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KASH N' XXXXX FOOD STORES, INC.
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AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of December 19, 1995
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Administrative Agent
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TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to
which it is attached but is inserted for convenience of reference only.
Page
Section 1. Definitions and Accounting Matters. . . . . . 1
1.01 Certain Defined Terms . . . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . . . . . . . 22
1.03 Classes of Loans. . . . . . . . . . . . . . . . . . 23
1.04 Types of Loans. . . . . . . . . . . . . . . . . . . 23
1.05 Interpretation. . . . . . . . . . . . . . . . . . . 23
Section 2. Commitments, Loans, Notes and
Prepayments . . . . . . . . . . . . . . . . . . . 23
2.01 Loans, Limit on Eurodollar Loans, Extension of
Termination Date. . . . . . . . . . . . . . . . . 23
2.02 Borrowings of Revolving Credit Loans. . . . . . . . 25
2.03 Letters of Credit . . . . . . . . . . . . . . . . . 26
2.04 Changes of Commitments. . . . . . . . . . . . . . . 33
2.05 Fees. . . . . . . . . . . . . . . . . . . . . . . . 34
2.06 Lending Offices . . . . . . . . . . . . . . . . . . 35
2.07 Several Obligations; Remedies Independent . . . . . 35
2.08 Notes and Loan Account. . . . . . . . . . . . . . . 35
2.09 Optional Prepayments and Conversions or
Continuations of Loans. . . . . . . . . . . . . . 37
2.10 Mandatory Prepayments and Reductions of
Commitments . . . . . . . . . . . . . . . . . . . 37
2.11 Casualty Proceeds. . . . . . . . . . . . . . . . . . 40
Section 3. Payments of Principal and Interest. . . . . . 40
3.01 Repayment of Loans. . . . . . . . . . . . . . . . . 40
3.02 Interest. . . . . . . . . . . . . . . . . . . . . . 41
Section 4. Payments; Pro Rata Treatment;
Computations; Etc.. . . . . . . . . . . . . . . . 41
4.01 Payments. . . . . . . . . . . . . . . . . . . . . . 41
4.02 Pro Rata Treatment. . . . . . . . . . . . . . . . . 44
4.03 Computations. . . . . . . . . . . . . . . . . . . . 44
4.04 Minimum Amounts . . . . . . . . . . . . . . . . . . 44
4.05 Certain Notices . . . . . . . . . . . . . . . . . . 45
4.06 Non-Receipt of Funds by the Administrative
Agent . . . . . . . . . . . . . . . . . . . . . . 46
4.07 Sharing of Payments, Etc. . . . . . . . . . . . . . 46
Section 5. Yield Protection, Etc.. . . . . . . . . . . . 47
5.01 Additional Costs. . . . . . . . . . . . . . . . . . 47
5.02 Limitation on Types of Loans. . . . . . . . . . . . 50
5.03 Illegality. . . . . . . . . . . . . . . . . . . . . 50
5.04 Treatment of Affected Loans . . . . . . . . . . . . 50
5.05 Compensation. . . . . . . . . . . . . . . . . . . . 51
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Page
5.06 Certain Protections in Respect of Letters of
Credit. . . . . . . . . . . . . . . . . . . . . . 52
5.07 Taxes . . . . . . . . . . . . . . . . . . . . . . . 53
Section 6. Conditions Precedent. . . . . . . . . . . . . 54
6.01 Effectiveness of Agreement. . . . . . . . . . . . . 54
6.02 Initial and Subsequent Extensions of Credit . . . . 58
Section 7. Representations and Warranties. . . . . . . . 59
7.01 Corporate Existence . . . . . . . . . . . . . . . . 59
7.02 Financial Condition . . . . . . . . . . . . . . . . 59
7.03 Litigation. . . . . . . . . . . . . . . . . . . . . 59
7.04 No Breach . . . . . . . . . . . . . . . . . . . . . 59
7.05 Action. . . . . . . . . . . . . . . . . . . . . . . 60
7.06 Approvals . . . . . . . . . . . . . . . . . . . . . 60
7.07 Use of Credit . . . . . . . . . . . . . . . . . . . 60
7.08 ERISA . . . . . . . . . . . . . . . . . . . . . . . 60
7.09 Taxes . . . . . . . . . . . . . . . . . . . . . . . 60
7.10 Certain Regulations . . . . . . . . . . . . . . . . 61
7.11 Material Agreements and Liens . . . . . . . . . . . 61
7.12 Environmental Matters . . . . . . . . . . . . . . . 62
7.13 Capitalization. . . . . . . . . . . . . . . . . . . 64
7.14 Subsidiaries, Etc.. . . . . . . . . . . . . . . . . 64
7.15 Title to Assets . . . . . . . . . . . . . . . . . . 64
7.16 True and Complete Disclosure. . . . . . . . . . . . 64
Section 8. Covenants of the Company. . . . . . . . . . . 65
8.01 Financial Statements, Etc.. . . . . . . . . . . . . 65
8.02 Litigation. . . . . . . . . . . . . . . . . . . . . 69
8.03 Existence, Etc. . . . . . . . . . . . . . . . . . . 69
8.04 Insurance . . . . . . . . . . . . . . . . . . . . . 70
8.05 Prohibition of Fundamental Changes. . . . . . . . . 73
8.06 Limitation on Liens . . . . . . . . . . . . . . . . 74
8.07 Indebtedness. . . . . . . . . . . . . . . . . . . . 75
8.08 Investments . . . . . . . . . . . . . . . . . . . . 76
8.09 Dividend Payments . . . . . . . . . . . . . . . . . 76
8.10 Net Worth . . . . . . . . . . . . . . . . . . . . . 77
8.11 Interest Coverage Ratio . . . . . . . . . . . . . . 77
8.12 Capital Expenditures. . . . . . . . . . . . . . . . 77
8.13 Lease Obligations.. . . . . . . . . . . . . . . . . 77
8.14 Lines of Business . . . . . . . . . . . . . . . . . 77
8.15 Transactions with Affiliates. . . . . . . . . . . . 78
8.16 Use of Proceeds . . . . . . . . . . . . . . . . . . 78
8.17 Modifications of Certain Documents. . . . . . . . . 78
8.18 After Acquired Real Property. . . . . . . . . . . . 79
8.19 Inventory and Receivables . . . . . . . . . . . . . 79
8.20 Certain Obligations Respecting Subsidiaries . . . . 80
8.21 Agreements Relating to Trusts . . . . . . . . . . . 80
8.22 Statutory Notice. . . . . . . . . . . . . . . . . . 81
Section 9. Events of Default . . . . . . . . . . . . . . 81
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Page
Section 10. The Administrative Agent . . . . . . . . . . 85
10.01 Appointment, Powers and Immunities . . . . . . . . 85
10.02 Reliance by Administrative Agent . . . . . . . . . 86
10.03 Defaults . . . . . . . . . . . . . . . . . . . . . 86
10.04 Rights as a Lender . . . . . . . . . . . . . . . . 86
10.05 Indemnification. . . . . . . . . . . . . . . . . . 87
10.06 Nonreliance on Administrative Agent and Other
Lenders . . . . . . . . . . . . . . . . . . . . . 87
10.07 Failure to Act . . . . . . . . . . . . . . . . . . 88
10.08 Resignation or Removal of Administrative
Agent . . . . . . . . . . . . . . . . . . . . . . 88
10.09 Agency Fees. . . . . . . . . . . . . . . . . . . . 89
10.10 Collateral Sub-Agent . . . . . . . . . . . . . . . 89
Section 11. Miscellaneous. . . . . . . . . . . . . . . . 89
11.01 Waiver . . . . . . . . . . . . . . . . . . . . . . 89
11.02 Notices. . . . . . . . . . . . . . . . . . . . . . 89
11.03 Expenses, Etc. . . . . . . . . . . . . . . . . . . 90
11.04 Amendments, Etc. . . . . . . . . . . . . . . . . . 91
11.05 Successors and Assigns . . . . . . . . . . . . . . 93
11.06 Assignments and Participations . . . . . . . . . . 93
11.07 Survival . . . . . . . . . . . . . . . . . . . . . 95
11.08 Agreements Superseded. . . . . . . . . . . . . . . 96
11.09 Severability . . . . . . . . . . . . . . . . . . . 96
11.10 Captions . . . . . . . . . . . . . . . . . . . . . 96
11.11 Counterparts . . . . . . . . . . . . . . . . . . . 96
11.12 Treatment of Certain Information . . . . . . . . . 96
11.13 GOVERNING LAW; SUBMISSION TO JURISDICTION. . . . . 97
11.14 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . 97
ANNEX 1 - Addresses for Notices and Commitments of the
Lenders
SCHEDULE I - Material Agreements and Liens
SCHEDULE II - Hazardous Materials
SCHEDULE III - Existing Letters of Credit
SCHEDULE IV - Litigation
EXHIBIT A-1 - Form of Revolving Credit Note
EXHIBIT A-2 - Form of Tranche A Term Note
EXHIBIT A-3 - Form of Tranche B Term Note
EXHIBIT A-4 - Form of Tranche C Term Note
EXHIBIT B - Form of Borrowing Base Certificate
EXHIBIT C - Form of Security Agreement
EXHIBIT D - Form of Opinion of Special Counsel to the
Company
EXHIBIT E - Form of Opinion of Special Counsel to the
Administrative Agent
EXHIBIT F - Form of Landlord Waiver Agreement
EXHIBIT G - Form of Confidentiality Agreement
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This AMENDED AND RESTATED CREDIT AGREEMENT (this
"Agreement"), dated as of December 19, 1995 is made among KASH N'
XXXXX FOOD STORES, INC., a Delaware corporation (the "Company");
each of the lenders that is a signatory to this Agreement
identified under the caption "LENDERS" on the signature pages of
this Agreement or which, pursuant to Section 11.06(b), shall
become a "Lender" under this Agreement (individually, a "Lender"
and, collectively, the "Lenders"); and THE CIT GROUP/BUSINESS
CREDIT, INC., as administrative agent for the Lenders (in such
capacity, together with its successors in such capacity, the
"Administrative Agent").
R E C I T A L S
WHEREAS, the Company, the Lenders and the
Administrative Agent are parties to a Credit Agreement dated as
of December 29, 1994 (the "Existing Credit Agreement"), pursuant
to which the Lenders have made revolving credit loans and term
loans to the Company and have issued or participated in letters
of credit for the account of the Company;
WHEREAS, the Company has requested that the Existing
Credit Agreement be amended and restated to extend the
Termination Date under the Existing Credit Agreement, to modify
certain of the payment provisions and covenants in the Existing
Credit Agreement and otherwise in the respects set forth below in
this Agreement;
WHEREAS, the Company desires to secure its obligations
under this Agreement and the other Basic Documents by confirming
the grant to the Administrative Agent for itself and the Lenders
of, and the continuation of, the security interests and liens on
the Properties of the Company pursuant to and to the extent
provided for in the Security Documents; and
WHEREAS, the Lenders are willing, on and subject to the
terms and conditions set forth in this Agreement, to amend and
restate the terms of the Existing Credit Agreement and to extend
credit to the Company, in an aggregate principal amount not
exceeding $59,900,000, by making loans to the Company and issuing
or participating in letters of credit for the account of the
Company.
ACCORDINGLY, the parties hereto agree to amend and
restate the Existing Credit Agreement as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings:
"Additional Cost" shall have the meaning assigned to
that term in Section 5.01.
"Administrative Agent" shall have the meaning assigned
to that term in the introductory paragraph to this Agreement.
"Affiliate" shall mean any Person that directly or
indirectly controls, or is under common control with, or is
controlled by, the Company. As used in this definition,
"control" (including, with its correlative meanings, "controlled
by" and "under common control with") shall mean the possession,
directly or indirectly, of power to direct or cause the direction
of the management or policies (whether through ownership of
securities or partnership or other ownership interests, by
contract or otherwise), provided that, in any event, any Person
that owns directly or indirectly securities having 10% or more of
the voting power for the election of directors or other governing
body of a corporation or 10% or more of the partnership or other
ownership interests of any other Person (other than as a limited
partner of such other Person) will be deemed to control such
corporation or other Person. Notwithstanding the foregoing, the
definition of "Affiliate" shall not encompass (a) any individual
solely by reason of his or her being a director, officer or
employee of the Company or any of its Subsidiaries, (b) any of
the Subsidiaries of the Company, and (c) the Administrative Agent
or any Lender.
"Applicable Lending Office" shall mean, for each
Lender, the "Lending Office" of such Lender (or of an affiliate
of such Lender) designated on Annex 1 or such other office of
such Lender (or of an affiliate of such Lender) as such Lender
may from time to time specify to the Administrative Agent and the
Company as the lending office for its Loans.
"Applicable Margin" shall mean, (a) with respect to
each Prime Rate Loan at any time, 0.50% per annum and (b) with
respect to each Eurodollar Loan at any time, 2.35% per annum;
provided that, if either (i) the Leverage Ratio (determined as of
each Quarterly Date) shall be less than 2.5:1.0 or (ii) the
Interest Coverage Ratio (determined as of each Quarterly Date for
the four consecutive fiscal quarters of the Company ending on
such date) shall be greater than 2.5:1.0, and the Company shall
have delivered to the Administrative Agent a certificate
demonstrating either such fact (together with a copy of the
Company's quarterly or annual filings with the Securities and
Exchange Commission on Form 10-Q or 10-K, as the case may be,
covering such fiscal quarter or quarters, as applicable) prior to
the end of the next succeeding fiscal quarter, the Applicable
Margin for each Type of Loan for the period commencing on the
first day of the month immediately following the month in which
the Administrative Agent has received both such certificate and
such quarterly or annual filings, as the case may be, and ending
(subject to delivery by the Company to the Administrative Agent
of a new such certificate and report meeting the requirements of
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this proviso) on the earlier of (A) the next date on which the
Company is required to deliver financial statements to the
Administrative Agent pursuant to clause (a) or (b) of Section
8.01, as applicable, and (B) the date on which the Company
delivers to the Administrative Agent pursuant to Section 8.01(c)
the Company's next required quarterly filing on Form 10-Q or
annual filing on Form 10-K, as the case may be, made with the
Securities and Exchange Commission (other than such portion of
any such period during which a Default shall be continuing),
shall be reduced from the percentage otherwise applicable as set
forth above by 0.25% per annum.
"Bankruptcy Code" shall mean Title 11 of the United
States Code.
"Basic Documents" shall mean, collectively, this
Agreement, the Notes, the Letter of Credit Documents and the
Security Documents.
"Basle Accord" shall mean the proposals for risk-based
capital framework described by the Basic Committee on Banking
Regulations and Supervisory Practices in its paper entitled
"International Convergence of Capital Measurement and Capital
Standards" dated July 1988.
"Blocked Account" shall mean the account of the Company
subject to the Blocked Account Agreement.
"Blocked Account Agreement" shall mean the agreement,
in substantially the form attached as Annex 8 of the Security
Agreement, executed by the Company, the Administrative Agent and
the financial institution named therein as holder of the Blocked
Account.
"Borrowing Base" shall mean, as at any date, the sum of
(a) an amount equal to the lesser of (i) 85% of the aggregate
amount of Eligible Receivables at that date and (ii) $5,000,000
plus (b) 65% of the aggregate value of Eligible Inventory at that
date minus (c) the aggregate amount of Loans and Letter of Credit
Liabilities outstanding at that date minus (d) an amount equal to
105% of the aggregate credit exposure of the Company at such date
under all Interest Rate Protection Agreements secured by Property
of the Company as permitted by Section 8.08(c), minus (e) the
amount of all unpaid sales taxes due any state that have been
collected by the Company minus (f) reserves as may be required by
the Administrative Agent for Liens or trusts created in favor of
fresh and frozen fruit and vegetable suppliers (and similar Liens
or trusts in favor of other suppliers) of the Company and other
statutory Liens minus (g) reserves as may be required by the
Administrative Agent for documentary stamp or similar taxes that
may be payable to the State of Florida in connection with the
transactions contemplated by this Agreement plus (h) the
aggregate amount of cover for Letter of Credit Liabilities held
by the Administrative Agent in the Collateral Account as
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contemplated in Section 2.10(e) plus (i) the aggregate amount on
deposit in the Special Collateral Account (after giving effect to
any permitted disbursements to the Company as contemplated in
Section 4.01(f)) on such day. The "value" of Eligible Inventory
shall be determined at the lower of cost or market in accordance
with GAAP, with cost being determined on an average cost basis.
In order to assist the Administrative Agent in determining the
amount of reserves for Liens and trusts referred to in clause (f)
above, the Company, at the time of delivery of each Borrowing
Base Certificate pursuant to Section 8.01(f), shall notify the
Administrative Agent of the aggregate amount payable by the
Company to fresh and frozen fruit and vegetable suppliers as at
the date of each such Borrowing Base Certificate.
"Borrowing Base Certificate" shall mean a certificate
of the chief financial or accounting officer of the Company, in
substantially the form of Exhibit B and appropriately completed.
"Business Day" shall mean any day on which (a)
commercial banks are not authorized or required to close in New
York City, New York or Los Angeles, California, (b) CITBC is not
closed for business and (c) if such day relates to a borrowing
of, a payment or prepayment of principal of or interest on, a
Conversion of or into, or an Interest Period for, a Eurodollar
Loan or a notice by the Company with respect to any such
borrowing, payment, prepayment, Conversion or Interest Period,
any day on which dealings in Dollar deposits are carried out in
the London interbank market.
"Capital Expenditures" shall mean, for any period,
expenditures (including the aggregate amount of Capital Lease
Obligations incurred during such period) made during such period
by the Company or any of its Consolidated Subsidiaries to acquire
or to construct fixed assets, plant and equipment (including
renewals, improvements and replacements, but excluding repairs in
the ordinary course), computed without duplication in accordance
with GAAP.
"Capital Lease Obligations" shall mean, for any Person,
all obligations of such Person to pay rent or other amounts under
a lease of (or other agreement conveying the right to use)
Property to the extent such obligations are required to be
classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards
Board), and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount of such obligation,
determined in accordance with GAAP (including such Statement
No. 13).
"Cash Flow" shall mean, for any period, the sum, for
the Company and its Consolidated Subsidiaries (determined without
duplication in accordance with GAAP), of the following:
(a) Operating Cash Flow minus (b) the sum of (i) taxes paid in
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cash during such period plus (ii) Capital Expenditures made in
cash (and not financed with the proceeds of borrowings) during
such period.
"Casualty Event" shall mean, with respect to any
Property of any Person, any loss of or damage to, or any
condemnation or other taking of, such Property for which such
Person or any of its Subsidiaries receives insurance proceeds
(including proceeds of business interruption insurance), or
proceeds of a condemnation award or other compensation.
"CITBC" shall mean The CIT Group/Business Credit, Inc.,
a New York corporation.
"Class" shall have the meaning assigned to that term in
Section 1.03.
"Code" shall mean the Internal Revenue Code of 1986.
"Collateral Account" shall have the meaning assigned to
that term in Section 3.01 of the Security Agreement.
"Commitment" shall mean, (a) for each Lender listed on
Annex 1, the obligation of such Lender to make Revolving Credit
Loans in an aggregate amount at any one time outstanding up to
but not exceeding the amount set opposite the name of such Lender
on such Annex 1 under the caption "Commitment" or (b) with
respect to each assignee of a Lender, the obligation of such
assignee to make Revolving Credit Loans in an aggregate amount up
to but not exceeding the amount of the transferor Lender's
Commitment assigned to such assignee pursuant to Section 11.06(b)
(in each case as the same may be reduced from time to time
pursuant to Section 2.04 or changed as a result of an assignment
pursuant to Section 11.06(b)). The original aggregate principal
amount of the Commitments is $50,000,000.
"Commitment Percentage" shall mean, with respect to any
Lender, the ratio of (a) the amount of the Commitment of such
Lender to (b) the aggregate amount of the Commitments of all of
the Lenders.
"Company" shall have the meaning assigned to that term
in the introductory paragraph of this Agreement.
"Consolidated Subsidiary" shall mean, for any Person,
each Subsidiary of such Person (whether now existing or hereafter
created or acquired) the financial statements of which shall be
(or should have been) consolidated with the financial statements
of such Person in accordance with GAAP, provided, however, that
the Trusts shall be deemed not to be Consolidated Subsidiaries of
the Company for all purposes of this Agreement.
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"Continue," "Continuation" and "Continued" shall refer
to the continuation pursuant to Section 2.09 of a Eurodollar Loan
from one Interest Period to the next Interest Period.
"Convert," "Conversion" and "Converted" shall refer to
a conversion pursuant to Section 2.09 of one Type of Loan into
another Type of Loan, which may be accompanied by the transfer by
a Lender (at its sole discretion) of a Loan from one Applicable
Lending Office to another.
"Debt Service" shall mean, for any period, the sum, for
the Company and its Consolidated Subsidiaries (determined without
duplication in accordance with GAAP), of the following: (a) all
payments of principal of Indebtedness scheduled to be made during
such period plus (b) all Interest Expense for such period.
"Default" shall mean an Event of Default or an event
that with notice or lapse of time or both would become an Event
of Default.
"Disposition" shall mean any sale, assignment, transfer
or other disposition of any Property (whether now owned or
hereafter acquired) by the Company or any of its Subsidiaries to
any Person excluding any sale, assignment, transfer or other
disposition of any Property sold or disposed of in the ordinary
course of business and on ordinary business terms.
"Dividend Payment" shall mean dividends (in cash,
Property or obligations) on, or other payments or distributions
on account of, or the setting apart of money for a sinking or
other analogous fund for, or the purchase, redemption, retirement
or other acquisition of, any shares of any class of stock of the
Company or any of its Subsidiaries or of any warrants, options or
other rights to acquire the same (or to make any payments to any
Person, such as "phantom stock" payments, where the amount is
calculated with reference to the fair market or equity value of
the Company or any of its Subsidiaries), but excluding dividends
payable solely in shares of common stock of the Company or any of
its Subsidiaries.
"Dollars" and "$" shall mean lawful money of the United
States of America.
"Effective Date" shall mean the date upon which the
initial extension of credit under the Existing Credit Agreement
was made.
"Eligible Inventory" shall mean, as at any date, the
sum of the following (determined without duplication): all
Inventory (a) that is owned by (and in the possession or under
the control of) the Company as at such date, (b) that is located
in a jurisdiction in the United States of America, (c) as to
which (i) appropriate Uniform Commercial Code financing
statements have been filed naming the Company as "debtor" and the
6
Administrative Agent as "secured party" and (ii) the
Administrative Agent (for the benefit of the Lenders and the
Administrative Agent) has a first priority Lien, (d) that is in
good condition, (e) that meets all standards imposed by any
Governmental Person having regulatory authority over such
Inventory, its use or sale and (f) that is either currently
usable or currently saleable in the normal course of the
Company's business without any notice to, or consent of, any
Governmental Person; provided that: (x) in no event shall any of
the following be "Eligible Inventory": (i) Inventory that is
perishable or that has exceeded its shelf life or otherwise been
held by the Company as inventory for more than 300 days;
(ii) Inventory to be returned to the Company's suppliers;
(iii) Inventory in transit to or from third parties (other than
warehouses owned by third parties at which the Company stores a
portion of its Inventory from time to time, provided that the
Administrative Agent shall have received acknowledgements from
each such warehouse consenting to the security interest of the
Administrative Agent for the benefit of the Lenders and the
Administrative Agent and any related original negotiable
warehouseman's receipts duly endorsed by the Company to the order
of the Administrative Agent); (iv) supplies used in the ordinary
course of the Company's business; or (v) shrinkage; and (y) the
Administrative Agent may at any time exclude from Eligible
Inventory any type of Inventory that the Administrative Agent (in
its reasonable business judgment) determines to be unmarketable
or otherwise ineligible for any reason. In addition, Eligible
Inventory shall be reduced by the amount of reserves required by
the Administrative Agent (in its reasonable judgment as set forth
below) for (A) special order Inventory, (B) market value declines
(to the extent the Inventory's value is below its cost), (C) xxxx
and hold (deferred shipment or consignment sales), (D) markdowns
(to the extent the Inventory's value is below its cost),
(E) Inventory that is not located at the Company's retail store
locations or its warehouses (or warehouses referred to in clause
(iii) above) or in transit between such stores or warehouses,
(F) demonstration items (to the extent the Inventory's value is
below its cost) and (G) Inventory held for rent. The amount of
such reserves shall be determined solely by the Administrative
Agent in its reasonable business judgment using standards,
consistently applied by the Administrative Agent. Such standards
shall take into consideration amounts representing, historically,
the Company's reserves, discounts, returns, claims, credits and
allowances.
"Eligible Receivables" shall mean, as at any date, the
aggregate amount of all Receivables at such date payable to the
Company other than the following (determined without
duplication):
(a) any Receivable not payable in Dollars,
7
(b) any Receivable that, at the date of issuance of
the original invoice for the related Inventory, was payable more
than 60 days after shipment of such Inventory,
(c) any Receivable due from a Subsidiary or an
Affiliate of the Company,
(d) any Receivable due from an account debtor whose
principal place of business is located outside of the United
States of America,
(e) any Receivable due from an account debtor that the
Administrative Agent has notified the Company does not have a
satisfactory credit standing (as determined in the sole
discretion of the Administrative Agent),
(f) any Receivable that is more than 90 days past due,
(g) all Receivables of any account debtor if more than
25% of the aggregate amount of the Receivables due from such
account debtor shall at the time be more than 30 days past due,
(h) all Receivables due from any account debtor if the
Receivables due from such account debtor and its Affiliates at
the time exceed 15% of all Receivables then payable to the
Company,
(i) any Receivable as to which there is any unresolved
dispute with the respective account debtor (but only to the
extent of the amount so in dispute),
(j) any Receivable due from an account debtor to whom
the Company is or may become liable for goods sold or services
rendered by such account debtor to the Company (but only to the
extent of the amount of the liability to such account debtor),
(k) any Receivable representing an obligation for
goods sold on consignment, approval or a sale-or-return basis or
subject to any other repurchase or return arrangement,
(l) any Receivable as to which the Administrative
Agent determines that it has insufficient information to
determine eligibility, and
(m) any Receivable that the Administrative Agent may
otherwise determine (in its reasonable business judgment) from
time to time to be uncollectible or otherwise ineligible for any
reason.
"Employee Subsidiary" shall mean a Wholly Owned
Subsidiary of the Company formed solely for the purpose of
employing personnel that will be engaged by the Company on a
contract basis to staff the operations of the Company and its
Subsidiaries.
8
"Environmental Claim" shall mean, with respect to any
Person, any written or oral notice, claim, demand or other
communication (collectively, a "claim") by any other Person
alleging or asserting such Person's liability for investigatory
costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines or
penalties arising out of, based on or resulting from (a) the
presence, or Release into the environment, of any Hazardous
Material at any location, whether or not owned by such Person, or
(b) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law. The term "Environmental
Claim" shall include any claim by any Governmental Person for
enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law,
and any claim by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief
resulting from the presence of Hazardous Materials or arising
from alleged injury or threat of injury to human or animal health
or safety or to the environment.
"Environmental Laws" shall mean any and all present and
future Governmental Rules relating to the regulation or
protection of human or animal health or safety or of the
environment or to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or toxic or
hazardous substances or wastes (including Hazardous Materials)
into the indoor or outdoor environment, including ambient air,
soil, surface water, ground water, wetlands, land or subsurface
strata, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals or toxic or
hazardous substances or wastes. The term "Environmental Law"
shall include the terms and conditions of any Governmental
Approval issued under any Environmental Law or with respect to
any Hazardous Material.
"Equity Rights" shall mean, with respect to any Person,
any outstanding subscriptions, options, warrants, commitments,
preemptive rights or agreements of any kind (including any
stockholders' or voting trust agreements) for the issuance, sale,
registration or voting of, or outstanding securities convertible
into, any additional shares of capital stock of any class, or
partnership or other ownership interests of any type in, such
Person.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974.
"ERISA Affiliate" shall mean any corporation or trade
or business that is a member of any group of organizations (i)
described in Section 414(b) or (c) of the Code of which the
Company is a member and (ii) solely for purposes of potential
liability under Section 302(c)(11) of ERISA and
Section 412(c)(11) of the Code and the lien created under
9
Section 302(f) of ERISA and Section 412(n) of the Code, described
in Section 414(m) or (o) of the Code of which the Company is a
member.
"Eurodollar Loans" shall mean Loans, the interest rates
on which are determined on the basis of rates referred to in the
definition of "Eurodollar Rate" in this Section 1.01.
"Eurodollar Rate" shall mean, with respect to any
Eurodollar Loan for any Interest Period for such Loan, the
arithmetic mean (rounded upwards, if necessary, to the nearest
1/16 of 1%), as determined by the Administrative Agent, of the
rates paid by Chemical Bank on the date two Business Days prior
to the first day of such Interest Period for Dollar deposits in
the London interbank market having a term comparable to such
Interest Period and in an amount comparable to the principal
amount of the Eurodollar Loan to be made for such Interest
Period. If such rates are not otherwise available, then the
Eurodollar Rate shall mean the London Interbank Offered Rate
(LIBOR) for a period equal to the applicable Interest Period as
published under "Money Rates" in the New York City edition of the
Wall Street Journal on the first day of such Interest Period.
"Event of Default" shall have the meaning assigned to
that term in Section 9.
"Excess Cash Flow" shall mean, for any period, the
excess of (i) the sum of (A) Cash Flow for such period plus
(B) any decrease in the amount of the Company's investment in
forward buy Inventory over such period (determined by reference
to the first and last days of such period) minus (C) any increase
in the amount of the Company's investment in forward buy
Inventory over such period (determined by reference to the first
and last days of such period) over (ii) the sum of the aggregate
amount of (A) Debt Service for such period plus (B) payments made
by the Company during such period pursuant to leases of retail
store locations that are no longer being operated by the Company.
"Existing Credit Agreement" shall have the meaning
assigned to that term in the recitals to this Agreement.
"Existing Letters of Credit" shall mean the letters of
credit identified on Schedule III.
"Existing Revolving Credit Loans" shall mean the
Revolving Credit Loans under (and as defined in) the Existing
Credit Agreement. Immediately prior to the Restatement Effective
Date, the aggregate principal amount of Revolving Credit Loans
under the Existing Credit Agreement is equal to $28,905,930.23.
"Existing Tranche B Term Loan" shall mean the Tranche B
Term Loan under (and as defined in) the Existing Credit
Agreement. Immediately prior to the Restatement Effective Date,
10
the aggregate principal amount of the Tranche B Term Loan under
the Existing Credit Agreement is equal to $3,948,871.42
"Existing Tranche C Term Loan" shall mean the Tranche C
Term Loan under (and as defined in) the Existing Credit
Agreement. Immediately prior to the Restatement Effective Date,
the aggregate principal amount of the Tranche C Term Loan under
the Existing Credit Agreement is equal to $951,128.58
"Federal Funds Rate" shall mean, for any day, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (a) if the day for
which such rate is to be determined is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such
transactions on the immediately preceding Business Day as so
published on the next succeeding Business Day and (b) if such
rate is not so published for any Business Day, the Federal Funds
Rate for such Business Day shall be the average rate charged to
Chemical Bank on such Business Day on such transactions as
determined by the Administrative Agent.
"GAAP" shall mean accounting principles set forth as
generally accepted in currently effective opinions of the
Accounting Principles Board of the American Institute of
Certified Public Accountants and in statements of the Financial
Accounting Standards Board, together with interpretive rulings
and bulletins issued in connection therewith, as in effect from
time to time but applied on a consistent basis with those
principles used in the preparation of the financial statements
referred to in Section 7.02.
"Governmental Approvals" shall mean any authorization,
consent, approval, license, lease, ruling, permit, waiver,
exemption, filing, registration or notice by or with any
Governmental Person.
"Governmental Person" shall mean any national (Federal
or foreign), state or local government, any political subdivision
or any governmental, quasi-governmental, judicial, public or
statutory instrumentality, authority, agency, body or entity,
including the PBGC, Federal Deposit Insurance Corporation, the
Comptroller of the Currency, the Board of Governors of the
Federal Reserve System, any central bank or any comparable
authority.
"Governmental Rules" shall mean any law, rule,
regulation, ordinance, order, code, judgment, decree, directive,
guideline, policy, or any similar form of decision of, or any
interpretation or administration of any of the foregoing by, any
Governmental Person.
11
"Guarantee" shall mean a guarantee, an endorsement, a
contingent agreement to purchase or to furnish funds for the
payment or maintenance of, or otherwise to be or to become
contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other
distributions upon the stock or equity interests of any Person,
or an agreement to purchase, sell or lease (as lessee or lessor)
Property, products, materials, supplies or services primarily for
the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to assure a creditor against loss,
including causing a bank or other financial institution to issue
a letter of credit or other similar instrument for the benefit of
another Person, but excluding endorsements for collection or
deposit in the ordinary course of business. The terms
"Guarantee" and "Guaranteed" used as verbs shall have correlative
meanings.
"Hazardous Material" shall mean, collectively, (a) any
petroleum or petroleum products, flammable explosives,
radioactive materials, asbestos in any form that is or could
reasonably be expected to become friable, urea formaldehyde foam
insulation, and transformers or other equipment that contain
dielectric fluid containing polychlorinated biphenyls (PCB's),
(b) any chemicals or other materials or substances which are now
or hereafter become defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," "contaminants,"
"infectious wastes," "pollutants" or words of similar import
under any Environmental Law and (c) any other chemical or other
material or substance, exposure to which or use of which is now
or hereafter prohibited, limited or regulated under any
Environmental Law.
"Indebtedness" shall mean, for any Person (without
duplication): (a) obligations created, issued or incurred by
such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or
otherwise, to repurchase such Property from such Person); (b)
obligations of such Person to pay the deferred purchase or
acquisition price of Property or services, other than trade
accounts payable (other than for borrowed money) arising, and
accrued expenses incurred, in the ordinary course of business so
long as such trade accounts payable are payable within 90 days of
the date the respective goods are delivered or the respective
services are rendered; (c) obligations of others secured by a
Lien on the Property of such Person, whether or not the
respective obligations so secured have been assumed by such
Person; (d) obligations of such Person in respect of letters of
credit or similar instruments issued or accepted by banks and
other financial institutions for the account of such Person; (e)
12
Capital Lease Obligations of such Person; and (f) obligations of
others Guaranteed by such Person.
"Interest Coverage Ratio" shall mean, as at any date
and for any period, the ratio of (a) Operating Cash Flow for such
period to (b) Interest Expense for such period.
"Interest Expense" shall mean, for any period, the sum,
for the Company and its Consolidated Subsidiaries (determined
without duplication in accordance with GAAP), of the following:
(a) all interest in respect of Indebtedness accrued, added to
principal or paid in kind during such period (whether or not
actually paid during such period), net of interest income of the
Company during such period, plus (b) the net amounts payable (or
minus the net amounts receivable) under Interest Rate Protection
Agreements accrued during such period (whether or not actually
paid or received during such period), minus (c) amortization of
deferred financing costs (to the extent included in determining
the amount of interest expense under clause (a) above).
"Interest Period" shall mean, with respect to any
Eurodollar Loan, each period commencing on the date such
Eurodollar Loan is made or Converted from a Loan of another Type
or the last day of the next preceding Interest Period for such
Loan and ending on the numerically corresponding day in the
first, second, third or sixth calendar month thereafter, as the
Company may select as provided in Section 4.05 (or such longer
period as may be requested by the Company and agreed to by all of
the Lenders), except that each Interest Period that commences on
the last Business Day of a calendar month (or on any day for
which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing (i) no Interest Period may end
after the Termination Date; (ii) each Interest Period that would
otherwise end on a day which is not a Business Day shall end on
the next succeeding Business Day (or, in the case of an Interest
Period for a Eurodollar Loan, if such next succeeding Business
Day falls in the next succeeding calendar month, on the next
preceding Business Day) and (iii) no Interest Period for any
Eurodollar Loan shall have a duration of less than one month and,
if the Interest Period for any such Eurodollar Loan would
otherwise be a shorter period, such Loan shall not be available
under this Agreement for such period.
"Interest Rate Protection Agreement" shall mean, for
any Person, an interest rate swap, cap or collar agreement or
similar arrangement between such Person and one or more financial
institutions, or (in connection with any such agreement or
arrangement which is a master agreement providing for separate
transactions to be entered into from time to time pursuant
thereto) any such separate transaction. For purposes of this
Agreement, the "credit exposure" at any time of any Person under
an Interest Rate Protection Agreement to which such Person is a
13
party shall be determined by the Administrative Agent at such
time in accordance with the customary methods of calculating
credit exposure under similar arrangements by Chemical Bank,
taking into account potential interest rate movements and the
respective termination provisions and notional principal amount
and term of such Interest Rate Protection Agreement.
"Inventory" shall have the meaning assigned to that
term in the Security Agreement.
"Investment" shall mean, for any Person: (a) the
acquisition (whether for cash, Property, services or securities
or otherwise) of capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities
(including Equity Rights) of any other Person or any agreement to
make any such acquisition (including any "short sale" or any sale
of any securities at a time when such securities are not owned by
the Person entering into such short sale); (b) the making of any
deposit with, or advance, loan or other extension of credit to,
any other Person (including the purchase of Property from another
Person subject to an understanding or agreement, contingent or
otherwise, to resell such Property to such Person, but excluding
(i) any such advance, loan or extension of credit having a term
not exceeding 90 days representing the purchase price of
inventory or supplies sold by such Person in the ordinary course
of business and (ii) advances to employees in the ordinary course
of business); (c) the entering into of any Guarantee of, or other
contingent obligation with respect to, Indebtedness or other
liability of any other Person and (without duplication) any
amount committed to be advanced, lent or extended to such Person;
or (d) the entering into of any Interest Rate Protection
Agreement.
"Issuing Bank" shall mean Chemical Bank or The Dai-Ichi
Kangyo Bank, Limited, as the case may be, as an issuer of Letters
of Credit under Section 2.03.
"Lenders" shall have the meaning assigned to that term
in the introductory paragraph of this Agreement.
"Letter of Credit" shall have the meaning assigned to
such term in Section 2.03.
"Letter of Credit Documents" shall mean, with respect
to any Letter of Credit, collectively, any application for any
Letter of Credit and any other agreements, instruments,
guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing
for (a) the rights and obligations of the parties concerned or at
risk with respect to such Letter of Credit or (b) any collateral
security for any of such obligations.
"Letter of Credit Interest" shall mean, for each
Lender, such Lender's participation interest in (a) the
14
Administrative Agent's liability with respect to Letters of
Credit and (b) Existing Letters of Credit and such Lender's
rights and interests in Reimbursement Obligations and fees,
interest and other amounts payable in connection with Letters of
Credit and Reimbursement Obligations.
"Letter of Credit Liability" shall mean, without
duplication, at any time and in respect of any Letter of Credit,
the sum of (a) the undrawn face amount of such Letter of Credit
plus (b) the aggregate unpaid principal amount of all
Reimbursement Obligations of the Company at such time due and
payable in respect of all drawings made under such Letter of
Credit. For purposes of this Agreement, a Lender shall be deemed
to hold a Letter of Credit Liability in an amount equal to its
participation interest in the Administrative Agent's liability
with respect to the Letters of Credit and its participation
interest in Existing Letters of Credit under Section 2.03.
"Leverage Ratio" shall mean, at any time, the ratio of
Total Liabilities to Net Worth of the Company and its
Consolidated Subsidiaries at such time.
"Lien" shall mean, with respect to any Property, any
mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such Property or any agreement to give,
or notice of, any of the foregoing. For purposes of this
Agreement and the other Basic Documents, a Person shall be deemed
to own subject to a Lien any Property that it has acquired or
holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title
retention agreement (other than an operating lease) relating to
such Property.
"Loans" shall mean Revolving Credit Loans and Term
Loans.
"Majority Lenders" shall mean, subject to the last
paragraph of Section 11.04, Lenders having at least 51% of the
aggregate amount of the Commitments or, if such Commitments shall
have terminated, Lenders holding at least 51% of the sum of (a)
the aggregate unpaid principal amount of the Loans plus (b) the
aggregate amount of all Letter of Credit Liabilities.
"Margin Stock" shall mean "margin stock" within the
meaning of Regulations U and X.
"Material Adverse Effect" shall mean a material adverse
effect on (a) the Property, business, operations, financial
condition, prospects, liabilities or capitalization of the
Company and its Subsidiaries taken as a whole, (b) the ability of
the Company to perform its obligations under any of the Basic
Documents, (c) the validity or enforceability of any of the Basic
Documents, (d) the rights, remedies, powers and privileges of the
15
Lenders and the Administrative Agent under any of the Basic
Documents or (e) the timely payment of the Obligations.
"Monthly Dates" shall mean the last day of each
calendar month in each year, the first of which shall be the
first such day after the Effective Date.
"Mortgage" shall mean, collectively, each Mortgage,
Assignment of Rents and Fixture Filing dated as of December 29,
1994, executed by the Company (or executed and delivered by the
Company after such date pursuant to Section 8.18) in favor of the
Administrative Agent and the Lenders, as amended by the Mortgage
Modification.
"Mortgage Modification" shall mean, collectively, the
modifications to the Mortgages dated as of the Restatement
Effective Date made by the Company in favor of the Administrative
Agent and the Lenders.
"Multiemployer Plan" shall mean a multiemployer plan
defined as such in Section 3(37) of ERISA to which contributions
have been made by the Company or any ERISA Affiliate and which is
covered by Title IV of ERISA.
"Net Available Proceeds" shall mean:
(a) in the case of any Disposition, the amount of Net
Cash Payments received in connection with such Disposition; and
(b) in the case of any Casualty Event, the aggregate
amount of proceeds of insurance, condemnation awards and other
compensation received by the Company and its Subsidiaries in
respect of such Casualty Event net of (A) reasonable expenses
incurred by the Company and its Subsidiaries in connection with
such Casualty Event and (B) contractually required repayments of
Indebtedness to the extent secured by a Lien on such Property and
any income and transfer taxes payable or estimated to be payable
by the Company and its Subsidiaries in respect of such Casualty
Event (but, in the case of estimated taxes, only to the extent
that such taxes are in fact paid to the relevant Governmental
Person within three months of the date of such Casualty Event or
(solely with respect to Federal income taxes in respect of any
Casualty Event occurring within one year after the Effective Date
to the extent the Company is not required by law to make
quarterly estimated Federal tax payments prior to the end of such
one-year period) within one year after the Effective Date) or
other payments required by the terms of existing arrangements
with landlords or mortgagees.
"Net Cash Payments" shall mean, with respect to any
Disposition, the aggregate amount of all cash payments, and the
fair market value of any noncash consideration, received by the
Company and its Subsidiaries directly or indirectly in connection
with such Disposition; provided that (a) Net Cash Payments shall
16
be net of (i) the amount of any legal, title and recording tax
expenses, commissions and other fees and expenses paid by the
Company and its Subsidiaries in connection with such Disposition
and (ii) any Federal, state and local income or other taxes
estimated to be payable by the Company and its Subsidiaries as a
result of such Disposition (but only to the extent that such
estimated taxes are in fact paid to the relevant Governmental
Person within three months of the date of such Disposition or
(solely with respect to Federal income taxes in respect of any
Disposition occurring within one year after the Effective Date to
the extent the Company is not required by law to make quarterly
estimated Federal tax payments prior to the end of such one-year
period) within one year after the Effective Date), and (b) Net
Cash Payments shall be net of (i) any repayments by the Company
and its Subsidiaries of Indebtedness to the extent that (A) such
Indebtedness is secured by a Lien on the Property that is the
subject of such Disposition and (B) the transferee of (or holder
of a Lien on) such Property requires that such Indebtedness be
repaid as a condition to the Disposition of such Property and
(ii) other payments required by the terms of existing
arrangements with landlords or mortgagees.
"Net Worth" shall mean, as at any date for the Company
and its Consolidated Subsidiaries, the excess of (a) Total Assets
at such date over (b) the sum of (i) Total Liabilities at such
date plus (ii) the aggregate amount of preferred stock of the
Company outstanding at such date (other than preferred stock as
to which the payment of dividends are solely within the
discretion of the Company).
"Notes" shall mean the Revolving Credit Notes and the
Term Loan Notes.
"Obligations" shall mean the principal of any Loan,
Reimbursement Obligations, interest, fees and any other amount
payable by the Company to any Lender or the Administrative Agent
under any Basic Document (including, if the Company becomes a
debtor in a case under the Bankruptcy Code, all such amounts
which would accrue under the terms of any Basic Document whether
or not such amounts constitute allowed claims in such
bankruptcy).
"Operating Cash Flow" shall mean, for any period, the
sum, for the Company and its Consolidated Subsidiaries
(determined without duplication in accordance with GAAP), of the
following: (a) operating income (calculated before Interest
Expense, taxes, extraordinary and unusual items and income or
loss attributable to equity in Affiliates) for such period plus
(b) depreciation and amortization (to the extent deducted in
determining operating income) for such period.
"Patent and Trademark Assignments" shall mean the
amended and restated assignments, in substantially the form
attached as Annexes 6 and 7 of the Security Agreement, executed
17
by the Company in favor of the Administrative Agent for the
benefit of the Administrative Agent and the Lenders.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation.
"Permitted Investments" shall mean: (a) direct
obligations of the United States of America, or of any of its
agencies, or obligations guaranteed as to principal and interest
by the United States of America, or of any of its agencies, in
either case maturing not more than 90 days from the date of
acquisition of such obligation; (b) certificates of deposit
issued by any bank or trust company organized under the laws of
the United States of America or any state and having capital,
surplus and undivided profits of at least $500,000,000, maturing
not more than 90 days from the date of acquisition; and
(c) commercial paper rated A-1 or better or P-1 by Standard &
Poor's Corporation or Xxxxx'x Investors Services, Inc.,
respectively, maturing not more than 90 days from the date of
acquisition.
"Person" shall mean any individual, corporation,
company, voluntary association, partnership, joint venture,
trust, unincorporated organization or Governmental Person.
"Plan" shall mean an employee benefit or other plan
established or maintained by the Company or any ERISA Affiliate
and that is covered by Title IV of ERISA, other than a
Multiemployer Plan.
"Post-Default Rate" shall mean, in respect of any
Obligation a rate per annum equal to 2.0% plus the Prime Rate as
in effect from time to time plus the Applicable Margin for Prime
Rate Loans (provided that, if the Obligation is principal of a
Eurodollar Loan and its due date is a day other than the last day
of the Interest Period for such Loan, the "Post-Default Rate" for
such principal shall be, for the period from and including such
due date to but excluding the last day of the Interest Period,
2.0% plus the interest rate for such Loan as provided in
Section 3.02 and, thereafter, the rate provided for above in this
definition).
"Prime Rate" shall mean the rate of interest from time
to time announced by Chemical Bank, New York City, New York, as
its prime rate. Such announced rate is not necessarily the
lowest rate offered by Chemical Bank, and any extension of credit
by Chemical Bank may be at rates above, below or at such
announced rate. Each interest rate that this Agreement provides
is to be based upon the Prime Rate shall change upon any change
in the Prime Rate, effective as of the opening of business on the
first day of the month following the month in which such change
in the Prime Rate occurs.
18
"Principal Office" shall mean the principal office of
Chemical Bank, located on the Restatement Effective Date at 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Property" shall mean any right or interest in or to
property of any kind whatsoever, whether real, personal or mixed
and whether tangible or intangible.
"Quarterly Dates" shall mean the last day of each
fiscal quarter of the Company, currently the Sunday closest to
the last day of January, April, July and October in each year,
the first of which shall be the first such day after the
Effective Date.
"Receivables" shall mean all "Accounts" (as such term
is defined in the Security Agreement) of the Company and rights
of the Company to the payment of money from or in respect of (a)
manufacturers on account of coupons issued by such manufacturers
and honored by the Company, (b) insurance companies and third
party health care providers in respect of reimbursements for
prescription drugs sold by the Company, (c) open accounts with
customers arising from the sale of Inventory and (d) distribution
arrangements permitted by Section 8.14 between the Company and
other food and liquor retailers.
"Regulations A, D, U and X" shall mean, respectively,
Regulations A, D, U and X of the Board of Governors of the
Federal Reserve System.
"Regulatory Change" shall mean, with respect to any
Lender (or its Applicable Lending Office), the occurrence after
the Effective Date of any of the following events: (a) the
adoption of any applicable Governmental Rule, (b) any change in
any applicable Governmental Rule or in the interpretation or
administration of any Governmental Rule by any Governmental
Person charged with its interpretation or administration or (c)
the adoption or making of any interpretation, directive,
guideline, policy or request applying to a class of banks
including such Lender of or under any Governmental Rule or in the
interpretation or administration of any Governmental Rule
(whether or not having the force of law and whether or not
failure to comply would be unlawful) by any Governmental Person
charged with its interpretation or administration.
"Reimbursement Obligations" shall mean, at any time,
the obligations of the Company then outstanding, or which may
thereafter arise in respect of all Letters of Credit then
outstanding, to reimburse amounts paid by (or debited from the
Administrative Agent's account by) an Issuing Bank or the
Administrative Agent in respect of any drawings under a Letter of
Credit.
