank and the U.S. Banks. Concurrently therewith, the Company shall (i)
cause A&P Canada to enter into an agreement substantially similar to the
Indemnity, Subrogation and Contribution Agreement or (ii) amend the Indemnity,
Subrogation and Contribution Agreement to incorporate A&P Canada as a party
thereto. Each of the agreements contemplated in this paragraph shall be
delivered to the U.S. Agent forthwith and, along with any other document
delivered in connection therewith, shall be reasonably satisfactory to the U.S.
Agent and its counsel with respect to the validity and enforceability thereof
after giving effect to the transactions contemplated in this Section 5.08.
SECTION 5.09. Ownership of A&P Canada. A&P Canada shall be a Wholly Owned
Subsidiary of the Company.
41
ARTICLE VI
NEGATIVE COVENANTS
Each of the Borrowers covenants and agrees with the Banks that, so long as
this Agreement shall remain in effect and until the Commitments have been
terminated and the principal of and interest on each Loan, any Acceptance
Obligation, all Fees and all other expenses or amounts payable under any Loan
Document shall have been paid in full and all Letters of Credit have been
canceled, cash collateralized or have expired and all amounts drawn thereunder
have been reimbursed in full, unless the Required Banks shall otherwise consent
in writing, it will not, and it will not cause or permit any of the
Subsidiaries, directly or indirectly, to:
SECTION 6.01. Minimum Consolidated Tangible Net Worth. Permit Consolidated
Tangible Net Worth of the Company to be less than U.S.$728,594,000 at any time.
Notwithstanding the foregoing, such minimum required amount of such Consolidated
Tangible Net Worth shall be increased (i) from the date of receipt by an amount
equal to 50% of the amount of any increase in Consolidated Tangible Net Worth
resulting from any sale of capital stock of or capital contribution to the
Company consummated after February 22, 1997, and (ii) from the first day of each
fiscal quarter of the Company commencing after February 22, 1997, by 50% (or, if
at the time such minimum required amount of Consolidated Tangible Net Worth
exceeds U.S.$825,000,000, then 20%) of the Consolidated Net Income of the
Company for the previous quarter (it being understood that the minimum required
amount of such Consolidated Tangible Net Worth shall not be reduced by reason of
a net deficit for any quarter).
SECTION 6.02. Ratio of Consolidated Indebtedness to Consolidated Tangible
Net Worth. Permit the ratio of Consolidated Indebtedness of the Company to
Consolidated Tangible Net Worth of the Company to exceed 1.60 to 1.0 at any
time.
SECTION 6.03. Fixed Charge Coverage Ratio. Permit the ratio of (a) EBITDA
plus Rent Expense to (b) Consolidated Interest Expense plus Rent Expense for any
period of four consecutive fiscal quarters ending on or after the Closing Date
to be less than 1.7 to 1.0.
SECTION 6.04. Liens. Incur, create, assume or permit to exist any mortgage,
pledge, security interest, lien, charge or other encumbrance of any nature
whatsoever (including conditional sales or other title retention agreement) on
any of its property or assets, whether owned at the date hereof or hereafter
acquired, other than:
(a) liens incurred or pledges and deposits made in connection with
workmen's compensation, unemployment insurance, old-age pensions, social
security and public liability and similar legislation;
(b) liens securing the performance of bids, tenders, leases, contracts
(other than for the repayment of borrowed money), statutory obligations, surety
and appeal bonds and other obligations of like nature, incurred incident to and
in the ordinary course of business;
(c) statutory liens of landlords and other liens imposed by law, such as
carriers', warehousemen's, mechanics', materialmen's and vendors' liens,
incurred in good faith in the ordinary course of business;
(d) liens securing the payment of taxes, assessments and governmental
charges or levies, either (i) not delinquent or (ii) being contested in good
faith by appropriate proceedings;
(e) zoning restrictions, easements, licenses, reservations, restrictions on
the use of real property or minor irregularities incident thereto which do not
in the aggregate materially detract from the value of the property or assets of
the Company and the Subsidiaries taken as a whole or materially impair the
operation of the business of either Borrower or of the Company and its
Subsidiaries taken as a whole;
(f) liens incurred in the ordinary course of business;
(g) liens on property or assets of any Subsidiary securing Indebtedness of
such Subsidiary to the Company or to a Wholly Owned Subsidiary of the Company;
42
(h) liens for judgments or awards, so long as the finality of such judgment
or award is being contested in good faith and execution thereof is stayed;
provided that the aggregate amount of liens permitted by this clause may not
exceed U.S.$50,000,000 (or its equivalent);
(i) any lien existing on any property or assets of any corporation at the
time it becomes a Subsidiary of the Company, or existing prior to the time of
acquisition upon any property or assets acquired by the Company or any of its
Subsidiaries through purchase, merger or consolidation or otherwise, whether or
not assumed by the Company or such Subsidiary;
(j) any lien placed upon property or assets within 12 months of the time of
acquisition or in-service date of such property or assets by the Company or any
of its Subsidiaries (or, in the case of a lien placed upon a supermarket, within
18 months of the date the supermarket commenced operations) to secure all or a
portion of (or to secure Indebtedness incurred to pay all or a portion of) the
purchase price (or in the case of such supermarket, Indebtedness up to the
market value thereof), provided that any such lien shall not encumber any other
property or assets of the Company or any Subsidiary;
(k) liens existing as of the date hereof; provided, however, that no such
lien shall be permitted under this clause (k) if it extends to property other
than the property subject to such lien on the date hereof;
(l) any lien renewing, extending or refunding any lien permitted by clause
(i), (j) or (k) above, provided that the principal amount secured has not
increased, and the lien is not extended to other property;
(m) other liens not permitted by clauses (a) through (l) above on property
or assets attaching after the date hereof; provided that the aggregate amount of
Indebtedness secured by such liens (other than those permitted by clauses (a)
through (l)) plus the aggregate book value of properties leased by the Company
or any of its Subsidiaries that is the subject of a Sale and Leaseback
Transaction subject to clause (ii) of Section 6.08 shall not exceed 15% of
Consolidated Tangible Net Worth of the Company at any time.
SECTION 6.05. Prohibition of Fundamental Changes. Enter into any merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or a
substantial part of its business or assets, except that: (a) either Borrower may
merge or consolidate with a Subsidiary or a Subsidiary may merge or consolidate
with either Borrower so long as such Borrower is the surviving entity; provided,
however, that neither Borrower may merge or consolidate with the other Borrower;
(b) any Subsidiary may merge or consolidate with any Subsidiary; provided,
however, that no Subsidiary may merge or consolidate with The Great Atlantic and
Pacific Tea Company, Limited or any subsidiary thereof; and provided further
that any subsidiary of The Great Atlantic and Pacific Tea Company, Limited may
merge or consolidate with it or with any of its other subsidiaries; and provided
still further that no merger or consolidation allowed by virtue of this
paragraph (b) may result in A&P Canada ceasing to be a Wholly Owned Subsidiary
of the Company; and
(c) either Borrower may merge or consolidate with, or acquire all the
assets of, another person; provided that:
(i) such Borrower is the surviving entity;
(ii) no Event of Default or event which, with notice or the passage of
time or both, would constitute an Event of Default exists after giving
effect to such merger, consolidation or acquisition; and
(iii) the acquired person shall be in substantially the same or a
related line of business as the Company.
SECTION 6.06. Transactions with Affiliates and Others. Except as otherwise
provided herein, directly or indirectly purchase, acquire or lease any property
from, or sell, transfer or lease any property to,
43
or lend or advance any money to, or borrow any money from, or guarantee any
obligation of, or acquire any stock, obligations or securities of, or enter into
any merger or consolidation agreement, or any management, consulting or similar
fee agreement with, any Affiliate or any officer, director or employee of any
Affiliate, or enter into any other transaction or arrangement or make any
payment to or otherwise deal with, in the ordinary course of business or
otherwise, any Affiliate; provided, however, that the Borrowers and the
Subsidiaries may, so long as no Event of Default has occurred and is continuing
or would occur after giving effect thereto, (i) make sales to and purchases from
Affiliates or provide services to or receive services from Affiliates, on an
arm's-length basis for fair market value and (ii) enter into transactions with
Affiliates (other than a person controlling the Company) in the ordinary course
of business and not otherwise prohibited under this Agreement, provided that
such transactions are either (y) consistent with past practice in connection
with commercial joint ventures in which the Company or a Subsidiary has a
significant interest and which has been formed for the purpose of developing the
Company's business or (z) consistent with industry practice and entered into in
connection with franchise arrangements; and provided further that the
prohibition of this Section shall not extend to (i) arrangements existing on the
date hereof (but not including any modifications, extensions or renewals
thereof), (ii) indemnifications permitted by the charter or by-laws of the
Company or any Subsidiary and (iii) transactions involving less than
U.S.$1,000,000 (or its equivalent). For the purposes of this Section, the term
"Affiliate" shall not include the Company or any of its Subsidiaries.
SECTION 6.07. Subsidiary Indebtedness. Permit any Subsidiary to create,
incur, assume or suffer to exist any Indebtedness except:
(i) any Indebtedness secured by liens permitted by Section 6.04(j) or
Indebtedness in respect of any capital leases resulting from Sale and
Leaseback Transactions permitted by Section 6.08; and any Indebtedness
secured by liens permitted by Section 6.04(m), so long as the aggregate
principal amount outstanding of all Indebtedness of the Company and its
Subsidiaries secured by liens permitted under Section 6.04(m) plus the
aggregate book value of the property leased by the Company or any of its
Subsidiaries that is the subject of Sale and Leaseback Transactions under
clause (ii) of Section 6.08 shall not exceed 15% of Consolidated Tangible
Net Worth of the Company at any time;
(ii) Indebtedness of the Loan Parties under the Loan Documents;
(iii) Indebtedness or any refinancing thereof of any Subsidiary
existing on the date hereof;
(iv) Indebtedness of any Subsidiary existing on the date it becomes a
Subsidiary so long as such Indebtedness was not incurred in contemplation
of such Subsidiary becoming a Subsidiary;
(v) Indebtedness of any Subsidiary to the Company or to a Wholly Owned
Subsidiary of the Company;
(vi) Indebtedness incurred in the ordinary course of business in
connection with supermarket leases that constitute Capitalized Lease
Obligations and in which the lessee is a Guarantor;
(vii) Indebtedness of A&P Canada incurred in respect of the commercial
paper issued by it; provided, however, that the aggregate amount of
Indebtedness incurred pursuant to this clause (vii) shall not at any time
exceed the amount of the unused portion of the Total Canadian Commitment at
such time; and
(viii) other Indebtedness, provided that the aggregate principal
amount outstanding of all such other Indebtedness of all Subsidiaries
(excluding amounts permitted under clauses (i) through (vii) above) does
not exceed U.S.$50,000,000 (or its equivalent).
SECTION 6.08. Sale and Leaseback Transactions. Enter into any Sale and
Leaseback Transaction; provided that the Company and its Subsidiaries may enter
into (i) Sale and Leaseback Transactions of property or assets within 12 months
of the time of acquisition or in-service date of such property or assets by the
Company or any of its Subsidiaries (or, in the case of a Sale and Leaseback
Transaction of a supermarket, within 18 months of the date the supermarket
commenced operations) or (ii) such transactions so long as the aggregate book
value of the property so leased (other than property or assets described in
clause (i)), together with the aggregate principal Indebtedness secured by liens
permitted under Sections 6.04(m), shall not exceed 15% of the Consolidated
Tangible Net Worth of the Company at any time.
44
ARTICLE VII
EVENTS OF DEFAULT
In the case of the happening of any of the following events (hereinafter
called "Events of Default"):
(a) any representation or warranty made in or in connection with any Loan
Document or the borrowings or issuances of Letters of Credit or Acceptances
hereunder or any statement or representation made in any report, certificate,
financial statement or other instrument furnished by any Loan Party to the Banks
in connection with or pursuant to any Loan Document shall prove to have been
false or misleading in any material respect when made or delivered or when
deemed made in accordance with the terms hereof;
(b) (i) default shall occur in the payment of the principal of any Loan or
the reimbursement with respect to any L/C Disbursement or any Acceptance
Obligation, when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise; or (ii) default shall occur in the payment of any Fee or
the interest on any Loan or L/C Disbursement or any other amount (other than an
amount referred to in clause (i) above) due under any Loan Document, when and as
the same shall become due and payable, and such default under this clause (ii)
shall continue unremedied for five days;
(c) default shall occur in the due observance or performance of any
covenant, condition or agreement on the part of or to be performed by either
Borrower or any Subsidiary contained in Article V hereof and such default shall
continue unremedied for 30 days after written notice thereof to such Borrower or
such Subsidiary from the applicable Agent or any Bank or Banks (with a copy
thereof sent to the applicable Agent in the case of notice from any Bank);
(d) default shall occur in the due observance or performance of any
covenant, condition or agreement on the part of or to be performed by either of
the Borrowers or any Consolidated Subsidiary contained in Article VI hereof and
such default shall continue unremedied for 5 days after written notice thereof
to the relevant Borrower from the applicable Agent or any Bank or Banks (with a
copy thereof sent to the applicable Agent in the case of notice from any Bank);
(e) default shall occur in the due observance of any other covenant,
condition or agreement contained in any Loan Document and such default shall
continue unremedied for 30 days after written notice thereof to the relevant
Loan Party from the applicable Agent or any Bank or Banks (with a copy thereof
sent to the applicable Agent in the case of notice from any Bank);
(f) either of the Borrowers or any Subsidiary shall fail to pay any
Indebtedness greater than U.S.$10,000,000 (or its equivalent), or fail during
any 30-day period to pay Indebtedness aggregating more than U.S.$10,000,000 (or
its equivalent) or any interest or premium thereon aggregating U.S.$10,000,000
(or its equivalent) or more, when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Indebtedness;
(g) either of the Borrowers or any Subsidiary shall fail to perform any
term, covenant or agreement on its part to be performed under any agreement or
instrument evidencing or securing or relating to any Indebtedness exceeding
U.S.$10,000,000 (or its equivalent) when required to be performed, if the effect
of such failure is to accelerate, or to permit the holder or holders of such
Indebtedness or the trustee or trustees under any such agreement or instrument
to accelerate, the maturity of such Indebtedness;
(h) either of the Borrowers or any Material Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking relief under
Title 11 of the United States Code or any other Federal, state or foreign
bankruptcy, insolvency or similar law, (ii) consent to the institution of, or
fail to controvert in a timely and appropriate manner, any such proceeding or
the filing of any such petition, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator or similar official for such
Borrower or such Material Subsidiary or for a substantial part of its property,
(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
45
writing its inability or fail generally to pay its debts as they become due or
(vii) take action for the purpose of effecting any of the foregoing;
(i) 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 either Borrower or any Material Subsidiary, or of a substantial part
of its property, under Title 11 of the United States Code or any other Federal,
state or foreign bankruptcy, insolvency or similar law, (ii) the appointment of
a receiver, trustee, custodian, sequestrator or similar official for such
Borrower or such Material Subsidiary or for a substantial part of its property
or (iii) the winding-up or liquidation of such Borrower or such Material
Subsidiary; and such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall
continue unstayed and in effect for 60 days;
(j) final judgment for the payment of money entered by a court of competent
jurisdiction in an amount in excess of U.S.$10,000,000 (or its equivalent) shall
be rendered against either of the Borrowers or a Subsidiary, and the same shall
remain undischarged for a period of 30 consecutive days (or such longer period
as any such court may allow) during which execution shall not be effectively
stayed;
(k) a Reportable Event or Reportable Events, or a failure to make a
required installment or other payment when due (within the meaning of Section
412(n)(1) of the Code) shall have occurred with respect to any Plan or Plans
that reasonably could be expected to result in liability of the Company to the
PBGC or to a Plan in an aggregate amount exceeding U.S.$10,000,000 and, within
30 days after the reporting of any such Reportable Event to the U.S. Agent or
after the receipt by the U.S. Agent of the statement required pursuant to
Section 5.06(b)(iii) hereof, the U.S. Agent shall have notified the Company in
writing that (i) the Required Banks have made a determination that, on the basis
of such Reportable Event or Reportable Events or the receipt of such statement,
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 thereto) to terminate any Plan or
Plans;
(l) (i) the Company or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to
such Multiemployer Plan, (ii) the Company or such ERISA Affiliate does not have
reasonable grounds for contesting such Withdrawal Liability and is not in fact
contesting such Withdrawal Liability in a timely and appropriate manner, and
(iii) the amount of such 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), requires payments exceeding U.S.$10,000,000 in any year;
(m) the Company 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 annual
contributions of the Company 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 contributed to such
Multiemployer Plans for their most recently completed plan years by an amount
exceeding U.S.$10,000,000; or
(n) the Guarantee Agreement shall cease to be in full force and effect or
any Guarantor shall deny or disaffirm its obligations under the Guarantee
Agreement;
then, in every such event and at any time thereafter during the continuance of
such event, the U.S. Agent, if requested by the Required Banks (which request
may be made by telephone, confirmed by written or telecopy notice), shall by
written notice to the Borrowers, take any or all of the following actions, at
the same or different times, (i) terminate the Commitments, (ii) declare the
Loans and all Acceptance Obligations then outstanding to be forthwith due and
payable in whole or in part, whereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and any unpaid
accrued Fees and all Acceptance Obligations and all other liabilities of the
Borrowers accrued hereunder and under any other Loan Document, shall become
forthwith due and payable, without presentment,
46
demand or any other notice of any kind, all of which are hereby expressly
waived, anything contained herein or in any other Loan Document to the contrary
notwithstanding or (iii) require cash collateral as contemplated by Section
9.08. Notwithstanding the foregoing, if an Event of Default specified in
paragraphs (h) or (i) occurs with respect to either Borrower, the Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon, any unpaid accrued Fees and all other
liabilities of the Borrowers accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived, anything contained herein or in
any other Loan Document to the contrary notwithstanding.
ARTICLE VIII
THE AGENT
In order to expedite the transactions contemplated by this Agreement, The
Chase Manhattan Bank is hereby appointed to act as U.S. Agent, and The Chase
Manhattan Bank of Canada is hereby appointed to act as Canadian Agent, in each
case on behalf of the Banks and the Issuing Banks. Each of the Banks and the
Issuing Banks and each assignee of any such Bank or Issuing Bank hereby
irrevocably authorizes each of the Agents to take such actions on behalf of such
Bank or assignee or Issuing Bank and to exercise such powers as are specifically
delegated to such Agent by the terms and provisions hereof and of the other Loan
Documents, together with such actions and powers as are reasonably incidental
thereto. The Agents are hereby expressly authorized by the Banks and the Issuing
Banks, without hereby limiting any implied authority, (a) to receive on behalf
of the Banks and the Issuing Banks all payments of principal of and interest on
the Loans, all payments in respect of L/C Disbursements and all other amounts
due to the Banks or the Issuing Banks hereunder, and promptly to distribute to
each Bank or Issuing Bank its proper share of each payment so received; (b) to
give notice on behalf of each of the Banks to the Company or A&P Canada of any
Event of Default specified in this Agreement of which the applicable Agent has
actual knowledge acquired in connection with its agency hereunder; and (c) to
distribute to each Bank and Issuing Bank copies of all notices, financial
statements and other materials delivered by a Borrower or any other Loan Party
pursuant to this Agreement or the other Loan Documents as received by such
Agent.
