U.S. $49,916,606.67
LOAN AGREEMENT
Dated as of December 17, 1998
Among
IBJ XXXXXXXX BUSINESS CREDIT CORPORATION,
XXXXXX FINANCIAL, INC., and
NATIONAL BANK OF CANADA,
individually, and in its capacity as Agent
and
HOMELAND STORES, INC.,
as Borrower,
and
HOMELAND HOLDING CORPORATION,
as Guarantor
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS 2
SEC. 1.1. CERTAIN DEFINED TERMS 2
SEC. 1.2. TERMS DEFINED IN THE UNIFORM COMMERCIAL CODE 38
SEC. 1.3. COMPUTATION OF TIME PERIODS 38
SEC. 1.4. ACCOUNTING TERMS 38
SEC. 1.5. OTHER PROVISIONS REGARDING DEFINITIONS 38
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT FACILITY 39
SEC. 2.1. REVOLVING CREDIT FACILITY ADVANCES 39
SEC. 2.2. REVOLVING CREDIT FACILITY COMMITMENT AND REVOLVING
LOAN BORROWING LIMIT 39
SEC. 2.3. REVOLVING NOTES 40
SEC. 2.4. NOTICE OF BORROWING; BORROWER'S CERTIFICATE 41
SEC. 2.5. TERMINATION OF REVOLVING CREDIT FACILITY COMMITMENT 42
SEC. 2.6. INTEREST ON REVOLVING LOAN 42
SEC. 2.7. PAYMENTS OF PRINCIPAL 42
SEC. 2.8. ESTABLISHMENT OF RESERVES 43
SECTION 3. AMOUNT AND TERMS OF TERM LOAN FACILITY 43
SEC. 3.1. TERM LOAN FACILITY 43
SEC. 3.2. TERM LOAN FACILITY COMMITMENT 43
SEC. 3.3. TERM NOTES 44
SEC. 3.4. INTEREST ON TERM LOAN 44
SEC. 3.5. PRINCIPAL PAYMENTS 44
SECTION 4. AMOUNT AND TERMS OF ACQUISITION TERM LOAN FACILITY 44
SEC. 4.1. ACQUISITION TERM LOAN FACILITY ADVANCES 44
SEC. 4.2. ACQUISITION TERM LOAN FACILITY COMMITMENT AND
ACQUISITION TERM LOAN BORROWING LIMIT 45
SEC. 4.3. ACQUISITION TERM NOTES 46
SEC. 4.4. NOTICE OF BORROWING; BORROWER'S CERTIFICATE 47
SEC. 4.5. TERMINATION OF ACQUISITION TERM LOAN FACILITY COMMITMENT 47
SEC. 4.6. INTEREST ON ACQUISITION TERM LOAN 48
SEC. 4.7. PRINCIPAL PAYMENTS 48
SECTION 5. TERMS AND FEES COMMON TO ALL FACILITIES 49
SEC. 5.1. INTEREST 49
SEC. 5.2. CONVERSION OF BORROWINGS; RENEWALS 50
SEC. 5.3. COMPUTATION OF INTEREST. 51
SEC. 5.4 COLLECTIONS THROUGH LOCKBOX 51
SEC. 5.5. INCREASED COSTS 51
SEC. 5.6. CHANGE IN LAW RENDERING EURODOLLAR ADVANCES UNLAWFUL 53
SEC. 5.7. EURODOLLAR AVAILABILITY 53
SEC. 5.8. INDEMNITIES 54
SEC. 5.9. DISBURSEMENT 57
SEC. 5.10. AGENT'S AVAILABILITY ASSUMPTION 58
SEC. 5.11. PRO RATA TREATMENT AND PAYMENTS 59
SEC. 5.12. SHARING OF PAYMENTS, ETC. 59
SEC. 5.13. EXCESS OPERATING FUNDS 60
SEC. 5.14. EURODOLLAR OFFICES 60
SEC. 5.15. TELEPHONIC NOTICE 60
SEC. 5.16. MAXIMUM INTEREST 60
SEC. 5.17. COMPOSITION AND APPLICATION OF PAYMENTS AND COLLECTIONS 61
LIMITATION ON PERMITTED INDEBTEDNESS UNDER INDENTURE. 61
SECTION 6. PAYMENTS, PREPAYMENTS AND REDUCTIONS 61
SEC. 6.1. MANDATORY PAYMENTS AND REDUCTIONS 61
SEC. 6.2. PAYMENT FROM INSURANCE PROCEEDS 62
SEC. 6.3. OPTIONAL PREPAYMENTS 63
SEC. 6.4. PROCEDURES FOR PAYMENT 63
SEC. 6.5. COMMITMENT FEES 65
SEC. 6.6. AGENCY FEE 66
SEC. 6.7. CLOSING FEE 66
SEC. 6.8. PREPAYMENTS TO INCLUDE INTEREST 66
SECTION 7. LETTERS OF CREDIT 66
SEC. 7.1. LETTERS OF CREDIT 66
SEC. 7.2. LETTER OF CREDIT FEES 68
SEC. 7.3. INDEMNITY 68
SEC. 7.4. REIMBURSEMENT OF CERTAIN COSTS 69
SEC. 7.5. PAYMENT OF DRAFTS 71
SEC. 7.6. ISSUING LENDER'S ACTIONS 71
SECTION 8. SECURITY AND GUARANTY 72
SEC. 8.1. SECURITY AGREEMENTS 72
SEC. 8.2. MORTGAGES 73
SEC. 8.3. FILING AND RECORDING 74
SEC. 8.4. INTERPRETATION OF SECURITY DOCUMENTS AND MORTGAGES 74
SEC. 8.5. GUARANTEES 74
SEC. 8.6 RELEASE OF MORTGAGES 74
SEC. 8.7 POWER OF ATTORNEY 75
SEC. 8.8. LIMITATION ON LENDER DEBT SECURED BY SECURITY DOCUMENTS 75
SECTION 9. CONDITIONS PRECEDENT TO INITIAL BORROWING AND ISSUANCE
OF LETTERS OF CREDIT 76
SEC. 9.1. OPINIONS OF COUNSEL 76
SEC. 9.2. AUDIT RESULTS 76
SEC. 9.3. MATERIAL ADVERSE CHANGE 76
SEC. 9.4. QUALIFICATION 76
SEC. 9.5. SECURITY DOCUMENTS AND INSTRUMENTS 76
SEC. 9.6. EVIDENCE OF INSURANCE 77
SEC. 9.7. EXAMINATION OF BOOKS 77
SEC. 9.8. CORPORATE STRUCTURE 77
SEC. 9.9. NOTES 77
SEC. 9.10. FEES TO AGENT AND LENDERS 77
SEC. 9.11. MANAGEMENT; OWNERSHIP 77
SEC. 9.12. DISBURSEMENT AUTHORIZATION 77
SEC. 9.13. LITIGATION 77
SEC. 9.14. COMPLIANCE WITH LAW 78
SEC. 9.15. PROCEEDINGS; RECEIPT OF DOCUMENTS 78
SEC. 9.16. APPROVAL OF SUBORDINATED NOTES; CAPITALIZATION, ETC. 79
SEC. 9.17. COLLECTION AND CONCENTRATION ACCOUNTS; LOCK-BOX
ACCOUNTS; CASH MANAGEMENT AGREEMENT. 79
SEC. 9.18. NO MARKET DISRUPTION 80
SEC. 9.19. LANDLORDS' LIENS 80
SEC. 9.20. UCC SEARCH RESULTS 80
SEC. 9.21 NO DEFAULT 80
SECTION 10. CONDITIONS PRECEDENT TO EACH BORROWING AND ISSUANCE
OF LETTERS OF CREDIT 81
SEC. 10.1. BORROWER'S CERTIFICATE; OTHERS 81
SEC. 10.2. WRITTEN NOTICE 82
SECTION 11. USE OF PROCEEDS 82
SECTION 12. AFFIRMATIVE COVENANTS 82
SEC. 12.1. FINANCIAL STATEMENTS AND OTHER INFORMATION 82
SEC. 12.2. TAXES AND CLAIMS 88
SEC. 12.3. INSURANCE 88
SEC. 12.4. BOOKS AND RESERVES 89
SEC. 12.5. PROPERTIES IN GOOD CONDITION 89
SEC. 12.6. MAINTENANCE OF EXISTENCE, ETC. 90
SEC. 12.7. INSPECTION BY THE AGENT 90
SEC. 12.8. PAY INDEBTEDNESS TO LENDERS AND PERFORM OTHER COVENANTS 90
SEC. 12.9. NOTICE OF DEFAULT 91
SEC. 12.10. REPORTING OF MISREPRESENTATIONS 91
SEC. 12.11. COMPLIANCE WITH LAWS, ETC. 91
SEC. 12.12. ERISA 91
SEC. 12.13. FURTHER ASSURANCES 93
SEC. 12.14. AUDITS AND APPRAISALS 93
SEC. 12.15. ENVIRONMENTAL MATTERS, ETC. 94
SEC. 12.16. FINANCIAL COVENANTS 95
SEC. 12.17. COLLECTION AND CONCENTRATION ACCOUNTS; LOCK-BOX
ACCOUNTS 96
SEC. 12.18. ENVIRONMENTAL REPORTS 99
SEC. 12.19. COUNSEL FEES 99
SEC. 12.20. LANDLORDS' LIENS 99
SEC. 12.21. OVERDUE LEASE 99
SEC. 12.22. COMPLIANCE WITH EQUIPMENT LEASES 99
SEC. 12.23. COMPLIANCE WITH VENDOR REBATE AGREEMENTS 99
SEC. 12.24 AGREEMENTS REGARDING PERMITTED ACQUISITIONS 100
SEC. 12.25 MILLENNIUM COMPLIANT 101
SECTION 12.26. NOTICE OF VENDORS OF PERISHABLE AGRICULTURAL
COMMODITIES. 101
SECTION 13. NEGATIVE COVENANTS 102
SEC. 13.1. CAPITAL EXPENDITURES 102
SEC. 13.2. LIENS 102
SEC. 13.3. INDEBTEDNESS 105
SEC. 13.4. LOANS, INVESTMENTS AND GUARANTEES 105
SEC. 13.5. MERGER, SALE OF ASSETS, DISSOLUTION, ETC. 107
SEC. 13.6. DIVIDENDS, REDEMPTIONS AND OTHER PAYMENTS 108
SEC. 13.7. TRANSACTIONS WITH AFFILIATES 108
SEC. 13.8. MANAGEMENT FEES AND OTHER PAYMENTS 109
SEC. 13.9. COMPROMISE OF PLEDGED ACCOUNTS 109
SEC. 13.10. NONCOMPLIANCE WITH ERISA 109
SEC. 13.11. AMENDMENTS AND MODIFICATIONS 109
SEC. 13.12. FISCAL YEAR 110
SEC. 13.13. CHANGE OF BUSINESS 110
SEC. 13.14. NO NEGATIVE PLEDGES 110
SEC. 13.15. COLLECTION AND CONCENTRATION ACCOUNTS; LOCK-BOX
ACCOUNTS 111
SEC. 13.16. TAX SHARING AGREEMENTS 112
SEC. 13.17. COVENANT OF PARENT 112
SEC. 13.18. MAXIMUM RETURNED INVENTORY 113
SEC. 13.19. THIRD PARTY PAYORS 113
SECTION 14. DEFAULTS AND REMEDIES 113
SEC. 14.1. EVENTS OF DEFAULT 113
SEC. 14.2. SUITS FOR ENFORCEMENT 117
SEC. 14.3. RIGHTS AND REMEDIES CUMULATIVE 118
SEC. 14.4. RIGHTS AND REMEDIES NOT WAIVED 118
SEC. 14.5. APPLICATION OF PROCEEDS 118
SEC. 14.6 INVENTORY COUNTING AND APPRAISAL 120
SECTION 15. REPRESENTATIONS AND WARRANTIES 121
SEC. 15.1. CORPORATE STATUS 121
SEC. 15.2. POWER AND AUTHORITY 121
SEC. 15.3. NO VIOLATION OF AGREEMENTS 122
SEC. 15.4. NO LITIGATION 122
SEC. 15.5. GOOD TITLE TO PROPERTIES 122
SEC. 15.6. FINANCIAL STATEMENTS AND CONDITION 123
SEC. 15.7. TRADEMARKS, PATENTS, ETC. 124
SEC. 15.8. TAX LIABILITY 124
SEC. 15.9. GOVERNMENTAL ACTION 124
SEC. 15.10. DISCLOSURE 124
SEC. 15.11. REGULATION U 124
SEC. 15.12. INVESTMENT COMPANY 125
SEC. 15.13. EMPLOYEE BENEFIT PLANS 125
SEC. 15.14. PERMITS, ETC. 126
SEC. 15.15. ENVIRONMENTAL STATUS 127
SEC. 15.16. MEDICARE/MEDICAID AND THIRD PARTY PAYOR AGREEMENTS 128
SEC. 15.17. VALIDITY OF RECEIVABLES 129
SEC. 15.18. COLLECTION AND CONCENTRATION ACCOUNTS; LOCK-BOX
ACCOUNTS 129
SEC. 15.19. PARENT 129
SEC. 15.20. VALIDITY OF PHARMACEUTICAL RECEIVABLES 129
SEC. 15.21. VALIDITY OF VENDOR RECEIVABLES 130
SEC. 15.22. COMPLIANCE WITH INDENTURE 130
SECTION 16. MISCELLANEOUS 130
SEC. 16.1. COLLECTION COSTS 130
SEC. 16.2. AMENDMENT, MODIFICATION AND WAIVER 131
SEC. 16.3. NEW YORK LAW 132
SEC. 16.4. NOTICES 132
SEC. 16.5. FEES AND EXPENSES 133
SEC. 16.6. STAMP OR OTHER TAX 133
SEC. 16.7. WAIVER OF JURY TRIAL AND SET-OFF 133
SEC. 16.8. TERMINATION OF AGREEMENT 134
SEC. 16.9. CAPTIONS 135
SEC. 16.10. LIEN; SETOFF BY LENDERS 135
SEC. 16.11. PAYMENT DUE ON NON-BUSINESS DAY 135
SEC. 16.12. SERVICE OF PROCESS 136
SEC. 16.13. NATIONAL BANK OF CANADA, AS AGENT 136
SEC. 16.14. SALE, ASSIGNMENT OR TRANSFER TO ADDITIONAL LENDERS 141
SEC. 16.15. BENEFIT OF AGREEMENT 142
SEC. 16.16. COUNTERPARTS; FACSIMILE SIGNATURE 143
SEC. 16.17. INVALIDITY 143
SEC. 16.18. LETTER OF CREDIT PARTICIPATIONS AND CERTAIN PAYMENTS 143
SEC. 16.19. DISCLOSURE OF FINANCIAL INFORMATION 145
SEC. 16.20. AMENDMENT AND RESTATEMENT 145
SCHEDULES AND EXHIBITS
Schedule 1.1(A) - Lenders and Commitments
Schedule 1.1(B) - Loans and Advances to Officers and Directors
Schedule 1.1(C) - Excluded Properties
Schedule 9.15 - Jurisdictions
Schedule 12.17(c) - Special Account Stores
Schedule 12.18 - Environmental Report Stores
Schedule 12.26 - Vendors of Perishable Agricultural Commodities
Schedule 13.2(c) - Existing Liens
Schedule 13.3(c) - Existing Indebtedness for Borrowed Money and
Contingent Obligations
Schedule 13.4 - Existing Investments
Schedule 13.6(b) - Permitted Prepayments
Schedule 15.1 - Subsidiaries
Schedule 15.4 - Description of Overtly Threatened or Pending
Litigation
Schedule 15.5(a) - Real Property
Schedule 15.5(c) - Lease payments 30 days past due
Schedule 15.13(a) - Reportable Events
Schedule 15.13(e) - Multiemployer Plans; Section 4204 of ERISA
Schedule 15.15 - Environmental Information
Schedule 15.16 - Medicare/Medicaid and Third Party Payor Agreements
Schedule 15.18(a) - Collection Account Agreement; Concentration Account
- Agreement; Lock-Box Agreement
Schedule 15.18(b) - Special Accounts
Exhibit 1.1 - Form of Lock-Box Account Agreement
Exhibit 1.1(a) - Form of Vendor Offset Agreement
Exhibit 2.3 - Form of Revolving Note
Exhibit 2.4 - Form of Borrower's Certificate
Exhibit 3.3 - Form of Term Note
Exhibit 4.3 - Form of Acquisition Term Note
Exhibit 8.1 - Form of Security Agreement
Exhibit 8.2 - Form of Mortgage
Exhibit 8.5 - Form of Guarantee
Exhibit 9.1 - Form of Opinion of Counsel for the Credit Parties
Exhibit 9.12 - Form of Disbursement Authorization Letter
Exhibit 9.18(b) - Form of Concentration Account Agreement
Exhibit 9.18(d) - Form of Pharmaceutical Collection Account Agreement
Exhibit 12.1(j) - Form of Borrowing Base Certificate
Exhibit 12.1(k) - Form of Schedule of Receivables, Accounts Payable
and Inventory
Exhibit 12.1(p) - Form of Coupon Certificate
Exhibit 12.1(q) - Form of Pharmaceutical Receivable Certificate
Exhibit 12.17(b) - Form of Collection Account Agreement
Exhibit 12.20 - Form of Landlord's Lien Waiver
Exhibit 12.24 - Form of Permitted Acquisition Certificate
Exhibit 15.6(c) - Budget
LOAN AGREEMENT, dated as of December 17, 1998 among HOMELAND
STORES, INC., a Delaware corporation (the "Borrower"), HOMELAND HOLDING
CORPORATION, a Delaware corporation ("Parent") (Borrower and Parent are
sometimes hereinafter collectively referred to as the "Companies" and
individually as a "Company"), IBJ XXXXXXXX BUSINESS CREDIT CORPORATION, the
assignee of IBJ Xxxxxxxx Bank & Trust Company ("IBJ"), XXXXXX FINANCIAL, INC.
("Xxxxxx"), NATIONAL BANK OF CANADA, a Canadian chartered bank ("NBC"), and
other financial institutions which may hereafter become parties hereto (such
lenders and other financial institutions and their respective successors and
assigns, individually, a "Lender" and collectively, the "Lenders"), and NBC,
as agent for the Lenders (in such capacity, the "Agent").
WHEREAS, the Companies are parties to that certain Loan Agreement,
dated as of August 2, 1996, as amended by various amendments (as amended, the
"Existing Agreement"), by and among Borrower, Parent, NBC, Xxxxxx, IBJ
Xxxxxxxx Bank & Trust Company (the predecessor-in-interest to IBJ) and NBC as
agent; and
WHEREAS, the Existing Agreement has been amended by the following
amendments:
(a) First Amendment to Loan Agreement, dated as of November 24,
1997;
(b) Second Amendment to Loan Agreement, dated as of May 1, 1998;
and
(c) Third Amendment to Loan Agreement, dated as of August 20,
1998; and
WHEREAS, the Companies, Lenders and the Agent desire to enter into
this Agreement to amend, modify and restate in its entirety the Existing
Agreement through the execution of this Agreement, which will supersede and
control all prior agreements among the parties hereto; and
WHEREAS, Borrower desires to borrow from the Lenders hereunder from
time to time certain sums on a revolving credit basis, the proceeds of which
shall be applied to its working capital needs and for other general corporate
purposes consistent with the terms of this Agreement; and
WHEREAS, Borrower desires to renew, modify and extend its existing
Term Loan with the Lenders hereunder in an amount up to $7,916,606.67, the
proceeds of which shall be applied consistent with the terms of this
Agreement; and
WHEREAS, Borrower desires to cause each Issuing Lender (as
hereinafter defined) to issue one or more letters of credit (each a "Letter
of Credit") for the account of Borrower to secure the performance of certain
obligations that Borrower may have from time to time to third parties in the
normal conduct of its business; and
WHEREAS, Borrower desires to borrow from the Lenders hereunder an
amount up to $5,000,000 under an acquisition term loan "A" facility, the
proceeds of which shall be applied consistent with the terms of this
Agreement; and
WHEREAS, Borrower desires to borrow from the Lenders hereunder an
amount up to $5,000,000 under an acquisition term loan "B" facility, the
proceeds of which shall be applied consistent with the terms of this
Agreement; and
WHEREAS, the Lenders are willing, subject to and upon the terms
and conditions herein set forth, to extend such financial accommodations to
Borrower;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS.
1.1. CERTAIN DEFINED TERMS. For all purposes of this
Agreement, unless the context otherwise requires (the following meanings to
be equally applicable to both the singular and plural forms of the terms
defined):
"Acquisition Term Commitment", as to any Lender, shall have the
meaning set forth in Section 4.2(b) hereof.
"Acquisition Term Loan Facility Commitment" shall mean the sum of
the Acquisition Term Loan A Facility Commitment and the Acquisition Term Loan
B Facility Commitment.
"Acquisition Term Loan A Facility Commitment" shall mean Five
Million Dollars ($5,000,000).
"Acquisition Term Loan B Facility Commitment" shall mean Five
Million Dollars ($5,000,000).
"Acquisition Term Loan" shall have the meaning set forth in
Section 4.1(a) hereof.
"Acquisition Term Loan A" shall have the meaning set forth in
Section 4.1(a) hereof.
"Acquisition Term Loan B" shall have the meaning set forth in
Section 4.1(a) hereof.
"Acquisition Term Loan Advance" shall have the meaning set forth
in Section 4.1(a) hereof.
"Acquisition Term Loan A Advance" shall have the meaning set forth
in Section 4.1(a) hereof.