"Release" shall mean any release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge,
19
dispersal, leaching or migration into the indoor or outdoor
environment, including the movement of Hazardous Materials
through ambient air, soil, surface water, ground water, wetlands,
land or subsurface strata.
"Restatement Effective Date" shall mean the date on
which the conditions to the effectiveness of this Agreement set
forth in Section 6.01 are satisfied.
"Retained Cash" shall mean coin and currency for the
Company to conduct business in the ordinary course of its
operations and consistent with past business practices of the
Company.
"Revolving Credit Loans" shall mean the loans provided
for by Section 2.01(a).
"Revolving Credit Notes" shall mean the promissory
notes provided for by Section 2.08(a).
"Security Agreement" shall mean an Amended and Restated
Security Agreement, in substantially the form of Exhibit C,
executed by the Company in favor of the Administrative Agent for
the benefit of the Administrative Agent and the Lenders.
"Security Documents" shall mean, collectively, the
Security Agreement, the Mortgages, the Patent and Trademark
Assignments, the Blocked Account Agreement, all warehouse
acknowledgements and receipts required pursuant to this Agreement
or the other Basic Documents, all Uniform Commercial Code
financing statements and all other filings or recordings with any
Governmental Person required by this Agreement or the Security
Agreement to be filed or recorded with respect to each of the
security interests in personal Property and fixtures created
pursuant to the Security Agreement.
"Senior Notes" shall mean the Indebtedness of the
Company in respect of the Senior Floating Rate Notes of the
Company due February 1, 2003 and the 11.5% Senior Fixed Rate
Notes of the Company due February 1, 2003, in each case issued
pursuant to the Senior Note Documents.
"Senior Note Documents" shall mean the (a) the
Indenture dated as of December 29, 1994 between the Company and
Shawmut Bank Connecticut, N.A., as Trustee, relating to the 11.5%
Senior Fixed Rate Notes of the Company due 2003 and (b) the
Indenture dated as of December 29, 1994 between the Company and
IBJ Xxxxxxxx Bank & Trust Company, as Trustee, relating to the
Senior Floating Rate Notes of the Company due 2003.
"Special Collateral Account" shall have the meaning
assigned to that term in Section 4.01(f).
20
"Subsidiary" shall mean, for any Person, any
corporation, partnership or other entity of which at least a
majority of the securities or other ownership interests having by
their terms ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions
of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership
interests of any other class or classes of such corporation,
partnership or other entity shall have or might have voting power
by reason of the happening of any contingency) is at the time
directly or indirectly owned or controlled by such Person or one
or more Subsidiaries of such Person or by such Person and one or
more Subsidiaries of such Person. "Wholly Owned Subsidiary"
shall mean any such corporation, partnership or other entity of
which all of the equity securities or other ownership interests
(other than, in the case of a corporation, directors' qualifying
shares) are so owned or controlled.
"Termination Date" shall mean December 31, 1998 (as
such date may be extended pursuant to Section 2.01(f)).
"Term Loan Notes" shall mean the promissory notes
provided for by Sections 2.08(b), 2.08(c) and 2.08(d).
"Term Loans" shall mean the Trance A Term Loan, the
Tranche B Term Loan and the Tranche C Term Loan.
"Total Assets" shall mean, as at any date for the
Company and its Consolidated Subsidiaries (determined in
accordance with GAAP), all assets which should be classified as
assets on a balance sheet of the Company at such date.
"Total Liabilities" shall mean, as at any date, the
sum, for the Company and its Consolidated Subsidiaries
(determined without duplication in accordance with GAAP), of the
following: (a) all Indebtedness of the Company at such date and
(b) all other liabilities which should be classified as
liabilities on a balance sheet of the Company at such date,
including all reserves and all deferred taxes and other deferred
items.
"Tranche A Term Loan" shall mean, individually or
collectively, the loans provided for by Section 2.01(b).
"Tranche B Term Loan" shall mean, individually or
collectively, the loans provided for by Section 2.01(c).
"Tranche C Term Loan" shall mean, individually or
collectively, the loans provided for by Section 2.01(d).
"Trusts" shall mean (a)(i) KNK 720 Delaware Business
Trust, (ii) KNK 725 Delaware Business Trust, and (iii) KNK 733
Delaware Business Trust, each being a Delaware Business Trust
formed under a Trust Agreement dated as of August 11, 1995
21
between the Company, as the beneficial owner, and Wilmington
Trust Company, a Delaware banking corporation, as trustee; and
(b) up to eight additional Delaware Business Trusts to be formed
by the Company, as beneficial owner, and Wilmington Trust
Company, as trustee, in connection with proposed sale-leaseback
transactions with respect to the Company's Store Nos. 702, 709,
717, 878, 886, 887, 891 and 896.
"Type" shall have the meaning assigned to such term in
Section 1.04.
1.02 Accounting Terms and Determinations.
(a) Except as otherwise expressly provided in this
Agreement, all accounting terms used in this Agreement shall be
interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the
Administrative Agent or the Lenders under this Agreement shall be
prepared, in accordance with GAAP in effect from time to time;
provided that (i) the covenants set forth in Sections 8.07, 8.08,
8.09, 8.10, 8.11, 8.12 and 8.13 and related definitions,
certificates and accounting terms shall be determined, prepared
and interpreted, as the case may be, in accordance with GAAP in
effect on the date of the financial statements of the Company
referred to in Section 7.02 and (ii) notwithstanding the
requirements of GAAP, the financial results of the Trusts shall
not be consolidated with the financial results of the Company for
purposes of (x) determining compliance with the covenants
referred to in clause (i) above or (y) preparation of financial
statements and certificates and reports as to financial matters
required to be delivered to the Administrative Agent or the
Lenders pursuant to this Agreement.
(b) To enable the ready and consistent determination
of compliance with the covenants set forth in Section 8, the
Company will not change the last day of its fiscal year from the
Sunday closest to the last day of July of each year, or the last
days of the first three fiscal quarters in each of its fiscal
years from the Sunday closest to the last day of October, January
and April of each year, respectively; provided, however, that the
Company may, upon prior written notice to the Administrative
Agent and each Lender, change the last day of each such fiscal
year and fiscal quarter from a Sunday to a Saturday.
1.03 Classes of Loans. Loans are distinguished by
"Class." The "Class" of a loan refers to whether such Loan is a
Revolving Credit Loan, a Tranche A Term Loan, a Tranche B Term
Loan or a Tranche C Term Loan, each of which constitutes a Class.
1.04 Types of Loans. The "Type" of a Loan refers to
whether such Loan is a Prime Rate Loan or a Eurodollar Loan, each
of which constitutes a Type.
22
1.05 Interpretation. In this Agreement, unless
otherwise indicated, the singular includes the plural and plural
the singular; words importing any gender include the other
gender; references to statutes or regulations are to be construed
as including all statutory or regulatory provisions
consolidating, amending or replacing the statute or regulation
referred to; references to "writing" include printing, typing,
lithography and other means of reproducing words in a tangible
visible form; the words "including," "includes" and "include"
shall be deemed to be followed by the words "without limitation";
references to articles, sections (or subdivisions of sections),
exhibits, annexes or schedules are to this Agreement; references
to agreements and other contractual instruments shall be deemed
to include all subsequent amendments, extensions and other
modifications to such instruments (without, however, limiting any
prohibition on any such amendments, extensions and other
modifications by the terms of this Agreement); and references to
Persons include their respective permitted successors and assigns
and, in the case of Governmental Persons, Persons succeeding to
their respective functions and capacities.
Section 2. Commitments, Loans, Notes and Prepayments.
2.01 Loans, Limit on Eurodollar Loans, Extension of
Termination Date.
(a) On the Restatement Effective Date, the aggregate
outstanding principal amount of the Existing Revolving Credit
Loans shall be automatically deemed to be Revolving Credit Loans
under this Agreement for all purposes of this Agreement and the
other Basic Documents (including for the purpose of determining
usage of the Commitments under this Agreement as set forth
below). Each Lender severally agrees, on the terms and
conditions of this Agreement, to make loans to the Company in
Dollars during the period from and including the Restatement
Effective Date to but not including the Termination Date in an
aggregate principal amount at any one time outstanding up to but
not exceeding the amount of the Commitment of such Lender as in
effect from time to time, provided that in no event shall the
aggregate principal amount of all Revolving Credit Loans
outstanding, together with the aggregate amount of all Letter of
Credit Liabilities outstanding, exceed the aggregate amount of
the Commitments as in effect from time to time.
(b) Each Lender severally agrees, on the terms and
conditions of this Agreement, to make a single Tranche A Term
Loan to the Company in Dollars on the Restatement Effective Date
in an aggregate amount equal to the product of (i) $5,000,000
multiplied by (ii) such Lender's Commitment Percentage on the
Restatement Effective Date.
(c) On the Restatement Effective Date, the aggregate
outstanding principal amount of the Existing Tranche B Term Loan
23
shall be automatically deemed to be the Tranche B Term Loan under
this Agreement for all purposes of this Agreement and the other
Basic Documents.
(d) On the Restatement Effective Date, the aggregate
outstanding principal amount of the Existing Tranche C Term Loan
shall be automatically deemed to be the Tranche C Term Loan under
this Agreement for all purposes of this Agreement and the other
Basic Documents.
(e) Subject to the terms and conditions of this
Agreement, during the period from and including the Restatement
Effective Date to but not including the Termination Date the
Company may borrow, repay and reborrow Revolving Credit Loans in
the amount of the Commitments by means of Prime Rate Loans and
Eurodollar Loans, may repay (but not reborrow) Term Loans and may
Convert Loans of one Type into Loans of another Type (as provided
in Section 2.09) or Continue Loans of one Type as Loans of the
same Type (as provided in Section 2.09); provided that no
Eurodollar Loans shall be available under this Agreement until
December 26, 1995; provided further that, no more than five
separate Interest Periods in respect of Eurodollar Loans may be
outstanding at any one time.
(f) On or prior to December 31, 1998, and on or prior
to each subsequent annual anniversary thereof if the Termination
Date shall have been extended on December 31, 1998 and, as to
subsequent anniversaries, the immediately preceding anniversary
thereof, each Lender, at its sole option and in its sole
discretion, upon the written request of the Company given to the
Administrative Agent and each Lender not more than 180 days nor
less than 90 days prior to such December 31, 1998 or such
subsequent anniversary date (as the case may be), may elect to
extend the Termination Date then in effect by a period of one
year. Within 45 days following receipt of such request, each
Lender shall give notice to the Company and the Administrative
Agent of its decision to extend or not to extend the Termination
Date. If, in accordance with the immediately preceding sentence,
all of the Lenders shall have elected to extend the Termination
Date, the Termination Date shall be extended by a period of one
year. In the event that any Lender notifies the Company and the
Administrative Agent that it will not extend the Termination Date
then in effect, or if any Lender fails to notify the Company and
the Administrative Agent of its decision to extend or not to
extend such Termination Date, in either case within the
applicable 45 day period referred to above, such Termination Date
shall not be extended and the Termination Date then in effect
shall be the Termination Date for all purposes of this Agreement.
2.02 Borrowings of Revolving Credit Loans.
(a) The Company shall give the Administrative Agent
notice of each borrowing of Revolving Credit Loans as provided in
Section 4.05.
24
(b) Subject to the terms and conditions of this
Agreement, not later than 10:00 a.m. Los Angeles time on the date
specified for each borrowing of Loans or, if the Administrative
Agent in its sole and absolute discretion requests funds from the
Lenders to fund the borrowing, after receipt of funds relating
thereto from the Lenders (but not later than 1:00 p.m. Los
Angeles time on such date), the Administrative Agent shall make
available to the Company the amount of such borrowing by
transferring the same, in immediately available funds, to an
account of the Company maintained with Chemical Bank at the
Principal Office as designated by the Company.
(c) Unless and until otherwise directed in writing by
the Majority Lenders, the Administrative Agent in its sole and
absolute discretion may make Revolving Credit Loans requested by
the Company or assist in the issuance of Letters of Credit
pursuant to Section 2.03 (each, a "Discretionary Extension"), in
excess of the Borrowing Base or at a time when one or more of the
other conditions set forth in Section 6.02 have not been
satisfied (including at a time when a Default has occurred and is
continuing); provided that, unless the Majority Lenders shall
have otherwise consented in writing, the Administrative Agent
agrees with the Lenders that it will not make on any date any
Discretionary Extension if such Discretionary Extension would
result in the principal amount of the Loans and Letter of Credit
Liabilities outstanding on such date (after giving effect
thereto) exceeding the Borrowing Base by more than $5,000,000,
nor will it make any such Discretionary Extension during any
period commencing upon the occurrence of an Event of Default and
ending on the date on which such Event of Default shall no longer
be continuing (each such period, a "Default Period") if, in the
case of any Event of Default other than one caused by the failure
to make mandatory prepayments under Section 2.10(a), (i) such
Discretionary Extension would result in the principal amount of
the Loans and Letter of Credit Liabilities outstanding on the
date such Discretionary Extension is made (after giving effect
thereto) exceeding by more than $5,000,000 the principal amount
of the Loans and Letter of Credit Liabilities outstanding at the
end of the day immediately preceding the first day of the Default
Period or (ii) such Discretionary Extension would occur more than
thirty (30) days after commencement of such Default Period and
the Administrative Agent has actual knowledge of such Event of
Default. Any such discretionary Revolving Credit Loans shall be
due on demand, and the making of any such discretionary Revolving
Credit Loans and the Administrative Agent's assistance in the
issuance of any such Letters of Credit at any time shall not be
deemed to constitute a waiver of any condition applicable to any
future borrowing or other extension of credit nor a waiver of any
Default, and the Administrative Agent and the Lenders reserve all
of their rights with respect thereto.
(d) The Administrative Agent shall from time to time,
25
but no less frequently than weekly, notify each Lender of the
date such Lender is to fund its Revolving Credit Loans and the
amount to be made available by it. At the discretion of the
Administrative Agent, the amount to be made available by a Lender
on any date may be netted against any amount owing to such Lender
and otherwise payable by the Administrative Agent on account of
payments received by it from the Company on such date. The
amount to be made available by each Lender on any date shall be
made available by it on such date to the Administrative Agent, at
account number 144054227 maintained by the Administrative Agent
with Chemical Bank at the Principal Office, in immediately
available funds (not later than 1:00 p.m. Los Angeles time on any
day in the case of fundings required pursuant to Section 2.02(b)
of which the Lenders have received notice not later than 10:00
a.m. Los Angeles time on such day). Except to the extent the
Administrative Agent shall have made Loans or other extensions of
credit under this Agreement available to the Company after the
Majority Lenders shall have instructed the Administrative Agent
in writing not to make such Loans or other extensions of credit
available because the conditions set forth in Section 6.02 have
not been satisfied or because a Default then exists and is
continuing or otherwise in contravention of Section 2.02(c), the
obligation of each Lender to fund its Revolving Credit Loans on
the date specified by the Administrative Agent (even if made
available by the Administrative Agent to the Company prior to
requiring the funding by such Lender) or to participate in such
Letters of Credit pursuant to Section 2.03 is absolute and
unconditional and shall not be affected by any circumstance
whatsoever, including (i) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against the
Administrative Agent, the Company or any other Person for any
reason whatsoever, (ii) the occurrence or continuation of a
Default or a Material Adverse Effect, whether the same shall
occur before or after the Administrative Agent shall have made
the Revolving Credit Loans available to the Company, (iii) the
financial condition or prospects of the Company, (iv) the failure
of any other Lender to make its Revolving Credit Loans available
to the Administrative Agent, or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of
the foregoing.
2.03 Letters of Credit. On the terms and subject to
the conditions of this Agreement, the Commitments may be
utilized, in addition to the Loans provided for by
Section 2.01(a), by the Company requesting the issuance by one of
the Issuing Banks of letters of credit (collectively, together
with the Existing Letters of Credit, the "Letters of Credit") for
the account of the Company, provided that in no event shall
(i) the aggregate amount of all Letter of Credit Liabilities,
together with the aggregate principal amount of the Loans, exceed
the aggregate amount of the Commitments as in effect from time to
time, (ii) the outstanding aggregate amount of all Letter of
Credit Liabilities exceed $25,000,000 or (iii) the expiration
date of any Letter of Credit extend beyond the earlier of fifteen
26
(15) days prior to the Termination Date (or such earlier date on
which the Commitment shall terminate) and the date one year
following the issuance of such Letter of Credit. The
Administrative Agent shall assist in the issuance of each Letter
of Credit (whether by co-signing an application therefor,
guaranteeing the Company's obligations with respect thereto or
otherwise). The following additional provisions shall apply to
Letters of Credit:
(a) The Company shall give the Administrative Agent at
least five Business Days' irrevocable prior notice (effective
upon receipt) specifying the Business Day (which shall be no
later than 30 days preceding the Termination Date or such earlier
date on which the Commitment shall terminate) each Letter of
Credit is to be issued and describing in reasonable detail the
proposed terms of such Letter of Credit (including its
beneficiary) and the nature of the transactions or obligations
proposed to be supported (including whether such Letter of Credit
is to be a commercial letter of credit or a standby letter of
credit); provided that, no Letter of Credit shall be issued
except for the purpose of supporting (i) workers' compensation
obligations of the Company, (ii) the purchase and importation of
Inventory of the Company (iii) other obligations of the Company
of the type supported by the Existing Letters of Credit or (iv)
other obligations of the Company approved in writing by the
Administrative Agent. Upon receipt of any such notice for a
Letter of Credit and satisfaction of the provisions of the
foregoing proviso, the Administrative Agent shall advise one of
the Issuing Banks of the contents thereof and assist the Company
in obtaining the issuance of such Letter of Credit. The
Administrative Agent shall periodically (but no less frequently
than weekly) notify the Lenders of the issuance of and payments
under Letters of Credit.
(b) On each day during the period commencing with the
issuance by an Issuing Bank of any Letter of Credit and until
such Letter of Credit shall have expired or been terminated or,
if drawn upon, until the resulting Reimbursement Obligations have
been reimbursed in full by the Company (whether by a borrowing
under this Agreement or otherwise), the Commitment of each Lender
shall be deemed to be utilized for all purposes of this Agreement
in an amount equal to such Lender's Commitment Percentage of the
then Letter of Credit Liabilities associated with such Letter of
Credit. Each Lender agrees that, upon the issuance in accordance
with this Agreement of any Letter of Credit it shall
automatically acquire a participation in the Administrative
Agent's liability with respect to such Letter of Credit in an
amount equal to such Lender's Commitment Percentage of such
liability, and each Lender thereby shall absolutely,
unconditionally and irrevocably assume, as primary obligor and
not as surety, and shall be unconditionally obligated to the
Administrative Agent to pay and discharge when due, its
Commitment Percentage of the Administrative Agent's liability
with respect to such Letter of Credit.
27
(c) Upon receipt by the Administrative Agent from an
Issuing Bank of notice that such Issuing Bank has made a payment
or received any demand for payment under a Letter of Credit, or
upon receipt by the Administrative Agent from an Issuing Bank
that such Issuing Bank has debited the Administrative Agent's
account with such Issuing Bank in respect of the payment by it of
a drawing under a Letter of Credit issued by it, the
Administrative Agent shall promptly notify the Company of the
amount paid or to be paid by such Issuing Bank as a result of
such demand or payment, or the amount debited from the
Administrative Agent's account in respect of such payment, and
the date on which such payment or debit was or is to be made in
respect of such Letter of Credit. Notwithstanding the identity
of the account party of any Letter of Credit, the Company hereby
unconditionally agrees to pay and reimburse the Administrative
Agent for the account of such Issuing Bank for the amount of each
payment or demand for payment under such Letter of Credit, or for
the account of the Administrative Agent for the amount of each
such debit to the Administrative Agent's account in respect of
such Letter of Credit, at or prior to the date on which payment
was or is to be made by such Issuing Bank to the beneficiary
under such Letter of Credit or on which any such debit is made to
the Administrative Agent's account, as the case may be, without
presentment, demand, protest or other formalities of any kind.
(d) Forthwith upon its receipt of a notice referred to
in clause (c) of this Section 2.03, the Company shall advise the
Administrative Agent whether or not the Company intends to borrow
under Section 2.01 to finance its obligation to reimburse an
Issuing Bank for the amount of the related payment or demand for
payment, or to reimburse the Administrative Agent for the amount
debited from its account with an Issuing Bank in respect of any
drawing under a Letter of Credit, and, if it does, submit a
notice of such borrowing as provided in Section 4.05. In the
event that the Company fails to so advise the Administrative
Agent, or if the Company fails to reimburse an Issuing Bank for a
demand for payment under a Letter of Credit, or fails to
reimburse the Administrative Agent for the amount debited from
its account with an Issuing Bank in respect of a drawing under a
Letter of Credit, by the date of such payment or debit, as the
case may be, the Administrative Agent shall have the right (in
its sole discretion) to make a Revolving Credit Loan pursuant and
subject to Section 2.02(c) in order to effect any such
reimbursement or, if it shall not make such a Loan for any
reason, the Administrative Agent shall give each Lender prompt
notice of the amount of the demand for payment or the amount of
the debit, as the case may be, specifying such Lender's
Commitment Percentage of the amount of the related demand for
payment or debit, as the case may be.
(e) Each Lender shall pay to the Administrative Agent
at the Principal Office in Dollars and in immediately available
funds, the amount of such Lender's Commitment Percentage of any
payment under a Letter of Credit or any debit of the
28
Administrative Agent's account with an Issuing Bank in respect of
a drawing under a Letter of Credit, as the case may be, upon
notice by the Administrative Agent to such Lender requesting such
payment and specifying such amount as provided in clause (d) of
this Section 2.03. Each such Lender's obligation to make such
payments to the Administrative Agent under this clause (e) shall
be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including (i) the failure of any other
Lender to make its payment under this clause (e), the financial
condition of the Company (or any other account party), the
existence of any Default or (ii) the termination of the
Commitments. Each such payment to the Administrative Agent shall
be made without any offset, abatement, withholding or reduction
whatsoever.
(f) Upon the making of each payment by a Lender to the
Administrative Agent pursuant to clause (e) above in respect of
any Letter of Credit, such Lender shall, automatically and
without any further action on the part of the Administrative
Agent, the Issuing Bank with respect to such Letter of Credit or
such Lender, acquire (i) a participation in an amount equal to
such payment in the Reimbursement Obligation in respect of such
Letter of Credit and under any applicable Letter of Credit
Documents relating to such Letter of Credit and (ii) a
participation in a percentage equal to such Lender's Commitment
Percentage in any interest or other amounts payable under such
Letter of Credit Documents and the other Basic Documents in
respect of such Reimbursement Obligation (other than the
commissions, charges, costs and expenses payable to such Issuing
Bank).
(g) The Company shall pay to the Administrative Agent
for its account in respect of each Letter of Credit a letter of
credit fee in an amount equal to 1-1/4% per annum of the daily
average undrawn face amount of such Letter of Credit for the
period from and including the date of issuance of such Letter of
Credit to and including the date such Letter of Credit is drawn
in full, expires or is terminated (such fee to be non-refundable,
to be paid in arrears on each Monthly Date and on the Termination
Date and to be calculated, for any day, after giving effect to
any payments made under such Letter of Credit on such day). The
Administrative Agent shall pay to each Lender, from time to time
at reasonable intervals (but in any event at least monthly), but
only to the extent actually received from the Company, an amount
equal to such Lender's Commitment Percentage of all such fees in
respect of each Letter of Credit (including any such fee in
respect of any period of any renewal or extension of such Letter
of Credit). In addition, the Company shall pay to the
Administrative Agent for the account of each Issuing Bank with
respect to a Letter of Credit all commissions, charges, costs and
expenses in the amounts customarily charged by such Issuing Bank
from time to time in like circumstances with respect to the
issuance of such Letter of Credit and drawings and other
transactions relating thereto.
29
(h) The issuance of each Letter of Credit, and the
obligation of the Administrative Agent to provide the assistance
in its issuance herein described, shall be subject, in addition
to the conditions precedent set forth in Section 6, to the
conditions precedent that (i) such Letter of Credit shall be in
such form, contain such terms and support such transactions as
shall be satisfactory to the Issuing Bank with respect to such
Letter of Credit and the Administrative Agent consistent with
their respective then current practices and procedures with
respect to letters of credit of the same type and (ii) the
Company shall have executed and delivered such applications,
agreements and other instruments relating to such Letter of
Credit as such Issuing Bank shall have reasonably requested
consistent with its then current practices and procedures with
respect to letters of credit of the same type.
(i) To the extent that any Lender fails to pay any
amount required to be paid pursuant to clause (e) or (f) of this
Section 2.03 when due, such Lender shall pay interest to the
Administrative Agent on such amount from and including such due
date to but excluding the date such payment is made (i) during
the period from and including such due date to but excluding the
date three Business Days thereafter, at a rate per annum equal to
the Federal Funds Rate (as in effect from time to time) and
(ii) thereafter, at a rate per annum equal to the Federal Funds
Rate (as in effect from time to time) plus 2%.
(j) The issuance of any modification or supplement to
any Letter of Credit shall be subject to the same conditions
applicable under this Section 2.03 to the issuance of new Letters
of Credit.
(k) The obligations of the Company under this
Section 2.03 shall be unconditional and absolute and shall not be
affected, modified or impaired, upon the happening at any time or
from time to time of any event, including any of the following,
whether or not with notice to or the consent of the Company:
(i) the compromise, settlement, release,
modification, amendment (whether material or otherwise) or
termination of any or all of the obligations, conditions,
covenants or agreements of any Person in respect of any of the
Basic Documents;
(ii) the occurrence, or the failure by the
Administrative Agent, any Lender or any other Person to give
notice to the Company of the occurrence, of any Default or any
default under any of the other Basic Documents;
(iii) the waiver of the payment, performance or
observance of any of the obligations, conditions, covenants or
agreements of any Person contained in any of the Basic Documents;
30
(iv) the extension of the time for performance
of any other obligations, covenants or agreements of any Person
under or arising out of any of the Basic Documents;
(v) the taking or the omission of any of the
actions referred to in any of the Basic Documents;
(vi) any failure, omission or delay on the part
of the Administrative Agent, any Lender, the Company or the
beneficiary of any Letter of Credit to enforce, assert or
exercise any right, remedy, power or privilege conferred by this
Agreement or any of the Basic Documents, or any other act or acts
on the part of the Administrative Agent, any Lender, the Company
or the beneficiary of any Letter of Credit;
(vii) the voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially
all the assets of, the marshalling of assets and liabilities,
conservatorship, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement,
composition with creditors or readjustment of, or other similar
proceedings which affect, the Company or any other party to any
of the Basic Documents;
(viii) any lack of validity or enforceability of
this Agreement, any Letter of Credit or any other Basic Document,
or any allegation of invalidity or unenforceability or any
contest of such validity or enforceability;
(ix) the existence of any claim, set-off,
defense or other right which the Company may have at any time
against the Administrative Agent, any Lender or any beneficiary
or any transferee of any Letter of Credit (or any persons or
entities for whom the Lender or any such beneficiary or
transferee may be acting), or any other Person, whether in
connection with this Agreement or any of the other Basic
Documents or any of the transactions contemplated by any Basic
Document or any unrelated transaction;
(x) any statement in any certificate or any
other document presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any
such statement being untrue or inaccurate in any respect
whatsoever;
(xi) payment by an Issuing Bank under any Letter
of Credit against presentation of a demand or certificate which
does not comply with the terms of such Letter of Credit;
(xii) the release or discharge by operation of
law of the Company from the performance or observance or any
obligation, covenant or agreement contained in any of the Basic
Documents; or
31
(xiii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing;
provided that nothing in this Section 2.03(k) shall preclude the
assertion by the Company of a separate claim against an Issuing
Bank for any damages which the Company proves were suffered
directly by or as a result of the gross negligence or willful
misconduct of such Issuing Bank in honoring or refusing to honor
any drawing under any Letter of Credit.
(l) Without affecting the Company's liability under
Section 11.03, the Company agrees to indemnify each of the
Issuing Banks, the Administrative Agent and the Lenders and their
respective affiliates, directors, officers, employees, attorneys
and agents from, and hold each of them harmless against, any and
all losses, liabilities, damages or expenses incurred by any of
them in connection with or by reason of any actual or threatened
investigation, litigation or other proceeding (including, in
respect of the Issuing Banks and the Administrative Agent, any
such investigations, litigation or other proceeding between the
Issuing Banks or the Administrative Agent and any Lender)
relating to (a) the execution and delivery of any Letter of
Credit; (b) the use of the proceeds of any drawing under any
Letter of Credit; or (c) the transfer or substitution of, or
payment or failure to pay under, any Letter of Credit, including
the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other
proceeding, but excluding damages, losses, liabilities or
expenses to the extent, but only to the extent, incurred by any
such Person by reason of the willful misconduct or gross
negligence of such Person in performing its respective
obligations under any Letter of Credit or this Agreement, as the
case may be. It shall not be a condition to any such
indemnification that the Issuing Banks, the Administrative Agent
or any Lender shall be a party to any such investigations,
litigation or other proceeding. Nothing in this Section 2.03 is
intended to limit the Company's payment obligations under this
Agreement.
(m) The Company assumes all risks of the acts or
omissions of any beneficiary of any Letter of Credit with respect
to the use of the Letter of Credit. None of the Administrative
Agent, any Lender nor any of its affiliates, nor any of their
respective officers, directors, employees, attorneys or agents
shall be liable or responsible for: (a) the use which may be
made of the Letter of Credit or for any acts or omissions of any
beneficiary of any Letter of Credit in connection with such
Letter of Credit; (b) the validity, sufficiency or genuineness of
documents presented to the Issuing Banks or the Administrative
Agent, or of any endorsement on such documents, even if such
documents should in fact prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by the
Issuing Banks against presentation of documents which vary in
immaterial respects from the terms of any Letter of Credit; or
32
(d) any other circumstances whatsoever in making or failing to
make payment under any Letter of Credit.
(n) From and after the Restatement Effective Date, the
Existing Letters of Credit shall be deemed to be Letters of
Credit issued under this Agreement (including for purposes of
determining Letter of Credit Liabilities, Reimbursement
Obligations, letter of credit fees under Section 2.03(g) and
usage of the Commitment at any time and from time to time) as of
the Restatement Effective Date. Each Lender shall participate in
the Existing Letters of Credit on the same terms and conditions
on which it participates in other Letters of Credit as set forth
above in this Section 2.03.
(o) The Company agrees either (i) to provide cover for
all Letter of Credit Liabilities relating to any Existing Letter
of Credit that have not expired or been terminated on or prior to
the Termination Date by paying to the Administrative Agent, not
later than 15 days prior to the Termination Date, immediately
available funds in an amount equal to the then aggregate undrawn
face amount of each such Existing Letter of Credit, which funds
shall be held by the Administrative Agent in the Collateral
Account (as collateral security in the first instance for such
Letter of Credit Liabilities as set forth in the Security
Agreement) until such time as such Existing Letters of Credit
shall have been terminated and all of such Letter of Credit
Liabilities paid in full or (ii) to cause the termination and
surrender of any such Existing Letter of Credit not later than 15
days prior to the Termination Date.
2.04 Changes of Commitments.
(a) The aggregate amount of the Commitments shall be
automatically reduced to zero on the Termination Date.
(b) The Company shall have the right at any time or
from time to time (i) so long as no Revolving Credit Loans or
Letter of Credit Liabilities are outstanding, to terminate the
Commitments and (ii) to reduce the aggregate unused amount of the
Commitments; provided that (x) the Company shall give notice of
each such termination or reduction as provided in Section 4.05
and (y) each partial reduction shall be in an aggregate amount at
least equal to $1,000,000 or in any larger multiple of $100,000.
(c) The Commitments once terminated or reduced may not
be reinstated.
2.05 Fees.
(a) The Company shall pay to the Administrative Agent
for the account of the Lenders a commitment fee on the daily
average unused amount of the aggregate Commitments of the Lenders
for the period from and including the Restatement Effective Date
to but not including the earlier of the date such Commitments are
33
terminated and the Termination Date, at a rate per annum equal to
1/4 of 1%. Accrued commitment fees shall be payable in arrears
on each Monthly Date and on the earlier of the date such
Commitments are terminated and the Termination Date, and shall be
allocated to the Lenders as set forth in Section 4.02. Such
fees, once paid, shall be non-refundable.
(b) Upon any termination or reduction of the
Commitments or any prepayment of the Term Loans for any reason
(other than (i) reductions or prepayments required by Section
2.10 or (ii) any termination resulting from, or arising in
connection with, a transaction of merger or consolidation to
which the Company is a party, any change after the Restatement
Effective Date of control of the Company (with the term "control"
being defined as set forth in the definition of Affiliate in
Section 1.01) or any sale of all or substantially all of the
Company's assets if such transaction is financed in whole or in
part by a revolving credit facility provided by CITBC in a
minimum principal amount of $25,000,000 and having such other
terms and conditions as shall be acceptable to CITBC in its sole
discretion (it being agreed and understood that nothing in this
Section 2.05(b) shall obligate CITBC to provide any such credit
facility)), the Company shall pay to the Administrative Agent for
the account of the Lenders a termination fee equal to (i) 1% of
the aggregate amount of the Commitments so terminated or reduced
or the principal amount of Term Loans so prepaid, as the case may
be, if such termination, reduction or prepayment occurs on or
prior to the first anniversary of the Restatement Effective Date
and (ii) 1/2 of 1% of the aggregate amount of the Commitments so
terminated or reduced or the principal amount of Term Loans so
prepaid, as the case may be, if such termination, reduction or
prepayment occurs after the first anniversary of the Restatement
Effective Date and on or prior to the second anniversary of the
Restatement Effective Date; provided that, if the aggregate
amount of partial reductions of the Commitments and prepayments
of the Term Loans within the period in which a fee would
otherwise be payable pursuant to this Section 2.05(b) (the "Fee
Period") does not exceed $20,000,000 (the "Threshold Amount"), no
fee shall be payable under this Section 2.05(b) in respect of
such reductions or prepayments; provided further, however, that
if the aggregate amount of such reductions and prepayments made
within the Fee Period exceeds the Threshold Amount or if the
Commitments are terminated within such period, the fee provided
for in this Section 2.05(b) shall be payable in respect of the
aggregate amount of the Commitments terminated or reduced and the
aggregate principal amount of Term Loans prepaid during the Fee
Period (calculated based on the dates on which each such
termination, reduction or prepayment is made). Such termination
fees shall be payable on the date of each such termination,
reduction or prepayment that would require the payment of a fee
pursuant to this Section 2.05(b), and shall be allocated to the
Lenders as set forth in Section 4.02. Such fees, once paid,
shall be non-refundable.
34
(c) The Company shall pay to the Administrative Agent
the agency fees provided for in Section 10.09.
2.06 Lending Offices. The Loans made by each Lender
shall be made and maintained at such Lender's Applicable Lending
Office.
2.07 Several Obligations; Remedies Independent. The
failure of any Lender to make any Loan to be made by it on the
date specified for such Loan shall not relieve any other Lender
of its obligation to make its Loan on such date, but neither any
Lender nor the Administrative Agent shall be responsible for the
failure of any other Lender to make a Loan to be made by such
other Lender, and no Lender shall have any obligation to the
Administrative Agent or any other Lender for the failure by such
Lender to make any Loan required to be made by such Lender. No
Lender shall be entitled to take any action to protect or enforce
its rights arising out of any Basic Document without the prior
written consent of the Majority Lenders or the Administrative
Agent.
2.08 Notes and Loan Account.
(a) The Revolving Credit Loans made by each Lender
shall be evidenced by a single promissory note of the Company in
substantially the form of Exhibit A-1, dated the Restatement
Effective Date, payable to such Lender in a principal amount
equal to the amount of its Commitment as in effect as of such
date and otherwise duly completed.
(b) The Tranche A Term Loan made by each Lender shall
be evidenced by a single promissory note of the Company in
substantially the form of Exhibit A-2, dated the Restatement
Effective Date, payable to such Lender in a principal amount
equal to the amount of its Tranche A Term Loan and otherwise duly
completed.
(c) The Tranche B Term Loan made by each Lender shall
be evidenced by a single promissory note of the Company in
substantially the form of Exhibit A-3, dated the Restatement
Effective Date, payable to such Lender in a principal amount
equal to the amount of its Tranche B Term Loan and otherwise duly
completed.
(d) The Tranche C Term Loan made by each Lender shall
be evidenced by a single promissory note of the Company in
substantially the form of Exhibit A-4, dated the Restatement
Effective Date, payable to such Lender in a principal amount
equal to the amount of its Tranche C Term Loan and otherwise duly
completed.
(e) The date, amount, Type, interest rate and duration
of Interest Period (if applicable) of each Loan of each Class
made by each Lender to the Company, and each payment made on
35
account of the principal of each Loan, shall be recorded by such
Lender on its books and, prior to any transfer of the Note
evidencing the Loans of such Class held by it, endorsed by such
Lender on the schedule attached to such Note or any continuation
of such Note; provided that the failure of such Lender to make
any such recordation or endorsement shall not affect the
obligations of the Company to make a payment when due of any
amount owing under this Agreement or under such Note in respect
of the Loans to be evidenced by such Note.
(f) No Lender shall be entitled to have its Notes
subdivided, by exchange for promissory notes of lesser
denominations or otherwise, except in connection with a permitted
assignment of all or any portion of such Lender's Commitment,
Loans and Notes pursuant to Section 11.06(b).
(g) The Administrative Agent will maintain a separate
account on its books in the Company's name in which the Company
will be charged with Loans made to it under this Agreement,
payments made by the Administrative Agent and the Lenders in
respect of Letters of Credit issued for the account of the
Company, and interest, fees, expenses and all other Obligations
payable by the Company under the Basic Documents; the Company
will be credited with all amounts received by the Administrative
Agent, for its own account and for the accounts of the Lenders,
from the Company or from others for the Company's account, such
amounts to be applied to the payment of the Obligations as set
forth in this Agreement and the other Basic Documents. The
Company and each Lender agrees that the Administrative Agent's
books and records showing the Obligations and the transactions
pursuant to this Agreement and the other Basic Documents shall be
admissible in any action or proceeding arising therefrom, and
shall constitute prima facie proof thereof, irrespective of
whether any Obligation is also evidenced by a promissory note or
other instrument. The Administrative Agent will provide to the
Company and each Lender a monthly statement of the Loans,
payments, issuances of and payments under Letters of Credit, and
other transactions pursuant to this Agreement. Such statement
shall be deemed correct, accurate, and binding on the Company,
absent manifest error, and as an account stated (except for
corrections of errors discovered by the Administrative Agent),
unless the Company notifies the Administrative Agent in writing
to the contrary within 30 days after such statement is delivered,
sent or mailed to the Company. In the event a timely written
notice of objections is given by the Company, only the items to
which exception is expressly made will be considered to be
disputed by the Company.
2.09 Optional Prepayments and Conversions or
Continuations of Loans. Subject to Section 4.04, the Company
shall have the right to prepay Loans, or to Convert Loans of one
Type into Loans of another Type or to Continue Loans of one Type
as Loans of the same Type, at any time or from time to time,
provided that: (a) the Company shall give the Administrative
36
Agent notice of each such prepayment, Conversion or Continuation
as provided in Section 4.05 (and, upon the date specified in any
such notice of prepayment, the amount to be prepaid shall become
due and payable under this Agreement); (b) Eurodollar Loans may
be prepaid or Converted only on the last day of an Interest
Period for such Loans; and (c) no Loan may be Converted into a
Eurodollar Loan until December 26, 1995. Notwithstanding the
foregoing, and without limiting the rights and remedies of the
Lenders under Section 9, in the event that any Default shall have
occurred and be continuing, the Administrative Agent may (and at
the request of the Majority Lenders shall) suspend the right of
the Company to Convert any Loan into a Eurodollar Loan, or to
Continue any Loan as a Eurodollar Loan, in which event all Loans
shall be Converted into (on the last day(s)) of their respective
Interest Periods) or Continued as, as the case may be, Prime Rate
Loans.
2.10 Mandatory Prepayments and Reductions of
Commitments.
(a) Borrowing Base. Until the Termination Date, the
Company shall from time to time prepay the Loans (or provide
cover for Letter of Credit Liabilities as specified in clause (e)
of this Section 2.10) in such amounts as shall be necessary so
that at all times the aggregate outstanding amount of the Loans
together with the aggregate amount of Letter of Credit
Liabilities outstanding, shall not exceed the Borrowing Base
(calculated, solely for purposes of this Section 2.10(a), without
deduction for any amount referred to in clause (c) of the
definition of "Borrowing Base"), such amount to be applied:
first to the Loans outstanding; and, second, as cover for Letter
of Credit Liabilities as specified in clause (e) of this Section
2.10.
(b) Casualty Events. Immediately upon the receipt by
the Administrative Agent or the Company or any of its
Subsidiaries of the proceeds of insurance, condemnation award or
other compensation in respect of any Casualty Event affecting any
Property of the Company or any of its Subsidiaries (or upon such
earlier date as the Company shall have determined not to restore,
repair or replace the Property affected by such Casualty Event),
(i) to the extent such proceeds (A) relate to Inventory or
(B) are proceeds of business interruption insurance maintained by
the Company, such proceeds shall be applied first to the
prepayment of the Loans and second as cover for Letter of Credit
Liabilities as specified in clause (e) of this Section 2.10, and
(ii) in all other circumstances, such proceeds shall (x) if an
Event of Default shall have occurred and be continuing at the
time such proceeds are required to be paid to or applied by the
Administrative Agent, be applied to the prepayment of the Loans
(or provide cover for Letter of Credit Liabilities as specified
in clause (e) of this Section 2.10), and the Commitments shall be
subject to automatic reduction (whether or not such prepayment is
actually made), in an aggregate amount, if any, equal to 100% of
37
the Net Available Proceeds of such Casualty Event not previously
applied to the restoration, repair or replacement of such
Property, such prepayment and reduction to be effected in each
case in the manner and to the extent specified in clause (d) of
this Section 2.10 and (y) if no Event of Default shall have
occurred and be continuing at the time such proceeds are required
to be paid to or applied by the Administrative Agent, such
proceeds shall be applied as provided in the first sentence of
Section 2.11. Nothing in this clause (b) shall be deemed to
limit any obligation of the Company or any of its Subsidiaries
pursuant to any of the Security Documents to remit to a
collateral or similar account (including the Collateral Account)
maintained by the Administrative Agent pursuant to any of the
Security Documents the proceeds of insurance, condemnation award
or other compensation received in respect of any Casualty Event.
(c) Sale of Assets. Without limiting the obligation of
the Company to obtain the consent of the Majority Lenders
pursuant to Section 8.05 to any Disposition not otherwise
permitted under the Basic Documents, no later than five Business
Days prior to the occurrence of any such Disposition which (when
taken together with all other Dispositions during the then
current fiscal year of the Company) would result in the receipt
by the Company of Net Available Proceeds of at least $50,000, the
Company will deliver to the Lenders a statement, certified by the
chief financial or accounting officer of the Company, in form and
detail reasonably satisfactory to the Administrative Agent, of
the amount of the Net Available Proceeds of such Disposition and,
to the extent such Net Available Proceeds (when taken together
with the Net Available Proceeds of all other Dispositions made
after the Restatement Effective Date) shall exceed $5,000,000,
the Company shall prepay the Loans (or provide cover for Letter
of Credit Liabilities as specified in clause (e) below), and the
Commitments shall, unless the Majority Lenders shall otherwise
consent, be subject to automatic reduction (whether or not such
prepayment is actually made), in an aggregate amount equal to the
excess of (i) 100% of the Net Available Proceeds of such
Disposition (together with 100% of the Net Available Proceeds of
all other Dispositions made after the Restatement Effective Date)
over (ii) $5,000,000, such prepayment and reduction to be
effected in each case in the manner and to the extent specified
in clause (d) of this Section 2.10; provided that, if the Company
shall have notified the Administrative Agent in writing prior to
the date of such Disposition that the Company intends to replace
the assets subject to such Disposition with similar assets for
use in the Company's operations within twelve (12) months after
the date of such Disposition, the required prepayment shall be
applied first to the Loans outstanding, and second as cover for
Letter of Credit Liabilities as specified in clause (e) of this
Section 2.10; provided further, however, that if the assets
subject to such Disposition are not so replaced within such
twelve-month period, the required prepayment shall thereupon be
applied and the Commitments shall, unless the Majority Lenders
shall otherwise consent, be reduced as set forth in clause (d) of
38
this Section 2.10 (and the Company agrees to make any necessary
prepayments in connection with such application and reduction).
(d) Application. Prepayments and reductions of
Commitments described in this Section 2.10 (other than in clause
(a) above and other than as set forth in clauses (b) and (c)
above) shall be effected as follows:
(i) first, the amount of the prepayment
(including cover for Letter of Credit Liabilities) specified in
such clauses shall be applied to the Revolving Credit Loans and
Letter of Credit Liabilities then outstanding in such order as
the Company may direct in writing to the Administrative Agent
and, in the absence of such direction, first to the Revolving
Credit Loans outstanding and second to provide cover for Letter
of Credit Liabilities as specified in clause (e) of this Section
2.10;
(ii) second, any excess over the amount referred
to in the foregoing clause (i) shall be applied to the prepayment
of the Term Loans pro rata in accordance with the respective
amounts of the Tranche A Term Loan, the Tranche B Term Loan and
the Tranche C Term Loan outstanding; and
(iii) third, the Commitments shall be
automatically reduced by an amount equal to the amount of the
prepayment (including cover for Letter of Credit Liabilities)
required to be applied to the Revolving Credit Loans and Letter
of Credit Liabilities as set forth in clause (i) above (and to
the extent that, after giving effect to such reduction, the
aggregate principal amount of Revolving Credit Loans, together
with the aggregate amount of all Letter of Credit Liabilities,
would exceed the Commitments, the Company shall, first, prepay
Revolving Credit Loans and, second, provide cover for Letter of
Credit Liabilities as specified in clause (e) of this Section
2.10, in an aggregate amount equal to such excess).
(e) Cover for Letter of Credit Liabilities. In the
event that the Company shall be required pursuant to this
Section 2.10 to provide cover for Letter of Credit Liabilities,
the Company shall effect the same by paying to the Administrative
Agent immediately available funds in an amount equal to the
required amount, which funds shall be retained by the
Administrative Agent in the Collateral Account (as collateral
security in the first instance for the Letter of Credit
Liabilities as set forth in the Security Agreement) until such
time as the Letters of Credit shall have been terminated and all
of the Letter of Credit Liabilities paid in full.
2.11 Casualty Proceeds. (a) So long as no Event of
Default shall have occurred and be continuing, the Company may
elect (by delivering written notice to the Administrative Agent)
to use the proceeds received by (or required to be delivered to)
the Administrative Agent in respect of a Casualty Event (other
39
than proceeds of business interruption insurance which shall be
applied as set forth in Section 2.10(b)) affecting any Property
of the Company (other than in respect of Inventory) to replace,
repair or restore such Property to substantially the equivalent
condition prior to such Casualty Event. If the Company does not
elect to use or is not entitled to use such proceeds as set forth
above, then such proceeds shall be applied as provided in Section
2.10(b).
(b) If the Company properly elects to use proceeds of
a Casualty Event for the repair, replacement or restoration of
Property as provided in subsection (a) above and so long as no
Event of Default shall then exist and be continuing, (i) such
proceeds shall be applied to the reduction of the Loans, (ii) the
Administrative Agent shall set up a reserve against availability
under the Commitments equal to such proceeds and (iii) subject to
all of the terms and conditions set forth in this Agreement,
including those set forth in this Section 2.11, the Company may
request Revolving Credit Loans for the purpose of such repair,
replacement or restoration. The reserve against availability
shall be reduced dollar-for-dollar as Revolving Credit Loans are
made therefor and, as a condition to the making of such Revolving
Credit Loans, the Administrative Agent may require the delivery
to it of executed purchase orders, delivery receipts or other
evidence of such repair, replacement or restoration. Prior to
the commencement of any such repair, replacement or restoration,
the Company shall provide the Administrative Agent with a plan
and total budget therefor which, in the case of real property
repair or restoration, shall (unless otherwise agreed by the
Administrative Agent) be certified by an experienced independent
third party acceptable to the Administrative Agent (the cost of
which shall be paid by the Company). If there are insufficient
proceeds in respect of such Casualty Event to cover the cost of
such repair, replacement or restoration, the Company shall be
responsible for the amount of any such insufficiency (which can
be, subject to the terms and conditions hereof, from proceeds
from the Revolving Credit Loans).
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans. The Company hereby promises
to pay to the Administrative Agent for the account of each Lender
the entire outstanding principal amount of such Lender's Loans,
and each Loan shall mature, on the Termination Date.