None of the Agents or any of their 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 the Borrowers or
any other Loan Party of any of the terms, conditions, covenants or agreements
contained in any Loan Document. Neither of the Agents shall be responsible to
the Banks for the due execution, genuineness, validity, enforceability or
effectiveness of this Agreement or any other Loan Documents, instruments or
agreements. Each Agent shall in all cases be fully protected in acting, or
refraining from acting, in accordance with written instructions signed by the
Required Banks (or, if applicable, each Bank) and, except as otherwise
specifically provided herein, such instructions and any action or inaction
pursuant thereto shall be binding on all the Banks. Each 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. None of the Agents or any of its
directors, officers, employees or agents shall have any responsibility to the
Borrowers or any other Loan Party on account of the failure of or delay in
performance or breach by any Bank or Issuing Bank of any of its obligations
hereunder or to any Bank or Issuing Bank on account of the failure of or delay
in performance or breach by any other Bank or Issuing Bank or the Borrowers or
any other Loan Party of any of their respective obligations hereunder or under
any other Loan Document or in connection herewith. Each 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 Banks and Issuing Banks hereby acknowledge that neither Agent shall be
under any 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 Required Banks.
Subject to the appointment and acceptance of a successor Agent as provided
below, an Agent may resign at any time by notifying the Banks, the Issuing Banks
and the Borrowers. Upon any such resignation, the Required Banks shall have the
right to appoint a successor. If no successor shall have been
47
so appointed by the Required Banks 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 Banks, appoint a successor Agent which
shall be, in the case of the retirement of the U.S. Agent, a bank with an office
in New York, New York, having a combined capital and surplus of at least
U.S.$500,000,000 or an Affiliate of any such bank and shall be, in the case of
the retirement of the Canadian Agent, a bank with an office in Toronto, Ontario,
having a combined capital surplus of at least Cdn.$100,000,000 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 an
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 Loans made by it hereunder, an Agent, in its individual
capacity and not as Agent, shall have the same rights and powers as any other
Bank and may exercise the same as though it were not an Agent and such Agent and
its Affiliates may accept deposits from, lend money to and generally engage in
any kind of business with the Borrowers or any of the Subsidiaries or other
Affiliates as if it were not an Agent.
Each Bank agrees (a) to reimburse each Agent, on demand, in the amount of
its pro rata share (based on its Commitment hereunder) of any expenses incurred
for the benefit of the Banks by such Agent, including counsel fees and
compensation of agents and employees paid for services rendered on behalf of the
Banks, that shall not have been reimbursed by the Borrowers or any other Loan
Party and (b) to indemnify and hold harmless each 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 are imposed on, incurred by
or asserted against it in its capacity as an Agent, any of them in any way
relating to or arising out of this Agreement or any other Loan Document or any
action taken or omitted by it or any of them under this Agreement or any other
Loan Document, to the extent the same shall not have been reimbursed by the
Borrowers or any other Loan Party; provided that no Bank shall be liable to an
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 such Agent or any of its
directors, officers, employees or agents.
Each Bank and Issuing Bank acknowledges that it has, independently and
without reliance upon an Agent or any other Bank and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank and Issuing Bank also
acknowledges that it will, independently and without reliance upon an Agent or
any other Bank 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 or any other Loan Document, any
related agreement or any document furnished hereunder. The Documentation Agent
and the Co-Agents, in their capacity as such, shall have no duties or
responsibilities, and shall incur no liabilities, under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. Notices and other communications provided for herein
shall be in writing and shall be delivered by hand or by overnight courier
service, mailed by certified or registered mail or sent by telecopy,
(a) if to the Company, to it at 0 Xxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxxxx
00000, to the attention of the Treasurer (Telecopy No. (000) 000-0000);
(b) if to A&P Canada, to it at 0000 Xxxxxx Xxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxx X0X 0X0, to the attention of Vice Chairman (Telecopy No. (416)
234-6586);
(c) if to the U.S. Agent, to The Chase Manhattan Bank Agency Services
Corporation, Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention
of Xxxxxxx Xxxxxxx (Telecopy No. (000) 000-0000), with a copy to The Chase
Manhattan Bank, at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of
Xx. Xxxxxxx Xxxxxxxx (Telecopy No. (000) 000-0000);
48
(d) if to the Canadian Agent, to it at One First Canadian Place, 000
Xxxx Xxxxxx Xxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx X0X 0X0;
(e) if to the U.S. Issuing Bank, to it at the address set forth in
clause (c) above;
(f) if to the Canadian Issuing Bank, to it at the address set forth in
clause (d) above;
(g) if to a Bank, to it at its address (or telecopy number) set forth
on Schedule 2.01 or in the Assignment and Acceptance pursuant to which such
Bank 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 second Business Day after the date when sent by
registered or certified 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.
SECTION 9.02. Waivers; Amendment. (a) No failure or delay of either Agent,
any Issuing Bank or any Bank 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 discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the Issuing
Banks and the Banks hereunder are cumulative and not exclusive of any rights or
remedies which they would otherwise have. No waiver of any provision of this
Agreement or any other Loan Document nor consent to any departure by either of
the Borrowers or any other Loan Party therefrom shall in any event be effective
unless the same shall be in writing and shall be signed or approved as required
by paragraph (b) below. Any such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice or demand
on either of the Borrowers in any case shall entitle such parties 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 Borrowers and the Required Banks. Neither the Guarantee Agreement
nor the Indemnity, Subrogation and Contribution Agreement shall be amended or
modified, or any provision thereof waived, without the prior written consent of
the Required Banks. Notwithstanding the foregoing, no such waiver, amendment or
modification of any Loan Document shall (i) with respect to any Bank, decrease
the principal amount of any Loan, or extend the maturity date or date for the
payment of any Fee or of any interest on any Loan or of any Acceptance
Obligation or any date for reimbursement of an L/C Disbursement, or waive or
excuse any such payment or any part thereof, or decrease the rate of interest on
any Loan or L/C Disbursement, in each case without the prior written consent of
the Bank affected thereby, (ii) change or extend the Commitment or decrease the
Fees of any Bank without the prior written consent of such Bank, (iii) amend,
modify or otherwise change any of the provisions of this Section 9.02(b) or the
definition of "Required Banks", or release all or substantially all of the
Guarantors from any material obligation, or release the Company from any
material obligation, under the Guarantee Agreement (except as expressly
contemplated therein), without the prior written consent of each Bank, (iv)
amend, modify or otherwise affect the rights or duties of any Agent or Issuing
Bank without the prior written consent of such Agent or Issuing Bank or (v)
effect any waiver, amendment or modification that by its terms affects the U.S.
Banks only without the prior written consent of a majority in interest of the
U.S. Banks, or affects the Canadian Banks only without the prior written consent
of a majority in interest of the Canadian Banks or affects the rights and
interests of U.S. Banks differently than those of Canadian Banks, or affects the
rights and interests of Canadian Banks differently than those of U.S. Banks,
without in either case the prior written consent of a majority in interest of
the U.S. Banks and the Canadian Banks, as separate classes.
SECTION 9.03. Payments on Business Days. Whenever any payment to be made
hereunder or under any other Loan Document shall be stated to be due on a day
other than a Business Day, such payment may be made on the next succeeding
Business Day; provided, however, that with respect only to any such payment in
respect of a Eurodollar Loan, if such next succeeding Business Day would fall in
the next calendar month, such payment shall be made on the next preceding
Business Day, and such extension of time shall in such case be included in
computing interest, if any, in connection with such payment. As used in this
Section 9.03, the term "Business Day" shall mean (i) a U.S. Business Day when
used in respect of a payment made to the U.S. Agent, the U.S. Issuing Bank or
any U.S. Bank or (ii) a Canadian Business
49
Day when used in respect of a payment made to the Canadian Agent, the Canadian
Issuing Bank or any Canadian Bank. SECTION 9.04. GOVERNING LAW. THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET
FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH, AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES
DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED,
THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION),
INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS")
AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF
NEW YORK.
SECTION 9.05. Expenses; Documentary Taxes. The Borrowers agree, jointly and
severally, to pay all reasonable out-of-pocket expenses incurred by the Agents
and the Issuing Banks in connection with the preparation, amendment or revision
of this Agreement (whether or not the transactions hereby contemplated shall be
consummated) and the other Loan Documents and the making of the Loans hereunder
or the issuance of Letters of Credit or Acceptances, or incurred by the Agents
or the Banks in connection with the enforcement of the rights of the Banks in
connection with this Agreement or the other Loan Documents or with the Loans
made or the Letters of Credit issued hereunder, and with respect to any action
which may be instituted by any person against any one or more of the Banks or
Issuing Banks in respect of the foregoing, or as a result of any transaction,
action or nonaction arising from the foregoing, including, but not limited to
(in each case), the fees and disbursements of Cravath, Swaine & Xxxxx, U.S.
counsel for the U.S. Agent and XxXxxxxx Binch, Canadian counsel for the Canadian
Agent. The Borrowers agree, jointly and severally, that they shall indemnify
each Bank and Issuing Bank and its officers, directors, employees and agents
from and hold them harmless against any losses, liabilities (including, without
limitation, liabilities arising out of failure by a Borrower or any Subsidiary
to comply with applicable environmental laws), damages, claims and expenses
incurred by or asserted against any of them in connection with this Agreement or
any of the other Loan Documents or the transactions contemplated hereby,
including, without limitation, documentary taxes or other similar assessments or
charges made by any governmental authority by reason of the execution and
delivery of this Agreement or any of the other Loan Documents. The obligations
of the Borrowers under this Section and under Sections 2.13 and 2.15 shall
survive the termination of this Agreement and/or the payment of the Loans and/or
the payment of the Acceptance Obligations and/or the expiration of any Letter of
Credit.
SECTION 9.06. Survival of Agreements; Representations and Warranties, etc.
All warranties, representations and covenants made by any Loan Party herein or
in any other Loan Document in any certificate or other instrument delivered by
it or on its behalf in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the Banks
and the Issuing Banks and shall survive the making of the Loans herein
contemplated and the issuance of Letters of Credit or Acceptances, regardless of
any investigation made by the Banks or the Issuing Banks or on their behalf and
shall continue in full force and effect so long as any amount due or to become
due hereunder or under any other Loan Document is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not been
terminated. All statements in any such certificate or other instrument shall
constitute representations and warranties by each of the Borrowers hereunder.
SECTION 9.07. Successors and Assigns. (a) 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 Borrowers, the Agents, the Issuing Banks or the Banks
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.
(b) Each Bank 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 Commitment, the Loans and Acceptance Obligations at the time
owing to it and its participation in Letters of Credit); provided, however, that
(i) except in the case of an assignment to a Bank or an Affiliate of a Bank,
each of the Company and A&P Canada and the Issuing Banks must give their prior
written consent to such assignment (which consents shall not be unreasonably
withheld), (ii) the amount of the Commitment of the assigning Bank to be
assigned pursuant to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
applicable Agent) shall not be less than U.S.$5,000,000 (in respect of a U.S.
Commitment) or Cdn.$5,000,000 (in respect of a Canadian Commitment) and shall be
for
50
an amount which is an integral multiple of U.S.$1,000,000 (in respect of a U.S.
Commitment) or Cdn.$1,000,000 (in respect of a Canadian Commitment) and (iii)
the parties to each such assignment shall execute and deliver to the applicable
Agent an Assignment and Acceptance, together with a processing and recordation
fee of U.S.$3,500, in the case of fees payable to the U.S. Agent, or Cdn.$4,500,
in the case of fees payable to the Canadian Agent (except such fee shall not be
payable in the case of an assignment by any Bank to any of its affiliates or an
assignment pursuant to Sections 2.09 or 2.19). Upon acceptance and recordation
in the Register pursuant to paragraph (e) of this Section 9.07, from and after
the effective date specified in each Assignment and Acceptance, which effective
date shall be at least five U.S. Business Days (or, if the Assignee is a
Canadian Bank, five Canadian Business Days) after the execution and recordation
thereof, (A) the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Bank under this Agreement, (B) the assigning Bank 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
Bank's rights and obligations under this Agreement, such Bank shall cease to be
a party hereto but shall continue to be entitled to the benefits of Sections
2.13, 2.15, 2.18 and 9.05) and (C) Schedule 2.01 shall be deemed amended to give
effect to such assignment.
(c) By executing and delivering an Assignment and Acceptance, the assigning
Bank 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 Bank 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 Loans, in each case without
giving effect to assignments thereof which have not become effective, are as set
forth in such Assignment and Acceptance, (ii) except as set forth in (i) above,
such assigning Bank makes no other representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or any other instrument or document
furnished pursuant hereto, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, any other Loan Documents or
any other instrument or document furnished pursuant hereto, or the financial
condition of either of the Borrowers or any Subsidiary or the performance or
observance by either of the Borrowers or any Subsidiary of any of its
obligations under this Agreement, any other Loan Documents 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 the most recent financial statements
delivered pursuant to Section 5.04 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 applicable Agent, such assigning Bank or any other
Bank and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
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 such 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 which by the terms of this Agreement are required to be performed by
it as a Bank.
(d) The Canadian Agent shall furnish to the U.S. Agent a copy of each
Assignment and Acceptance with respect to a Canadian Commitment. The U.S. Agent,
on behalf of and solely for this purpose as an agent for the Borrowers, shall
maintain at one of its offices in The City of New York a copy of each Assignment
and Acceptance delivered to it and a register for the recordation of the names
and addresses of the Banks, and the Commitment of, and principal amount of the
Loans and Acceptance Obligations owing to, and participation in Letters of
Credit belonging to, each Bank pursuant to the terms hereof from time to time
(the "Register"). The entries in the Register shall be conclusive in the absence
of manifest error and the Borrowers, the Agents, the Issuing Banks and the Banks
may treat each person whose name is recorded in the Register pursuant to the
terms hereof as a Bank hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrowers, the Issuing Banks and any Bank, 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 Bank and an assignee, an Administrative Questionnaire in the
applicable Agent's customary form completed in respect of the assignee (unless
the assignee shall already be a Bank hereunder), the processing and recordation
fee referred to in paragraph (b) above and, if required, the written consent of
the Company and the Issuing Banks to such assignment, the applicable Agent shall
(i) accept such Assignment and
51
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Issuing Banks and the Banks. No
assignment shall be effective unless recorded in the Register. Any purported
assignment by a Bank of all or a portion of its interests, rights and
obligations under this Agreement (including all or a portion of its Commitment,
the Loans and Acceptance Obligations at the time owing to it and its
participation in Letters of Credit) shall, until such time as it is recorded in
the Register, be deemed to be, and treated as, a sale of a participation therein
pursuant to paragraph (f).
(f) Each Bank may without the consent of either Borrower, the Issuing Banks
or the Agents sell participations to one or more banks or other entities in all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment and the Loans owing to it); provided, however,
that (i) such Bank's obligations under this Agreement shall remain unchanged,
(ii) such Bank 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 2.13 and 2.15 to the same extent as if they were Banks and
(iv) the Borrowers, the Agents, the Issuing Banks and the other Banks shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement, and such Bank shall retain
the sole right to enforce the obligations of the Borrowers relating to the
Loans, Acceptance Obligations, or L/C Disbursements 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 Loans, Acceptances or
Letters of Credit 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 Loans, Acceptances or Letters of
Credit in which the participating bank or other entity has purchased a
participation or (C) any extension of the dates fixed for scheduled payments of
a Fee or of principal of or interest on the Loans or Acceptances or
reimbursements of drawings under Letters of Credit in which the participating
bank or other entity has purchased a participation).
(g) Any Bank may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 9.07, disclose to
the assignee or participant or proposed assignee or participant any information
relating to the Borrowers or the Subsidiaries furnished to such Bank by or on
behalf of the Borrowers; provided that, prior to any such disclosure, each such
assignee or participant or proposed assignee or participant shall execute an
agreement whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of any confidential information
relating to the Borrowers received from such Bank.
(h) Any U.S. Bank may at any time assign all or any portion of its rights
under this Agreement to a Federal Reserve Bank; provided that no such assignment
shall release a Bank from any of its obligations hereunder.
(i) None of the Borrowers shall assign or delegate any of its respective
rights and duties hereunder without the prior written consent of each Issuing
Bank and each Bank.
SECTION 9.08. Cash Collateralization. If (a) pursuant to Article VII, the
Commitments shall be terminated or the Loans and Acceptance Obligations shall be
declared due and payable, or (b) the Total U.S. Exposure shall exceed the Total
U.S. Commitment or the Total Canadian Exposure shall exceed the Total Canadian
Commitment, in each case as a result of a reduction or termination of
Commitments or otherwise pursuant to Section 2.09, 2.12 or 2.23, the relevant
Borrower shall, on the applicable Business Day it receives notice from the
applicable Agent or the Required Banks (or, if the maturity of the Loans has
been accelerated, Banks holding participations in outstanding Letters of Credit
representing greater than 50% of the aggregate undrawn amount of all outstanding
Letters of Credit) thereof and of the amount to be deposited, deposit in an
account with the U.S. Agent, if such Borrower is the Company and with the
Canadian Agent, if such Borrower is A&P Canada, for the benefit of the
applicable Banks, an amount in cash (in U.S. Dollars if such Borrower is the
Company and in Canadian Dollars if such Borrower is A&P Canada) equal to the
U.S. L/C Exposure or the Total Canadian Exposure (less the principal amount of
outstanding Canadian Loans), as applicable, as of such date. Such deposit shall
be held by the U.S. Agent or the Canadian Agent, as applicable, as collateral
for the payment and performance of the obligations of the relevant Borrower
under this Agreement. Such Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Other than any
interest earned on the investment of such deposits, which investments shall be
made at the option and sole discretion of the applicable Agent, such deposits
shall not bear interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall (i) automatically be
applied by the applicable Agent to reimburse the relevant Issuing Bank for L/C
Disbursements for which it has not been reimbursed,
52
(ii) be held for the satisfaction of the reimbursement obligations of the
relevant Borrower for its L/C Exposure at such time, (iii) be held for the
satisfaction of outstanding Acceptance Obligations and (iv) if the maturity of
the Loans has been accelerated (but subject to the consent of Banks holding
participations in outstanding Letters of Credit representing greater than 50% of
the aggregate undrawn amount of all outstanding Letters of Credit), be applied
to satisfy other obligations of such Borrower under this Agreement. If such
Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to such Borrower within three Business
Days after all Events of Default have been cured or waived or the applicable
Agent is satisfied that the Total U.S. Commitment exceeds the Total U.S.