"Acquisition Term Loan B Advance" shall have the meaning set forth
in Section 4.1(a) hereof.
"Acquisition Term Loan A Borrowing Base" shall mean, as of any
time, an amount equal to up to sixty percent (60%) of the Net Amount of
Eligible Real Property, as determined by reference to and as set forth in
appraisals that
(a) conform to the generally accepted appraisal standards
promulgated by the Appraisal Standards Board of the Appraisal Foundation,
(b) have been prepared by a state-licensed appraiser acceptable
to the Agent, and
(c) appraise the value of the Eligible Real Properties, other
than Eligible Real Properties that (1) secure Acquisition Term Loan B
Advances and (2) pursuant to the terms of the Indenture, may not secure
Lender Debt other than Acquisition Term Loan B,
which appraisals are required to be delivered to the Agent prior to such time
pursuant to the definition of Eligible Real Property.
"Acquisition Term Loan B Borrowing Base" shall mean, as of any
time, an amount equal to up to sixty percent (60%) of the Net Amount of
Eligible Real Property that is being acquired with the proceeds of an
Acquisition Term Loan B Advance, as determined by reference to and as set
forth in appraisals that
(a) conform to the generally accepted appraisal standards
promulgated by the Appraisal Standards Board of the Appraisal Foundation,
(b) have been prepared by a state-licensed appraiser acceptable
to the Agent, and
(c) appraise the value of the Eligible Real Properties that
secure Acquisition Term Loan B Advances,
which appraisals are required to be delivered to the Agent prior to such time
pursuant to the definition of Eligible Real Property.
"Acquisition Term Loan A Borrowing Limit" shall have the meaning
set forth in Section 4.2(a) hereof.
"Acquisition Term Loan B Borrowing Limit" shall have the meaning
set forth in Section 4.2(b) hereof.
"Acquisition Term Note" and "Acquisition Term Notes" shall have
the meanings set forth in Section 4.3(a) hereof.
"Acquisition Term A Note" and "Acquisition Term A Notes" shall
have the meanings set forth in Section 4.3(a) hereof.
"Acquisition Term B Note" and "Acquisition Term B Notes" shall
have the meanings set forth in Section 4.3(a) hereof.
"Additional Indebtedness" shall mean all Lender Debt other than
principal of the Revolving Loan and the Term Loan.
"Additional Lenders" shall have the meaning set forth in Section
15.14 hereof.
"Adjusted Eurodollar Rate" shall mean, with respect to each
Interest Period for a Eurodollar Advance, the rate obtained by dividing (i)
the Eurodollar Rate for such Interest Period by (ii) a percentage equal to 1
minus the stated maximum rate (stated as a decimal) of all reserves required
to be maintained against "Eurocurrency liabilities" as specified in
Regulation D (or against any other category of liabilities which includes
deposits by reference to which the interest rate on Eurodollar Advances is
determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of any Lender to United States
residents).
"Advance" shall mean each and any Revolving Credit Advance, Term
Loan Advance, and Acquisition Term Loan Advance.
"Affiliate" of any specified Person shall mean any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or which is a director,
officer or partner (limited or general) of such specified Person. For the
purposes of this definition, (i) "control," when used with respect to any
specified Person, means the possession, direct or indirect, of the power to
vote five percent (5%) or more of the securities having ordinary voting power
for the election of directors or the power to direct or cause the direction
of the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing, and (ii) any full time employee of Borrower shall not, solely by
virtue of such employment, be deemed to be an Affiliate of Borrower, although
the degree of "control" possessed by such employee as a consequence of such
employment or otherwise can be taken into account in determining whether such
employee is an Affiliate of Borrower.
"Agent" shall have the meaning set forth in the preamble to this
Agreement and in Section 16.13(j) hereof.
"Agreement" shall mean this Loan Agreement, as amended, modified,
supplemented or restated from time to time.
"Approved Delegate" shall have the meaning set forth in Section
16.13(n) hereof.
"Asset Sale" shall mean any sale, lease, conveyance, transfer or
other disposition (including by way of merger or consolidation of a
Subsidiary or sale-leaseback transaction), whether in a single transaction or
in a group of transactions that are part of a common plan, other than any
sale, transfer or other disposition under paragraphs (a), (b), (c), (e) or
(f) of Section 13.5 hereof and other than any exchange of assets leased
pursuant to Capital Leases for other assets to be leased pursuant to such
leases (or other leases on substantially the same terms) to the extent such
exchange is permitted under paragraph (g) of Section 13.5 hereof.
"Authorized Representative" shall mean each Person designated from
time to time, as appropriate, in a Written Notice to the Agent for the
purposes of giving notices of borrowing, conversion or renewal of, Advances,
or requesting Letters of Credit, which designation shall continue in force
and effect until terminated in a Written Notice to the Agent.
"AWG" shall mean Associated Wholesale Grocers, Inc., a Missouri
corporation.
"AWG Equity" shall mean all equity, deposits, credits, sums and
indebtedness of any kind or description, whatsoever, at any time owed by AWG
to Borrower or at any time standing in the name of or to the credit of
Borrower on the books and/or records of AWG, including, without limitation,
AWG Membership Stock, members deposit certificates, patronage refund
certificates, members savings, direct patronage or year-end patronage,
concentrated purchase allowance, quarterly payments and any other amounts due
from AWG to Borrower under the Supply Agreement.
"AWG Membership Stock" shall mean the Class A common Stock, par
value $100 per share, of AWG.
"AWG Purchase Agreement" shall mean that certain Asset Purchase
Agreement, dated as of February 6, 1995, by and between the Borrower and AWG.
"AWG Sale" shall mean the sale of assets pursuant to the AWG
Purchase Agreement.
"Bankruptcy Court" shall mean the United States Bankruptcy Court
for the District of Delaware.
"Bankruptcy Proceedings" shall mean the proceedings from the Cases.
"Base Rate" shall mean a fluctuating interest rate per annum as
shall be in effect from time to time, which rate per annum shall at all times
be equal to the rate of interest announced publicly by NBC in New York, New
York from time to time as its prime rate for U.S. dollar loans, such rate to
change when and as such announced rate changes:
"Base Rate Advance" shall mean any portion of an Advance which is
not a Eurodollar Advance.
"Board" shall mean the Board of Governors of the Federal Reserve
System or any successor agency or entity performing substantially the same
functions.
"Borrower" has the meaning set forth in the preamble to this
Agreement.
"Borrower Case" shall mean the Chapter 11 case of Borrower under
the Federal Bankruptcy Code captioned In re: Homeland Stores, Inc., Case No.
96-747-PJW (Chapter 11) in the Bankruptcy Court.
"Borrower's Certificate" shall have the meaning set forth in
Section 2.4 hereof.
"Borrowing Base" shall mean, as of any time, an amount equal to
the sum of the following:
(a) up to sixty-five percent (65%) of the Net Amount of Eligible
Inventory,
(b) up to sixty-five percent (65%) of the Net Amount of Eligible
Pharmaceutical Inventory,
(c) up to eighty-five percent (85%) of the Net Amount of Eligible
Coupons,
(d) up to fifty percent (50%) of the Net Amount of Eligible
Pharmaceutical Receivables, and
(e) up to sixty-five percent (65%) of the Net Amount of Eligible
Vendor Receivables,
as determined by reference to and as set forth in the last Borrowing Base
Certificate required to be delivered to the Agent and each Lender prior to
such time pursuant to Section 12.1(j) hereof.
"Borrowing Base Certificate" shall have the meaning set forth in
Section 12.1(j) hereof.
"Business Day" shall mean:
(a) for Base Rate Advances and in any event for the purposes of
Section 14.1(b) hereof, any day other than a Saturday, Sunday or other
day on which banks in New York, New York are authorized or required to
close, and
(b) for Eurodollar Advances on which interest accrues based upon
the Eurodollar Rate but in no event for the purposes of Section 14.1(b)
hereof, the days described in the immediately preceding subclause (i)
for the definition of Business Day, but excluding therefrom any day on
which commercial banks are not open for dealings in U.S. Dollar deposits
in the London (England, U.K.) interbank market.
"Calendar Month" or "calendar month" shall mean (i) except in the
case of Sections 12.1, 12.16 and 13.18 hereof, a calendar month, and (ii) for
the purposes of Sections 12.1, 12.16 and 13.18 one of Borrower's four-week or
five-week accounting periods, of which there are thirteen (13) in each Fiscal
Year.
"Capital Expenditures" shall mean, for any period, the capital
expenditures made by the Borrower and its Subsidiaries during such period,
determined in accordance with GAAP, less the following amounts, as determined
with respect to such period, (i) Capital Leases to the extent included in the
calculation of Capital Expenditures, and (ii) the principal amount of
Indebtedness incurred and secured by purchase money Liens (but not including
Capital Leases), to the extent permitted by Section 13.2(d)(y) of this
Agreement.
"Capital Lease" of any Person shall mean any lease of any property
(whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is, or is required to be, accounted for as a capital
lease on the balance sheet of such Person.
"Capitalized Lease Obligations" of any Person shall mean, at any
time, all obligations under Capital Leases of such Person in each case taken
at the amount thereof accounted for as liabilities at such time in accordance
with GAAP.
"Carryover Capital Expenditures Amount" shall mean with regard to
any Fiscal Year the amount, if a positive number, of (a) the maximum amount
of Capital Expenditures permitted under Section 13.1(a)(i), minus (b) the
amount of Capital Expenditures actually made by Borrower during the
immediately preceding Fiscal Year; such amount not to exceed the lesser of:
(1) $2,600,000.00, or
(2) the remainder of (A) the maximum amount of Capital
Expenditures that would have been permitted during such immediately
preceding Fiscal Year, assuming compliance with the Consolidated Fixed
Charge Coverage Ratio with respect to such immediately preceding Fiscal
Year, minus (B) the amount of Capital Expenditures actually made during
such immediately preceding Fiscal Year.
Notwithstanding the foregoing, if Borrower breached the Consolidated Fixed
Charge Coverage Ratio with respect to the Fiscal Year during which the
Carryover Capital Expenditures Amount is being determined, then, for purposes
of this Section 13.1(a), the Carryover Capital Expenditures Amount shall be
zero (0).
"Cases" shall mean, collectively, the Borrower Case and the Parent
Case.
"Certificate of Exemption" shall have the meaning set forth in
Section 5.4(b) hereof.
"Change of Control" shall mean such time as (i) Borrower or Parent
liquidates or dissolves, or (ii) Parent shall cease to own and control,
beneficially and of record, 100% of all capital stock of Borrower, or (iii) a
"Change of Control", as defined in the Indenture (as in effect from time to
time), shall occur.
"Claims" shall have the meaning set forth in Section 5.8(c) hereof.
"Closing Date" shall mean December 17, 1998.
"Code" shall mean, at any date, the Internal Revenue Code of 1986,
as the same shall be in effect at such date.
"Collateral" shall mean all property of Borrower and Parent,
wherever located, of any kind or nature, in which a Lien has been granted to
Agent and Lenders as security for Lender Debt, or any guarantee thereof,
pursuant to the Loan Documents, and shall include, without limitation, the
following personal property of Borrower and Parent, and all products and
proceeds thereof (including, without limitation, claims of Borrower and
Parent against third parties for loss or damage to such property), including
all accessions thereto, substitutions and replacements thereof, and wherever
located:
(i) Inventory. All inventory in all of its forms, wherever
located, now or hereafter acquired by either of the Companies, now or
hereafter existing, including but not limited to:
(A) all inventory, raw materials, work in process and
finished products intended for sale or lease or to be furnished
under contracts of service in the ordinary course of business, of
every kind and description, including, without limitation, all
Pharmaceutical Inventory;
(B) goods in which either of the Companies have or may
acquire an interest in mass or a joint or other interest or right
of any kind (including, without limitation, goods in which either
of the Companies have any interest or right as consignee); and
(C) goods which are returned to or repossessed by
either of the Companies, and all accessions thereto and products
thereof and documents (including without limitation, all warehouse
receipts, negotiable documents, bills of lading and other title
documents) therefor (any and all such inventory, accessions,
products and documents being, for the purpose of this definition of
Collateral, the "Inventory");
(ii) Accounts. All accounts and contract rights and other
obligations of any kind, whether secured or unsecured, now or hereafter
acquired by either of the Companies, now or hereafter existing, and
including, without limitation, all Pharmaceutical Receivables, all
Coupons and coupon receivables, and any note or other document or
instrument evidencing any such account or contract right or other
obligation (the "Accounts");
(iii) Special Accounts. All of the Companies' lock-box
accounts, collection accounts and concentration accounts containing cash
proceeds of the Collateral, all funds now or hereafter held therein, all
present or future claims, demands and chooses in action in respect
thereof and all certificates and instruments, if any, from time to time
representing or evidencing such accounts and all investments made
therefrom and all securities representing or evidencing such investments
(for the purpose of this definition of Collateral, the "Special
Accounts");
(iv) Records. All of the Companies' cash registers,
scanning systems, books and records, including, without limitation,
computer records, disks, tapes and other media on which any information
relating to Inventory, inventory control systems or the Accounts is
stored or recorded and all computer software, management information
systems and other systems and copies of every kind thereof relating to
Inventory, inventory controls or the Accounts and all customer lists
(for the purpose of this definition of Collateral, collectively, the
"Records and Other Property");
(v) Intellectual Property. All of the Companies'
intellectual property, including, without limitation, patents, patent
applications, trademarks, trademark applications, service marks, service
xxxx applications, tradenames, technical knowledge and processes, formal
or informal licensing arrangements, blueprints, technical
specifications, computer software, copyrights, copyright applications
and other trade secrets, and all embodiments thereof and rights thereto
and all of the Companies' rights to use the patents, trademarks, service
marks or other property of the aforesaid nature of other persons now or
hereafter licensed to the Companies, together with the goodwill of the
business symbolized by or connected with the Companies' trademarks,
service marks, licenses and the other rights under this section;
(vi) General Intangibles. All of the Companies' general
intangibles, instruments, securities, credits, claims, demands,
documents, letters of credit and letter of credit proceeds, chattel
paper, documents of title, certificates of title, certificates of
deposit, warehouse receipts, bills of lading, leases which are permitted
to be assigned or pledged, tax refund claims, contract rights which are
permitted to be assigned or pledged, customer lists, books and records
(including, without limitation, software, data bases, materials, books,
records, magnetic tapes and disks and other storage media) and other
rights (including all rights to the payment of money);
(vii) Equipment. All of the Companies' equipment, including,
without limitation, machinery, equipment, office equipment and supplies,
computers and related equipment, cash registers, scanning systems,
furniture, furnishings, shelving, refrigeration equipment, fixtures,
fork lifts, trucks, trailers, motor vehicles, and other equipment (the
foregoing being the "Equipment");
(viii) Real Property. All real properties owned or leased by
either of the Companies, other than those real properties described on
Schedule 1.1(C) attached to this Agreement (the "Excluded Properties"),
but only so long as the Company that owns or leases an Excluded Property
grants the Agent and the Lenders a negative pledge on the Excluded
Properties and agrees that the net proceeds from any disposition of the
Excluded Properties will be applied to the Revolving Credit Facility
upon receipt thereof by the Companies; and
(ix) Proceeds.
(A) All proceeds of every kind or nature of any and all
of the foregoing Collateral (including, without limitation, all
checks, money, drafts, instruments and other evidences of payment
and all proceeds of such property which constitute property of
the types described in clauses (i), (ii), (iii), (iv) (v), (vi),
(vii), or (viii) above, and property of such type or types acquired
with any such proceeds), and
(B) to the extent not otherwise included, all (1)
payments under insurance or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Collateral, and (2) cash proceeds of the
foregoing Collateral (collectively, the "Proceeds").
"Collection Account" shall mean each deposit account of Borrower
established pursuant to Section 9.18(a) hereof (or as otherwise established
with the prior written consent of the Agent), maintained at a bank, into
which Borrower deposits cash proceeds of Inventory and Pledged Accounts, and,
to the extent required by Section 12.17(b) hereof, as to which all amounts
deposited in which and all claims arising under which have been pledged to
the Agent for the benefit of the Agent and the Lenders pursuant to a
Collection Account Agreement.
"Collection Account Agreement" shall mean a collection account
agreement substantially in the form of Exhibit 12.17(b) hereto (with such
modifications as are acceptable to the Agent and as amended, modified or
supplemented from time to time.
"Company" shall have the meaning set forth in the recitals to this
Agreement.
"Concentration Account" shall mean a deposit account of Borrower,
established pursuant to Section 9.18(b) hereof, into which only cash proceeds
of Inventory and Pledged Accounts shall be deposited, all amounts deposited
in which and all claims arising under which have been pledged to the Agent
for the benefit of the Agent and the Lenders pursuant to a Concentration
Account Agreement.
"Concentration Account Agreement" shall have the meaning set forth
in Section 9.18(b) hereof.
"Consolidated Current Ratio" of Parent and its Subsidiaries shall
mean the ratio of Consolidated Current Assets to Consolidated Current
Liabilities.
"Consolidated Current Assets" of Parent and its Subsidiaries
determined at any time, shall mean all assets of Parent and its Subsidiaries
that would, in accordance with GAAP, be classified as consolidated current
assets of a company conducting a business the same or similar to that of such
Person, after deducting adequate reserves in each case in which a reserve is
proper in accordance with GAAP, reduced by the amount of the accounts
receivable owing to Borrower by AWG.
"Consolidated Current Liabilities" of Parent and its Subsidiaries,
determined at any time, shall mean all liabilities of Parent and its
Subsidiaries which would, in accordance with GAAP, be classified as
consolidated current liabilities, except that the liabilities of Borrower
under the Revolving Loan and the Term Loan will be excluded from the
determination of consolidated current liabilities.
"Consolidated Fixed Charge Coverage Ratio" shall mean, for any
period, the ratio obtained by dividing (i) the aggregate EBITDA of Parent and
its Subsidiaries on a consolidated basis for such period, by (ii) the
scheduled payments of Indebtedness for Borrowed Money of Borrower and its
Subsidiaries for such period, plus the Consolidated Tax Expense, the
Consolidated Interest Expense and the Net Capital Expenditures, exclusive of
(A) Capital Expenditures that are made with proceeds of Acquisition Term Loan
Advances, and (B) the Carryover Capital Expenditures Amount, in each case of
Borrower and its Subsidiaries on a consolidated basis for such period.
"Consolidated Interest Expense" of any Person for any period shall
mean the amount by which (i) the aggregate amount of interest expense in
respect of Indebtedness of such Person and its Subsidiaries for such period,
on a consolidated basis, determined in accordance with GAAP (including,
without limitation, all net payments and receipts in respect of Hedge
Agreements and the interest component of Capitalized Lease Obligations,
excluding non-cash interest expense (other than for Funded Debt) and
amortization of financing costs), exceeds (ii) the aggregate interest income
of such Person (excluding any non-cash interest from securities which do not
have a rating of at least A-2 from Standard & Poor's Corporation or at least
P-2 from Xxxxx'x Investor Service, Inc.) for such period, all as determined
in accordance with GAAP.
"Consolidated Tax Expense" of any Person for any period shall mean
the amount of taxes upon or determined by reference to such Person's net
income, in each case, due and payable by such Person during such period.
"Contingent Obligations" of any Person shall mean any direct or
indirect liability, contingent or otherwise, of such Person:
(a) with respect to any indebtedness, lease, dividend,
letter of credit or other obligation of another if the primary purpose
or intent in creating such liability is to provide assurance to the
obligee of such obligation of another that such obligation of another
will be paid or discharged, or that any agreements relating thereto will
be complied with, or that the holders of such obligation will be
protected (in whole or in part) against loss in respect thereof;
(b) under any letter of credit issued for the account of
such Person or for which such Person is otherwise liable for
reimbursement thereof;
(c) under any Hedge Agreement; or
(d) to advance or supply funds or otherwise to assure or
hold harmless the owner of such primary obligation against loss in
respect thereof.
Contingent Obligations shall include, without limitation:
(A) the direct or indirect guarantee, endorsement (other than for
collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the
obligation of another, and
(B) any liability of such Person for the obligations of another
through any agreement (contingent or otherwise):
(1) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the
payment or discharge of such obligation (whether in the form of
loans, advances, stock purchases, capital contributions or
otherwise);
(2) to maintain the Solvency or any balance sheet item,
level of income or financial condition of another; or
(3) to make take-or-pay or similar payments if required
regardless of non-performance by any other party or parties to an
agreement,
if, in the case of any agreement described under subclauses (1) or (2) of this
sentence, the primary purpose or intent thereof is as described in the
immediately preceding sentence. The amount of any Contingent Obligation shall
be equal to the amount of the obligation so guaranteed or otherwise supported.
"Coupons" of any Person shall mean any and all parts of an
advertisement entitling the bearer to certain stated benefits, at a minimum
consisting of a cash refund, now or hereafter acquired, intended for
redemption for cash, by the issuer of such coupons, in the ordinary course of
business of such Person, of every kind and description.
"Credit Parties" shall mean and include Borrower and each Guarantor.
"Default" shall mean an event, act or condition which with the
giving of notice or the lapse of time, or both, would constitute an Event of
Default.
"EBITDA" of any Person for any period shall mean the sum of:
(a) the net income (or net loss) from operations of such
Person and its Subsidiaries on a consolidated basis (determined in
accordance with GAAP) for such period, without giving effect to any
extraordinary or unusual gains (losses) or gains (losses) from the sale
of assets (other than the sale of Inventory in the ordinary course of
business); plus
(b) to the extent that any of the items referred to in any
of clauses (i) through (iii) below were deducted in calculating such net
income:
(i) Consolidated Interest Expense of such Person for
such period;
(ii) income tax expense of such Person and its
Subsidiaries with respect to their operations for such period; and
(iii) the amount of all non-cash charges (including,
without limitation, depreciation and amortization) plus
Reorganization Costs, if any, of such Person and its Subsidiaries
for such period.