3.02 Interest. The Company hereby promises to pay to
the Administrative Agent for the account of each Lender interest
on the unpaid principal amount of each Loan made by such Lender
for the period from and including the date of such Loan to but
excluding the date such Loan shall be paid in full, at the
following rates per annum:
40
(a) during such periods as such Loan is a Prime Rate
Loan, the Prime Rate (as in effect from time to time) plus the
Applicable Margin; and
(b) during such periods as such Loan is a Eurodollar
Loan, for each Interest Period, the Eurodollar Rate for such Loan
for such Interest Period plus the Applicable Margin.
Notwithstanding the foregoing, the Company hereby promises to pay
to the Administrative Agent for the account of the Lenders
interest at the applicable Post-Default Rate on (a) any
Obligations (including the principal of any Loan) held by the
Lenders which shall not be paid in full when due (whether at
stated maturity, by acceleration, by mandatory prepayment or
otherwise), for the period from and including the due date of any
such Obligation to but excluding the date such Obligations are
paid in full and (b) all of the Obligations outstanding upon the
occurrence and during the continuance of an Event of Default.
Accrued interest on each Loan shall be payable (i) monthly on the
Monthly Dates, (ii) in the case of a Eurodollar Loan, on the last
day of the Interest Period for such Loan and (iii) upon the
payment or prepayment of such Loan or the Conversion of such Loan
to a Loan of another Type (but only on the principal amount so
paid, prepaid or Converted), except that interest payable at the
Post-Default Rate shall be payable from time to time on demand
and otherwise on the Monthly Dates. Promptly after the
determination of any interest rate provided for in this Agreement
or any change in any such interest rate, the Administrative Agent
shall give notice of the same to the Lenders to which such
interest is payable and to the Company. Accrued interest shall
be allocated to the Lenders as set forth in Section 4.02.
Section 4. Payments; Pro Rata Treatment; Computations;
Etc.
4.01 Payments.
(a) Except to the extent otherwise provided in this
Agreement, all payments of any Obligations, except to the extent
otherwise provided in any other Basic Document, shall be made in
Dollars, in immediately available funds, without deduction, set-
off or counterclaim, to the Administrative Agent at account
number 144054227 maintained by the Administrative Agent with
Chemical Bank at the Principal Office (or such other account as
the Administrative Agent shall have designated in writing to the
Company), not later than 10:00 a.m. Los Angeles time on the date
on which such payment shall become due (each such payment made
after such time on such due date to be deemed to have been made
on the next succeeding Business Day).
(b) Except to the extent otherwise provided in clause
(f) below, all moneys that the Administrative Agent receives from
or on behalf of the Company (including moneys received by the
Administrative Agent pursuant to the Blocked Account Agreement)
41
shall be deemed to be payments by the Company under this
Agreement. The Company shall, at the time of making each payment
under this Agreement of any Obligation for the account of any
Lender, specify to the Administrative Agent (which shall so
notify each intended recipient) to which Obligation such payment
is to be applied (and in the event that the Company fails to so
specify, or if an Event of Default has occurred and is
continuing, the Administrative Agent shall (subject to Section
2.02(d)) distribute such payment to the Lenders for application:
(a) first, to the Revolving Credit Loans outstanding; second, to
the Term Loans outstanding as provided in Section 2.10(d)(ii);
and third, as cover for Letter of Credit Liabilities; and (b)
otherwise in such manner as it or the Majority Lenders, subject
in each case to Section 4.02, may determine to be appropriate).
(c) Each payment received by the Administrative Agent
under this Agreement of any Obligation for the account of any
Lender shall (subject to Section 2.02(d)) be paid by the
Administrative Agent promptly to such Lender, in immediately
available funds, for the account of such Lender's Applicable
Lending Office for the Loan or other Obligation in respect of
which such payment is made.
(d) If the due date of any payment of any Obligation
would otherwise fall on a day that is not a Business Day, such
date shall be extended to the next succeeding Business Day, and
interest shall be payable for any principal so extended for the
period of such extension.
(e) The Company hereby authorizes the Administrative
Agent to charge the Company's loan account referred to in
Section 2.08(f) with the amount of all Obligations due hereunder
as such payment becomes due. In furtherance of the foregoing,
the Administrative Agent may (and at the request of the Majority
Lenders shall) cause Revolving Credit Loans to be made at any
time (subject only to availability of the Commitments) to pay any
such Obligations when due; provided that, except as set forth
above in this sentence, the Administrative Agent shall have no
obligation to cause any such Loans to be made.
(f) Moneys in the Blocked Account shall be
transferred to the Administrative Agent to the account specified
in paragraph 3 of the Blocked Account Agreement (the "Collection
Account") in accordance with the terms of such Blocked Account
Agreement. On each Business Day on which no Event of Default of
which the Administrative Agent has actual knowledge shall have
occurred and be continuing, moneys on deposit in the Collection
Account shall be withdrawn by the Administrative Agent and (i)
deposited to the Special Collateral Account referred to below in
an amount which, when taken together with all other amounts on
deposit therein after giving effect to any requested
disbursements from such account on such day, does not exceed the
lesser of $5,000,000 and the amount specified by the Company for
the Special Collateral Account as of the end of such day, and
42
(ii) to the extent that the amount available for deposit from the
Collection Account to the Special Collateral Account on any day
would cause the balance therein (after giving effect to any
requested disbursements from such account on such day) to exceed
such lesser amount, such excess shall be withdrawn by the
Administrative Agent and deposited into the account referred to
in clause (a) of this Section 4.01 and then applied to the
Obligations as set forth in clause (b) of this Section 4.01. If
an Event of Default of which the Administrative Agent has actual
knowledge shall have occurred and be continuing on any day, no
moneys shall be deposited to the Special Collateral Account on
such day and any and all moneys received from the Blocked Account
on such day, together with any and all moneys then on deposit in
the Special Collateral Account, shall be withdrawn by the
Administrative Agent and deposited into the account referred to
in clause (a) of this Section 4.01 and then applied to the
Obligations as set forth in clause (b) of this Section 4.01. The
Administrative Agent shall establish an account (the "Special
Collateral Account") by and in the name of the Administrative
Agent with Chemical Bank at the Principal Office (or such other
account as the Administrative Agent shall designate from time to
time) for the sole purpose of holding certain cash proceeds of
Collateral and earnings thereon in which a security interest has
been created under the Security Documents, which Special
Collateral Account shall be under the sole and absolute dominion
and control of the Administrative Agent for the benefit of the
Lenders and the Administrative Agent and shall be subject to no
Liens other than the Lien of the Security Documents. Amounts on
deposit in the Special Collateral Account on any day that are not
subject to withdrawal and deposit into the account referred to in
clause (a) of this Section 4.01 for application to the
Obligations as set forth above shall be made available by the
Administrative Agent to the Company upon its request therefor for
the same purposes that, and on the same terms and subject to the
same conditions on which, Revolving Credit Loans may be borrowed
by the Company under this Agreement (including the giving and
timing of notices requesting disbursements and satisfaction of
the conditions precedent specified in Section 6.02), it being
understood and agreed by the Company that amounts on deposit in
the Special Collateral Account shall be disbursed only to the
extent that the Company would, at the time of any such
disbursement, be permitted to make a borrowing of Revolving
Credit Loans in the amount of such disbursement. The Special
Collateral Account shall be an interest bearing deposit account
and amounts on deposit therein shall bear interest at market
rates set from time to time by Chemical Bank (or such other
financial institution at which the Special Collateral Account
shall be held) for like accounts; except as set forth in this
sentence, amounts on deposit in the Special Collateral Account
shall not be invested.
4.02 Pro Rata Treatment. Except to the extent
otherwise provided in this Agreement: (a) the making, Conversion
and Continuation of Loans of a particular Class and Type (other
43
than Conversions provided for by Section 5.04) shall be made pro
rata among the Lenders according to each Lender's respective
Commitment Percentage (subject to the right of the Administrative
Agent to require the Lenders to fund their interest in Revolving
Credit Loans at a date later than the borrowing date of such
Revolving Credit Loans as provided in Section 2.02(d)) and the
then current Interest Period for each Loan of such Class and Type
shall be coterminous; and (b) each payment on account of any
Obligations to or for the account of one or more of the Lenders
in respect of any Obligations due on a particular day (or, if
such day is not a Business Day, the next succeeding Business Day)
shall be entitled to priority over payments in respect of
Obligations not then due and shall be allocated among the Lenders
entitled to such payments (after appropriate adjustment by the
Administrative Agent for Revolving Credit Loans funded by or
repaid to the Lenders on a date later than the date such
Revolving Credit Loans were made available to or repaid by the
Company) pro rata in accordance with the respective amounts due
and payable to such Lenders on such day (or Business Day) and
shall be distributed accordingly. For the purpose of allocating
interest and fees among the Lenders under this Agreement, such
interest and fees shall be deemed to accrue to each Lender on
each day based upon Loans that have actually been funded by such
Lender and are outstanding on such day. Nothing in this Section
4.02 shall be deemed to prevent, except in the case of shortfall,
the differential indemnity and other amounts owing to or for the
account of a particular Lender or Lenders pursuant to any
provisions of any Basic Document which, by their terms, require
differential payments.
4.03 Computations. Interest payable in respect of the
Loans and all fees provided for in this Agreement shall be
computed on the basis of a year of 360 days and the actual number
of days elapsed (including the first day but excluding the last
day) occurring in the period for which payable.
4.04 Minimum Amounts. Subject to the other terms and
conditions of this Agreement (including the next sentence),
borrowings, Conversions and prepayments are not required to be
made in any minimum Dollar amounts. Notwithstanding any other
provision of this Agreement, the aggregate principal amount of
Eurodollar Loans having the same Interest Period shall be in an
amount at least equal to $1,000,000 or any larger multiple of
$100,000 and, if any Eurodollar Loans would otherwise be in a
lesser principal amount for any period, such Loans shall be Prime
Rate Loans during such period.
4.05 Certain Notices. Notices by the Company to the
Administrative Agent of terminations or reductions of the
Commitments, of borrowings, Conversions, Continuations and
optional prepayments of Loans and of the duration of Interest
Periods shall be irrevocable and shall be effective only if
received by the Administrative Agent not later than 9:30 a.m. Los
Angeles time on the same Business Day or the number of Business
44
Days prior to the date of the relevant termination, reduction,
borrowing, Conversion, Continuation or prepayment or the first
day of such Interest Period specified below:
Number of
Business
Notice Days Prior
Termination or reduction
of Commitments 3
Borrowing or prepayment of,
or Conversions into,
Prime Rate Loans same day
Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 4
Each such notice of termination or reduction shall specify the
amount of the Commitments to be terminated or reduced. Each such
notice of borrowing, Conversion, Continuation or optional
prepayment shall specify the Class of Loans and the amount
(subject to Section 4.04) and Type of each Loan to be borrowed,
Converted, Continued or prepaid (and, in the case of a
Conversion, the Type of Loan to result from such Conversion) and
the date of borrowing, Conversion, Continuation or optional
prepayment (which shall be a Business Day). Each such notice of
the duration of an Interest Period shall specify the Class of
Loans to which such Interest Period is to relate. The
Administrative Agent shall promptly notify the Lenders of the
contents of any such notices received by it except that, at the
Administrative Agent's option, notices of the borrowings and
optional prepayments of Loans may be summarized periodically (but
no less frequently than weekly). In the event that the Company
fails to select the Type of Loan, or the duration of any Interest
Period for any Eurodollar Loan, within the time period and
otherwise as provided in this Section 4.05, such Loan (if
outstanding as a Eurodollar Loan) will be automatically Converted
into a Prime Rate Loan on the last day of the then current
Interest Period for such Loan or (if outstanding as a Prime Rate
Loan) will remain as, or (if not then outstanding) will be made
as, a Prime Rate Loan.
4.06 Non-Receipt of Funds by the Administrative Agent.
Unless the Administrative Agent shall have been notified by a
Lender or the Company (the "Payor") prior to the date on which
the Payor is to make payment to the Administrative Agent of (in
the case of a Lender) the proceeds of a Loan to be made by such
Lender, or a participation in a Letter of Credit drawing to be
acquired by such Lender, under this Agreement or (in the case of
the Company) a payment to the Administrative Agent for the
account of one or more of the Lenders (the "Required Payment"),
45
which notice shall be effective upon receipt, that the Payor does
not intend to make the Required Payment to the Administrative
Agent, the Administrative Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount of such payment
available to the intended recipient on such date; and, if the
Payor has not in fact made the Required Payment to the
Administrative Agent, the recipient or recipients of such payment
shall, on demand, repay to the Administrative Agent the amount so
made available together with interest on such amount in respect
of each day during the period commencing on the date (the
"Advance Date") such amount was so made available by the
Administrative Agent until the date the Administrative Agent
recovers such amount at a rate per annum equal to (x) if the
recipient is the Company, the rate applicable to Loans on such
day and (y) if the recipient is a Lender, the Federal Funds Rate
for such day and, if such recipient or recipients shall fail
within two Business Days to make such payment, the Administrative
Agent shall be entitled to recover such amount, on demand, from
the Payor, together with interest on such amount for each day
during the period commencing on the Advance Date until the date
the Administrative Agent recovers such amount at a rate per annum
equal to (i) if the Payor is the Company, the Post-Default Rate
and (ii) if the Payor is a Lender, the Federal Funds Rate for
such day plus 2%.
4.07 Sharing of Payments, Etc.
(a) The Company agrees that, in addition to (and
without limitation of) any right of set-off, banker's lien or
counterclaim a Lender may otherwise have, each Lender shall be
entitled, at its option but only with the prior consent of the
Administrative Agent, to offset balances held by it for the
account of the Company at any of its offices, in Dollars or in
any other currency, against any Obligations of the Company to
such Lender that are not paid when due (regardless of whether
such balances are then due to the Company). Any Lender so
entitled shall promptly notify the Company and the Administrative
Agent of any offset effected by it, provided that such Lender's
failure to give such notice shall not affect the validity of such
offset.
(b) If any Lender shall obtain from the Company
payment of any Obligation through the exercise of any right of
set-off, banker's lien or counterclaim or similar right or
otherwise (other than from the Administrative Agent as provided
in this Agreement), and, as a result of such payment, such Lender
shall have received a greater amount of the Obligations than the
amount allocable to such Lender under Section 4.02, it shall
promptly purchase from such other Lenders participations in (or,
if and to the extent specified by such Lender, direct interests
in) such Obligations owing to such other Lenders in such amounts,
and make such other adjustments from time to time as shall be
equitable, to the end that all the Lenders shall share the
46
benefit of such excess payment (net of any expenses that may be
incurred by such Lender in obtaining or preserving such excess
payment) pro rata in accordance with the unpaid Obligations owing
to each of the Lenders, provided that if at the time of such
payment the outstanding principal amount of the Loans of any
Class shall not be held by the Lenders pro rata in accordance
with the Lender's respective Commitment Percentage in effect at
the time such Loans were made (by reason of a failure of a Lender
to make a Loan under this Agreement in the circumstances
described in the last paragraph of Section 11.04), then such
purchases of participations or direct interests shall be made in
such manner as will result, as nearly as is practicable, in the
outstanding principal amount of the Loans being held by the
Lenders pro rata according to such Commitment Percentage. To
such end all the Lenders shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if
such payment is rescinded or must otherwise be restored.
(c) The Company agrees that any Lender so purchasing
such a participation (or direct interest) may exercise all rights
of set-off, banker's lien, counterclaim or similar rights with
respect to such participation as fully as if such Lender were a
direct holder of Loans or other amounts (as the case may be)
owing to such Lender in the amount of such participation.
(d) Nothing contained in this Section 4.07 shall
require any Lender to exercise any such right or shall affect the
right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness
or obligation of the Company. If, under any applicable
bankruptcy, insolvency or other similar law, any Lender receives
a secured claim in lieu of a set-off to which this Section 4.07
applies, such Lender shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this
Section 4.07 to share in the benefits of any recovery on such
secured claim.
Section 5. Yield Protection, Etc.
5.01 Additional Costs.
(a) The Company shall pay directly to each Lender from
time to time on demand such amounts as such Lender may determine
to be necessary to compensate such Lender for any costs that such
Lender determines are attributable to its making or maintaining
of any Eurodollar Loans or its obligation to make any such Lender
in respect of any such Loans or such obligation (collectively,
"Additional Costs"), resulting from any Regulatory Change that:
(i) changes the basis of taxation of any amounts
payable to such Lender under this Agreement or its Notes in
respect of any of such Loans (other than changes in the rate of
taxation imposed on or measured by the overall net income of such
47
Lender or of its Applicable Lending Office for any of such Loans
by the jurisdiction in which such Lender has its principal office
or such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special
deposit or similar requirements relating to any extensions of
credit or other assets of, or any deposits with or other
liabilities of, such Lender (including any of such Loans or any
deposits referred to in the definition of "Eurodollar Rate" in
section 1.01), or any commitment of such Lender (including the
Commitments of such Lender); or
(iii) imposes any other condition affecting this
Agreement or its Notes (or any of such extensions of credit or
liabilities) or its Commitments.
If any Lender requests compensation from the Company under this
Section 5.01(a), the Company may, by notice to such Lender (with
a copy to the Administrative Agent), suspend the obligation of
such Lender thereafter to make or to Continue Loans of the Type
with respect to which such compensation is requested, or to
Convert Loans of any other Type into Loans of such Type, until
the Regulatory Change giving rise to such request ceases to be in
effect (in which case the provisions of Section 5.04 shall be
applicable), provided that such suspension shall not affect the
right of such Lender to receive the compensation so requested.
(b) Without limiting the effect of the foregoing
provisions of this Section 5.01, in the event that, by reason of
any Regulatory Change, any Lender either (i) incurs (or would
incur) Additional Costs as a result of its exceeding a specified
level of a category of deposits or other liabilities of such
Lender that includes deposits by reference to which the interest
rate on Eurodollar Loans is determined as provided in this
Agreement or of a category of extensions of credit or other
assets of such Lender that includes Eurodollar Loans or (ii)
becomes subject to restrictions on the amount of such a category
of liabilities or assets that it may hold, then, if such Lender
so elects by notice to the Company (with a copy to the
Administrative Agent), the obligation of such Lender to make or
Continue, or to Convert Loans of any other Type into, Loans of
such Type shall be suspended until such Regulatory Change ceases
to be in effect (in which case the provisions of Section 5.04
shall be applicable).
(c) Without limiting the effect of the foregoing
provisions of this Section 5.01 (but without duplication), the
Company shall pay directly to each Lender from time to time on
demand such amounts as such Lender may determine to be necessary
to compensate such Lender (or, without duplication, the bank
holding company of which such Lender is a subsidiary) for any
costs that it determines are attributable to the maintenance by
such Lender (or any Applicable Lending Office or such bank
holding company), pursuant to any Governmental Rule (i) following
48
any Regulatory Change or (ii) implementing any risk-based capital
guideline or other requirement (whether or not having the force
of law and whether or not the failure to comply would be
unlawful) issued by any government or governmental or supervisory
authority implementing at the national level the Basle Accord
(including the Final Risk-Based Capital Guidelines of the Board
of Governors of the Federal Reserve System (12 C.F.R. Part 208,
Appendix A; 00 X.X.X. Xxxx 000, Xxxxxxxx X) and the Final Risk-
Based Capital Guidelines of the Office of the Comptroller of the
Currency (12 C.F.R. Part 3, Appendix A)), of capital in respect
of its Commitments or Loans (such compensation to include an
amount equal to any reduction of the rate of return on assets or
equity of such Lender (or any Applicable Lending Office or such
bank holding company) to a level below that which such Lender (or
any Applicable Lending Office or such bank holding company) could
have achieved but for such Governmental Rule.
(d) Each Lender shall notify the Company of any event
occurring after the date of this Agreement entitling such Lender
to compensation under paragraph (a) or (c) of this Section 5.01
as promptly as practicable, but in any event within 180 days,
after such Lender obtains actual knowledge of such event;
provided that if any Lender fails to give such notice within 180
days after it obtains actual knowledge of such event, such Lender
shall, with respect to compensation payable pursuant to this
Section 5.01 in respect of any costs resulting from such event,
only be entitled to payment under this Section 5.01 for costs
incurred from and after the date 180 days prior to the date that
such Lender does give such notice. Each Lender will furnish to
the Company a certificate setting forth the basis and amount of
each request by such Lender for compensation under paragraph (a)
or (c) of this Section 5.01. Determinations and allocations by
any Lender for purposes of this Section 5.01 of the effect of any
Regulatory Change pursuant to paragraph (a) or (b) of this
Section 5.01, or of the effect of capital maintained pursuant to
paragraph (c) of this Section 5.01, on its costs or rate of
return of maintaining Loans or its obligation to make Loans, or
on amounts receivable by it in respect of Loans, and of the
amounts required to compensate such Lender under this
Section 5.01, shall be conclusive absent manifest error, provided
that such determinations and allocations are made on a reasonable
basis.
5.02 Limitation on Types of Loans. Notwithstanding
any other provision of this Agreement, if, on or prior to the
determination of any Eurodollar Rate for any Interest Period:
(a) the Administrative Agent determines, which
determination shall be conclusive, that quotations of interest
rates for the relevant deposits referred to in the definition of
"Eurodollar Rate" in Section 1.01 are not being provided in the
relevant amounts or for the relevant maturities for purposes of
determining rates of interest for Eurodollar Loans as provided in
this Agreement; or
49
(b) if the Majority Lenders determine, which
determination shall be conclusive, and notify the Administrative
Agent that the relevant rates of interest referred to in the
definition of "Eurodollar Rate" in Section 1.01 upon the basis of
which the rate of interest for Eurodollar Loans for such Interest
Period is to be determined are not likely to cover adequately the
cost to such Lenders (or to such quoting Lender) of making or
maintaining such Type of Loans for such Interest Period;
then the Administrative Agent shall give the Company and each
Lender prompt notice of such determination and, so long as such
condition remains in effect, the Lenders (or such quoting Lender)
shall be under no obligation to make additional Loans of such
Type, to Continue Loans of such Type or to Convert Loans of any
other Type into Loans of such Type, and the Company shall, on the
last day or days of the then current Interest Period or Periods
for the outstanding Loans of such Type, either prepay such Loans
or Convert such Loans into Prime Rate Loans in accordance with
Section 2.09.
5.03 Illegality. Notwithstanding any other provision
of this Agreement, in the event that it becomes unlawful or, by
reason of a Regulatory Change, impossible for any Lender or its
Applicable Lending Office to honor its obligation to make or
maintain Eurodollar Loans, then such Lender shall promptly notify
the Company of such event (with a copy to the Administrative
Agent) and such Lender's obligation to make or to Continue, or to
Convert Loans of any other Type into, Eurodollar Loans shall be
suspended until such time as such Lender may again make and
maintain Eurodollar Loans (in which case the provisions of
Section 5.04 shall be applicable).
5.04 Treatment of Affected Loans. If the obligation
of any Lender to make Eurodollar Loans or to Continue, or to
Convert Loans of any other Type into, Eurodollar Loans shall be
suspended pursuant to Section 5.01 or 5.03 (such Loans being
called "Affected Loans" and such Type being called the "Affected
Type"), such Lender's Affected Loans shall be automatically
Converted into Prime Rate Loans on the last day or days of the
then current Interest Period or Periods for Affected Loans (or,
in the case of a Conversion required by Section 5.01(b) or 5.03,
on such earlier date as such Lender may specify to the Company
with a copy to the Administrative Agent) and, unless and until
such Lender gives notice as provided below that the circumstances
specified in Section 5.01 or 5.03 that gave rise to such
Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans
have been so Converted, all payments and prepayments of principal
that would otherwise be applied to such Lender's Affected Loans
shall be applied instead to its Prime Rate Loans; and
(b) all Loans that would otherwise be made or
Continued by such Lender as Loans of the Affected Type shall be
50
made or Continued instead as Prime Rate Loans, and all Loans of
such Lender that would otherwise be Converted into Loans of the
Affected Type shall be Converted instead into (or shall remain
as) Prime Rate Loans.
If such Lender gives notice to the Company with a copy to the
Administrative Agent that the circumstances specified in Section
5.01 or 5.03 that gave rise to the Conversion of such Lender's
Affected Loans pursuant to this Section 5.04 no longer exist
(which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made
by other Lenders are outstanding, such Lender's Prime Rate Loans
shall be automatically Converted, on the first day or days of the
next succeeding Interest Period or Periods for such outstanding
Loans of the Affected Type, to the extent necessary so that,
after giving effect to such Conversions, all Loans held by the
Lenders holding Loans of the Affected Type and by such Lender are
held pro rata (as to principal amounts, Classes, Types and
Interest Periods) in accordance with their respective Commitment
Percentage.
5.05 Compensation. The Company shall pay to the
Administrative Agent for the account of each Lender, upon the
request of such Lender through the Administrative Agent, such
amount or amounts as shall be sufficient (in the reasonable
opinion of such Lender) to compensate it for any loss, cost or
expense that such Lender determines is attributable to:
(a) any payment, mandatory or optional prepayment or
Conversion of a Eurodollar Loan made by such Lender for any
reason (including the acceleration of the Loans pursuant to
Section 9) on a date other than the last day of the Interest
Period for such Loan; or
(b) any failure by the Company for any reason
(including the failure of any of the conditions precedent
specified in Section 6 to be satisfied) to borrow a Eurodollar
Loan from such Lender on the date for such borrowing specified in
the relevant notice of borrowing given pursuant to Section 2.02.
Without limiting the effect of the preceding sentence, such
compensation shall include an amount equal to the excess, if any,
of (i) the amount of interest that otherwise would have accrued
on the principal amount so paid, prepaid or Converted or not
borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of
the then current Interest Period for such Loan (or, in the case
of a failure to borrow, the Interest Period for such Loan that
would have commenced on the date specified for such borrowing) at
the applicable rate of interest for such Loan provided for in
this Agreement over (ii) the amount of interest that otherwise
would have accrued on such principal amount at a rate per annum
equal to the interest component of the amount such Lender (or, in
the case of CITBC, Chemical Bank) would have bid in the London
51
interbank market for Dollar deposits of leading banks in amounts
comparable to such principal amount and with maturities
comparable to such period (as reasonably determined by such
Lender).
5.06 Certain Protections in Respect of Letters of
Credit.
(a) Without limiting the obligations of the Company
under Section 5.01 (but without duplication), if, as a result of
any Regulatory Change or any risk-based capital guideline or
other Governmental Rule implementing at the national level the
Basle Accord, there shall be imposed, modified or deemed
applicable any tax, reserve, special deposit, capital adequacy or
similar requirement against or with respect to or measured by
reference to Letters of Credit issued or to be issued under this
Agreement and the result shall be to increase the cost to the
Administrative Agent or any Lender or Lenders of issuing (or
purchasing participations in) or maintaining its or their
obligation to issue (or purchase participations in or, in the
case of the Administrative Agent, becoming a guarantor of) any
Letter of Credit or reduce any amount receivable by the
Administrative Agent or any Lender in respect of any Letter of
Credit (which increases in cost, or reductions in amount
receivable, shall be the result of Administrative Agent's or such
Lender's or Lenders' reasonable allocation of the aggregate of
such increases or reductions resulting from such event), then,
upon demand by the Administrative Agent or such Lender or Lenders
(through the Administrative Agent), the Company shall pay
immediately to the Administrative Agent for the account of the
Administrative Agent or such Lender or Lenders, from time to time
as specified by the Administrative Agent or such Lender or
Lenders (through the Administrative Agent), such additional
amounts as shall be sufficient to compensate the Administrative
Agent or such Lender or Lenders (through the Administrative
Agent) for such increased costs or reductions in amount. A
statement as to such increased costs or reductions in amount
incurred by the Administrative Agent or any such Lender or
Lenders, submitted by such Lender or Lenders to the Company,
shall be conclusive in the absence of manifest error as to such
amount.
(b) Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful or, by reason of
any Regulatory Change, impossible for the Administrative Agent to
guarantee or any Lender to issue (or to participate in) any
Letter of Credit, then the Administrative Agent or such Lender
shall promptly notify the Company of such event (with a copy to
the Administrative Agent) and the Administrative Agent's
obligation to assist in the issuance by way of guarantee or the
Lenders' obligation to issue (or participate in) any Letter of
Credit shall be suspended until such time as each Lender may
again issue (or participate in) Letters of Credit.
52
5.07 Taxes.
(a) The Company agrees to pay to each Lender such
additional amounts as are necessary in order that the net payment
of any Obligation due to such Lender after deduction for or
withholding in respect of any Tax imposed with respect to such
payment (or for payment of such Tax by such Lender), will not be
less than the amount of the Obligation then due and payable,
provided that the foregoing obligation to pay such additional
amounts shall not apply:
(i) to any payment to a Lender that is not a U.S.
Person unless such Lender is, on the Restatement Effective Date
(or on the date it becomes a Lender as provided in
Section 11.06(b)) and on the date of any change in the Applicable
Lending Office of such Lender, either entitled to submit a
Form 1001 (relating to such Lender and entitling it to a complete
exemption from withholding on all interest to be received by it
under this Agreement and the Notes in respect of the Loans) or
Form 4224 (relating to all interest to be received by such Lender
under this Agreement in respect of the Loans) (and in that regard
each such non-U.S. Person shall on such date deliver to the
Administrative Agent and the Company duplicate such Forms 1001 or
4224, as appropriate), or
(ii) to any Tax imposed solely by reason of the
failure by such non-U.S. Person to comply with applicable
certification, information, documentation or other reporting
requirements concerning the nationality, residence, identity or
connections with the United States of America of such non-
U.S. Person if such compliance is required by statute or
regulation of the United States of America as a precondition to
relief or exemption from such Tax.
For the purposes of this Section 5.07(a), (w) "Form 1001" shall
mean Form 1001 (Ownership, Exemption, or Reduced Rate
Certificate) of the Department of the Treasury of the United
States of America, (x) "Form 4224" shall mean Form 4224
(Exemption from Withholding of Tax on Income Effectively
Connected with the Conduct of a Trade or Business in the United
States) of the Department of the Treasury of the United States of
America (or in relation to either such Form such successor and
related forms as may from time to time be adopted by the relevant
taxing authorities of the United States of America to document a
claim of the kind to which such Form relates), (y) "U.S. Person"
shall mean a citizen, national or resident of the United States
of America, a corporation, partnership or other entity created or
organized in or under any laws of the United States of America,
or any estate or trust that is subject to Federal income taxation
regardless of the source of its income and (z) "Taxes" shall mean
any present or future tax (including any recurring or
nonrecurring intangible personal property taxes that may be
payable to the State of Florida), assessment or other charge or
levy imposed by or on behalf of any Governmental Person (other
53
than taxes imposed on or measured by the overall net income of
any Lender or of its Applicable Lending Office by the
jurisdiction in which such Lender has its principal office or any
Applicable Lending Office).
(b) Within 30 days after paying any amount to the
Administrative Agent or any Lender from which it is required by
law to make any deduction or withholding, and within 30 days
after it is required by law to remit such deduction or
withholding to any relevant taxing or other authority, the
Company shall deliver to the Administrative Agent for delivery to
such non-U.S. Person evidence satisfactory to such Person of such
deduction, withholding or payment (as the case may be).
Section 6. Conditions Precedent.
6.01 Effectiveness of Agreement. The effectiveness of
this Agreement and the obligation of each Lender to make the
initial extension of credit under this Agreement on or after the
Restatement Effective Date (whether by making a Loan or issuing a
Letter of Credit) is subject to (i) the condition precedent that
such extension of credit shall be made on or before December 19,
1995 and (ii) the receipt by the Administrative Agent (in
sufficient copies for each Lender) of the following documents,
each of which shall be satisfactory to the Administrative Agent
(and to the extent specified below, to each Lender) in form and
substance:
(a) Corporate Documents. The following documents,
each certified as indicated below:
(i) a copy of the Company's charter, as amended
and in effect, certified as of a recent date by the Secretary of
State of its jurisdiction of incorporation, and such evidence
from such Governmental Persons as to the good standing of and
information regarding such charter filed by the Company as the
Administrative Agent may reasonably request;
(ii) a certificate of the Secretary or an
Assistant Secretary of the Company, dated the Restatement
Effective Date and certifying (A) that attached to such
certificate is a true and complete copy of the by-laws of the
Company as amended and in effect at all times from the date on
which the resolutions referred to in clause (B) were adopted to
and including the date of such certificate, (B) that attached to
such certificate is a true and complete copy of resolutions duly
adopted by the board of directors of the Company authorizing the
execution, delivery and performance of such of the Basic
Documents to which the Company is or is intended to be a party
and the extensions of credit under this Agreement, and that such
resolutions have not been modified, rescinded or amended and are
in full force and effect, (C) that the charter of the Company has
not been amended since the date of the certification furnished
54
pursuant to clause (i) above, and (D) as to the incumbency and
specimen signature of each officer of the Company executing such
of the Basic Documents to which the Company is or is intended to
be a party and each other document to be delivered by the Company
from time to time in connection with any Basic Document (and the
Administrative Agent and each Lender may conclusively rely on
such certificate until the Administrative Agent receives notice
in writing from the Company); and
(iii) a certificate of another officer of the
Company as to the incumbency and specimen signature of the
Secretary or Assistant Secretary, as the case may be, of the
Company.
(b) Officer's Certificate. A certificate of a senior
officer of the Company, dated the Restatement Effective Date, to
the effect set forth in the first sentence of Section 6.02.
(c) Borrowing Base Certificate. A Borrowing Base
Certificate as of a date not more than 5 days prior to the
Restatement Effective Date.
(d) Opinion of Counsel to the Company. An opinion,
dated the Restatement Effective Date, of Barnett, Bolt, Kirkwood
& Long, special Florida counsel to the Company, in substantially
the form of Exhibit D, and covering such other matters as the
Administrative Agent or any Lender may reasonably request (and
the Company hereby instructs such counsel to deliver such
opinions to the Lenders and the Administrative Agent).
(e) Opinion of Special Counsel to the Administrative
Agent. An opinion, dated the Restatement Effective Date, of
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx, special counsel to the
Administrative Agent, in substantially the form of Exhibit E.
(f) Notes. The Notes, duly completed and executed.
(g) Security Agreements. The Security Agreement, the
Blocked Account Agreement and the Patent and Trademark
Assignments duly executed and delivered by the Company and the
Administrative Agent and, in the case of the Blocked Account
Agreement, Xxxxxxx Bank of Tampa. In addition, the Company shall
have (i) taken such other action as any such Security Document
shall specify or as the Administrative Agent shall have requested
in order to create, perfect, establish, confirm or maintain the
priority (subject only to Liens permitted by Section 8.06) of the
Liens granted by the Security Agreement (and the Company shall
have delivered to the Administrative Agent Uniform Commercial
Code searches certified by the appropriate filing officer
evidencing the first priority Liens of the Administrative Agent
in the Property in which the Administrative Agent has been
granted a security interest under the Security Agreement),
(ii) filed the Patent and Trademark Assignments with any
appropriate Governmental Person and paid all fees in connection
55
therewith and (iii) delivered to the Administrative Agent
(A) estoppel certificates from each landlord and mortgagee of any
premises on which the Company conducts its business and that is
held under ground lease by the Company and (B) acknowledgements
from each public warehouse in which Inventory is stored
consenting to the security interest of the Administrative Agent
for the benefit of itself and the Lenders in such Inventory and
any related original negotiable warehouseman's receipts duly
endorsed by the Company to the order of the Administrative Agent.
(h) Mortgage Modifications and Title Insurance. The
Mortgage Modification, duly executed and delivered and, where
appropriate, acknowledged by the Company, together with:
(A) evidence that the Mortgage Modification has
been duly recorded in the appropriate recorder's office in,
respectively, each county in Florida in which the Company leases
real property as to those leased properties of the Company
covered by the Mortgage delivered by the Company on the Effective
Date (and the Administrative Agent and the Lenders agree to the
release on the Restatement Effective Date of those properties
covered by the Mortgage that are owned in fee simple absolute by
the Company (excluding fixtures covered by the Security
Agreement));
(B) endorsements to the policies of title
insurance issued on the Effective Date pursuant to the Existing
Credit Agreement, which endorsements shall be in form and
substance satisfactory to each Lender;
(C) estoppel letters from holders of Liens on the
Properties owned by the Company that are permitted pursuant to
Section 8.06(b) (it being acknowledged that the estoppel letters
delivered by the Company pursuant to the Existing Credit
Agreement shall be deemed to satisfy this condition).
In addition, the Company shall have paid to the title companies
issuing the endorsements referred to above all expenses and
premiums of such title companies in connection with the issuance
of such endorsements and in addition shall have paid to such
title companies an amount equal to the recording and stamp taxes
payable in connection with recording the Mortgage Modification in
the appropriate county land offices.
(i) Financial Statements. Copies of the financial
statements of the Company referred to in Section 7.02.
(j) Insurance. Certificates of insurance evidencing
the existence of all insurance required to be maintained by the
Company pursuant to Section 8.04 and the designation of the
Administrative Agent as the loss payee under such policies to the
extent required by Section 8.04 in respect of all insurance
covering tangible Property, such certificates to be in such form
as the Administrative Agent shall require. In addition, the
56
Company shall have delivered a certificate of the chief financial
or accounting officer of the Company (i) setting forth the
insurance obtained by it in accordance with the requirements of
Section 8.04 and (ii) stating that such insurance is in full
force and effect and that all premiums then due and payable with
respect to such insurance have been paid.
(k) Financial Officer's Certificate. A certificate of
the chief financial or accounting officer of the Company, dated
the Restatement Effective Date, to the effect that after giving
effect to all extensions of credit under this Agreement on the
Restatement Effective Date, the aggregate unused amount of the
Commitments (as well as availability under the Borrowing Base) is
equal to or greater than an amount equal to the sum of (i)
$10,000,000 plus (ii) the aggregate amount of all trade payables
and Indebtedness of the Company that is not then current
(determined taking into account any relevant course of conduct
between the Company and its trade creditors to the extent invoice
terms differ from such course of conduct, but only to the extent
any such trade creditors have not taken any action, or notified
the Company that they intend to take any action, to enforce such
invoice terms).
(l) Financial Projections. A cash forecast for the
12-month period commencing on July 31, 1995, which forecast shall
be satisfactory to the Lenders, certified as a true and correct
copy as of the Restatement Effective Date by the chief financial
or accounting officer of the Company.
(m) Credit Card Receipts. Confirmation that the
Company shall have taken all action required to be taken by it as
of the Restatement Effective Date in respect of credit card
receipts as provided in Section 8.19(f) and copies of all
agreements with credit card companies and merchant banks in
respect thereof.
(n) Payments under Existing Credit Agreement.
Evidence that all interest and fees accrued under the Existing
Credit Agreement through and including the Restatement Effective
Date shall have been paid by the Company.
(o) Assignments under Existing Credit Agreement.
Evidence of the assignment to and purchase by CITBC of 100% of
the Commitments, Loans and Letter of Credit Liabilities under the
Existing Credit Agreement pursuant to an assignment and
acceptance agreement in form and substance satisfactory to CITBC.
In addition, the Company shall have consented to the assignment
by CITBC on the Restatement Effective Date of at least 55% of the
Commitments, Loans and Letter of Credit Liabilities of CITBC to
other lenders.
(p) Other Documents. Such other documents as the
Administrative Agent or any Lender or special counsel to the
Administrative Agent may reasonably request.
57
The effectiveness of this Agreement is also subject to the
payment or delivery by the Company of such fees and other
consideration as the Company shall have agreed to pay or deliver
to any Lender or an affiliate of such Lender or the
Administrative Agent as of the Restatement Effective Date in
connection with this Agreement.
6.02 Initial and Subsequent Extensions of Credit. The
obligation of any Lender to make any Loan (including such
Lender's initial Loan) or otherwise extend any credit to the
Company upon the occasion of each borrowing or other extension of
credit under this Agreement is subject to the further conditions
precedent that, both immediately prior to the making of such Loan
or other extension of credit and also after giving effect to, and
to the intended use of, such Loan or other extension: (a) no
Default shall have occurred and be continuing; (b) the
representations and warranties made by the Company in Section 7,
and by the Company in each of the other Basic Documents to which
it is a party, shall be true and complete on and as of the date
of the making of such Loan or other extension of credit with the
same force and effect as if made on and as of such date (or, if
any such representation or warranty is expressly stated to have
been made as of a specific date, as of such specific date); and
(c) the aggregate principal amount of the Revolving Credit Loans
borrowed on such occasion together with the aggregate face amount
of all Letters of Credit issued on such occasion shall not
(subject to the right of the Administrative Agent to make
Discretionary Extensions pursuant to Section 2.02(c)) exceed the
availability under the Borrowing Base as reflected in the most
recent Borrowing Base Certificate delivered pursuant to
Section 8.01(f). Each notice of borrowing or request for the
issuance of a Letter of Credit by the Company shall constitute a
certification by the Company to the effect set forth in the
preceding sentence (both as of the date of such notice or request
and, unless the Company otherwise notifies the Administrative
Agent prior to the date of such borrowing or issuance, as of the
date of such borrowing or issuance).
Section 7. Representations and Warranties. The
Company represents and warrants to the Lenders that:
7.01 Corporate Existence. Each of the Company and its
Subsidiaries: (a) is a corporation, duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its organization; (b) has all requisite corporate or other
power, and has all material Governmental Approvals necessary, to
own its assets and to carry on its business as now being or as
proposed to be conducted; and (c) is qualified to do business and
is in good standing in all jurisdictions in which the nature of
the business conducted by it makes such qualification necessary
and where failure so to qualify could have a Material Adverse
Effect.
58
7.02 Financial Condition. The Company has previously
furnished to each of the Lenders balance sheets of the Company as
at July 30, 1995 and the related statements of income, retained
earnings and cash flow of the Company for the fiscal year ended
on that date, with the opinion (in the case of those balance
sheets and statements) of Coopers & Xxxxxxx, L.L.P. All such
financial statements fairly present the financial condition of
the Company as at July 30, 1995, all in accordance with GAAP and
practices applied on a consistent basis. The Company does not
have on the Restatement Effective Date any material contingent
liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any
unfavorable commitments, except as referred to or reflected or
provided for in the most recent balance sheet referred to above
(or in the notes thereto). Since July 30, 1995, there has been
no material adverse change in the financial condition,
operations, business or prospects taken as a whole of the Company
from that set forth in the financial statements as at July 30,
1995 for the fiscal year ended on that date.
7.03 Litigation. Except as disclosed to the Lenders
in Schedule IV there are no legal or arbitral proceedings, or any
proceedings by or before any Governmental Person now pending or
(to the knowledge of the Company) threatened against the Company
or any of its Subsidiaries which, if adversely determined, could
have a Material Adverse Effect.
7.04 No Breach. None of the execution and delivery of
the Basic Documents, the consummation of the transactions
contemplated in the Basic Documents or compliance with the terms
and provisions of the Basic Documents will conflict with or
result in a breach of, or require any consent under, the charter
or by-laws of the Company, or any applicable Governmental Rule or
any agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which it or its Property is bound
or to which it is subject, or constitute a default under, or
result in the acceleration or mandatory prepayment of, any
indebtedness evidenced by or termination of any such agreement or
instrument, or (except for the Liens created pursuant to the
Security Documents) result in the creation or imposition of any
Lien upon any Property of the Company or any of its Subsidiaries
pursuant to the terms of any such agreement or instrument.
7.05 Action. The Company has all necessary corporate
power and authority to execute, deliver and perform its
obligations under each of the Basic Documents to which it is a
party; the execution, delivery and performance by the Company of
each of the Basic Documents to which it is a party have been duly
authorized by all necessary corporate action on its part
(including any required shareholder approvals); and each of this
Agreement, the Notes and each other Basic Document has been duly
and validly executed and delivered by the Company and constitutes
its legal, valid and binding obligation, enforceable against the
Company in accordance with its terms, (a) except as limited by
59
bankruptcy, insolvency, reorganization, moratorium or similar
laws of general applicability affecting the enforcement of
creditors' rights and (b) except as such enforceability may be
limited by the application of general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
7.06 Approvals. No Governmental Approvals are
necessary for the execution, delivery or performance by the
Company of the Basic Documents to which it is a party or for the
legality, validity or enforceability of any Basic Document,
except for filings and recordings in respect of the Liens created
pursuant to the Security Documents.
7.07 Use of Credit. Neither the Company nor any of
its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the
purpose, whether immediate, incidental or ultimate, of buying or
carrying Margin Stock, and no part of the proceeds of any
extension of credit under this Agreement will be used to buy or
carry any Margin Stock.
7.08 ERISA. Each Plan, and, to the knowledge of the
Company, each Multiemployer Plan, is in compliance with, and has
been administered in compliance with, the applicable provisions
of ERISA, the Code and any other Governmental Rule except to the
extent non-compliance could not reasonably be expected to have a
Material Adverse Effect, and no event or condition has occurred
and is continuing as to which the Company would be under an
obligation to furnish a report to the Lenders under
Section 8.01(e).
7.09 Taxes. Each of the Company and its Subsidiaries
has filed all Federal income tax returns and all other material
tax returns that are required to be filed and has paid all taxes
due pursuant to such returns or pursuant to any assessment
received by the Company or any of its Subsidiaries and all other
related penalties and charges, except for any such tax (excluding
any Federal tax the nonpayment of which could result in the
imposition of a Lien on any Property of the Company or any of its
Subsidiaries) the payment of which is being contested in good
faith and by proper proceedings and against which adequate
reserves are being maintained in accordance with GAAP. As of the
Restatement Effective Date, no such taxes are being contested by
the Company or any of its Subsidiaries. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in
respect of taxes and other governmental charges are, in the
opinion of the Company and such Subsidiaries, adequate. The
Company and its Subsidiaries have not given or been requested to
give a waiver of the statute of limitations relating to the
payment of Federal or other taxes.
7.10 Certain Regulations. Neither the Company nor any
of its Subsidiaries is (a) an "investment company," or a company
60
"controlled" by an "investment company," within the meaning of
the Investment Company Act of 1940; (b) a "holding company," or
an "affiliate" of a "holding company" or a "subsidiary company"
of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935; or (c) subject to any other
Governmental Rule restricting its ability to incur debt or to
grant Liens.
7.11 Material Agreements and Liens.
(a) Part A of Schedule I is a complete and correct
list, as of the Restatement Effective Date, of each credit
agreement, loan agreement, indenture, purchase agreement,
guarantee, letter of credit or other arrangement providing for or
otherwise relating to any Indebtedness or any extension of credit
(or commitment for any extension of credit) to, or guarantee by,
the Company (other than Indebtedness under this Agreement) the
aggregate principal or face amount of which equals or exceeds (or
may equal or exceed) $50,000, and the aggregate principal or face
amount outstanding or that may become outstanding under each such
arrangement is correctly described in Part A of Schedule I.
(b) Part B of Schedule I is a complete and correct
list, as of the Restatement Effective Date, of each Lien securing
Indebtedness of any Person the aggregate principal or face amount
of which equals or exceeds (or may equal or exceed) $50,000 and
covering any Property of the Company, and the aggregate
Indebtedness secured (or which may be secured) by each such Lien
and the Property covered by each such Lien is correctly described
in Part B of Schedule I. Except for (i) Liens granted by the
Security Agreement, (ii) in the case of Inventory, Liens arising
by operation of law and (iii) in the case of Property of the
Company other than Inventory and Receivables, Liens permitted
pursuant to Section 8.06, there are no Liens on Inventory,
Receivables or other Property of the Company. Except for Liens
permitted pursuant to Section 8.06, the Liens of the Security
Documents constitute first priority Liens on all of the
Properties of the Company purported to be covered by the Security
Documents.
7.12 Environmental Matters. Each of the Company and
its Subsidiaries has obtained all Governmental Approvals required
under all Environmental Laws to carry on its business as now
being or as proposed to be conducted, except to the extent
failure to have any such Governmental Approvals would not have a
Material Adverse Effect. Each of such Governmental Approvals is
in full force and effect and each of the Company and its
Subsidiaries is in compliance with the terms and conditions of
such Governmental Approvals, and is also in compliance with all
other provisions of any applicable Environmental Law or any
Governmental Rule issued, entered, promulgated or approved under
any Environmental Law, except to the extent failure to comply
with such provisions would not have a Material Adverse Effect.
61
In addition, except as set forth in Schedule II:
(a) No notice, notification, demand, request for
information, citation, summons or order has been issued and is
pending, no complaint has been filed and is pending, no material
penalty has been assessed and no investigation or review is
pending or threatened by any Governmental Person with respect to
any alleged failure by the Company or any of its Subsidiaries to
have any Governmental Approval required under any Environmental
Law in connection with the conduct of the business of the Company
or any of its Subsidiaries or with respect to any generation,
treatment, storage, recycling, transportation or Release of any
Hazardous Materials generated by the Company or any of its
Subsidiaries.