Exposure or, as the case may be, the Total Canadian Commitment exceeds the Total
Canadian Exposure.
SECTION 9.09. Sharing of Setoffs. If one or more Events of Default shall
have occurred and be continuing, each Bank shall have the right, in addition to
and not in limitation of any right which any such holder may have under
applicable law or otherwise, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Bank or its affiliate banks to or for the
credit or the account of either of the Borrowers against any of and all the
obligations of either of the Borrowers now or hereafter existing under this
Agreement and other Loan Documents held by such Bank, irrespective of whether or
not such Bank shall have made any demand under this Agreement or such other Loan
Document and although such obligations may be unmatured. The rights of each Bank
under this Section 9.09 are in addition to other rights and remedies (including
other rights of setoff) which such Bank may have. Each Bank agrees that, if it
shall through the exercise of a right of banker's lien, setoff, counterclaim or
otherwise obtain payment of a proportion of any Loan or L/C Disbursement held by
it in excess of the proportion of the Loans or participations in L/C
Disbursements of the other holder of a Loan or participation in L/C
Disbursements being paid simultaneously or required hereby to be paid
proportionately, it shall be deemed to have simultaneously purchased from such
other holders a participation in the Standby Loans and L/C Exposure held by such
other holders so that the aggregate unpaid principal amount of the Standby Loans
and L/C Exposure and participations in Standby Loans and L/C Exposure held by
each holder shall be in the same proportion to the aggregate unpaid principal
amount of all Standby Loans and L/C Exposure then outstanding as the principal
amount of its Standby Loans and L/C Exposure held by it prior to such exercise
of banker's lien, setoff, counterclaim or other receipt of payment was to the
principal amount of all Standby Loans and L/C Exposure outstanding prior to such
exercise of banker's lien, setoff, counterclaim or other receipt of payment, and
it shall promptly remit to each such holder the amount of the participation thus
deemed to have been purchased; provided, however, that if any such purchase or
purchases or adjustments shall be made pursuant to this Section and the payment
giving rise thereto shall thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such recovery and the purchase
price or prices or adjustment restored without interest. The Borrowers expressly
consent to the foregoing arrangements and agree that any holder of a
participation in a Standby Loan or L/C Disbursement deemed to have been so
acquired may exercise any and all rights of banker's lien, setoff, counterclaim
or otherwise with respect to any and all moneys owing by such holder to either
of the Borrowers as fully as if such Bank had made a Loan directly to the such
parties in the amount of such participation. Purchases and adjustments
contemplated hereby shall be applied by the holders first to Standby Loans and
Canadian Loans and thereafter to Competitive Loans.
SECTION 9.10. Representations of Banks. Each Bank represents to the
Borrowers that it is engaged in the business of making commercial loans and that
it is entering into this Agreement in the ordinary course of its commercial
banking business.
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 or any of the other Loan Documents. 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 case any one or more of the provisions
contained in this Agreement or in any other Loan Document shall be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein 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.
53
SECTION 9.13. Cover Page; Table of Contents and Section Headings. The cover
page, table of contents and section headings used herein are for convenience of
reference only, are not part of this Agreement and are not to affect the
construction of or be taken into consideration in interpreting this Agreement.
SECTION 9.14. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures thereof and hereto were
upon the same instrument. Subject to the conditions set forth in Section 4.02,
this Agreement shall become effective when copies hereof which, when taken
together, bear the signatures of each of the parties hereto shall have been
received by the U.S. Agent.
SECTION 9.15. Entire Agreement. This Agreement, and the other Loan
Documents, including the exhibits and schedules hereto and thereto and the
letter agreement dated the date hereof between the Company and the U.S. Agent,
constitute the entire agreement and understanding of the parties hereto with
respect to the subject matter of this Agreement.
SECTION 9.16. Jurisdiction; Consent to Service of Process. (a) Each of the
Borrowers 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 an
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, 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
Issuing Bank or any Bank may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against either of the
Borrowers or its properties in the courts of any other jurisdiction.
(b) Each of the Borrowers hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents 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.
54
(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, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers as of the day and year first
above written.
THE GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC.,
by
----------------------------------
Name:
Title:
THE GREAT ATLANTIC & PACIFIC COMPANY OF
CANADA, LIMITED,
by
----------------------------------
Name:
Title:
00
XXX XXXXX XXXXXXXXX BANK, individually
and as U.S. Agent,
by
----------------------------------
Name:
Title:
56
COMMERZBANK AKTIENGESELLSCHAFT, individually
and as Documentation Agent,
by
----------------------------------
Name:
Title:
by
----------------------------------
Name:
Title:
00
XXX XXXXX XXXXXXXXX XXXX XX XXXXXX,
individually and as Canadian Agent,
by
----------------------------------
Name:
Title:
58
NATIONSBANK, N.A.,
by
----------------------------------
Name:
Title:
00
XXXXX XXXX XX XXXXXX (XXX XXXX),
by
----------------------------------
Name:
Title:
60
CITIBANK, N.A.,
by
----------------------------------
Name:
Title:
00
XXX XXXX XX XXXX XXXXXX,
by
----------------------------------
Name:
Title:
62
CORESTATES BANK, N.A.,
by
----------------------------------
Name:
Title:
00
XXX XXXX XX XXX XXXX,
by
----------------------------------
Name:
Title:
64
DEUTSCHE BANK AG NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH,
by
----------------------------------
Name:
Title:
by
----------------------------------
Name:
Title:
00
XXX XXXXXXXX XXXX, XXXXXXX,
XXX XXXX BRANCH,
by
----------------------------------
Name:
Title:
66
NORDDEUTSCHE LANDESBANK GIROZENTRALE
NEW YORK AND/OR CAYMAN ISLANDS BRANCH,
by
----------------------------------
Name:
Title:
by
----------------------------------
Name:
Title:
67
THE NORTHERN TRUST COMPANY,
by
----------------------------------
Name:
Title:
68
FLEET NATIONAL BANK,
by
----------------------------------
Name:
Title:
69
ARAB BANK PLC,
by
----------------------------------
Name:
Title:
00
XXX XXXXX XXXXXXXXX XXXX XX XXXXXX,
individually and as Canadian Agent,
by
----------------------------------
Name:
Title:
00
XXX XXXX XX XXXX XXXXXX (TORONTO),
by
----------------------------------
Name:
Title:
by
----------------------------------
Name:
Title:
72
CITIBANK (CANADA),
by
----------------------------------
Name:
Title:
by
----------------------------------
Name:
Title:
73
DEUTSCHE BANK CANADA,
by
----------------------------------
Name:
Title:
by
----------------------------------
Name:
Title:
74
LANDESBANK HESSEN THUERINGEN-GIROZENTRALE,
by
----------------------------------
Name:
Title:
by
----------------------------------
Name:
Title:
75
HIBERNIA NATIONAL BANK,
by
----------------------------------
Name:
Title:
76
SUMMIT BANK,
by
----------------------------------
Name:
Title:
77
BAYERISCHE LANDESBANK GIROZENTRALE,
by
----------------------------------
Name:
Title:
78
BERLINER BANK AG,
by
----------------------------------
Name:
Title:
by
----------------------------------
Name:
Title:
79
CARIPLO BANK,
by
----------------------------------
Name:
Title:
80
EUROPEAN AMERICAN BANK,
by
----------------------------------
Name:
Title:
81
FIRSTAR BANK,
by
----------------------------------
Name:
Title:
82
MICHIGAN NATIONAL BANK,
by
----------------------------------
Name:
Title:
00
XXXXX XXXXXX BANK AND TRUST COMPANY,
by
----------------------------------
Name:
Title:
84
WACHOVIA BANK,
by
----------------------------------
Name:
Title:
[Schedule 1.01(a)
to the
Credit Agreement]
[Schedule 1.01(b)
to the
Credit Agreement]
SCHEDULE 2.01
Contact Person
and Telephone
Name and Address of U.S. Bank and Telecopy Numbers U.S. Commitment
----------------------------- -------------------- ---------------
The Chase Manhattan Bank Xxxxxxx Xxxxxxxx U.S.$32,250,000
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000 Tel: 000-000-0000
Fax: 000-000-0000
Commerzbank Aktiengesellschaft Xxxxxx Xxxxxx U.S.$33,500,000
2 World Financial Xxxxxx,
00xx Xxxxx
Xxx Xxxx, XX 00000-0000 Tel: 000-000-0000
Fax: 000-000-0000
NationsBank, N.A. Xxxxxxxxxxx X. Xxxxxxx U.S.$32,000,000
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000 Tel: 000-000-0000
Fax: 000-000-0000
Royal Bank of Canada Xxxxx Xxxxxxxxxx U.S.$32,000,000
Royal Bank Plaza Tel: 000-000-0000
Toronto, Ontario Fax: 000-000-0000
Xxxxxx, X0X0X0
Citibank Xxxxxxx Xxxxxxx U.S.$24,500,000
000 Xxxx Xxxxxx Tel: 000-000-0000
Xxx Xxxx, XX 00000 Fax: 000-000-0000
The Bank of Nova Scotia Xxxxxxx Xxx U.S.$13,250,000
One Liberty Plaza Tel: 000-000-0000
Xxx Xxxx, XX 00000 Fax: 000-000-0000
Corestates Bank, N.A. Xxxxxx XxXxxxxx U.S.$32,000,000
Northeast Corp. District Tel: 000-000-0000
0000 Xxxxxx Xxxxxx Fax: 000-000-0000
Xxxxxxxxxxxx, XX 00000-0000
The Bank of New York Xxxxxx XxXxxxxx U.S.$32,000,000
Xxx Xxxx Xxxxxx, 00xx Xxxxx Tel: 000-000-0000
Xxx Xxxx, XX 00000 Fax: 000-000-0000
Fleet National Bank Xxxxxxx Xxxxxxx U.S.$32,000,000
Xxx Xxxxxxx Xxxxxx -- XX0000 Tel: 000-000-0000
Xxxxxx, XX 00000 Fax: 000-000-0000
Deutsche Bank AG Xxxx Xxxx U.S.$9,500,000
New York Branch and/or Tel: 000-000-0000
Cayman Islands Branch Fax: 000-000-0000
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
The Sumitomo Bank, Limited, Suresh Tata U.S.$10,000,000
New York Branch Tel: 000-000-0000
000 Xxxx Xxxxxx Fax: 000-000-0000
Xxx Xxxx, XX 00000
Norddeutsche Landesbank Xxxxx Xxxx U.S.$22,000,000
Girozentrale (New York Tel: 000-000-0000
and/or Cayman Islands Branches) Fax: 000-000-0000
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
2
The Northern Trust Company Xxxxxxxx X. X. Xxxxxxx U.S.$22,000,000
00 Xxxxx XxXxxxx Xxxxxx Tel: 000-000-0000
Xxxxxxx, XX 00000 Fax: 000-000-0000
Arab Bank PLC. Xxxxx Xxxxx U.S.$10,000,000
000 Xxxxxxx Xxxxxx, 0xx Xxxxx Tel: 000-000-0000
Xxx Xxxx, XX 00000 Fax: 000-000-0000
Landesbank Hessen Thueringen- Xxxx Xxxxx U.S.$16,000,000
Girozentrale Tel: 000-000-0000
000 Xxxxx Xxxxxx, Fax: 000-000-0000
00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Hibernia National Bank Xxxxxxxxx Xxxxxxx U.S.$16,000,000
000 Xxxxxxxxxx Xxxxxx Tel: 000-000-0000
Xxx Xxxxxxx, XX 00000 Fax: 000-000-0000
Summit Bank Xxxxx Xxxxxxx U.S.$16,000,000
301 Carnegie Center Tel: 000-000-0000
Xxxxxxxxx, XX 00000 Fax: 000-000-0000
Bayerische Landesbank Girozentrale Xxxxxx Asma U.S.$10,000,000
000 Xxxxxxxxx Xxxxxx, 00xx Floor Tel: 000-000-0000
Xxx Xxxx, XX 00000 Fax: 000-000-0000
Berliner Bank A.G. Xxxxxx Xxxxxxx U.S.$10,000,000
Xxxxxxxxxxxxxxxxxx, 00 Tel: 00 00 0000 0000
Berlin, D-10890 Fax: 00 00 0000 0000
Cariplo Bank Xxxxxxx X. Xxxxxx U.S.$10,000,000
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx Tel: 000-000-0000
Xxx Xxxx, XX 00000 Fax: 000-000-0000
European American Bank Xxxxxx Xxxxxx U.S.$10,000,000
730 Veterans Memorial Highway Tel: 000-000-0000
Xxxxxxxx, XX 00000 Fax: 000-000-0000
Firstar Bank Xxxxxxx Xxxxxx U.S.$10,000,000
000 Xxxx Xxxxxxxxx Xxxxxx Tel: 000-000-0000
Xxxxxxxxx, XX 00000 Fax: 000-000-0000
Michigan National Bank Xxxxxxx Xxxxxx U.S.$10,000,000
00000 Xxxxxxx Xxxx Tel: 000-000-0000
Xxxxxxxxxx Xxxxx, XX 00000-0000 Fax: 000-000-0000
State Street Bank and Trust Company Xxxxx Xxxxxxx U.S.$10,000,000
000 Xxxxxxxx Xxxxxx Tel: 000-000-0000
Xxxxxx, XX 00000 Fax: 000-000-0000
Wachovia Bank Xxxxx Xxxxxx U.S.$10,000,000
000 Xxxxxxxxx Xxxxxx N.E. Tel: 000-000-0000
Xxxxxxx, XX 00000 Fax: 000-000-0000
3
Name and Address of Contact Person Canadian
Canadian Bank and Telephone Commitment
and Telecopy Numbers
The Chase Manhattan Bank of Canada Xxxxxxxxx Xxxx Cdn.$5,000,000
000 Xxxx Xxxxxx Xxxx Tel: 000-000-0000
Xxxxxxx, Xxxxxxx X0X 0X0 Fax: 000-000-0000
CANADA
Bank of Nova Scotia Xxxxxxx Xxxx Cdn.$25,000,000
00 Xxxx Xxxxxx, 00xx Xxxxx Tel: 000-000-0000
Xxxxxxx, Xxxxxxx X0X 0X0 Fax: 000-000-0000
CANADA
Citibank (Canada) Xxxxxxxx Xxxxxxx Cdn.$10,000,000
000 Xxxxx Xxxxxx Xxxx Tel: 000-000-0000
Xxxxxxx, Xxxxxxx X0X0X0 Fax: 000-000-0000
CANADA
Deutsche Bank Canada Xxxxxxx X. Xxxxx Cdn.$10,000,000
000 Xxx Xxxxxx Tel: 000-000-0000
Xxxxxxx, Xxxxxxx X0X 0X0 Fax: 000-000-0000
CANADA
SCHEDULE 3.06
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
AND
SUBSIDIARIES
EXHIBIT A
to the
Credit Agreement
[Form of]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Competitive Advance and Revolving Credit
Facilities Agreement dated as of June 10, 1997 (the "Credit Agreement"), among
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC., a Maryland corporation, THE
GREAT ATLANTIC & PACIFIC COMPANY OF CANADA, LIMITED, a Canadian corporation
(each a "Borrower"), the lenders listed on Schedule 2.01 thereto (the "Banks"),
The Chase Manhattan Bank, as agent for the U.S. Banks (in such capacity, the
"U.S. Agent") and The Chase Manhattan Bank of Canada, as agent for the Canadian
Banks (in such capacity, the "Canadian Agent"). Terms defined in the Credit
Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of the Effective Date set forth below (but not prior
to the registration of the information contained herein in the Register pursuant
to Section 9.07(e) of the Credit Agreement), the interests set forth below (the
"Assigned Interest") in the Assignor's rights and obligations under the Credit
Agreement and the other Loan Documents, including, without limitation, the
amounts and percentages set forth below of (i) the Commitment of the Assignor on
the Effective Date, (ii) the Loans owing to the Assignor which are outstanding
on the Effective Date and (iii) participations in Letters of Credit and
Acceptances which are outstanding on the Effective Date, together with unpaid
interest accrued on the assigned Loans to the Effective Date and the amount, if
any, set forth below of the fees accrued to the Effective Date for the account
of the Assignor. Each of the Assignor and the Assignee hereby makes and agrees
to be bound by all the representations, warranties and agreements set forth in
Section 9.07(c) of the Credit Agreement, a copy of which has been received by
each such party. From and after the Effective Date (i) the Assignee shall be a
party to and be bound by the provisions of the Credit Agreement and, to the
extent of the interests assigned by this Assignment and Acceptance, have the
rights and obligations of a Bank thereunder and under the Loan Documents and
(ii) the Assignor shall, to the extent of the interests assigned by this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
2. This Assignment and Acceptance is being delivered together with (i) if
the Assignee is organized under the laws of a jurisdiction outside the United
States, the forms specified in Section 2.19(g) of the Credit Agreement, duly
completed and executed by such Assignee, (ii) if the Assignee is not already a
Bank under the Credit Agreement, an administrative questionnaire and (iii) a
processing and recordation fee of U.S.$3,500, in the case of fees payable to the
U.S. Agent, or Cdn.$4,500, in the case of fees payable to the Canadian Agent.
3. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment (may not be fewer than 5 Business Days after the
Date of Assignment):
2
(Principal Amount Assigned and Percentage Assigned of Applicable
Identifying information as to Facility/Commitment (set forth, to at
Facility/Commitment individual Competitive Loans) least 8 decimals, as a percentage of
the Facility and the aggregate
Commitments of all Banks thereunder)
U.S. Commitment
Canadian Commitment
2
Standby Loans U.S.$ %
Competitive Loans U.S.$ %
Canadian Loans U.S.$ %
Cdn.$ %
U.S. L/C Exposure U.S.$ %
Canadian L/C Exposure Cdn.$ %
Acceptances Cdn.$ %
The terms set forth above are
hereby agreed to: Accepted */
_________________, as Assignor [U.S. Issuing Bank]
by:___________________________ by:________________________
Name: Name:
Title: Title:
_________________, as Assignee [Canadian Issuing Bank]
by:___________________________ by:________________________
Name: Name:
Title: Title:
----------
*/ To be completed to the extent consents are required under Section 9.07(b)
of the Credit Agreement.