"EFS" shall have the meaning set forth in Section 12.17(d) hereof.
"Eligible Coupons" shall mean only such Coupons of Borrower as the
Agent, in its reasonable discretion, shall from time to time elect to
consider Eligible Coupons for purposes of this Agreement. The value of such
Coupons (the "Net Amount of Eligible Coupons" shall be determined at any time
by reference to the then most recent Borrowing Base Certificate delivered
under Section 12.1(j) hereof, which Borrowing Base Certificate shall reflect
the value of such Coupons at their book value determined in accordance with
GAAP (on a basis consistent with the accounting method used by Borrower as
of the Closing Date). Criteria for eligibility may be fixed and revised from
time to time by the Agent in its reasonable discretion. By way of example
only, and without limiting the discretion of the Agent to consider any
Coupons not to be Eligible Coupons, the Agent may consider any of the
following classes of Coupons not to be Eligible Coupons:
(a) Coupons subject to any Lien (whether or not any such
lien is permitted under this Agreement), other than those granted in
favor of the Agent;
(b) Coupons which are obsolete, damaged, expired,
unredeemable or otherwise unfit for return to the issuer for redemption
for cash in accordance with the face and tenor thereof;
(c) Coupons which are prohibited, restricted, void or taxed
under law of the jurisdiction that is applicable to the transaction that
otherwise would give rise to an Eligible Coupon;
(d) Coupons not in the possession and control of Borrower or
the Processing Agent;
(e) Coupons in respect of which the relevant Security
Agreement, after giving effect to the related filings of financing
statements that have then been made, if any, does not or has ceased to
create a valid and perfected first priority Lien in favor of the Lenders
securing the Lender Debt; and
(f) Coupons, to the extent such Coupons are subject to a
contractual or statutory Lien (whether or not such Lien is permitted
under this Agreement) in favor of any third person.
"Eligible Inventory" shall mean only such Inventory of Borrower
as the Agent, in its reasonable discretion, shall from time to time elect to
consider Eligible Inventory for purposes of this Agreement. The value of
such Inventory (the "Net Amount of Eligible Inventory") shall be determined
at any time by reference to the then most recent Borrowing Base Certificate
delivered under Section 12.1(j) hereof, which Borrowing Base Certificate shall
reflect the value of Inventory at its book value determined in accordance with
GAAP (on a basis consistent with the accounting method used by Borrower as of
the Closing Date, which includes, without limitation, first-in, first-out
inventory reporting). Criteria for eligibility may be fixed and revised from
time to time by the Agent in its reasonable discretion. By way of example
only, and without limiting the discretion of the Agent to consider any
Inventory not to be Eligible Inventory, the Agent may consider any of the
following classes of Inventory not to be Eligible Inventory:
(a) Inventory subject to any Lien (whether or not any such
Lien is permitted under this Agreement), other than those granted in
favor of the Agent;
(b) Inventory financed by bankers' acceptances, but only until
the payment in full of the related bankers' acceptances by such Person;
(c) Inventory which is obsolete, damaged, unsalable or
otherwise unfit for use;
(d) Inventory located on any premises not owned or leased by
Borrower;
(e) Inventory in respect of which the relevant Security
Agreement, after giving effect to the related filings of financing
statements that have then been made, if any, does not or has ceased to
create a valid and perfected first priority Lien in favor of the Lenders
securing the Lender Debt;
(f) Inventory on which a Lien has arisen or may arise (A) in
favor of agricultural producers under the Perishable Agricultural
Commodities Act of 1930, as amended (7 U.S.C. SEC. 499(e)), and the
regulations thereunder, or any comparable state or local laws or (B) in
favor of a seller of livestock under the Packer and Stockyards Act
(7 U.S.C. SEC. 196) and the regulations thereunder, or under any
comparable state or local laws;
(g) Inventory comprised of dairy products, eggs, perishable
merchandise (excluding cheese), fresh meat, prescription products, SLB
Marketing, Inc., delicatessen products, bakery products, produce and
consigned Inventory; and
(h) Inventory at a location leased by Borrower (A) for which
Agent has not received a waiver substantially in the form and substance
as set forth in Exhibit 12.20 hereto, duly executed by the owner/
landlord of such location and, if applicable, the sub-lessor to Borrower
at such location, and (B) to the extent such Inventory is subject to
a contractual or statutory Lien (whether or not such Lien is permitted
under this Agreement) in favor of such landlord or sub-lessor.
"Eligible Pharmaceutical Inventory" shall mean only such
Pharmaceutical Inventory of the Borrower as the Agent, in its reasonable
discretion, shall from time to time elect to consider Eligible Pharmaceutical
Inventory for purposes of this Agreement. The value of such Pharmaceutical
Inventory (the "Net Amount of Eligible Pharmaceutical Inventory") shall be
determined at any time by reference to the then most recent Borrowing Base
Certificate delivered under Section 12.1(j) hereof, which Borrowing Base
Certificate shall reflect the value of Pharmaceutical Inventory at its book
value determined in accordance with GAAP (on a basis consistent with the
accounting method used by Borrower as of the Closing Date, which includes,
without limitation, first-in, first-out inventory reporting). Criteria for
eligibility may be fixed and revised from time to time by the Agent in its
reasonable discretion. By way of example only, and without limiting the
discretion of the Agent to consider any Pharmaceutical Inventory not to be
Eligible Pharmaceutical Inventory, the Agent may consider any of the
following classes of Pharmaceutical Inventory not to be Eligible
Pharmaceutical Inventory:
(a) Pharmaceutical Inventory subject to any Lien (whether or
not any such Lien is permitted under this Agreement), other than those
granted in favor of the Agent;
(b) Pharmaceutical Inventory financed by banker's acceptances,
but only until the payment in full of the related bankers' acceptances
by such Person;
(c) Pharmaceutical Inventory which is obsolete, damaged,
unsalable or otherwise unfit for use;
(d) Pharmaceutical Inventory located on any premises not
owned or leased by Borrower;
(e) Pharmaceutical Inventory in respect of which the relevant
Security Agreement, after giving effect to the related filings of
financing statements that have then been made, if any, does not or has
ceased to create a valid and perfected first priority Lien in favor of
the Lenders securing the Lender Debt;
(f) Pharmaceutical Inventory comprised of consigned
Pharmaceutical Inventory;
(g) Pharmaceutical Inventory at a location leased by Borrower
(i) for which Agent has not received a waiver substantially in the form
and substance as set forth in Exhibit 12.22 hereto, duly executed by the
landlord of such location, and, if applicable, the sub-lessor to
Borrower at such location, and (ii) to the extent such Pharmaceutical
Inventory is subject to a contractual or statutory Lien (whether or not
such Lien is permitted under this Agreement) in favor of such landlord;
and
(h) Pharmaceutical Inventory comprised of "narcotics," as such
term is defined in the regulation promulgated by the United States Food
and Drug Administration and codified at 21 C.F.R. SEC. 1308.02(f).
"Eligible Pharmaceutical Receivables" shall mean, at the time of
calculation, bona fide outstanding Pharmaceutical Receivables:
(a) upon which the Agent has a first priority perfected
security interest;
(b) as to which the obligor thereof has been directed by
Borrower (if so directed to do so by the Agent) to make payment to a
Pharmaceutical Collection Account;
(c) which arose in the ordinary course of Borrower's
business; and
(d) as to which all applicable services have been duly
performed or as to which all goods have been delivered to the account
debtor.
The term "Eligible Pharmaceutical Receivables" shall not include any
Pharmaceutical Receivable:
(i) with respect to which any of the representations and
warranties contained in Section 15.20 hereof are not or have ceased to
be true, complete and correct;
(ii) with respect to which, in whole or in part, a check,
promissory note, draft, trade acceptance or other instrument for the
payment of money has been received, presented for payment and returned
uncollected for any reason;
(iii) as to which Borrower has extended the time for payment
without the consent of the Agent;
(iv) as to which any Third Party Payor has terminated, extended
or suspended the time for payment without the consent of the Agent;
(v) owed by an account debtor which:
(1) does not maintain its chief executive office in the
United States;
(2) is not organized under the laws of the United States or
any State thereof; or
(3) has taken any action, or suffered any event to occur, of
the type described in paragraph (f) or (g) of Section 14.1 hereof;
(vi) owed by an account debtor which is (i) an affiliate of a
Credit Party, or (ii) except for a Pharmaceutical Receivable owing from
a Medicare/Medicaid Account Debtor, a federal or state government or any
agency of instrumentality thereof;
(vii) except for a Pharmaceutical Receivable owing from a
Medicare/Medicaid Account Debtor, as to which either the perfection,
enforceability, or validity of the security interest in such
Pharmaceutical Receivables, is governed by any federal, state, or local
statutory requirements other than those of the UCC;
(viii) except for a Pharmaceutical Receivable owing from a
Medicare/Medicaid Account Debtor, owed by an account debtor to which
Borrower is indebted in any way, or which is subject to any right of
set-off by the account debtor; or if the account debtor thereon has
disputed liability or acknowledged its inability to pay or made any
claim with respect to any other Pharmaceutical Receivable due from such
account debtor, but in each such case only to the extent of such
indebtedness, set-off, dispute, or claim;
(ix) if such Pharmaceutical Receivable or the sale or provision
of goods or services giving rise thereto contravenes any applicable law,
rule or regulation, including any law, rule or regulation relating to
truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices or privacy;
(x) owed by a Third Party Payor or a Medicare/Medicaid Account
Debtor if such Pharmaceutical Receivable:
(1) is subject to any limitation which would make payment by
such Third Party Payor or Medicare/Medicaid Account Debtor conditional,
to the extent the payment of such Pharmaceutical Receivable is
conditional;
(2) has not been billed or forwarded to such Third Party
Payor or Medicare/Medicaid Account Debtor for payment in accordance, in
all material respects, with applicable laws and in compliance, in all
material respects, with any and all requisite procedures, requirements
and regulations governing payment by such Third Party Payor or
Medicare/Medicaid Account Debtor;
(3) if payable by a Third Party Payor, is not properly
payable directly to Borrower or by such Third Party Payor in accordance
with the terms and conditions of a validly existing and legally binding
certification, participation agreement, provider agreement or other
written contract;
(4) if payable by a Medicare/Medicaid Account Debtor, is not
properly payable directly to Borrower or by such Medicare/Medicaid
Account Debtor in accordance with the terms and conditions of any
applicable certification, agreement, contract, law or regulation, if
any; or
(5) remains unpaid for more than sixty (60) days from the
date a claim is properly made to the Third Party Payor or
Medicare/Medicaid Account Debtor;
(xi) payable in part (but not in whole) by a Third Party Payor
or Medicare/Medicaid Account Debtor, to the extent such Pharmaceutical
Receivable exceeds the portion payable by such Third Party Payor or
Medicare/Medicaid Account Debtor;
(xii) payable by any individual beneficiary and not a Third Party
Payor or Medicare/Medicaid Account Debtor, to the extent the portion of
such Pharmaceutical Receivable is payable by the individual beneficiary;
or
(xiii) if the Agent (1) believes in its reasonable discretion that
the prospect of payment of such Pharmaceutical Receivable is impaired for
any reason or that the Pharmaceutical Receivable may not be paid by
reason of the account debtor's financial inability to pay, or (2) is not
reasonably satisfied with the credit standing of the account debtor with
respect to the amount of Pharmaceutical Receivables payable to Borrower
by such account debtor.
"Eligible Real Property" shall mean only such Real Property of
Borrower as the Agent, in its reasonable discretion, shall from time to time
elect to consider Eligible Real Property for purposes of this Agreement. The
value of such Real Property (the "Net Amount of Eligible Real Property") shall
be determined at any time by reference to independent, third-party appraisals
conducted by an appraiser or appraisers satisfactory to Agent, which
appraisals shall reflect the fair market value of Real Property determined in
accordance with MAI appraisals acceptable to the Agent. Criteria for
eligibility may be fixed and revised from time to time by the Agent in its
reasonable discretion. By way of example only, and without limiting the
discretion of the Agent to consider any Real Property not to be Eligible Real
Property, the Agent may consider any of the following classes of Real Property
not to be Eligible Real Property:
(i) Real Property subject to any Lien (whether or not any such
Lien is permitted under this Agreement), other than (1) those granted in
favor of the Agent and (2) those for taxes, assessments and governmental
charges and levees, provided payment thereof shall not at the time be
required in accordance with the provisions of Section 12.2 hereof;
(ii) Real Property as to which the representations and warranties
in Section 15.15, pertaining to environmental status, are not true and
correct;
(iii) Real Property not owned in fee simple by Borrower;
(iv) Real Property in respect of which the relevant Mortgage,
after giving effect to the filings thereof, does not or has ceased to
create a valid and perfected first priority Lien in favor of the Lenders
securing the Lender Debt;
(v) Real Property as to which Agent has not received a
mortgagee's policy of title insurance, insuring the priority of the lien
created by the relevant Mortgage, subject only to those exceptions as
may be reasonably acceptable to Agent; and
(vi) Real Property leased by Borrower.
"Eligible Vendor Receivables" shall mean only such Vendor Receivables
of Borrower as the Agent, in its reasonable discretion, shall from time to time,
(a) determine are free from off-set, counterclaim and any other method of
reduction, and (b) otherwise elect to consider Eligible Vendor Receivables for
purposes of this Agreement. The value of such Vendor Receivables (the "Net
Amount of Eligible Vendor Receivables") shall be determined at any time by
reference to the then most recent Borrowing Base Certificate delivered under
Section 12.1(j) hereof, which Borrowing Base Certificate shall reflect the
value of such Vendor Receivables at their book value determined in accordance
with GAAP (on a basis consistent with the accounting method used by Borrower
as of the Closing Date). Criteria for eligibility may be fixed and revised
from time to time by the Agent in its reasonable discretion. By way of
example only, and without limiting the discretion of the Agent to consider
any Vendor Receivables not to be Eligible Vendor Receivables, the Agent may
consider any of the following classes of Vendor Receivables not to be
Eligible Vendor Receivables:
(a) Vendor Receivables subject to any Lien (whether or not any
such Lien is permitted under this Agreement), other than those granted
in favor of the Agent;
(b) Vendor Receivables for which there is (i) no executed Vendor
Offset Agreement by the applicable vendor and (ii) no waiver by the
Agent of any requirement for a Vendor Offset Agreement with regard to a
particular vendor;
(c) Vendor Receivables in respect of which the relevant Security
Agreement, after giving effect to the related filings of financing
statements that have then been made, if any, does not or has ceased to
create a valid and perfected first priority Lien in favor of the Lenders
securing the Lender Debt; and
(d) Vendor Receivables with respect to which the Agent (1) believes
in its reasonable discretion that the prospect of payment of such Vendor
Receivable is impaired for any reason or that the Vendor Receivable may
not be paid by reason of the account debtor's financial inability to pay,
or (2) is not reasonably satisfied with the credit standing of the
account debtor with respect to the amount of Vendor Receivables payable
to Borrower by such account debtor; or
(e) Vendor Receivables that are unpaid for more than ninety (90)
days after the date due for payment thereof; or
(f) Vendor Receivables with respect to which fifty percent (50%)
or more of the Vendor Receivable from the debtor are not deemed eligible
Vendor Receivables hereunder; or
(g) the total unpaid Vendor Receivables of the vendor exceed twenty
percent (20%) of the net amount of all Eligible Vendor Receivables, to
the extent of such excess; or
(h) the vendor has disputed liability with respect to such Vendor
Receivables, or the vendor has made any claim with respect to any other
Vendor Receivables due from such vendor to Borrower, or the Vendor
Receivables otherwise is subject to any right of setoff by the vendor;
or
(i) the vendor has commenced a voluntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or made an
assignment for the benefit of creditors, or a decree or order for relief
has been entered by a court having jurisdiction in the premises in
respect of the vendor in an involuntary case under the federal bankruptcy
laws, as now constituted or hereafter amended, or any other petition or
other application for relief under the federal bankruptcy laws has been
filed against the vendor, or if the vendor has failed, suspended business,
ceased to be Solvent, or consented to or suffered a receiver, trustee,
liquidation or custodian to be appointed for it or for all or a
significant portion of its assets of affairs; or
(j) Vendor Receivables that arise from a vendor located outside the
United States, unless the sale is on letter of credit, guaranty or
acceptable terms, in each case in form and substance acceptable to the
Agent in its reasonable discretion and where the proceeds thereof have
been collaterally assigned to the Agent.
"Employee Plan" shall mean an "employee benefit plan" as defined in
Section 3(3) of ERISA which is maintained for employees of any of the
Credit Parties or any ERISA Affiliate, other than a Multiemployer Plan.
"Environmental Law" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the Resource
Conservation and Recovery Act of 1976, as amended, any "Superfund" or
"Superlien" law, the Hazardous Materials Transportation Act, as amended, and
any other Federal, state, or local statute, rule, regulation, ordinance,
interpretation, order, judgment, or decree, as now or at any time hereafter
amended or in effect and applicable to Borrower and its Subsidiaries,
regulating, relating to or imposing liability or standards of conduct
concerning the manufacture, processing, distribution, use, treatment,
handling, storage, disposal, or transportation of Hazardous Materials, or
air emissions, water discharges, noise emissions, or otherwise concerning the
protection of the outdoor or indoor environment, or health or safety of
persons or property.
"Equipment Lease" shall mean any lease, title retention agreement,
conditional sale agreement or similar agreement under which Parent, Borrower
or any Subsidiary of Parent or Borrower is the lessee, purchaser or similarly
situated contracting party, which agreement covers equipment or other goods
not held for sale or lease by Borrower in the ordinary course of Borrower's
business. The term "Equipment Lease" includes specifically, but without
limitation, leases covering "point-of-sale" computer equipment.
"ERISA" shall mean, at any date, the Employee Retirement Income
Security Act of 1974 and the regulations promulgated and rulings issued
thereunder, all as the same shall be in effect at such date.
"ERISA Affiliate" shall mean any Person that for purposes of Title
I or Title IV of ERISA is a member of any Credit Party's controlled group, or
under common control with any Credit Party, within the meaning of Section
414(b), (c) or (m) of the Code and the regulations promulgated and rulings
issued thereunder.
"Eurodollar Advance" shall mean that portion of any Advance
designated to bear interest based upon the Adjusted Eurodollar Rate as
provided in Section 2 hereof or in Section 3 hereof.
"Eurodollar Lending Office" shall mean, for any Lender, the branch
or Affiliate of such Lender designated as the Eurodollar Lending Office of
such Lender on the signature pages hereto.
"Eurodollar Rate" shall mean, for any Interest Period for any
Eurodollar Advance, an interest rate per annum equal to the offered quotation,
if any, to first-class banks in the London (England, U.K.) interbank market
by three reference banks selected by the Agent for U.S. Dollar deposits of
amounts in funds comparable to the principal amount of such Eurodollar
Advance requested by Borrower for which the Eurodollar Rate is being
determined with maturities comparable to the Interest Period for which such
Eurodollar Rate will apply as of approximately 11:00 A.M. (London setting
time) two (2) Business Days prior to the commencement of such Interest Period,
subject, however, to the provisions of Section 5.7 hereof.
"Eurodollar Rate Margin" shall mean the following, as applicable:
(A) in the case of principal outstanding under the Revolving
Credit Facility, the Revolving Credit Eurodollar Margin; and
(B) in the case of principal outstanding under the Term Loan
Facility and the Acquisition Term Loan Facility, the Term Loan
Eurodollar Margin.
"Event of Default" shall have the meaning set forth in Section
14.1 hereof.
"Excess Funds" shall have the meaning set forth in Section 5.13
hereof.
"Excluded Claims" shall have the meaning set forth in Section
5.8(c) hereof.
"Excluded Properties" shall have the meaning given such term in
the definition of Collateral.
"Excluded Taxes" shall mean franchise taxes, taxes on doing
business or taxes measured by capital or net worth of any Lender and taxes
upon or determined by reference to any Lender's net income, in each case,
imposed:
(i) by the United States of America or any political
subdivision or taxing authority thereof or therein (including, without
limitation, branch taxes imposed by the United States or similar taxes
imposed by any subdivision thereof);
(ii) by any jurisdiction in which the Eurodollar Lending
Office or other branch of any Lender is located or in which any Lender
is organized or has its principal or registered office;
(iii) by reason of any connection, including, without
limitation, a present or former connection, between the jurisdiction
imposing such tax and such Lender other than a connection arising solely
from this Agreement or any related agreements or any transaction
contemplated hereby or thereby; or
(iv) by reason of the failure of any Lender to provide
documentation required to be provided by such Lender pursuant to Section
6.4(b) hereof.
"Existing Agreement" shall have the meaning set forth in the
recitals to this Agreement.
"Federal Bankruptcy Code" shall mean the United States Bankruptcy
Code, 11 U.S.C. Paragraph 101, et seq., in effect as of the date hereof,
together with all rules, regulations and interpretations thereunder or
related thereto, as amended, modified, supplemented or recodified from time
to time.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (i) if such day is not a Business
Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate quoted to the Agent on such day on such transactions as
determined by the Agent.
"First Offer Rights" shall mean (i) AWG's right of first offer with
respect to the stores owned or operated by Borrower listed on Exhibit B to
the Supply Agreement, as such agreement may be amended from time to time, and
(ii) any public recordation of such first offer rights, provided that any such
public recordation shall be terminable from time to time as set forth in
Section 7(f) of the Supply Agreement.