(b) Neither the Company nor any of its Subsidiaries
owns, operates or leases a treatment, storage or disposal
facility requiring a permit under the Resource Conservation and
Recovery Act of 1976 or under any comparable state or local
statute; and
(i) no polychlorinated biphenyls (PCB's) are or
have been present at any site, facility or vessel now or
previously owned, operated or leased by the Company or any of its
Subsidiaries that could reasonably be expected to have a Material
Adverse Effect;
(ii) no friable asbestos or materials containing
friable asbestos are or have been present at any site or facility
now or previously owned, operated or leased by the Company or any
of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect;
(iii) there are no underground storage tanks or
surface impoundments for Hazardous Materials, active or
abandoned, at any site or facility now or previously owned,
operated or leased by the Company or any of its Subsidiaries;
(iv) no Hazardous Materials have been Released at,
on or under any site or facility now or previously owned,
operated or leased by the Company or any of its Subsidiaries in a
quantity established as reportable by statute, ordinance, rule,
regulation or order; and
(v) no Hazardous Materials have been otherwise
Released at, on or under any site or facility now or previously
owned, operated or leased by the Company or any of its
Subsidiaries that could reasonably be expected to have a Material
Adverse Effect.
(c) Neither the Company nor any of its Subsidiaries
has transported or arranged for the transportation of any
Hazardous Material to any location that is listed on the National
Priorities List ("NPL") under the Comprehensive Environmental
62
Response, Compensation and Liability Act of 1980 ("CERCLA"),
listed for possible inclusion on the NPL by the Environmental
Protection Agency in the Comprehensive Environmental Response and
Liability Information System, as provided for by 40 C.F.R.
Section 300.5 ("CERCLIS"), or on any similar state or local list or
that is the subject of Federal, state or local enforcement
actions or other investigations that may lead to Environmental
Claims against the Company or any of its Subsidiaries.
(d) No Hazardous Material generated by the Company or
any of its Subsidiaries has been recycled, treated, stored,
disposed of or Released by the Company or any of its Subsidiaries
at any location other than those listed in Schedule II.
(e) No oral or written notification of a Release of a
Hazardous Material has been filed by or on behalf of the Company
or any of its Subsidiaries and no site or facility now or
previously owned, operated or leased by the Company or any of its
Subsidiaries is listed or proposed for listing on the NPL,
CERCLIS or any similar state list of sites requiring
investigation or clean-up.
(f) No Liens have arisen under or pursuant to any
Environmental Laws on any site or facility owned, operated or
leased by the Company or any of its Subsidiaries, and no action
has been taken or is in process by any Governmental Person that
could subject any such site or facility to such Liens and neither
the Company nor any of its Subsidiaries would be required to
place any notice or restriction relating to the presence of
Hazardous Materials at any site or facility owned by it or in any
instrument of transfer affecting such site or facility.
(g) There have been no environmental investigations,
studies, audits, tests, reviews or other analyses conducted by or
that are in the possession of the Company or any of its
Subsidiaries in relation to any site or facility now or
previously owned, operated or leased by the Company or any of its
Subsidiaries which have not been made available to the Lenders.
7.13 Capitalization. The authorized capital stock of
the Company consists, on the Restatement Effective Date, of an
aggregate of 6,500,000 shares consisting of (i) 5,500,000 shares
of common stock, par value $0.01 per share, of which 4,649,943
shares are duly and validly issued and outstanding, each of which
shares is fully paid and nonassessable and (ii) 1,000,000 shares
of preferred stock, par value $0.01 per share which may be issued
in such series and with such preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications and other provisions as may be fixed from time to
time by the Board of Directors of the Company (but only to the
extent permitted by this Agreement and the other Basic
Documents), of which no shares will be issued and outstanding as
of the Restatement Effective Date. Except for (a) the preferred
stock purchase rights granted under the Rights Agreement dated
63
April 13, 1995, as amended, between the Company and Shawmut Bank
Connecticut, N.A., and (b) options to purchase common stock of
the Company granted to (i) certain key employees under the 1995
Key Employee Stock Option Plan, (ii) certain directors under the
1995 Non-Employee Director Option Plan and (iii) Green Equity
Investors, L.P., as of the Restatement Effective Date there are
no outstanding Equity Rights with respect to the Company or any
of its Subsidiaries and there are no outstanding obligations of
the Company or any of its Subsidiaries to repurchase, redeem, or
otherwise acquire any shares of capital stock of the Company nor
are there any outstanding obligations of the Company to make
payments to any Person, such as "phantom stock" payments, where
the amount of the payment is calculated with reference to the
fair market value or equity value of the Company or any of its
Subsidiaries.
7.14 Subsidiaries, Etc. The Company has no direct or
indirect Subsidiaries other than (a) the Trusts, (b) the Employee
Subsidiary and (c) other Subsidiaries that have been approved in
writing by the Majority Lenders prior to the formation of such
Subsidiaries.
7.15 Title to Assets. The Company owns and has good
and marketable title (subject only to Liens permitted by Section
8.06) to the Properties shown to be owned by it in the most
recent financial statements referred to in Section 7.02 (other
than Properties disposed of in the ordinary course of business or
otherwise permitted to be disposed of pursuant to Section 8.05).
The Company owns and has good and marketable title to, and enjoys
peaceful and undisturbed possession of, all Properties (subject
only to Liens permitted by Section 8.06) that are necessary for
the operation and conduct of its businesses.
7.16 True and Complete Disclosure. The information,
reports, financial statements, exhibits and schedules furnished
in writing by or on behalf of the Company to the Administrative
Agent or any Lender in connection with the negotiation,
preparation or delivery of the Basic Documents or included in or
delivered pursuant to any Basic Document, when taken as a whole,
do not contain any untrue statement of material fact or omit to
state any material fact necessary to make the statements in the
Basic Documents, in light of the circumstances under which they
were made, not misleading. All written information furnished
after the Restatement Effective Date by the Company and its
Subsidiaries to the Administrative Agent or the Lenders in
connection with the Basic Documents and the transactions
contemplated by the Basic Documents will be true, complete and
accurate in all material respects, or (in the case of
projections) based on reasonable estimates, on the date as of
which such information is stated or certified. There is no fact
known to the Company that could have a Material Adverse Effect
that has not been disclosed in the Basic Documents or in a
report, financial statement, exhibit, schedule, disclosure letter
64
or other writing furnished to the Lenders for use in connection
with the transactions contemplated by the Basic Documents.
Section 8. Covenants of the Company. The Company
covenants and agrees with the Lenders and the Administrative
Agent that, so long as any Commitment, Loan or Letter of Credit
Liability is outstanding and until payment in full of all
Obligations:
8.01 Financial Statements, Etc. The Company shall
deliver to the Administrative Agent (with sufficient copies for
each of the Lenders) for delivery to the Lenders:
(a) as soon as available and in any event within 45
days after the end of each of the first three quarterly fiscal
periods of each fiscal year of the Company, statements of income
and cash flow of the Company and its Consolidated Subsidiaries
for such period and for the period from the beginning of the
respective fiscal year to the end of such period, and the related
balance sheets of the Company and its Consolidated Subsidiaries
as at the end of such period, setting forth in each case in
comparative form the corresponding figures for the corresponding
period in the preceding fiscal year, accompanied by a certificate
of a senior financial officer of the Company, which certificate
shall state such financial statements fairly present the
financial condition and results of operations of the Company and
its Consolidated Subsidiaries in accordance with GAAP,
consistently applied (except (i) for the application of fresh
start accounting, SOP No. 90-7 and (ii) that the notes to such
financial statements shall not be required to be presented in
accordance with GAAP), as at the end of, and for, such period
(subject to normal year-end audit adjustments);
(b) as soon as available and in any event within 90
days after the end of each fiscal year of the Company, statements
of income, retained earnings and cash flow of the Company and its
Consolidated Subsidiaries for such fiscal year and the related
balance sheets of the Company and its Consolidated Subsidiaries
as at the end of such fiscal year, setting forth in each case in
comparative form the corresponding figures for the preceding
fiscal year, and accompanied (i) by an unqualified opinion of
independent certified public accountants of recognized national
standing, which opinion shall state that such financial
statements fairly present the financial condition and results of
operations of the Company and its Consolidated Subsidiaries as at
the end of, and for, such fiscal year in accordance with GAAP,
consistently applied (except for application of fresh start
accounting, SOP No. 90-7), and a certificate of such accountants
stating that, in making the examination necessary for their
opinion, they obtained no knowledge, except as specifically
stated, of any Default, and (ii) by a certificate of a senior
financial officer of the Company, which certificate shall state
that such financial statements fairly present the financial
65
condition and results of operations of the Company and its
Consolidated Subsidiaries in accordance with GAAP, consistently
applied (except for application of fresh start accounting,
SOP No. 90-7), as at the end of, and for, such fiscal year;
(c) promptly upon their becoming available, copies of
all registration statements and regular periodic reports, if any,
which the Company or any of its Subsidiaries shall have filed
with the Securities and Exchange Commission or any national
securities exchange;
(d) promptly upon their being mailed or provided to
the shareholders of the Company generally, copies of all
financial statements, reports and proxy statements so mailed or
provided;
(e) as soon as possible, and in any event within ten
days after the Company knows or has reason to believe that any of
the events or conditions specified below with respect to any Plan
or Multiemployer Plan has occurred or exists, a statement signed
by a senior financial officer of the Company setting forth
details respecting such event or condition and the action, if
any, that the Company or its ERISA Affiliate proposes to take
with respect to such event or condition (and a copy of any report
or notice required to be filed with or given to PBGC by the
Company or an ERISA Affiliate with respect to such event or
condition):
(i) any reportable event, as defined in
Section 4043(b) of ERISA and the regulations issued under that
Section, with respect to a Plan, as to which PBGC has not by
regulation waived the requirement of Section 4043(a) of ERISA
that it be notified within 30 days of the occurrence of such
event (provided that a failure to meet the minimum funding
standard of Section 412 of the Code or Section 302 of ERISA,
including the failure to make on or before its due date a
required installment under Section 412(m) of the Code or
Section 302(e) of ERISA, shall be a reportable event regardless
of the issuance of any waivers in accordance with Section 412(d)
of the Code); and any request for a waiver under Section 412(d)
of the Code for any Plan;
(ii) the distribution under Section 4041(a) of
ERISA of a notice of intent to terminate any Plan or any action
taken by the Company or an ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan, or the receipt by the
Company or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by PBGC with respect to such
Multiemployer Plan;
66
(iv) the complete or partial withdrawal from a
Multiemployer Plan by the Company or any ERISA Affiliate that
results in liability under Section 4201 or 4204 of ERISA
(including the obligation to satisfy secondary liability as a
result of a purchaser default) or the receipt by the Company or
any ERISA Affiliate of notice from a Multiemployer Plan that it
is in reorganization or insolvency pursuant to Section 4241
or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a
fiduciary of any Multiemployer Plan against the Company or any
ERISA Affiliate to enforce Section 515 of ERISA, which proceeding
is not dismissed within 30 days; and
(vi) the adoption of an amendment to any Plan
that, pursuant to Section 401(a)(29) of the Code or Section 307
of ERISA, would result in the loss of tax-exempt status of the
trust of which such Plan is a part if the Company or an ERISA
Affiliate fails to timely provide security to the Plan in
accordance with the provisions of those Sections;
(f) as soon as available and in any event by Tuesday
of each week, (i) a Borrowing Base Certificate for the weekly
accounting period ending on Saturday of the second preceding week
(10 days before), (ii) a statement of earnings of the Company for
the week ended Saturday of the second preceding week (10 days
before), which statement shall include a summary of accounts
payable of the Company, and (iii) a sales report of the Company
for the week ended Saturday of the immediately preceding week (3
days before), in each case in form and substance satisfactory to
the Administrative Agent;
(g) periodically at the request of the Administrative
Agent or the Majority Lenders (but not more often than once
during each fiscal quarter of the Company so long as no Default
has occurred and is continuing), a report of an independent
collateral auditor (which may be, or be affiliated with, the
Administrative Agent or one of the Lenders) with respect to the
Receivables and Inventory components included in the Borrowing
Base as at the end of any weekly or quarterly accounting period
selected by the Administrative Agent or the Majority Lenders,
which report shall indicate that, based upon a review by such
auditors of the Receivables (including verification with respect
to the amount, aging, identity and credit of the respective
account debtors and the billing practices of the Company and its
Subsidiaries) and Inventory (including verification as to the
value, location and respective types), the information set forth
in the Borrowing Base Certificate delivered by the Company as at
the end of such accounting period is accurate and complete in all
material respects and (if so requested by the Administrative
Agent or the Majority Lenders), in addition, as soon as available
and in any event within 90 days after the end of each fiscal year
of the Company, a like report of Coopers & Xxxxxxx, L.L.P., or
67
other independent public accountants with respect to the
Receivables and Inventory components included in the Borrowing
Base as at the end of such fiscal year;
(h) as soon as available and in any event within 30
days after the end of each month, an aging report, in form and
substance satisfactory to the Administrative Agent, as to the
Receivables of the Company showing all customer balances during
such month; provided that, no such report will be required for
any month in which the Company has no Eligible Receivables;
(i) promptly upon request of any Lender, copies of any
documents relating to the verification of Inventory by the
independent certified public accountants referred to in clause
(g) above;
(j) not later than 10 days after the end of each
fiscal year of the Company, a copy of the final budget of the
Company for the next succeeding fiscal year (broken down by
quarter), in form and substance satisfactory to the Majority
Lenders;
(k) promptly after an officer of the Company knows or
has reason to believe that any Default has occurred, a notice of
such Default describing the same in reasonable detail and,
together with such notice or as soon thereafter as possible, a
description of the action that the Company has taken or proposes
to take with respect to such Default;
(l) promptly after the amendment of the charter of the
Company or the amendment of the Senior Notes or the Senior Note
Documents, copies of such amendments; and
(m) from time to time such other information regarding
the financial condition, operations, business or prospects of the
Company or any of its Subsidiaries (including any Plan or
Multiemployer Plan and any reports or other information required
to be filed under ERISA) as any Lender or the Administrative
Agent may reasonably request.
The Company will furnish to the Administrative Agent (with
sufficient copies for each Lender) for delivery to the Lenders,
at the time it furnishes each set of financial statements
pursuant to paragraph (a) or (b) above, a certificate of a senior
financial officer of the Company (i) to the effect that no
Default has occurred and is continuing (or, if any Default has
occurred and is continuing, describing the same in reasonable
detail and describing the action that the Company has taken or
proposes to take with respect to such Default) and (ii) setting
forth in reasonable detail the computations necessary to
determine whether the Company is in compliance with Sections
8.07, 8.08, 8.09, 8.10, 8.11, 8.12 and 8.13 as of the end of the
respective quarterly fiscal period or fiscal year (together with,
to the extent such financial statements have been prepared on a
68
basis different than the financial statements delivered pursuant
to Section 7.02 as a result of changes in GAAP, an explanation of
such changes in order that such determinations may be verified).
8.02 Litigation. The Company will promptly give to
each Lender notice of all legal, arbitral or investigatory
proceedings, and of all proceedings by or before any Governmental
Person, and any material development in respect of any such
proceedings, affecting the Company or any of its Subsidiaries,
except proceedings which, if adversely determined, could not have
a Material Adverse Effect. Without limiting the generality of
the foregoing, the Company will give to each Lender notice of the
assertion of any Environmental Claim by any Person against, or
with respect to the activities of, the Company or any of its
Subsidiaries and notice of any alleged violation of or non-
compliance with any Environmental Laws or any Governmental
Approvals under Environmental Laws other than any Environmental
Claim or alleged violation which, if adversely determined, could
not have a Material Adverse Effect.
8.03 Existence, Etc. The Company will, and will cause
each of its Subsidiaries to:
(a) preserve and maintain its legal existence and all
of its material rights, privileges, licenses and franchises
(provided that nothing in this Section 8.03 shall prohibit any
transaction expressly permitted under Section 8.05);
(b) comply with the requirements of all applicable
Governmental Rules, if failure to comply with such requirements
could have a Material Adverse Effect;
(c) pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its income or
profits or on any of its Properties prior to the date on which
penalties attach except for any such tax, assessment, charge or
levy the payment of which is being contested in good faith and by
proper proceedings and against which adequate reserves are being
maintained;
(d) maintain all of its Properties used or useful in
its business in good working order and condition, ordinary wear
and tear excepted;
(e) keep adequate records and books of account, in
which complete entries will be made in accordance with GAAP
consistently applied; and
(f) permit representatives of any Lender or the
Administrative Agent, during normal business hours and upon at
least one Business Days' prior notice to the Company so long as
no Default has occurred and is continuing, to examine, copy and
make extracts from its books and records, to inspect any of its
Properties, and to discuss its business and affairs with its
69
officers, all to the extent reasonably requested by such Lender
or the Administrative Agent (as the case may be); and, without
limitation of the foregoing, the Company will pay the expenses of
the Administrative Agent and one representative of each Lender to
attend periodic meetings of the Administrative Agent, the Lenders
and the Company, provided that, so long as no Default has
occurred and is continuing, the Company shall not be required to
pay such expenses for more than two such meetings per calendar
year.
8.04 Insurance. The Company will, and will cause each
of its Subsidiaries to, keep insured by financially sound and
reputable insurers all Property of a character usually insured by
corporations engaged in the same or similar business similarly
situated against loss or damage of the kinds and in the amounts
customarily insured against by such corporations and carry such
other insurance as is usually carried by such corporations or as
otherwise may be requested by the Administrative Agent or the
Majority Lenders, provided that in any event, except as provided
in the certificates received and approved by the Lenders pursuant
to Section 6.01(j), the Company will maintain (with respect to
itself and each of its Subsidiaries):
(1) Casualty Insurance -- insurance against loss
or damage covering all of the tangible real and personal Property
and improvements of the Company and each of its Subsidiaries by
reason of any Peril (as defined below) in such amounts and
subject to such deductibles as shall be satisfactory to the
Administrative Agent or the Majority Lenders and sufficient to
avoid the named insured from becoming a co-insurer of any loss
under such policy but in any event in an amount (i) in the case
of fixed assets and equipment (including vehicles), at least
equal to 100% of the actual replacement cost of such assets
(including foundation, footings and excavation costs), subject to
deductibles and (ii) in the case of Inventory, not less than the
replacement cost of such Inventory, subject to deductibles.
(2) Automobile Liability Insurance for Bodily
Injury and Property Damage -- insurance against liability for
bodily injury and property damage in respect of all vehicles
(whether owned, hired or rented by the Company or any of its
Subsidiaries) at any time located at, or used in connection with,
its Properties or operations in such amounts as are then
customary for vehicles used in connection with similar Properties
and businesses, but in any event to the extent required by
applicable law.
(3) Comprehensive General Liability Insurance --
insurance against claims for bodily injury, death or Property
damage occurring on, in or about the Properties (and adjoining
streets, sidewalks and waterways) of the Company and its
Subsidiaries, in such amounts as are then customary for Property
similar in use in the jurisdictions where such Properties are
located.
70
(4) Workers' Compensation Insurance -- workers'
compensation insurance (including Employers' Liability Insurance)
to the extent required by applicable law.
(5) Product Liability Insurance -- insurance
against claims for bodily injury, death or Property damage
resulting from the use of products sold by the Company or any of
its Subsidiaries in such amounts as are then customarily
maintained by responsible persons engaged in businesses similar
to that of the Company and its Subsidiaries.
(6) Business Interruption Insurance -- insurance
against loss of operating income (up to an aggregate amount equal
to $49,500,000) by reason of any Peril.
(7) Other Insurance -- such other insurance, in
each case as generally carried by owners of similar Properties in
the jurisdictions where such Properties are located, in such
amounts and against such risks as are then customary for Property
similar in use.
Such insurance shall be written by financially responsible
companies selected by the Company and having an A. M. Best rating
of "B+" or better (or "A-" or better in the case of any change in
the Company's insurers after the Restatement Effective Date) and
being in a financial size category of XI or larger, or by other
companies acceptable to the Majority Lenders, and (other than
workers' compensation) shall name the Administrative Agent as
additional insured, or loss payee, as its interests may appear.
Each policy referred to in this Section 8.04 shall provide that
it will not be canceled or reduced, or allowed to lapse without
renewal, except after not less than 30 days' notice to the
Administrative Agent and shall also provide that the interests of
the Administrative Agent and the Lenders shall not be invalidated
by any act or negligence of the Company or any Person having an
interest in any Property covered by the Security Documents nor by
occupancy or use of any such Property for purposes more hazardous
than permitted by such policy nor by any foreclosure or other
proceedings relating to such Property. The Company will advise
the Administrative Agent promptly of any policy cancellation,
reduction or amendment.
On the Restatement Effective Date, the Company will
deliver to the Administrative Agent certificates of insurance
satisfactory to the Administrative Agent evidencing the existence
of all insurance required to be maintained by the Company under
this Section 8.04 (or as otherwise approved by Administrative
Agent and the Lenders pursuant to Section 6.01(j)) setting forth
the respective coverages, limits of liability, carrier, policy
number and period of coverage and showing that such insurance
will remain in effect through October 31, 1996, subject only to
the payment of premiums as they become due (or December 15, 1996
in the case of insurance required by subsection (1) above).
Thereafter, on each September 30 (or November 15 in the case of
71
insurance required by subsection (1) above) in each year
(commencing with 1996), the Company will deliver to the
Administrative Agent certificates of insurance evidencing that
all insurance required to be maintained by the Company under this
Section 8.04 will be in effect through the October 31 (or
December 15 in the case of insurance required by subsection (1)
above) of the calendar year following the calendar year of the
current September 30, subject only to the payment of premiums as
they become due. The dates referred to in the immediately
preceding two sentences may be modified with the consent of the
Administrative Agent to reflect the purchase and/or renewal by
the Company of insurance on an annual basis corresponding with
the Company's fiscal year. In addition, the Company will not
modify any of the provisions of any policy with respect to
casualty insurance without delivering the original copy of the
endorsement reflecting such modification to the Administrative
Agent accompanied by a written report of Alexander & Alexander,
or any other firm of independent insurance brokers of nationally
recognized standing, stating that, in their opinion, such policy
(as so modified) adequately protects the interests of the Lenders
and the Administrative Agent, is in compliance with the
provisions of this Section 8.04, and is comparable in all
respects with insurance carried by responsible owners and
operators of Properties similar to those covered by the Security
Documents. The Company will not obtain or carry separate
insurance concurrent in form or contributing in the event of loss
with that required by this Section 8.04 unless such insurance
names the Administrative Agent as additional insured or loss
payee as provided in this Section 8.04. The Company will
immediately notify the Administrative Agent whenever any such
separate insurance is obtained and shall deliver to the
Administrative Agent the certificates evidencing the same.
Without limiting the obligations of the Company under
the foregoing provisions of this Section 8.04, in the event the
Company shall fail to maintain in full force and effect insurance
as required by the foregoing provisions of this Section 8.04,
then the Administrative Agent may, but shall have no obligation
to, procure insurance covering the interests of the Lenders and
the Administrative Agent in such amounts and against such risks
as the Administrative Agent (or the Majority Lenders) shall deem
appropriate, and the Company shall reimburse the Administrative
Agent in respect of any premiums paid by the Administrative Agent
in respect of such insurance.
For purposes of this Section 8.04, the term "Peril"
shall mean, collectively, fire, lightning, flood (but, unless
otherwise required by the Administrative Agent or the Majority
Lenders, only to the maximum amount available under federal
programs), windstorm, hail, earthquake, explosion, riot and civil
commotion, vandalism and malicious mischief, damage from
aircraft, vehicles and smoke and all other perils covered by the
"all-risk" endorsement then in use in the jurisdictions where the
Properties of the Company and its Subsidiaries are located.
72
8.05 Prohibition of Fundamental Changes. The Company
will not, nor will it permit any of its Subsidiaries to, enter
into any transaction of merger or consolidation or amalgamation,
or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution). The Company will not, nor will it
permit any of its Subsidiaries to, acquire any business or
Property from, or capital stock of, or be a party to any
acquisition of, any Person except for purchases of inventory and
other Property to be sold or used in the ordinary course of
business, Investments permitted under Section 8.08 and Capital
Expenditures permitted under Section 8.12. The Company will not,
nor will it permit any of its Subsidiaries to, convey, sell,
lease, transfer or otherwise dispose of, in one transaction or a
series of transactions, any part of its business or Property,
whether now owned or hereafter acquired (including receivables
and leasehold interests, but excluding (i) obsolete or worn-out
Property, tools or equipment no longer used or useful in its
business so long as the amount so sold in any single fiscal year
by the Company shall not have a fair market value in excess of
$250,000; (ii) any inventory sold or disposed of in the ordinary
course of business and on ordinary business terms; (iii) the
beneficial ownership interest of the Company in one or more of
the Trusts, (iv) real estate and improvements to such real estate
owned by the Company to the extent (A) the same is sold to a
Trust or to another Person that is not an Affiliate of the
Company and leased back by the Company pursuant to arrangements
and documentation reasonably satisfactory to the Administrative
Agent and (B) the Administrative Agent shall have received the
instruments and assurances contemplated in, and shall otherwise
have complied with, Section 8.18, (v) the Company's fee interest
in Store Nos. 726 and 734, and (vi) other Property of the Company
so long as the amount so sold in any single fiscal year shall not
have a fair market value in excess of $3,000,000, to any Person
(including any Subsidiary of the Company). Nothing in this
Section 8.05 shall limit the obligations of the Company pursuant
to Section 2.10(c) in connection with any Disposition referred to
above (except that a Disposition by the Company of its fee
interest in Store Nos. 726 and 734 shall not require a prepayment
pursuant to Section 2.10(c)).
8.06 Limitation on Liens. The Company will not, nor
will it permit any of its Subsidiaries to, create, incur, assume
or suffer to exist any Lien upon any of its Property, whether now
owned or hereafter acquired, except:
(a) Liens created pursuant to the Security Documents;
(b) Liens in existence on the Restatement Effective
Date and listed in Part B of Schedule I or Liens securing
Indebtedness referred to in Section 8.07(c) (excluding, however,
Liens on Inventory and Receivables of the Company other than
those arising by operation of law);
73
(c) Liens (other than Federal tax Liens and Liens
imposed under ERISA) imposed by any Governmental Person for
taxes, assessments or charges not yet due or which are being
contested in good faith and by proper proceedings if adequate
reserves with respect to such Liens are being maintained in
accordance with GAAP, but only to the extent such Governmental
Person shall not have filed a notice of Lien in the public
records;
(d) carriers', mechanics', warehousemen's, artisans',
service, suppliers', depositaries', or other like Liens arising
in the ordinary course of business which are not overdue for a
period of more than 30 days;
(e) pledges or deposits in respect of workers'
compensation, unemployment insurance and other social security
legislation;
(f) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
the Company's business;
(g) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of the
Company's business and encumbrances consisting of zoning
restrictions, easements, licenses, restrictions on the use of
Property or minor imperfections in title which, in the aggregate,
are not material in amount, and which do not in any case
materially detract from the value of the Property subject to such
Lien or interfere with the ordinary conduct of the business of
the Company or any of its Subsidiaries;
(h) Liens upon real or tangible personal Property
(excluding Liens on Inventory and Receivables) acquired after the
Restatement Effective Date (by purchase, construction or
otherwise) by the Company, each of which Liens either (A) existed
on such Property before the time of its acquisition and was not
created in anticipation of such event, or (B) was created solely
for the purpose of securing Indebtedness representing, or
incurred to finance, refinance or refund, the cost (including the
cost of construction) of such Property; provided that no such
Lien shall extend to or cover any Property of the Company other
than the Property so acquired and improvements on such Property;
and provided, further, that the principal amount of Indebtedness
secured by any such Lien shall at no time exceed 80% of the fair
market value (as determined in good faith by a senior financial
officer of the Company) of such Property (or 100% in the case of
equipment) at the time it was acquired (by purchase, construction
or otherwise);
(i) Liens on motor vehicles; and
74
(j) Liens upon Property of the Trusts to the extent
permitted by Section 8.21(c); and
(k) any extension, renewal or replacement of the
foregoing, provided, however, that the Liens permitted under this
clause (i) shall not be spread to cover any additional
Indebtedness or Property (other than a substitution of like
Property).
8.07 Indebtedness. The Company will not, nor will it
permit any of its Subsidiaries to, create, incur or suffer to
exist any Indebtedness except:
(a) Indebtedness of the Company under the Basic
Documents;
(b) Indebtedness of the Company outstanding on the
Restatement Effective Date and listed in Part A of Schedule I
(excluding, however, Indebtedness referred to in subsection (d)
below);
(c) additional Indebtedness of the Company outstanding
on the Restatement Effective Date and not listed in Part A of
Schedule I pursuant to Section 7.11(a) provided that the
aggregate amount thereof shall not exceed $150,000;
(d) Indebtedness of the Company under the Indentures
listed in numbered paragraphs 1 and 2 in Part A of Schedule I
either (i) as of the Restatement Effective Date or (ii) after the
Restatement Effective Date as payments in kind permitted pursuant
to the terms of the Senior Note Documents as in effect on the
Effective Date (for clarification purposes only, fees and
expenses under, and indemnities payable pursuant to Sections 408
and 607(3) of, the Senior Note Documents as in effect on the
Restatement Effective Date are not Indebtedness under this
Agreement);
(e) Indebtedness of the Company consisting of Capital
Lease Obligations of the Company relating to Capital Expenditures
permitted by Section 8.12;
(f) additional Indebtedness of the Company up to but
not exceeding $15,000,000 at any one time outstanding; and
(g) Indebtedness of the Trusts to the extent permitted
by Section 8.21(c).
8.08 Investments. The Company will not, nor will it
permit any of its Subsidiaries to, make or permit to remain
outstanding any Investments except:
(a) operating deposit accounts with banks;
(b) Permitted Investments of the Company;
75
(c) Interest Rate Protection Agreements of the Company
so long as (i) the aggregate notional principal amount under all
such Interest Rate Protection Agreements calculated at the time
any such Interest Rate Protection Agreement is entered into does
not exceed the aggregate amount of floating rate Indebtedness of
the Company and the aggregate amount of unfunded commitments to
lend floating rate Indebtedness to the Company, and (ii) the
obligations of the Company under such Interest Rate Protection
Agreements are not secured by any Property of the Company (except
to the extent any such Interest Rate Protection Agreement is with
a Lender or an affiliate of such Lender, in which event such
Interest Rate Protection Agreement may be secured by Property of
the Company to the extent that (x) the Lenders are secured by
such Property, (y) the Lenders' security interest in such
Property is senior to or parri passu with the security interest
of the counterparty to such Interest Rate Protection Agreement
and (z) all documentation and arrangements relating to any such
security interest (including intercreditor arrangements) shall
be in form and substance reasonably satisfactory to the Majority
Lenders);
(d) repurchase obligations of the Company permitted
pursuant to Section 8.09; and
(e) additional Investments up to but not exceeding
$1,000,000 in the aggregate.
8.09 Dividend Payments. The Company will not, nor
will it permit any Subsidiaries to, declare or make any Dividend
Payment at any time (other than (a) Dividend Payments made by the
Company in respect of its obligations to repurchase capital stock
or Equity Rights of the Company of retired, terminated or
deceased directors, officers or employees of the Company,
provided that (i) the aggregate amount of such payments in any
fiscal year of the Company shall not exceed the sum of
(A) $500,000 plus (B) for each fiscal year of the Company
beginning after the Restatement Effective Date, an amount equal
to the excess (if any) of $500,000 over the amount of such
payments made by the Company in its immediately preceding fiscal
year and (ii) no such Dividend Payments may be made after the
occurrence and during the continuance of any Default and (b) any
Subsidiary of the Company may make Dividend Payments to the
Company).
8.10 Net Worth. The Company will not permit the Net
Worth of the Company and its Consolidated Subsidiaries (deter-
mined as of each Quarterly Date) to be less than (a) $40,000,000
for the fiscal quarters of the Company ending October 29, 1995
and January 28, 1996 and (b) $45,000,000 at any other time.
8.11 Interest Coverage Ratio. The Company will not
permit the Interest Coverage Ratio (determined as of each
Quarterly Date for the four consecutive fiscal quarters of the
Company ending on such date) to be less than 1.75 to 1.0.
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8.12 Capital Expenditures. The Company will not
permit the aggregate amount of Capital Expenditures by the
Company and its Consolidated Subsidiaries for any fiscal year of
the Company to exceed the sum of (a) $30,000,000 and (b) Excess
Cash Flow for such fiscal year (provided that the foregoing
limitations shall not apply to (a) Capital Expenditures made for
the purpose of restoring, repairing or replacing assets subject
to a Casualty Event to the extent permitted by this Agreement and
provided such expenditures are made within twelve (12) months of
the occurrence of such Casualty Event or (b) Capital Expenditures
made for the purpose of replacing assets subject to a Disposition
to the extent not exceeding an aggregate amount equal to $500,000
in any fiscal year of the Company).
8.13 Lease Obligations. The aggregate obligations of
the Company and its Consolidated Subsidiaries for the payment of
rent for any Property under operating leases or agreements to
lease (including pursuant to any such arrangements with the
Trusts) shall not exceed $25,000,000 (or, upon consummation of
any sale-leaseback transaction permitted by clause (iv) of
Section 8.05 with respect to all of the Company's Store Nos. 702,
709, 717, 878, 886, 887, 891 or 896, $28,000,000) during any
fiscal year of the Company.
8.14 Lines of Business. Neither the Company nor any
of its Subsidiaries (other than the Employee Subsidiary and the
Trusts) shall engage to any substantial extent in any line or
lines of business activity other than the business of
distributing merchandise to retail food and liquor stores owned
by the Company and others and operating retail food and liquor
stores in the State of Florida which offer for sale groceries,
meats, fresh produce, dairy products, delicatessen and bakery
products, health and beauty aids, pharmacies, wine, beer, liquor
and selected general merchandise. The Employee Subsidiary shall
not engage in any business activity other than employing
personnel to be used in the operation of the Company's business.
So long as the Trusts shall be Affiliates of the Company, the
Trusts shall not engage in any business activity except as
permitted by Section 8.21(d).
8.15 Transactions with Affiliates. Except as
expressly permitted by this Agreement, the Company will not,
directly or indirectly, nor will it permit any of its
Subsidiaries, directly or indirectly, to: (a) make any
Investment in an Affiliate; (b) transfer, sell, lease, assign or
otherwise dispose of any Property to an Affiliate; (c) merge into
or consolidate with or purchase or acquire Property from an
Affiliate; or (d) enter into any other transaction directly or
indirectly with or for the benefit of an Affiliate (including
guarantees and assumptions of obligations of an Affiliate);
provided that (x) any Affiliate who is an individual may serve as
a director, officer or employee of the Company or any of its
Subsidiaries and receive reasonable compensation for his or her
services in such capacity and (y) the Company and its
77
Subsidiaries may enter into transactions (other than extensions
of credit by the Company or any of its Subsidiaries to an
Affiliate) (i) in the ordinary course of business if the monetary
or business consideration arising from such activity would be
substantially as advantageous to the Company and its Subsidiaries
as the monetary or business consideration which would obtain in a
comparable transaction with a Person not an Affiliate and (ii) in
which an Affiliate participates as a holder of stock of the
Company which is also held by Persons not Affiliates of the
Company on terms no more favorable than terms on which such other
Persons may participate.
8.16 Use of Proceeds. The Company will use the
proceeds of the Loans for general corporate purposes (provided
that the proceeds of such Loans shall not be used to make any
payments in respect of the Senior Notes if (i) the Company shall
have the option under the Senior Notes to make payments in kind
and the average, for the 60 days immediately preceding the date
on which such payment is proposed to be made, of the excess of
(A) the Borrowing Base (calculated, solely for purposes of this
Section 8.16, without deduction for any amount referred to in
clause (c) of the definition of "Borrowing Base") over (B) the
aggregate principal amount of Loans outstanding, together with
the aggregate amount of Letter of Credit Liabilities outstanding,
shall be less than $15,000,000, or (ii) either before or after
giving effect to such payment, a Default shall have occurred and
be continuing) (in each case in compliance with all applicable
Governmental Rules); provided that none of the Administrative
Agent nor any Lender shall have any responsibility as to the use
of any of such proceeds.
8.17 Modifications of Certain Documents. The Company
will not amend its charter in a manner which could be adverse to
the Lenders or the Administrative Agent nor consent to any
modification, supplement or waiver of any of the provisions of
the Senior Notes or the Senior Note Documents the effect of which
would change the terms thereof in any manner which could be
adverse to the Company, the Lenders or the Administrative Agent,
in either case without the prior consent of the Administrative
Agent (with the approval of the Majority Lenders). The Company
may not prepay the Senior Notes in whole or in part except with,
and to the extent of, the cash proceeds received by the Company
in connection with the issuance or sale by the Company after the
Restatement Effective Date of any capital stock of the Company;
provided that no such prepayment shall be permitted at any time
during which a Default shall be continuing.
8.18 After Acquired Real Property. If the Company or
any of its Subsidiaries leases any real property after the
Restatement Effective Date, the Company shall (a) promptly notify
the Administrative Agent in writing of such lease and
(b) promptly (and in any event within 30 days after the execution
of such lease) deliver or cause to be delivered to the
Administrative Agent an instrument, executed by each lessor or
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other Person having an interest in the real property covered by
such lease, in substantially the form of Exhibit F (with such
changes therein as may be reasonably requested by (A) such
Persons and approved by the Administrative Agent, such approval
not to be unreasonably withheld, and (B) the Administrative
Agent).
8.19 Inventory and Receivables. The Company agrees
that:
(a) all sales of Inventory shall be bona fide sales in
the ordinary course of the Company's business;
(b) all invoices representing Receivables shall be in
the name of the Company;
(c) all credit memoranda shall be issued promptly;
(d) it will, consistent with its existing business
practice, promptly enforce, collect and receive all amounts owing
in respect of the Receivables;
(e) except for Retained Cash in an amount not to
exceed $6,000,000 at any time, all cash and checks received by
the Company in respect of the sale of Inventory or services
rendered by the Company shall be deposited promptly to the
Blocked Account;
(f) all amounts owing to the Company in respect of
credit card sales shall be paid directly by the relevant credit
card companies (or, if applicable, the bank or banks at which the
Company has merchant agreements with respect to such credit
cards) directly to the Blocked Account (and the Company shall, on
or before the Restatement Effective Date, direct the credit card
companies or such banks to make such payments directly to the
Blocked Account); and
(g) it will otherwise comply in all material respects
with its cash management procedures and policies in effect as of
the Restatement Effective Date (as the same may be amended from
time to time with the consent of the Majority Lenders).
8.20 Certain Obligations Respecting Subsidiaries.
(a) The Company will not, directly or indirectly,
organize or acquire any Subsidiary other than (i) the Trusts,
(ii) the Employee Subsidiary or (iii) other Subsidiaries that
have been approved in writing by the Majority Lenders prior to
the formation of such Subsidiaries; and
(b) The Company will, and will cause each of its
Subsidiaries to, take such action from time to time as shall be
necessary to ensure that the terms and conditions of the Basic
Documents shall be complied with in all material respects. The
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Company will not permit any of its Subsidiaries (other than the
Trusts) to enter into, after the Restatement Effective Date, any
indenture, agreement, instrument or other arrangement (other than
pursuant to any Basic Document) that, directly or indirectly,
prohibits or restrains, or has the effect of prohibiting or
restraining, or imposes materially adverse conditions upon, the
incurrence or payment of Indebtedness, the granting of Liens, the
declaration or payment of dividends, the making of loans,
advances or Investments or the sale, assignment, transfer or
other disposition of Property.
8.21 Agreements Relating to Trusts. The Company will
not permit any Trust to do any of the following for so long as
such Trust shall be an Affiliate of the Company:
(a) convey, sell, lease, transfer or otherwise dispose
of, in one transaction or a series of transactions, any part of
its business or Property, whether now owned or hereafter
acquired, except (i) to the Company or (ii) in connection with
the sale by the Company of its beneficial interest in such Trust
pursuant to Section 8.05;
(b) create, incur, assume or suffer to exist any Lien
upon any of its Property, whether now owned or hereafter
acquired, except for Liens securing Indebtedness permitted by
clause (c) below;
(c) create, incur or suffer to exist any Indebtedness
except for Indebtedness of such Trust to Midland Loan Services,
L.P., or its assigns, in an amount not exceeding (i) as to any
such Trust organized prior to the Restatement Effective Date, the
principal amount of such Indebtedness outstanding as of the
Restatement Effective Date, (ii) as to any such Trust organized
after the Restatement Effective Date, Indebtedness representing,
or incurred to finance, the cost of Property purchased by such
Trust from the Company, and (iii) as to all such Trusts at any
time, $25,500,000.
(d) engage in any business other than owning the
Property that it owns as of the Restatement Effective Date (or,
in the case of a Trust organized after the Restatement Effective
Date, that it acquires from the Company after the Restatement
Effective Date) and leasing the same to the Company pursuant to
the lease in effect with respect to such Property as of the
Restatement Effective Date.
8.22 Statutory Notice. The Company will not, nor will
it permit any of its Subsidiaries to, file or record any
instrument of record pursuant to Section 697.04(1)(b) of the
Florida Statutes that would limit the maximum amount that may be
secured by any of the Security Documents.
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Section 9. Events of Default. If one or more of the
following events ("Events of Default") shall occur and be
continuing:
(a) The Company shall: (i) default in the payment of
any principal of any Loan or any Reimbursement Obligation when
due (whether at stated maturity or at mandatory or optional
prepayment); or (ii) default in the payment of any interest on
any Loan or any other Obligation when due and such default shall
have continued unremedied for 2 or more days; or
(b) The Company, any Trust to the extent such Trust is
an Affiliate of the Company or any other Subsidiary of the
Company (collectively, the "Relevant Parties") shall default
(after the passage of any applicable grace period, without giving
effect to any extensions thereof after default) in the payment
when due of any principal of or interest on any of its or their
other Indebtedness the aggregate outstanding principal amount of
which exceeds $250,000, or in the payment when due of any amount
under any Interest Rate Protection Agreement for an amount
exceeding $250,000; or any event specified in any note,
agreement, indenture or other document evidencing or relating to
any such Indebtedness or any event specified in any Interest Rate
Protection Agreement shall occur if the effect of such event is
to cause, or (with or without the giving of any notice or the
lapse of time or both) to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause (other than, in the case of a Capitalized Lease
Obligation, as a result of a default occurring on the Effective
Date in respect of such Capitalized Lease Obligation caused
solely by the creation of the Liens intended to be created by the
Security Documents on the Property to which such Capitalized
Lease Obligation relates), such Indebtedness to become due, or to
be prepaid in full or to be purchased by any Relevant Party or
one of their Affiliates (whether by redemption, purchase,
repurchase, offer to purchase or repurchase, exercise of a put or
call option or otherwise), prior to its stated maturity or to
have the interest rate on such Indebtedness reset to a level so
that securities evidencing such Indebtedness trade at a level
specified in relation to its par value or, in the case of an
Interest Rate Protection Agreement, to permit the payments owing
under such Interest Rate Protection Agreement to be liquidated;
or the holder of any Lien on any Property of any Relevant Party
having a fair market value in excess of $250,000 shall have
commenced foreclosure of such Lien; or
(c) Any representation, warranty or certification made
or deemed made by any Relevant Party in any Basic Document or any
certificate furnished to any Lender or the Administrative Agent
pursuant to the provisions of any Basic Document shall prove to
have been false or misleading as of the time made or furnished or
deemed made or furnished in any material respect; or
81
(d) The Company shall default in the performance of
any of its obligations under any of Section 8.01(k), 8.05, 8.06,
8.07, 8.08, 8.09, 8.10, 8.11, 8.12, 8.13, 8.15, or 8.22 or
Section 5 of the Security Agreement or any provisions of the
Mortgage; or the Company shall default in the performance of any
of its obligations under Section 8.01(f) and such default shall
continue unremedied for a period of 1 Business Day after notice
of such default shall have been given to the Company by the
Administrative Agent or any Lender (through the Administrative
Agent); or the Company shall default in the performance of any of
its other obligations in this Agreement or any other Basic
Document and such default shall continue unremedied for a period
of 30 days after notice of such default shall have been given to
the Company by the Administrative Agent or any Lender (through
the Administrative Agent); or
(e) Any Relevant Party shall admit in writing its
inability to, or be generally unable to, pay its debts as such
debts become due; or
(f) Any Relevant Party shall (i) apply for or consent
to the appointment of, or the taking of possession by, a
receiver, custodian, trustee, examiner or liquidator of itself or
of all or a substantial part of its Property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a
voluntary case under the Bankruptcy Code, (iv) file a petition
seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of
debts, (v) fail to controvert in a timely and appropriate manner,
or acquiesce in writing to, any petition filed against it in an
involuntary case under the Bankruptcy Code or (vi) take any
corporate action for the purpose of effecting any of the
foregoing; or
(g) A proceeding or case shall be commenced, without
the application or consent of any Relevant Party in any court of
competent jurisdiction, seeking (i) its reorganization,
liquidation, dissolution, arrangement or winding-up, or the
composition or readjustment of its debts, (ii) the appointment of
a receiver, custodian, trustee, examiner, liquidator or the like
of any Relevant Party or of all or any substantial part of its
Property, or (iii) similar relief in respect of any Relevant
Party under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of
debts, and such proceeding or case shall continue undismissed, or
an order, judgment or decree approving or ordering any of the
foregoing shall be entered and continue unstayed and in effect,
for a period of 60 or more days; or an order for relief against
any Relevant Party shall be entered in an involuntary case under
the Bankruptcy Code; or
(h) A final judgment or judgments (including any
arbitration award) for the payment of money in excess of $100,000
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in the aggregate (exclusive of judgment amounts fully covered by
insurance where the insurer has admitted in writing liability in
respect of such judgment) or in excess of $250,000 in the
aggregate (regardless of insurance coverage) shall be rendered by
one or more Governmental Persons (or, in the case of an
arbitration award, one or more arbitrators) having jurisdiction
against any Relevant Party and the same shall not be discharged
(or provision shall not be made for such discharge), or a stay of
execution of the relevant judgment shall not be procured, within
60 days from the date of entry of such judgment and any Relevant
Party shall not, within that sixty-day period, or such longer
period during which execution of the same shall have been stayed,
appeal from and cause the execution of such judgment to be stayed
during such appeal; or
(i) An event or condition specified in Section 8.01(e)
shall occur or exist with respect to any Plan or Multiemployer
Plan and, as a result of such event or condition, together with
all other such events or conditions, any Relevant Party or any
ERISA Affiliate shall incur or shall be reasonably likely to
incur a liability to a Plan, a Multiemployer Plan or PBGC (or any
combination of the foregoing) which would constitute a Material
Adverse Effect; or
(j) A reasonable basis shall exist for the assertion
against any Relevant Party of (or there shall have been asserted
against any Relevant Party) claims or liabilities, whether
accrued, absolute or contingent, based on or arising from the
generation, storage, transport, handling or Release of Hazardous
Materials by such Relevant Party or any of its Affiliates, or any
predecessor in interest of any Relevant Party or any of its
Affiliates, or relating to any site, facility or vessel owned,
operated or leased by any Relevant Party or any of its
Affiliates, which claims or liabilities (insofar as they are
payable by any Relevant Party but after deducting any portion
which is reasonably expected to be paid by other creditworthy
Persons jointly and severally liable for such portion), in the
judgment of the Majority Lenders are reasonably likely to be
determined adversely to any Relevant Party, and the amount of
such claims or liabilities is, singly or in the aggregate,
reasonably likely to have a Material Adverse Effect; or
(k) Except for expiration in accordance with its
terms, any of the Security Documents shall be terminated or shall
cease to be in full force and effect, or any Lien intended to be
created by the Security Documents shall at any time be
invalidated, subordinated or otherwise cease to be in full force
and effect, for whatever reason; or
(l) The Company shall make any payment or prepayment
(whether in cash or other Property) of the principal of or
interest on, or any other amount owing in respect of the
principal of or interest on, the Senior Notes (including any
redemption, retirement, purchase or defeasance of, or sinking
83
fund or similar payment with respect to, the Senior Notes),
except (i) as permitted by Section 8.17 or (ii) for regularly
scheduled payments of interest in respect of such Senior Notes
required pursuant to the Senior Notes and Senior Note Documents;
THEREUPON: (1) in the case of an Event of Default other than one
referred to in clause (f) or (g) of this Section 9, (A) the
Administrative Agent may and, upon the request of the Majority
Lenders, shall, by notice to the Company, terminate the
Commitments and they shall thereupon terminate and (B) the
Administrative Agent may and, upon the request of the Majority
Lenders, shall, by notice to the Company, declare the principal
amount then outstanding of, and the accrued interest on, the
Loans, the Reimbursement Obligations and all other Obligations to
be forthwith due and payable, whereupon such amounts shall be
immediately due and payable without presentment, demand, protest
or other formalities of any kind, all of which are hereby
expressly waived by the Company; and (2) in the case of the
occurrence of an Event of Default referred to in clause (f)
or (g) of this Section 9, the Commitments shall automatically be
terminated and the principal amount then outstanding of, and the
accrued interest on, the Loans, the Reimbursement Obligations and
all other Obligations shall automatically become immediately due
and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived
by the Company. The Majority Lenders shall have the right (in
their sole and absolute discretion) to rescind any declaration of
termination or acceleration made by the Administrative Agent
under this Section 9. Nothing in this Section 9 shall affect the
rights of the Administrative Agent to make Discretionary
Extensions in accordance with Section 2.02(c) (or the obligations
of the Company and the Lenders with respect thereto) prior to any
termination of the Commitments or acceleration of the Obligations
as set forth above.