3
[THE CHASE MANHATTAN BANK],
by
------------------------------
Name:
Title:
[THE CHASE MANHATTAN BANK OF CANADA],
by
------------------------------
Name:
Title:
[THE GREAT ATLANTIC & PACIFIC TEA
COMPANY, INC.],
by
------------------------------
Name:
Title:
[THE GREAT ATLANTIC & PACIFIC COMPANY
OF CANADA, LIMITED]
by
------------------------------
Name:
Title:
EXHIBIT B-1
to the
Credit Agreement
[Form of]
COMPETITIVE BID REQUEST
The Chase Manhattan Bank, as U.S. Agent for
the Banks referred to below,
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000
[Date]
Attention:
Ladies and Gentlemen:
The undersigned, The Great Atlantic & Pacific Tea Company, Inc., a Maryland
corporation (the "Company"), refers to the Competitive Advance and Revolving
Credit Facilities Agreement dated as of June 10, 1997 (as it may have been
amended, modified, extended or restated from time to time, the "Credit
Agreement"), among the Company, The Great Atlantic & Pacific Company of Canada,
Limited, the Banks and other entities from time to time party thereto, The Chase
Manhattan Bank, as U.S. Agent, and The Chase Manhattan Bank of Canada, as
Canadian Agent. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement. The
Company hereby gives you notice pursuant to Section 2.02(a) of the Credit
Agreement that it requests a Competitive Borrowing under the Credit Agreement,
and in that connection sets forth below the terms on which such Competitive
Borrowing is requested to be made:
(A) Date of Competitive
Borrowing (which is a
Business Day) -------------- -------------- ------------
(B) Principal Amount of
Competitive Borrowing 1/ $_____________ $_____________ $___________
(C) Interest Period and the
last day thereof 2/ ______________ ______________ ____________
(D) Interest Rate Basis*/
Upon acceptance of any or all of the Loans offered by the Banks in response
to this request, the Company shall be deemed to have represented and warranted
that the conditions to lending specified in Sections 4.01(b) and 4.01(c) of the
Credit Agreement have been satisfied.
Very truly yours,
THE GREAT ATLANTIC & PACIFIC TEA COMPANY,
INC.,
by
------------------------------
Name:
Title: [Responsible Officer]
----------
1 In U.S. Dollars not less than U.S.$10,000,000 (and in integral multiples of
U.S.$1,000,000) nor greater than the Total U.S. Commitment then available.
2 Which shall be subject to the definition of "Interest Period" and end not
later than the Termination Date.
* Eurodollar Competitive Loan or Fixed Rate Loan.
EXHIBIT B-2
to the
Credit Agreement
[Form of]
STANDBY BORROWING REQUEST
The Chase Manhattan Bank, as U.S. Agent for
the Banks referred to below,
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention:
[Date]
Ladies and Gentlemen:
The undersigned, The Great Atlantic & Pacific Tea Company, Inc., a Maryland
corporation (the "Company"), refers to the Competitive Advance and Revolving
Credit Facilities Agreement dated as of June 10, 1997(as it may have been
amended, modified, extended or restated from time to time, the "Credit
Agreement"), among the Company, The Great Atlantic & Pacific Company of Canada,
Limited, the Banks and other entities from time to time party thereto, The Chase
Manhattan Bank, as U.S. Agent, and The Chase Manhattan Bank of Canada, as
Canadian Agent. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement. The
Company hereby gives you notice pursuant to Section 2.03 of the Credit Agreement
that it requests a Standby Borrowing under the Credit Agreement, and in that
connection sets forth below the terms on which such Standby Borrowing is
requested to be made:
(A) Date of Standby Borrowing
(which is a Business Day) _______________________
(B) PU.S.$pal Amount of
Standby Borrowing 1/ U.S.$__________________
(C) Interest rate basis 2/ _______________________
(D) Interest Period and the last
day thereof 3/ _______________________
Upon acceptance of any or all of the Loans made by the Banks in response to
this request (but only to the extent required by Section 4.01 of the Credit
Agreement), the Company shall be deemed to have represented and warranted that
the conditions to lending specified in Sections 4.01(b) and (c) of the Credit
Agreement have been satisfied.
THE GREAT ATLANTIC & PACIFIC TEA COMPANY,
INC.,
by
------------------------------------
Name:
Title: [Responsible Officer]
----------
1 In U.S. Dollars not less than U.S.$10,000,000 and in integral multiples of
U.S.$1,000,000.
2 Eurodollar Loan or Alternate Base Loan.
3 Which shall be subject to the definition of "Interest Period" and end not
later than the Termination Date.
EXHIBIT B-3
to the
Credit Agreement
[Form of]
CANADIAN BORROWING REQUEST
The Chase Manhattan Bank of Canada, as Canadian
Agent for the Banks referred to below,
One First Canadian Place
100 King Street West, Suite 6900
Toronto, Ontario X0X 0X0
XXXXXX
Attention:
[Date]
Ladies and Gentlemen:
The undersigned, The Great Atlantic & Pacific Company of Canada, Limited,
("A&P Canada"), refers to the Competitive Advance and Revolving Credit
Facilities Agreement dated as of June [ ], 1997 (as it may have been amended,
modified, extended or restated from time to time, the "Credit Agreement"), among
A&P Canada, The Great Atlantic & Pacific Tea Company, Inc., the Banks and other
entities from time to time party thereto, The Chase Manhattan Bank, as U.S.
Agent and The Chase Manhattan Bank of Canada, as Canadian Agent. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement. A&P Canada hereby gives you
notice pursuant to Section 2.03 of the Credit Agreement that it requests a
Canadian Borrowing under the Credit Agreement, and in that connection sets forth
below the terms on which such Canadian Borrowing is requested to be made:
(A) Date of Borrowing
(which is a Business Day) ________________________________
(B) Principal Amount of $
Borrowing 1/ ________________________________
(C) Interest rate basis 2/ ________________________________
(D) Interest Period and the last
day thereof 3/ ________________________________
(E) Currency of Borrowing ________________________________
Upon acceptance of any or all of the Loans offered by the Banks in response
to this request, the Company shall be deemed to have represented and warranted
that the conditions to lending specified in Sections 4.01(b) and (c) of the
Credit Agreement have been satisfied.
THE GREAT ATLANTIC & PACIFIC COMPANY OF
CANADA, LIMITED,
by
-------------------------------------
Name:
Title:[Responsible Officer]
----------
1 Not less than U.S.$5,000,000 or Cdn.$5,000,000, as applicable and in an
integral multiple of U.S.$1,000,000 or Cdn.$1,000,000, as applicable.
2 Specify Eurodollar Loan, Alternate Base Loan or Canadian Prime Loan.
3 Which shall be subject tothe definition of "Interest Period' and end not
later than the Termination Date.
EXHIBIT C
to the
Credit Agreement
[Form of]
NOTICE OF COMPETITIVE BID REQUEST
[Name of Bank]
[Address]
[Date]
Attention:
Ladies and Gentlemen:
Reference is made to the Competitive Advance and Revolving Credit
Facilities Agreement dated as of June [ ], 1997 (as it may have been amended,
modified, extended or restated from time to time, the "Credit Agreement"), among
The Great Atlantic & Pacific Tea Company, Inc., a Maryland corporation, (the
"Company"), The Great Atlantic & Pacific Company of Canada, Limited, the Banks
and other entities from time to time party thereto, The Chase Manhattan Bank, as
U.S. Agent, and The Chase Manhattan Bank of Canada, as Canadian Agent.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement. The Company made a
Competitive Bid Request on , 19 , pursuant to Section 2.02(a) of the Credit
Agreement, and in that connection you are invited to submit a Competitive Bid by
[Date]/[Time]. 1/1/ Your Competitive Bid must comply with Section 2.03(b) of the
Credit Agreement and the terms set forth below on which the Competitive Bid
Request was made:
(A) Date of Competitive Borrowing _______________________
(B) Principal amount of
Competitive Borrowing $______________________
(C) Interest Period and the last
day thereof _______________________
Very truly yours,
THE CHASE MANHATTAN BANK, as
U.S. Agent,
by
--------------------------------
Name:
Title:
----------
1 The Competitive Bid must be received by the U.S. Agent not later than 9:30
a.m., New York City time, on the U.S. Business Day of a proposed
Competitive Borrowing.
EXHIBIT D
to the
Credit Agreement
[Form of]
COMPETITIVE BID
The Chase Manhattan Bank, as U.S. Agent for
the Banks referred to below,
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
[Date]
Attention:
Ladies and Gentlemen:
The undersigned, [Name of Bank], refers to the Competitive and Advance
Revolving Credit Facilities Agreement dated as of June 10, 1997 (as it may have
been amended, modified, extended or restated from time to time, the "Credit
Agreement"), among The Great Atlantic & Pacific Tea Company, Inc., a Maryland
corporation, (the "Company"), The Great Atlantic & Pacific Company of Canada,
Limited, the Banks and other entities from time to time party thereto, The Chase
Manhattan Bank, as U.S. Agent, and The Chase Manhattan Bank of Canada, as
Canadian Agent. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement. The
undersigned hereby makes a Competitive Bid pursuant to Section 2.02(b) of the
Credit Agreement, in response to the Competitive Bid Request made by the Company
on , 19 , and in that connection sets forth below the terms on which such
Competitive Bid is made:
(A) Interest Period and last
day thereof _______________ _______________ ___________
(B) Principal Amount 1/ $______________ _______________ ___________
(C) Competitive Bid Rate _______________ _______________ ___________
The undersigned hereby confirms that it is prepared, subject to the
conditions set forth in the Credit Agreement, to extend credit to the Company
upon acceptance by the Company of this bid in accordance with Section 2.02(d) of
the Credit Agreement.
Very truly yours,
[Name of Bank],
by
-------------------------------
Name:
Title:
----------
1 In U.S. Dollars not less than U.S.$1,000,000 or greater than the requested
Competitive Borrowing and in integral multiples of U.S.$1,000,000. Multiple
bids will be accepted by the U.S. Agent.
EXHIBIT E
to the
Credit Agreement
INDEMNITY, SUBROGATION and CONTRIBUTION AGREEMENT dated as of
June 10, 1997, among THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC., a
Maryland corporation (the "Company"), THE GREAT ATLANTIC & PACIFIC
COMPANY OF CANADA, LIMITED, a Canadian corporation ("A&P Canada" and,
together with the Company, the "Borrowers"), each of the Guarantors
referred to in the Credit Agreement referred to below, and THE CHASE
MANHATTAN BANK, a New York banking corporation, as agent for the U.S.
Banks and THE CHASE MANHATTAN BANK OF CANADA, a Canadian chartered
bank, as agent for the Canadian Banks (each an "Agent" and
collectively the "Agents").
Reference is made to the Competitive Advance and Revolving Credit
Facilities Agreement dated as of June 10, 1997 (as it may have been amended,
modified, extended or restated from time to time, the "Credit Agreement"), among
the Borrowers, the banks from time to time party thereto (the "Banks") and the
Agents. Capitalized terms used herein and not defined herein shall have the
meanings assigned to such terms in the Credit Agreement.
The U.S. Banks have agreed to make Loans to the Company and to acquire
participations in Letters of Credit issued for the account of the Company, the
Canadian Banks have agreed to make Loans to A&P Canada, to acquire
participations in Letters of Credit issued for the account of A&P Canada and to
issue Acceptances, and the Issuing Banks have agreed to issue Letters of Credit
for the respective accounts of the Borrowers, pursuant to, and upon the terms
and subject to the conditions specified in, the Credit Agreement. The Guarantors
have guaranteed Obligations (as defined in the Guarantee Agreement). The
obligations of the Banks to make Loans and issue Acceptances and of the Issuing
Banks to issue Letters of Credit are conditioned on, among other things, the
execution and delivery by the Borrowers and the Guarantors of an agreement in
the form hereof.
Accordingly, each of the Borrowers, Guarantors and Agents agree as follows:
SECTION 1. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 3), each Borrower agrees that in the event a payment shall be
made by any Guarantor under the Guarantee Agreement in respect of any Obligation
of such Borrower, then such Borrower shall indemnify such Guarantor for the full
amount of such payment and such Guarantor shall be subrogated to the rights of
the Person to whom such payment shall have been made to the extent of such
payment.
SECTION 2. Contribution and Subrogation. Each Guarantor (a "Contributing
Guarantor") agrees (subject to Section 3) that, in the event a payment shall be
made by any other Guarantor under the Guarantee Agreement and such other
Guarantor (the "Claiming Guarantor") shall not have been fully indemnified by
the relevant Borrower as provided in Section 1, the Contributing Guarantor shall
indemnify the Claiming Guarantor in an amount equal to the amount of such
payment multiplied by a fraction of which the numerator shall be the net worth
of the Contributing Guarantor on the date hereof and the denominator shall be
the aggregate net worth of all the Guarantors on the date hereof (or, in the
case of any Guarantor becoming a party hereto pursuant to Section 14, the date
of the Supplement hereto executed and delivered by such Guarantor). Any
Contributing Guarantor making any payment to a Claiming Guarantor pursuant to
this Section 2 shall be subrogated to the rights of such Claiming Guarantor
under Section 1 to the extent of such payment.
SECTION 3. Subordination. Notwithstanding any provision of this Agreement
to the contrary, all rights of the Guarantors under Sections 1 and 2 and all
other rights of indemnity, contribution or subrogation under applicable law or
otherwise shall be fully subordinated to the indefeasible payment in full of the
Obligations. No failure on the part of either Borrower or any Guarantor to make
the payments required by Sections 1 and 2 (or any other payments required under
applicable law or otherwise) shall in any respect limit the obligations and
liabilities of any Guarantor with respect to any Guarantee, and each Guarantor
shall remain liable for the full amount of the obligations of such Guarantor
under each such Guarantee.
SECTION 4. Termination. This Agreement shall survive and be in full force
and effect so long as any Obligation is outstanding and has not been
indefeasibly paid in full in cash, and so long as the outstanding Acceptances
and the L/C Exposure have not been reduced to zero or any of the Commitments
under the Credit Agreement have not been terminated, and shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any Obligation is rescinded or must otherwise be restored by
any Bank or any Guarantor upon the bankruptcy or reorganization of either
Borrower, any Guarantor or otherwise.
2
SECTION 5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. No Waiver. No failure on the part of either Agent or any
Guarantor to exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy by either Agent or any Guarantor
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law. None of the Agents and the
Guarantors shall be deemed to have waived any rights hereunder unless such
waiver shall be in writing and signed by such parties.
SECTION 7. Notices. All communications and notices hereunder shall be in
writing and given as provided in Section 14 of the Guarantee Agreement and
addressed as specified in such Section 14.
SECTION 8. Binding Agreement; Assignments. 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 parties that are contained in this Agreement
shall bind and inure to the benefit of their respective successors and assigns.
None of the Borrowers and the Guarantors may assign or transfer any of its
rights or obligations hereunder (and any such attempted assignment or transfer
shall be void) without the prior written consent of the Required Banks.
SECTION 9. Survival of Agreement; Severability. (a) All covenants and
agreements made by either Borrower and each Guarantor herein and in the
certificates or other instruments prepared or delivered in connection with this
Agreement or the other Loan Documents shall be considered to have been relied
upon by each of the Agents, Issuing Banks and Banks and each Guarantor and shall
survive the making of the Loans and the issuance of the Acceptances by the
Banks, and the issuance of the Letters of Credit by the Issuing Banks regardless
of any investigation by the Banks or on their behalf, and shall continue in full
force and effect as long as the principal of or any accrued interest on any
Loans or any other fee or amount payable under the Credit Agreement or this
Agreement or, without duplication of the foregoing, under any of the other Loan
Documents, is outstanding and unpaid or the outstanding Acceptances and the L/C
Exposure have not been reduced to zero and as long as the Commitments have not
been terminated.
(b) In case any one or more of the provisions contained in this Agreement
should be held invalid, illegal or unenforceable in any respect, no party hereto
shall be required to comply with such provision for so long as such provision is
held to be invalid, illegal or unenforceable, but the validity, legality and
enforceability 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 10. 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 instrument. This Agreement shall be
effective with respect to any Guarantor when a counterpart bearing the signature
of such Guarantor shall have been delivered to either of the Agents.
SECTION 11. Rules of Interpretation. The rules of interpretation specified
in Section 1.02 of the Credit Agreement shall be applicable to this Agreement.
SECTION 12. Jurisdiction; Consent to Service of Process. (a) Each of the
Borrowers and each Guarantor hereby irrevocably and unconditionally submits, for
itself and its property, to the 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.
Each of the parties hereto agrees that it will not institute or seek to
institute any action or proceeding arising out of or relating to this Agreement
(other than an action or proceeding seeking enforcement of a judgment) in any
forum other than a New York State court or Federal court of the United States of
America sitting in New York City.
3
(b) Each of the Borrowers and each Guarantor hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection 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 of the United States of America sitting in New
York. 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 7. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.
SECTION 13. 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.
SECTION 14. Additional Guarantors. Pursuant to Section 5.08 of the Credit
Agreement, additional Subsidiaries may be required to enter into this Agreement
as Guarantors. Upon execution and delivery, after the date hereof, by the Agents
and a Subsidiary of an instrument in the form of Annex 1, such Subsidiary shall
become a Guarantor hereunder with the same force and effect as if originally
named as a Guarantor hereunder. The execution and delivery of any instrument
adding an additional Guarantor as a party to this Agreement shall not require
the consent of any Guarantor hereunder. The rights and obligations of each
Guarantor hereunder shall remain in full force and effect notwithstanding the
addition of any new Guarantor as a party to this Agreement.
SECTION 15. Release of Guarantors. If all of the capital stock of the
Guarantor is sold, transferred or otherwise disposed of pursuant to a
transaction permitted by Section 6.05 of the Credit Agreement, such Guarantor
shall be released from its obligations under this Agreement without further
action.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first appearing above.
THE GREAT ATLANTIC & PACIFIC TEA COMPANY,
INC., as Borrower and as Guarantor,
by
--------------------------------------
Name:
Title:
4
THE GREAT ATLANTIC & PACIFIC TEA COMPANY,
CANADA, LIMITED, as Borrower,
by
--------------------------------------
Name:
Title:
by
--------------------------------------
Name:
Title:
5
[NAMES OF ADDITIONAL GUARANTORS],
as Guarantor,
by
--------------------------------------
Name:
Title:
6
THE CHASE MANHATTAN BANK, as U.S. Agent,
by
--------------------------------------
Name:
Title:
0
XXX XXXXX XXXXXXXXX XXXX XX XXXXXX,
as Canadian Agent,
by
--------------------------------------
Name:
Title:
EXHIBIT F-1
To The
Credit Agreement
[Letterhead of]
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
June , 1997
To the Banks and the Agents
and the Issuing Banks under
the Credit Agreement referred to below
In care of
The Chase Manhattan Bank, as U.S.