"Fiscal Quarter" shall mean, with respect to the Companies and with
respect to each of the first three (3) "Fiscal Quarters" of each Fiscal Year,
a period of twelve (12) consecutive weeks, beginning on the first day after
the last day of the preceding Fiscal Year of Borrower and ending on the
Saturday on or closest to the next Fiscal Quarter; and with respect to the
fourth and last "Fiscal Quarter" of each Fiscal Year, a period of sixteen
(16) or seventeen (17) weeks, as the case may be, beginning on the first day
after the last day of the third Fiscal Quarter of each Fiscal Year. The
fourth Fiscal Quarter for the Companies' Fiscal Year 1998 began September 13,
1998.
"Fiscal Year" shall mean, with respect to the Companies, a period
of fifty-two (52) or fifty-three (53) consecutive weeks beginning on the first
day after the last day of the preceding "Fiscal Year" of and ending on the
Saturday on or closest to the next December 31, beginning with the fifty-two
(52)-week period ending January 2, 1999.
"Floating Rate" shall mean a fluctuating interest rate per annum
as shall be in effect from time to time, which rate per annum shall at all
times be equal to the sum of (i) the Base Rate plus (ii) the following, as
applicable:
(A) in the case of principal outstanding under the Revolving Loan,
the Revolving Credit Base Rate Margin; and
(B) in the case of principal outstanding under either the Term
Loan or the Acquisition Term Loan, the Term Loan Base Rate Margin.
"Foreign Lender" shall have the meaning set forth in Section
6.4(b) hereof.
"Funded Debt" of any Person shall mean:
(a) all Indebtedness for Borrowed Money of such
Person;
(b) Capitalized Lease Obligations of such Person;
(c) notes payable and drafts accepted representing
extensions of credit of such Person whether or not representing
obligations for borrowed money (other than any balance that constitutes
an accrued expense or trade payable);
(d) any obligation owed by such Person for all or any part
of the deferred purchase price of property or services that have been
rendered, which purchase price is (y) due more than one year from the
date of incurrence of the obligation in respect thereof, or (z)
evidenced by a note or similar written instrument, in each case except
any such obligation that constitutes an accrued expense or trade payable;
(e) all indebtedness of such Person secured by any Lien on
any property or asset owned or held by that Person regardless of whether
the indebtedness secured thereby shall have been assumed by that Person
or is non-recourse to the credit of that Person;
(f) all reimbursement obligations and other liabilities of
such Person with respect to letters of credit issued for such Person's
account; and
(g) the guarantee or joint obligation of that Person of
items described in any of clauses (a) through (f) above guaranteed by
such Person;
provided, however, in the case of any of the foregoing
items (a) through (f), the term "Funded Debt" shall include any such
item only to the extent such item would appear as a liability upon a
balance sheet of such Person prepared on a consolidated basis in
accordance with GAAP.
"Funded Debt-to-EBITDA Ratio" shall mean, for any Fiscal Quarter
of the Companies, the ratio obtained by dividing (a) the Funded Debt of the
Parent and its Subsidiaries on a consolidated basis as of the last day of
such Fiscal Quarter, by (b) the aggregate amount of EBITDA of the Parent and
its Subsidiaries on a consolidated basis for the four (4) Fiscal Quarter
periods ending at the end of such Fiscal Quarter.
"GAAP" shall have the meaning specified in Section 1.4 hereof.
"Gross Proceeds" shall mean, as to any transaction, an amount
equal to the Net Proceeds, calculated, however, without the deductions set
forth in clauses (A) and (C) of clause (i) of the definition of Net Proceeds.
"Guarantor" shall mean, at any time, the Parent and each of
Borrower's present or future Subsidiaries.
"Guaranty" shall mean any guaranty executed and delivered pursuant
to Section 8.5 hereof, as each may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Hazardous Material" shall mean any pollutant, contaminant,
chemical, or industrial or hazardous, toxic or dangerous waste, substance or
material, defined or regulated as such in (or for purposes of) any
Environmental Law and any other toxic, reactive, or flammable chemicals,
including (without limitation) any asbestos, any petroleum (including crude
oil or any fraction), any radioactive substance and any polychlorinated
biphenyls; provided, in the event that any Environmental Law is amended so as
to broaden the meaning of any term defined thereby, such broader meaning
shall apply subsequent to the effective date of such amendment; and provided,
further, to the extent that the applicable laws of any state establish a
meaning for "hazardous material," "hazardous substance," "hazardous waste,"
"solid waste" or "toxic substance" which is broader than that specified in
any Environmental Law, such broader meaning shall apply.
"Hedge Agreement" shall have the meaning specified in clause (e)
of the definition of Indebtedness.
"Indebtedness" of any Person shall mean all items which, in
accordance with GAAP, would be included in determining total liabilities of
such Person as shown on the liability side of a balance sheet as at the date
Indebtedness of such Person is to be determined and, in any event, shall
include (without limitation and without duplication):
(a) all Indebtedness for Borrowed Money of such Person;
(b) any liability of such Person secured by any Lien on
property owned or acquired by such Person, whether or not such liability
shall have been assumed;
(c) all Contingent Obligations of such Person;
(d) letters of credit and all obligations of such Person
relating thereto; and
(e) all obligations (other than obligations to pay fees in
connection therewith) of such Person in respect of interest rate swap
agreements, currency swap agreements and other similar agreements
designed to hedge against fluctuations in interest rates or foreign
exchange rates (each, a "Hedge Agreement").
"Indebtedness for Borrowed Money" of any Person shall mean all
Indebtedness for borrowed money or evidenced by notes, bonds, debentures or
similar evidences of Indebtedness of such Person, all obligations of such
Person for the deferred and unpaid purchase price of any property, service or
business (other than trade accounts payable and similar current accrued
liabilities incurred in the ordinary course of business and constituting
Current Liabilities), and all obligations of such Person under Capitalized
Lease Obligations.
"Indemnified Party" shall have the meaning set forth in Section
5.8(c) hereof.
"Indenture" shall mean the indenture dated as of August 2, 1996
(as originally in effect or as amended in accordance with the terms of such
agreement) among Borrower, as issuer, Parent, as guarantor, and the Trustee,
pursuant to which Borrower's 10% Senior Subordinated Notes due 2003 were
issued (collectively, the "Subordinated Notes").
"Interest Payment Date" shall mean, with respect to each Eurodollar
Advance, the last day of the Interest Period for such Eurodollar Advance;
provided, however, that with respect to each Interest Period for any
Eurodollar Advance of a duration of three or more months, the Interest Payment
Date with respect to such Eurodollar Advance shall include, in addition to the
last day of such Interest Period, each day which occurs every three months
after the initial date of such Interest Period.
"Interest Period" shall mean, with respect to each Eurodollar
Advance, initially, the period commencing on, as the case may be, the
borrowing or conversion date with respect to such Eurodollar Advance and
ending one, two, three or six months thereafter, as selected by Borrower;
and thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Eurodollar Advance and ending one, two,
three or six months thereafter, as selected by Borrower; provided, however,
that no Interest Period may be selected for a Eurodollar Advance which expires
later than the Maturity Date; and provided, further, that any Interest Period
in respect of a Eurodollar Advance which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall, subject
to the foregoing proviso, end on the last Business Day of a calendar month.
Notwithstanding the above, all Interest Periods shall be adjusted in
accordance with Section 16.11 hereof.
"Inventory" of any Person shall mean any and all inventory, raw
materials, work-in-process and finished products of such Person, now or
hereafter acquired, intended for sale or lease or to be furnished under
contracts of service in the ordinary course of business of such Person, of
every kind and description.
"Investment" shall have the meaning set forth in Section 13.4
hereof.
"Issuing Lender" shall have the meaning set forth in Section 7.1
hereof.
"Lease" shall mean each lease or sublease of real property existing
on the Closing Date under which Parent, Borrower or any of its Subsidiaries
is the lessee or sublessee and each future lease or sublease of real property
under which Borrower or any of its Subsidiaries is the lessee or sublessee.
"Lender" and "Lenders" shall have the meanings set forth in the
preamble to this Agreement.
"Lender Debt" shall mean and include all Advances and all other
Indebtedness owing at any time by Borrower, any one or more of its
Subsidiaries or any other Credit Party to Agent or any one or more of Lenders
(including, without limitation, all principal and interest, Letter of Credit
reimbursement obligations, fees, indemnities, costs, charges and other amounts
payable under the Letter of Credit Agreements or in respect of the Letters of
Credit or under any of the other Loan Documents), arising under or in
connection with this Agreement, the Notes, any Security Document, any of the
other Loan Documents, or any Guaranty in favor of the Agent or any one or more
of the Lenders, in each instance, whether absolute or contingent, secured or
unsecured, due or not, and whether arising by operation of law or otherwise,
and all interest and other charges thereon.
"Letter of Credit" shall have the meaning set forth in the preamble
to this Agreement, and any extension, modification, amendment, renewal or
replacement thereof.
"Letter of Credit Agreement" shall mean an application and
agreement, as amended, modified or supplemented from time to time, with
respect to the issuance and reimbursement of and otherwise with respect to a
Letter of Credit, in form and substance satisfactory to the Agent.
"Letter of Credit Cash Collateral" shall mean cash deposited by
Borrower with the Agent to secure obligations of Borrower under Letters of
Credit (contingent or otherwise) pursuant to agreements in form and substance
satisfactory to the Agent.
"Letter of Credit Fee" shall mean 1.25% per annum.
"Letter of Credit Sublimit" shall mean the lesser of (i) Twelve
Million Dollars ($12,000,000), and (ii) the Borrowing
Base.
"Letter of Credit Usage" shall mean, at any time, (i) the
aggregate undrawn amount at such time of all outstanding Letters of Credit,
plus (ii) the aggregate amount of unreimbursed drawings at such time under
Letters of Credit.
"Lien" shall mean any lien, mortgage, pledge, security interest or
other type of charge or encumbrance of any kind, or any other type of
preferential arrangement, including, without limitation, the lien or retained
security title of a conditional vendor, any lien in favor of a landlord
(whether or not perfected and whether or not notice of any such lien has been
filed) and any easement, right of way or other encumbrance on title to real
property and any financing statement filed in respect of any of the foregoing.
For the purposes of this Agreement, a Credit Party shall be deemed to be the
owner of any property which it has placed in trust for the benefit of the
holder of Indebtedness of such Credit Party which Indebtedness is deemed to
be extinguished under GAAP but for which such Credit Party remains legally
liable, and such trust shall be deemed to be a Lien.
"Loan Documents" shall mean, collectively, the Agreement, each
Security Document, each Mortgage, each Guaranty, the Notes, each Letter of
Credit Agreement, each Borrower's Certificate, each Borrowing Base Certificate,
each Landlord's Certificate, each Collection Account Agreement, each
Concentration Account Agreement, each Lock-Box Agreement, each Pharmaceutical
Collection Account Agreement, and each other document or instrument delivered
to the Agent or any Lender by any Credit Party pursuant to or in connection
with the Existing Agreement or the Original Agreement or now or hereafter
delivered to the Agent or any Lender by any Credit Party pursuant to or in
connection herewith or therewith and as each of the same are further amended,
modified, supplemented, extended, renewed, restated or replaced from time to
time.
"Local Bank Special Account" shall have the meaning set forth in
Section 12.17(c) hereof.
"Lock-Box Account" means an account maintained for the purpose of
receiving all cash collections and other cash proceeds of Pledged Accounts.
"Lock-Box Agreement" means an agreement in substantially the form
of Exhibit 1.1 hereto.
"Material Adverse Effect" shall mean a material adverse effect on
(i) the business, assets, prospects, operations or financial or other
condition of Parent, Borrower and Borrower's Subsidiaries, taken as a whole,
(ii) Borrower's ability to pay the Lender Debt in accordance with the terms
hereof, (iii) the Collateral, or (iv) the Agent's Liens on the Collateral or
the priority of any such Lien.
"Maturity Date" shall mean August 2, 2002.
"Maximum Lawful Rate" shall have the meaning set forth in Section
5.16(a) hereof.
"Maximum Permissible Rate" shall have the meaning set forth in
Section 5.16(b) hereof.
"Medicare/Medicaid Account Debtor" shall mean the following Persons
who are or may become obligated for payment of any Pharmaceutical Receivables:
(a) the United States of America acting under the Medicare Program established
pursuant to the Social Security Act, (b) any State acting pursuant to a health
plan adopted pursuant to Title XIX of the Social Security Act, or (c) any
agent for any of the foregoing.
"Membership Sign-Up Documents" shall mean (a) the Application for
Membership by Homeland Stores, Inc., between Borrower and AWG and (b) the
Stock Power of Attorney granted to AWG by Borrower with respect to the AWG
Membership Stock owned by Borrower.
"Mortgages" shall have the meaning specified in Section 8.2(a)
hereof.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which any of the Credit Parties or any ERISA
Affiliate contributes.
"Net Amount of Eligible Coupons" shall have the meaning set forth
in the definition of Eligible Coupons.
"Net Amount of Eligible Inventory" shall have the meaning set forth
in the definition of Eligible Inventory.
"Net Amount of Eligible Pharmaceutical Inventory" shall have the
meaning set forth in the definition of Eligible Pharmaceutical Inventory.
"Net Amount of Eligible Pharmaceutical Receivables" shall have the
meaning set forth in the definition of Eligible Pharmaceutical Receivables.
"Net Amount of Eligible Real Property" shall have the meaning set
forth in the definition of Eligible Real Property.
"Net Amount of Eligible Vendor Receivables" shall have the meaning
set forth in the definition of Eligible Vendor Receivables.
"Net Capital Expenditures" shall mean for any period, the Capital
Expenditures made by Borrower and its Subsidiaries in such period, less net
cash proceeds from the sale of Excluded Properties.
"Net Proceeds" shall mean, with respect to any transaction,
(a) cash (freely convertible into U.S. dollars) received by any
Credit Party from such transaction (including cash received as
consideration for the assumption or incurrence of liabilities incurred in
connection with or in anticipation of such transaction), after
(i) provision for all income, title, recording or other taxes
measured by or resulting from such transaction after taking into
account all available deductions and credits,
(ii) payment of all brokerage commissions, reasonable
investment banking and legal fees and other fees and expenses
related to such transaction,
(iii) deduction of appropriate amounts to be provided by such
Credit Party as a reserve, in accordance with GAAP, against any
liabilities associated with the assets sold or disposed of in such
transaction and retained by such Credit Party after such transaction,
including, without limitation, pension and other post-employment
benefit liabilities and liabilities related to environmental matters
or against any indemnification obligations associated with the
assets sold or disposed of in such transaction,
(iv) amounts paid to satisfy Indebtedness (other than the
Lender Debt and Subordinated Notes) which are required to be repaid
in connection with any such transaction, and
(v) so long as no Default or Event of Default is continuing,
payment of trade payables incurred as a result of the purchase of
Inventory sold in connection with such transaction; and
(b) promissory notes received by such Credit Party from such
transaction or such other disposition upon the liquidation or conversion
of such notes into cash.
"Note" and "Notes" shall mean the Revolving Notes, the Term Notes,
and the Acquisition Term Notes.
"Original Agreement" shall mean that certain Amended and Restated
Revolving Credit Agreement, dated as of April 21, 1995, by and among Borrower,
Parent, NBC, Xxxxxx, and NBC as agent.
"Overadvance" shall have the meaning set forth in Section 2.2(c)
hereof.
"Parent" shall have the meaning set forth in the preamble hereto.
"Parent Case" shall mean the Chapter 11 case of Parent under the
Federal Bankruptcy Code captioned In re: Homeland Holding Corporation, Case
No. 96-748-PJW (Chapter 11) in the Bankruptcy Court.
"Payment Office" shall have the meaning set forth in Section 2.4(c)
hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereof under ERISA.
"Pension Benefit Plan" shall mean an "employee pension benefit plan"
as defined in Section 3(2) of ERISA which is maintained for employees of any
of the Credit Parties or any ERISA Affiliate, other than a Multiemployer Plan.
"Permitted Acquisition" shall mean any Investment in assets or
properties (exclusive of stock, securities or Indebtedness of a Person, other
than Indebtedness incurred as the result of a Permitted Acquisition) that:
(a) constitute a food retailing business that carries a mix of
grocery, meat, produce, household goods, and variety products, and may
contain specialty departments, such as a pharmacy;
(b) constitute in purchase price no more than Two Million Five
Hundred Thousand Dollars ($2,500,000.00);
(c) have a purchase price which does not exceed six (6) times the
pro forma EBITDA attributable to the Investment under consideration for
qualification as a Permitted Acquisition, as calculated for the thirteen
(13) Calendar Months immediately following the proposed date of
consummation of such Investment; and
(d) would cause, after giving effect to the proposed terms hereof,
no Default under this Agreement; and
(e) with respect to Permitted Acquisitions involving a purchase
price of $2,500,000 or more, have been approved in writing by the Agent
and the Required Lenders.
"Permitted Transaction" shall mean:
(a) payments on behalf of Parent and SLB Marketing, Inc.:
(i) to pay reasonable and necessary operating costs and taxes
incurred in the ordinary course of business including, without
limitation,
(1) the execution, delivery and performance by Parent
or Borrower of indemnification and contribution agreements in
favor of each Person who becomes a director of Parent, Borrower
or any of their respective Subsidiaries in respect of
liabilities
(A) arising under the Securities Act, the Securities
Exchange Act, and any other applicable securities laws or
otherwise in connection with any offering of securities by
Parent, Borrower or any of their respective Subsidiaries,
(B) incurred to third parties for any action or
failure to act of Parent, Borrower or any of their
Subsidiaries or successors,
(C) arising out of the fact that any indemnitee was
or is a director of Holding, Borrower, or any of their
respective Subsidiaries, or is or was serving at the
request of any such corporation as director, officer,
employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, or
(D) to the fullest extent permitted by Delaware law,
out of any breach or alleged breach by such an indemnitee
of his or her fiduciary duty as a director of Parent,
Borrower or any of their respective Subsidiaries,
(2) loans and advances to officers and directors of
Parent, Borrower or any of their respective Subsidiaries (or
employees thereof, if approved by an officer of Borrower)
existing on the Closing Date and set forth on Schedule 1.1(B)
hereto or made in the ordinary course of business for
reasonable travel, entertainment and relocation expenses, or
(3) customary compensation and severance arrangements
with officers, directors, and employees of Parent, and
(ii) to permit Parent to cover its expenses (including all
reasonable professional fees and expenses) incurred in connection
with (1) so long as no Default or Event of Default in payment of
principal of or interest on Lender Debt has occurred and is
continuing, public offerings of its equity securities or debt
permitted by the Indenture, and its obligations to register
securities with the Securities and Exchange Commission (and any
government agency succeeding to its functions) and similar state
agencies, or (2) to comply with its reporting obligations under the
federal and state securities laws; and
(b) payments to any Affiliate of reasonable fees and reasonable
expenses incurred by any such Affiliate in connection with its
performance of services to Parent, Borrower and their respective
Subsidiaries.
"Person" shall mean an individual, a corporation, an association, a
joint stock company, a business trust, a partnership, a trust, a joint
venture, an unincorporated organization or other entity, or a government or
any agency or political subdivision thereof.
"Pharmaceutical Collection Account" shall mean a deposit account
of Borrower, established pursuant to Section 9.18(e) hereof, into which only
cash proceeds of Pharmaceutical Receivables shall be deposited, all amounts
deposited in which and all claims arising under which have been pledged to the
Agent for the benefit of the Agent and the Lenders pursuant to a
Pharmaceutical Collection Account Agreement; provided, however, that Borrower
shall have access to such account.
"Pharmaceutical Collection Account Agreement" shall have the meaning
set forth in Section 9.18(e) hereof.
"Pharmaceutical Inventory" of any Person shall mean any and all
inventory and stock of prescription products, now or hereafter acquired,
intended for sale or lease or to be furnish under contracts of service in the
ordinary course of business of such Person, of every kind and description.
"Pharmaceutical Receivables" shall mean and include all accounts,
contract rights, instruments, documents, chattel paper and general intangibles,
whether secured or unsecured, now existing and hereafter created, of the
Credit Parties, whether or not specifically sold or assigned to the Agent or
the Lenders, and arising form a sale or other disposition of Pharmaceutical
Inventory by Borrower in the ordinary course of Borrower's business including,
without limitation, all rights to receive payments from Third Party Payors and
Medicare/Medicaid Account Debtors and any and all contracts related to payment
by such Third Party Payors and Medicare/Medicaid Account Debtors.
"Pledged Accounts" shall have the meaning set forth in Section 8.1
(a) hereof.
"Processing Agent" shall mean International Data, L.L.C., an
Indiana limited liability company, Borrower's agent for processing of Coupons
pursuant to the terms of the Processing Agreement and any successor agent for
processing of coupons that is approved by the Lenders and that has entered
into a coupon processing service agreement acceptable to Lenders.
"Processing Agreement" shall mean that certain Coupon Processing
Service Agreement (Cash Advance Program) dated as of September 18, 1995,
between the Processing Agent and Borrower, as amended, modified, supplemented
or restated from time to time.
"Pro rata" shall mean, with respect to each Lender, a percentage
equal to the ratio that (x) the sum of the Revolving Commitment, the Term
Commitment, and the Acquisition Term Commitment of such Lender bears (y) to
the sum of the Revolving Credit Facility Commitment, the Term Loan Facility
Commitment, and the Acquisition Term Loan Facility Commitment.