In addition, upon the occurrence and during the
continuance of any Event of Default (if the Administrative Agent
has declared the principal amount then outstanding of, and
accrued interest on, the Loans and all other Obligations to be
due and payable), the Company agrees that it shall, if requested
by the Administrative Agent or the Majority Lenders through the
Administrative Agent (and, in the case of any Event of Default
referred to in clause (f) or (g) of this Section 9, forthwith,
without any demand or the taking of any other action by the
Administrative Agent or such Lenders) provide cover for the
Letter of Credit Liabilities by paying to the Administrative
Agent immediately available funds in an amount equal to the then
aggregate undrawn face amount of all Letters of Credit, which
funds shall be held by the Administrative Agent in the Collateral
Account as collateral security in the first instance for the
Letter of Credit Liabilities and be subject to withdrawal only as
provided in the Security Documents with respect to the Collateral
Account.
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Section 10. The Administrative Agent.
10.01 Appointment, Powers and Immunities. Each Lender
hereby irrevocably appoints and authorizes the Administrative
Agent to act as its agent under this Agreement and the other
Basic Documents with such powers as are specifically delegated to
the Administrative Agent by the terms of the Basic Documents,
together with such other powers as are reasonably incidental to
such powers. The Administrative Agent (which term as used in
this sentence and in Section 11.05 and the first sentence of
Section 11.06 shall include reference to its affiliates and its
own and its affiliates' officers, directors, employees and
agents): (a) shall have no duties or responsibilities except
those expressly set forth in the Basic Documents, and shall not
by reason of any Basic Document be a trustee or fiduciary for any
Lender; (b) shall not be responsible to the Lenders for any
recitals, statements, representations or warranties contained in
any Basic Document, or in any certificate or other document
referred to or provided for in, or received by any of them under,
this Agreement or any other Basic Document, or for the value,
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, any Note or any other Basic
Document or any other document referred to or provided for in any
Basic Document or for any failure by the Company or any other
Person to perform any of its obligations under any Basic
Document; (c) shall not be required to initiate or conduct any
litigation or collection proceedings under any Basic Document;
(d) shall not be responsible for any action taken or omitted to
be taken by it under any Basic Document or under any other
document or instrument referred to or provided for in any Basic
Document or in connection with any Basic Document, except for its
own gross negligence or willful misconduct. The Administrative
Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents
or attorneys-in-fact selected by it in good faith. The
Administrative Agent may deem and treat the payee of any Note as
the holder of such Note for all purposes of the Basic Documents
unless and until a notice of the assignment or transfer of such
Note shall have been filed with the Administrative Agent,
together with the consent of the Company to such assignment or
transfer (to the extent provided in Section 11.06(b)).
10.02 Reliance by Administrative Agent. The
Administrative Agent shall be entitled to rely upon any
certification, notice or other communication (including any made
by telephone, telecopy, telex, telegram or cable) believed by it
to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other
experts selected by the Administrative Agent. As to any matters
not expressly provided for by any Basic Document, the
Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under any Basic Document in
accordance with instructions given by the Majority Lenders or, if
85
provided in this Agreement, in accordance with the instructions
given by all of the Lenders as is required in such circumstance,
and such instructions of such Lenders and any action taken or
failure to act pursuant to such instructions shall be binding on
all of the Lenders.
10.03 Defaults. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of a Default
(other than the nonpayment of principal of or interest on Loans
or Reimbursement Obligations or of commitment fees) unless the
Administrative Agent has received notice from a Lender or the
Company specifying such Default and stating that such notice is a
"Notice of Default". In the event that the Administrative Agent
receives such a notice of the occurrence of a Default, the
Administrative Agent shall give prompt notice of such receipt to
the Lenders (and shall give each Lender prompt notice of each
such nonpayment). The Administrative Agent shall (subject to
Section 11.07) take such action with respect to such Default as
shall be directed by the Majority Lenders, provided that, unless
and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such
action, with respect to such Default as it shall deem advisable
in the best interest of the Lenders (including the making of
discretionary Revolving Credit Loans pursuant to Section 2.02)
except to the extent that this Agreement expressly requires that
such action be taken, or not be taken, only with the consent or
upon the authorization of the Majority Lenders, or all of the
Lenders.
10.04 Rights as a Lender. With respect to its
Commitments and the Loans made by it, CITBC (and any successor
acting as Administrative Agent) in its capacity as a Lender under
the Basic Documents shall have the same rights, privileges and
powers under the Basic Documents as any other Lender and may
exercise the same as though it were not acting as the
Administrative Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the
Administrative Agent in its individual capacity. CITBC (and any
successor acting as Administrative Agent) and its affiliates may
(without having to account for the same to any Lender) accept
deposits from, lend money to, make investments in and generally
engage in any kind of banking, trust or other business with the
Company (and any of its Subsidiaries or Affiliates) as if it were
not acting as the Administrative Agent, and CITBC and its
affiliates may accept fees and other consideration from the
Company for services in connection with this Agreement or
otherwise without having to account for the same to the Lenders.
10.05 Indemnification. The Lenders agree to indemnify
each of the Administrative Agent (in its capacity as
administrative agent and co-agent for the Lenders under the Basic
Documents) and its affiliates, directors, officers, employees,
attorneys and agents (to the extent not reimbursed under
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Section 11.03, but without limiting the obligations of the
Company under Section 11.03) ratably in accordance with their
respective Commitments or, if the Commitments shall have
terminated, in accordance with the principal outstanding amount
of the Loans held by the Lenders, for any and all losses,
liabilities, damages or expenses (a) incurred by any of them in
connection with or by reason of any actual or threatened
investigation, litigation or other proceedings (including any
such investigation, litigation or other proceedings between the
Administrative Agent and any Lender) relating to the extensions
of credit under, and the transactions contemplated by, the Basic
Documents or any actual or proposed use by the Company or any of
its Subsidiaries of the proceeds of any such extensions of credit
(or arising under any Environmental Law as provided in the last
sentence of Section 11.03), including the reasonable fees and
disbursements of counsel incurred in connection with any such
investigation, litigation or other proceedings and (b) payable or
reimbursable to the Administrative Agent pursuant to clause (a),
(b) or (c) of Section 11.03 but not paid or reimbursed by or on
behalf of the Company when due (but excluding in any such case
any such losses, liabilities, damages or expenses to the extent,
but only to the extent, incurred by reason of the gross
negligence or willful misconduct of the Person to be
indemnified).
10.06 Nonreliance on Administrative Agent and Other
Lenders. Each Lender agrees that it has, independently and
without reliance on the Administrative Agent or any other Lender,
and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and its
Subsidiaries and decision to enter into this Agreement and that
it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking
or not taking action under this Agreement. The Administrative
Agent shall not be required to keep itself informed as to the
performance or observance by the Company of any Basic Document or
any other document referred to or provided for in any Basic
Document or to inspect the Properties or books of the Company or
any of its Subsidiaries. Except for notices, reports and other
documents and information expressly required to be furnished to
the Lenders by the Administrative Agent under this Agreement, the
Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the
Company or any of its Subsidiaries (or any of their Affiliates)
that may come into the possession of the Administrative Agent or
any of its affiliates.
10.07 Failure to Act. Except for action expressly
required of the Administrative Agent under the Basic Documents,
the Administrative Agent shall in all cases be fully justified in
failing or refusing to act under any Basic Document unless it
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shall receive further assurances to its satisfaction from the
Lenders of their indemnification obligations under Section 11.05
against any and all liability and expense that may be incurred by
it by reason of taking or continuing to take any such action.
10.08 Resignation or Removal of Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent
may resign at any time by notice to the Lenders and the Company,
and the Administrative Agent may be removed at any time with or
without cause by the Majority Lenders. Upon any such resignation
or removal, the Majority Lenders shall have the right to appoint
a successor Administrative Agent. If no successor Administrative
Agent shall have been so appointed by the Majority Lenders and
shall have accepted such appointment within 30 days after the
retiring Administrative Agent's giving of notice of resignation
or the Majority Lenders' removal of the retiring Administrative
Agent, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, that shall
be a financial institution which has an office in New York City,
New York or Los Angeles, California. Upon the acceptance of any
appointment as Administrative Agent by a successor Administrative
Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers,
privileges, duties and obligations of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations, under the Basic Documents.
After any retiring Administrative Agent's resignation or removal
as Administrative Agent, the provisions of this Section 10 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 the
Administrative Agent.
10.09 Agency Fees. So long as the Commitments are in
effect and until payment in full of the principal of and interest
on the Loans and all other Obligations, the Company will pay to
the Administrative Agent agency fees of (i) $5,555.56 on the
Restatement Effective Date (for the period from the Restatement
Effective Date to and including December 31, 1995), and
(ii) $100,000 on January 1, 1996 and on each anniversary thereof.
Such fees, once paid, shall be non-refundable.
10.10 Collateral Sub-Agent. Each Lender by its
execution and delivery of this Agreement agrees, as contemplated
by Section 3.03 of the Security Agreement, that, in the event it
shall hold any Permitted Investments referred to in that Section
3.03, such Permitted Investments shall be held in the name and
under the control of such Lender, and such Lender shall hold such
Permitted Investments as a collateral sub-agent for the
Administrative Agent under the Security Agreement. In addition,
a Lender in possession of any property subject to the Lien of the
Security Documents shall hold the same as a collateral sub-agent
for the Administrative Agent for the benefit of the Lenders and
the Administrative Agent as provided for in the Security
88
Documents. Any such property held or recovered at any time by
any Lender or any realization on account of any such property
shall inure to the ratable benefit of the Lenders and the
Administrative Agent as provided in the Security Agreement. The
Company by its execution and delivery of this Agreement hereby
consents to the foregoing.
Section 11. Miscellaneous.
11.01 Waiver. No failure on the part of the
Administrative Agent or any Lender to exercise and no delay in
exercising, and no course of dealing with respect to, any right,
remedy, power or privilege under this Agreement or any Note shall
operate as a waiver of such right, remedy, power or privilege,
nor shall any single or partial exercise of any right, power or
privilege under this Agreement or any Note preclude any other or
further exercise of any such right, remedy, power or privilege or
the exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges provided in this
Agreement and the Notes are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
11.02 Notices. All notices, requests and other
communications provided for in this Agreement and under the Basic
Documents making reference to this Section 11.02 (including any
modifications of, or waivers or consents under, this Agreement)
shall be given or made in writing, delivered to the intended
recipient at the "Address for Notices" specified below its name
on Annex 1 or, as to any party, at such other address as shall be
designated by such party in a notice to each other party. Except
as otherwise provided in any Basic Document, all such
communications shall be deemed to have been duly given when
transmitted by telex or telecopier or personally delivered or, in
the case of a mailed notice, upon receipt, in each case given or
addressed as set forth above (provided that, if the day on which
any such communication shall be deemed to have been duly given as
set forth above is not a Business Day, such communication shall
be deemed to have been duly given on the next succeeding Business
Day).
11.03 Expenses, Etc. The Company agrees to pay or
reimburse each of the Lenders and the Administrative Agent, as
the case may be, for paying: (a) all reasonable out-of-pocket
costs and expenses of the Administrative Agent (including, upon
delivery of statements therefor, the reasonable fees and expenses
of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx, special counsel to the
Administrative Agent, and of special Florida counsel to the
Administrative Agent, in an aggregate amount not to exceed
$50,000 through and including the Restatement Effective Date) in
connection with the negotiation, preparation, execution, delivery
and administration of the Basic Documents and the extension of
credit under this Agreement; (b) all reasonable out-of-pocket
costs and expenses of the Lenders and the Administrative Agent
(including, upon delivery of statements therefor, reasonable
89
counsels' fees and expenses) in connection with any modification,
supplement or waiver of any of the terms of any Basic Document;
(c) all reasonable costs and expenses of the Lenders and the
Administrative Agent (including, upon delivery of statements
therefor, reasonable counsels' fees and expenses) in connection
with (i) any Default and any enforcement or collection
proceedings (including any bankruptcy, reorganization, workout or
other similar proceeding) resulting from such Default or in
connection with the negotiation of any restructuring or "work-
out" (whether or not consummated) of the obligations of the
Company under the Basic Documents and (ii) the enforcement of
this Section 11.03; and (d) all transfer, stamp, documentary or
other similar taxes, assessments or charges (including intangible
personal property taxes) levied by any governmental or revenue
authority in respect of any Basic Document or any other document
referred to in any Basic Document and all costs, expenses, taxes,
assessments and other charges (including intangible personal
property taxes) incurred in connection with any filing,
registration, recording or perfection of any security interest
contemplated by any Basic Document or any other document referred
to in any Basic Document (including recurring and nonrecurring
intangible personal property taxes payable under Chapters 199 and
201 of the Florida Statutes).
The Company hereby agrees (i) to indemnify the
Administrative Agent, each Lender, their affiliates and their
respective directors, officers, employees, attorneys, agents,
accountants and consultants from, and hold each of them harmless
against, any and all losses, liabilities, damages or expenses
incurred by any of them in connection with or by reason of any
actual or threatened investigation, litigation or other
proceedings (including, in respect of the Administrative Agent,
any such investigation, litigation or other proceedings between
the Administrative Agent and any Lender) relating to the
extensions of credit under, and the transactions contemplated by,
the Basic Documents or any actual or proposed use by the Company
or any of its Subsidiaries of the proceeds of any such extensions
of credit, including, upon delivery of statements therefor, the
reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other
proceedings (but excluding any such losses, liabilities, damages
or expenses to the extent, but only to the extent, incurred by
reason of the gross negligence or willful misconduct of the
Person to be indemnified) and (ii) not to assert any claim
against the Administrative Agent, any Lender, their Affiliates or
any of their respective directors, officers, employees, attorneys
and agents, on any theory of liability, for special, indirect,
consequential or punitive damages arising out of or otherwise
relating to any of the transactions contemplated in any Basic
Document. It shall not be a condition to any such
indemnification that the Administrative Agent or any Lender be a
party to any such investigation, litigation or other proceeding.
Without limiting the generality of the foregoing, the Company
will indemnify the Administrative Agent, each Lender, their
90
Affiliates and their affiliates, directors, officers, employees,
attorneys and agents from, and hold each of them harmless
against, any losses, liabilities, damages or expenses described
in the preceding provisions (but excluding, as provided in the
preceding provisions, any loss, liability, damage or expense
incurred by reason of the gross negligence or willful misconduct
of the Person to be indemnified) arising under any Environmental
Law as a result of the past, present or future operations of the
Company or any of its Subsidiaries (or any predecessor in
interest to the Company or any of its Subsidiaries), or the past,
present or future condition of any site or facility owned,
operated or leased by the Company or any of its Subsidiaries (or
any such predecessor in interest), or any Release or threatened
Release of any Hazardous Materials from any such site or
facility, including any such Release or threatened Release which
shall occur during any period when the Administrative Agent or
any Lender shall be in possession of any such site or facility
following the exercise by the Administrative Agent or any Lender
of any of its rights and remedies under any Basic Document.
Without limitation of the foregoing, the Company hereby
releases and forever discharges CITBC (in its capacity as
Administrative Agent and as a Lender) and its affiliates,
directors, officers, employees, attorneys, agents and
consultants, and each of them, from any and all manner of losses,
liabilities, damages, expenses, actions, claims, liens, debts,
suits, judgments, executions and demands of any kind, nature and
description relating to or arising out of the Existing Credit
Agreement or the transactions referred to in or contemplated by
the Existing Credit Agreement.
11.04 Amendments, Etc. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement and
the other Basic Documents may be modified or supplemented only by
an instrument in writing signed by the Company, the
Administrative Agent and the Majority Lenders, or by the Company
and the Administrative Agent acting with the written consent of
the Majority Lenders, and any provision of this Agreement and the
other Basic Documents may be waived by the Majority Lenders or by
the Administrative Agent acting with the written consent of the
Majority Lenders; provided that: (a) no modification, supplement
or waiver shall, unless by an instrument signed by all of the
Lenders that will be adversely affected thereby or by the
Administrative Agent acting with the written consent of such
Lenders: (i) increase, or extend the term of, any of the
Commitments, or extend the time or waive any requirement for the
reduction or termination of any of the Commitments, (ii) extend
the date fixed for the payment of any principal, interest or fees
under this Agreement or the Notes, (iii) reduce the amount of any
such payment of principal, (iv) reduce the rate at which interest
or any fee is payable under this Agreement or alter the basis for
calculating any other Obligation (provided that the Majority
Lenders shall have the right to waive compliance with the
requirement in Section 3.02 that the Obligations shall bear
91
interest at the Post-Default Rate upon the occurrence and during
the continuance of an Event of Default, other than under the
circumstances in which an Event of Default specified in Section
9(a) shall have occurred and is continuing), (v) alter the terms
of this Section 11.04, (vi) modify the definition of the term
"Majority Lenders," or modify in any other manner the number or
percentage of the Lenders required to make any determinations or
to waive any rights under, or to modify any provision of, this
Agreement, (vii) modify the definition of the term "Borrowing
Base" or (viii) release any collateral or otherwise terminate any
Lien under any Basic Document providing for collateral security
or agree to additional obligations (other than the Obligations)
being secured by such collateral security (except that no such
consent shall be required, and the Administrative Agent is hereby
authorized, to release any Lien covering Property (A) which is
the subject of a permitted Disposition under this Agreement, (B)
leased by the Company to the extent (1) the creation of such Lien
violates the terms of any applicable lease in effect as of the
Restatement Effective Date and (2) the lessor under such lease
has notified the Company that it intends to terminate such lease
unless such Lien is released, or (C) which is the subject of a
Disposition as to which (1) Net Available Proceeds in respect of
such Disposition of such Property in an amount equal to the
greater of the fair market value of such Property at the
Restatement Effective Date and the date of such Disposition shall
have been received by the Company and applied to the prepayment
of the Loans as set forth in Section 2.10(c) and (2) the Majority
Lenders shall have given their prior written consent (and, upon
the written request of the Company, the Administrative Agent
shall execute such reconveyances and other instruments as shall
be reasonably necessary to evidence any such release); and (b)
any modification, supplement or waiver of Section 10 (or any
increase in the duties of the Administrative Agent) shall require
the consent of the Administrative Agent. Any modification,
supplement or waiver shall be for such period and subject to such
conditions as shall be specified in the instrument effecting the
same and shall be binding upon the Administrative Agent, the
Lenders and the Company, and any such waiver shall be effective
only in the specific instance and for the purpose for which
given.
Notwithstanding any other provision of this Agreement,
if:
(a) any Lender shall fail to fulfill its obligations
to make a Loan as set forth in this Agreement, or
(b) any Lender shall fail to pay to the Administrative
Agent the amount of such Lender's Commitment Percentage of any
payment under a Letter of Credit pursuant to Section 2.03,
then, for so long as such failure shall continue, such Lender
shall (unless the Majority Lenders, determined as if such Lender
were not a "Lender" under the Basic Documents, shall otherwise
92
consent in writing) be deemed for all purposes relating to
amendments, modifications, waivers or consents under any of the
Basic Documents (including under this Section 11.04) to have no
Loans, Letter of Credit Liabilities or Commitments.
11.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of its parties and their
respective successors and permitted assigns.
11.06 Assignments and Participations.
(a) The Company may not assign any of its rights or
obligations under this Agreement or under the Notes without the
prior consent of all of the Lenders and the Administrative Agent.
Any attempted or purported assignment in contravention of the
preceding sentence shall be null and void.
(b) Each Lender may assign all or any part of its
Loans, its Notes, its Commitments and its Letter of Credit
Interest (but only with the consent of the Administrative Agent
and, in the case of an outstanding Commitment, the Company
(provided that the Company's consent shall not be required at any
time during which a Default shall have occurred and be
continuing), which consents shall not be unreasonably withheld or
delayed), together with, in any such case, its related rights,
remedies, powers and privileges under the Basic Documents;
provided that (i) no such consent by the Company or the
Administrative Agent shall be required in the case of any
assignment to another Lender or (in the case of consent by the
Company) to an affiliate of a Lender; (ii) any such partial
assignment shall be in an amount at least equal to $5,000,000 and
the assigning Lender (other than CITBC) shall have a retained
interest at least equal to $5,000,000 after giving effect to such
partial assignment; (iii) CITBC shall not make any assignment
unless, after giving effect to such assignment, it shall have a
retained interest at least equal to twenty percent (20%) of the
outstanding Obligations (or, if no such Obligations are
outstanding, of the Commitments) at such time; (iv) each such
assignment by a Lender of its Loans, Notes, Commitments and
Letter of Credit Interest shall be made in such manner so that
the same portion of its Loans, Notes, Commitments and Letter of
Credit Interest is assigned to the respective assignee; and
(v) the assigning Lender or the respective assignee shall have
paid to the Administrative Agent an assignment fee of $5,000.
Upon execution and delivery by the assignee to the Company and
the Administrative Agent of an instrument in writing pursuant to
which such assignee agrees to become a "Lender" under this
Agreement (if not already a Lender) having the Commitment or
Commitments, Loans, and Letter of Credit Interest specified in
such instrument, and upon the consent of the Company and the
Administrative Agent, to the extent required above, the assignee
93
shall have, to the extent of such assignment (unless otherwise
provided in such assignment with the consent of the Company and
the Administrative Agent), the obligations, rights and benefits
of a Lender under the Basic Documents holding the Commitment or
Commitments, Loans and Letter of Credit Interest assigned to it
(in addition to the Commitment or Commitments, Loans and Letter
of Credit Interest, if any, theretofore held by such assignee)
and the assigning Lender shall, to the extent of such assignment,
be released from the Commitment or Commitments so assigned.
(c) A Lender may sell or agree to sell to one or more
other Persons a participation in all or any part of its Loans,
its Notes, its Commitments, its Letter of Credit Interest and its
related rights, remedies, powers and privileges under the Basic
Documents, in which event each purchaser of a participation (a
"Participant") shall be entitled to the rights and benefits of
the provisions of Section 8.01(m) with respect to such
participation as if (and the Company shall be directly obligated
to such Participant under such provisions as if) such Participant
were a "Lender" for purposes of Section 8.01(m), but, except as
otherwise provided in Section 4.07(c), shall not have any other
rights, remedies, powers or privileges under any Basic Document
(the Participant's rights against such Lender in respect of such
participation to be those set forth in the agreements executed by
such Lender in favor of the Participant). All amounts payable by
the Company to any Lender under Section 5 in respect of such
Lender's Loans, Notes, Letter of Credit Interest, and Commitments
shall be determined as if such Lender had not sold or agreed to
sell any participations in such Loans, Letter of Credit Interest
and Commitments, and as if such Lender were funding each of such
Loans, Notes, Letter of Credit Interest and Commitments in the
same way that it is funding the portion of such Loans, Notes,
Letter of Credit Interest and Commitments in which no
participations have been sold. In no event shall a Lender that
sells a participation agree with the Participant to take or to
refrain from taking any action under any Basic Document except
that such Lender may agree with the Participant that it will not,
without the consent of the Participant, agree to (i) increase or
extend the term, or extend the time or waive any requirement for
the reduction or termination, of such Lender's related
Commitment, (ii) extend the date fixed for the payment of
principal of or interest on the related Loan or Loans,
Reimbursement Obligations or any portion of any fee under this
Agreement payable to the Participant, (iii) reduce the amount of
any such payment of principal, (iv) reduce the rate at which
interest or any fee under this Agreement in which such Lender has
sold an interest is payable to the Participant, to a level below
the rate at which the Participant is entitled to receive such
interest or fee under its agreements with such Lender, (v) alter
the rights or obligations of the Company to prepay the related
Loans or (vi) consent to any modification, supplement or waiver
of any Basic Document to the extent that the same, under
Section 11.04, requires the consent of each Lender.
(d) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 11.06,
any Lender may assign and pledge all or any portion of its Loans
94
and its Notes to any Federal Reserve Bank as collateral security
pursuant to Regulation A and any Operating Circular issued by
such Federal Reserve Bank. No such assignment shall release the
assigning Lender from its obligations under the Basic Documents.
(e) A Lender may furnish any information concerning
the Company or any of its Subsidiaries in the possession of such
Lender from time to time to assignees and participants (including
prospective assignees and participants), subject, however, to the
provisions of Section 11.12.
(f) Notwithstanding anything in this Section 11.06 to
the contrary, no Lender may assign or participate any interest in
any Obligation or Commitment (or any related rights, remedies,
powers or privileges) to the Company or any of its Affiliates or
Subsidiaries without the prior written consent of each Lender.
11.07 Survival. The obligations of the Company under
Sections 2.03(l), 2.03(o), 5.01, 5.05, 5.06, 5.07 and 11.03 and
the obligations of the Lenders under Section 10.05 shall survive
the repayment of the Obligations and the termination of the
Commitments. In addition, each representation and warranty made,
or deemed to be made by a notice of any extension of credit
(whether by means of a Loan or a Letter of Credit), in or
pursuant to any Basic Document to which the Company is a party
shall survive the making or deemed making of such representation
and warranty, and no Lender shall be deemed to have waived, by
reason of making any extension of credit (whether by means of a
Loan or a Letter of Credit), any Default which may arise by
reason of such representation or warranty proving to have been
false or misleading, notwithstanding that such Lender, the
Administrative Agent may have had notice or knowledge or reason
to believe that such representation or warranty was false or
misleading at the time such extension of credit was made.
11.08 Agreements Superseded. This Agreement
supersedes all prior agreements and understandings (including any
and all commitment letters and term sheets), written or oral,
among the parties with respect to the subject matter of this
Agreement.
11.09 Severability. Any provision of this Agreement
or the Notes that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or the
Notes, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
11.10 Captions. The table of contents and captions
and section headings appearing in this Agreement are included
solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.
95
11.11 Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties to
this Agreement may execute this Agreement by signing any such
counterpart.
11.12 Treatment of Certain Information;
Confidentiality. Each of the Lenders and the Administrative
Agent agrees (on behalf of itself and each of its affiliates,
directors, officers, employees and representatives) to use
reasonable precautions to keep confidential, in accordance with
customary procedures for handling confidential information of
this nature and in accordance with safe and sound banking
practices, any nonpublic information supplied to it by the
Company pursuant to this Agreement which is identified by the
Company as being confidential at the time the same is delivered
to the Lenders or the Administrative Agent, provided that nothing
in this Agreement shall limit the disclosure of any such
information (i) to the extent required by Governmental Rule,
(ii) to counsel for any of the Lenders or the Administrative
Agent, (iii) to bank examiners, auditors or accountants, (iv) to
the Administrative Agent, or any other Lender or their
affiliates, directors, officers, employees, accountants,
consultants and representatives, (v) in connection with any
litigation to which any one or more of the Lenders or the
Administrative Agent is a party, (vi) to any assignee or
participant (or prospective assignee or participant) so long as
such assignee or participant (or prospective assignee or
participant) first executes and delivers to the respective Lender
a Confidentiality Agreement substantially in the form of
Exhibit G.
11.13 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS
AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. THE COMPANY
HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND
OF ANY NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK FOR THE
PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
11.14 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT. 96
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed and delivered as of the day and
year first above written.
KASH N' XXXXX FOOD STORES, INC.
By: /s/ X.X.Xxxxxxxx
------------------------------
Title: Senior Vice President,
Chief Financing Officer,
Treasurer and Secretary
LENDERS
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ Xxx Xxxxx
---------------------------------
Title: Vice President
ADMINISTRATIVE AGENT
THE CIT GROUP/BUSINESS CREDIT,
INC., as Administrative Agent
By: /s/ Xxx Xxxxx
----------------------------
Title: Vice President
Annex 1
Addresses for Notices and Commitments of the Lenders
THE COMPANY
KASH N' XXXXX FOOD STORES, INC.
0000 Xxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention: Senior Vice President, Administration
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
THE LENDERS
(Lending Offices and Addresses for Notices)
Commitment
----------
THE CIT GROUP/BUSINESS CREDIT, INC. $50,000,000.00
000 Xxxxx Xxxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Regional Credit Manager
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
THE ADMINISTRATIVE AGENT
THE CIT GROUP/BUSINESS CREDIT, INC.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Regional Credit Manager
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
1
Schedule I
Material Agreements and Liens
PART A
1. Indenture dated as of December 29, 1994, between the
Company and Shawmut Bank Connecticut, N.A., as Trustee,
relating to 11.5% Senior Fixed Rate Notes due 2003.
2. Indenture dated as of December 29, 1994, between the
Company and IBJ Xxxxxxxx Bank & Trust Company, as
Trustee, relating to Senior Floating Rate Notes due 2003.
3. Guaranty of Payment, Nondisturbance and Attornment
Agreement dated as of July 12, 1995 between IBM Credit
Corporation, as Lessor, GSI Outsourcing Corporation, as
Lessee, and the Company, as Guarantor.
4. Obligations secured by Liens identified on Schedule I,
Part B.
SCHEDULE I
Material Agreements and Liens
PART B
Kash n' Xxxxx Food Stores, Inc.
Debts over $50,000 subject to liens
Ending October 28, 1995
Obligation
Property Description Location Balance Holder
==================== ===================== ======== =========
Store Fixtures & Equipment #207 Charlotte Harbor $ 139,841 GE Capital
Store Fixtures & Equipment #000 Xxxxxx Xxxxxxx $ 280,038 GE Capital
Store Fixtures & Equipment #214 Sarasota $ 754,542 GE Capital
Store Fixtures & Equipment #000 Xxxxxx Xxxx $ 441,479 GE Capital
Store Fixtures & Equipment #854 Palmetto $ 310,864 GE Capital
4683 Front End Equipment 23 Locations $ 159,788 IBMCC
Store Fixtures & Equipment #715 Bradenton $ 253,253 MDFC
Store Fixtures & Equipment #717 New Port Xxxxxx $ 268,062 MDFC
Store Fixtures & Equipment #215 Sarasota $ 786,651 Sanwa GEL
Store Fixtures & Equipment #723 Plant City $ 539,755 Sanwa GEL
EAS Camera System #401 & #403 $ 65,632 Sensormatic
Store Fixtures & Equipment #719 Sarasota $ 139,830 US Leasing
IBM Front End Financing Various $ 570,436 IBMCC
Building & Equipment #651 Ocala $ 1,774,807 Goodings
Save n' Pack Building #401 Tampa $ 1,987,885 Supervalu, Inc.
Save n' Pack Equipment #401 & #403 $ 1,205,195 Supervalu, Inc.
EAS Systems Various $ 358,982 Sensormatic
Store Fixtures & Equipment #718 Tampa $ 56,854 CIT Equipment
Financing
Store Fixtures & Equipment #712 Tampa $ 51,914 CIT Equipment
Financing
Sakurai Color Press Admin $ 214,839 CIT Equipment
Financing
Unix Hardware/Software Admin $ 394,238 Sanwa GEL
Trucks & Trailers Warehouse $ 250,236 Sanwa GEL
Building Lease 0000 Xxxxxx Xx. $ 383,791 Xxxxxx Xxxx
Meat Scales Unix Hardware Admin/Various Stores $ 291,321 Sunfinancial
Mortgage #000 Xxxxxxx Xxxxx $ 1,885,222 AegonUSA Mortgage
Mortgage #000 Xxxx Xxxxxxxxx $ 2,014,741 AegonUSA Mortgage
Mortgage #717 New Port Xxxxxx $ 1,511,055 AegonUSA Mortgage
Mortgage #878 Tampa $ 1,690,943 AegonUSA Mortgage
Mortgage #000 Xxxxxx Xxxx $ 2,014,741 AegonUSA Mortgage
Mortgage #887 Tampa $ 1,547,033 AegonUSA Mortgage
Mortgage #891 Sebring $ 1,959,575 AegonUSA Mortgage
Mortgage #896 Belleview $ 1,978,763 AegonUSA Mortgage
Mortgage Warehouse
0000 Xxxxxx Xx. $14,837,807 Sunlife Mortgage
Mortgage #875 Palm Harbor $ 1,346,232 CALPERS(Pers ABKB)
Mortgage #876 Gainesville $ 680,801 CALPERS(Pers ABKB)
Mortgage #877 Seffner $ 665,936 CALPERS(Pers ABKB)
Mortgage #880 Sarasota $ 743,906 CALPERS(Pers ABKB)
Store Fixtures & Equipment #720 Gainesville Operating Xxxx Commercial
Equipment Lease Credit
/TABLE
Schedule II
Hazardous Materials
[Section 7.12]
GASOLINE SERVICE STATIONS
At the time of the Lucky acquisition, Kash n' Xxxxx acquired
12 sites containing operating gasoline service stations ("sublet
locations") operated by third parties under sublease agreements and
8 sites which contained closed gasoline service stations ("former
locations"). As part of the acquisition agreement, as amended by
that certain Agreement Respecting Service Stations and Former
Service Stations dated November 14, 1989 (the "Agreement"), Lucky
was obligated to perform tests for the presence of underground tank
hazardous materials at the former locations and to use its best
efforts to perform tests at the sublet locations. In the event the
tests revealed the presence of hazardous materials, Lucky agreed to
take all actions reasonably necessary to eliminate such hazardous
materials from the former locations and to use its best efforts to
cause such action to be taken with respect to the sublet locations.
All costs and expenses incurred by Lucky were to be borne solely by
Lucky.
Subsequent to the acquisition date, subleases with Devco
Petroleum on 8 of the 12 sublet locations were terminated ("Devco
sites"). Consequently, the Devco sites were treated as former
locations and all underground tanks and other service station
improvements were removed and disposed of by Lucky on the 8 former
locations and the 8 Devco sites.
Of the 20 sites, 4 sites have been approved by the Florida
Department of Environmental Protection ("DEP") for no further
action, and Kash n' Xxxxx has released Lucky from any further
obligations with respect to these sites.
The clean-up of the 4 sublet locations is primarily the
responsibility of the subtenant, Worsley Companies. Although the
sites have been certified as eligible for the state Early Detection
Incentive ("EDI") program, the DEP has notified parties performing
remediation activities to cease all work if such parties intend to
seek reimbursement from the State. Therefore, the remediation work
at these sites has ceased temporarily.
The remaining 12 sites are the responsibility of Lucky, and
certain sites have been certified as eligible for state clean-up
under the EDI program. Even though Lucky may not receive future
reimbursement from the State with respect to such sites, as a
result of the DEP's order to cease work, Lucky is proceeding with
site rehabilitation on all of the sites. The attached summarizes
the status of the work at each of the 20 sites as of October 26,
1995.
STORE #722
The site is approximately four acres in area and supports the Kash
n' Xxxxx retail food store, 722, which is approximately 47,000
square feet in area. The remainder of the site is dominantly
covered by asphalt and concrete parking area.
On July 31, 1992, during demolition of a former fabric store
building located on the subject property, an underground concrete
tank and rusted drum in the tank were encountered and crushed by a
backhoe. An unidentified blue liquid residue present in the drum
subsequently spilled onto portions of the concrete tank walls and
soil in the vicinity of the former tank location. The area around
the tank location was then over-excavated and the excavated soil,
concrete debris and drum were stockpiled on site and covered with
plastic, pending soil debris waste characterization and removal.
In August and September 1992, Law, authorized by Kash n' Xxxxx,
conducted a preliminary assessment of ground-water and soil quality
in the area where the tank was previously located. A Preliminary
Contamination Assessment Report (PCAR) which summarized the
assessment activities and results was submitted to the Florida
Department of Environmental Protection (FDEP) by Kash n' Xxxxx in
October 1992 (Law, 1992). According to the report, soil and ground
water assessed did not appear to have been adversely impacted by
the constituents of interest (volatile and semi-volatile organic
compounds and eight RCRA metals).
In September 1992, soil samples were collected from the soil pile
for analyses for disposal method determination. Analytical results
on samples indicated that concentrations of seven metals were
detected in the samples above method detection limits: arsenic,
barium, cadmium, chromium, lead, selenium and silver. The
concentration of only one of the metals, lead, exceeded the maximum
concentration standard established for a waste. The soil debris
was subsequently removed and transported to the Chemical Waste
Management, Inc. facility in Emelle, Alabama for disposal and the
clean concrete debris was sent to a Xxxxxxxx & Sons, Inc. facility
for disposal.
Based on their review of the PCAR, the FDEP requested by letter
(October and December 1993) that assessment of ground water and
soil quality be conducted in the area of the former soil pile
location. In March 1994, the FDEP approved a supplemental
preliminary contamination assessment plan. In April 1994, Law, on
behalf of Kash n' Xxxxx, implemented the plan which included
collection and analysis of soil and ground-water samples for the
constituents of interest: volatile organic compounds and semi-
volatile organic compounds, excluding pesticides and PCBs, and
eight RCRA metals.
2
Data obtained as part of the supplemental preliminary contamination
assessment indicated the following:
1. Ground-water flow direction in the southwestern portion
of the site is toward the northeast;
2. Concentrations of five metals, arsenic, barium, chromium,
lead and mercury, detected in soil samples were below the
toxicity characteristic leachate standards established in
Chapter 40 of the Code of Federal Regulation Part 261.24,
Table 1, for these metals in a waste and there were no
toxicity standards established for the constituents
acetone and di-n-butylphthalate which were also detected
in these samples;
3. Concentrations of total chromium and barium detected in
ground-water samples did not exceed the maximum
contaminant levels established in Florida Administrative
Code 17-550.310 for these metals in drinking water.
These data indicate that there does not appear to be a concern with
regard to soil and ground-water quality related to the volatile and
semi-volatile compounds and the metals for which these matrices
were analyzed. No further assessment of soil and ground water in
the areas of interest is recommended.
1
SITE SUMMARY
Former Key Energy Service Station No. 408
000 X. Xxxxxxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx
Former Keystop/Kangaroo Service Station No. 423
0000 00xx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxx
Former Service Xxxxxxx Xx. 000
0000 Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx
Former Key Energy Service Station No. 427
000 Xxxxxx Xxxxxx (xx Xxxxxxx Xxxxxx)
Xxxxx, Xxxxxxx
Former Service Xxxxxxx Xx. 000
0000 X.X. Xxxxxxx 000 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx
Former Keystop/Kangaroo Service Station No. 430
0000 X.X. Xxxx Xxxxxx
Xxxxx, Xxxxxxx
Former Service Station No. 439
458 Venice By-Pass
Venice, Florida
Former Keystop/Kangaroo Service Station No. 440
00000 00xx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx
Former Service Xxxxxxx Xx. 000
X.X. Xxxxxxx 00 at State Road 35A
Dade City, Florida
Former Keystop Service Station No. 444
0000 Xxxx Xxxxxxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx
Former Keystop/Kangaroo Service Station No. 445
00000 X.X. Xxxxxxx 00
Xxxx Xxxxxx, Xxxxxxx
Former Key Energy Station No. 448
1023 U.S. Highway 41 (at 11th Street)
Ruskin, Florida
Former Service Station No. 450
00000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxx
Former Service Station No. 451
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
Former Devco Service Station No. 454
000 0xx Xxxxxx
Xxxxxxxx, Xxxxxxx
Former Key Energy Station No. 455
0000 X.X. Xxxxxxx 000
Xxxxxxxxx, Xxxxxxx
Site Remediation Summary
Site No. 408
The underground storage tanks were removed from this site in
1984. A limited contamination assessment was prepared and a No
Further Action proposal submitted to the Florida Department of
Environmental Protection (FDEP) and Hillsborough County
Environmental Protection Commission (HCEPC) in 1991. A No
Further Action order was issued by the FDEP in December 1991.
Site No. 423
The underground storage tanks were removed from this site in
1990. A Contamination Assessment Report and a Remedial Action
Plan were submitted to the FDEP and approved. A remediation
system was installed on the site in June 1994 and the groundwater
contaminant concentrations have been on the decline ever since.
It is anticipated that the subject remediation system will need
to be operated for at least another year before the groundwater
will meet FDEP cleanup criteria. Once the FDEP Cleanup criteria
are met groundwater quality at the site will need to be monitored
for a period of one year with quarterly reports being submitted
to the FDEP. At the conclusion of a years monitoring the FDEP
will issue a Site Rehabilitation Complete Order (SCRO) or an NFA
order.
Site No. 424
The underground storage tanks were removed from this site in
1988. A Contamination Assessment Report and Remedial Action Plan
request were submitted and approved by the Florida Department of
Environmental Protection (FDEP) and Hillsborough County
Environmental Protection Commission (HCEPC). Implementation of
the RAP at the subject site was initiated on October 17, 1995.
During the implementation of the RAP at the site it was
discovered that at least one and possibly two previously
unidentified underground storage tanks may exist at the site.
Permits are currently being sought for the removal of the UST's.
It is anticipated that upon the conclusion of the RAP
Implementation that groundwater quality will meet FDEP cleanup
criteria. Once the FDEP cleanup criteria are met, groundwater
quality at the site will need to be monitored for a period of one
year with quarterly reports being submitted to the FDEP. At the
conclusion of a years monitoring it is anticipated that FDEP will
issue a Site Rehabilitation Complete Order (SCRO) or an NFA
order.
Site No. 427
The underground storage tanks were removed from this site in
1990. A Contamination Assessment Report and Remedial Action Plan
request were submitted and approved by the Florida Department of
Environmental Protection (FDEP) and Hillsborough County
Environmental Protection Commission (HCEPC). The remediation
system was started in March 1995 and it is anticipated that will
operated for at least another year before the FDEP cleanup
criteria are met. Once FDEP groundwater criteria are met,
groundwater quality at the site will need to be monitored for a
period of one year with quarterly reports being submitted to the
FDEP. At the conclusion of a years monitoring it is anticipated
that FDEP will issue a Site Rehabilitation Complete Order (SCRO)
or an NFA order.
Store No. 428
The underground storage tanks were removed from this site in
1990. A Contamination Assessment Report and Remedial Action Plan
request were submitted and approved by the Florida Department of
Environmental Protection (FDEP). The remediation system was
installed at the site January 1995. It is anticipated that
system will need to be operated for at least another year before
the FDEP cleanup criteria are met. Once FDEP groundwater
criteria are met, groundwater quality at the site will need to be
monitored for a period of one year with quarterly reports being
submitted to the FDEP. At the conclusion of a years monitoring
it is anticipated that FDEP will issue a Site Rehabilitation
Complete Order (SCRO) or an NFA order.
Site No. 430
The underground storage tanks were removed from this site in
1988. A Contamination Assessment Report and Remedial Action Plan
request were submitted and approved by the Florida Department of
Environmental Protection (FDEP). The remediation system was
installed at the site December 1994. It is anticipated that
system will need to be operated for at least another year before
the FDEP cleanup criteria are met. Once FDEP groundwater
criteria are met, groundwater quality at the site will need to be
monitored for a period of one year with quarterly reports being
submitted to the FDEP. At the conclusion of a years monitoring
it is anticipated that FDEP will issue a Site Rehabilitation
Complete Order (SCRO) or an NFA order.
Site No. 439
The underground storage tanks were removed from this site in
1988. A Contamination Assessment Report was submitted and
approved by the Sarasota County Pollution Control Department
(SCPCD). A Remedial Action Plan was submitted to the SCPCD in
February 1995 and we expect SCPCD approval at any time. A
remediation system consisting of a soil vapor extraction and air
sparge unit is anticipated to be installed at the site in during
February 1996. It is anticipated that the subject remediation
system will need to be operated for 1-2 years before the
groundwater quality will meet FDEP cleanup criteria. Once the
FDEP Cleanup criteria are met groundwater quality at the site
will need to be monitored for a period of one year with quarterly
reports being submitted to the FDEP. At the conclusion of a
years monitoring is it anticipated that FDEP will issue a Site
Rehabilitation Complete Order (SCRO) or an NFA order.
Site No. 440
The underground storage tanks were removed from this site in
1988. A Contamination Assessment Report and a Remedial Action
Plan were submitted to the FDEP and approved. A remediation
system was installed on the site in March 1995 and the
groundwater contaminant concentrations have been observed to be
on the decline since. It is anticipated that the subject
remediation system will need to be operated for at least another
year before the groundwater will meet FDEP cleanup criteria.
Once the FDEP Cleanup criteria are met groundwater quality at the
site will need to be monitored for a period of one year with
quarterly reports being submitted to the FDEP. At the conclusion
of a years monitoring it is anticipated that the FDEP will issue
a Site Rehabilitation Complete Order (SCRO) or an NFA order.
Site No. 441
The underground storage tanks were removed from this site in
1988. A Contamination Assessment Report and a No Further Action
order was issued by the FDEP in May 1993.
Site No. 444
The underground storage tanks were removed from this site in
1988. A Contamination Assessment Report and Monitor Only Plan
request were submitted and approved by the Florida Department of
Environmental Protection (FDEP) and Hillsborough County
Environmental Protection Commission (HCEPC). The results of the
MOP implementation at the site have been mixed as groundwater
quality has been observed to fluctuate with respect to meeting
FDEP cleanup criteria. MOP will continue to be implemented at
the site for another year. At the conclusion of the year of
additional monitoring it is anticipated that FDEP will issue a
Site Rehabilitation Complete Order (SCRO) or an NFA order.
Site No. 445
The underground storage tanks were removed from this site in
1988. A Contamination Assessment Report and a Remedial Action
Plan were submitted to the FDEP and approved. Operation of the
remediation system installed on the site was initiated in April
1994 and the groundwater contaminant concentrations have just
recently reached FDEP groundwater cleanup criteria levels. A
Monitor Only Plan (MOP) is being prepared for submittal to FDEP.
Upon receipt of FDEP's approval for the implementation of MOP,
groundwater quality at the site will need to be monitored for a
period of one year with quarterly reports being submitted to the
FDEP. At the conclusion of the year of monitoring it is
anticipated that FDEP will issue a Site Rehabilitation Complete
Order (SCRO) or an NFA order.
Site No. 448
The underground storage tanks were removed from this site in
1990. A Contamination Assessment Report and Remedial Action Plan
request were submitted and approved by the Florida Department of
Environmental Protection (FDEP) and Hillsborough County
Environmental Protection Commission (HCEPC). Per the request of
Kash n' Xxxxx the initiation of the implementation of the RAP has
been delayed until May 1996. It is anticipated that upon the
conclusion of the RAP Implementation (3 weeks) that groundwater
quality will meet FDEP cleanup criteria. Once the FDEP Cleanup
criteria are met groundwater quality at the site will need to be
monitored for a period of one year with quarterly reports being
submitted to the FDEP. At the conclusion of a years monitoring
it is anticipated that FDEP will issue a Site Rehabilitation
Complete Order (SCRO) or an NFA order.
Site No. 450
The underground storage tanks were removed from this site in
1989. A limited contamination assessment was prepared and a No
Further Action proposal submitted to the Florida Department of
Environmental Protection (FDEP) and Hillsborough County
Environmental Protection Commission (HCEPC) in 1991. A No
Further Action order was issued by the FDEP in August 1992.
Site No. 451
The underground storage tanks were removed from this site in
1989. An Interim Remedial Action Report and a No Further Action
Request were submitted to the Florida Department of Environmental
Protection (FDEP) in 1990. A No Further Action order was issued
by the FDEP in October 1990.
Site No. 454
The underground storage tanks were removed from this site in
1989. A Contamination Assessment Report and Interim Remedial
Action (XXX) request were submitted and approved by the Florida
Department of Environmental Protection (FDEP). Following the
implementation of the XXX at the site a Monitor Only plan Request
was submitted to and approved by the FDEP. The results of the
MOP implementation at the site have been mixed as groundwater
quality has been observed to fluctuate with respect to meeting
FDEP cleanup criteria. MOP will continue to be implemented at
the site for another year. At the conclusion of the year of
additional monitoring it is anticipated that FDEP will issue a
Site Rehabilitation Complete Order (SCRO) or an NFA order.
Site No. 455
The underground storage tanks were removed from this site in
1990. A Contamination Assessment Report and Monitor Only Plan
request were submitted and approved by the Florida Department of
Environmental Protection (FDEP) and Hillsborough County
Environmental Protection Commission (HCEPC). The results of the
MOP implementation at the site have been mixed as groundwater
quality has been observed to fluctuate with respect to meeting
FDEP cleanup criteria. MOP will continue to be implemented at
the site for another year. At the conclusion of the year of
additional monitoring it is anticipated that FDEP will issue a
Site Rehabilitation Complete Order (SCRO) or an NFA order.
SITE STATUS
WORSLEY SITES
10/26/95
Portable
Site No. & Site Free Product Xxxxx (within
Location Task Score (Yes/No) 1/4 mile) Status
================== ==== ===== ======== ======= ========
Site #449 RAP 12 YES NO RAP
(Gas world #5) Approved
000 X.X. Xxxxxxx 00 0/0/00
Xxxxxxxxxx, XX
Site #426 RAP 28 YES NO RAP
(Gas world #6) Comments
000 Xxxxxxx Xx. Rec'd
Plant [City], FL 9/6/95
from HCEPC
Site #429 RAP 8 NO YES; RAP
(Gas world #7) (1) cross Approved
000 Xxxxxx Xx. xxxxxxxx 0/00/00
Xxxxxxxx, XX
Site #464 CAR 40 NO YES; CAR
(Gas world #11) (3) up Comments
0000 Xxxx Xx. gradient Issued by
Dunedin, FL FDEP
CAR- Contamination Assessment Report
RAP- Remedial Action Plan
FDEP- Florida Department of Environmental Protection
HCEPC- Hillsborough County Environmental Protection Commission
SCHEDULE III
Existing Letters of Credit
==========================
Kash n' Xxxxx Food Stores, Inc.