Agent and U.S. Issuing Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
The Chase Manhattan Bank of Canada
as Canadian Agent and Canadian Issuing Bank,
One First Canadian Place
100 King Street West, Suite 6900
Toronto, Ontario X0X 0X0
XXXXXX
Ladies and Gentlemen:
In accordance with Section 4.02 of the Competitive Advance and Revolving
Credit Facilities Agreement dated as of June 10, 1997 (the "Agreement"), among
The Great Atlantic & Pacific Tea Company, Inc. (the "Company"), The Great
Atlantic & Pacific Company of Canada, Limited ("A&P Canada"), The Chase
Manhattan Bank, as U.S. Agent, The Chase Manhattan Bank of Canada, as Canadian
Agent and the Banks (such term and other capitalized terms used but not defined
herein shall have the meanings assigned in the Agreement), I hereby set forth my
opinion as follows:
1. The Company and each of the Subsidiaries (other than Subsidiaries,
including A&P Canada, that are organized under the laws of Canada) (each a "U.S.
Subsidiary") (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization; (b) has the corporate power
and authority to own its property and to carry on its business as now conducted,
(c) is qualified to do business in every jurisdiction where such qualification
is necessary, except where the failure to so qualify would not have a materially
adverse effect on the condition, financial or otherwise, of the Company and the
Subsidiaries taken as a whole; and (d) has the corporate power and authority to
execute, deliver and perform its obligations under each of the Loan Documents to
which it is a party and, in the case of the Company, to borrow under the
Agreement.
2. The execution, delivery and performance by each Loan Party of each of
the Loan Documents to which it is or will be a party and, in the case of the
Borrowers, the borrowings thereunder (a) will not (i) violate (A) any provision
of law or the articles of incorporation or by-laws of either Borrower or any
Subsidiary, (B) to the best of my knowledge after due inquiry, any applicable
order of any court or other agency of government, (C) to the best of my
knowledge after due inquiry, any material indenture, any material agreement for
borrowed money, any material bond, note or other similar instrument or any other
material agreement to which either Borrower or any Subsidiary is a party or by
which either Borrower or any Subsidiary or any of their respective property is
bound; (ii) to the best of my knowledge after due inquiry, be in conflict with,
result in a breach of or constitute (with due notice or lapse of time, or both)
a default under any such indenture, agreement, bond, note, instrument or other
agreement; or (iii) to the best of my knowledge after due inquiry, result in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any property or assets of either Borrower or any Subsidiary.
2
3. No action, consent or approval of, or registration or filing with, or
any other action by, any governmental agency, bureau, commission or court, or
any other person, is required in connection with the Transactions.
4. Set forth in Schedule 3.06 to the Agreement is a complete and accurate
list of all the Subsidiaries as of the date of the Agreement, showing as of the
date thereof (as to each Subsidiary) the jurisdiction of its organization and
the percentage of the Company's ownership interest in such Subsidiary and the
number of shares of capital stock of any Subsidiary covered by options,
warrants, rights of conversion or purchase and similar rights at the date of the
Agreement. All the outstanding capital stock of each of the Subsidiaries has
been validly issued, is fully paid and nonassessable and, to the extent owned by
the Company or one or more of the Subsidiaries, to the best of my knowledge
after due inquiry, is owned free and clear of all mortgages, deeds of trust,
pledges, liens, security interests and other charges or encumbrances.
5. There are no actions, suits or proceedings at law or in equity or by or
before any governmental instrumentality or other agency now pending or, of the
best of my knowledge after due inquiry, threatened against or affecting either
Borrower or any of the Subsidiaries which (i) involve any Loan Documents or the
transactions contemplated thereby or (ii) individually or in the aggregate, is
likely to materially impair the right of the Company and the Subsidiaries taken
as a whole to carry on business substantially as now being conducted or would
result in any Material Adverse Change.
6. None of the Loan Parties is an "investment company" as that term is
defined in, or is otherwise subject to regulation under, the Investment Company
Act of 1940.
7. To the best of my knowledge after due inquiry, none of the Borrowers and
the Subsidiaries is a party to any agreement or instrument or subject to any
charter or other corporate restriction materially and adversely affecting its
business, properties or assets, operations or condition (financial or
otherwise). To the best of my knowledge after due inquiry, none of the Borrowers
and the Subsidiaries is in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any agreement or
instrument to which it is a party in any manner which would materially and
adversely affect the business, properties or assets, operations or condition
(financial or otherwise) of the Company and the Subsidiaries taken as a whole.
Very truly yours,
Xxxxxx X. Xxxxxx
Senior Vice President
and General Counsel
EXHIBIT F-2
To The
Credit Agreement
[Letterhead of]
XXXXXX XXXXXX & XXXXXXX
Xxxx , 1997
To the Banks and the Agents
and the Issuing Banks under
the Credit Agreement referred to below
In care of
The Chase Manhattan Bank, as U.S.
Agent and U.S. Issuing Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
The Chase Manhattan Bank of Canada
as Canadian Agent and Canadian Issuing Bank,
One First Canadian Place
100 King Street West, Suite 6900
Toronto, Ontario X0X 0X0
XXXXXX
Ladies and Gentlemen:
In accordance with Section 4.02 of the Competitive Advance and Revolving
Credit Facilities Agreement dated as of June 10, 1997 (the "Agreement"), among
The Great Atlantic & Pacific Tea Company, Inc. (the "Company"), The Great
Atlantic & Pacific Company of Canada, Limited ("A&P Canada"), The Chase
Manhattan Bank, as U.S. Agent, The Chase Manhattan Bank of Canada, as Canadian
Agent and the Banks (such term and other capitalized terms used but not defined
herein shall have the meanings assigned in the Agreement), I hereby set forth my
opinion as follows:
1. The execution, delivery and performance of each of the Loan Documents by
the Company and each Subsidiary party thereto (other than Subsidiaries,
including A&P Canada, that are organized under the laws of Canada) and, in the
case of the Company, the borrowings thereunder have been duly authorized by all
requisite corporate action on the part of the Company and each such Subsidiary.
2. Each Loan Document has been duly executed and delivered by each Loan
Party that is a party thereto and constitutes a legal, valid and binding
obligation of each such Loan Party, enforceable in accordance with its terms
(except as enforcement may be affected by bankruptcy laws or other similar laws
for the relief of debtors and except as the remedy of specific performance may
be affected by the equitable powers of a court of competent jurisdiction).
Very truly yours,
[ ]
EXHIBIT F-3
To The
Credit Agreement
[Letterhead of]
BLAKE, XXXXXXX & GRAYDON
June , 1997
To the Banks and the Agents
and the Issuing Banks under
the Credit Agreement referred to below
In care of
The Chase Manhattan Bank, as U.S.
Agent and U.S. Issuing Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
The Chase Manhattan Bank of Canada
as Canadian Agent and Canadian Issuing Bank,
One First Canadian Place
100 King Street West, Suite 6900
Toronto, Ontario X0X 0X0
XXXXXX
Ladies and Gentlemen:
In accordance with Section 4.02 of the Competitive Advance and Revolving
Credit Facilities Agreement dated as of June , 1997 (the "Agreement"), among The
Great Atlantic & Pacific Tea Company, Inc. (the "Company"), The Great Atlantic &
Pacific Company of Canada, Limited ("A&P Canada"), The Chase Manhattan Bank, as
U.S. Agent, The Chase Manhattan Bank of Canada, as Canadian Agent and the Banks
(such term and other capitalized terms used but not defined herein shall have
the meanings assigned in the Agreement), our opinion is as follows:
1. A&P Canada and each of A&P Properties Limited ("Properties") and A&P
Drug Mart Limited ("Drug Mart") (each of Properties and Drug Mart is a "Canadian
Subsidiary" and collectively are the "Canadian Subsidiaries") (a) is existing
under the laws of the jurisdiction of its organization and has not been
dissolved (based and relying solely on Certificates of Compliance or Status,
copies of which are attached hereto); (b) has the corporate power and authority
to own its property and to carry on its business as now conducted, and (c) has
the corporate power and authority to execute, deliver and perform its
obligations under each of the Loan Documents to which it is a party and, in the
case of A&P Canada, to borrow under the Agreement.
2. The execution, delivery and performance of each of the Loan Documents by
A&P Canada and each Canadian Subsidiary party thereto and, in the case of A&P
Canada, the borrowings thereunder, have been duly authorized by all requisite
corporate action on the part of A&P Canada and each Canadian Subsidiary and each
of the Loan Documents to which A&P Canada or a Canadian Subsidiary is a party
has been duly executed and delivered by A&P Canada or such Canadian Subsidiary,
as applicable. The execution, delivery and performance by A&P Canada and each
Canadian Subsidiary of the Loan Documents to which it is a party and, in the
case of A&P Canada, the borrowings thereunder, will not violate any provision of
(i) applicable laws or regulations of Ontario or the federal laws of Canada
applicable therein; or (ii) any of the terms or provisions of the constating
documents or by-laws of A&P Canada or either Canadian Subsidiary attached to the
officer's certificates referred to below.
3. No action, consent, order or approval of, or registration or filing
with, or any other action by, any court, governmental agency, bureau, commission
or other governmental or regulatory body or authority in Ontario or under the
federal laws of Canada applicable therein is required in connection
2
with the performance by A&P Canada or either Canadian Subsidiary of the
Transactions contemplated by the Loan Documents..
4. The choice of New York law as the governing law of each of the Loan
Documents (except with respect to the authorizations and execution thereof by
A&P Canada and each of the Canadian Subsidiaries which shall be governed by the
laws of the Province of Ontario and the laws of Canada applicable therein) will
be upheld as a valid choice of law by an Ontario court provided that (i) such
choice of law is not contrary to public policy, as that term would be applied by
an Ontario court ("Public Policy") and (ii) such choice of law is bona fide and
legal (in the sense it was not made with a view to avoiding the consequences of
the laws of any other jurisdiction).
5. Notwithstanding paragraph 6 of this opinion, in the event that any Loan
Document is sought to be enforced by the U.S. Agent, the Canadian Agent and the
Banks in the Province of Ontario in accordance with the laws of New York, an
Ontario court would, subject to paragraph 4 herein and to the extent
specifically pleaded and proved as a fact by expert evidence, recognize and
apply the laws of New York to all issues which, under the conflict of law rules
of the Province of Ontario are to be determined in accordance with the proper or
governing law of a contract, except that in any such proceedings such court (i)
will apply those laws of the Province of Ontario which it characterizes as
procedural and will not apply those laws of New York which the court
characterizes as procedural; and (ii) will not apply those laws of New York
which it characterizes of a revenue, expropriatory, penal or of similar nature,
or which would be contrary to Public Policy for it to do so. However a court in
the Province of Ontario has inherent jurisdiction to decline to hear such an
action if it determines it is not the appropriate forum to hear such an action.
6. The submission by A&P Canada and each of the Canadian Subsidiaries in
the Loan Documents to the non-exclusive jurisdiction of the courts of New York
and the United States of America is a valid submission to the jurisdiction of
such courts and would be upheld by an Ontario court.
7. The laws of the Province of Ontario permit an action to be brought in an
Ontario court on any final and conclusive judgment in personam under the
internal laws of New York, which is not impeachable as void or voidable under
the internal laws of New York, for a sum certain if:
(i) the court rendering such judgment had jurisdiction over the judgment
debtor, as recognized by the courts of the Province of Ontario;
(ii) such judgment was not obtained by fraud or in manner contrary to
natural justice and the enforcement thereof would not be contrary to
Public Policy;
(iii)the enforcement of such judgment does not constitute, directly or
indirectly, the enforcement of foreign revenue, expropriatory, penal
or similar laws;
(iv) no new admissible evidence relevant to the action is discovered prior
to the rendering of the judgment by the courts of the Province of
Ontario which shows the New York judgment to be erroneous; and
(v) there has been compliance with the Limitations Act (Ontario) which
provides that an action to enforce a foreign judgment must be
commenced within six years of the date of the foreign judgment.
In this opinion the Agreement, the Guarantee Agreement and the Indemnity,
Subrogation and Contribution Agreement are referred to as the "Loan Documents".
We have participated in the preparation of and have examined an executed copy of
each of the Loan Documents and have also made, in respect of A&P Canada and each
of the Canadian Subsidiaries the following investigations and have examined
originals or copies, certified or otherwise identified to our satisfaction, of
the following certificates of public officials and of the following other
certificates, documents and records for the purposes of the opinions hereinafter
expressed:
(i) certified copies of the articles of incorporation and searches at
the office of the Registrar in Bankruptcy at Toronto dated as of June ,
1997 (local search, current to June , 1997) and at the office of the
Official Receiver of Bankruptcy (national search, current to June , 1997)
which disclosed no proceedings as at such dates;
(ii) a resolution of the board of directors passed on June , 1997
approving the transactions contemplated in the Loan Documents and
authorizing the execution and delivery by
2
A&P Canada or the Canadian Subsidiary, as applicable, of the Loan Documents
to which it is a party and the performance of its obligations thereunder;
(iii) a Certificate of Status dated June , 1997 issued by the Ministry
of Consumer and Commercial Relations of the Province of Ontario with
respect to Drug Mart and Certificates of Compliance dated June , 1997 with
respect to A&P Canada and dated June , 1997 with respect to Properties,
respectively, and issued by Industry Canada;
(iv) certificates dated the date hereof of a senior officer of A&P
Canada and of each Canadian Subsidiary, as applicable, as to certain
factual matters, copies of which is attached; and
(v) certificates of incumbency and specimen signature dated the date
hereof in respect of each person executing documents on behalf of A&P
Canada or a Canadian Subsidiary.
For the purposes of this opinion, we have assumed, with respect to all
documents examined by us, the genuineness of all signatures, the authenticity of
all documents submitted to us as certified, conformed, telecopied or photocopied
copies. We have relied exclusively upon the certificates referred to above with
respect to the accuracy of the factual matters contained therein. While we have
not performed any independent check or verification of such factual matters,
other than as set out in this opinion, nothing has come to our attention during
our participation and review with respect to the Loan Documents which lead us to
believe such certificates are incorrect.
This opinion relates only as to the laws of the Province of Ontario and the
laws of Canada applicable therein in effect on the date hereof and we express no
opinion as to the laws of other jurisdictions.
This opinion is for the sole use of the addressees in connection with the
Loan Documents and may not be relied upon by or communicated to any other person
without prior written consent.
Very truly yours,
[ ]
EXHIBIT G
to the
Credit Agreement
GUARANTEE AGREEMENT dated as of June [ ], 1997, among THE GREAT
ATLANTIC & PACIFIC TEA COMPANY, INC., a Maryland corporation (the
"Company"), THE GREAT ATLANTIC & PACIFIC COMPANY OF CANADA, LIMITED, a
Canadian corporation ("A&P Canada" and, together with the Company, the
"Borrowers"), each of the Subsidiaries of the Company listed on
Schedule I hereto (each such Subsidiary and the Company (in its
capacity as a guarantor hereunder) individually, a "Guarantor" and
collectively, the "Guarantors"), and The Chase Manhattan BANK, a New
York banking corporation, as agent for the U.S. Banks and THE CHASE
MANHATTAN BANK OF CANADA, a Canadian chartered bank, as agent for the
Canadian Banks (each an "Agent" and collectively the "Agents").
Reference is made to the Competitive Advance and Revolving Credit
Facilities Agreement dated as of June 10, 1997 (as it may have been amended,
modified, extended or restated from time to time, the "Credit Agreement"), among
the Borrowers, the banks from time to time party thereto (the "Banks") and the
Agents. Capitalized terms used herein and not defined herein shall have the
meanings assigned to such terms in the Credit Agreement.
The U.S. Banks have agreed to make Loans to the Company and to acquire
participations in Letters of Credit issued for the account of the Company, the
Canadian Banks have agreed to make Loans to A&P Canada, to acquire
participations in Letters of Credit issued for the account of A&P Canada and to
issue Acceptances, and the Issuing Banks have agreed to issue Letters of Credit
for the respective accounts of the Borrowers, pursuant to, and upon the terms
and subject to the conditions specified in, the Credit Agreement. Each of the
Guarantors acknowledges that it will derive substantial benefit from the making
of the Loans and issuance of Acceptances by the Banks, and the issuance of the
Letters of Credit by the Issuing Banks. The obligations of the Banks to make
Loans and to issue Acceptances and of the Issuing Banks to issue Letters of
Credit are conditioned on, among other things, the execution and delivery by the
Guarantors of a Guarantee Agreement in the form hereof. As consideration
therefor and in order to induce the Banks to make Loans and to issue Acceptances
and the Issuing Banks to issue Letters of Credit, the Guarantors are willing to
execute this Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee. Each Guarantor unconditionally guarantees, jointly
with the other Guarantors and severally, as a primary obligor and not merely as
a surety, (a) the due and punctual payment of (i) the principal of and premium,
if any, and interest (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding) on the Loans, when and as due,
whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, (ii) each payment required to be made by a Borrower under the
Credit Agreement in respect of any Letter of Credit or Acceptance, when and as
due, including payments in respect of reimbursement of disbursements, interest
thereon and obligations to provide cash collateral and (iii) all other monetary
obligations, including fees, costs, expenses and indemnities (including, without
limitation, the obligations described in Section 2.18 of the Credit Agreement),
whether primary, secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Borrowers to the Banks under the Credit
Agreement and the other Loan Documents and (b) the due and punctual performance
of all covenants, agreements, obligations and liabilities of the Borrowers under
or pursuant to the Credit Agreement and the other Loan Documents (all the
monetary and other obligations referred to in the preceding clauses (a) and (b)
being collectively called the "Obligations"). Each Guarantor further agrees that
the Obligations may be extended or renewed, in whole or in part, without notice
to or further assent from it, and that it will remain bound upon its guarantee
notwithstanding any extension or renewal of any Obligation.