"Quarterly Amortization Amount" shall have the meaning set forth in
Section 4.7(b) hereof.
"Real Property" shall have the meaning set forth in the definition
of Collateral.
"Receivables" shall mean and include all accounts, contract rights,
instruments, documents, chattel paper and general intangibles, whether secured
or unsecured, now existing or hereafter created, of the Credit Parties, and
whether or not specifically sold or assigned to the Agent or the Lenders.
"Records and Other Property" shall have the meaning set forth in
Section 8.1(a) hereof.
"Regulation D" shall mean Regulation D of the Board as from time to
time in effect and any successor to all or a portion thereof establishing
reserve requirements.
"Release" shall mean any releasing, spilling, escaping, leaking,
seepage, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, disposing or dumping. The meaning of the term shall also
include any threatened Release.
"Reorganization Costs" shall mean the sum of the following:
(a) legal, professional and bank facility fees associated with the
reorganization of the Companies incurred in connection with the
Bankruptcy Proceedings,
(b) severance expenses for the Employee Buyout Offer not to exceed
$6,600,000,
(c) expenses, up to $750,000, in the aggregate, paid to establish
the Health and Welfare Benefit Plan, as described in section XIV(B) of
the Disclosure Statement,
(d) expenses incurred in discontinuing operations at Borrower's
stores numbered 488 and 602, not to exceed $1,806,250 in the aggregate,
of which total, the cash expenses will not exceed $400,000 and the
non-cash expenses will not exceed $1,406,250, and
(e) to the extent actually incurred and not reimbursed from any
source, the net transition expenses incurred in connection with
termination of Borrower's prior Health and Welfare Benefit Plan, such
expenses not to exceed, in the aggregate, $900,000.
"Reportable Event" shall mean any reportable event described in
Section 4043(b) of ERISA or the regulations thereunder, as to which the PBGC
has not by regulation waived the notice requirement of Section 4043(a) of
ERISA.
"Required Lenders" shall mean, at any time, Lenders having more than
sixty-six and two-thirds percent (66 2/3%) of the sum of (a) the aggregate
outstanding principal balance of the Revolving Loan, (b) the Letter of Credit
Usage (which shall be deemed to be held by the Lenders in accordance with
their exposure under Section 16.18 hereof), (c) the aggregate outstanding
principal balance of the Term Loan, (d) the aggregate amount of unutilized
Revolving Commitments of the Lenders, and (e) the aggregate outstanding
principal balance of the Acquisition Term Loan, in each case, at such time.
"Revolving Commitment", as to any Lender, shall have the meaning
set forth in Section 2.2(b) hereof. For purposes of Sections 5.5, 5.8 and
7.4 hereof, the Revolving Commitment of any Lender shall include the
participation interest of such Lender in Letters of Credit as provided in
Section 16.18 hereof.
"Revolving Credit Advance" shall have the meaning set forth in
Section 2.1(a) hereof.
"Revolving Credit Base Rate Margin" shall mean one-quarter percent
(0.25%).
"Revolving Credit Eurodollar Margin" shall mean two and one-quarter
percent (2.25%).
"Revolving Credit Facility Commitment" shall mean Thirty-Two Million
Dollars ($32,000,000).
"Revolving Loan" shall have the meaning set forth in Section 2.1(a)
hereof.
"Revolving Loan Borrowing Limit" shall have the meaning set forth
in Section 2.2(a) hereof.
"Revolving Note" and "Revolving Notes" shall have the meanings set
forth in Section 2.3(a) hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
"Security Agreement" shall have the meaning specified in Section
8.1(a) hereof.
"Security Documents" shall have the meaning specified in Section
8.1(a) hereof.
"Settlement Date" shall have the meaning set forth in Section 2.4(c).
"Settlement Notice" shall have the meaning set forth in Section
2.4(c).
"Sight Draft Special Account" shall have the meaning set forth in
Section 12.17(c) hereof.
"Solvent" and "Solvency" shall mean, with respect to any Person on
a particular date, that on such date,
(a) the fair value of the property of such Person is greater than
the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person; and
(b) the present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured;
and
(c) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay as
such debts and liabilities mature; and
(d) such Person is not engaged in business or a transaction, and
is not about to engage in business or a transaction, for which such
Person's property would constitute an unreasonably small capital.
"Special Account" shall have the meaning set forth in Section 12.17
(c) hereof.
"Store Deposit" shall have the meaning set forth in Section 12.17(c)
hereof.
"Subordinated Note Documents" shall mean the Indenture and each
instrument, document and agreement evidencing, securing, creating, guaranteeing
or governing the Indebtedness evidenced by the Subordinated Notes or entered
into in connection therewith, in each case as originally in effect or as
amended in accordance with the terms of this Agreement.
"Subordinated Notes" shall have the meaning specified in the
definition of the term "Indenture".
"Subsidiary" of any Person shall mean (i) any corporation of which
more than fifty percent (50%) of the issued and outstanding securities having
ordinary voting power for the election of directors is owned or controlled,
directly or indirectly, by such Person and/or one or more of its Subsidiaries,
and (ii) any partnership in which a Person and/or one or more Subsidiaries of
such Person shall have an interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent
(50%).
"Supply Agreement" shall mean the Supply Agreement, dated as of
April 21, 1995, by and between AWG and Borrower, as amended by that certain
First Amendment to Supply Agreement, dated effective as of August 2, 1996.
"1996 Term Loan" shall have the meaning set forth in Section 3.1
hereof.
"Term Commitment", as to any Lender, shall have the meaning set
forth in Section 3.2(b) hereof.
"Term Loan Facility Commitment" shall mean Seven Million Nine
Hundred Sixteen Thousand Six Hundred Six and 67/100 Dollars ($7,916,606.67).
"Term Loan" shall have the meaning set forth in Section 3.1(a)
hereof.
"Term Loan Advance" shall have the meaning set forth in Section 3.1
(a) hereof.
"Term Loan Base Rate Margin" shall mean one-half percent (0.50%).
"Term Loan Eurodollar Margin" shall mean two and three-quarters
percent (2.75%).
"Term Note" and "Term Notes" shall have the meanings set forth in
Section 3.3(a) hereof.
"Total Commitment" shall mean the total amount available to Borrower
under the Revolving Credit Facility Commitment, the Term Loan Facility
Commitment, and the Acquisition Term Loan Facility Commitment.
"Third Party Payor" shall mean any insurance company third-party
payor or managed care payor that makes payment for the provision of goods or
services related to medical treatment provided to an individual, including,
but not limited to, any commercial payor, hospital or pharmacy.
"Trustee" shall mean Fleet National Bank, as trustee under the
Indenture, and any successor trustee appointed pursuant to the applicable
provisions of the Indenture.
"UCC" shall mean the Uniform Commercial Code (or any successor
statute) of the State of New York or of any other state the laws of which are
required by Section 9-103 of the UCC of New York to be applied in connection
with the perfection of a security interest in favor of the Agent hereunder or
under any Security Document.
"U.S. Dollars" and "$" shall mean lawful currency of the United
States of America.
"Use Restrictions" shall mean (a) Borrower's agreement under Section
8(b) of the Supply Agreement to dedicate (to the extent of its interest therein
(including leasehold interests)) certain real property and the improvements
thereon to the exclusive use of a retail grocery facility (including all
activities which from time to time are commonly associated with the operation
of a grocery facility) which is owned by a retail member of AWG, and (b) any
public recordations of such agreement, provided that any such public
recordation shall be terminable from time to time as set forth in Section 8(b)
of the Supply Agreement.
"Vendor Inventory" of any Person shall mean any and all Inventory
and stock supplied by an independent, third-party vendor to Borrower or to a
supplier (e.g., AWG) of Borrower, intended for sale or lease or to be furnished
under contracts of service in the ordinary course of business of such Person,
of every kind and description.
"Vendor Offset Agreement" shall mean a vendor offset agreement
substantially in the form of Exhibit 1.1 (a) hereto (with such modifications
as are acceptable to the Agent and as amended, modified or supplemented from
time to time).
"Vendor Rebate Agreement" shall mean any written agreement or
written commitment pursuant to which an independent, third-party vendor to
Borrower or to a supplier (e.g., AWG) of Borrower becomes obligated to pay to
Borrower funds in connection with product rebates, promotional discounts,
advertising incentives and other marketing arrangements.
"Vendor Receivables" shall mean and include all accounts, contract
rights (including rebates, promotional discounts and incentives), instruments,
documents, chattel paper and general intangibles, whether secured or unsecured,
now existing and hereafter created, of the Credit Parties, whether or not
specifically sold or assigned to the Agent or the Lenders, and arising from a
sale or other disposition of Vendor Inventory by Borrower or from cooperative
advertising services provided by the Borrower in the ordinary course of
Borrower's business, which is payable to Borrower by an independent, third-
party vendor to either Borrower or a supplier (e.g., AWG) of Borrower, pursuant
to the terms of a Vendor Rebate Agreement.
"Written Notice" and "in writing" shall mean any form of written
communication or a communication by means of telex, telecopier device,
telegraph or cable.
SEC. 1.2. TERMS DEFINED IN THE UNIFORM COMMERCIAL CODE. Each term
defined in the UCC of the State of New York and used herein shall have the
meaning given therein unless otherwise defined herein.
SEC. 1.3. COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" shall mean "from and including" and the words "to" and
"until" each shall mean "to but excluding."
SEC. 1.4. ACCOUNTING TERMS. (a) All accounting terms not
specifically defined herein shall be construed, as to a specified Person, in
accordance with generally accepted accounting principles in the United States,
consistent with those applied in the preparation of the financial statements
of such Person ("GAAP").
(b) If any change in accounting principles from those used in the
preparation of any financial statements previously delivered to Lenders under
the Existing Agreement are hereafter occasioned by promulgation of rules,
regulations, pronouncements or opinions by or are otherwise required by the
Financial Accounting Standards Board or the American Institute of Certified
Public Accountants (or successors thereto or agencies with similar functions),
Borrower shall cause its independent auditors promptly to report such change
and the effect thereof on Borrower (and Parent) and its financial reporting
to the Agent in writing. If Parent and Borrower do not adopt such change and
the Agent determines that such change is material to the Parent, Borrower and
their Subsidiaries and requests that Parent, Borrower and their respective
Subsidiaries adopt such change, then Parent, Borrower and their Subsidiaries
shall adopt such change (but not prior to the date that such Credit Party is
required to adopt such change by such authorities). If such change results
in a change in the method of calculation of, or affects the results of such
calculation of, any of the financial covenants, standards or terms found in
any Loan Document, then the parties hereto agree to enter into and diligently
pursue negotiations in order to amend such financial covenants, standards or
terms so as to equitably reflect such change, with the desired result that the
criteria for evaluating a Credit Party's financial condition and results of
operations shall be the same after such change as if such change had not been
made.
SEC. 1.5. OTHER PROVISIONS REGARDING DEFINITIONS. (a) The words
"hereof," "herein" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.
(b) The terms defined in this Section 1, unless the context
requires otherwise, will have the meanings applied to them in this Section 1,
references to an "Exhibit," "exhibit," "Schedule" or "schedule" are, unless
otherwise specified, to one of the exhibits or schedules attached to this
Agreement and references to a "section" or "Section" are, unless otherwise
specified, to one of the sections of this Agreement.
(c) The term "or" is not exclusive.
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT FACILITY.
SEC. 2.1. REVOLVING CREDIT FACILITY ADVANCES. (a) Each of the
Lenders severally, but not jointly, agrees to lend to Borrower, subject to
and upon the terms and conditions herein set forth, at any time or from time
to time on or after the Closing Date and before the Maturity Date, such
Lender's pro rata share of such amounts as may be requested or be deemed
requested by Borrower in accordance with the terms of this Agreement (each
such borrowing, a "Revolving Credit Advance" and the outstanding principal
balance of all Revolving Credit Advances from time to time, the "Revolving
Loan"), subject to the limitations contained in Section 2.2 hereof.
(b) Each Revolving Credit Advance shall be made on the date
specified in the Written Notice or telephonic notice confirmed in writing as
described in Section 2.4; provided, however, that if Borrower shall be deemed
to request a Revolving Credit Advance under Section 7.1(c) hereof, no notice
of a borrowing shall be necessary and such Advance shall be in an amount
equal to the reimbursement obligation of Borrower for the drawing made under
the Letter of Credit for which such Advance is deemed requested.
SEC. 2.2. REVOLVING CREDIT FACILITY COMMITMENT AND REVOLVING LOAN
BORROWING LIMIT. (a) The aggregate unpaid principal amount of the Revolving
Credit Advances outstanding at any time shall not exceed an amount equal to
the least of (i) the Revolving Credit Facility Commitment minus the Letter of
Credit Usage at such time (after giving effect to any concurrent reimbursement
of a Letter of Credit with the proceeds of an Advance pursuant to Section 7.1
(c) hereof), and (ii) the Borrowing Base as of such time minus the Letter of
Credit Usage at such time (after giving effect to any concurrent reimbursement
of a Letter of Credit with the proceeds of an Advance pursuant to Section 7.1
(c) hereof), and (iii) the amount that would be permitted under the Indenture;
pursuant to the definition of "Permitted Indebtedness," as defined in the
Indenture, (the least of (i), (ii) and (iii) being the "Revolving Loan
Borrowing Limit").
(b) Subject to the limitations of Sections 2 and 5 hereof,
Borrower may borrow, repay and reborrow the Revolving Loan. The portion of
the Revolving Loan to be funded by each Lender shall not exceed in aggregate
principal amount at any one time outstanding, and no Lender shall have any
obligation to make its pro rata share of the Revolving Loan outstanding at
any one time in the aggregate in excess of, the revolving commitment amount
set forth opposite such Lender's name on Schedule 1.1(A) hereto for the
Revolving Credit Facility Commitment (for each Lender, its "Revolving
Commitment").
(c) Insofar as Borrower may request and Lenders may be willing at
their option to make Revolving Credit Advances to Borrower at a time when the
aggregate unpaid principal amount of the Revolving Credit Advances exceeds, or
would exceed with the making of any such Revolving Credit Advance, the
Borrowing Base minus the Letter of Credit Usage at such time (but not exceed
the Revolving Credit Facility Commitment minus the Letter of Credit Usage at
such time) by no more than ten percent (10%) of the Borrowing Base minus the
Letter of Credit Usage (any such Advance or Advances being herein referred to
individually as an "Overadvance" and collectively as "Overadvances"), Agent
may, at its option, make such Overadvance or Overadvances. All Overadvances
shall be secured by the Collateral and shall bear interest at an annual rate
equal to the lesser of (i) the rate then applicable to such Revolving Credit
Advance, plus one percent (1%), or (ii) the Maximum Lawful Rate. The principal
amount of all Overadvances shall be paid on demand, and interest thereon shall
be paid as provided in Section 2.6 hereof.
SEC. 2.3. REVOLVING NOTES. (a) The pro rata portion of the
Revolving Credit Advances made by each Lender to Borrower shall be evidenced
by, and be repayable with interest in accordance with the terms of, a
promissory note issued by Borrower, in each case payable to the order of such
Lender, and in the maximum principal amount of such Lender's Revolving
Commitment, in the form of Exhibit 2.3 hereto (together with any replacement,
modification, renewal or substitution thereof, individually, a "Revolving
Note" and collectively, the "Revolving Notes").
(b) Each Revolving Note shall be dated the Closing Date and be
duly completed, executed and delivered by Borrower.
(c) Each Lender shall endorse that portion of the amount of each
Revolving Credit Advance which it has made to Borrower and the amount of each
payment or prepayment of principal thereon in the appropriate space on the
grid sheet attached to its Revolving Note (or so note the same in its records);
provided, however, that the failure of any Lender to make any such endorsement
or recordation shall not in any manner affect the obligation of Borrower to
repay to such Lender the portion of the Revolving Credit Advance advanced by
such Lender under the Revolving Note held by such Lender. Any such
endorsement or recordation shall represent conclusive evidence of the date
and amount of such Lender's pro rata share of any Revolving Credit Advance or
payment or prepayment of principal thereon, absent manifest error.
(d) Each of the Revolving Notes shall mature on the Maturity Date
(or earlier as hereinafter provided), and shall be subject to payment and
prepayment as provided in Sections 2 and 5 hereof.
SEC. 2.4. NOTICE OF BORROWING; BORROWER'S CERTIFICATE. (a) Except
as provided in Section 7.1(c) hereof, whenever Borrower desires to make a
borrowing of a Revolving Credit Advance, it shall give the Agent, at its
address designated in Section 16.4 hereof, prior Written Notice or telephonic
notice from an Authorized Representative confirmed promptly in writing (which
notice shall be irrevocable) of its desire to make a borrowing of a Revolving
Credit Advance (i) not later than 12:00 noon (New York time) on the proposed
borrowing date of each Revolving Credit Advance that is a Base Rate Advance,
and (ii) not later than 11:00 a.m. (New York time) three (3) Business Days
prior to the proposed borrowing date of each Revolving Credit Advance that is
a Eurodollar Advance. Each notice of borrowing under this Section 2.4 shall
be substantially in the form of Exhibit 2.4 hereto (each, together with each
Written Notice delivered under Section 7.1(a) hereto, a "Borrower's
Certificate"), shall be dated the date of such notice (which notice shall be
deemed repeated on the date of such borrowing), and specify the date on which
Borrower desires to make a borrowing of a Revolving Credit Advance (which in
each instance shall be a Business Day), the amount of such borrowing, whether
such borrowing shall be a Base Rate Advance or a Eurodollar Advance or a
combination thereof, and, in the case of the selection of a Eurodollar Advance,
the proposed Interest Period therefor, and shall refer to the most recent
Borrowing Base Certificate delivered by Borrower to the Agent and each Lender
pursuant to Section 12.1(j) hereof, and set forth the Borrowing Base
provided therein. If such notice shall be with respect to a borrowing of a
Eurodollar Advance but fails to state an applicable Interest Period therefor,
then such notice shall be deemed to be a request for a one-month Interest
Period. If (x) Borrower shall fail to state in any such notice whether such
Revolving Credit Advance shall be a Base Rate Advance or a Eurodollar Advance,
or (y) Borrower shall be deemed to have made a borrowing of a Revolving
Credit Advance pursuant to Section 7.1(c) hereof, then Borrower shall be
deemed to have selected a Base Rate Advance. Subject to the other provisions
of this Agreement, Base Rate Advances and Eurodollar Advances of more than one
type may be outstanding at the same time; provided, however, that Eurodollar
Advances shall be available for election by Borrower only for (1) advances of
$1,000,000 or any integral multiple of $100,000 in excess of $1,000,000 and,
(2) one, two, three and six month interest periods.
(b) Borrower shall not be permitted to select a borrowing of a
Eurodollar Advance in any Borrower's Certificate (i) to the extent such
selection would be prohibited by Section 5.1(f), Section 5.6 or Section 5.7
hereof, or (ii) if a Default or an Event of Default shall be in existence as
of the date of selection of the applicable Interest Period.
(c) On or before 12:00 noon (New York time) on Wednesday of each
week (or at such other time or on such other day as the Agent determines)
prior to the expiration of the Revolving Credit Facility Commitment (or, if
any such Wednesday is not a Business Day, the next preceding Business Day
(each a "Settlement Date")), Agent shall notify each Lender by telephone
(confirmed immediately by Written Notice) of the terms of Revolving Credit
Advances outstanding at the time of such notice and the amount of such
Lender's pro rata portion of such Revolving Credit Advances (each a
"Settlement Notice"). If the Revolving Credit Advances outstanding at the
time of such Settlement Notice exceed the Revolving Credit Advances
outstanding at the time of the immediately preceding Settlement Notice, then
each Lender shall, before 3:00 p.m. (New York time) on such Settlement Date,
deposit with Agent the amount of such Lender's pro rata portion of the
increase to the Revolving Credit Advances in U.S. dollars in immediately
available funds at the office of the Agent located at 000 Xxxx 00xx, Xxx Xxxx,
Xxx Xxxx 00000 or such other office as the Agent may from time to time direct
(the "Payment Office"). If the Revolving Credit Advances at the time of such
Settlement Notice are less than the Advances outstanding at the time of the
immediately preceding Settlement Notice, then Agent will distribute to each
Lender such Lender's pro rata portion of such difference before 3:00 p.m.
(New York time) on such Settlement Date.
(d) Except for Revolving Credit Advances made pursuant to Section
7.1(c) hereof (which Revolving Credit Advances shall be applied to the
reimbursement of drawings under the Letter of Credit for which such Revolving
Credit Advance was made in accordance with Section 7.1(c) hereof), subject to
satisfaction of closing conditions, proceeds of a Revolving Credit Advance
received by the Agent shall be made available to Borrower by the Agent at its
Payment Office (or such other office of the Agent in New York State as Agent
may from time to time specify in writing to the Borrower).
SEC. 2.5. TERMINATION OF REVOLVING CREDIT FACILITY COMMITMENT.
Borrower shall have the right, upon not less than five (5) Business Days'
prior Written Notice to the Agent (which shall promptly notify each Lender
thereof in writing or by telephone confirmed promptly in writing), to
terminate the Revolving Credit Facility Commitment; provided, however, that
any such termination of the Revolving Credit Facility Commitment shall be
accompanied by prepayment in full of the Revolving Loan then outstanding, the
Term Loan then outstanding, and the Acquisition Term Loan then outstanding,
together with the payment of any unpaid fees owing with respect to the
Revolving Credit Facility Commitment, the Term Loan Facility Commitment, the
Acquisition Term Loan Facility Commitment, any fees, premiums, costs and
charges required to be paid by Borrower pursuant to Section 5.8 hereof, and
accrued interest on the amount so prepaid to the date of such prepayment;
provided, further, that Borrower may not cancel the Revolving Credit Facility
Commitment while any Letter of Credit Usage is outstanding.