Existing Letter of Credit Balances
As of: 12/19/95
LC#
===
Chemical Bank
=============
AEGON USA REALTY 320,000.00
CIT EQUIPMENT GROUP FINANCING 125,000.00
XXXX COMMERCIAL CREDIT CORPORATION 487,600.00
FIDELITY & DEPOSIT COMPANY OF MD 341,911.00
GAINESVILLE REGIONAL UTILITIES 86,600.00
G.E. CAPITAL CORPORATION 550,338.00
G.E. CAPITAL CORPORATION 361,100.00
HOME INSURANCE COMPANY 6,350,000.00
SUN LIFE INSURANCE CO. OF AMERICA 450,000.00
RELIANCE INSURANCE CO 1,330,843.75
_____________
SUBTOTAL CHEMICAL LC'S 10,403,392.75
-------------
DAI ITCHI KANGYO
xxxxxxxxxxxxxxxxx
XXX 000000 GE CAPITAL 361,588.00
SDC 016297 IBP INC. 250,000.00
----------
SUBTOTAL DKB LC'S 611,588.00
----------
-------------
TOTALS 11,014,980.75
=============
Schedule IV
Litigation
[See Section 7.03]
None
EXHIBIT A-1
[Form of Revolving Credit Note]
PROMISSORY NOTE
$[________________] December __, 1995
FOR VALUE RECEIVED, KASH N' XXXXX FOOD STORES, INC., a
Delaware corporation (the "Company"), hereby promises to pay to
[_________________] (the "Lender"), for the account of its
Applicable Lending Office provided for by the Credit Agreement
referred to below, at the principal office of Chemical Bank, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, the principal sum of
[_________________] Dollars (or such lesser amount as shall equal
the aggregate unpaid principal amount of the Revolving Credit
Loans made by the Lender to the Company under the Credit
Agreement), in lawful money of the United States of America and
in immediately available funds, on the dates and in the principal
amounts provided in the Credit Agreement, and to pay interest on
the unpaid principal amount of each such Revolving Credit Loan,
at such office, in like money and funds, for the period
commencing on the date of such Revolving Credit Loan until such
Revolving Credit Loan shall be paid in full, at the rates per
annum and on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate and duration of
Interest Period (if applicable) of each Revolving Credit Loan
made by the Lender to the Company, and each payment made on
account of the principal of such Loan, shall be recorded by the
Lender on its books and, prior to any transfer of this Note,
endorsed by the Lender on the schedule attached to this Note or
any continuation of such schedule, provided that the failure of
the Lender to make any such recordation or endorsement shall not
affect the obligations of the Company to make a payment when due
of any amount owing under the Credit Agreement or under this Note
in respect of the Revolving Credit Loans made by the Lender.
This Note is one of the Revolving Credit Notes referred
to in the Amended and Restated Credit Agreement dated as of
December 19, 1995 (as modified and supplemented and in effect
from time to time, the "Credit Agreement") among the Company, the
Lenders (including the Lender) and The CIT Group/Business Credit,
Inc., as Administrative Agent and evidences Revolving Credit
Loans made by the Lender under the Credit Agreement. This Note
is an amendment and restatement of, and modification to, the
Revolving Credit Notes (as defined in the Existing Credit
Agreement) which were issued by the Company to the Lender in
accordance with Section 2.08(a) of the Existing Credit Agreement.
Capitalized terms used but not defined in this Note have the
respective meanings assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of
the maturity of this Note upon the occurrence of certain events
and for prepayments of Loans upon the terms and conditions
specified in the Credit Agreement. This Note is secured by and
entitled to the benefits of the Security Documents.
Except as permitted by Section 11.06(b) of the Credit
Agreement, this Note may not be assigned by the Lender to any
other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK.
KASH N' XXXXX FOOD STORES, INC.
By: _______________________
Title:
3
SCHEDULE OF REVOLVING CREDIT LOANS
This Note evidences Revolving Credit Loans made,
Continued or Converted under the Credit Agreement to the Company,
on the dates, in the principal amounts, of the Types, bearing
interest at the rates and having Interest Periods (if applicable)
of the durations set forth below, subject to the payments,
Continuations, Conversions and prepayments of principal set forth
below:
Amount
Date Paid,
Made, Principal Duration Prepaid,
Continued Amount Type of Continued Unpaid
or of of Interest Interest or Principal Notation
Converted Loan Loan Rate Period Converted Amount Made by
========= ====== ==== ======== ====== ========= ======= =========
4
EXHIBIT A-2
[Form of Tranche A Term Loan Note]
PROMISSORY NOTE
$[_______________] December ____, 1995
FOR VALUE RECEIVED, KASH N' XXXXX FOOD STORES, INC., a
Delaware corporation (the "Company"), hereby promises to pay to
[__________________] (the "Lender"), for the account of its
Applicable Lending Office provided for by the Credit Agreement
referred to below, at the principal office of Chemical Bank, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, the principal sum of
[_______________] Dollars (or such lesser amount as shall equal
the aggregate unpaid principal amount of the Tranche A Term Loan
made by the Lender to the Company under the Credit Agreement), in
lawful money of the United States of America and in immediately
available funds, on the dates and in the principal amounts
provided in the Credit Agreement, and to pay interest on the
unpaid principal amount of the Tranche A Term Loan, at such
office, in like money and funds, for the period commencing on the
date of the Tranche A Term Loan until the Tranche A Term Loan
shall be paid in full, at the rates per annum and on the dates
provided in the Credit Agreement.
The date, amount, Type, interest rate and duration of
Interest Period (if applicable) of the Tranche A Term Loan made
by the Lender to the Company, and each payment made on account of
the principal of such Loan, shall be recorded by the Lender on
its books and, prior to any transfer of this Note, endorsed by
the Lender on the schedule attached to this Note or any
continuation of such schedule, provided that the failure of the
Lender to make any such recordation or endorsement shall not
affect the obligations of the Company to make a payment when due
of any amount owing under the Credit Agreement or under this Note
in respect of the Tranche A Term Loan made by the Lender.
This Note is one of the Term Loan Notes referred to in
the Amended and Restated Credit Agreement dated as of December
19, 1995 (as modified and supplemented and in effect from time to
time, the "Credit Agreement") among the Company, the Lenders
(including the Lender) and The CIT Group/Business Credit, Inc.,
as Administrative Agent and evidences the Tranche A Term Loan
made by the Lender under the Credit Agreement. Capitalized terms
used but not defined in this Note have the respective meanings
assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of
the maturity of this Note upon the occurrence of certain events
and for prepayments of the Tranche A Term Loan upon the terms and
conditions specified in the Credit Agreement. This Note is
secured by and entitled to the benefits of the Security
Documents.
Except as permitted by Section 11.06(b) of the Credit
Agreement, this Note may not be assigned by the Lender to any
other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK.
KASH N' XXXXX FOOD STORES, INC.
By: _______________________
Title:
2
SCHEDULE OF TRANCHE A TERM LOAN
This Note evidences the Tranche A Term Loan made, as
well as any portion thereof Continued or Converted, under the
Credit Agreement to the Company, on the dates, in the principal
amounts, of the Types, bearing interest at the rates and having
Interest Periods (if applicable) of the durations set forth
below, subject to the payments, Continuations, Conversions and
prepayments of principal set forth below:
Amount
Date Paid,
Made, Principal Duration Prepaid,
Continued Amount Type of Continued Unpaid
or of of Interest Interest or Principal Notation
Converted Loan Loan Rate Period Converted Amount Made by
========= ====== ==== ======= ======= ========= ======== ========
3
EXHIBIT A-3
[Form of Tranche B Term Loan Note]
PROMISSORY NOTE
$[_______________] December ____, 1995
FOR VALUE RECEIVED, KASH N' XXXXX FOOD STORES, INC., a
Delaware corporation (the "Company"), hereby promises to pay to
[__________________] (the "Lender"), for the account of its
Applicable Lending Office provided for by the Credit Agreement
referred to below, at the principal office of Chemical Bank, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, the principal sum of
[_______________] Dollars (or such lesser amount as shall equal
the aggregate unpaid principal amount of the Tranche B Term Loan
made by the Lender to the Company under the Credit Agreement), in
lawful money of the United States of America and in immediately
available funds, on the dates and in the principal amounts
provided in the Credit Agreement, and to pay interest on the
unpaid principal amount of the Tranche B Term Loan, at such
office, in like money and funds, for the period commencing on the
date of the Tranche B Term Loan until the Tranche B Term Loan
shall be paid in full, at the rates per annum and on the dates
provided in the Credit Agreement.
The date, amount, Type, interest rate and duration of
Interest Period (if applicable) of each Tranche B Term Loan made
by the Lender to the Company, and each payment made on account of
the principal of such Loan, shall be recorded by the Lender on
its books and, prior to any transfer of this Note, endorsed by
the Lender on the schedule attached to this Note or any
continuation of such schedule, provided that the failure of the
Lender to make any such recordation or endorsement shall not
affect the obligations of the Company to make a payment when due
of any amount owing under the Credit Agreement or under this Note
in respect of the Tranche B Term Loan made by the Lender.
This Note is one of the Term Loan Notes referred to in
the Amended and Restated Credit Agreement dated as of December
19, 1995 (as modified and supplemented and in effect from time to
time, the "Credit Agreement") among the Company, the Lenders
(including the Lender) and The CIT Group/Business Credit, Inc.,
as Administrative Agent and evidences the Tranche B Term Loan
made by the Lender under the Credit Agreement. This Note is an
amendment and restatement of, and modification to, the Term Loan
Notes (as defined in the Existing Credit Agreement) which were
issued by the Company to the Lender in accordance with Section
2.08(c) of the Existing Credit Agreement. Capitalized terms used
but not defined in this Note have the respective meanings
assigned to them in the Credit Agreement.
1
The Credit Agreement provides for the acceleration of
the maturity of this Note upon the occurrence of certain events
and for prepayments of the Tranche B Term Loan upon the terms and
conditions specified in the Credit Agreement. This Note is
secured by and entitled to the benefits of the Security
Documents.
Except as permitted by Section 11.06(b) of the Credit
Agreement, this Note may not be assigned by the Lender to any
other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK.
KASH N' XXXXX FOOD STORES, INC.
By: _______________________
Title:
2
SCHEDULE OF TRANCHE B TERM LOAN
This Note evidences the Tranche B Term Loan made, as
well as any portion thereof Continued or Converted, under the
Credit Agreement to the Company, on the dates, in the principal
amounts, of the Types, bearing interest at the rates and having
Interest Periods (if applicable) of the durations set forth
below, subject to the payments, Continuations, Conversions and
prepayments of principal set forth below:
Amount
Date Paid,
Made, Principal Duration Prepaid,
Continued Amount Type of Continued Unpaid
or of of Interest Interest or Principal Notation
Converted Loan Loan Rate Period Converted Amount Made by
========= ====== ==== ======== ====== ========= ======== ========
3
EXHIBIT A-4
[Form of Tranche C Term Loan Note]
PROMISSORY NOTE
$[_______________] December ____, 1995
FOR VALUE RECEIVED, KASH N' XXXXX FOOD STORES, INC., a
Delaware corporation (the "Company"), hereby promises to pay to
[__________________] (the "Lender"), for the account of its
Applicable Lending Office provided for by the Credit Agreement
referred to below, at the principal office of Chemical Bank, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, the principal sum of
[_______________] Dollars (or such lesser amount as shall equal
the aggregate unpaid principal amount of the Tranche C Term Loan
made by the Lender to the Company under the Credit Agreement), in
lawful money of the United States of America and in immediately
available funds, on the dates and in the principal amounts
provided in the Credit Agreement, and to pay interest on the
unpaid principal amount of the Tranche C Term Loan, at such
office, in like money and funds, for the period commencing on the
date of the Tranche C Term Loan until the Tranche C Term Loan
shall be paid in full, at the rates per annum and on the dates
provided in the Credit Agreement.
The date, amount, Type, interest rate and duration of
Interest Period (if applicable) of each Tranche C Term Loan made
by the Lender to the Company, and each payment made on account of
the principal of such Loan, shall be recorded by the Lender on
its books and, prior to any transfer of this Note, endorsed by
the Lender on the schedule attached to this Note or any
continuation of such schedule, provided that the failure of the
Lender to make any such recordation or endorsement shall not
affect the obligations of the Company to make a payment when due
of any amount owing under the Credit Agreement or under this Note
in respect of the Tranche C Term Loan made by the Lender.
This Note is one of the Term Loan Notes referred to in
the Amended and Restated Credit Agreement dated as of December
19, 1995 (as modified and supplemented and in effect from time to
time, the "Credit Agreement") among the Company, the Lenders
(including the Lender) and The CIT Group/Business Credit, Inc.,
as Administrative Agent and evidences the Tranche C Term Loan
made by the Lender under the Credit Agreement. This Note is an
amendment and restatement of, and modification to, the Term Loan
Notes (as defined in the Existing Credit Agreement) which were
issued by the Company to the Lender in accordance with Section
2.08(d) of the Existing Credit Agreement. Capitalized terms used
but not defined in this Note have the respective meanings
assigned to them in the Credit Agreement.
4
The Credit Agreement provides for the acceleration of
the maturity of this Note upon the occurrence of certain events
and for prepayments of the Tranche C Term Loan upon the terms and
conditions specified in the Credit Agreement. This Note is
secured by and entitled to the benefits of the Security
Documents.
Except as permitted by Section 11.06(b) of the Credit
Agreement, this Note may not be assigned by the Lender to any
other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK.
KASH N' XXXXX FOOD STORES, INC.
By: _______________________
Title:
5
SCHEDULE OF TRANCHE C TERM LOAN
This Note evidences the Tranche C Term Loan made, as
well as any portion thereof Continued or Converted, under the
Credit Agreement to the Company, on the dates, in the principal
amounts, of the Types, bearing interest at the rates and having
Interest Periods (if applicable) of the durations set forth
below, subject to the payments, Continuations, Conversions and
prepayments of principal set forth below:
Amount
Date Paid,
Made, Principal Duration Prepaid,
Continued Amount Type of Continued Unpaid
or of of Interest Interest or Principal Notation
Converted Loan Loan Rate Period Converted Amount Made by
========= ====== ==== ======== ====== ========== ====== =========
6
EXHIBIT B
[Form of Borrowing Base Certificate]
BORROWING BASE CERTIFICATE
Weekly accounting period ended [__________ _____, ____]
Reference is made to the Amended and Restated Credit
Agreement dated as of December 19, 1995 (as modified and
supplemented and in effect from time to time, the "Credit
Agreement"), among Kash n' Xxxxx Food Stores, Inc. (the
"Company"), the lenders referred to in the Credit Agreement (the
"Lenders") and The CIT Group/Business Credit, Inc., as
Administrative Agent. Capitalized terms used in this Certificate
have the respective meanings assigned to them in the Credit
Agreement.
Pursuant to Section 8.01(f) of the Credit Agreement,
the undersigned, the Chief [Financial/Accounting] Officer of the
Company, hereby certifies that, to the best of [his][her]
knowledge, attached as Annex 1 is a true and accurate calculation
of the Borrowing Base as at the end of the weekly accounting
period ended [__________ _____, ____] determined in accordance
with the requirements of the Credit Agreement.
All Inventory covered by this Certificate has been
produced in compliance with all applicable laws, including (to
the extent applicable) the minimum wage and overtime requirements
of the Fair Labor Standards Act of 1938.
IN WITNESS WHEREOF, the undersigned has caused this
certificate to be duly executed as of the [__________] day of
[____________, ____].
[____________________________]
Title: Chief [Financial/
Accounting] Officer
1
Annex 1
KASH N' XXXXX FOOD STORES, INC.
Borrowing Base Certificate
(000's omitted)
************************************************************
Receivables (determined net of credits)
beginning balance period ended
[_________ _____, _____] ______
Plus: total sales for period ______
Less: total cash receipts for period ______
total other adjustments
for period (+/) (details
attached) including rebates,
offsets and commissions ______
Receivables (determined net of credits)
ending balance period ended
[__________ ____, _____] ______
Less: ineligible Receivables at period end
(determined without duplication):
Receivables not payable in Dollars
or convertible currency ______
Receivables over 60 days original terms ______
Receivables due from Subsidiaries
and Affiliates ______
Export Receivables ______
Receivables from creditors with
unsatisfactory credit standing (as
determined by the Administrative Agent) ______
Receivables over 90 days past due ______
Receivables with excess of 25% of
balances past 30 days past due ______
Receivables exceeding concentration of
15% of aggregate Receivables ______
Receivables subject to dispute ______
Contras ______
Receivables arising out of sale or
return transactions ______
Receivables otherwise determined by
Administrative Agent to be ineligible ______
Total ineligible Receivables ______
Total Eligible Receivables ______
1
************************************************************
Inventory at average cost
covered by appropriate filings
with first lien priority:
Beginning period Inventory balance
[____________ ____, ____] ______
Ending period Inventory balance
[____________ ____, ____] ______
Less: ineligible Inventory at period end
(determined without duplication)
Perishable Inventory ______
Inventory exceeding shelf life ______
Inventory held more than 300 days ______
Inventory to be returned to suppliers ______
Inventory in transit to or from third ______
parties
Supplies ______
Shrinkage ______
Total ineligible Inventory ______
Less: Required Reserves ______
Total Eligible Inventory ______
************************************************************
Borrowing Base:
85% of Eligible Receivables ______
Plus: 65% of Eligible Inventory ______
Subtotal ______
Less 105% of secured Interest Rate
Protection Agreements (______)
Less Reserves for Liens or trusts created in
favor of suppliers and other statutory Liens (______)
Less Reserves for documentary stamp or similar taxes (______)
Plus Cover for Letter of Credit Liabilities (______)
Plus Amount on Deposit in Special Collateral Account (______)
Borrowing Base (before deduction of outstandings): ______
2
************************************************************
Less:
Loan Balance Period beginning
[____________ ____, _____] ______
advances for period ______
reductions for period ______
other adjustments (+/) ______
Loan Balance Period ending
[___________, ____, _____] ______
Letter of Credit Liabilities ______
Total outstandings ______
************************************************************
Borrowing Base
Availability (overadvance) ______
************************************************************
3
EXHIBIT C
==========================================================================
AMENDED AND RESTATED SECURITY AGREEMENT
Dated as of December 19, 1995
between KASH N' XXXXX FOOD STORES, INC.
and
THE CIT GROUP/BUSINESS CREDIT, INC.,
as the Administrative Agent
==========================================================================
TABLE OF CONTENTS
Page
Section 1. Definitions and Interpretation . . . . . . . . . . 1
1.01 Certain Defined Terms . . . . . . . . . . . . . . . 1
1.02 Interpretation. . . . . . . . . . . . . . . . . . . 4
Section 2. Collateral . . . . . . . . . . . . . . . . . . . . 5
2.01 Grant . . . . . . . . . . . . . . . . . . . . . . . 5
2.02 Intellectual Property . . . . . . . . . . . . . . . 7
2.03 Perfection. . . . . . . . . . . . . . . . . . . . . 7
2.04 Preservation and Protection of Security
Interests. . . . . . . . . . . . . . . . . . . . . . 7
2.05 Attorney-in-Fact. . . . . . . . . . . . . . . . . . 8
2.06 Use of Intellectual Property. . . . . . . . . . . . 9
2.07 Instruments . . . . . . . . . . . . . . . . . . . . 9
2.08 Use or Sale of Collateral . . . . . . . . . . . . . 10
2.09 Rights and Obligations. . . . . . . . . . . . . . . 10
2.10 Termination . . . . . . . . . . . . . . . . . . . . 11
Section 3. Cash Proceeds of Collateral. . . . . . . . . . . . 11
3.01 Collateral Account. . . . . . . . . . . . . . . . . 11
3.02 Certain Proceeds. . . . . . . . . . . . . . . . . . 12
3.03 Investment of Balance in Collateral Account . . . . 12
3.04 Cover for Letter of Credit Liabilities. . . . . . . 13
Section 4. Representations and Warranties . . . . . . . . . . 13
4.01 Title . . . . . . . . . . . . . . . . . . . . . . . 13
4.02 Intellectual Property . . . . . . . . . . . . . . . 13
Section 5. Covenants. . . . . . . . . . . . . . . . . . . . . 14
5.01 Books and Records . . . . . . . . . . . . . . . . . 14
5.02 Removals, Etc.. . . . . . . . . . . . . . . . . . . 15
5.03 Sales and Other Liens . . . . . . . . . . . . . . . 15
5.04 Intellectual Property . . . . . . . . . . . . . . . 15
5.05 Further Assurances. . . . . . . . . . . . . . . . . 16
Section 6. Remedies . . . . . . . . . . . . . . . . . . . . . 17
6.01 Events of Default, Etc. . . . . . . . . . . . . . . 17
6.02 Deficiency. . . . . . . . . . . . . . . . . . . . . 18
6.03 Manner of Disposition . . . . . . . . . . . . . . . 18
6.04 Application of Proceeds . . . . . . . . . . . . . . 18
Section 7. Miscellaneous. . . . . . . . . . . . . . . . . . . 19
7.01 The Administrative Agent. . . . . . . . . . . . . . 19
7.02 Waiver. . . . . . . . . . . . . . . . . . . . . . . 19
7.03 Notices . . . . . . . . . . . . . . . . . . . . . . 20
7.04 Expenses, Etc.. . . . . . . . . . . . . . . . . . . 20
7.05 Amendments, Etc.. . . . . . . . . . . . . . . . . . 21
7.06 Successors and Assigns. . . . . . . . . . . . . . . 21
7.07 Survival. . . . . . . . . . . . . . . . . . . . . . 21
7.08 Agreements Superseded . . . . . . . . . . . . . . . 21
7.09 Severability. . . . . . . . . . . . . . . . . . . . 21
i
7.10 Captions. . . . . . . . . . . . . . . . . . . . . . 21
7.11 Counterparts. . . . . . . . . . . . . . . . . . . . 21
7.12 GOVERNING LAW; SUBMISSION TO JURISDICTION . . . . . 22
7.13 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . 22
ANNEX 1 LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS AND
APPLICATIONS FOR COPYRIGHT REGISTRATIONS
ANNEX 2 LIST OF PATENTS AND PATENT APPLICATIONS
ANNEX 3 LIST OF TRADE NAMES, TRADEMARKS, SERVICES MARKS,
TRADEMARK AND SERVICE XXXX REGISTRATIONS AND
APPLICATIONS FOR TRADEMARK AND SERVICE XXXX
REGISTRATIONS
ANNEX 4 LIST OF CONTRACTS, LICENSES AND OTHER AGREEMENTS
ANNEX 5 LIST OF LOCATIONS
ANNEX 6 ASSIGNMENT FOR SECURITY (PATENTS)
ANNEX 7 ASSIGNMENT FOR SECURITY (TRADEMARKS)
ANNEX 8 FORM OF BLOCKED ACCOUNT AGREEMENT
ANNEX 9 LIST OF LIQUOR LICENSES
ii
AMENDED AND RESTATED SECURITY AGREEMENT
This AMENDED AND RESTATED SECURITY AGREEMENT (this
"Agreement") dated as of December 19, 1995 is made between KASH
N' XXXXX FOOD STORES, INC. (the "Company") and THE CIT
GROUP/BUSINESS CREDIT, INC., as the administrative agent (in such
capacity, the "Administrative Agent") for the Lenders referred to
below.
WHEREAS, the Company, the lenders referred to therein
(the "Lenders") and the Administrative Agent, have entered into
that certain Amended and Restated Credit Agreement dated as of
December 19, 1995 (the "Credit Agreement") amending and restating
the Credit Agreement dated as of December 29, 1994 (the "Existing
Credit Agreement") among the Company, the Lenders and the
Administrative Agent;
WHEREAS, as a condition precedent to the Existing
Credit Agreement, the Company and the Administrative Agent
executed and delivered that certain Security Agreement dated as
of December 28, 1994 (the "Existing Security Agreement") pursuant
to which, among other things, the Company granted a security
interest in certain collateral to secure its Obligations under
and as defined in the Existing Credit Agreement;
WHEREAS, it is a condition precedent to the
effectiveness of the Credit Agreement and extensions of credit by
Lenders under the Credit Agreement that the Company, among other
things, shall have, together with the Administrative Agent,
executed and delivered this Agreement amending and restating the
Existing Security Agreement as provided herein; and
WHEREAS, the Company and the Administrative Agent
desire to amend and restate the Existing Security Agreement in
order to confirm the continuation of and to pledge and grant
security interests in all of the Collateral (as hereinafter
defined below) in favor of the Administrative Agent for the
benefit of itself and the Lenders, as security for the Secured
Obligations.
NOW, THEREFORE, in consideration of the premises and in
order to induce the Lenders to make extensions of credit under
the Credit Agreement, the Company and the Administrative Agent
hereby agree to amend and restate the Existing Security Agreement
as follows:
Section 1. Definitions and Interpretation.
1.01 Certain Defined Terms. Unless otherwise defined,
all capitalized terms used in this Agreement that are defined in
the Credit Agreement (including those terms incorporated by
reference) shall have the respective meanings assigned to them in
1
the Credit Agreement. In addition, the following terms shall
have the following meanings under this Agreement:
"Account" shall have the meaning assigned to that term
in Section 9-106 of the Uniform Commercial Code as in effect on
the date of this Agreement, without regard to any subsequent
amendments .
"Chattel Paper" shall have the meaning assigned to that
term in Section 9-105 of the Uniform Commercial Code, as in
effect on the date of this Agreement, without regard to any
subsequent amendments.
"Collateral" shall have the meaning assigned to that
term in Section 2.01.
"Collateral Account" shall have the meaning assigned to
that term in Section 3.01.
"Copyright Collateral" shall mean all Copyrights,
whether now owned or hereafter acquired by the Company, including
each Copyright identified in Annex 1.
"Copyrights" shall mean, collectively, (a) all
copyrights, copyright registrations and applications for
copyright registrations, (b) all renewals and extensions of all
copyrights, copyright registrations and applications for
copyright registration and (c) all rights, now existing or
hereafter coming into existence, (i) to all income, royalties,
damages and other payments (including in respect of all past,
present or future infringements) now or hereafter due or payable
under or with respect to any of the foregoing, (ii) to xxx for
all past, present and future infringements with respect to any of
the foregoing and (iii) otherwise accruing under or pertaining to
any of the foregoing throughout the world.
"Deposit Account" shall have the meaning assigned to
that term in Section 9-105 of the Uniform Commercial Code as in
effect on the date of this Agreement, without regard to any
subsequent amendments.
"Document" shall have the meaning assigned to that term
in Section 9-105 of the Uniform Commercial Code as in effect on
the date of this Agreement, without regard to any subsequent
amendments.
"Equipment" shall have the meaning assigned to that
term in Section 9-109 of the Uniform Commercial Code as in effect
on the date of this Agreement, without regard to any subsequent
amendments.
"General Intangibles" shall have the meaning assigned
to that term in Section 9-106 of the Uniform Commercial Code as
2
in effect on the date of this Agreement, without regard to any
subsequent amendments.
"Instrument" shall have the meaning assigned to that
term in Section 9-105 of the Uniform Commercial Code as in effect
on the date of this Agreement, without regard to any subsequent
amendments.
"Intellectual Property" shall mean all Copyright
Collateral, all Patent Collateral and all Trademark Collateral,
together with (a) all inventions, processes, production methods,
proprietary information, know-how and trade secrets; (b) all
licenses or user or other agreements granted to the Company with
respect to any of the foregoing, in each case whether now or
hereafter owned or used, including the licenses or other
agreements with respect to the Copyright Collateral, the Patent
Collateral or the Trademark Collateral listed in Annex 4; (c) all
information, customer lists, identification of suppliers, data,
plans, blueprints, specifications, designs, drawings, recorded
knowledge, surveys, engineering reports, test reports, manuals,
materials standards, processing standards, performance standards,
catalogs, computer and automatic machinery software and programs;
(d) all accounting information and all media in which or on which
any information or knowledge or data or records may be recorded
or stored and all computer programs used for the compilation or
printout of such information, knowledge, records or data; (e) all
Governmental Approvals now held or hereafter obtained by the
Company in respect of any of the foregoing; and (f) all causes of
action, claims and warranties now owned or hereafter acquired by
the Company in respect of any of the foregoing. It is understood
that Intellectual Property shall include all of the foregoing
owned or acquired by the Company on a worldwide basis.
"Inventory" shall have the meaning assigned to that
term in Section 9-109 of the Uniform Commercial Code as in effect
on the date of this Agreement, without regard to any subsequent
amendments.
"Motor Vehicles" shall mean motor vehicles, tractors,
trailers and other like property, whether or not the title to any
such property is governed by a certificate of title or ownership.
"Patent Collateral" shall mean all Patents, whether now
owned or hereafter acquired by the Company, including each Patent
identified in Annex 2.
"Patents" shall mean, collectively, (a) all patents and
patent applications, (b) all reissues, divisions, continuations,
renewals, extensions and continuations-in-part of all patents or
patent applications and (c) all rights, now existing or hereafter
coming into existence, (i) to all income, royalties, damages, and
other payments (including in respect of all past, present and
future infringements) now or hereafter due or payable under or
with respect to any of the foregoing, (ii) to xxx for all past,
3
present and future infringements with respect to any of the
foregoing and (iii) otherwise accruing under or pertaining to any
of the foregoing throughout the world, including all inventions
and improvements described or discussed in all such patents and
patent applications.
"Proceeds" shall have the meaning assigned to that term
in Section 9-306 of the Uniform Commercial.
"Secured Obligations" shall mean (a) any and all
Obligations and (b) any and all other obligations of the Company
for the performance of its agreements, covenants and undertakings
under or in respect of the Basic Documents.
"Trademark Collateral" shall mean all Trademarks,
whether now owned or hereafter acquired by the Company, including
each Trademark identified in Annex 3. Notwithstanding the
foregoing, the Trademark Collateral shall not include any
Trademark which would be rendered invalid, abandoned, void or
unenforceable by reason of its being included as part of the
Trademark Collateral.
"Trademarks" shall mean, collectively, (a) all trade
names, trademarks and service marks, logos, trademark and service
xxxx registrations and applications for trademark and service
xxxx registrations, (b) all renewals and extensions of any of the
foregoing and (c) all rights, now existing or hereafter coming
into existence, (i) to all income, royalties, damages and other
payments (including in respect of all past, present and future
infringements) now or hereafter due or payable under or with
respect to any of the foregoing, (ii) to xxx for all past,
present and future infringements with respect to any of the
foregoing and (iii) otherwise accruing under or pertaining to any
of the foregoing throughout the world, together, in each case,
with the product lines and goodwill of the business connected
with the use of, or otherwise symbolized by, each such trade
name, trademark and service xxxx.
"Uniform Commercial Code" shall mean the Uniform
Commercial Code as in effect in the State of New York.
Section 1.02 Interpretation. In this Agreement,
unless otherwise indicated: the singular includes the plural and
plural the singular; words importing either gender include the
other gender; references to statutes or regulations are to be
construed as including all statutory or regulatory provisions
consolidating, amending or replacing the statute or regulation
referred to; references to "writing" include printing, typing,
lithography and other means of reproducing words in a tangible
visible form; the words "including," "includes" and "include"
shall be deemed to be followed by the words "without limitation";
references to articles, sections (or subdivisions of sections),
exhibits, annexes or schedules are to this Agreement; references
to agreements and other contractual instruments shall be deemed
4
to include all subsequent amendments, extensions and other
modifications to such instruments (without, however, limiting any
prohibition on any such amendments, extensions and other
modifications by the terms of any Basic Document); and references
to Persons include their respective permitted successors and
assigns and, in the case of Governmental Persons, Persons
succeeding to their respective functions and capacities.
Section 2. Collateral.
2.01 Grant. As collateral security for the prompt
payment in full when due (whether at stated maturity, by
acceleration or otherwise) and performance of the Secured
Obligations, the Company hereby pledges and grants to the
Administrative Agent, for the benefit of the Administrative Agent
and the Lenders, a security interest in all of the Company's
right, title and interest in and to the following property,
whether now owned or hereafter acquired by the Company and
whether now existing or hereafter coming into existence
(collectively, the "Collateral"):
(a) all Accounts and General Intangibles, including
all rights to the payment of money, whether or not earned by
performance, including all moneys due and to become due to the
Company in repayment of any loans or advances, in payment for
goods (including Inventory and Equipment) sold or leased or for
services rendered, in payment of tax refunds and in payment of
any guarantee of any of the foregoing;
(b) all Documents, Instruments, and Chattel Paper and,
without limiting the generality of the foregoing, letters of
credit, including any such writing evidencing, representing,
arising from or existing in respect of, relating to, covering,
evidencing, securing or supporting the payment of, any of the
Accounts, General Intangibles, Inventory or Equipment;
(c) all Inventory, including all goods of the Company
that are held by the Company for sale, lease or furnishing under
a contract of service that are so leased or furnished, and
including all spare parts and related supplies, all goods
obtained by the Company in exchange for any such goods, all
products made or processed from any such goods and all
substances, if any, commingled with or added to any such goods;
(d) all Equipment, including all goods of the Company
that are used or bought for use primarily in its business,
including all spare parts and related supplies, all goods
obtained by the Company in exchange for any such goods, all
substances, if any, commingled with or added to such goods and
all upgrades and other improvements to such goods;
5
(e) all Deposit Accounts and the balances thereof from
time to time, including the Collateral Account, the Special
Collateral Account and the balance thereof from time to time;
(f) without limiting the generality of the foregoing,
all Intellectual Property;
(g) without limiting the generality of the foregoing,
all contracts and other agreements relating to the sale or other
disposition of all or any part of the Collateral and all rights,
warranties, claims and benefits against any Person arising out
of, relating to or in connection with all or any part of the
Collateral, including any such rights, warranties, claims or
benefits against any Person storing or transporting any Inventory
or Equipment or issuing any Documents or other writings;
(h) without limiting the generality of the foregoing,
to the extent related to all or any part of the other Collateral,
all books, correspondence, credit files, records, invoices,
tapes, cards, computer runs and other papers and documents in the
possession or under the control of the Company or any computer
bureau or service company from time to time acting for the
Company;
(i) without limiting the generality of the foregoing,
all liquor licenses, including, without limitation, each of the
liquor licenses set forth on Annex 9;
(j) without limiting the generality of the foregoing,
all property that is or may become fixtures under applicable law;
(k) all other tangible and intangible property of the
Company; and
(l) all Proceeds and products in whatever form of all
or any part of the other Collateral including all insurance
payments in respect of the Collateral and all condemnation awards
and all other compensation for any Casualty Event with respect to
all or any part of the other Collateral, together with all rights
to recover and proceed with respect to the same, and all
accessions to, substitutions for and replacements of all or any
part of the Collateral.
Notwithstanding the foregoing, Motor Vehicles shall not
be included in the Collateral.
The foregoing pledge and grant of security interest
confirms the pledge and grant of security interest in the
Collateral pledged and granted pursuant to the Existing Security
Agreement and continues in all respects the pledge and grant in
the Existing Security Agreement with respect to the Collateral
without in any way causing any interruption in the continuity of
such original pledge and grant.
6
2.02 Intellectual Property. For the purpose of
enabling the Administrative Agent to exercise its rights,
remedies, powers and privileges under Section 6 at such time or
times as the Administrative Agent shall be lawfully entitled to
exercise such rights, remedies, powers and privileges, and for no
other purpose, the Company hereby grants to the Administrative
Agent, to the extent assignable, an irrevocable, nonexclusive
license (exercisable without payment of royalty or other
compensation to the Company) to use, assign, license or
sublicense any of the Intellectual Property, together with
reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer programs used for
the compilation or printout of such items.
2.03 Perfection. Concurrently with the execution and
delivery of this Agreement, the Company shall (i) execute such
financing statements and other documents as the Administrative
Agent may request with respect to the Liens granted hereby and
the continuation thereof, (ii) deliver and pledge to the
Administrative Agent any and all Instruments, endorsed or
accompanied by such instruments of assignment and transfer in
such form and substance as the Administrative Agent may request,
(iii) deliver to the Administrative Agent and file with each
relevant Governmental Person, each of the assignments in the form
of Annex 6 (in the case of any Patent Collateral) and Annex 7 (in
the case of any Trademark Collateral), (iv) give appropriate
notice to the relevant depository institution or financial
intermediary with respect to all Deposit Accounts or
uncertificated Securities, and (v) take all such other actions as
the Administrative Agent may request to perfect or establish the
priority of the Liens granted by this Agreement.
2.04 Preservation and Protection of Security
Interests. The Company shall:
(a) upon the acquisition after the Restatement
Effective Date, by the Company of any Instrument (so long as no
Default shall have occurred and be continuing, excluding any
checks received by the Company for the payment of goods or
services in the ordinary course of business), promptly deliver
and pledge to the Administrative Agent all such Instruments,
endorsed or accompanied by such instruments of assignment and
transfer in such form and substance as the Administrative Agent
may request;
(b) upon the acquisition after the Effective Date by
the Company of any Equipment covered by a certificate of title or
ownership (excluding Motor Vehicles), promptly cause the
Administrative Agent to be listed as the lienholder on such
certificate of title and within 120 days of the acquisition of
such Equipment deliver evidence of the same to the Administrative
Agent;
7
(c) upon the Company's acquiring, or otherwise
becoming entitled to the benefits of, any Copyright (or
copyrightable material), Patent (or patentable invention),
Trademark (or associated goodwill) or other Intellectual Property
or upon or prior to the Company's filing, either directly or
through any agent, licensee or other designee, of any application
with any Governmental Person for any Copyright, Patent,
Trademark, or other Intellectual Property, in each case after the
Effective Date, execute and deliver such contracts, agreements
and other instruments (including assignments in the form of
Annexes 6 and 7, as applicable) as the Administrative Agent may
request to evidence, validate, perfect and establish the priority
(subject only to Liens permitted under the Credit Agreement) of
the Liens granted by this Agreement in such and any related
Intellectual Property and, if requested by the Administrative
Agent, amend Annex 1, 2 or 3 (as the case may be) to reflect the
inclusion of any such Intellectual Property as part of the
Collateral (it being understood that the failure to amend any
such Annex shall not affect the Liens granted by this Agreement
on any such Intellectual Property); and
(d) give, execute, deliver, file or record any and all
financing statements, notices, contracts, agreements or other
instruments, obtain any and all Governmental Approvals and take
any and all steps that may be necessary or as the Administrative
Agent may request to create, perfect, establish the priority of,
or to preserve the validity, perfection or priority of, the Liens
granted by this Agreement or to enable the Administrative Agent
to exercise and enforce its rights, remedies, powers and
privileges under this Agreement with respect to such Liens,
provided that notices to account debtors in respect of any
Accounts or Instruments shall be subject to the provisions of
Section 3.02(b).
2.05 Attorney-in-Fact.
(a) Subject to the rights of the Company under
Sections 2.06, 2.07, 2.08 and 2.09, the Administrative Agent is
hereby appointed the attorney-in-fact of the Company for the
purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which the
Administrative Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, to preserve the
validity, perfection or priority of the Liens granted by this
Agreement, including the execution and filing of financing
statements, continuation statements and the like, and to exercise
its rights, remedies, powers and privileges under this Agreement.
This appointment as attorney-in-fact is irrevocable and coupled
with an interest. Without limiting the generality of the
foregoing, the Administrative Agent shall be entitled under this
Agreement upon the occurrence and during the continuance of any
Event of Default or, in respect of Section 3.02(b), any Default,
(i) to ask, demand, collect, xxx for, recover, receive and give
receipt and discharge for amounts due and to become due under and
8
in respect of all or any part of the Collateral; (ii) to receive,
endorse and collect any Instruments or other drafts, instruments,
documents and chattel paper in connection with clause (i) above
(including any draft or check representing the proceeds of
insurance or the return of unearned premiums); (iii) to file any
claims or take any action or proceeding that the Administrative
Agent may deem necessary or advisable for the collection of all
or any part of the Collateral, including the collection of any
compensation due and to become due under any contract or
agreement with respect to all or any part of the Collateral; and
(iv) to execute, in connection with any sale or disposition of
the Collateral under Section 6, any endorsements, assignments,
bills of sale or other instruments of conveyance or transfer with
respect to all or any part of the Collateral.
(b) Without limiting the rights and powers of the
Administrative Agent under Section 2.05(a), the Company hereby
appoints the Administrative Agent as its attorney-in-fact,
effective the Restatement Effective Date and terminating upon the
termination of this Agreement and upon satisfaction in full of
the Secured Obligations, for the purpose of executing and filing
all such contracts, agreements and other documents as are
contemplated by Section 2.04(c). This appointment as attorney-
in-fact is irrevocable and coupled with an interest.
2.06 Use of Intellectual Property. Subject to such
action not otherwise constituting a Default and so long as no
Event of Default shall have occurred and be continuing, the
Company will be permitted to exploit, use, enjoy, protect,
license, sublicense, assign, sell, dispose of or take other
actions with respect to the Intellectual Property in the ordinary
course of the business of the Company. In furtherance of the
foregoing, so long as no Event of Default shall have occurred and
be continuing, the Administrative Agent shall from time to time,
upon the request of the Company, execute and deliver any
instruments, certificates or other documents, in the form so
requested, which the Company shall have certified are appropriate
(in its judgment) to allow it to take any action permitted above
(including relinquishment of the license provided pursuant to
Section 2.02 as to any specific Intellectual Property). The
exercise of rights, remedies, powers and privileges under
Section 6 by the Administrative Agent shall not terminate the
rights of the holders of any licenses or sublicenses theretofore
granted by the Company in accordance with the first sentence of
this Section 2.06.
2.07 Instruments. So long as no Default shall have
occurred and be continuing, the Company may retain for collection
in the ordinary course of business any checks received by the
Company for the payment of goods and services in the ordinary
course of business, and the Administrative Agent shall, promptly
upon the request, and at the expense, of the Company, make
appropriate arrangements for making any other Instruments pledged
by the Company available to the Company for purposes of
9
presentation, collection or renewal. Any such arrangement shall
be effected, to the extent deemed appropriate by the
Administrative Agent, against trust receipt or like document.
2.08 Use or Sale of Collateral. So long as no Event
of Default shall have occurred and be continuing, the Company
shall, in addition to its rights under Sections 2.06 and 2.07 in
respect of the Collateral contemplated in those sections, be
entitled to use and possess the other Collateral and to exercise
its rights, title and interest in all contracts, agreements,
licenses and Governmental Approvals, subject to the rights,
remedies, powers and privileges of the Administrative Agent under
Sections 3 and 6 and to such use, possession or exercise not
otherwise constituting a Default. With respect to any of the
Collateral that the Company has the right to sell under
Section 8.05 of the Credit Agreement, such sale shall be deemed
to be an authorized disposition of such Collateral for purposes
of Section 9-306(2) of the Uniform Commercial Code and the
security interest granted by this Agreement in such Collateral
shall be deemed released so long as the cash Proceeds of such
sale are applied in accordance with the Credit Agreement and the
other Basic Documents.
2.09 Rights and Obligations.
(a) The Company shall remain liable to perform its
duties and obligations under the contracts and agreements
included in the Collateral in accordance with their respective
terms to the same extent as if this Agreement had not been
executed and delivered. The exercise by the Administrative Agent
or any Lender of any right, remedy, power or privilege in respect
of this Agreement shall not release the Company from any of its
duties and obligations under such contracts and agreements.
Neither the Administrative Agent nor any Lender shall have any
duty, obligation or liability under such contracts and agreements
or in respect to any Governmental Approval included in the
Collateral by reason of this Agreement or any other Basic
Document, nor shall the Administrative Agent or any Lender be
obligated to perform any of the duties or obligations of the
Company under any such contract or agreement or any such
Governmental Approval or to take any action to collect or enforce
any claim (for payment) under any such contract or agreement or
Governmental Approval.
(b) No Lien granted by this Agreement in the Company's
right, title and interest in any contract, agreement or
Governmental Approval shall be deemed to be a consent by the
Administrative Agent or any Lender to any such contract,
agreement or Governmental Approval.
(c) No reference in this Agreement to Proceeds or to
the sale or other disposition of Collateral shall authorize the
Company to sell or otherwise dispose of any Collateral except to
10
the extent otherwise expressly permitted by the terms of any
Basic Document.
(d) Neither the Administrative Agent nor any Lender
shall be required to take steps necessary to preserve any rights
against prior parties to any part of the Collateral.
2.10 Termination. When all Secured Obligations shall
have been fully paid or otherwise fully performed and the
Commitments and all Letter of Credit Liabilities shall have
expired or been terminated, this Agreement shall terminate, and
the Administrative Agent shall forthwith cause to be assigned,
transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever, any remaining
Collateral and money received in respect of the Collateral, to or
on the order of the Company and to be released, canceled and
granted back all licenses and rights referred to in Section 2.02.
The Administrative Agent shall also execute and deliver to the
Company upon such termination such Uniform Commercial Code
termination statements and such other documentation as shall be
reasonably requested by the Company to effect the termination and
release of the Liens granted by this Agreement on the Collateral.
Section 3. Cash Proceeds of Collateral.
3.01 Collateral Account. The Administrative Agent
shall establish with Chemical Bank at the Principal Office a cash
collateral account (the "Collateral Account") in the name and
under the control of the Administrative Agent into which there
shall be deposited from time to time (i) the cash Proceeds of any
of the Collateral required to be deposited in the Collateral
Account pursuant to the Credit Agreement, (ii) prior to their
disbursement, cash Proceeds required to be disbursed by the
Administrative Agent pursuant to Section 6.04, and (iii) any
additional amounts which the Company wishes (subject to Section
4.01(b) of the Credit Agreement) to pledge as additional
collateral security under this Agreement or which, as provided in
the Credit Agreement, are required to be pledged as additional
collateral security under this Agreement. The balance from time
to time in the Collateral Account shall constitute part of the
Collateral and shall not constitute payment of the Secured
Obligations until applied as provided in this Agreement. Except
as expressly provided in the next sentence, the Administrative
Agent shall remit the collected balance outstanding to the credit
of the Collateral Account to or upon the order of the Company as
the Company shall from time to time instruct. However, if any
Event of Default shall have occurred and be continuing, the
Administrative Agent may (and, if instructed by the Lenders as
specified in Section 9 of the Credit Agreement, shall) in its (or
their) discretion apply or cause to be applied (subject to
collection) the balance from time to time outstanding to the
credit of the Collateral Account to the payment of the Secured
Obligations in the manner specified in Section 6. The balance
11
from time to time in the Collateral Account shall be subject to
withdrawal only as provided in this Agreement.
3.02 Certain Proceeds.
(a) If any Event of Default shall have occurred and be
continuing, the Company shall, upon request of the Administrative
Agent, instruct all account debtors and other Persons obligated
in respect of all Accounts and General Intangibles to make all
payments in respect of the Accounts and General Intangibles
directly to Xxxxxxx Bank of Tampa under and pursuant to a blocked
account agreement, in substantially the form of Annex 8, or to
such other Persons or under other arrangements in form and
substance satisfactory to the Administrative Agent.
(b) If any Event of Default shall have occurred and be
continuing, the Company shall, upon request of the Administrative
Agent, promptly notify (and the Company hereby authorizes the
Administrative Agent so to notify) each account debtor in respect
of any Instruments that such Collateral has been assigned to the
Administrative Agent under this Agreement and that any payments
due or to become due in respect of such Collateral are to be made
directly to the Administrative Agent. All such payments made to
the Administrative Agent shall be immediately deposited in the
Collateral Account.
(c) The Company agrees that if the Proceeds of any
Collateral required to be deposited in the Collateral Account
shall be received by the Company, the Company shall as promptly
as possible deposit such Proceeds into the Collateral Account or,
if the Proceeds are of a type that cannot be so deposited,
deliver such Proceeds to the Administrative Agent in kind. Until
so deposited or delivered, all such Proceeds shall be held in
trust by the Company for the Administrative Agent and shall not
be commingled with any other funds or property of the Company.
3.03 Investment of Balance in Collateral Account.
Amounts on deposit in the Collateral Account shall be invested
from time to time in such Permitted Investments as the Company
(or, if any Default shall have occurred and be continuing, the
Administrative Agent) shall determine. All such Permitted
Investments shall be held in the name and be under the control of
the Administrative Agent, provided that, if requested by the
Company, such Permitted Investments may be held in the name and
under the control of one or more of the Lenders (and in that
connection each Lender, pursuant to Section 10.10 of the Credit
Agreement, has agreed that such Permitted Investments shall be
held by such Lender as a collateral subagent for the
Administrative Agent under this Agreement). At any time after
the occurrence and during the continuance of an Event of Default,
the Administrative Agent may (and, if instructed by the Lenders
as specified in Section 9 of the Credit Agreement, shall) in its
(or their) discretion at any time and from time to time elect to
liquidate, or direct any such Lender acting as a collateral
12
subagent to liquidate, any such Permitted Investments and to
apply or cause to be applied the proceeds of such action to the
payment of the Secured Obligations in the manner specified in
Section 6.