Anything contained in this Agreement to the contrary notwithstanding, the
obligations of each Guarantor hereunder shall be limited to a maximum aggregate
amount equal to the greatest amount that would not render such Guarantor's
obligations hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or any
provisions of applicable state or Canadian or provincial law (collectively, the
"Fraudulent Transfer Laws"), in each case after giving effect to all other
liabilities of such Guarantor, contingent or otherwise, that are relevant under
the Fraudulent Transfer Laws (specifically excluding, however, any liabilities
of such Guarantor (a) in respect of intercompany indebtedness to either Borrower
or Affiliates of either Borrower to the extent that such indebtedness would be
discharged in an amount equal to the amount paid by such Guarantor hereunder and
(b) under any Guarantee of Indebtedness subordinated in right of payment to the
Obligations which Guarantee contains a limitation as to maximum amount similar
to that set forth in this paragraph, pursuant
2
to which the liability of such Guarantor hereunder is included in the
liabilities taken into account in determining such maximum amount) and after
giving effect as assets to the value (as determined under the applicable
provisions of the Fraudulent Transfer Laws) of any rights to subrogation,
contribution, reimbursement, indemnity or similar rights of such Guarantor
pursuant to (i) applicable law or (ii) any agreement providing for an equitable
allocation among such Guarantor and other Affiliates of either Borrower of
obligations arising under Guarantees by such parties (including the Indemnity,
Subrogation and Contribution Agreement).
In addition, notwithstanding anything contained in this Agreement to the
contrary, no Guarantor that is identified in Schedule I hereto as a "Canadian
Guarantor" shall be required to make any payment pursuant to this Agreement in
respect of, nor shall this Agreement be deemed effective on the part of such
Canadian Guarantor with respect to, any Obligation of the Company (as
distinguished from an Obligation of A&P Canada) unless and until one of the
events described in clause (i), (ii) or (iii) of Section 2.23(a) of the Credit
Agreement occurs.
SECTION 2. Obligations Not Waived. To the fullest extent permitted by
applicable law, each Guarantor waives presentment to, demand of payment from and
protest to each Borrower of any of the Obligations, and also waives notice of
acceptance of its guarantee and notice of protest for nonpayment. To the fullest
extent permitted by applicable law, the obligations of each Guarantor hereunder
shall not be affected by (a) the failure of either Agent or Issuing Bank or any
Bank to assert any claim or demand or to enforce or exercise any right or remedy
against either Borrower or any other Guarantor under the provisions of the
Credit Agreement, any other Loan Document or otherwise, (b) any rescission,
waiver, amendment or modification of, or any release from any of the terms or
provisions of this Agreement, any other Loan Document, any Guarantee or any
other agreement, including with respect to any other Guarantor under this
Agreement or (c) the failure to perfect any security interest in, or the release
of, any of the security held by or on behalf of either Agent or Issuing Bank or
any Bank.
SECTION 3. Security, etc. To the extent security is given for the payment
of this Guarantee or the Obligations, each of the Guarantors authorizes each
Agent and Issuing Bank and the Banks to apply such security and direct the order
or manner of sale thereof as they in their sole discretion may determine. Each
of the Guarantors further authorizes each Agent to release or substitute any one
or more endorsees, other guarantors or other obligors.
SECTION 4. Guarantee of Payment. Each Guarantor further agrees that its
guarantee is a continuing guarantee and constitutes a guarantee of payment when
due and not of collection, and waives any right to require that any resort be
had by either Agent or Issuing Bank or any Bank to any balance of any deposit
account or credit on the books of such Agent or Issuing Bank or Bank in favor of
either Borrower or any other person or any security for the payment of this
Guarantee or the Obligations held by either Agent or Issuing Bank or any Bank.
SECTION 5. No Discharge or Diminishment of Guarantee. The obligations of
each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Obligations), including any claim of waiver, release,
surrender, alteration or compromise of any of the Obligations, and shall not be
subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder shall not be discharged or impaired or
otherwise affected by the failure of either Agent or Issuing Bank or any Bank to
assert any claim or demand or to enforce any remedy under the Credit Agreement,
any other Loan Document or any other agreement, by any waiver or modification of
any provision of any thereof, by any default, failure or delay, wilful or
otherwise, in the performance of the Obligations, or by any other act or
omission that may or might in any manner or to any extent vary the risk of any
Guarantor or that would otherwise operate as a discharge of each Guarantor as a
matter of law or equity (other than the indefeasible payment in full in cash of
all the Obligations).
SECTION 6. Defenses of Borrower Waived. To the fullest extent permitted by
applicable law, each of the Guarantors waives any defense based on or arising
out of any defense of either Borrower or the unenforceability of the Obligations
or any part thereof from any cause, or the cessation from any cause of the
liability of either Borrower, other than the final and indefeasible payment in
full in cash of the Obligations. The Agents, the Issuing Banks and the Banks
may, at their election, foreclose on any security held by one or more of them by
one or more judicial or nonjudicial sales, accept an assignment of any such
security in lieu of foreclosure, compromise or adjust any part of the
Obligations, make any other accommodation with either Borrower or any other
guarantor or exercise any other right or remedy available to them against either
Borrower or any other guarantor, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the Obligations have
been fully,
3
finally and indefeasibly paid in cash. Pursuant to applicable law, each of the
Guarantors waives any defense arising out of any such election even though such
election operates, pursuant to applicable law, to impair or to extinguish any
right of reimbursement or subrogation or other right or remedy of such Guarantor
against either Borrower or any other Guarantor or guarantor, as the case may be,
or any security.
SECTION 7. Agreement to Pay; Subordination. In furtherance of the foregoing
and not in limitation of any other right that an Agent, Issuing Bank or Bank has
at law or in equity against any Guarantor by virtue hereof, upon the failure of
either Borrower or any other Loan Party to pay any Obligation when and as the
same shall become due, whether at maturity, by acceleration, after notice of
prepayment or otherwise, each Guarantor hereby promises to and will forthwith
pay, or cause to be paid, to such Agent, Bank or Issuing Bank as designated
thereby in cash the amount of such unpaid Obligations. Upon payment by any
Guarantor of any sums to an Agent, Issuing Bank or Bank as provided above, all
rights of such Guarantor against either Borrower arising as a result thereof by
way of right of subrogation, contribution, reimbursement, indemnity or otherwise
shall in all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full in cash of all the Obligations. In addition, any
indebtedness of either Borrower or any Subsidiary thereof now or hereafter held
by any Guarantor is hereby subordinated in right of payment to the prior payment
in full of the Obligations. If any amount shall erroneously be paid to any
Guarantor on account of (i) such subrogation, contribution, reimbursement,
indemnity or similar right or (ii) any such indebtedness of either Borrower or
any Subsidiary thereof, such amount shall be held in trust for the benefit of
the Banks and the Issuing Banks and shall forthwith be paid to an Agent to be
credited against the payment of the Obligations, whether matured or unmatured,
in accordance with the terms of the Loan Documents.
SECTION 8. Information. Each of the Guarantors assumes all responsibility
for being and keeping itself informed of each Borrower's financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Obligations and the nature, scope and extent of the risks that such
Guarantor assumes and incurs hereunder, and agrees that neither Agent will have
any duty to advise any of the Guarantors of information known to it regarding
such circumstances or risks.
SECTION 9. Representations and Warranties. Each Guarantor hereby represents
and warrants that:
(a) Duly Organized; Good Standing. It is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization and
has the power and authority and the legal right to own and operate its property,
to lease the property it operates and to conduct the business in which it is
currently engaged.
(b) Authority. It has the requisite power and authority and the legal right
to execute and deliver, and to perform its obligations under, this Guarantee
Agreement, and has taken all necessary action to authorize the execution,
delivery and performance of this Guarantee Agreement.
(c) Valid and Binding Agreement. This Guarantee Agreement constitutes a
legal, valid and binding obligation of such Guarantor enforceable in accordance
with its terms.
(d) Requirements of Law and Contractual Obligations. The execution,
delivery and performance of this Guarantee Agreement will not violate any
requirement of law or contractual obligation of such Guarantor and will not
result in or require the creation or imposition of any Lien on any of the
properties or revenues of such Guarantor.
(e) Consents and Approvals. No consent or authorization of, filing with, or
other act by or in respect of, any arbitrator or governmental authority and no
consent of any other Person (including, without limitation, any stockholder or
creditor of such Guarantor) is required in connection with the execution,
delivery, performance, validity or enforceability of this Guarantee Agreement,
except such as have been obtained, made or taken, as the case may be, and are in
full force and effect.
(f) Benefits Derived. (i) The businesses and corporate activities of such
Guarantor are closely related to, and substantially benefit, the business and
corporate activities of the Borrowers, (ii) such Guarantor has received
substantial economic benefit from the transactions contemplated by, and the
execution and delivery of, the Credit Agreement and the related execution and
delivery of this Guarantee Agreement, and (iii) the Credit Agreement is for the
benefit of such Guarantor and the Borrowers as though, for purposes of the
Credit Agreement, the documents and instruments executed and delivered in
connection therewith or pursuant thereto (including, with-
4
out limitation, this Guarantee Agreement), the Borrower and such Guarantor
constituted a single entity.
(g) Credit Agreement Representation and Warranties. The representations and
warranties contained in Article III of the Credit Agreement are true and correct
to the extent such representations and warranties apply to such Guarantor.
SECTION 10. Termination. The Guarantees made hereunder (a) shall terminate
when all the Obligations have been indefeasibly paid in full and the Banks have
no further commitment to lend or accept Drafts under the Credit Agreement, the
outstanding Acceptances and the L/C Exposure have been reduced to zero and the
Issuing Banks have no further obligation to issue Letters of Credit under the
Credit Agreement and (b) shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by any Bank, Issuing Bank or Guarantor
upon the bankruptcy or reorganization of either Borrower, any Guarantor or
otherwise.
SECTION 11. Binding Agreement; Assignments. 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 Guarantors that are contained in this
Agreement shall bind and inure to the benefit of each party hereto and their
respective successors and assigns. This Agreement shall become effective as to
any Guarantor when a counterpart hereof executed on behalf of such Guarantor
shall have been delivered to either Agent, and a counterpart hereof shall have
been executed on behalf of each Agent, and thereafter shall be binding upon such
Guarantor and each Agent and their respective successors and assigns, and shall
inure to the benefit of such Guarantor, each Agent and Issuing Bank and the
Banks, and their respective successors and assigns, except that no Guarantor
shall have the right to assign its rights or obligations hereunder or any
interest herein (and any such attempted assignment shall be void). If all of the
capital stock of a Guarantor is sold, transferred or otherwise disposed of
pursuant to a transaction permitted by Section 6.05 of the Credit Agreement,
such Guarantor shall be released from its obligations under this Agreement
without further action.
SECTION 12. Waivers; Amendment. (a) No failure or delay of either Agent 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 discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of each Agent hereunder and of each
Issuing Bank and the Banks under the other Loan Documents are cumulative and are
not exclusive of any rights or remedies that it would otherwise have. No waiver
of any provision of this Agreement or consent to any departure by any Guarantor
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 any Guarantor in any case shall entitle such Guarantor 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 a written agreement entered into between the
Guarantors with respect to which such waiver, amendment or modification relates
and the Agents, with the prior written consent of the Required Banks (except as
otherwise provided in the Credit Agreement).
SECTION 13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 14. Notices. All communications and notices hereunder shall be in
writing and given as provided in Section 9.01 of the Credit Agreement. All
communications and notices hereunder to each Guarantor shall be given to it at
its address set forth in Schedule I.
SECTION 15. Survival of Agreement; Severability. (a) All covenants,
agreements, representations and warranties made by each Guarantor herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by each of the Agents, Issuing Banks and Banks and shall
survive the making of the Loans and the issuance of the Acceptances by the Banks
and the issuance of the Letters of Credit by the Issuing Banks regardless of any
investigation made by the Banks or on their behalf, and shall continue in full
force and effect as long as the principal of or any accrued interest on any Loan
or any other fee or amount payable under this Agreement, the Credit Agreement or
any other Loan Document is
5
outstanding and unpaid or the outstanding Acceptances and the L/C Exposure have
not been reduced to zero and as long as the Commitments have not been
terminated.
(b) In the event any one or more of the provisions contained in this
Agreement or in any other Loan Document should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). 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 16. Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract, and shall become effective as provided in
Section 11. Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 17. Rules of Interpretation. The rules of interpretation specified
in Section 1.02 of the Credit Agreement shall be applicable to this Agreement.
SECTION 18. Jurisdiction; Consent to Service of Process. (a) Each Guarantor
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 the other Loan Documents, 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 either Agent or Issuing
Bank or any Bank may otherwise have to bring any action or proceeding relating
to this Agreement or the other Loan Documents against any Guarantor or its
properties in the courts of any jurisdiction.
(b) Each Guarantor 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 or the other Loan Documents 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 14. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.
SECTION 19. 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 OR THE OTHER LOAN DOCUMENTS. 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 AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 19.
SECTION 20. Additional Guarantors. Pursuant to Section 5.08 of the Credit
Agreement, additional Subsidiaries may be required to enter into this Agreement
as Guarantors. Upon execution and delivery after the date hereof by the Agents
and such a Subsidiary of an instrument in the form of Annex 1, such Subsidiary
shall become a Guarantor hereunder with the same force and effect as if
originally named as a Guarantor herein. The execution and delivery of any
instrument adding an additional Guarantor as a party to this Agreement shall not
require the consent of any other Guarantor hereunder. The
6
rights and obligations of each Guarantor hereunder shall remain in full force
and effect notwithstanding the addition of any new Guarantor as a party to this
Agreement.
SECTION 21. Right of Setoff. If an Event of Default shall have occurred and
be continuing, each Bank and Issuing Bank is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other Indebtedness at any time owing by such Bank or
Issuing Bank or their respective affiliate banks to or for the credit or the
account of any Guarantor against any or all the obligations of such Guarantor
now or hereafter existing under this Agreement and the other Loan Documents held
by such Bank or Issuing Bank, irrespective of whether or not such Bank or
Issuing Bank shall have made any demand under this Agreement or any other Loan
Document and although such obligations may be unmatured. The rights of each Bank
and Issuing Bank under this Section 21 are in addition to other rights and
remedies (including other rights of setoff) which such Bank or Issuing Bank may
have.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
THE CHASE MANHATTAN BANK, as U.S. Agent,
by
------------------------------------
Name:
Title:
0
XXX XXXXX XXXXXXXXX XXXX XX XXXXXX, as
Canadian Agent,
by
------------------------------------
Name:
Title:
8
THE GREAT ATLANTIC & PACIFIC TEA COMPANY,
INC., as Guarantor
by
------------------------------------
Name:
Title:
9
[SUBSIDIARIES]
by
------------------------------------
Name:
Title: Authorized Officer
EXHIBIT H
to the
Credit Agreement
[FORM OF]
DISCOUNT NOTE
Cdn.$___________________ Date:________________
FOR VALUE RECEIVED, the undersigned unconditionally promises to pay on
_________________, _____, to or to the order of [NAME OF CANADIAN BANK]
("Holder"), the sum of Cdn.$____________________ with no interest thereon.
The undersigned hereby waives presentment, protest and notice of every kind
and waives any defences based upon indulgences which may be granted by the
holder thereof to any party liable hereon and any days of grace.
This promissory note evidences an Acceptance Equivalent Loan, as defined in
the Competitive Advance and Revolving Credit Facilities Agreement dated as of
June [ ], 1997 (as it may have been amended, modified, extended or restated from
time to time, the "Credit Agreement") among, inter alia, The Great Atlantic &
Pacific Company of Canada, Limited, The Great Atlantic & Pacific Tea Company,
Inc., The Chase Manhattan Bank of Canada, as Canadian Agent, The Chase Manhattan
Bank, as U.S. Agent and the Canadian Banks (as defined in the Credit Agreement)
and constitutes evidence of indebtedness to the Holder arising from such
Acceptance Equivalent Loan. Payment of this note shall be made to the Holder.
THE GREAT ATLANTIC & PACIFIC COMPANY OF
CANADA, LIMITED
by
------------------------------------
Name:
Title: Authorized Signing Officer
by
------------------------------------
Name:
Title: Authorized Signing Officer
EXHIBIT I
to the
Credit Agreement
[FORM OF]
NOTICE OF DRAWING BY WAY OF ACCEPTANCE
DATE:
TO: [Name of Canadian Agent]
Address:
Fax:
Attention:
Ladies and Gentlemen:
We refer to the Competitive Advance and Revolving Credit Facilities
Agreement dated as of June 10, 1997 (as it may have been amended, modified,
extended or restated from time to time, the "Credit Agreement") among, inter
alia, The Great Atlantic & Pacific Company of Canada, Limited ("A&P Canada"),
The Great Atlantic & Pacific Tea Company, Inc., The Chase Manhattan Bank of
Canada, as Canadian Agent, The Chase Manhattan Bank, as U.S. Agent and the
Canadian Banks (as defined in the Credit Agreement). Unless otherwise defined
herein, capitalized terms used herein have the meanings given to them in the
Credit Agreement. We have read the provisions of the Credit Agreement which are
relevant to this notice.
We hereby give notice of our irrevocable request for the acceptance by the
Canadian Banks of Drafts pursuant to Section 2.21 of the Credit Agreement as
follows:
1. Date of Acceptances:________________________.
2. Aggregate face amount of Drafts to be accepted:
Cdn.$____________________________.
3. The Acceptances will be sold by [the Canadian Banks/A&P Canada].
4. The term of the Acceptances will be ________ days, with such Acceptances
maturing on ________________.
[5. The proceeds of the sale of these Acceptances will be used to repay the
Acceptances accepted by ______________ and maturing on ________________.]
Yours truly,
THE GREAT ATLANTIC & PACIFIC COMPANY
OF CANADA, LIMITED
by
-----------------------------------
Name:
Title: Authorized Signing Officer
by
-----------------------------------
Name:
Title: Authorized Signing Officer
FORM OF ACCEPTANCES
---------------------------------------------------------------------
No._______________
To__________________________ Due________________________________________
Bank ________ days after date (without grace)
____________________________ For value received pay to the order of the
Address undersigned drawer the sum of Cdn.$________
ACCEPTED
____________________________ ____________Canadian Dollars Cdn.$_________
Payable at
____________________________ Value Received, and Charge to the Account of:
---------------------------- -------------------------------------------
For: _______________________ Per:_______________________________________
____________________________ Per:_______________________________________
Authorized Signature
Per:________________________
Authorized Signature
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
-------------------------------
Per: __________________________
Per: __________________________
EXECUTION COPY
GUARANTEE AGREEMENT dated as of June 10, 1997, among THE GREAT
ATLANTIC & PACIFIC TEA COMPANY, INC., a Maryland corporation (the
"Company"), THE GREAT ATLANTIC & PACIFIC COMPANY OF CANADA, LIMITED, a
Canadian corporation ("A&P Canada" and, together with the Company, the
"Borrowers"), each of the Subsidiaries of the Company listed on
Schedule I hereto (each such Subsidiary and the Company (in its
capacity as a guarantor hereunder) individually, a "Guarantor" and
collectively, the "Guarantors"), and The Chase Manhattan BANK, a New
York banking corporation, as agent for the U.S. Banks and THE CHASE
MANHATTAN BANK OF CANADA, a Canadian chartered bank, as agent for the
Canadian Banks (each an "Agent" and collectively the "Agents").