SEC. 2.6. INTEREST ON REVOLVING LOAN. Borrower shall pay interest
on the unpaid principal amount of each Revolving Credit Advance made to it
which is outstanding from time to time in accordance with the terms and
conditions of Section 5 hereof.
SEC. 2.7. PAYMENTS OF PRINCIPAL. Principal on the Revolving
Credit Facility shall be due in full at maturity of the Revolving Credit
Facility.
SEC. 2.8. ESTABLISHMENT OF RESERVES. The Agent may at any time
and from time to time in its discretion establish reserves against the
Receivables or the Inventory of Borrower. The amount of such reserves shall
be subtracted from the Borrowing Base when calculating the amount of the
Revolving Loan Borrowing Limit. Without limiting the foregoing, the Credit
Parties specifically agree that the Agent may establish reserves against the
Inventory of Borrower with respect to any leased store location of Borrower
that constitutes a Real Property where the Agent has not received a waiver of
landlord's lien, substantially in the form and substance of the form of
Landlord's Waiver attached as Exhibit 12.20 hereto or such other form as
approved by Agent. Borrower specifically acknowledges that the existing
landlord's waivers received in conjunction with the Original Agreement are not
satisfactory for purposes of satisfying Borrower's obligations under Sections
9.20 or 12.20 of this Agreement, that Agent and Lenders nevertheless shall be
entitled to enjoy the benefits of such existing landlord's waivers, and that
Agent's and Lenders' enjoyment of the benefits of such existing landlord's
waivers shall not constitute approval thereof for purposes of this Section 2.8.
The amount of the reserve established as a result of the failure of Agent to
receive a Landlord's Waiver will be equal to the amount of rent payable with
respect to the applicable store and Real Property for a period of ninety (90)
days.
SECTION 3. AMOUNT AND TERMS OF TERM LOAN FACILITY.
SEC. 3.1. TERM LOAN FACILITY. Each of the Lenders severally, but
not jointly, agrees to renew, extend and modify the term loan (the "1996 Term
Loan") to Borrower, which, under the Existing Agreement, was in the original
principal amount of $10,00,000.00, subject to and upon the terms and conditions
herein set forth. The amount of the 1996 Term Loan renewed, extended and
modified by each Lender shall be equal to such Lender's pro rata share of the
1996 Term Loan (each such borrowing outstanding under the 1996 Term Loan, a
"Term Loan Advance", and the outstanding principal balance of all Term Loan
Advances from time to time, the "Term Loan"), subject to the limitations
contained in Section 3.2 hereof.
SEC. 3.2 TERM LOAN FACILITY COMMITMENT.
(a) The amount of the 1996 Term Loan, as renewed, extended and
modified under the Term Loan Facility, shall be the Term Loan Facility
Commitment.
(b) The portion of the Term Loan to be renewed, extended and
modified by each Lender shall not exceed in aggregate principal amount at any
one time outstanding, and no Lender shall have any obligation to renew,
extend or modify its pro rata share of the Term Loan outstanding at any one
time in the aggregate in excess of, the term loan commitment amount set forth
opposite such Lender's name on Schedule 1.1(A) hereto for the Term Loan
Facility Commitment (for each Lender its "Term Commitment").
SEC. 3.3. TERM NOTES. (a) The pro rata portion of the Term Loan
Advances renewed, extended and modified by each Lender for the benefit of
Borrower shall be evidenced by, and be repayable with interest in accordance
with the terms of, a promissory note issued by Borrower, in each case payable
to the order of such Lender, and in the maximum principal amount of such
Lender's Term Commitment, in the form of Exhibit 3.3 hereto (together with any
replacement, modification, renewal or substitution thereof, individually, a
"Term Note" and collectively, the "Term Notes").
(b) Each Term Note shall be dated the Closing Date and be duly
completed, executed and delivered by Borrower.
(c) Each Lender shall endorse that portion of the amount of each
Term Loan Advance which it has renewed, extended and modified for the benefit
of Borrower and the amount of each payment or prepayment of principal thereon
in the appropriate space on the grid sheet attached to its Term Note (or so
note the same in its records); provided, however, that the failure of any
Lender to make any such endorsement or recordation shall not in any manner
affect the obligation of Borrower to repay to such Lender the portion of the
Term Loan Advance owed to such Lender under the Term Note held by such Lender.
Any such endorsement or recordation shall represent conclusive evidence of
the date and amount of such Lender's pro rata share of any Term Loan Advance
or payment or prepayment of principal thereon, absent manifest error.
(d) Each of the Term Notes shall mature on the Maturity Date (or
earlier as hereinafter provided), and shall be subject to payment and
prepayment as provided in Sections 3 and 6 hereof.
SEC. 3.4. INTEREST ON TERM LOAN. Borrower shall pay interest on
the unpaid principal amount of each Term Loan Advance made to it which is
outstanding from time to time in accordance with the terms and conditions of
Section 5 hereof.
SEC. 3.5. PRINCIPAL PAYMENTS. Principal payments, each in the
amount of one twenty-fourth of the original amount used and advanced under
the Term Loan (i.e., a six-year amortization, based on quarterly payments),
shall be paid on the last day of March, June, September, and December of
each calendar year, commencing December 31, 1998.
SECTION 4. AMOUNT AND TERMS OF ACQUISITION TERM LOAN
FACILITY
SEC. 4.1. ACQUISITION TERM LOAN FACILITY ADVANCES. (a) Each of
the Lenders severally, but not jointly, agrees to lend to Borrower, subject
to and upon the terms and conditions herein set forth, at any time or from
time to time on or after the Closing Date and before the Maturity Date, such
Lender's pro rata share of such amounts as may be requested or be deemed
requested by Borrower in accordance with the terms of this Agreement (each
such borrowing, an "Acquisition Term Loan Advance" and the outstanding
principal balance of all Acquisition Term Loan Advances from time to time,
the "Acquisition Term Loan"), subject to the limitations contained in
Section 4.2 hereof.
(b) An Acquisition Term Loan Advance shall be further
characterized as an "Acquisition Term Loan A Advance" if the borrowing is
characterized as a funding under the Acquisition Term Loan A, and as an
"Acquisition Term Loan B Advance" if the borrowing is characterized as a
funding under the Acquisition Term Loan B.
(c) All Acquisition Term Loan Advances will first be characterized
as Acquisition Term Loan A Advances under the Acquisition Term Loan A Facility
Commitment until the aggregate amount of Acquisition Term Loan Advances equals
the Acquisition Term Loan A Facility Commitment. Thereafter, all Acquisition
Term Loan Advances will be characterized as Acquisition Term Loan B Advances
under the Acquisition Term Loan B Facility Commitment.
(d) Each Acquisition Term Loan Advance shall be made on the date
specified in the Written Notice or telephonic notice confirmed in writing as
described in Section 4.4.
SEC. 4.2 ACQUISITION TERM LOAN FACILITY COMMITMENT AND
ACQUISITION TERM LOAN BORROWING LIMIT.
(a) The aggregate unpaid principal amount of the Acquisition Term
Loan A Advances outstanding at any time shall not exceed an amount equal to
the least of (i) the Acquisition Term Loan A Facility Commitment, (ii) the
Acquisition Term Loan A Borrowing Base as of such time, minus the principal
balance of the Term Loan outstanding at any time and from time to time, and
(iii) the amount that would be permitted under the Indenture, pursuant to the
definition of "Permitted Indebtedness," as defined in the Indenture (the
least of (i), (ii), and (iii) being the "Acquisition Term Loan A Borrowing
Limit").
(b) The aggregate unpaid principal amount of the Acquisition
Term Loan B Advances outstanding at any time shall not exceed an amount equal
to the least of (i) the Acquisition Term Loan B Facility Commitment, (ii) the
Acquisition Term Loan B Borrowing Base as of such time, and (iii) the amount
that would be permitted under the Indenture pursuant to the definition of
"Permitted Indebtedness," as defined in the Indenture (the least of (i), (ii)
and (iii) being the "Acquisition Term Loan B Borrowing Limit").
(c) Subject to the limitations of Sections 4 and 5 hereof,
Borrower may borrow the Acquisition Term Loan. The portion of the Acquisition
Term Loan to be funded by each Lender shall not exceed in aggregate principal
amount at any one time outstanding, and no Lender shall have any obligation
to make its pro rata share of the Acquisition Term Loan outstanding at any
one time in the aggregate in excess of, the Acquisition Term Loan Commitment
amount set forth opposite such Lender's name on Schedule 1.1(A) hereto for the
Acquisition Term Loan Facility Commitment (for each Lender its "Acquisition
Term Commitment").
SEC. 4.3. ACQUISITION TERM NOTES. (a) The pro rata portion of
the Acquisition Term Loan Advances made by each Lender to Borrower shall be
evidenced by, and be repayable with interest in accordance with the terms of,
promissory notes issued by Borrower, in each case payable to the order of
such Lender, and in the aggregate maximum principal amount of such Lender's
Acquisition Term Commitment, in the form of Exhibit 4.3 hereto (together with
any replacement, modification, renewal or substitution thereof, individually,
an "Acquisition Term Note" and collectively, the "Acquisition Term Notes").
(a) Borrower will issue two Acquisition Term Notes to each Lender.
One Acquisition Term Note will evidence Borrower's obligation to repay
Acquisition Term Loan A Advances; the other Acquisition Term Note will
evidence Borrower's obligation to repay Acquisition Term Loan B Advances.
(i) The pro rata portion of the Acquisition Term Loan A
Advances made by each Lender to Borrower shall be evidenced by, and be
repayable with interest in accordance with the terms of, an Acquisition
Term Note issued by Borrower, in each case payable to the order of such
Lender, and in the maximum principal amount of such Lender's Acquisition
Term Commitment with respect to Acquisition Term Loan A (together with
any replacement, modification, renewal or substitution thereof,
individually, an "Acquisition Term Note A" and collectively, the
"Acquisition Term Notes A").
(ii) The pro rata portion of the Acquisition Term Loan B
Advances made by each Lender to Borrower shall be evidenced by, and be
repayable with interest in accordance with the terms of, an Acquisition
Term Note issued by Borrower, in each case payable to the order of such
Lender, and in the maximum principal amount of such Lender's Acquisition
Term Commitment with respect to Acquisition Term Loan B (together with
any replacement, modification, renewal or substitution thereof,
individually, an "Acquisition Term B Note" and collectively, the
"Acquisition Term B Notes").
(b) Each Acquisition Term Note shall be dated the Closing Date
and be duly completed, executed and delivered by Borrower.
(c) Each Lender shall endorse that portion of the amount of each
Acquisition Term Loan Advance which it has made to Borrower and the amount of
each payment or prepayment of principal thereon in the appropriate space on
the grid sheet attached to its Acquisition Term Note (or so note the same in
its records); provided, however, that the failure of any Lender to make any
such endorsement or recordation shall not in any manner affect the obligation
of Borrower to repay to such Lender the portion of the Acquisition Term Loan
Advance advanced by such Lender under the Acquisition Term Note held by such
Lender. Any such endorsement or recordation shall represent conclusive
evidence of the date and amount of such Lender's pro rata share of any
Acquisition Term Loan Advance or payment or prepayment of principal thereon,
absent manifest error.
(d) Each of the Acquisition Term Notes shall mature on the Maturity
Date (or earlier as hereinafter provided), and shall be subject to payment and
prepayment as provided in Sections 4 and 6 hereof.
SEC. 4.4 NOTICE OF BORROWING; BORROWER'S CERTIFICATE.
(a) Whenever Borrower desires to make a borrowing of an Acquisition
Term Loan Advance, it shall give the Agent, at its address designated in
Section 16.4 hereof, prior Written Notice or telephonic notice from an
Authorized Representative confirmed promptly in writing (which notice shall
be irrevocable) of its desire to make a borrowing of an Acquisition Term Loan
Advance not later than fifteen (15) Business Days prior to the proposed
borrowing date of each Acquisition Term Loan Advance. Each notice of
borrowing under this Section 4.4 shall be substantially in the form of Exhibit
4.4 hereto (each, together with each Written Notice delivered under Section
7.1(a) hereto, a "Borrower's Certificate"), shall be dated the date of such
notice (which notice shall be deemed repeated on the date of such borrowing),
and specify the date on which Borrower desires to make a borrowing of an
Acquisition Term Loan Advance (which in each instance shall be a Business Day),
the amount of such borrowing, whether such borrowing shall be a Base Rate
Advance or a Eurodollar Advance or a combination thereof, and, in the case
of the selection of a Eurodollar Advance, the proposed Interest Period
therefor. If such notice shall be with respect to a borrowing of a
Eurodollar Advance but fails to state an applicable Interest Period therefor,
then such notice shall be deemed to be a request for a one-month Interest
Period. If Borrower shall fail to state in any such notice whether such
Advance shall be a Base Rate Advance of a Eurodollar Advance, then Borrower
shall be deemed to have selected a Base Rate Advance. Subject to the other
provisions of this Agreement, Base Rate Advances and Eurodollar Advances of
more than one type may be outstanding at the same time; provided, however,
that Eurodollar Advances shall be available for election by Borrower only for
(1) advances of $1,000,000 or any integral multiple of $100,000 in excess of
$1,000,000, and (2) one, two, three and six month interest periods.
(b) Borrower shall not be permitted to select a borrowing of a
Eurodollar Advance in any Borrower's Certificate (i) to the extent such
selection would be prohibited by Section 5.6 or Section 5.7 hereof, or (ii)
if a Default or an Event of Default shall be in existence as of the date of
selection of the applicable Interest Period.
(c) Subject to satisfaction of closing conditions, proceeds of
an Acquisition Term Loan Advance received by the Agent shall be made available
to Borrower by the Agent at its Payment Office (or such other office of the
Agent in New York State as Agent may from time to time specify in writing to
the Borrower).
SEC. 4.5 TERMINATION OF ACQUISITION TERM LOAN FACILITY
COMMITMENT. Borrower shall have the right, upon not less than five (5)
Business Days' prior Written Notice to the Agent (which shall promptly notify
each Lender thereof in writing or by telephone confirmed promptly in writing),
to terminate the Acquisition Term Loan Facility Commitment; provided, however,
that any such termination of the Acquisition Term Loan Facility Commitment
shall be accompanied by prepayment in full of the Revolving Loan then
outstanding, the Term Loan then outstanding, and the Acquisition Term Loan
then outstanding, together with the payment of any unpaid fees owing with
respect to the Revolving Credit Facility Commitment, the Term Loan Facility
Commitment, or the Acquisition Term Loan Facility Commitment, any fees,
premiums, costs and charges required to be paid by Borrower pursuant to
Section 4.8 hereof, and accrued interest on the amount so prepaid to the date
of such prepayment[;provided, further that Borrower may not cancel the
Acquisition Term Loan Facility Commitment while any Letter of Credit Usage is
outstanding].
SEC. 4.6. INTEREST ON ACQUISITION TERM LOAN. Borrower shall pay
interest on the unpaid principal amount of each Acquisition Term Loan Advance
made to it which is outstanding from time to time in accordance with the
terms and conditions of Section 5 hereof.
SEC. 4.7. PRINCIPAL PAYMENTS.
(a) Principal payments, each in an amount equal to the sum of the
Quarterly Amortization Amounts, as determined from time to time, shall be
paid on the last day of March, June, September, and December of each
calendar year, commencing March 30, 2000.
(b) The Agent shall determine the "Quarterly Amortization Amount"
as of the end of each calendar year with regard to the principal amount
used and advanced under the Acquisition Term Loan during the calendar
year then ended. The Quarterly Amortization Amount for any particular
calendar year shall be the amount equal to one twenty-fourth of the
principal amount used and advanced under the Acquisition Term Loan during
the applicable calendar year (i.e., a six-year amortization, based on
quarterly payments). The amount of the Quarterly Amortization Amount,
once determined for a particular calendar year, will remain constant
until the earlier of the Maturity Date or any prepayment in full of the
Acquisition Term Loan; and the total of the principal payments due, as
provided in Section 4.7(a), shall be the sum of all Quarterly Amortization
Amounts determined by the Agent as of any date.
(c) Payments of the Quarterly Amortization Amounts shall be
applied as follows:
FIRST, to the outstanding principal of Acquisition Term
Loan B until the Acquisition Term Loan B has been paid in full, and
SECOND, to the outstanding principal of Acquisition
Term Loan A until Acquisition Term Loan A has been paid in full.
SECTION 5. TERMS AND FEES COMMON TO ALL FACILITIES
SEC. 5.1. INTEREST. (a) Interest on Eurodollar Advances. (i)
Borrower shall pay interest on the unpaid principal amount of each Eurodollar
Advance made to it under the terms of the Existing Agreement and which is
outstanding prior to the Closing Date (and, therefore, outstanding under the
Existing Agreement), on each Interest Payment Date with respect to such
Eurodollar Advance, at the date of conversion of such Eurodollar Advance (or
portion thereof) to a Base Rate Advance, at maturity of such Eurodollar
Advance and, after maturity of such Eurodollar Advance (whether by acceleration
or otherwise) upon demand, at an interest rate per annum equal during the
Interest Period for such Eurodollar Advance to the Adjusted Eurodollar Rate
for the Interest Period in effect for such Eurodollar Advance under the terms
of the Existing Agreement, plus the applicable Eurodollar Rate Margin that was
in effect with respect to such Eurodollar Advance under the terms of the
Existing Agreement. (ii) Except as provided in Section 5.1(c) hereof, Borrower
shall pay interest on the unpaid principal amount of each Eurodollar Advance
made to it after the Closing Date and which is outstanding from time to time,
on each Interest Payment Date with respect to such Eurodollar Advance, at the
date of conversion of such Eurodollar Advance (or portion thereof) to a Base
Rate Advance, at maturity of such Eurodollar Advance and, after maturity of
such Eurodollar Advance (whether by acceleration or otherwise) upon demand,
at an interest rate per annum equal during the Interest Period for such
Eurodollar Advance to the Adjusted Eurodollar Rate for the Interest Period in
effect for such Eurodollar Advance plus the Eurodollar Rate Margin.
(b) Interest on Base Rate Advances. (i) Unpaid accrued interest on
the Base Rate Advances outstanding under the Existing Agreement as of the
Closing Date of this Agreement, based on the Floating Rate as in effect under
the Existing Agreement shall be paid on December 31, 1998. (ii) Except as
provided in Section 5.1(c) hereof, Borrower shall pay interest on the unpaid
principal amount of the Base Rate Advances made to it hereunder, and, to the
extent due and payable, Additional Indebtedness incurred by it, in each case,
which is outstanding from time to time at an interest rate per annum equal to
the Floating Rate in effect from time to time. Interest on Base Rate Advances
shall be paid quarterly in arrears on the last day of each March, June,
September and December of each calendar year commencing with December 31, 1998,
upon conversion thereof to a Eurodollar Advance and at maturity (whether by
acceleration or otherwise) and thereafter on demand. Interest on Additional
Indebtedness shall be paid upon demand.
(c) Default Interest. Notwithstanding anything to the contrary
contained herein, while any Event of Default is continuing, interest on the
Base Rate Advances, Eurodollar Advances, Additional Indebtedness and interest
thereon (to the extent such interest is in default) shall be payable at a
rate per annum equal to two percentage points (2%) in excess of the rate then
otherwise applicable thereto under this Agreement (or in the case of interest
in default, otherwise applicable to the principal in respect of which such
interest accrued).
(d) Eurodollar Rate Determination. The Agent, upon determining
the Eurodollar Rate and the Adjusted Eurodollar Rate for any Interest Period,
shall promptly notify by telephone (confirmed promptly in writing) or in
writing Borrower and the Lenders of such rates. Such determination shall, in
the absence of manifest error, be conclusive and binding upon Borrower and
the Lenders.
(e) Changes in Base Rate. After each change in the Base Rate, the
Agent shall promptly notify Borrower and each Lender of the date of such change
and the new Floating Rate; provided, however, that the failure of the Agent to
so notify Borrower or any Lender shall not affect the effectiveness of such
change.
SEC. 5.2. CONVERSION OF BORROWINGS; RENEWALS. (a) Unless otherwise
prohibited under Section 5.5 or Section 5.6 hereof, Borrower may, from time to
time prior to the Maturity Date, convert (i) all or a portion of outstanding
Base Rate Advances made to Borrower to one or more Eurodollar Advances, except
as provided in Section 5.5 or 5.6 hereof, and only in aggregate amounts of
$1,000,000 or any integral multiple of $100,000 excess of $1,000,000, or (ii)
all or a portion of outstanding Eurodollar Advances made to Borrower to one
or more Base Rate Advances so long as the aggregate principal balance of the
portion of the Eurodollar Advances made to Borrower not being converted, if
any, is $1,000,000 or an integral multiple of $100,000 in excess thereof;
provided, however, that Borrower shall not be entitled to convert any Base
Rate Advance, or portion thereof, to a Eurodollar Advance or any Eurodollar
Advance, or portion thereof, to a Base Rate Advance unless all accrued
interest on the Base Rate Advance, or portion thereof, or Eurodollar Advance
or portion thereof, as the case may be, to be converted through the date of
such conversion shall have been paid in full; and provided, further, that
only six (6) Interest Periods for a Eurodollar Advance shall be in effect at
any one time. Each conversion by Borrower of any Advance or portion thereof
(other than a conversion pursuant to Section 5.5 or 5.6 hereof) shall be made
on a Business Day on at least three (3) Business Days' prior Written Notice
or telephonic notice from an Authorized Representative confirmed promptly in
writing to the Agent from Borrower. Each such notice (which notice shall be
irrevocable) shall specify (i) the date of the conversion and the amount to
be converted, (ii) the particular Advance, or portion thereof, to be converted,
and (iii) in the case of conversion of any Advance, or portion thereof, to a
Eurodollar Advance, the duration of the Interest Period for such Eurodollar
Advance. Notwithstanding the above, Borrower shall not be entitled to
convert any Advance, or portion thereof, to a Eurodollar Advance if a Default
or Event of Default shall have occurred and be continuing. Except as provided
in Section 5.5, any conversion of a Eurodollar Advance, or portion thereof, to
a Base Rate Advance shall be made only on the last day of the Interest Period
with respect to such Eurodollar Advance.