3.04 Cover for Letter of Credit Liabilities. Amounts
deposited into the Collateral Account as cover for Letter of
Credit Liabilities pursuant to Sections 2.10(f) or 9 of the
Credit Agreement shall be held by the Administrative Agent in a
separate sub-account (designated "Letter of Credit Liabilities
Sub-Account") of the Collateral Account, and all amounts held in
such sub-account shall constitute collateral security first for
the Letter of Credit Liabilities outstanding from time to time
and second as collateral security for the other Secured
Obligations.
Section 4. Representations and Warranties. As of the
Effective Date and as of the date of each extension of credit by
the Lenders, the Company represents and warrants to the Lenders
and the Administrative Agent as follows:
4.01 Title. The Company is the sole beneficial owner
of the Collateral in which it purports to xxxxx x Xxxx pursuant
to this Agreement, and such Collateral is free and clear of all
Liens, except for Liens permitted under Section 8.06 of the
Credit Agreement. The Liens granted by this Agreement in favor
of the Administrative Agent for the benefit of the Administrative
Agent and the Lenders have attached and constitute a perfected
security interest in all of such Collateral (other than
Intellectual Property registered or otherwise located outside of
the United States of America) prior to all other Liens (except
such permitted Liens). Notwithstanding the foregoing, nothing
contained in this Section 4.01 shall derogate the grant of a
security interest under Section 2.01 with respect to any property
not owned by the Company but with respect to which the Company
has sufficient rights to confer a security interest.
4.02 Intellectual Property.
(a) Annexes 1, 2 and 3 set forth completely and
correctly all Copyrights, Patents and Trademarks owned by the
Company on the Effective Date; except pursuant to licenses and
other user agreements entered into by the Company in the ordinary
course of business and listed in Annex 4, the Company owns and
possesses the right to use, and has done nothing to authorize or
enable any other Person to use, any Copyright, Patent or
Trademark listed in Annex 1, 2 or 3; all registrations listed in
Annexes 1, 2 and 3 are valid and in full force and effect; and,
except as may be set forth in Annex 4, the Company owns and
possesses the right to use all Copyrights, Patents and Trademarks
listed in Annexes 1, 2 and 3.
13
(b) Annex 4 sets forth completely and correctly all
licenses and other user agreements included in the Intellectual
Property on the Effective Date.
(c) To the Company's knowledge, (i) except as set
forth in Annex 4, there is no violation by others of any right of
the Company with respect to any Copyright, Patent or Trademark
listed in Annex 1, 2 or 3 and (ii) the Company is not infringing
in any respect upon any Copyright, Patent or Trademark of any
other Person; and no proceedings have been instituted, are
pending against the Company or, to the Company's knowledge, have
been threatened against, and no claim has been received by, the
Company, alleging any such violation, except as may be set forth
in Annex 4.
(d) The Company does not own any Trademarks registered
in the United States of America to which the last sentence of the
definition of Trademark Collateral applies.
Section 5. Covenants.
5.01 Books and Records. The Company shall:
(a) keep full and accurate books and records relating
to the Collateral and stamp or otherwise xxxx such books and
records in such manner as the Administrative Agent may reasonably
require in order to reflect the Liens granted by this Agreement;
(b) furnish to the Administrative Agent on the last
business day of the months of March, June, September and December
(or at such other times as the Administrative Agent may
designate) statements and schedules further identifying and
describing the Copyright Collateral, the Patent Collateral and
the Trademark Collateral and such other reports in connection
with the Copyright Collateral, the Patent Collateral and the
Trademark Collateral, as the Administrative Agent may reasonably
request, all in reasonable detail;
(c) prior to filing, either directly or through an
agent, licensee or other designee, any application for any
Copyright, Patent or Trademark, furnish to the Administrative
Agent prompt notice of such proposed filing; and
(d) permit representatives of the Administrative
Agent, upon reasonable notice, at any time during normal business
hours, to inspect and make abstracts from its books and records
pertaining to the Collateral, permit representatives of the
Administrative Agent to be present at the Company's place of
business to receive copies of all communications and remittances
relating to the Collateral and forward copies of any notices or
communications received by the Company with respect to the
Collateral, all in such manner as the Administrative Agent may
reasonably request.
14
5.02 Removals, Etc. Without at least 30 days' prior
written notice to the Administrative Agent, the Company shall not
(i) maintain any of its books and records with respect to the
Collateral at any office or maintain its principal place of
business at any place, or permit any Inventory or Equipment to be
located anywhere, other than at the address initially indicated
for notices to it under Section 7 or at one of the locations
identified in Annex 5 or in transit from one of such locations to
another or (ii) change its corporate name, or the name under
which it does business, from the name shown on the signature
pages to this Agreement.
5.03 Sales and Other Liens. Except as otherwise
permitted under Section 8 of the Credit Agreement, without the
prior written consent of the Administrative Agent (granted with
the authorization of the Lenders as specified in Section 11.04 of
the Credit Agreement), the Company shall not dispose of any
Collateral, create, incur, assume or suffer to exist any Lien
upon any Collateral or file or suffer to be on file or authorize
to be filed, in any jurisdiction, any financing statement or like
instrument with respect to all or any part of the Collateral in
which the Administrative Agent is not named as the sole secured
party for the benefit of the Lenders.
5.04 Intellectual Property.
(a) The Company (either itself or through licensees)
will, for each Trademark, (i) to the extent consistent with past
practice and good business judgment, continue to use such
Trademark on each and every trademark class of goods in order to
maintain such Trademark in full force and effect free from any
claim of abandonment for nonuse, (ii) maintain as in the past the
quality of products and services offered under such Trademark,
(iii) employ such Trademark with the appropriate notice of
registration and (iv) not (and not permit any licensee or
sublicensee to) do any act or knowingly omit to do any act
whereby any Trademark material to the conduct of its business may
become invalidated.
(b) The Company (either itself or through licensees)
will not do any act or knowingly omit to do any act whereby any
Patent material to the conduct of its business may become
abandoned or dedicated.
(c) The Company shall notify the Administrative Agent
immediately if it knows or has reason to know that any
Intellectual Property material to the conduct of its business may
become abandoned or dedicated, or of any adverse determination or
development (including the institution of, or any such
determination or development in, any proceeding before any
Governmental Person) regarding the Company's ownership of any
Intellectual Property material to its business, its right to
copyright, patent or register the same (as the case may be), or
its right to keep, use and maintain the same.
15
(d) The Company will take all necessary steps that are
consistent with good business practices in any proceeding before
any appropriate Governmental Person to maintain and pursue each
application relating to any Intellectual Property (and to obtain
the relevant registrations) and to maintain each registration
material to the conduct of its business, including payment of
maintenance fees, filing of applications for renewal, affidavits
of use, affidavits of incontestability and opposition,
interference and cancellation proceedings.
(e) In the event that any Intellectual Property
material to the conduct of its business is infringed,
misappropriated or diluted by a third party, the Company shall
notify the Administrative Agent within (10) days after it learns
of such event and shall, if consistent with good business
practice, promptly xxx for infringement, misappropriation or
dilution, seek temporary restraints and preliminary injunctive
relief to the extent practicable, seek to recover any and all
damages for such infringement, misappropriation or dilution and
take such other actions as are appropriate under the
circumstances to protect such Collateral.
(f) The Company shall, through counsel acceptable to
the Administrative Agent, prosecute diligently any application
for any Intellectual Property pending as of the date of this
Agreement or thereafter made until the termination of this
Agreement, make application on uncopyrighted but copyrightable
material, unpatented but patentable inventions and unregistered
but registerable Trademarks and preserve and maintain all rights
in applications for any Intellectual Property; provided, however,
that the Company shall have no obligation to make any such
application if making such application would be unnecessary or
imprudent in the good faith business judgment of the Company.
Any expenses incurred in connection with such an application
shall be borne by the Company. The Company shall not abandon any
right to file an application for any Intellectual Property or any
pending such application in the United States without the consent
of the Administrative Agent, which consent shall not be
unreasonably withheld.
(g) The Administrative Agent shall have the right but
shall in no way be obligated to bring suit in its own name to
enforce the Copyrights, Patents and Trademarks and any license
under such Intellectual Property, in which event the Company
shall, at the request of the Administrative Agent, do any and all
lawful acts and execute and deliver any and all proper documents
required by the Administrative Agent in aid of such enforcement
action.
5.05 Further Assurances. The Company agrees that,
from time to time upon the request of the Administrative Agent,
the Company will execute and deliver such further writings and do
such other acts and things as the Administrative Agent may
16
reasonably request in order fully to effect the purposes of this
Agreement.
Section 6. Remedies.
6.01 Events of Default, Etc. If any Event of Default
shall have occurred and be continuing:
(a) The Administrative Agent in its discretion may
require the Company to, and the Company shall, assemble the
Collateral owned by it at such place or places, reasonably
convenient to both the Administrative Agent and the Company,
designated in the Administrative Agent's request.
(b) The Administrative Agent in its discretion may
make any reasonable compromise or settlement it deems desirable
with respect to any of the Collateral and may extend the time of
payment, arrange for payment in installments, or otherwise modify
the terms of, all or any part of the Collateral.
(c) The Administrative Agent in its discretion may, in
its name or in the name of the Company or otherwise, demand, xxx
for, collect or receive any money or property at any time payable
or receivable on account of or in exchange for all or any part of
the Collateral, but shall be under no obligation to do so.
(d) In the event of any sale, license or other
disposition of any of the Trademark Collateral, the goodwill
connected with and symbolized by the Trademark Collateral subject
to such disposition shall be included, and the Company shall
supply to the Administrative Agent or its designee, for inclusion
in such sale, assignment or other disposition, all Intellectual
Property relating to such Trademark Collateral.
(e) In addition to any rights conferred by this
Agreement, the Administrative Agent shall have, and in its
discretion may exercise, all of the rights, remedies, powers and
privileges with respect to the Collateral of a secured party
under the Uniform Commercial Code (whether or not a version of
the Official Text of the Uniform Commercial Code is in effect in
the jurisdiction where such rights, remedies, powers and
privileges are asserted) and such additional rights, remedies,
powers and privileges to which a secured party is entitled under
the laws in effect in any jurisdiction where any rights,
remedies, powers and privileges in respect of this Agreement or
the Collateral may be asserted, including the right, to the
maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the
Collateral as if the Administrative Agent were the sole and
absolute owner of the Collateral (and the Company agrees to take
all such action as may be appropriate to give effect to such
right).
17
The Proceeds of, and other realization upon, the Collateral by
virtue of the exercise of remedies under this Section 6.01 and of
the exercise of the license granted to the Administrative Agent
in Section 2.02 shall be applied in accordance with Section 6.04.
6.02 Deficiency. If the Proceeds of, or other
realization upon, the Collateral by virtue of the exercise of
remedies under Section 6.01 and of the exercise of the license
granted by the Administrative Agent in Section 2.02 are
insufficient to cover the costs and expenses of such exercise and
the payment in full of the other Secured Obligations, the Company
shall remain liable for any deficiency.
6.03 Manner of Disposition.
(a) The Administrative Agent and the Lenders shall
incur no liability as a result of the sale, lease or other
disposition of all or any part of the Collateral conducted in any
commercially reasonable manner. The Company hereby waives any
claims against the Administrative Agent or any Lender arising by
reason of the fact that the price at which the Collateral may
have been sold, leased, or otherwise disposed of was less than
the price which might have been obtained by some other manner of
sale, lease or other disposition or was less than the aggregate
amount of the Secured Obligations, even if, in connection with a
private sale or other non-public disposition, the Administrative
Agent accepts the first offer received and does not offer the
Collateral to more than one offeree.
(b) With respect to any Collateral that may from time
to time be pledged to secure the Secured Obligations the
disposition of which is subject to certain prohibitions contained
in the Securities Act of 1933 and applicable state securities
laws, the Company recognizes that the Administrative Agent may be
compelled, with respect to any sale of all or any part of such
Collateral, to limit purchasers to those who will agree, among
other things, to acquire the Collateral for their own account,
for investment and not with a view to distribution or resale.
The Company acknowledges that any such private sales may be at
prices and on terms less favorable to the Administrative Agent
than those obtainable through a public sale without such
restrictions, and, notwithstanding such circumstances, agree that
any such private sale shall be deemed to have been made in a
commercially reasonable manner and that the Administrative Agent
shall have no obligation to engage in public sales and no
obligation to delay the sale of any Collateral for the period of
time necessary to permit the respective issuer of such Collateral
to register it for public sale.
6.04 Application of Proceeds. Except as otherwise
expressly provided in this Agreement and except as provided below
in this Section 6.04, the proceeds of, or other realization upon,
all or any part of the Collateral by virtue of the exercise of
remedies under Section 6.01 or of the exercise of the license
18
granted in Section 2.02, and any other cash at the time held by
the Administrative Agent under Section 3 or this Section 6, shall
be applied by the Administrative Agent:
First, to the reasonable expenses of retaking, holding,
preparing for sale or lease, selling, or leasing or other
disposition of the Collateral, including reasonable out-of-pocket
costs and expenses of the Administrative Agent, and the
reasonable fees and expenses of its agents, as well as reasonable
attorneys' fees and legal expenses incurred by the Administrative
Agent in that connection;
Next, to satisfaction of the Secured Obligations
equally and ratably in accordance with their respective amounts
then due and owing or as the Lenders may otherwise agree;
Next, to any Persons entitled to such amounts pursuant
to Section 9-504(1)(c) of the Uniform Commercial Code; and
Finally, to the Company, or its respective successors
or assigns, or as a court of competent jurisdiction may direct,
of any surplus then remaining.
Notwithstanding the foregoing, the proceeds of any cash or other
amounts held in the Letter of Credit Liabilities Sub-Account of
the Collateral Account pursuant to Section 3.04 shall be applied
first to the Letter of Credit Liabilities outstanding from time
to time and second to the other Secured Obligations in the manner
provided above in this Section 6.04.
Section 7. Miscellaneous.
7.01 The Administrative Agent. As provided in
Section 10.01 of the Credit Agreement, each of the Lenders has
appointed The CIT Group/Business Credit, Inc. as its
Administrative Agent for purposes of this Agreement. In such
capacity, The CIT Group/Business Credit, Inc. shall be entitled
to all of the rights and benefits accorded the Administrative
Agent by Section 10 of the Credit Agreement. Following the
payment in full of all Secured Obligations and the termination or
expiration of the Commitments of the Lenders and Letter of Credit
Liabilities, the provisions of Section 11.03 of the Credit
Agreement shall be deemed to continue in full force and effect
for the benefit of the Administrative Agent under this Agreement.
7.02 Waiver. No failure on the part of the
Administrative Agent or any Lender to exercise and no delay in
exercising, and no course of dealing with respect to, any right,
remedy, power or privilege under this Agreement shall operate as
a waiver of such right, remedy, power or privilege, nor shall any
single or partial exercise of any right, remedy, power or
privilege under this Agreement preclude any other or further
exercise of any such right, remedy, power or privilege or the
19
exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges provided in this
Agreement are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
7.03 Notices. All notices and communications to be
given under this Agreement shall be given or made in writing to
the intended recipient at the address specified below or, as to
any party, at such other address as shall be designated by such
party in a notice to each other party. Except as otherwise
provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telecopier, or
personally delivered or, in the case of a mailed notice, upon
receipt, in each case, given or addressed as provided in this
Section 7.03:
To the Company:
Kash n' Xxxxx Food Stores, Inc.
0000 Xxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention: Senior Vice President,
Administration
Telecopier No.: (000) 000-0000
To the Administrative Agent:
The CIT Group/Business Credit, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Regional Credit Manager
Telecopier No.: (000) 000-0000
Notwithstanding the foregoing, if a notice is
transmitted by telecopier or personal delivery or, in the case of
a mailed notice, is received on a day that is not a Business Day,
then such notice shall be deemed to have been duly given on the
first Business Day after such transmission or, in the case of a
mailed notice, receipt.
7.04 Expenses, Etc. The Company agrees to pay or to
reimburse the Administrative Agent and the Lenders for all costs
and expenses (including reasonable attorney's fees and expenses)
that may be incurred by the Administrative Agent or the Lenders
in any effort to enforce any of the provisions of Section 6 or
any of the obligations of the Company in respect of the
Collateral or in connection with (a) the preservation of the Lien
of, or the rights of, the Administrative Agent and the Lenders
under this Agreement, (b) any actual or attempted sale, lease,
disposition, exchange, collection, compromise, settlement or
other realization in respect of, or care of, the Collateral, or
(c) all such costs and expenses and any other costs and expenses,
including reasonable attorneys' fees and expenses incurred in any
20
bankruptcy, reorganization, workout or other similar proceeding,
including costs, expenses and reasonable attorneys' fees and
expenses relating to any proceeding concerning relief from stay,
cash collateral, appointment of a trustee, disclosure statement
approval, or plan confirmation.
7.05 Amendments, Etc. Any provision of this Agreement
may be modified, supplemented or waived only by an instrument in
writing duly executed by the Company and the Administrative Agent
(with the consent of the Lenders as specified in Section 11.04 of
the Credit Agreement). Any such modification, supplement or
waiver shall be for such period and subject to such conditions as
shall be specified in the instrument effecting the same and shall
be binding upon the Administrative Agent and each Lender, each
holder of any of the Secured Obligations and the Company, and any
such waiver shall be effective only in the specific instance and
for the purposes for which given.
7.06 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Company, the
Administrative Agent, the Lenders and each holder of any of the
Secured Obligations and their respective successors and permitted
assigns. The Company shall not assign or transfer its rights
under this Agreement without the prior written consent of the
Administrative Agent.
7.07 Survival. All representations and warranties
made in this Agreement or in any certificate or other document
delivered pursuant to or in connection with this Agreement shall
survive the execution and delivery of this Agreement or such
certificate or other document (as the case may be) or any deemed
repetition of any such representation or warranty.
7.08 Agreements Superseded. This Agreement supersedes
all prior agreements and understandings (including any and all
commitment letters and term sheets), written or oral, between or
among the parties with respect to the subject matter of this
Agreement.
7.09 Severability. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions of this Agreement, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
7.10 Captions. The table of contents and captions and
section headings appearing in this Agreement are included solely
for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
7.11 Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties to
21
this Agreement may execute this Agreement by signing any such
counterpart.
7.12 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK. THE COMPANY HEREBY SUBMITS TO
THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY STATE COURT
SITTING IN THE BOROUGH OF MANHATTAN, COUNTY OF NEW YORK, NEW YORK
FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
7.13 WAIVER OF JURY TRIAL. THE COMPANY, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVE, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT.
22
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed and delivered as of the day and
year first above written.
KASH N' XXXXX FOOD STORES, INC.
By:
----------------------
Title: Senior Vice President,
Chief Financial Officer,
Treasurer and Secretary
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Administrative Agent
By:
----------------------
Title: Vice President
23
ANNEX 1
LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS AND
APPLICATIONS FOR COPYRIGHT REGISTRATIONS
None.
ANNEX 2
LIST OF PATENTS AND PATENT APPLICATIONS
None.
ANNEX 3
Page 1 of 2
LIST OF TRADE NAMES, TRADEMARKS, SERVICES
MARKS, TRADEMARK AND SERVICE XXXX REGISTRATIONS AND
APPLICATIONS FOR TRADEMARK AND SERVICE XXXX
REGISTRATIONS
KASH n' XXXXX FOOD STORES, INC.
I. Federal Registrations
Reg.
No. Reg. No. Serial No. Date Xxxx
-- --------- ---------- -------- --------------------
1. 1,905,000 00-000,115 07/11/95 Fresh American Royal
Banquet Lamb and design
2. 1,848,000 00-000,864 08/09/94 Nature Friendly and design
3. 1,830,000 00-000,021 04/12/94 Pro's Choice
4. 1,804,000 00-000,865 11/16/93 Nature Friendly and design
5. 1,534,000 00-000,534 04/11/89 Round Up
6. 1,533,000 00-000,902 04/04/89 Florida Choice
7. 1,500,000 00-000,966 08/16/88 EZ Checkout and design
8. 1,351,000 00-000,163 07/30/85 Five Star Meats and design
9. 1,297,000 00-000,900 09/25/84 Hi-Class
10. 1,279,000 00-000,487 05/22/84 Harvest Day block letters
11. 1,214,000 00-000,445 10/26/82 Key Buy
12. 1,169,000 00-000,485 09/22/81 Lady Xxx
13. 1,000,000 00-000,692 01/07/75 Medi-Guard and design
14. 965,000 00-000,456 08/14/73 Medi-Guard and design
15. 875,000 00-000,945 08/26/69 Medi-Guard and design
16. 839,000 00-000,522 12/05/67 Medi-Guard and design
II. Federal Registrations - pending status
No. Reg. No. Serial No. File Date Xxxx
--- -------- ----------- ---------- -----
None.
III. Florida Registrations
No. Reg. No. Reg. Date Xxxx
--- --------- ---------- ------
17. T94000000100 01/20/94 Florida Preferred and design
18. T16172 07/22/92 Kash $aver
19. T15518 02/10/92 Kash $aver
ANNEX 3
Page 2 of 2
20. T15161 10/29/91 Kash $aver
21. T14932 08/28/91 $ave and Pack and design
22. T14214 03/08/91 Pro's Choice and design
23. T14071 01/28/91 $mart Buy and design
24. T13496 09/19/90 Nature Friendly and design
25. T13370 08/27/90 Kash n' Xxxxx Food Stores and
design
26. T13369 08/27/90 So Much More To Pay Less For!
27. T13368 08/27/90 Kash n' Xxxxx and design
28. T12501 02/21/90 The Pharmacy With TLC
(Touch Link Computers)
29. T09931 11/29/88 Kash n' Xxxxx Hollywood at Home
30. T02593 12/31/84 Five Star Meats and design
31. T08543 10/20/83 Xxxx X Xxxxx (for carts)
32. 925816 12/31/81 Kash n' Xxxxx Discount Centers
33. 925815 12/31/81 Kash n' Xxxxx Discount
Supermarkets
34. 923973 02/19/81 We Make Savings Simple
35. 922717 07/24/80 Tell a Friend
36. 922401 05/19/80 Kash n' Xxxxx K
37. 922400 05/19/80 Kash n' Xxxxx K
38. 922399 05/19/80 K Kash n' Xxxxx
39. 922398 05/19/80 K Kash n' Xxxxx
XX. Registered Fictitious Names
No. Reg. No. File Date Name
--- -------- --------- -------
40. G92323900024 11/18/92 Save 'n Pack
V. Unregistered Trade Marks
The Bakery
The Corner Deli
Farm Fresh Produce
Fresh n' Easy Salads
Kash n' Xxxxx
Xxxx n' Xxxxx Food Centers
K Kash n' Xxxxx Food Centers and design
Silken Care
Smart Lane
So Much More To Pay Less For
Captain's Choice and design
Smart Buy
ANNEX 4
LIST OF CONTRACTS, LICENSES AND OTHER AGREEMENTS
- None -
ANNEX 5
Page 1 of 3
LIST OF LOCATIONS
KASH n' XXXXX FOOD STORES, INC.
NOTES OPEN-1 XXXXX XXXXXXX XXXX XXXXXX
#
0 Xxxxxx 000 0000 X.X. 34th Street Gainesville Alachua
2 1 720 0000 X.X. 00xx Xxxxxx Gainesville Alachua
3 1 876 0000 X.X. 00xx Xxxxxxxxx Gainesville Alachua
2 1 884 2002 S.W. 34th Street Gainesville Alachua
2 1 207 4200 South Tamiami Trail Ch. Harbor Charlotte
1 1 709 2050 Xxxxxxx Xxxxxx Blvd Pt Charlotte Charlotte
2 1 729 0000 X. XxXxxx Xxxx Xxxxxxxxx Xxxxxxxxx
1 1 702 1651 X.X. Xxxxxxx 00 Crystal Rvr Citrus
1 Land 726 Xxxxxxx Hills Xxxxxxx Xxxx Citrus
2 1 851 0000 X. Xxxx Xxxxxx Xxxxxxxxx Citrus
2 1 871 0000 Xxxxx Xxxxxxxx Xxxx Homosassa Citrus
2 1 890 0000 X.X. Xxxxxxx 00 Xxxxx Xxxxxxxx Xxxxxx
2 1 716 00000 Xxxxxx Xxxx Xxxxx Xxxxxx Xxxx Xxxxxxxx
2 1 868 00000 Xxxxxx Xxxxxxxxx Xxxxxxxxxxx Hernando
1 1 886 0000 Xxxxxxxxxx Xxx Xxxxxx Xxxx Xxxxxxxx
1 1 891 3250 U.S. 00 Xxxxx Xxxxxxx Xxxxxxxxx
2 Assigned 108 000 X Xxxxxxxxxxxx Xxxxxx Xxxxx Xxxxxxxxx
2 1 113 128 South Westshore Blvd Tampa Hillsboro
2 Closed 144 0000 X Xxxxxxxxxxxx Xxx Xxxxx Hillsboro
1 1 146 0000 X Xxxxxxx Xxxxxx Xxxxx Xxxxxxxxx
3 1 401 2525 North Xxxx Xxxxx Tampa Hillsboro
2 1 403 11612 North Nebraska Tampa Hillsboro
2 Liquor 587 0000 Xxxx Xxxxxx Xxxxxx Xxxxx Xxxxxxxxx
2 Liquor 592 00000 Xxxx Xxxxxxx Xxxxx Xxxxx Xxxxxxxxx
2 1 617 15692 Xxxx Xxxxx Highway Tampa Hillsboro
2 1 619 13508 Florida Avenue Tampa Hillsboro
2 1 621 2333 W Hillsborough Ave Tampa Hillsboro
2 1 623 4317 Xxxxx Boulevard Tampa Hillsboro
2 1 703 8775 Temple Terrace Hwy T Terrace Hillsboro
2 1 718 0000 Xxxx Xxxxxx Xxxxxx Xxxxx Xxxxxxxxx
3 1 722 0000 Xxxx Xxxxx Xxxxxx Xxxxx Xxxxxxxxx
2 1 723 000 Xxxx Xxxxxxxxx Xxxxxx Xxxxx Xxxx Xxxxxxxxx
1 Land 734 Xxxx Xxxxx & Xxxxxxxxx Tampa Hillsboro
1 Land 736 M L K & Nebraska Tampa Hillsboro
2 1 743 8837 56th Street T Terrace Hillsboro
2 1 824 5028 Columbus Plaza Tampa Hillsboro
2 1 826 507 Xxxxxxx Street Plant City Hillsboro
2 1 827 0000 Xxxxxxx Xxxxxx Xxxxx Xxxxxxxxx
2 1 848 0000 X Xxxxxxx Xxxxx Xxxxxx Xxxxxxxxx
2 1 855 7415 U.S. Xxxxxxx 000 Xxxxxxxxx Xxxxxxxxx
2 1 858 4056 North Armenia Tampa Hillsboro
2 Assigned 866 Xxxx Xxxxx & Ehrlich Tampa Hillsboro
2 1 869 901 Lithia-Pinecrest Road Xxxxxxx Hillsboro
2 1 870 6734 Memorial Highway Tampa Hillsboro
3 1 877 750 State Road 574 Seffner Hillsboro
1 1 878 4519 Xxxx Highway Tampa Hillsboro
1 1 887 0000 Xxxxxx Xxxxxx Xxxxx Xxxxxxxxx
2 1 892 5320 Xxxxxxx Road Tampa Hillsboro
2 Sublease 206 1801 North Tamiami Trail Ft Xxxxx Xxx
LIST OF LOCATIONS
ANNEX 5
Page 2 of 3
KASH n' XXXXX FOOD STORES, INC.
NOTES OPEN-1 STORE ADDRESS CITY COUNTY
#
2 1 209 8951 Xxxxxx Beach Road Xxxxxx Spgs Xxx
2 Closed 217 6257 XxXxxxxx Boulevard Ft Xxxxx Xxx
2 1 309 0000-00 Xxxxxxx Xxxxxxx Ft Xxxxx Xxx
2 1 311 15675 XxXxxxxx Boulevard Ft Xxxxx Xxx
2 1 313 5660 Bayshore Road N Ft Xxxxx Xxx
2 1 315 1530 Del Xxxxx Boulevard Cape Xxxxx Xxx
2 1 629 13352 North Cleveland Ave N Ft Xxxxx Xxx
2 1 882 4820 Xxxxxxx Street Cape Xxxxx Xxx
1 Land 882 0000 Xxxxxxx Xxxxxx Xxxx Xxxxx Xxx
2 1 211 5805 Manatee Avenue Bradenton Manatee
2 1 627 2401 Xxxxxx Road Bradenton Manatee
2 1 715 5201 33rd Street Bradenton Manatee
2 1 854 515 7th Street Palmetto Manatee
2 1 867 5802 14th Street West Bradenton Manatee
2 1 301 2499 S.W. 27th Avenue Ocala Xxxxxx
2 Closed 601 0000 X Xxxxxx Xxxxxxx Xxxx Ocala Xxxxxx
2 1 651 0000 X Xxxxxx Xxxxxxx Xxxx Ocala Xxxxxx
2 1 725 0000 X X.X. Xxx 000 Xxxxx Xxxxxx
2 1 894 833 U.S. Highway 41 N Dunnellon Xxxxxx
1 1 896 11310 S.E. U.S. 301 Belleview Xxxxxx
2 Closed 898 3233 S.E. Maricamp Road Ocala Xxxxxx
2 1 701 0000 Xxxx Xxxx Xxxxxx Kissimmee Osceola
2 1 204 3535 U.S. Hwy 19 N Nw Pt Xxxxxx Xxxxx
2 Assigned 000 X.X. Xxx 19 & Embassy Blvd Port Xxxxxx Xxxxx
2 1 603 9017 S.R. 52 Xxxxxx Xxxxx
2 1 605 7431 County Road 54 Nw Pt Xxxxxx Xxxxx
2 1 704 21605 Village Lakes Land O' Lks Pasco
1 1 717 0000 Xxxxxxxxxxxxx Xxx Xx Pt Xxxxxx Xxxxx
2 1 728 Medical Arts Court Zephyrhills Pasco
2 1 874 0000 Xxxxx Xxxxxxxxx Xx Xx Xxxxxx Xxxxx
2 1 885 9101 Little Road Nw Pt Xxxxxx Xxxxx
2 1 897 1870 U.S. 301 South Dade City Pasco
2 1 133 7625 Blind Pass Road St Xxxx Bch Pinellas
2 Closed 201 0000 0xx Xxxxxx Xxxxx Xx Xxxx Pinellas
2 Sublease 000 Xxxx Xxxx & Xxxxxxx Xx Largo Pinellas
2 Sublease 000 00xx Xxxxxx & 30th Ave St Xxxx Pinellas
2 Assigned 405 0000 X.X. Xxx 00 Xxxx Xxxxxx Xxxxxxxx
2 Sublease 607 2465 U.S. Highway 19 Palm Harbor Pinellas
2 1 609 0000 000xx Xxxxxx X.X. Largo Pinellas
2 1 611 4665 66th Street Xxxxxxx City Pinellas
2 1 613 2134 34th Street North St Xxxx Pinellas
2 1 615 6851 Gulfport Blvd S S Pasadena Pinellas
2 1 705 3146 Tampa Road Oldsmar Pinellas
LIST OF LOCATIONS
ANNEX 5
Page 3 of 3
KASH n' XXXXX FOOD STORES, INC.
NOTES OPEN-1 STORE ADDRESS CITY COUNTY
#
2 1 707 1360 Tampa Road Palm Harbor Pinellas
2 1 710 00000 Xxxxxxxxxx Xxxx Largo Pinellas
1 1 765 3327 9th Street North St Xxxx Pinellas
3 1 765 3327 9th Street North St Xxxx Pinellas
2 1 831 6095 9th Avenue North St Xxxx Pinellas
2 1 849 21323 U.S. Highway 19 N Clearwater Pinellas
2 1 852 7491 4th Street North St Xxxx Pinellas
2 1 857 955 62nd Avenue South St Xxxx Pinellas
2 1 864 2200 Main Street Dunedin Pinellas
2 1 873 2519 XxXxxxxx Booth Road Clearwater Pinellas
3 1 875 2650 U.S. 19 North Palm Harbor Pinellas
2 1 879 13000 66th Street North Largo Pinellas
2 1 881 2460 East Bay Drive Largo Pinellas
2 1 883 Highland & Sunset Point Clearwater Pinellas
2 Closed 888 0000 Xxxxxxxx Xxxx Xxxxx Xxxxxxxx
2 1 129 000 Xxxxxx Xxxx Xxxxxxxx Xxxx
2 1 733 000 Xxxxxxxxx Xxxxxxxxx Xxxxxxxxxx Xxxx
2 1 000 0xx Xx & Xxxxxx X X.X. Winter Haven Polk
2 1 889 1340 S.R. 00 Xxxx Xxxx Xxxxx Xxxx
2 1 893 0000 Xxxxx Xxxxxxx Xxx Xxxxxxxx Xxxx
2 1 895 1176 U.S. 00 Xxxxx Xxxxxx Xxxx Xxxx
2 1 899 0000 Xxxxx Xxxxxxx 00 Xxxxxxxx Xxxx
2 1 139 458 Venice By-Pass Venice Sarasota
2 Closed 212 8199 S. Tamiami Trail Sarasota Sarasota
2 1 214 3535 Fruitville Road Sarasota Sarasota
2 1 215 1325 Tamiami Trail South Sarasota Sarasota
2 1 216 0000 Xxx Xxxxx Xxxx Xxxxxxxx Xxxxxxxx
2 Closed 305 0000 Xxxxx Xxxxxxx Xxxxx Venice Sarasota
2 Closed 319 15 Beneva Road South Sarasota Sarasota
2 1 712 1254 Jacaranda Boulevard Venice Sarasota
2 1 719 0000 Xxxxxxxx Xxxxx Xxxx Xxxxxxxx Xxxxxxxx
3 1 880 4057 Cattleman Road Sarasota Sarasota
2 1 711 858 Saxon Boulevard Orange City Volusia
ANNEX 6
ASSIGNMENT FOR SECURITY
(PATENTS)
WHEREAS, Kash n' Xxxxx Food Stores, Inc., a Delaware
corporation (herein referred to as "Assignor"), owns the letters
patent, and/or applications for letters patent, of the United
States, more particularly described on Schedule 1 annexed hereto
as part hereof (the "Patents");
WHEREAS, Assignor, the lenders referred to therein (the
"Lenders") and The CIT Group/Business Credit, Inc., a New York
corporation, as administrative agent (herein referred to as
"Assignee") for the Lenders, have entered into an Amended and
Restated Credit Agreement dated as of December 19, 1995 (as
amended, supplemented, restated or otherwise modified from time
to time, the "Credit Agreement"), which agreement amends and
restates the Credit Agreement dated as of December 29, 1994 among
Assignor, Lenders and Assignee;
WHEREAS, Assignor has executed and delivered to
Assignee for the ratable benefit of Assignee and the Lenders an
Amended and Restated Security Agreement of even date herewith
(the "Agreement", terms defined therein and not otherwise defined
herein being used herein as therein defined) in favor of
Assignee, which agreement amends and restates the Security
Agreement dated as of December 28, 1994 (the "Existing Security
Agreement") between Assignor and Assignee;
WHEREAS, pursuant to the Existing Security Agreement
and an Assignment for Security (Patents) dated December 28, 1994
(the "Existing Assignment"), Assignor has assigned to Assignee,
and granted to Assignee a security interest in, and mortgage on,
all right, title and interest of Assignor in and to the Patents,
together with any reissue, continuation, continuation-in-part or
extension thereof, and all proceeds thereof, including, without
limitation, any and all causes of action which may exist by
reason of infringement thereof for the full term of the Patents
(the "Intellectual Property Collateral"), to secure the prompt
payment, performance and observance of the Secured Obligations;
and
WHEREAS, Assignor and Assignee desire to amend and
restate the Existing Assignment in order to confirm the
continuation of and to pledge and grant security interests in the
Intellectual Property Collateral in favor of Assignee for itself
and Lenders as security for the Secured Obligations;
NOW, THEREFORE, for good and valuable consideration,
receipt of which is hereby acknowledged, Assignor does hereby
further assign unto Assignee and grant to Assignee a security
interest in, and mortgage on, the Intellectual Property
Collateral to secure the prompt payment, performance and
observance of the Secured Obligations.
The foregoing assignment and grant of security interest
and mortgage confirms the assignment and grant of security
interest and mortgage assigned and granted pursuant to the
Existing Assignment and continues in all respects the assignment
and grant in the Existing Assignment with respect to the
Intellectual Property Collateral without in any way causing any
interruption in the continuity of such original assignment and
mortgage.
Assignor does hereby further acknowledge and affirm
that the rights and remedies of Assignee with respect to the
assignment of, security interest in and mortgage on the
Intellectual Property Collateral made and granted hereby are more
fully set forth in the Agreement, the terms and provisions of
which are hereby incorporated herein by reference as if fully set
forth herein.
Assignee's address is 000 Xxxxx Xxxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000.
IN WITNESS WHEREOF, Assignor has caused this Assignment
to be duly executed by its officer thereunto duly authorized as
of the ___th day of December, 1995.
KASH N' XXXXX FOOD STORES, INC.
By: _______________________________
Name: ________________________
Title: ________________________
SCHEDULE 1 TO AMENDED AND RESTATED ASSIGNMENT FOR SECURITY
PATENTS
Title Date Issued Patent No.
ANNEX 7
AMENDED AND RESTATED
ASSIGNMENT FOR SECURITY
(TRADEMARKS)
WHEREAS, Kash n' Xxxxx Food Stores, Inc., a Delaware
corporation (herein referred to as "Assignor"), has adopted, used
and is using the trademarks listed on the annexed Schedule 1,
which trademarks are registered in the United States Patent and
Trademark Office (the "Trademarks");
WHEREAS, Assignor, the lenders referred to therein (the
"Lenders") and The CIT Group/Business Credit, Inc., a New York
corporation, as administrative agent (herein referred to as
"Assignee") for the Lenders, have entered into an Amended and
Restated Credit Agreement dated as of December 19, 1995 (as
amended, supplemented, restated or otherwise modified from time
to time, the "Credit Agreement"), which agreement amends and
restates the Credit Agreement dated as of December 29, 1994 among
Assignor, Lenders and Assignee;
WHEREAS, Assignor has executed and delivered to
Assignee for the ratable benefit of Assignee and the Lenders an
Amended and Restated Security Agreement of even date herewith
(the "Agreement", terms defined therein and not otherwise defined
herein being used herein as therein defined) in favor of Assignee
which agreement amends and restates the Security Agreement dated
as of December 28, 1994 (the "Existing Security Agreement")
between Assignor and Assignee;
WHEREAS, pursuant to the Existing Security Agreement
and an Assignment for Security (Trademarks) dated December 28,
1994 (the "Existing Assignment"), Assignor has assigned to
Assignee and granted to Assignee a security interest in, and
mortgage on, all right, title and interest of Assignor in and to
the Trademarks, together with the goodwill of the business
symbolized by the Trademarks and the applications and
registrations thereof, and all proceeds thereof, including,
without limitation, any and all causes of action which may exist
by reason of infringement thereof (the "Intellectual Property
Collateral"), to secure the payment, performance and observance
of the Secured Obligations; and
WHEREAS, Assignor and Assignee desire to amend and
restate the Existing Assignment in order to confirm the
continuation of and to pledge and grant security interests in the
Intellectual Property Collateral in favor of Assignee for itself
and Lenders as security for the Secured Obligations;
NOW, THEREFORE, for good and valuable consideration,
receipt of which is hereby acknowledged, Assignor does hereby
further assign unto Assignee and grant to Assignee a security
interest in, and mortgage on, the Intellectual Property
Collateral to secure the prompt payment, performance and
observance of the Secured Obligations.
The foregoing assignment and grant of security interest
and mortgage confirms the assignment and grant of security
interest and mortgage assigned and granted pursuant to the
Existing Assignment and continues in all respects the assignment
and grant in the Existing Assignment with respect to the
Intellectual Property Collateral without in any way causing any
interruption in the continuity of such original assignment and
mortgage.
Assignor does hereby further acknowledge and affirm
that the rights and remedies of Assignee with respect to the
assignment of, security interest in and mortgage on the
Intellectual Property Collateral made and granted hereby are more
fully set forth in the Agreement, the terms and provisions of
which are hereby incorporated herein by reference as if fully set
forth herein.
Assignee's address is 000 Xxxxx Xxxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000.
IN WITNESS WHEREOF, Assignor has caused this Assignment
to be duly executed by its officer thereunto duly authorized as
of the day of December, 1995.
KASH N' XXXXX FOOD STORES, INC.
By: _______________________________
Name: ________________________
Title: ________________________
SCHEDULE 1 TO AMENDED AND RESTATED ASSIGNMENT FOR SECURITY
TRADEMARKS
Trademark Reg. Date Reg. No.
ANNEX 8
FORM OF BLOCKED ACCOUNT AGREEMENT
=========================================================================
AMENDED AND RESTATED
BLOCKED ACCOUNT AGREEMENT
Dated as of December 19, 1995
among
KASH N' XXXXX FOOD STORES, INC.,
XXXXXXX BANK OF TAMPA,
and
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Administrative Agent
=========================================================================
BLOCKED ACCOUNT AGREEMENT
This AMENDED AND RESTATED BLOCKED ACCOUNT AGREEMENT
(this "Agreement") dated as of December 19, 1995 is made among
KASH N' XXXXX FOOD STORES, INC. (the "Company"), XXXXXXX BANK OF
TAMPA (the "Bank"), and THE CIT GROUP/BUSINESS CREDIT, INC., as
the administrative agent (in such capacity, the "Administrative
Agent") for the Lenders referred to below.
The Amended and Restated Credit Agreement dated as of
December 19, 1995 (the "Credit Agreement") among KASH N' XXXXX
FOOD STORES, INC., the lenders identified in the Credit Agreement
(the "Lenders") and the Administrative Agent provides, subject to
its terms and conditions, for certain extensions of credit to the
Company. It is a condition to the obligations of the
Administrative Agent and the Lenders under the Credit Agreement
that the Company shall have executed and delivered this
Agreement.
Accordingly, the parties hereto agree as follows:
1. The parties acknowledge that the Company and the
Administrative Agent for the benefit of the Lenders have entered
into an Amended and Restated Security Agreement dated as of
December 19, 1995 (the "Security Agreement") under which the
Administrative Agent for the benefit of the Lenders and the
Administrative Agent has been granted a security interest in,
among other things, all of the Company's right, title and
interest in Account Number 1407708881 of the Company with the
Bank (the "Blocked Account") and all monies on deposit in the
Blocked Account from time to time.
2. The Company and the Bank agree that (a) the
Company shall not be entitled to withdraw monies from the Blocked
Account and (b) all monies from time to time on deposit in the
Blocked Account shall be paid on each day on which the Bank is
open for business to the Administrative Agent as set forth in
Section 3 below, subject to court resolution of any third party
claims and/or legal rights of the Company in the event of the
filing of a petition in bankruptcy, whether voluntary or
involuntary. The Company agrees not to permit the Blocked
Account to become subject to any other pledge, assignment, lien,
charge or encumbrance of any kind, nature or description. The
Bank agrees that the maintaining by the Bank of the Blocked
Account and the Bank's holding any checks, drafts, notes,
acceptances, cash and other evidences of indebtedness
("Remittances") included therein shall be solely on behalf of the
Administrative Agent for the benefit of the Lenders and the
Administrative Agent.
3. The Bank shall transfer the sum of the previous
day's collected balance in the Blocked Account by Federal Funds
Wire as follows:
Chemical Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA No: 000000000
for the account of The CIT Group/Business Credit, Inc.,
as Administrative Agent
Account No. 323094929
Refer to: Kash n' Xxxxx Food Stores, Inc.
4. The Bank may charge the Company's Operating
Account Number 1407288441 with the Bank (the "Operating Account")
for all service charges, returned items and any other charges to
which it may be entitled for maintaining the Blocked Account. In
the event there are insufficient funds in the Operating Account
for such purpose, the Bank may then charge the Blocked Account
for such service charges and returned items.
5. The Bank will provide a copy of the Company's
monthly bank statements relating to the Blocked Account and the
Operating Account at the time such statements are provided to the
Company (and, upon the written request of the Administrative
Agent, statements relating to other accounts of the Company with
the Bank) to the Administrative Agent addressed as follows:
The CIT Group/Business Credit, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Regional Credit Manager
6. As collateral security for the payment of all of
the Secured Obligations (as defined in the Security Agreement),
howsoever evidenced or acquired, whether now existing or
hereafter arising, whether direct or indirect, absolute or
contingent, the Company confirms that it has assigned, pledged
and transferred, and does hereby assign, pledge and transfer, to
the Administrative Agent for the benefit of the holders of the
Secured Obligations all of the Company's rights, title and
interest in and to the Blocked Account, including all sums now or
hereafter deposited in or payable to or withdrawable from said
Blocked Account and any interest accrued or payable thereon and
in and to the Remittances. The Administrative Agent shall have
the full and irrevocable right, power and authority, to demand,
collect, withdraw, receipt for or xxx for all amounts due or to
become due and payable pursuant to the Blocked Account and the
Remittances and at the Administrative Agent's discretion take any
other action, including the transfer of the Blocked Account to
the Administrative Agent's own name, which the Administrative
Agent deems necessary or appropriate to preserve or protect the
2
Administrative Agent's security interests in the Blocked Account
and the Remittances.
7. The Bank shall be fully protected in acting on any
order or direction by the Administrative Agent respecting the
Blocked Account and disposition of Remittances without making any
inquiry whatsoever as to the Administrative Agent's right or
authority to give such order or direction or as to the
application or any payment made pursuant thereto.
8. Except as set forth in Section 4 above, the Bank
agrees that it shall not effect any right of offset (statutory or
otherwise) that it may otherwise have, or make any deduction or
claim, against the Blocked Account or the Remittances unless and
until the Administrative Agent shall have notified the Bank in
writing that all of the Secured Obligations have been paid in
full, and all such rights of offset and deduction are hereby
waived by the Bank until such time.
9. Nothing herein constitutes a waiver of, and the
Bank reserves all of, its present and future rights with respect
to checks and other items deposited to the Blocked Account and
returned for insufficient funds or for any other reason.
10. The Bank will not close the Blocked Account
without giving the Administrative Agent and the Company at least
ten (10) days' prior written notice thereof.
11. No amendments or modifications made to this
Agreement shall be effective without the written consent of the
Bank, the Company and the Administrative Agent.
12. The Company will indemnify the Bank and hold the
Bank harmless from and against all losses, liability, damages,
costs and expenses, including reasonable attorneys' fees at trial
and on appeal, arising from or in connection with the Bank's
liability to collect any endorsed Remittances. The Company
further agrees that the Bank shall not be liable for any action
or inaction taken by the Bank or the Bank's employees in
accordance with the provisions of this Agreement, nor for the
loss of any instruments, documents or other property of any
nature whatsoever received by the Bank in connection with this
Agreement, other than cash and Remittances lost through the gross
negligence or willful misconduct of the Bank or its employees.
13. Except as expressly provided in this Agreement,
the Bank makes no representations or warranties arising by law or
otherwise, including but not limited to, implied warranties of
merchantability or fitness of a particular purpose, relating to
the performance of any lockbox process system. The Bank makes no
warranty concerning the accuracy of any report or other form
furnished to the Company or on the Company's behalf.
3
14. Except for damages resulting from, related to or
caused by the Bank's gross negligence, willful misconduct or
fraud, the Bank shall not be liable for any loss, destruction,
mutilation, damage or theft of any documents or items and the
Bank shall not be liable to the Company for failure to follow any
of the operating procedures or failure to perform any service
within the time period stated, if failure to perform is due to
the occurrence of any of the following events: any act or
failure to act by the Company; mechanical failures of the Bank's
equipment or power failures; strikes or lockout; fire or other
casualty; riot or civil commotion, wind storms, earthquakes;
floods or other acts of God; delay in transportation; government
regulations or interferences; or any other event beyond the
control of the Bank.
15. This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York.
16. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
and the same instrument.
17. This Agreement amends and restates the Blocked
Account Agreement dated as of December 28, 1994 among the
Company, the Bank and the Administrative Agent.
4
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed and delivered as of the day and
year first above written.
KASH N' XXXXX FOOD STORES, INC.