Reference is made to the Competitive Advance and Revolving Credit
Facilities Agreement dated as of June 10, 1997 (as it may have been amended,
modified, extended or restated from time to time, the "Credit Agreement"), among
the Borrowers, the banks from time to time party thereto (the "Banks") and the
Agents. Capitalized terms used herein and not defined herein shall have the
meanings assigned to such terms in the Credit Agreement.
The U.S. Banks have agreed to make Loans to the Company and to acquire
participations in Letters of Credit issued for the account of the Company, the
Canadian Banks have agreed to make Loans to A&P Canada, to acquire
participations in Letters of Credit issued for the account of A&P Canada and to
issue Acceptances, and the Issuing Banks have agreed to issue Letters of Credit
for the respective accounts of the Borrowers, pursuant to, and upon the terms
and subject to the conditions specified in, the Credit Agreement. Each of the
Guarantors acknowledges that it will derive substantial benefit from the making
of the Loans and issuance of Acceptances by the Banks, and the issuance of the
Letters of Credit by the Issuing Banks. The obligations of the Banks to make
Loans and to issue Acceptances and of the Issuing Banks to issue Letters of
Credit are conditioned on, among other things, the execution and delivery by the
Guarantors of a Guarantee Agreement in the form hereof. As consideration
therefor and in order to induce the Banks to make Loans and to issue Acceptances
and the Issuing Banks to issue Letters of Credit, the Guarantors are willing to
execute this Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee. Each Guarantor unconditionally guarantees, jointly
with the other Guarantors and severally, as a primary obligor and not merely as
a surety, (a) the due and punctual payment of (i) the principal of and premium,
if any, and interest (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding) on the Loans, when and as due,
whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, (ii) each payment required to be made by a Borrower under the
Credit Agreement in respect of any Letter of Credit or Acceptance, when and as
due, including payments in respect of reimbursement of disbursements, interest
thereon and obligations to provide cash collateral and (iii) all other monetary
obligations, including fees, costs, expenses and indemnities (including, without
limitation, the obligations described in Section 2.18 of the Credit Agreement),
whether primary, secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Borrowers to the Banks under the Credit
Agreement and the other Loan Documents and (b) the due and punctual performance
of all covenants, agreements, obligations and liabilities of the Borrowers under
or pursuant to the Credit Agreement and the other Loan Documents (all the
monetary and other obligations referred to in the preceding clauses (a) and (b)
being collectively called the "Obligations"). Each Guarantor further agrees that
the Obligations may be extended or renewed, in whole or in part, without notice
to or further assent from it, and that it will remain bound upon its guarantee
notwithstanding any extension or renewal of any Obligation.
Anything contained in this Agreement to the contrary notwithstanding, the
obligations of each Guarantor hereunder shall be limited to a maximum aggregate
amount equal to the greatest amount that would not render such Guarantor's
obligations hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or any
provisions of applicable state or Canadian or provincial law (collectively, the
"Fraudulent Transfer Laws"), in each case after giving effect to all other
liabilities of such Guarantor, contingent or otherwise, that are relevant under
the Fraudulent Transfer Laws (specifically excluding, however, any liabilities
of such Guarantor (a) in respect
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of intercompany indebtedness to either Borrower or Affiliates of either Borrower
to the extent that such indebtedness would be discharged in an amount equal to
the amount paid by such Guarantor hereunder and (b) under any Guarantee of
Indebtedness subordinated in right of payment to the Obligations which Guarantee
contains a limitation as to maximum amount similar to that set forth in this
paragraph, pursuant to which the liability of such Guarantor hereunder is
included in the liabilities taken into account in determining such maximum
amount) and after giving effect as assets to the value (as determined under the
applicable provisions of the Fraudulent Transfer Laws) of any rights to
subrogation, contribution, reimbursement, indemnity or similar rights of such
Guarantor pursuant to (i) applicable law or (ii) any agreement providing for an
equitable allocation among such Guarantor and other Affiliates of either
Borrower of obligations arising under Guarantees by such parties (including the
Indemnity, Subrogation and Contribution Agreement).
In addition, notwithstanding anything contained in this Agreement to the
contrary, no Guarantor that is identified in Schedule I hereto as a "Canadian
Guarantor" shall be required to make any payment pursuant to this Agreement in
respect of, nor shall this Agreement be deemed effective on the part of such
Canadian Guarantor with respect to, any Obligation of the Company (as
distinguished from an Obligation of A&P Canada) unless and until one of the
events described in clause (i), (ii) or (iii) of Section 2.23(a) of the Credit
Agreement occurs.
SECTION 2. Obligations Not Waived. To the fullest extent permitted by
applicable law, each Guarantor waives presentment to, demand of payment from and
protest to each Borrower of any of the Obligations, and also waives notice of
acceptance of its guarantee and notice of protest for nonpayment. To the fullest
extent permitted by applicable law, the obligations of each Guarantor hereunder
shall not be affected by (a) the failure of either Agent or Issuing Bank or any
Bank to assert any claim or demand or to enforce or exercise any right or remedy
against either Borrower or any other Guarantor under the provisions of the
Credit Agreement, any other Loan Document or otherwise, (b) any rescission,
waiver, amendment or modification of, or any release from any of the terms or
provisions of this Agreement, any other Loan Document, any Guarantee or any
other agreement, including with respect to any other Guarantor under this
Agreement or (c) the failure to perfect any security interest in, or the release
of, any of the security held by or on behalf of either Agent or Issuing Bank or
any Bank.
SECTION 3. Security, etc. To the extent security is given for the payment
of this Guarantee or the Obligations, each of the Guarantors authorizes each
Agent and Issuing Bank and the Banks to apply such security and direct the order
or manner of sale thereof as they in their sole discretion may determine. Each
of the Guarantors further authorizes each Agent to release or substitute any one
or more endorsees, other guarantors or other obligors.
SECTION 4. Guarantee of Payment. Each Guarantor further agrees that its
guarantee is a continuing guarantee and constitutes a guarantee of payment when
due and not of collection, and waives any right to require that any resort be
had by either Agent or Issuing Bank or any Bank to any balance of any deposit
account or credit on the books of such Agent or Issuing Bank or Bank in favor of
either Borrower or any other person or any security for the payment of this
Guarantee or the Obligations held by either Agent or Issuing Bank or any Bank.
SECTION 5. No Discharge or Diminishment of Guarantee. The obligations of
each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Obligations), including any claim of waiver, release,
surrender, alteration or compromise of any of the Obligations, and shall not be
subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder shall not be discharged or impaired or
otherwise affected by the failure of either Agent or Issuing Bank or any Bank to
assert any claim or demand or to enforce any remedy under the Credit Agreement,
any other Loan Document or any other agreement, by any waiver or modification of
any provision of any thereof, by any default, failure or delay, wilful or
otherwise, in the performance of the Obligations, or by any other act or
omission that may or might in any manner or to any extent vary the risk of any
Guarantor or that would otherwise operate as a discharge of each Guarantor as a
matter of law or equity (other than the indefeasible payment in full in cash of
all the Obligations).
SECTION 6. Defenses of Borrower Waived. To the fullest extent permitted by
applicable law, each of the Guarantors waives any defense based on or arising
out of any defense of either Borrower or the unenforceability of the Obligations
or any part thereof from any cause, or the cessation
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from any cause of the liability of either Borrower, other than the final and
indefeasible payment in full in cash of the Obligations. The Agents, the Issuing
Banks and the Banks may, at their election, foreclose on any security held by
one or more of them by one or more judicial or nonjudicial sales, accept an
assignment of any such security in lieu of foreclosure, compromise or adjust any
part of the Obligations, make any other accommodation with either Borrower or
any other guarantor or exercise any other right or remedy available to them
against either Borrower or any other guarantor, without affecting or impairing
in any way the liability of any Guarantor hereunder except to the extent the
Obligations have been fully, finally and indefeasibly paid in cash. Pursuant to
applicable law, each of the Guarantors waives any defense arising out of any
such election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of such Guarantor against either Borrower or any other Guarantor or
guarantor, as the case may be, or any security.
SECTION 7. Agreement to Pay; Subordination. In furtherance of the foregoing
and not in limitation of any other right that an Agent, Issuing Bank or Bank has
at law or in equity against any Guarantor by virtue hereof, upon the failure of
either Borrower or any other Loan Party to pay any Obligation when and as the
same shall become due, whether at maturity, by acceleration, after notice of
prepayment or otherwise, each Guarantor hereby promises to and will forthwith
pay, or cause to be paid, to such Agent, Bank or Issuing Bank as designated
thereby in cash the amount of such unpaid Obligations. Upon payment by any
Guarantor of any sums to an Agent, Issuing Bank or Bank as provided above, all
rights of such Guarantor against either Borrower arising as a result thereof by
way of right of subrogation, contribution, reimbursement, indemnity or otherwise
shall in all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full in cash of all the Obligations. In addition, any
indebtedness of either Borrower or any Subsidiary thereof now or hereafter held
by any Guarantor is hereby subordinated in right of payment to the prior payment
in full of the Obligations. If any amount shall erroneously be paid to any
Guarantor on account of (i) such subrogation, contribution, reimbursement,
indemnity or similar right or (ii) any such indebtedness of either Borrower or
any Subsidiary thereof, such amount shall be held in trust for the benefit of
the Banks and the Issuing Banks and shall forthwith be paid to an Agent to be
credited against the payment of the Obligations, whether matured or unmatured,
in accordance with the terms of the Loan Documents.
SECTION 8. Information. Each of the Guarantors assumes all responsibility
for being and keeping itself informed of each Borrower's financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Obligations and the nature, scope and extent of the risks that such
Guarantor assumes and incurs hereunder, and agrees that neither Agent will have
any duty to advise any of the Guarantors of information known to it regarding
such circumstances or risks.
SECTION 9. Representations and Warranties. Each Guarantor hereby represents
and warrants that:
(a) Duly Organized; Good Standing. It is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and has the power and authority and the legal right to own and
operate its property, to lease the property it operates and to conduct the
business in which it is currently engaged.
(b) Authority. It has the requisite power and authority and the legal
right to execute and deliver, and to perform its obligations under, this
Guarantee Agreement, and has taken all necessary action to authorize the
execution, delivery and performance of this Guarantee Agreement.
(c) Valid and Binding Agreement. This Guarantee Agreement constitutes
a legal, valid and binding obligation of such Guarantor enforceable in
accordance with its terms.
(d) Requirements of Law and Contractual Obligations. The execution,
delivery and performance of this Guarantee Agreement will not violate any
requirement of law or contractual obligation of such Guarantor and will not
result in or require the creation or imposition of any Lien on any of the
properties or revenues of such Guarantor.
(e) Consents and Approvals. No consent or authorization of, filing
with, or other act by or in respect of, any arbitrator or governmental
authority and no consent of any other Person (including, without
limitation, any stockholder or creditor of such Guarantor) is required in
connection with the execution, delivery, performance, validity or
enforceability of this Guarantee
4
Agreement, except such as have been obtained, made or taken, as the case
may be, and are in full force and effect.
(f) Benefits Derived. (i) The businesses and corporate activities of
such Guarantor are closely related to, and substantially benefit, the
business and corporate activities of the Borrowers, (ii) such Guarantor has
received substantial economic benefit from the transactions contemplated
by, and the execution and delivery of, the Credit Agreement and the related
execution and delivery of this Guarantee Agreement, and (iii) the Credit
Agreement is for the benefit of such Guarantor and the Borrowers as though,
for purposes of the Credit Agreement, the documents and instruments
executed and delivered in connection therewith or pursuant thereto
(including, without limitation, this Guarantee Agreement), the Borrower and
such Guarantor constituted a single entity.
(g) Credit Agreement Representation and Warranties. The
representations and warranties contained in Article III of the Credit
Agreement are true and correct to the extent such representations and
warranties apply to such Guarantor.
SECTION 10. Termination. The Guarantees made hereunder (a) shall terminate
when all the Obligations have been indefeasibly paid in full and the Banks have
no further commitment to lend or accept Drafts under the Credit Agreement, the
outstanding Acceptances and the L/C Exposure have been reduced to zero and the
Issuing Banks have no further obligation to issue Letters of Credit under the
Credit Agreement and (b) shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by any Bank, Issuing Bank or Guarantor
upon the bankruptcy or reorganization of either Borrower, any Guarantor or
otherwise.
SECTION 11. Binding Agreement; Assignments. 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 Guarantors that are contained in this
Agreement shall bind and inure to the benefit of each party hereto and their
respective successors and assigns. This Agreement shall become effective as to
any Guarantor when a counterpart hereof executed on behalf of such Guarantor
shall have been delivered to either Agent, and a counterpart hereof shall have
been executed on behalf of each Agent, and thereafter shall be binding upon such
Guarantor and each Agent and their respective successors and assigns, and shall
inure to the benefit of such Guarantor, each Agent and Issuing Bank and the
Banks, and their respective successors and assigns, except that no Guarantor
shall have the right to assign its rights or obligations hereunder or any
interest herein (and any such attempted assignment shall be void). If all of the
capital stock of a Guarantor is sold, transferred or otherwise disposed of
pursuant to a transaction permitted by Section 6.05 of the Credit Agreement,
such Guarantor shall be released from its obligations under this Agreement
without further action.
SECTION 12. Waivers; Amendment. (a) No failure or delay of either Agent 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 discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of each Agent hereunder and of each
Issuing Bank and the Banks under the other Loan Documents are cumulative and are
not exclusive of any rights or remedies that it would otherwise have. No waiver
of any provision of this Agreement or consent to any departure by any Guarantor
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 any Guarantor in any case shall entitle such Guarantor 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 a written agreement entered into between
the Guarantors with respect to which such waiver, amendment or modification
relates and the Agents, with the prior written consent of the Required Banks
(except as otherwise provided in the Credit Agreement).
SECTION 13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
5
SECTION 14. Notices. All communications and notices hereunder shall be in
writing and given as provided in Section 9.01 of the Credit Agreement. All
communications and notices hereunder to each Guarantor shall be given to it at
its address set forth in Schedule I.
SECTION 15. Survival of Agreement; Severability. (a) All covenants,
agreements, representations and warranties made by each Guarantor herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by each of the Agents, Issuing Banks and Banks and shall
survive the making of the Loans and the issuance of the Acceptances by the Banks
and the issuance of the Letters of Credit by the Issuing Banks regardless of any
investigation made by the Banks or on their behalf, and shall continue in full
force and effect as long as the principal of or any accrued interest on any Loan
or any other fee or amount payable under this Agreement, the Credit Agreement or
any other Loan Document is outstanding and unpaid or the outstanding Acceptances
and the L/C Exposure have not been reduced to zero and as long as the
Commitments have not been terminated.
(b) In the event any one or more of the provisions contained in this
Agreement or in any other Loan Document should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). 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 16. Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract, and shall become effective as provided in
Section 11. Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 17. Rules of Interpretation. The rules of interpretation specified
in Section 1.02 of the Credit Agreement shall be applicable to this Agreement.
SECTION 18. Jurisdiction; Consent to Service of Process. (a) Each Guarantor
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 the other Loan Documents, 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 either Agent or Issuing
Bank or any Bank may otherwise have to bring any action or proceeding relating
to this Agreement or the other Loan Documents against any Guarantor or its
properties in the courts of any jurisdiction.
(b) Each Guarantor 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 or the other Loan Documents 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 14. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.
SECTION 19. 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 OR THE OTHER LOAN DOCUMENTS. EACH PARTY
HERETO (A) CERTIFIES THAT NO
6
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 AND THE OTHER LOAN
DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 19.
SECTION 20. Additional Guarantors. Pursuant to Section 5.08 of the Credit
Agreement, additional Subsidiaries may be required to enter into this Agreement
as Guarantors. Upon execution and delivery after the date hereof by the Agents
and such a Subsidiary of an instrument in the form of Annex 1, such Subsidiary
shall become a Guarantor hereunder with the same force and effect as if
originally named as a Guarantor herein. The execution and delivery of any
instrument adding an additional Guarantor as a party to this Agreement shall not
require the consent of any other Guarantor hereunder. The rights and obligations
of
7
each Guarantor hereunder shall remain in full force and effect notwithstanding
the addition of any new Guarantor as a party to this Agreement.
SECTION 21. Right of Setoff. If an Event of Default shall have occurred and
be continuing, each Bank and Issuing Bank is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other Indebtedness at any time owing by such Bank or
Issuing Bank or their respective affiliate banks to or for the credit or the
account of any Guarantor against any or all the obligations of such Guarantor
now or hereafter existing under this Agreement and the other Loan Documents held
by such Bank or Issuing Bank, irrespective of whether or not such Bank or
Issuing Bank shall have made any demand under this Agreement or any other Loan
Document and although such obligations may be unmatured. The rights of each Bank
and Issuing Bank under this Section 21 are in addition to other rights and
remedies (including other rights of setoff) which such Bank or Issuing Bank may
have.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
THE CHASE MANHATTAN BANK, as U.S. Agent,
by
-----------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK OF CANADA, as
Canadian Agent,
by
-----------------------------------
Name:
Title:
THE GREAT ATLANTIC & PACIFIC TEA COMPANY,
INC., as Guarantor
by
-----------------------------------
Name:
Title:
BORMANS, INC., as Guarantor,
by
-----------------------------------
Name:
Title:
8
XXXX'X FOOD STORES, INC., as Guarantor,
by
-----------------------------------
Name:
Title:
SHOPWELL, INC., as Guarantor,
by
-----------------------------------
Name:
Title:
SUPER FRESH FOOD MARKETS, INC., as
Guarantor,
by
-----------------------------------
Name:
Title:
THE SOUTH DAKOTA GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC., as Guarantor,
by
-----------------------------------
Name:
Title:
XXXXXXXX, INC, as Guarantor,
by
-----------------------------------
Name:
Title:
A&P DRUG MART LIMITED, as Guarantor,
by
-----------------------------------
Name:
Title:
A&P PROPERTIES LIMITED, as Guarantor,
by
-----------------------------------
Name:
Title:
SCHEDULE I TO THE
GUARANTEE AGREEMENT
Canadian Guarantor Address
------------------ -------
A&P Drug Mart Limited Canadian Company
0000 Xxxxxx Xxxxxx X.
Xxxxxxxxx, Xxxxxxx X0X0X0
A&P Properties Limited Canadian Company
0000 Xxxxxx Xxxxxx X.
Xxxxxxxxx, Xxxxxxx X0X0X0
U.S. Guarantors Address
--------------- -------
Bormans, Inc. 00000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Xxxx'x Food Stores Inc. 00000 Xxxx Xxxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Shopwell, Inc. 0 Xxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Super Fresh Food Markets, Inc. 000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
The South Dakota Great Atlantic & 2 Paragon Drive
Pacific Tea Company, Inc. Xxxxxxxx, Xxx Xxxxxx 00000
Xxxxxxxx, Inc. Xxxxxxx Xxxxxx & Xxxxxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxx 00000
Annex 1 to the
Guarantee Agreement
SUPPLEMENT NO. dated as of , to the Guarantee Agreement
dated as of June 10, 1997 (as it may have been amended, modified,
extended or restated from time to time, the "Guarantee
Agreement") among each of the guarantors described therein (the
"Guarantors"), THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC., a
Maryland Corporation, and THE GREAT ATLANTIC & PACIFIC COMPANY OF
CANADA, LIMITED, a Canadian corporation (each a "Borrower" and
collectively, the "Borrowers"), and THE CHASE MANHATTAN BANK, a
New York banking corporation, as agent for the U.S. Banks and THE
CHASE MANHATTAN BANK OF CANADA, a Canadian chartered bank, as
agent for the Canadian Banks (each an "Agent" and collectively
the "Agents").