(b) Each renewal by Borrower of an outstanding Eurodollar Advance
or portion thereof shall be made on notice to the Agent given not later than
11:00 a.m. (New York time) on the third Business Day prior to the last day of
the Interest Period just ending for such Eurodollar Advance. Each notice
(which notice shall be irrevocable) by Borrower of the renewal of a Eurodollar
Advance or portion thereof, shall be in writing or by telephone from an
Authorized Representative confirmed promptly in writing and shall specify (i)
the amount of such renewal of the Eurodollar Advance or portion thereof and
(ii) the duration of the Interest Period for such renewal; provided, however,
that if Borrower fails to select the duration of any Interest Period for the
renewal of such Eurodollar Advance or portion thereof, the duration of such
Interest Period shall be one (1) month. Notwithstanding the above, Borrower
shall not be entitled to renew a Eurodollar Advance or a portion thereof, (x)
if at the time of the selection of such renewal there shall exist a Default or
an Event of Default, or (y) to the extent such renewal would be prohibited by
Section 5.5 or 5.6 hereof.
(c) Any Eurodollar Advance or portion thereof as to which the Agent
shall not have received a proper notice of conversion or renewal as provided
in Section 5.2(a) or 5.2(b) hereof or notice of payment or prepayment by 11:00
a.m. (New York time) at least three (3) Business Days prior to the last day of
the Interest Period just ending for such Eurodollar Advance shall (whether or
not any Default or Event of Default has occurred) automatically be converted
to a Base Rate Advance on the last day of the Interest Period for such
Eurodollar Advance.
SEC. 5.3. COMPUTATION OF INTEREST. Interest on all Advances and
Additional Indebtedness calculated on the basis of a rate per annum shall be
computed on the basis of actual days elapsed over a 360-day year. Any rate
of interest on the Revolving Loan, the Term Loan, the Acquisition Term Loan,
and Additional Indebtedness, which is computed on the basis of the Base Rate,
shall change when and as the Floating Rate changes.
SEC. 5.4 COLLECTIONS THROUGH LOCKBOX. Borrower shall collect daily
all receivables, cash, checks, monies, drafts and other proceeds of the
Collateral through the lockbox and collection accounts set forth in Section
12.17. Borrower shall pledge to the Agent and Lenders a lien on all deposit
and disbursement accounts and any other account maintained by Borrower at any
bank or financial institution, except for Borrower's payroll and medical
disbursement accounts.
SEC. 5.5. INCREASED COSTS. In the case of the pro rata share of
any Lender in any Eurodollar Advance, in the event of any change in conditions
or the introduction or change in any applicable law, regulation, treaty, order
or directive or condition or interpretation thereof (including, without
limitation, any request, guideline or policy whether or not having the force
of law with which such Lender must reasonably comply), including, without
limitation, Regulation D, by any authority charged with the administration
or interpretation thereof, shall occur, which:
(i) subjects such Lender or any branch or Affiliate of such
Lender to any tax, duty or other charge with respect to such share of
such Eurodollar Advance (other than Excluded Taxes); or
(ii) changes the basis of taxation of payments to any Lender
or any branch or Affiliate of such Lender of principal of and/or interest
on such share of such Eurodollar Advance and/or other fees and amounts
payable hereunder with respect thereto (other than Excluded Taxes); or
(iii) imposes, modifies or deems applicable any reserve, deposit
or similar requirement against any assets held by, deposits with or for
the account of, or loans or commitments by, an office of any Lender or any
branch or Affiliate of such Lender; or
(iv) imposes upon such Lender or any branch or Affiliate of
such Lender any other condition with respect to such share of such
Eurodollar Advance or this Agreement;
and the result of any of the foregoing is to increase the actual cost by an
amount such Lender deems to be material to such Lender or any branch or
Affiliate of such Lender of making, funding or maintaining such share of such
Eurodollar Advance hereunder (except to the extent such Lender has determined
that such amount has been already included in the determination of the
applicable Adjusted Eurodollar Rate for Eurodollar Advances), or to reduce the
amount of any payment (whether of principal, interest, or otherwise) received
or receivable by such Lender or any branch or Affiliate of such Lender, or to
require such Lender or any branch or Affiliate of such Lender to make any
payment, in each case by or in an amount which such Lender in its sole
judgment deems material, then and in any such case:
(x) such Lender shall promptly notify Borrower, the Agent
and the other Lenders in writing of the happening of such event;
(y) such Lender shall promptly deliver to Borrower, the Agent
and the other Lenders a certificate stating the change which has occurred,
or the reserve requirements or other conditions which have been imposed
on such Lender or branch or Affiliate of such Lender, or the request,
directive or requirement with which it has complied, together with the
date thereof, the amount of such increased cost, reduction or payment
and the way in which such amount has been calculated; and
(z) Borrower hereby agrees to pay such Lender within five
(5) Business Days following demand such an amount or amounts as will
compensate such Lender or its branch or Affiliate for such additional
cost, reduction or payment.
The certificate of such Lender as to the additional amounts payable pursuant
to this Section 5.5 delivered to Borrower shall in the absence of manifest
error be conclusive of the amount thereof. Each Lender agrees to use reasonable
efforts to avoid or minimize the payment by Borrower of any additional amounts
under this Section 5.5, including, without limitation, by the designation of
another branch or Affiliate of such Lender from which such Lender could make
such Lender's pro rata share of Eurodollar Advances so long as such designation
is not disadvantageous to such Lender as reasonably determined by such Lender.
The protection of this Section 5.5 shall be available to such Lender regardless
of any possible contention of invalidity or inapplicability of the law,
regulation, treaty, order, directive, interpretation or condition which has
been imposed. In the event that after Borrower shall have paid any additional
amount under this Section 5.5 a Lender shall have successfully contested such
law, regulation, treaty, order, directive, interpretation or condition, then
to the extent that such Lender does not incur any increased cost or amount
payable or reduction in an amount receivable, such Lender shall refund, on an
after-tax basis, to Borrower such additional amount.
SEC. 5.6. CHANGE IN LAW RENDERING EURODOLLAR ADVANCES UNLAWFUL.
(a) Notwithstanding anything to the contrary herein contained, in the event
that any new law, treaty, order, directive, rule or regulation or any change
in any existing law, treaty, order, directive, rule or regulation or in the
interpretation thereof by any governmental or other regulatory authority
charged with the administration thereof, makes it unlawful for any Lender to
fund any portion of a Eurodollar Advance or to give effect to its obligations
as contemplated hereby with respect to Eurodollar Advances, such Lender shall,
upon the happening of such event, notify the Agent, the other Lenders and
Borrower thereof in writing stating the reason therefor, and the obligation of
such Lender to allow conversion to or selection or renewal with respect to its
pro rata share of any Eurodollar Advance by Borrower shall, upon the happening
of such event, forthwith be suspended for the duration of such illegality and,
during such illegality, such Lender shall fund its share of all Advances as
Base Rate Advances, and there shall be no renewal of, or conversion to, any
share of such Lender in any Eurodollar Advance. If and when such illegality
ceases to exist, such suspension shall cease and such affected Lender shall
similarly notify the Agent, the other Lenders and Borrower.
(b) Notwithstanding anything to the contrary contained herein, in
the event that any new law, treaty, order, directive, rule or regulation or
any change in any existing law, treaty, order, directive, rule or regulation
or in the interpretation thereof by any governmental or other regulatory
authority charged with the administration thereof shall make it commercially
impracticable or unlawful for any Lender to continue in effect the funding of
any portion of a Eurodollar Advance previously made by it hereunder and then
outstanding, such Lender shall, upon the happening of such event, notify the
Agent, the other Lenders and Borrower thereof in writing stating the reasons
therefor, and such Lender's pro rata share of such Eurodollar Advance shall
automatically be converted to a Base Rate Advance. Borrower shall pay to the
Agent for the benefit of such Lender accrued interest owing on such converted
portion of such Eurodollar Advance made to Borrower through the date of such
conversion, together with any amounts payable under Section 5.8 hereof with
respect to such prepayment. After such notice shall have been given and until
the circumstances giving rise to such notice no longer exist, each request for
such Lender's pro rata share of a Eurodollar Advance or for conversion to or
renewal of such Lender's pro rata share of a Eurodollar Advance shall be deemed
a request by Borrower for a Base Rate Advance. If and when such
impracticability or illegality ceases to exist, such suspension shall cease
and such affected Lender shall similarly notify the Agent, the other Lenders
and Borrower.
SEC. 5.7. EURODOLLAR AVAILABILITY. (a) In the event, and on each
occasion, that on the day two (2) Business Days prior to the commencement of
any Interest Period for a Eurodollar Advance, the Agent shall have determined
in good faith (which determination shall, in the absence of manifest error,
be conclusive and binding upon Borrower) that dollar deposits in the amount of
the principal amount of such Eurodollar Advance are not generally available in
the London (England, U.K.) interbank market, or that the rate at which such
dollar deposits are being offered will not accurately reflect the cost to one
or more Lenders of making or funding the principal amount of their portions of
such Eurodollar Advance during such Interest Period, or that reasonable means
do not exist for ascertaining the Eurodollar Rate, the Agent shall, as soon as
practicable thereafter, give Written Notice or telephonic notice of such
determination to the Lenders and Borrower and any request by Borrower for a
Eurodollar Advance pursuant to Sections 2.4 or 4.4 hereof or for conversion
to or renewal of a Eurodollar Advance pursuant to Section 5.2 hereof shall
thereupon, and until the circumstances giving rise to such notice no longer
exist (as notified by the Agent to Borrower and the Lenders), be deemed a
request by Borrower for the making of or conversion to a Base Rate Advance.
(b) If, at any time, the Agent shall have determined (which
determination shall, in the absence of manifest error, be conclusive and
binding upon Borrower) that any contingency has occurred which adversely
affects the London (England, U.K.) interbank market or that any new law,
treaty, order, directive, rule or regulation or any change in any existing
law, treaty, order, directive, rule or regulation or in the interpretation
thereof or other circumstance affecting one or more Lenders, in the London
(England, U.K.) interbank market makes the funding of any portion of a
Eurodollar Advance impracticable, the Agent shall, as soon as practicable
thereafter, give Written Notice or telephonic notice of such determination to
the Lenders and Borrower and any request by Borrower for a Eurodollar Advance
pursuant to Sections 2.4 or 4.4 hereof or for conversion to or renewal of a
Eurodollar Advance pursuant to Section 5.2 hereof shall thereupon, and until
the circumstances giving rise to such notice no longer exist (as notified by
the Agent to Borrower and the Lenders), be deemed a request by Borrower for
the making of or conversion to a Base Rate Advance.
SEC. 5.8. INDEMNITIES. (a) Borrower hereby agrees to indemnify
each Lender on demand against any loss or expense which such Lender or its
branch or Affiliate may sustain or incur as a consequence of:
(i) any default in payment or prepayment of the principal
amount of any Eurodollar Advance made to it or any portion thereof or
interest accrued thereon, as and when due and payable (at the due date
thereof, by irrevocable notice of payment or prepayment, or otherwise),
(ii) the effect of the occurrence of any Event of Default
upon any Eurodollar Advance made to it,
(iii) the payment or prepayment of the principal amount of any
Eurodollar Advance made to it or any portion thereof, pursuant to Sections
2, 3, 4, or 5 hereof, or otherwise, on any day other than the last day of
an Interest Period or the payment of any interest on any Eurodollar
Advance made to it, or portion thereof, on a day other than an Interest
Payment Date for such Eurodollar Advance, or
(iv) the failure by Borrower to accept or make a borrowing of
a Eurodollar Advance or a conversion to or renewal of a Eurodollar Advance
after it has requested such borrowing, conversion or renewal,
in each case including, but not limited to, any loss or expense sustained or
incurred in liquidating or employing deposits from third parties acquired to
effect or maintain such Eurodollar Advance or any portion thereof. Each Lender
shall provide to Borrower, the Agent and the other Lenders a statement,
supported where applicable by documentary evidence, explaining the amount of
any such loss or expense it incurs, which statement shall be conclusive
absent manifest error.
(b) If any law, regulation or change in any law or regulation or in
the interpretation thereof or any ruling, decree, judgment or recommendation,
or any guideline or directive (whether or not giving the force of law) in any
case adopted, issued or effective after the Closing Date (and including in any
event all risk based capital guidelines heretofore adopted by the Comptroller
of the Currency, the Board or any other banking regulatory agency, domestic or
foreign, to the extent that any provision contained therein does not have to
be complied with as of the Closing Date), by any regulatory body, court or any
administrative or governmental authority charged or claiming to be charged
with the administration thereof, shall:
(i) impose upon, modify, require, make or deem applicable to
any one or more Lenders, or any of their Affiliates or branches, any
reserve requirement, special deposit requirement, insurance assessment
or similar requirement against or affecting the Revolving Commitment,
the Term Commitment, or the Acquisition Term Commitment of such Lender
or Lenders or such Affiliates or branches, or
(ii) impose any condition upon or cause in any manner the
addition of, any supplement to or any increase of any kind to the capital
or cost base of such Lender or Lenders, or such Affiliates or branches
thereof, for extending or maintaining the Revolving Commitment, the Term
Commitment, or the Acquisition Term Commitment of such Lender, which
results in an increase in the capital requirement supporting such
Revolving Commitment, Term Commitment, or Acquisition Term Commitment, or
(iii) impose upon, modify, require, make or deem applicable to
such Lender or Lenders or any such Affiliates or branches any capital
requirement, increased capital requirement or similar requirement, and
the result of any events referred to in clause (i), (ii) or (iii) above
shall be to (x) increase the amount of capital required or expected to
be required to be maintained by such Lender or any such Affiliate or
branch and such Lender determines that the amount of such capital
requirement is incurred by or based on such Revolving Commitment, Term
Commitment, Acquisition Term Commitment or other commitments of this
type, or (y) increase the costs or decrease the benefit in any way to
such Lender or Lenders, or any such Affiliate or branch, of extending or
maintaining such Revolving Commitment, Term Commitment or Acquisition
Term Commitment, or extending or maintaining such Lender's or Lenders'
portion of the Loans or holding any Collateral;
then, and in such event Borrower shall, on or prior to the tenth (10th)
Business Day after the giving of Written Notice of such increased costs and/or
decreased benefits to Borrower and the Agent by such Lender or Lenders (or any
such Affiliate or branch), pay to such Lender or Lenders all such additional
amounts (other than those which, in the reasonable and good faith judgment of
such Lender or Lenders, are reflected in the interest rates charged on the
Revolving Loan, the Term Loan, or the Acquisition Term Loan, as applicable,)
which in the sole good faith calculation of such Lender or Lenders are properly
allocable to the Revolving Commitment, the Term Commitment, or the Acquisition
Term Commitment of such Lender, such Lender's or Lenders' portion of the
Revolving Loan, the Term Loan, the Acquisition Term Loan, and/or the Collateral,
as the case may be, and which:
(1) in the case of events referred to in clause (i) above,
shall be sufficient to compensate it for all such increased costs and/or
decreased benefits, and/or
(2) in the case of events referred to in clauses (ii) and
(iii) above, shall be an amount equal to the reduction, as reasonably
determined by such Lender, in the after-tax rate of return on such Lender's
capital resulting from any such capital or increased capital or similar
requirement (including, without limitation, any such Lender's or Lender's
Affiliates' or branches' cost of taking action in anticipation of the
effectiveness of any event described in clause (ii) or (iii) in order to
enable such Lender, Lenders, Affiliate or branch to be in compliance
therewith upon such effectiveness), all as certified by such Lender or
Lenders in said Written Notice to Borrower. Such certification shall be
conclusive and binding on Borrower absent manifest error.
(c) Borrower hereby agrees to indemnify and hold harmless the
Agent and each Lender and their respective Affiliates, directors, officers,
agents, representatives, counsel and employees and each other Person, if any,
controlling them or any of their Affiliates within the meaning of either Section
15 of the Securities Act or Section 20(a) of the Securities Exchange Act (each
an "Indemnified Party"), from and against any and all losses, claims, damages,
costs, expenses (including reasonable counsel fees and disbursements) and
liabilities which may be incurred by or asserted against such Indemnified
Party with respect to or arising out of the commitments hereunder to make the
Advances or to issue Letters of Credit, or the financings contemplated hereby,
the other Loan Documents, the Collateral (including, without limitation, the
use thereof by any of such Persons or any other Person, the exercise by the
Agent or any Lender of rights and remedies or any power of attorney with
respect thereto, and any action or inaction of the Agent or any Lender under
any Security Document), the use of proceeds of any financial accommodations
provided hereunder, any investigation, litigation or other proceeding brought
or threatened relating to the role of any such Person or Persons in connection
with the foregoing whether or not they or any other Indemnified Party is named
as a party to any legal action or proceeding ("Claims"). Borrower will not,
however, be responsible to any Indemnified Party hereunder for any Claims to
the extent that a court having jurisdiction shall have determined by a final
judgment that any such Claim shall have arisen out of or resulted from actions
taken or omitted to be taken by such Indemnified Party which constitute the
gross negligence or willful misconduct of such Indemnified Party ("Excluded
Claims"). Further, should any of the Agent's or any of the Lenders' employees
be involved in any legal action or proceeding in connection with the
transactions contemplated hereby (other than relating to an Excluded Claim),
Borrower hereby agrees to pay to the Agent and each Lender such per diem
compensation as the Agent or such Lender shall request for each employee for
each day or portion thereof that such employee is involved in preparation and
testimony pertaining to any such legal action or proceeding. The Indemnified
Party shall give Borrower prompt Written Notice of any Claim setting forth a
description of those elements of the Claim of which such Indemnified Party
has knowledge. Borrower shall have the right at any time during which a
Claim is pending to select counsel to defend and settle any Claims so long as
in any such event Borrower shall have stated in a writing delivered to the
applicable Indemnified Party that, as between Borrower and such Indemnified
Party, Borrower is responsible to such Indemnified Party with respect to such
Claim; provided, however, that Borrower shall not be entitled to control the
defense of any Claim in the event that there are defenses available to the
Indemnified Party which are not available to Borrower. In any other case,
the Indemnified Party shall have the right to select counsel and control the
defense of any Claims; provided, however, that no Indemnified Party shall
settle any Claim as to which it is controlling the defense without the consent
of Borrower, which consent shall not be unreasonably withheld or delayed.
With respect to any Claim for which Borrower is entitled to select counsel,
each Indemnified Party shall have the right, at its expense, to participate in
the defense of such Claim. In the event that, with respect to any Claim,
more than one Indemnified Party shall be permitted hereunder to select counsel
to defend such Claim at the expense of Borrower and shall decide to do so,
then all such Indemnified Parties shall select the same counsel to defend such
Indemnified Parties with respect to such Claim; provided, however, that if any
such Indemnified Party shall in its reasonable opinion consider that the
retention of one joint counsel as aforesaid shall result in a conflict of
interest adverse to it, such Indemnified Party may, at the expense of Borrower,
select its own counsel to defend such Indemnified Party with respect to such
Claim. The Indemnified Parties and Borrower shall cooperate with each other
in all reasonable respects and their respective counsel in any investigation,
trial and defense of any such Claim and any appeal arising therefrom.
(d) If for any reason the foregoing indemnity is unavailable to
any Indemnified Party or insufficient to hold it free and harmless as
contemplated by the preceding paragraph (c), then Borrower shall contribute to
the amount paid or payable by the Indemnified Party as a result of any Claim
in such proportion as is appropriate to reflect, not only the relative benefits
received by Borrower on the one hand and such Indemnified Party on the other
hand, but also the relative fault of Borrower and such Indemnified Party, as
well as any other relevant equitable considerations.
SEC. 5.9. DISBURSEMENT. Each Advance shall be disbursed by the
Agent from the Payment Office, shall be charged, together with interest, fees
and other amounts payable by Borrower hereunder, to the account of Borrower on
the books of the Agent from time to time, and shall be payable at such office.
SEC. 5.10. AGENT'S AVAILABILITY ASSUMPTION. (a) The Agent may
assume that each Lender will make such Lender's pro rata portion of the
Advances available to the Agent on the date set forth in Sections 2.4(c) and
4.4(c) hereof, and the Agent may, in reliance upon such assumption, make
available to Borrower the amount of each requested Advance. If Lender's pro
rata portion of the Advances is not in fact made available to the Agent by such
Lender in accordance with Sections 2.4(c) and 4.4(c) hereof, then the Agent
shall be entitled to recover such amount on demand from such Lender, which
demand shall be made in a reasonably prompt manner. If such Lender does not
pay such amount forthwith upon the Agent's demand therefor, the Agent shall
promptly notify the other Lenders and Borrower, and Borrower shall pay such
amount to the Agent.