By:________________________________
Title:
XXXXXXX BANK OF TAMPA, BY XXXXXXX
XXXXX, INC., as Attorney-in Fact
for Xxxxxxx Bank of Tampa
By:________________________________
Title:
THE CIT GROUP/BUSINESS CREDIT,
INC., as Administrative Agent
By:________________________________
Title:
5
ANNEX 9
LIST OF LIQUOR LICENSES
ANNEX 9
Page 1 of 3
LICENSES ISSUED BY
THE FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION
DIVISION OF ALCOHOLIC BEVERAGES AND TOBACCO
KASH N' XXXXX FOOD STORES, INC.
As of November 1, 1995
STORE LICENSE LICENSE
NO. LOCATION COUNTY NO. SERIES
___ ____________________________ ___________ ________ _______
520 0000 XX 00XX XX. XXXXXXX 00-00000 3PS
584 0000 X.X. 00XX XXXXXX XXXXXXX 00-00000 3PS
720 0000 XX 00XX XX. XXXXXXX 00-00000 2APS
876 0000 XX 00XX XXXX. XXXXXXX 00-00000 2APS
884 0000 XX 00XX XX. XXXXXXX 00-00000 2APS
207 0000 X. XXXXXXX XXXXX XXXXXXXXX 00-00000 2APS
709 0000 XXXXXXX XXXXXX XXXX. XXXXXXXXX 00-00000 2APS
729 0000 X. XxXXXX XXXXXX XXXXXXXXX 2APS
529 0000 X. XxXXXX XXX. XXX 000 XXXXXXXXX 00-00000 3PS
702 0000 XX XXXXXXX 00 XXXXXX 00-00000 2APS
851 0000 X. XXXX XX. XXXXXX 00-00000 2APS
871 0000 X. XXXXXXXX XXXX. CITRUS 19-00265 2APS
890 0000 X.X. XXXXXXX 00 X. XXXXXX 00-00000 2APS
716 00000 XXXXXXXXXX XX. HERNANDO 37-00585 2APS
868 00000 XXXXXX XXXX. HERNANDO 37-00173 2APS
886 0000 XXXXXXXXXX XXX HERNANDO 37-00249 2APS
891 3250 U.S. 27 S. HIGHLANDS 38-00437 2APS
113 000 X. XXXXXXXXX XXXX. XXXXXXXXXXXX 00-00000 2APS
146 0000 X. XXXXXXX XXX. HILLSBOROUGH 39-01047 2APS
401 0000 X. XXXX XXXXX XXXXXXXXXXXX 00-00000 2APS
000 00000-X X. XXXXXXXX HILLSBOROUGH 39-02986 2APS
518 0000 X. XXXXXX XXX. HILLSBOROUGH 39-00779 3PS
523 000 X. XXXXXXXXX XX. XXXXXXXXXXXX 39-00994 3PS
550 HILLS. DISTRICT OFFICE HILLSBOROUGH 39-00782 3PS ESCROW
587 0000 X. XXXXXX XXX. HILLSBOROUGH 39-00201 3PS
592 00000 X. XXXXXXX XX. XXXXXXXXXXXX 00-00000 3PS
617 00000 X. XXXX XXXXX XXX. HILLSBOROUGH 39-02455 2APS
618 00000 X. XXXX XXXXX XXX. HILLSBOROUGH 39-01009 3PS
619 00000 XXXXXXX XXX. HILLSBOROUGH 39-00018 2APS
620 00000 XXXXXXX XXX. HILLSBOROUGH 39-01099 3PS
621 0000 X. XXXXXXXXXXXX XXX. HILLSBOROUGH 39-01740 2APS
622 0000 X. XXXXXXXXXXXX XXX. HILLSBOROUGH 39-00948 3PS
623 0000 XXXXX XXXX. XXXXXXXXXXXX 00-00000 2APS
624 0000 XXXXX XXXX. XXXXXXXXXXXX 00-00000 3PS
703 0000 XXXXXX XXXXXXX XXX. XXXXXXXXXXXX 00-00000 2APS
718 0000 X. XXXXXX XXX. HILLSBOROUGH 39-03610 2APS
722 0000 XXXXX XXX. XXXXXXXXXXXX 00-00000 2APS
723 000 X. XXXXXXXXX XX. XXXXXXXXXXXX 39-03858 2APS
743 0000 X. 00XX XXXXXX XXXXXXXXXXXX 00-00000 2APS
824 0000 XXXXXXXX XXXXX XXXXXXXXXXXX 39-00729 2APS
826 000 XXXXXXX XX. XXXXXXXXXXXX 39-00945 2APS
827 0000 X. XXXXXXX XXX. HILLSBOROUGH 39-00247 2APS
ANNEX 9
Page 2 of 3
848 1023 N. TAMIAMI TRAIL HILLSBOROUGH 39-01139 2APS
855 0000 X.X. XXXXXXX 000 XXXXXXXXXXXX 39-00275 2APS
858 4056 N. ARMENIA HILLSBOROUGH 39-00370 2APS
869 000 XXXXXX-XXXXXXXXX XX. XXXXXXXXXXXX 00-00000 2APS
870 0000 XXXXXXXX XXX. XXXXXXXXXXXX 39-01932 2APS
877 000 XXXXX XXXX 000 XXXXXXXXXXXX 39-02209 2APS
000 0000 XXXX XXX. XXXXXXXXXXXX 39-02414 2APS
887 0000 XXXXXX XXX. XXXXXXXXXXXX 00-00000 2APS
892 0000 XXXXXXX XX. HILLSBOROUGH 39-02608 2APS
209 0000 XXXXXX XXXXX XX. XXX 00-00000 2APS
309 0000-00 XXXXXXX XXXXXXX XXX 00-00000 2APS
310 0000-00 XXXXXXX XXXXXXX XXX 00-00000 3PS
311 00000 XxXXXXXX XXXX, XXX 0 XXX 00-00000 2APS
312 00000 XxXXXXXX XXXX, XXX 0 XXX 00-00000 3PS
313 0000 XXXXXXXX XX, XX, XXX 00 XXX 00-00000 2APS
314 0000 XXXXXXXX XX, XX, XXX 00 XXX 00-00000 3PS
315 0000 X. XXX XXXXX XXXX. XXX 00-00000 2APS
316 0000 X. XXX XXXXX XXXX. XXX 00-00000 3PS
629 00000 X. XXXXXXXXX XXX. XXX 00-00000 2APS
630 00000 X. XXXXXXXXX XXX. XXX 00-00000 3PS
882 0000 XXXXXXX XX. XXX 00-00000 2APS
211 0000 XXXXXXX XXX. X. XXXXXXX 00-00000 2APS
515 0000 00XX XX. X. XXXXXXX 51-00857 3PS
554 000 0XX XXXXXX XXXXXXX 00-00000 3PS
627 0000 XXXXXX XX. XXXXXXX 00-00000 2APS
628 0000 XXXXXX XX. XXXXXXX 00-00000 3PS
715 0000 00XX XX. X. XXXXXXX 51-01036 2APS
000 0XX XXXXXX & 0XX XXXXXX XXXXXXX 00-00000 2APS
867 0000 00XX XX. X. XXXXXXX 51-00473 2APS
301 0000 XX 00XX XXX. XXXXXX 00-00000 2APS
525 0000 X. X.X. XXX 000 XXXXXX 00-00000 3PS
596 00000 XX X.X. XXX 000 XXXXXX 00-00000 3PS
651 0000 X. XXXXXX XXXXXXX XXXXXX 00-00000 2APS
725 0000 X. X.X. XXX 000 XXXXXX 00-00000 2APS
894 000 X.X. 00 X. XXXXXX 00-00000 2APS
896 00000 XX X.X. XXX 000 XXXXXX 00-00000 2APS
701 0000 X. XXXX XX. XXXXXXX 00-00000 2APS
204 0000 X.X. XXX. 00 XXXXX 00-00000 2APS
528 0000 XXXX XXXXXXXXX XXXXX 00-00000 3PS
603 0000 XXXXX XXXX 00 XXXXX 00-00000 2APS
604 0000 XXXXX XXXX 00 XXXXX 00-00000 3PS
605 0000 XXXXXX XXXX 00 XXXXX 00-00000 2APS
606 0000 XXXXXX XXXX 00 XXXXX 00-00000 3PS
704 21605 XXXXXXX XXXXX XXXXX 00-00000 2APS
717 0000 XXXXXXXXXXXXX XXX. XXXXX 00-00000 2APS
728 0000 XXXX XXXXXXXXX XXXXX 00-00000 2APS
874 0000 X. XXXXXXXXX XXXXX 00-00000 2APS
885 0000 XXXXXX XX. XXXXX 00-00000 2APS
897 0000 X.X XXX 000 X. XXXXX 00-00000 2APS
133 0000 XXXXX XXXX XX. XXXXXXXX 00-00000 2APS
507 0000 XXXXX XXXXXX XXXXXXXX 00-00000 3PS
552 0000 0XX XX. X. XXXXXXXX 62-00368 3PS
ANNEX 9
Page 3 of 3
609 00000 XXXXXXXX XX. PINELLAS 62-01965 2APS
610 0000 000XX XX., XX XXXXXXXX 00-00000 3PS
611 0000 00XX XX. X. XXXXXXXX 62-03587 2APS
612 0000 00XX XX. X. XXXXXXXX 62-00146 3PS
613 0000 00XX XX. X. XXXXXXXX 62-00301 2APS
614 0000 00XX XX. X. XXXXXXXX 62-00098 3PS
615 0000 XXXXXXXX XXXX., X. XXXXXXXX 00-00000 2APS
616 0000 XXXXXXXX XXXX., X. XXXXXXXX 00-00000 3PS
705 3110 S.R. 000 X. XXXXXXXX 00-00000 2APS
707 0000 XXXXX XX. XXXXXXXX 00-00000 2APS
710 00000 XXXXXXXXXX XX. PINELLAS 62-04082 2APS
765 0000 0XX XX. X. XXXXXXXX 62-05192 2APS
831 0000 0XX XXX. X. XXXXXXXX 62-01146 2APS
849 00000 X.X. 00 X. XXXXXXXX 00-00000 2APS
852 0000 0XX XX. X. XXXXXXXX 62-01444 2APS
857 000 00XX XXX. X. XXXXXXXX 00-00000 2APS
864 0000 XXXX XX. XXXXXXXX 00-00000 2APS
873 0000 XxXXXXXX XXXXX XX. XXXXXXXX 00-00000 2APS
875 0000 X.X. XXX 00 X. XXXXXXXX 00-00000 2APS
879 13000 00XX XX. X. XXXXXXXX 00-00000 2APS
881 0000 X. XXX XX. XXXXXXXX 00-00000 2APS
883 0000 X. XXXXXXXX XXXXXXXX 00-00000 2APS
129 000 XXXXXX XX. XXXX 00-00000 2APS
533 000 XXXXXXXXX XXXX 63-00466 3PS
733 000 XXXXXXXXX XXXX 63-03773 2APS
000 0XX XX. & XXX. X., XX XXXX 00-00000 2APS
889 0000 XXXXX XXXX 00 X. XXXX 00-00000 2APS
893 0000 X. XXXXXXX XXX. POLK 63-01815 2APS
895 0000 X.X. XXX. 00 X. XXXX 00-00000 2APS
899 0000 X. XXX. 00 XXXX 63-01845 2APS
139 000 XXXXXX XX-XXXX XXXXXXXX 00-00000 2APS
214 0000 XXXXXXXXXX XX. XXXXXXXX 00-00000 2APS
215 0000 X. XXXXXXX XXXXX XXXXXXXX 00-00000 2APS
216 0000 XXX XXXXX XX. XXXXXXXX 00-00000 2APS
512 0000 XXXXXXXXX XXXX. XXXXXXXX 00-00000 3PS
514 000 X. XXXXXX XXXX XXXXXXXX 00-00000 3PS
519 0000 X. XXXXXXXX XXXXX XX. XXXXXXXX 00-00000 3PS
712 0000 XXXXXXXXX XXXX. XXXXXXXX 00-00000 2APS
719 0000 X.XXXXXXXX XXXXX XX. XXXXXXXX 00-00000 2APS
880 0000 XXXXXXXXX XX. XXXXXXXX 00-00000 2APS
XXXXXXXX XXXXXXXX XXXXXX XXXXXXXX 00-00000 3PS ESCROW
711 000 XXXXX XXXX. XXXXXXX 00-00000 2APS
1
EXHIBIT D
[Form of Opinion of Special Florida Counsel to the Company]
December 19, 1995
To the Lenders party to the Amended and
Restated Credit Agreement referred to below
and The CIT Group/Business Credit, Inc.
as the Administrative Agent
Ladies and Gentlemen:
We have acted as special Florida counsel to Kash n' Xxxxx
Food Stores, Inc., a Delaware corporation (the "Company"), in
connection with the transactions contemplated by the Amended and
Restated Credit Agreement dated as of December 19, 1995 (the
"Amended and Restated Credit Agreement") among the Company, each
of the lenders referred to therein (collectively, the "Lenders")
and The CIT Group/Business Credit, Inc., in its capacity as the
Administrative Agent (the "Administrative Agent"). All
capitalized terms defined in the Amended and Restated Credit
Agreement are used with the same meanings, unless otherwise
defined, in this opinion letter.
This opinion has been prepared and is to be construed in
accordance with the Report on Standards For Florida Opinions
dated April 8, 1991 issued by the Business Law Section of The
Florida Bar (the "Report"), as published in 46 The Business
Lawyer 1407 (August 1991). The Report is incorporated by
reference into this opinion.
In rendering the opinions expressed below, we have relied,
with your approval, as to factual matters (but not legal
conclusions) that affect our opinions, solely on our examination
of the following documents and have made no independent
verification of the facts asserted to be true and correct in
those documents, including the factual representations and
warranties contained therein: (a) (i) the Amended and Restated
Credit Agreement and the Notes, as modified and renewed on the
Restatement Effective Date (collectively, the "Modified Notes"),
(ii) the Security Agreement, (iii) the Patent and Trademark
Assignments, (iv) each counterpart of the Mortgage, each Partial
Release executed and delivered by the Administrative Agent as of
the Restatement Effective Date with respect to the collateral
consisting of real property owned by the Company in fee simple
(the "Partial Releases"), and each Mortgage Modification (the
Mortgages, as modified by the Partial Releases and the Mortgage
To the Lenders party to the Amended and
Restated Credit Agreement referred to below
and The CIT Group/Business Credit, Inc.,
as the Administrative Agent
December 19, 1995
Page 2
Modifications, are referred to, collectively, as the "Modified
Mortgage," and (v) the Blocked Account Agreement (the Security
Agreement, together with the Modified Mortgage, the Patent and
Trademark Assignments and the Blocked Account Agreement, as
amended and restated on the Restatement Effective Date, the
"Amended and Restated Security Documents" and, together with the
Amended and Restated Credit Agreement and the Modified Notes, the
"Amended and Restated Loan Documents"), (b) the financing
statement on Form UCC-1 naming the Company as debtor and the
Administrative Agent (as Agent) as secured party, bearing File
No. 940000252635, as filed with the Secretary of State of the
State of Florida on December 19, 1994, and the financing
statement on Form UCC-1 naming Save 'n Pack as debtor and the
Administrative Agent (as Agent) as secured party, bearing File
No. 940000261676, as filed with the Secretary of State of the
State of Florida on December 30, 1994 (the "State Financing
Statements"), (c) the financing statements on Form UCC-1 naming
the Company as debtor and the Administrative Agent (as Agent) as
secured party, as filed with the Clerk of Circuit Court in each
county in Florida in which goods of the Company which are or are
to become fixtures are located, more particularly identified on
Exhibit "A" attached hereto (the "Fixture Financing Statements,"
and together with the State Financing Statements, the "Financing
Statements"), (d) the notice of liquor license lien on Form 739L
naming the Company as debtor and the Administrative Agent (as
Agent) as secured party as recorded on or about February 15,
1995, with the Division of Alcoholic Beverages and Tobacco of the
State of Florida pursuant to section 561.65(4) of the Florida
Statutes, and the notice of liquor license lien on Form 739L
naming the Company as debtor and the Administrative Agent (as
Agent) as lienholder to be filed with the Division of Alcoholic
Beverages and Tobacco of the State of Florida pursuant to section
561.65(4) with respect to liquor licenses acquired by the Company
subsequent to the Effective Date and prior to the Restatement
Effective Date (collectively, the "Notices of Lien"), (e) a
Certificate of the Company's Authority to Transact Business in
Florida issued by the Florida Department of State on September
14, 1995, (f) a Certificate of Good Standing as to the Company
issued by the Secretary of State of the State of Delaware on
November 6, 1995, and (g) the Confirmation Order (as defined in
the Existing Credit Agreement). In our examination, we have
assumed the genuineness of all signatures, the authenticity of
documents submitted to us as originals and the conformity with
authentic original documents of all documents submitted to us as
copies. With your permission, we have also relied upon (a) the
opinion letter dated as of December 29, 1994 delivered to you by
Kramer, Levin, Xxxxxx, Xxxxx & Xxxxxxx pursuant to section
To the Lenders party to the Amended and
Restated Credit Agreement referred to below
and The CIT Group/Business Credit, Inc.,
as the Administrative Agent
December 19, 1995
Page 3
6.01(d) of the Existing Credit Agreement to the effect that the
execution and delivery of the Mortgage and the Notes on the
Effective Date and the recordation of the Mortgage are exempt
from Florida documentary stamp taxes pursuant to section 1146(c)
of the U.S. Bankruptcy Code and paragraph 26 of the Confirmation
Order, and (b) the Technical Advisement Assistance dated April 7,
1995 (the "TAA") issued by the Florida Department of Revenue (the
"Department") to the effect that the execution and delivery of
the Mortgage and the Notes, the borrowing by the Company under
the Notes, the recordation of the Mortgage, and any subsequent
renewals or modifications of the Notes and the Mortgage, are
exempt from Florida nonrecurring intangible taxes pursuant to
section 1146(c) of the U.S. Bankruptcy Code and paragraph 26 of
the Confirmation Order.
Based upon and subject to the foregoing and subject also to
the comments and qualifications set forth below, and having
considered such questions of law as we have deemed necessary as a
basis for the opinions expressed below, we are of the opinion
that:
(i) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State
of Delaware and has the corporate power to execute and deliver,
and to borrow and perform its obligations under, the Amended and
Restated Loan Documents.
(ii) The Company has been duly authorized to transact
business as a foreign corporation under the laws of, and its
status is active in, the State of Florida.
(iii) The execution, delivery and performance by the
Company of the Amended and Restated Loan Documents, and borrowing
by the Company under the Amended and Restated Loan Documents,
have been duly authorized by all necessary corporate action on
the part of the Company.
(iv) The Amended and Restated Loan Documents have been
duly executed and delivered by the Company.
(v) Subject to the limitations contained in the next
paragraph, the Amended and Restated Loan Documents constitute the
legal, valid and binding obligation of the Company, enforceable
against it in accordance with their respective terms.
To the Lenders party to the Amended and
Restated Credit Agreement referred to below
and The CIT Group/Business Credit, Inc.,
as the Administrative Agent
December 19, 1995
Page 4
Our opinion concerning the validity, binding effect and
enforceability of the Amended and Restated Loan Documents means
that (a) each Amended and Restated Loan Document constitutes an
effective contract under applicable law, (b) each Amended and
Restated Loan Document is not invalid in its entirety because of
a specific statutory prohibition or public policy and is not
subject in its entirety to a contractual defense, and (c) subject
to the last sentence of this paragraph, remedies generally
available to mortgage lenders in the State of Florida are
available to the Administrative Agent under the Amended and
Restated Loan Documents if the Company is in material default
under the Amended and Restated Loan Documents. This opinion does
not mean that (a) any particular remedy is available upon a
material default, or (b) every provision of the Amended and
Restated Loan Documents will be upheld or enforced in any or each
circumstance by a court. Furthermore, the validity, binding
effect and enforceability of the Amended and Restated Loan
Documents may be limited or otherwise affected by (a) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or
other similar statutes, rules, regulations or other laws
affecting the enforcement of creditors' rights and remedies
generally and (b) the unavailability of, or limitation on the
availability of, a particular right or remedy (whether in a
proceeding in equity or at law) because of an equitable principle
or a requirement as to commercial reasonableness, conscionability
or good faith.
We further note that certain of the Amended and
Restated Loan Documents provide that such Amended and Restated
Loan Documents shall be governed by and construed in accordance
with the laws of New York (collectively, the "New York
Documents"). We do not purport to be experts on, generally
familiar with, or qualified to express legal conclusions based
upon, the laws of New York and, accordingly, we express no
opinion as to the laws of New York or to their applicability to
the matters covered by this opinion. Our opinion in this
paragraph (v) has been rendered as though the New York Documents
were governed by, and were to be construed in accordance with,
the laws of the State of Florida (without reference to choice of
law principles under such laws).
(vi) No authorization, consent or other approval of, or
registration, declaration or other filing with, any governmental
authority (except for the recording of the Mortgage Modification
in the places referred to in paragraph (x) below) is required on
the part of the Company for the execution and delivery by it of,
for the borrowing by the Company under, or for the performance by
To the Lenders party to the Amended and
Restated Credit Agreement referred to below
and The CIT Group/Business Credit, Inc.,
as the Administrative Agent
December 19, 1995
Page 5
the Company of its agreements under, the Amended and Restated
Loan Documents, which, if not obtained, could have a materially
adverse impact on the transactions contemplated thereby.
(vii) The execution and delivery by the Company of, the
borrowing by the Company under, and the performance by the
Company of its obligations under, the Amended and Restated Loan
Documents do not and will not (a) violate any law, rule or
regulation of any governmental authority applicable to the
Company, (b) violate any provision of the Certificate of
Incorporation or bylaws of the Company, or (c) except as set
forth in paragraph (viii) of our opinion dated December 29, 1994
addressed to you, result in a breach of, constitute a default
under, require consent under, result in or require the creation
of any Lien on any Property of the Company or result in the
acceleration or required prepayment of any indebtedness pursuant
to the terms of, any agreement, instrument or order (including
any arbitral award) to which the Company or any of its assets is
subject. For purposes of clause (c) above, we have reviewed
those agreements, instruments and orders that have been
identified to us, after due inquiry, by the Company as its
material agreements, instruments and orders.
(viii) The Modified Mortgage is in proper form for the
creation of the mortgage lien contemplated thereby in favor of
the Administrative Agent for the benefit of the Lenders and the
Administrative Agent in the right, title and interest of the
Company in the real property purported to be subject to the Lien
of such Amended Mortgage (the "Mortgage Collateral") as
collateral security for the Obligations specified in such
Modified Mortgage except that the lien in any Mortgage Collateral
in which the Company acquires rights after the commencement of a
case against it under the Bankruptcy Code will be limited by
section 552 of the Bankruptcy Code.
(ix) The Lien granted by the Modified Mortgage will
continue to be perfected with respect to the Mortgage Collateral
referred to in the Modified Mortgage upon the recording of the
Mortgage Modification in the places referred to in paragraph (x)
below.
(x) The Mortgage Modification is in proper form for
recording with the Clerk of the Circuit Court of the various
counties in Florida in which the Mortgage Collateral is located.
(xi) Assuming that, notwithstanding the New York choice
of law set forth in the Amended and Restated Security Agreement,
To the Lenders party to the Amended and
Restated Credit Agreement referred to below
and The CIT Group/Business Credit, Inc.,
as the Administrative Agent
December 19, 1995
Page 6
Florida law governs the creation of the Lien thereunder, to the
extent that a security interest may be created in such property
under Article 9 of the Uniform Commercial Code of Florida (the
"Code"), the Security Agreement is effective to continue in favor
of the Administrative Agent for the benefit of the Lenders and
the Administrative Agent a valid security interest under the Code
in the rights of the Company in the personal property purported
to be subject to the Lien of such Security Agreement (the
"Collateral") as collateral security for the Secured Obligations
specified in such Security Agreement except that the security
interest in any Collateral in which the Company acquires rights
after the commencement of a case against it under the Bankruptcy
Code will be limited by section 552 of the Bankruptcy Code.
(xii) The security interest granted by the Security
Agreement will continue to be perfected without any further
action required to be taken with respect to that portion of the
Collateral as to which a security interest can be perfected under
the Code by the filing of financing statements with the Florida
Secretary of State in accordance with the Code, except that we
call your attention to the fact that the Lien on certain of the
Collateral may not be perfected by filing a financing statement
under the Code. Trademarks (as defined in the Security
Agreement) constitute general intangibles within the meaning of
section 679.106 of the Code. Except as set forth in section
679.302 of the Code, general intangibles of the Company may be
perfected by filing a financing statement with the Secretary of
State of Florida. The Lien granted by the Modified Mortgage and
the security interest granted by the Security Agreement will
continue to be perfected with respect to that portion of the
Collateral consisting of goods that are or are to become fixtures
on the Premises (as defined in the Modified Mortgage).
(xiii) A court in Florida would give effect to the
New York choice of law set forth in each of the Amended and
Restated Loan Documents stated to be governed by New York law, so
long as a normal and reasonable relationship exists between New
York and the transaction represented by the Amended and Restated
Loan Documents. In this regard, we understand and assume that
the Administrative Agent is a New York corporation, that it
maintains its principal place of business in New York, that the
Amended and Restated Loan Documents, including the Modified
Notes, will be executed and delivered in New York, and that the
disbursements and payments to be made under the Amended and
Restated Loan Documents will take place in New York. Given these
understandings and assumptions, we are of the opinion that a
Florida court would honor the parties' choice of New York law as
To the Lenders party to the Amended and
Restated Credit Agreement referred to below
and The CIT Group/Business Credit, Inc.,
as the Administrative Agent
December 19, 1995
Page 7
the law applicable to such of the Amended and Restated Loan
Documents stated to be governed by New York law, subject to the
qualification that we are unable to opine that a Florida court
would apply the laws of New York respecting (a) remedies
available in Florida upon a breach by the Company of any Amended
and Restated Loan Document; (b) the procedural rules governing or
affecting any action in Florida to enforce any Amended and
Restated Loan Document; or (c) any law that is determined to be
against an overriding public policy of the State of Florida.
(xiv) Neither the Administrative Agent nor any of the
Lenders will, solely by reason of the making by any Lender of any
Loan or solely by reason of, or as a condition to, the obtaining
by the Administrative Agent (on behalf of the Lenders) of the
Liens of the Amended and Restated Security Documents or the
enforcement by the Administrative Agent or any Lender of its
rights, remedies, powers and privileges under the Amended and
Restated Loan Documents, be required to qualify to do business in
the State of Florida or to make any registration, declaration or
filing (other than the State Financing Statements stated to be
filed, and the Notices of Lien, Fixture Financing Statements and
Mortgage Modifications stated to be recorded, in the State of
Florida) with any Governmental Person of the State of Florida.
(xv) Florida law levies a one-time non-recurring intangible
tax on obligations for the payment of money which are secured by
a lien upon real property situated in the State of Florida. See
sections 199.133 and 199.143 of the Florida Statutes. For
purposes of ad valorem taxes, the term "real property" means
"land, buildings, fixtures, and all other improvements to land."
Section 192.001(12) of the Florida Statutes. In The Aurora
Group, Ltd. v. Department of Revenue, 487 So. 2d 1132 (Fla. 3rd
DCA 1986), the court held that a mortgage secured by a 99-year
leasehold interest in real property was not subject to the non-
recurring intangible tax because the lease does not constitute
real property for ad valorem tax purposes. In addition, in
Technical Assistance Advisement No. 89(C)2-007 (November 22,
1989), the Department advised the taxpayer that a note, which was
secured by a mortgage on the borrower's leasehold interest in a
parcel of real property located in Florida, together with the
improvements to be erected thereon, was not subject to the non-
recurring intangible tax.
The position of the Department, as expressed in
Technical Assistance Advisement No. 89(C)2-007, is subject to
change from time to time. Moreover, technical assistance
advisements have no precedential value except to the taxpayer who
To the Lenders party to the Amended and
Restated Credit Agreement referred to below
and The CIT Group/Business Credit, Inc.,
as the Administrative Agent
December 19, 1995
Page 8
requests the advisement and then only for the specific
transaction addressed therein.
While the matter is not free from doubt, it is our view
that, if the matter were properly presented to a court having
jurisdiction, and assuming interpretation of the relevant law on
a basis consistent with existing authority and the analysis
applied in Technical Assistance Advisement No. 89(C)2-007, the
court should hold that there are no Florida nonrecurring
intangible taxes due pursuant to sections 199.133(1) or
199.143(1) of the Florida Statutes in respect of the execution
and delivery of the Modified Notes, the Mortgage Modification and
the other Amended and Restated Loan Documents on the Restatement
Effective Date, the recordation of the Mortgage Modification, or
the borrowing, repayment and reborrowing under the Modified Notes
and the other Amended and Restated Loan Documents on and from
time to time after the Restatement Effective Date.
Notwithstanding the foregoing, we express no opinion regarding:
(i) the applicability of the Florida annual intangible personal
property tax to the Amended and Restated Loan Documents or the
impact of such tax on the enforceability of any of the foregoing
documents, and (ii) any Florida corporate income tax liability
that may be incurred by the Lenders or the Administrative Agent
as a result of the transactions entered into or contemplated
under the Amended and Restated Credit Agreement.
(xvi) The Confirmation Order provides that, pursuant to
section 1146(c) of the Bankruptcy Code, "renewals" and
"modifications" of the Notes and the Mortgage "shall not be
subject to any document recording tax, stamp tax, conveyance fee,
recurring or nonrecurring intangibles or other similar tax,
mortgage tax, real estate transfer tax, mortgage recording tax or
other similar tax or assessment."
To our knowledge, there are no administrative rules,
nor reported court decisions, implementing section 1146(c) of the
Bankruptcy Code or section 201.08 of the Florida Statutes as they
relate to the exemption from any stamp tax or similar tax
(including Florida documentary stamp taxes) upon any renewal or
modification of an obligation originally exempt from such tax
pursuant to section 1146(c) of the Bankruptcy Code.
However, in Technical Assistance Advisement No. 94(M)-
009 issued by the Department on September 22, 1994, the
Department advised a Chapter 11 debtor on the application of
section 1146(c) to various transactions effected pursuant to an
amended and restated credit agreement, the original obligations
To the Lenders party to the Amended and
Restated Credit Agreement referred to below
and The CIT Group/Business Credit, Inc.,
as the Administrative Agent
December 19, 1995
Page 9
under which were exempt from Florida documentary stamp and
nonrecurring intangible taxes pursuant to section 1146(c). The
facts upon which Technical Assistance Advisement No. 94(M)-009
was based are summarized below:
The taxpayer had executed a credit agreement and
certain notes and mortgages pursuant to its confirmed plan of
reorganization. The credit facility consisted of a $20 million
revolving line of credit and term loans in the original principal
amount of $25 million. The notes evidencing the loans were
secured by mortgages on Florida real property. In an earlier
technical assistance advisement to the taxpayer, the Department
had confirmed that the original notes and mortgages were exempt
under section 1146(c) of the Bankruptcy Code. The original
credit agreement contemplated the transfer and assignment of
notes from one holder to another holder. Four years later, the
debtor and the lenders proposed to restructure the credit
facility. The holders of the notes proposed to assign their
interest in the notes to a new group of lenders. At the same
time, the taxpayer would pay down the term loan to $12.5 million,
and would execute and deliver renewal notes to the assignees in
the aggregate principal amount purchased by each assignee. The
taxpayer would amend and restate the credit agreement and other
loan documents to reflect the payment terms and other covenants
required by the assignees. The original collateral agent would
remain the mortgagee in the renewal mortgage. In addition, the
assignees would make an additional term loan to the taxpayer in
the amount of $12.5 million, which would be evidenced by
additional promissory notes payable to the assignees, issued as
future advances secured under the renewal mortgage.
Based on the facts presented to it, the Department
advised the taxpayer that (a) the new term loans were subject to
Florida documentary stamp taxes and nonrecurring intangible
taxes, and (b) no such taxes were due on the assignment of the
notes from the assignors to the assignees, on the execution and
delivery of the renewal notes, or on the repayment and borrowing
of funds from time to time under the renewal revolving notes,
based on section 1146(c) and because the renewal notes are exempt
renewals under section 201.09 of the Florida Statutes and exempt
refinancings under section 199.145 of the Florida Statutes.
The position of the Department, as expressed in
Technical Assistance Advisement No. 94(M)-009, is subject to
change from time to time. Moreover, technical assistance
advisements have no precedential value except to the taxpayer who
To the Lenders party to the Amended and
Restated Credit Agreement referred to below
and The CIT Group/Business Credit, Inc.,
as the Administrative Agent
December 19, 1995
Page 10
requests the advisement and then only for the specific
transaction addressed therein.
While the matter is not free from doubt, it is our view
that, if the matter were properly presented to a court having
jurisdiction, and assuming that (a) the transactions effected
under the Amended and Restated Credit Agreement were analyzed on
a basis consistent with the analysis applied in Technical
Assistance Advisement No. 94(M)-009, and (b) the execution and
delivery of the Notes and the Mortgage on the Effective Date, and
the recordation of the Mortgage thereafter, were exempt from
Florida documentary stamp taxes pursuant to section 1146(c) of
the Bankruptcy Code, the court should hold that (x) Florida
documentary stamp taxes would be due in respect of the Tranche A
Term Loan to the extent secured by the Modified Mortgage and (y)
except as set forth in clause (x) above, no Florida documentary
stamp taxes would be due in respect of the execution and delivery
of the Modified Notes and the Mortgage Modification on the
Restatement Effective Date or the recordation of the Mortgage
Modification.
We advise you that, to our knowledge after limited
investigation, there are no pending or threatened actions, suits,
proceedings or investigations against the Company in any court or
by or before any arbitrator or governmental authority in Florida,
which will or might reasonably be expected to have a material
adverse effect upon the business or financial condition of the
Company, upon the ability of the Company to repay the Loans, or
upon the benefits provided to the Administrative Agent or the
Lenders under the Amended and Restated Security Documents.
The foregoing opinions are also subject to the following
comments and qualifications:
(a) We express no opinion as to the ownership of or
title to any of the Collateral or the Mortgage Collateral, as to
the priority of any Liens (including the Liens of the Amended and
Restated Loan Documents), or (except as set forth in paragraphs
(viii), (ix), (x), (xi) and (xii) above) as to the creation or
perfection of any Liens (including the Liens of the Amended and
Restated Loan Documents). Further, we advise you that we have,
for the purposes of this opinion, assumed that: (i) the chief
executive office of the Company is located in Florida; and (ii)
the Collateral does not include property of the types described
in sections 679.104 and 679.401(1)(a) or (except as to goods
which are or are to become fixtures) 679.401(1)(b) of the Code.
To the Lenders party to the Amended and
Restated Credit Agreement referred to below
and The CIT Group/Business Credit, Inc.,
as the Administrative Agent
December 19, 1995
Page 11
(b) In connection with our opinions in paragraphs (xi)
and (xii) above, we wish to call your attention to the provisions
of (1) sections 679.306 through 679.310, and section 679.312 of
the Code as to limitations on the effect of perfection and (2)
sections 679.103, 679.402 and 679.403 of the Code as to actions
(including the filing of continuation statements) that may be
necessary in the future to continue perfection as a result of the
lapse of time or a change in circumstances.
The foregoing opinions are limited to matters involving
the Federal laws of the United States, the laws of the State of
Florida and the General Corporation law of the State of Delaware
and we do not express any opinion as to the laws of any other
jurisdiction. Without limitation of the foregoing, we do not
express any opinion as to any Federal or Florida securities laws,
bank regulatory laws, environmental laws, land use and zoning
laws, or, except as provided in paragraphs (xv) and (xvi) above,
tax laws, or as to any matters of law or fact not expressly
opined upon herein.
This opinion letter is in addition to, and not a replacement
of, our opinion letter to you dated December 29, 1994. This
opinion letter is provided to you by us as counsel to the Company
pursuant to section 6.01(d) of the Amended and Restated Credit
Agreement and is rendered solely in connection with the
transactions contemplated thereby. This opinion may be relied
upon by you (and your successors and assigns) only in connection
with such transactions, and may not be relied upon by any other
person or for any purpose without our prior written consent in
each instance.
Very truly yours,
EXHIBIT E
[Form of Opinion of Counsel to the Administrative Agent]
December 19, 1995
To the Lenders party to the
Credit Agreement referred to below
and The CIT Group/Business Credit, Inc.,
as Administrative Agent
c/o The CIT Group/Business Credit, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Re: Amended and Restated Credit Agreement dated as of
December 19, 1995, among Kash n' Xxxxx Food
Stores, Inc., The CIT Group/Business Credit, Inc.,
as Administrative Agent and the financial
institutions parties thereto
Ladies and Gentlemen:
Description of Representation
We have acted as special counsel to The CIT
Group/Business Credit, Inc., as Administrative Agent (the
"Administrative Agent"), in connection with the preparation,
execution and delivery of that certain Amended and Restated
Credit Agreement (the "Credit Agreement") dated as of December
19, 1995 among Kash n' Xxxxx Food Stores, Inc., the
Administrative Agent and the financial institutions party thereto
(the "Lenders"). This opinion is being furnished to you pursuant
to Section 6.01(e) of the Credit Agreement. Capitalized terms
used herein are used with the meanings given to them in the
Credit Agreement.
Materials Examined
In this regard, we have examined executed originals or
copies of the following, each of which, unless otherwise
indicated, is dated the date (or as of the date) hereof:
(a) Credit Agreement.
(b) Notes being delivered on the date hereof (the
"Notes").
(c) The Amended and Restated Security Agreement (the
"Security Agreement") between Kash n' Xxxxx Food
Stores, Inc. and the Administrative Agent, as
agent for the holders, from time to time, of
Secured Obligations (as defined in the Security
To the Lenders party to the
Credit Agreement referred to below
and The CIT Group/Business Credit, Inc.,
as Administrative Agent
December 19, 1995
Page 2
Agreement). The Credit Agreement, the Notes and
the Security Agreement are collectively referred
to herein as the "Loan Documents."
(d) Opinion of Barnett, Bolt, Kirkwood & Long, special
Florida counsel to the Company.
(e) Other certificates and documents of the Company,
governmental authorities or other parties
delivered pursuant to the Credit Agreement on the
Restated Effective Date in satisfaction of the
conditions specified in Section 6.01 and Section
6.02 of the Credit Agreement.
Opinions
Based upon such examination, and having regard for
legal considerations we deem relevant, we are of the opinion that
the Loan Documents, when duly executed and delivered by the
respective parties thereto, constitute legal, valid and binding
obligations of the Company enforceable against the Company in
accordance with their respective terms.
Certain Assumptions
With your permission we have assumed the following:
(a) the authenticity of original documents and the genuineness of
all signatures on the documents we have reviewed; (b) the
conformity to the originals of all documents submitted to us as
copies; (c) the truth, accuracy, and completeness of the
information, representations, and warranties contained in the
records, documents, instruments, and certificates we have
reviewed; (d) the due power and authority of all parties to the
Loan Documents; (e) the due authorization, execution and delivery
of the Loan Documents by all parties thereto and, except with
respect to the Company, the legal, valid and binding nature of
the obligations of all such parties under the Loan Documents, and
the enforceability of the Loan Documents against such parties in
accordance with their respective terms; (f) the due organization
and valid existence of all parties to the Loan Documents; and (g)
the absence of any evidence extrinsic to the provisions of the
written agreements between the parties that the parties intended
a meaning contrary to those expressed by those provisions.
To the Lenders party to the
Credit Agreement referred to below
and The CIT Group/Business Credit, Inc.,
as Administrative Agent
December 19, 1995
Page 3
We also assume that failure to pay any documentary
stamp or intangible tax, if due, under Florida law will not
affect the enforceability of, or any right or remedy any Person
has under, the Loan Documents.
Certain Limitations and Qualifications
We express no opinion as to: (i) matters of law in
jurisdictions other than the State of New York and the United
States; (ii) regulatory matters relating to each Lender
including, but not limited to, lending limits and affiliate
transactions; and (iii) the enforceability of choice of law
provisions in the Loan Documents.
Our opinions set forth above are qualified as to:
(a) limitations imposed by bankruptcy, insolvency,
reorganization, arrangement, fraudulent conveyance, moratorium,
or other laws relating to or affecting the rights of creditors
generally;
(b) rights to indemnification and contribution which
may be limited by applicable law and equitable principles;
(c) the unenforceability under certain circumstances
of provisions imposing penalties, forfeiture, late payment
charges, or an increase in interest rate upon delinquency in
payment or the occurrence of any event of default;
(d) general principles of equity, including without
limitation, concepts of materiality, reasonableness, good faith
and fair dealing, and the possible unavailability of specific
performance or injunctive relief, regardless of whether such
enforceability is considered in a proceeding in equity or at law;
(e) certain remedial or procedural provisions
contained in the Loan Documents may be limited or rendered
unenforceable by applicable law, but such limitations do not, in
our opinion, make the remedies and procedures that are available
to the Administrative Agent and the Lenders inadequate for the
practical realization of the principal benefits purported to be
provided to them by the Loan Documents;
To the Lenders party to the
Credit Agreement referred to below
and The CIT Group/Business Credit, Inc.,
as Administrative Agent
December 19, 1995
Page 4
(f) the enforceability of provisions of the Loan
Documents to the effect that terms may not be waived or modified
except in writing may be limited under certain circumstances; and
(g) we express no opinion as to the ownership of or
title to any of the collateral securing the Obligations or as to
the creation, continuation or perfection of any Liens (including
the Liens of the Loan Documents).
Use of Opinion
This opinion is solely for your benefit and may not be
relied upon or used by any other person without our prior written
approval. We disclaim any obligation to update this opinion
letter for events occurring or coming to our attention after the
date hereof.
Very truly yours,
EXHIBIT F
[Form of Landlord Waiver Agreement]
REQUESTED BY AND
WHEN RECORDED MAIL TO:
THE CIT GROUP/BUSINESS
CREDIT, INC.
000 XXXXX XXXXX XXXXXX
XXXXX XXXXX
XXX XXXXXXX, XXXXXXXXXX 00000
Attn: Regional Credit Manager
------------------------------------------------------
LANDLORD WAIVER AGREEMENT
WHEREAS, The CIT Group/Business Credit, Inc., as
administrative agent (in such capacity, the "Administrative Agent")
for itself and certain other lenders (the "Lenders") under that
certain Amended and Restated Credit Agreement (the "Credit
Agreement") dated as of December 19, 1995 among Kash n' Xxxxx Food
Stores, Inc. (the "Company"), the Administrative Agent and the
Lenders, has or will enter into certain Security Documents under,
and as defined in, the Credit Agreement with the Company, pursuant
to which the Company has or will grant a security interest in favor
of the Administrative Agent and the Lenders covering, in part, all
equipment, fixtures, inventory and other property of the Company,
whether now owned or hereafter acquired by the Company, and the
proceeds and products thereof, and all replacements, substitutions,
additions and accessions thereto (collectively "Personal
Property"); and
WHEREAS, certain of the Personal Property is now or may
be located in the future at the location described in Exhibit "A"
attached hereto and by this reference incorporated herein (the
"Premises"); and
WHEREAS, ___________________ has an interest in the
Premises as landlord (the "Landlord"), under a Lease dated
__________, 19___ executed by the Company and the Landlord (the
"Lease").
NOW, THEREFORE, in consideration of the foregoing, and
other good and valuable consideration, the undersigned agrees as
follows:
The Lease is in full force and effect, there are
currently no defaults under the Lease, and no event exists which,
with the passage of time or the giving of notice or both, would
constitute a default thereunder. The rent and all other charges
due under the Lease have been paid in full by the Company through
the date of this Landlord Waiver Agreement and no rent payable
under the Lease has been paid more than one (1) month in advance of
its due date. There are no existing set-offs or defenses against
the enforcement of any of the obligations under the Lease on the
part of Landlord.
The Landlord acknowledges that the Lenders have made or
intend to make loans and other extensions of credit to the Company
pursuant to the Credit Agreement, which loans and other extensions
of credit are secured by substantially all the assets of the
Company. The Landlord consents to such liens as the Company has
granted and may elect to grant to the Administrative Agent and the
Lenders from time to time, and specifically consents to the
execution, delivery, performance and recordation by the Company,
and the enforcement of, collateral assignments, mortgages and
security agreements (or any extensions, amendments or modifications
thereof) in favor of the Administrative Agent, as agent for the
Lenders, encumbering the Company's interest in the Personal
Property without the same constituting a default under the terms of
the Lease.
The Landlord hereby waives in favor of the Lenders any
right, title or interest in or to the fixtures or equipment
installed by the Company at the Premises and agrees and consents
that said fixtures and equipment, and any accessories, additions,
substitutions or replacements therefor, shall not be subject to and
shall be free of any lien of Landlord, statutory or otherwise, for
the payment of rent by the Company or for the performance of any
other obligation of the Company under the Lease.
The Personal Property may be installed on or otherwise
affixed to the Premises and shall not be deemed an accession or
addition to or fixture or part of the Premises but shall at all
times be considered Personal Property.
The Administrative Agent, or its representatives, may
advertise and conduct a public auction or private sale of the
Personal Property on the Premises and the Landlord shall not
interfere with any such auction or sale.
At the option of the Administrative Agent, the Personal
Property may remain upon the Premises (without the Administrative
Agent being deemed to be taking possession of the Premises) for a
period of 90 days after the Administrative Agent's receipt of
written notice from the Landlord directing removal. During such
90-day period, the Administrative Agent may remove the Personal
Property from the Premises at any reasonable time and the
Administrative Agent will not be liable for the condition of the
Premises after it has removed the Personal Property as long as
reasonable care is used in removing said Personal Property. In
addition, the Administrative Agent shall in no event be required or
deemed to have assumed the Company's obligations under the Lease.
2
The Landlord agrees to give notice within five (5) days
of any default by any party of any of the provisions of the Lease
to the Administrative Agent at:
The Cit Group/Business Credit, Inc.
000 Xxxxx Xxxxx Xxx.
Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attn: Regional Credit Manager
Upon receipt of said notice, the Administrative Agent shall
thereupon have the right but not the obligation to cure such
default within ten (10) days. Any failure by the Administrative
Agent to cure such default shall not otherwise affect the rights of
the Administrative Agent or the Lenders hereunder.
This waiver agreement is binding upon the Landlord and
the heirs, personal representatives, successors and assigns of the
Landlord.
IN WITNESS WHEREOF, the undersigned parties to this
waiver agreement have executed it as of the ____ day of
___________, 1995.
_____________________________,
as Landlord
By: __________________________
Name:
Title:
THE CIT GROUP/BUSINESS CREDIT,
INC., as Administrative Agent
By: __________________________
Name:
Title:
3
EXHIBIT A
Description of the Premises
EXHIBIT G
[Form of Confidentiality Agreement]
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: Amended and Restated Credit Agreement dated as of December
19, 1995 (the "Credit Agreement") among Kash n' Xxxxx Food
Stores, Inc., the Lenders identified in the Credit Agreement
and the CIT Group/Business Credit, Inc., as Administrative
Agent.
Ladies and Gentlemen:
As a Lender party to the Credit Agreement, we have
agreed with the Company pursuant to Section 11.12 of the Credit
Agreement to use reasonable precautions to keep confidential,
except as otherwise provided in the Credit Agreement, all
nonpublic information identified by the Company as being
confidential at the time the same is delivered to us pursuant to
the Credit Agreement.
As provided in that Section 11.12, we are permitted to
provide you, (i) as a prospective [HOLDER OF A PARTICIPATION IN
THE LOANS (AS DEFINED IN THE CREDIT AGREEMENT)] [ASSIGNEE LENDER],
with certain of such nonpublic information subject to the
execution and delivery by you, prior to receiving such nonpublic
information, of a Confidentiality Agreement in this form. Such
information will not be made available to you until your
execution and return to us of this Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you
agree (on behalf of yourself and each of your affiliates,
directors, officers, employees and representatives) that (A)
such information will not be used by you except in connection with the
proposed [PARTICIPATION] [ASSIGNMENT] mentioned above and (B) you
shall use reasonable precautions, in accordance with your
customary procedures for handling confidential information and in
accordance with safe and sound banking practices, to keep such
information confidential, provided that nothing in this
Confidentiality Agreement shall limit the disclosure of any such
information (i) to the extent required by Governmental Rule,
(ii) to your counsel or to counsel for any of the Lenders or the
Administrative Agent, (iii) to bank examiners, auditors or
accountants, (iv) to the Administrative Agent or any other Lender
or their affiliates, directors, officers, employees, accountants,
consultants and representatives, (v) in connection with any
litigation to which you or any one or more of the Lenders or the
Administrative Agent is a party, (vi) to a subsidiary or
affiliate of yours or (vii) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first
executes and delivers to you a Confidentiality Agreement
substantially in this form and (y) that in no event shall you be
obligated to return any materials furnished to you pursuant to
this Confidentiality Agreement.
Please indicate your agreement to the foregoing by signing
as provided below the enclosed copy of this Confidentiality
Agreement and returning the same to us.
Very truly yours,
[NAME OF LENDER]
By: [_________________________]
The foregoing is agreed to
as of the date of this letter.
[NAME OF PROSPECTIVE
PARTICIPANT OR ASSIGNEE]
By: [_________________________]
2