A. Reference is made to the Competitive Advance and Revolving Credit
Facilities Agreement dated as of June 10, 1997 (as it may have been amended,
modified, extended or restated from time to time, the "Credit Agreement"), among
the Borrowers, the banks from time to time party thereto and the Agents.
Capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in the Guarantee Agreement and the Credit Agreement.
B. The Guarantors and the Agents have entered into the Guarantee Agreement
in order to induce the Banks to make Loans and to issue Acceptances and the
Issuing Banks to issue Letters of Credit. Pursuant to Section 5.08 of the Credit
Agreement, additional Subsidiaries may be required to enter into the Guarantee
Agreement as Guarantors. Section 20 of the Guarantee Agreement provides that
additional Subsidiaries may become parties to the Guarantee Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the "New Guarantor") is becoming a Guarantor under the
Guarantee Agreement and is executing this Supplement in accordance with the
requirements of the Credit Agreement to become a party to the Guarantee
Agreement as a "Guarantor" in order to induce the Banks to make additional Loans
and to issue additional Acceptances and the Issuing Banks to issue additional
Letters of Credit and as consideration for Loans previously made, Acceptances
previously issued and Letters of Credit previously issued.
Accordingly, the Agents and the New Guarantor agree as follows:
SECTION 1. In accordance with Section 20 of the Guarantee Agreement, the
New Guarantor by its signature below becomes a Guarantor under the Guarantee
Agreement with the same force and effect as if originally named therein as a
Guarantor and the New Guarantor hereby (a) agrees to all the terms and
provisions of the Guarantee Agreement applicable to it as a Guarantor thereunder
and (b) represents and warrants that the representations and warranties made by
it as a Guarantor thereunder are true and correct on and as of the date hereof.
Each reference to a "Guarantor" in the Guarantee Agreement shall be deemed to
include the New Guarantor. The Guarantee Agreement is hereby incorporated herein
by reference.
SECTION 2. The New Guarantor represents and warrants to the Agents, the
Issuing Banks and the Banks that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts, each of which
shall constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when one of
the Agents shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Guarantor and the Agents. Delivery of
an executed signature page to this Supplement by facsimile transmission shall be
as effective as delivery of a manually executed counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the Guarantee Agreement
shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Guarantee Agreement shall not in any way be affected
2
or impaired thereby (it being understood that the invalidity of a particular
provision hereof in a particular jurisdiction shall not in and of itself affect
the validity of such provision in any other jurisdiction). The parties hereto
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 7. All communications and notices hereunder shall be in writing and
given as provided in Section 14 of the Guarantee Agreement. All communications
and notices hereunder to the New Guarantor shall be given to it at the address
set forth under its signature below, with a copy to the Borrowers.
SECTION 8. The New Guarantor agrees to reimburse each Agent for its
out-of-pocket expenses in connection with this Supplement, including the fees,
disbursements and other charges of counsel for such Agent.
IN WITNESS WHEREOF, the New Guarantor and the Agents have duly executed
this Supplement to the Guarantee Agreement as of the day and year first above
written.
[Name Of New Guarantor],
by
-----------------------------------
Name:
Title:
Address:
3
4
THE CHASE MANHATTAN BANK, as U.S. Agent,
by
-----------------------------------
Name:
Title:
5
6
THE CHASE MANHATTAN BANK OF CANADA,
as Canadian Agent,
by
-----------------------------------
Name:
Title:
EXECUTION COPY
INDEMNITY, SUBROGATION and CONTRIBUTION AGREEMENT dated as of June 10,
1997, among THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC., a Maryland
corporation (the "Company"), THE GREAT ATLANTIC & PACIFIC COMPANY OF CANADA,
LIMITED, a Canadian corporation ("A&P Canada" and, together with the Company,
the "Borrowers"), each of the Guarantors referred to in the Credit Agreement
referred to below, and THE CHASE MANHATTAN BANK, a New York banking corporation,
as agent for the U.S. Banks and THE CHASE MANHATTAN BANK OF CANADA, a Canadian
chartered bank, as agent for the Canadian Banks (each an "Agent" and
collectively the "Agents").
Reference is made to the Competitive Advance and Revolving Credit
Facilities Agreement dated as of June 10, 1997 (as it may have been amended,
modified, extended or restated from time to time, the "Credit Agreement"), among
the Borrowers, the banks from time to time party thereto (the "Banks") and the
Agents. Capitalized terms used herein and not defined herein shall have the
meanings assigned to such terms in the Credit Agreement.
The U.S. Banks have agreed to make Loans to the Company and to acquire
participations in Letters of Credit issued for the account of the Company, the
Canadian Banks have agreed to make Loans to A&P Canada, to acquire
participations in Letters of Credit issued for the account of A&P Canada and to
issue Acceptances, and the Issuing Banks have agreed to issue Letters of Credit
for the respective accounts of the Borrowers, pursuant to, and upon the terms
and subject to the conditions specified in, the Credit Agreement. The Guarantors
have guaranteed Obligations (as defined in the Guarantee Agreement). The
obligations of the Banks to make Loans and issue Acceptances and of the Issuing
Banks to issue Letters of Credit are conditioned on, among other things, the
execution and delivery by the Borrowers and the Guarantors of an agreement in
the form hereof.
Accordingly, each of the Borrowers, Guarantors and Agents agree as follows:
SECTION 1. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 3), each Borrower agrees that in the event a payment shall be
made by any Guarantor under the Guarantee Agreement in respect of any Obligation
of such Borrower, then such Borrower shall indemnify such Guarantor for the full
amount of such payment and such Guarantor shall be subrogated to the rights of
the Person to whom such payment shall have been made to the extent of such
payment.
SECTION 2. Contribution and Subrogation. Each Guarantor (a "Contributing
Guarantor") agrees (subject to Section 3) that, in the event a payment shall be
made by any other Guarantor under the Guarantee Agreement and such other
Guarantor (the "Claiming Guarantor") shall not have been fully indemnified by
the relevant Borrower as provided in Section 1, the Contributing Guarantor shall
indemnify the Claiming Guarantor in an amount equal to the amount of such
payment multiplied by a fraction of which the numerator shall be the net worth
of the Contributing Guarantor on the date hereof and the denominator shall be
the aggregate net worth of all the Guarantors on the date hereof (or, in the
case of any Guarantor becoming a party hereto pursuant to Section 14, the date
of the Supplement hereto executed and delivered by such Guarantor). Any
Contributing Guarantor making any payment to a Claiming Guarantor pursuant to
this Section 2 shall be subrogated to the rights of such Claiming Guarantor
under Section 1 to the extent of such payment.
SECTION 3. Subordination. Notwithstanding any provision of this Agreement
to the contrary, all rights of the Guarantors under Sections 1 and 2 and all
other rights of indemnity, contribution or subrogation under applicable law or
otherwise shall be fully subordinated to the indefeasible payment in full of the
Obligations. No failure on the part of either Borrower or any Guarantor to make
the payments required by Sections 1 and 2 (or any other payments required under
applicable law or otherwise) shall in any respect limit the obligations and
liabilities of any Guarantor with respect to any Guarantee, and each Guarantor
shall remain liable for the full amount of the obligations of such Guarantor
under each such Guarantee.
SECTION 4. Termination. This Agreement shall survive and be in full force
and effect so long as any Obligation is outstanding and has not been
indefeasibly paid in full in cash, and so long as the outstanding Acceptances
and the L/C Exposure have not been reduced to zero or any of the Commitments
under the Credit Agreement have not been terminated, and shall continue to be
effective or be
2
reinstated, as the case may be, if at any time payment, or any part thereof, of
any Obligation is rescinded or must otherwise be restored by any Bank or any
Guarantor upon the bankruptcy or reorganization of either Borrower, any
Guarantor or otherwise.
SECTION 5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. No Waiver. No failure on the part of either Agent or any
Guarantor to exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy by either Agent or any Guarantor
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law. None of the Agents and the
Guarantors shall be deemed to have waived any rights hereunder unless such
waiver shall be in writing and signed by such parties.
SECTION 7. Notices. All communications and notices hereunder shall be in
writing and given as provided in Section 14 of the Guarantee Agreement and
addressed as specified in such Section 14.
SECTION 8. Binding Agreement; Assignments. 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 parties that are contained in this Agreement
shall bind and inure to the benefit of their respective successors and assigns.
None of the Borrowers and the Guarantors may assign or transfer any of its
rights or obligations hereunder (and any such attempted assignment or transfer
shall be void) without the prior written consent of the Required Banks.
SECTION 9. Survival of Agreement; Severability. (a) All covenants and
agreements made by either Borrower and each Guarantor herein and in the
certificates or other instruments prepared or delivered in connection with this
Agreement or the other Loan Documents shall be considered to have been relied
upon by each of the Agents, Issuing Banks and Banks and each Guarantor and shall
survive the making of the Loans and the issuance of the Acceptances by the
Banks, and the issuance of the Letters of Credit by the Issuing Banks regardless
of any investigation by the Banks or on their behalf, and shall continue in full
force and effect as long as the principal of or any accrued interest on any
Loans or any other fee or amount payable under the Credit Agreement or this
Agreement or, without duplication of the foregoing, under any of the other Loan
Documents, is outstanding and unpaid or the outstanding Acceptances and the L/C
Exposure have not been reduced to zero and as long as the Commitments have not
been terminated.
(b) In case any one or more of the provisions contained in this Agreement
should be held invalid, illegal or unenforceable in any respect, no party hereto
shall be required to comply with such provision for so long as such provision is
held to be invalid, illegal or unenforceable, but the validity, legality and
enforceability 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 10. 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 instrument. This Agreement shall be
effective with respect to any Guarantor when a counterpart bearing the signature
of such Guarantor shall have been delivered to either of the Agents.
SECTION 11. Rules of Interpretation. The rules of interpretation specified
in Section 1.02 of the Credit Agreement shall be applicable to this Agreement.
SECTION 12. Jurisdiction; Consent to Service of Process. (a) Each of the
Borrowers and each Guarantor hereby irrevocably and unconditionally submits, for
itself and its property, to the 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
3
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Each of the parties hereto agrees that it
will not institute or seek to institute any action or proceeding arising out of
or relating to this Agreement (other than an action or proceeding seeking
enforcement of a judgment) in any forum other than a New York State court or
Federal court of the United States of America sitting in New York City.
(b) Each of the Borrowers and each Guarantor hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection 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 of the United States of America sitting in New
York. 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 7. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.
SECTION 13. 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.
SECTION 14. Additional Guarantors. Pursuant to Section 5.08 of the Credit
Agreement, additional Subsidiaries may be required to enter into this Agreement
as Guarantors. Upon execution and delivery, after the date hereof, by the Agents
and a Subsidiary of an instrument in the form of Annex 1, such Subsidiary shall
become a Guarantor hereunder with the same force and effect as if originally
named as a Guarantor hereunder. The execution and delivery of any instrument
adding an additional Guarantor as a party to this Agreement shall not require
the consent of any Guarantor hereunder. The rights and obligations of each
Guarantor hereunder shall remain in full force and effect notwithstanding the
addition of any new Guarantor as a party to this Agreement.
SECTION 15. Release of Guarantors. If all of the capital stock of the
Guarantor is sold, transferred or otherwise disposed of pursuant to a
transaction permitted by Section 6.05 of the Credit Agreement, such Guarantor
shall be released from its obligations under this Agreement without further
action.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first appearing above.
THE GREAT ATLANTIC & PACIFIC TEA COMPANY,
INC., as Guarantor
by
-----------------------------------
Name:
Title:
THE GREAT ATLANTIC & PACIFIC COMPANY OF
CANADA, LIMITED, as Borrower,
by
-----------------------------------
Name:
Title:
4
BORMANS, INC., as Guarantor,
by
-----------------------------------
Name:
Title:
XXXX'X FOOD STORES, INC., as Guarantor,
by
-----------------------------------
Name:
Title:
SHOPWELL, INC., as Guarantor,
by
-----------------------------------
Name:
Title:
SUPER FRESH FOOD MARKETS, INC., as
Guarantor,
by
-----------------------------------
Name:
Title:
THE SOUTH DAKOTA GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC., as Guarantor,
by
-----------------------------------
Name:
Title:
XXXXXXXX, INC, as Guarantor,
by
-----------------------------------
Name:
Title:
A&P DRUG MART LIMITED, as Guarantor,
by
-----------------------------------
Name:
Title:
5
A&P PROPERTIES LIMITED, as Guarantor,
by
-----------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as U.S. Agent,
by
-----------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK OF CANADA, as
Canadian Agent,
by
-----------------------------------
Name:
Title:
Annex 1 to
the Indemnity, Subrogation and
Contribution Agreement
SUPPLEMENT NO. dated as of , to the Indemnity, Subrogation and
Contribution Agreement dated as of June 10, 1997 (as it may have
been amended, modified, extended or restated from time to time,
the "Indemnity, Subrogation and Contribution Agreement"), among
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC., a Maryland
corporation (the "Company"), THE GREAT ATLANTIC & PACIFIC COMPANY
OF CANADA, LIMITED, a Canadian corporation ("A&P Canada" and,
together with the Company, the "Borrowers"), each of the
Guarantors identified in the Guarantee Agreement (as defined in
the Credit Agreement referred to below), and THE CHASE MANHATTAN
BANK, a New York banking corporation, as agent for the U.S. banks
and THE CHASE MANHATTAN BANK OF CANADA, a Canadian chartered
bank, as agent for the Canadian banks (each an "Agent" and
collectively the "Agents").
A. Reference is made to the Competitive Advance and Revolving Credit
Facilities Agreement dated as of June 10, 1997 (as it may have been amended,
modified, extended or restated from time to time, the "Credit Agreement"), among
the Borrowers, the banks from time to time party thereto and the Agents.
Capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in the Indemnity, Subrogation and Contribution Agreement
and the Credit Agreement.
B. The Borrowers, the Guarantors and the Agents have entered into the
Indemnity, Subrogation and Contribution Agreement in order to induce the Banks
to make Loans and issue Acceptances and the Issuing Banks to issue Letters of
Credit. Pursuant to Section 5.08 of the Credit Agreement, additional
Subsidiaries may be required to enter into the Guarantee Agreement as Guarantors
and to enter into the Indemnity, Subrogation and Contribution Agreement. Section
14 of the Indemnity, Subrogation and Contribution Agreement provides that
additional Subsidiaries may become parties to the Indemnity, Subrogation and
Contribution Agreement by execution and delivery of an instrument in the form of
this Supplement. The undersigned Subsidiary (the "New Guarantor") is becoming a
Guarantor under the Guarantee Agreement and is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a party to
the Indemnity, Subrogation and Contribution Agreement as a "Guarantor" in order
to induce the Banks to make additional Loans and to issue additional Acceptances
and the Issuing Banks to issue additional Letters of Credit and as consideration
for Loans previously made and Acceptances and Letters of Credit previously
issued.
Accordingly, the Agents and the New Guarantor agree as follows:
SECTION 1. In accordance with Section 14 of the Indemnity, Subrogation and
Contribution Agreement, the New Guarantor by its signature below becomes a
Guarantor under the Indemnity, Subrogation and Contribution Agreement with the
same force and effect as if originally named therein as a Guarantor and the New
Guarantor hereby agrees to all the terms and provisions of the Indemnity,
Subrogation and Contribution Agreement applicable to it as a Guarantor
thereunder. Each reference to a "Guarantor" in the Indemnity, Subrogation and
Contribution Agreement shall be deemed to include the New Guarantor. The
Indemnity, Subrogation and Contribution Agreement is hereby incorporated herein
by reference.
SECTION 2. The New Guarantor represents and warrants to the Agents, the
Issuing Banks and the Banks that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement 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 instrument. This Supplement shall become
effective when one of the Agents shall have received counterparts of this
Supplement that, when taken together, bear the signatures of the New Guarantor
and the Agents.
SECTION 4. Except as expressly supplemented hereby, the Indemnity,
Subrogation and Contribution Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
2
SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
neither party hereto shall be required to comply with such provision for so long
as such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein and in the Indemnity, Subrogation and Contribution Agreement shall not in
any way be affected or impaired. The parties hereto 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 7. All communications and notices hereunder shall be in writing and
given as provided in Section 7 of the Indemnity, Subrogation and Contribution
Agreement. All communications and notices hereunder to the New Guarantor shall
be given to it at the address set forth under its signature, which supplements
Schedule I to the Guarantee Agreement, with a copy to the Borrowers.
SECTION 8. The New Guarantor agrees to reimburse each Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including
the reasonable fees, other charges and disbursements of counsel for such Agent.
IN WITNESS WHEREOF, the New Guarantor and the Agents have duly executed
this Supplement to the Indemnity, Subrogation and Contribution Agreement as of
the day and year first above written.
[NAME OF NEW GUARANTOR],
by
-----------------------------------
Name:
Title:
Address:
3
THE CHASE MANHATTAN BANK, as U.S. Agent,
by
-----------------------------------
Name:
Title:
0
XXX XXXXX XXXXXXXXX XXXX XX XXXXXX, as
Canadian Agent,
by
-----------------------------------
Name:
Title:
[OPINION of
Xxxxxx X. Xxxxxx]
[OPINION of
Xxxxxx Xxxxxx & Xxxxxxx]
[OPINION of
Blake, Xxxxxxx & Xxxxxxx]