(b) The Agent shall also be entitled to recover from such Lender
or Borrower interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the Agent to Borrower
to the date such corresponding amount is recovered by the Agent, at a rate per
annum equal to (i) if paid by such Lender, the cost to the Agent of funding
such amount as notified in writing by the Agent to such Lender, or (ii) if
paid by Borrower, the applicable rate for Base Rate Advances or Eurodollar
Advances, as the case may be.
(c) In the event that any Lender shall fail to fund its pro rata
share of any Advance made pursuant to Section 7.1(c) hereof or to purchase its
letter of credit participation under Section 16.18 hereof, the Agent on behalf
of the relevant Issuing Lender shall be entitled to recover such amount on
demand from such Lender. If such Lender does not pay such amount forthwith upon
the Agent's demand therefor, the Agent shall promptly notify Borrower and the
other Lenders thereof and Borrower shall pay such amount to the Agent. The
Agent on behalf of such Issuing Lender shall also be entitled to recover from
such Lender or Borrower, as the case may be, interest on such amount in respect
of each day from the date such Advance was made or the date such purchase was
to have been made, as the case may be, to the date such amount is recovered by
the Agent, at a rate per annum equal to (i) if paid by such Lender, the cost
to the relevant Issuing Lender of the payment of the drawing under the Letter
of Credit for which the Advance was (or was to have been) made in the case of
an Advance made pursuant to Section 7.1(c) hereof or a participation under
Section 16.18 hereof, as the case may be, or (ii) if paid by Borrower, the
applicable rate for Base Rate Advances.
(d) Nothing herein shall be deemed to relieve any Lender from its
obligation to fund its pro rata share of any Advance or purchase any
participation as required hereunder, or to prejudice any rights which Borrower
may have against any Lender as a result of any default by such Lender
hereunder. No Lender shall be responsible for any default of any other Lender
in respect of any other Lender's obligation to make its pro rata share of any
Advances hereunder, nor shall the Revolving Commitment of any Lender hereunder
be increased as a result of such default of any other Lender. Each Lender shall
be obligated to the extent provided herein regardless of the failure of any
other Lender to fulfill its obligations hereunder.
SEC. 5.11. PRO RATA TREATMENT AND PAYMENTS. (a) Except as
contemplated by this Agreement, including, without limitation, Sections 2.5,
5.5, 5.6, 5.8, 6.5, 7, 16.1, 16.5, 16.13(h) and 16.14 hereof, each borrowing
by Borrower from the Lenders and each payment (including each prepayment) on
account of the principal of and interest on the Advances and fees described in
this Agreement shall be made to or by, as the case may be, each Lender
according to their respective pro rata percentage. Other than payments to be
applied to principal, payment of which is addressed in Sections 2.4(c) and
4.4(c) hereof, the Agent will distribute each payment to the Lenders promptly
following receipt thereof (and in any event on the same Business Day as the
date when received, if such payment is received at or prior to 12:00 noon
(New York time)). Unless Agent shall have received notice from Borrower prior
to the date on which any payment is due to Lenders hereunder that Borrower will
not make such payment in full, Agent may assume that Borrower has made such
payment in full to Agent on such date and Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such date or any date
thereafter an amount equal to the amount then due such Lender. If and to the
extent Borrower shall not have so made such payment in full to Agent, each
Lender shall repay to Agent forthwith on demand such amount distributed to such
Lender, together with interest thereon for each day from the date such amount
is distributed to such Lender until the date such Lender repays such amount to
Agent, at the Federal Funds Rate.
(b) Pursuant to the Concentration Account Agreement, Borrower has
agreed that all amounts deposited into the Concentration Account shall be
transferred to the Payment Office or as otherwise directed by the Agent on a
daily basis. Subject to Section 14.5 hereof, all amounts so transferred shall
be applied to the Lender Debt as mandatory prepayments thereof as follows:
first, to Base Rate Advances until all Base Rate Advances are paid in full;
and second, to the payment of all other Lender Debt that is then due and
payable until such Lender Debt is paid in full.
SEC. 5.12. SHARING OF PAYMENTS, ETC. If any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) in excess of such Lender's percentage of payments
shared pro rata by all Lenders, such Lender shall forthwith purchase from the
other Lenders such participations in the Advances made by them as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; provided, however, if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
the other Lenders shall be rescinded and each other Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment, to (ii) the
total amount so recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
recovered. Borrower agrees that any Lender purchasing a participation from
another Lender pursuant to this Section 5.12 may, to the fullest extent
permitted by law, exercise all of its rights of payment (including the right
of set-off) with respect to such participation as fully as if such Lender were
the direct creditor of Borrower in the amount of such participation.
SEC. 5.13. EXCESS OPERATING FUNDS. If, at any time and from time
to time during the term hereof, the balance of the Advances has been reduced
to zero and Borrower then has funds in its account at NBC in excess of the
aggregate face amount of all undrawn Letters of Credit ("Excess Funds"),
Borrower may, if it so elects, upon at least one (1) Business Day's notice to
Agent and NBC, invest such Excess Funds in an interest-bearing account at NBC,
or acquire with such Excess Funds certificates of deposit maturing within one
(1) year from the date of acquisition and issued by NBC.
SEC. 5.14. EURODOLLAR OFFICES. Each Lender intends to initially
fulfill its commitment with respect to such Lender's pro rata share of any
Eurodollar Advance by causing the Eurodollar Lending Office of such Lender to
make such Lender's pro rata share of such Eurodollar Advance; provided,
however, that each Lender may, at its option, fulfill such commitment by
causing another branch or an Affiliate of such Lender to make such Lender's
pro rata share of such Eurodollar Advance; and provided, further, that the
selection by such Lender of the Eurodollar Lending Office of such Lender or
any other such branch or Affiliate shall not affect the obligations of Borrower
to repay such Lender's pro rata share of the Eurodollar Advances in accordance
with the terms of this Agreement.
SEC. 5.15. TELEPHONIC NOTICE. Without in any way limiting
Borrower's obligation to confirm in writing any telephonic notice of a
borrowing, conversion or renewal, the Agent may act without liability upon the
basis of telephonic notice believed by the Agent in good faith to be from an
Authorized Representative of Borrower prior to receipt of written confirmation.
SEC. 5.16. MAXIMUM INTEREST. (a) No provision of this Agreement
or any Note shall require the payment to any Lender or permit the collection
by any Lender of interest in excess of the maximum rate permitted by any
applicable law (the "Maximum Lawful Rate").
(b) If the amount of interest computed without giving effect to
this Section 5.16 and payable on any interest payment date in respect of the
preceding interest computation period would exceed the amount of interest
computed in respect of such period at the maximum rate of interest from time
to time permitted (after taking into account all consideration which constitute
interest) by laws applicable to any Lender (such maximum rate being such
Lender's "Maximum Permissible Rate"), the amount of interest payable to such
Lender on such date in respect of such period shall be computed at such
Lender's Maximum Permissible Rate.
(c) If at any time and from time to time (i) the amount of interest
payable to any Lender on any interest payment date shall be computed at such
Lender's Maximum Permissible Rate pursuant to the preceding subsection (b) and
(ii) in respect of any subsequent interest computation period the amount of
interest otherwise payable to such Lender would be less than the amount of
interest payable to such Lender computed at such Lender's Maximum Permissible
Rate, then the amount of interest payable to such Lender in respect of such
subsequent interest computation period shall continue to be computed at such
Lender's Maximum Permissible Rate until the amount of interest payable to such
Lender shall equal the total amount of interest which would have been payable
to such Lender if the total amount of interest had been computed without giving
effect to the preceding clause (b).
SEC. 5.17. COMPOSITION AND APPLICATION OF PAYMENTS AND COLLECTIONS.
Subject to Section 14.5 hereof, Borrower does hereby irrevocably agree that
Agent shall have the continuing exclusive right to apply and reapply any and
all payments and collections at any time or times hereafter received by Agent
or Lenders against the Lender Debt, in such manner as Agent may determine.
SECTION 5.18. LIMITATION ON PERMITTED INDEBTEDNESS UNDER INDENTURE.
Notwithstanding anything to the contrary in this Agreement, and for so long as
the Indenture, in general, and, in particular, the terms and conditions of the
Indenture pertaining to Permitted Indebtedness (as such term is defined in the
Indenture) are in force and effect, then the portion of the Revolving Loan, the
Term Loan and the Acquisition Term Loan to be funded by each Lender shall not
exceed in aggregate the principal amount at any one time outstanding, and no
Lender shall have any obligation to make its pro rata share of the Revolving
Loan, the Term Loan and the Acquisition Term Loan outstanding at any one time
in the aggregate in excess of, the applicable and respective amounts that are
permitted to be outstanding pursuant to the definition of Permitted
Indebtedness, as such term is defined in the Indenture.
SECTION 6. PAYMENTS, PREPAYMENTS AND REDUCTIONS.
SEC. 6.1. MANDATORY PAYMENTS AND REDUCTIONS. (a) Except as
otherwise provided in Section 2.2(c) hereof, if at any time the sum of the
then aggregate outstanding principal amount of the Revolving Loan plus the
Letter of Credit Usage at such time shall exceed the Revolving Loan Borrowing
Limit at such time, Borrower shall immediately eliminate such excess by paying
the Revolving Loan until the Revolving Loan is paid in full and, to the extent
then necessary to eliminate any remaining excess after payment in full of the
Revolving Loan, by depositing cash in an amount equal to the remaining excess
in a cash collateral account established with the Agent as security for
outstanding Letters of Credit pursuant to agreements in form, scope and
substance satisfactory to the Agent.
(b) Borrower shall, on each date that any Credit Party receives
Gross Proceeds of an Asset Sale (other than the sale of an Excluded Property)
by any Credit Party, prepay the outstanding principal of the Advances and
unreimbursed Letters of Credit (or, if no Advance or unreimbursed Letter of
Credit is then outstanding, to provide Letter of Credit Cash Collateral until
an amount equal to the undrawn amount of all outstanding Letters of Credit has
been secured by Letter of Credit Cash Collateral, and thereafter to Borrower)
in an amount equal to 100% of the Net Proceeds of such Asset Sale (other than
the sale of an Excluded Property) of such Net Proceeds to be applied to
prepay first, the outstanding principal of the Acquisition Term Loan Advances
per Section 4.7(c), in inverse order of maturity, second, the outstanding
principal of the Term Loan Advances, in inverse order of maturity, and then to
prepay the outstanding principal of the Advances and unreimbursed Letters of
Credit (or, if no Revolving Credit Advance or unreimbursed Letter of Credit is
then outstanding, to provide Letter of Credit Cash Collateral until an amount
equal to the undrawn amount of all outstanding Letters of Credit has been
secured by Letter of Credit Cash Collateral, and thereafter to Borrower).
(c) Borrower shall, on each date that any Credit Party receives
Gross Proceeds of an Asset Sale of an Excluded Property by any Credit Party,
prepay the outstanding principal of the Revolving Credit Advances and
unreimbursed Letters of Credit (or, if no Revolving Credit Advance or
unreimbursed Letter of Credit is then outstanding, to provide Letter of Credit
Cash Collateral until an amount equal to the undrawn amount of all outstanding
Letters of Credit has been secured by Letter of Credit Cash Collateral, and
thereafter to Borrower) in an amount equal to 100% of the Net Proceeds of such
Asset Sale of an Excluded Property.
(d) All prepayments under this Section 6.1 that are to be applied
to Term Loan Advances or to Acquisition Term Loan Advances shall be made
together with accrued interest to the date of such prepayment on the principal
amount prepaid.
SEC. 6.2. PAYMENT FROM INSURANCE PROCEEDS. Not later than the
fifteenth (15th) calendar day following the receipt by the Agent or any Credit
Party or Subsidiary of any Credit Party of any proceeds of any insurance
required to be maintained pursuant to Section 12.3(a) on account of each
separate loss, damage or injury in excess of $250,000 (or, if there shall be
continuing an Event of Default, of any amount of Net Proceeds) to any
Collateral of such Credit Party or such Subsidiary, such Credit Party or
Subsidiary shall notify the Agent of such receipt in writing or by telephone
promptly confirmed in writing, and not later than the fifteenth (15th) calendar
day following receipt by the Agent or such Credit Party or Subsidiary of
$250,000 or more of such Net Proceeds (or, if there shall be continuing an
Event of Default, of any amount of Net Proceeds), there shall become due and
payable a prepayment of principal in an amount equal to such Net Proceeds.
Prepayments from such Net Proceeds shall be applied as follows:
FIRST, to the outstanding principal of Acquisition Term Loan
B, until the Acquisition Term Loan B has been paid in full,
SECOND, to the outstanding principal of Acquisition Term Loan
A, until the Acquisition Term Loan A has been paid in full,
THIRD, to the outstanding principal of the Term Loan, until
the Term Loan has been paid in full,
FOURTH, to the outstanding principal of the Revolving Loan,
until the Revolving Loan has been paid in full,
FIFTH, to repay the amount of all unreimbursed Letters of
Credit until reimbursed in full, and then to provide cash collateral (on
terms reasonably satisfactory to the Agent) for any outstanding Letters
of Credit, until there shall have been provided cash collateral equal to
the undrawn amount of all Letters of Credit (which cash collateral shall
constitute part of the Collateral), and
SIXTH, to the Credit Party or Subsidiary thereof, as the case
may be, whose property was lost, damaged or injured or whoever else shall
be legally entitled thereto. Any such prepayment on the Revolving Loan
shall be made without penalty or premium but shall be subject to payment
of any applicable indemnity obligations pursuant to Section 5.8 hereof.
SEC. 6.3. OPTIONAL PREPAYMENTS. (a) Upon not less than three (3)
Business Days' prior Written Notice to the Agent with respect to Advances
constituting Eurodollar Advances and not less than one (1) Business Day's prior
Written Notice to the Agent with respect to Advances constituting Base Rate
Advances, Borrower shall have the right from time to time to prepay in part,
without premium, fee or charge (except as provided in Section 5.8 hereof), any
Advances, so long as each such prepayment is in the amount of $1,000,000 or
an integral multiple of $100,000 in excess thereof or, if less, the then
aggregate outstanding principal balance of the Revolving Loan or the Term
Loan, as the case may be, and so long as, concurrently with the making of any
such prepayment, Borrower pays any fees, premiums, charges or costs provided
for under Section 5.8 hereof.
(b) No Eurodollar Advance or portion thereof may be prepaid under
this Section 6.3 until the last day of the Interest Period therefor. Upon the
giving of notice of prepayment, the amount therein specified to be prepaid
shall be due and payable on the date therein specified for such prepayment,
together with all accrued interest thereon to such date plus any fees,
premiums, charges or costs provided for under Section 5.8 hereof. The Agent
shall, promptly after receipt of any notice of prepayment of any Advance as
provided in this Section 6.3, notify each Lender in writing or by telephone
confirmed promptly in writing of Borrower's intention so to prepay all or part
of such Advance.
SEC. 6.4. PROCEDURES FOR PAYMENT. (a) Each payment or prepayment
hereunder and under the Notes shall be made not later than 12:00 noon (New
York City time) on the day when due in lawful money of the United States of
America to the Agent at the Payment Office in immediately available funds,
without counterclaim, offset, claim or recoupment of any kind. Each payment or
prepayment hereunder and under the Notes shall be made without setoff or
counterclaim and free and clear of, and without deduction for, any present or
future withholding or other taxes, duties or charges of any nature imposed on
such payments or prepayments by or on behalf of any government or any political
subdivision or agency thereof or therein, except for Excluded Taxes. If any
such taxes, duties or charges (other than any Excluded Taxes) are so levied or
imposed on any payment or prepayment to any Lender, Borrower will make
additional payments in such amounts as may be necessary so that the net amount
received by such Lender, after withholding or deduction for or on account of
all taxes, duties or charges, including deductions applicable to additional
sums payable under this Section 6.4(a) (other than Excluded Taxes), will be
equal to the amount provided for herein or in such Lender's Note or Notes.
Whenever any taxes, duties or charges (other than Excluded Taxes) are payable
by Borrower with respect to any payments or prepayments hereunder or under any
of the Notes, Borrower shall furnish promptly to the Agent for the account of
the applicable Lender official receipts (to the extent that the relevant
governmental authority delivers such receipts) evidencing payment of any such
taxes, duties or charges so withheld or deducted. If Borrower fails to pay any
such taxes, duties or charges when due to the appropriate taxing authority or
fails to remit to the Agent for the account of the applicable Lender the
required receipts evidencing payment of any such taxes, duties or charges so
withheld or deducted, Borrower shall indemnify the affected Lender for any
incremental taxes, duties, charges, interest or penalties that may become
payable by such Lender as a result of any such failure.
(b) (i) Each Lender organized under the laws of a jurisdiction
outside of the United States (a "Foreign Lender") shall provide to
Borrower and the Agent a properly completed and executed Internal Revenue
Service Form 4224 or Form 1001 or other applicable form, certificate or
document prescribed by the Internal Revenue Service of the United States
certifying as to such Foreign Lender's entitlement to complete exemption
from United States withholding tax (a "Certificate of Exemption"). Each
Foreign Lender, if a party to this Agreement on the Closing Date, shall
provide such a Certificate of Exemption on or before the Closing Date
and, assuming that it is proper, under then existing United States
withholding tax statutes and applicable tax treaties, to issue such
Certificate of Exemption from time to time thereafter upon the reasonable
request of Borrower or the Agent. Each Foreign Lender that becomes a
Lender pursuant to Section 16.14 or 16.15 hereof after the Closing Date
shall provide a Certificate of Exemption on or before the date such
Foreign Lender becomes a Lender and, assuming that it is proper, under
then-existing United States withholding tax statutes and applicable tax
treaties, to issue such Certificate of Exemption from time to time
thereafter upon the reasonable request of Borrower or the Agent.
(ii) Each Foreign Lender shall provide to Borrower (x) in the
case of a Foreign Lender which is a party to this Agreement on the Closing
Date, on or before the Closing Date, and (y) in the case of a Foreign
Lender that becomes a Lender pursuant to Section 16.14 or 16.15 hereof,
on or before such Foreign Lender becomes a Lender, a statement describing
all taxes, duties or charges that are in effect and applicable on the
Closing Date or the date that such Foreign Lender becomes a Lender
hereunder, as the case may be, with respect to which Borrower would be
required to make additional payments to such Foreign Lender under the
third sentence of Section 6.4(a) hereof.
(iii) Within thirty (30) days after the written reasonable
request of Borrower, each Foreign Lender shall execute and deliver to
Borrower such certificates, forms or other documents which can be
furnished consistent with the facts and which are reasonably necessary
to assist Borrower in applying for refunds of taxes paid by Borrower
hereunder or making payment of taxes hereunder; provided, however, that
no Foreign Lender shall be required to furnish to Borrower any financial
information with respect to itself or other information which it
considers confidential.
(iv) If a Foreign Lender that originally provided a Certificate
of Exemption indicating that such Foreign Lender was exempt from United
States withholding tax thereafter ceases to qualify for such exemption,
Borrower shall have the right to require such Foreign Lender to assign
its Revolving Commitment, its Term Commitment and its pro rata share of
the Advances (including its pro rata share of the interest accrued
thereon) to one or more banks or financial institutions identified by
Borrower at a purchase price equal to the principal of and accrued but
unpaid interest and fees (to the date of purchase) on such Foreign
Lender's pro rata share of the Advances.
(c) Notwithstanding anything contained in Section 6.1(b) or 6.2
hereof, the Agent shall not, to the extent requested in writing by Borrower,
apply any mandatory prepayment under such Sections to any portion of the
Revolving Loan, the Term Loan, or the Acquisition Term Loan which constitutes
a Eurodollar Advance until the last day of the respective Interest Period
therefor or the earlier maturity of such portion of such Revolving Loan, such
Term Loan, or such Acquisition Term Loan, as the case may be, by acceleration
or otherwise, such mandatory prepayment, until it can be so applied, to be
applied to the prepayment of such portion of the Loan comprising Base Rate
Advances. If there shall remain any portion of such mandatory prepayment
after payment in full of such portion of the Revolving Loan, the Term Loan,
or the Acquisition Term Loan constituting Base Rate Advances, then until such
remaining portion of the mandatory prepayment can be applied to the Eurodollar
Advances as aforesaid, such remaining portion of such mandatory prepayment
shall be invested and reinvested by and in the name of the Agent in investments
of the type permitted under Section 13.4(b) hereof with the type and maturity
of such investments to be mutually agreed to by the Agent and Borrower. All
interest earned on such investments shall be for the account and risk of
Borrower. Interest earned on any portion of principal applied to a Eurodollar
Advance shall be, so long as no Default or Event of Default shall have
occurred and be continuing, and to the extent received by the Agent, turned
over to Borrower promptly following application of such principal to such
Eurodollar Advance. As additional collateral security for the Lender Debt,
Borrower hereby grants to the Agent a security interest in (i) any such
mandatory prepayments and any investments thereof, including, without
limitation, any certificates or instruments evidencing any such investments,
and all claims and chooses in action in respect of the foregoing, (ii) any
interest or other payment made in respect of such investments and (iii) any
and all proceeds of any of the above and all claims and causes in action in
respect of the foregoing (all of the foregoing constituting part of the
Collateral). To the extent the Agent makes any such investments, Borrower
hereby authorizes the Agent to hold any certificate or instrument evidencing
such investments.
SEC. 6.5. COMMITMENT FEES.
(a) Borrower shall pay to the Agent for the account of the Lenders
a fee which shall accrue from and after the Closing Date until the date of the
expiration, termination or cancellation of the Revolving Credit Facility
Commitment payable quarterly in arrears beginning on December 31, 1998, and
on each December 31, March 31, June 30 and September 30 occurring thereafter
(and on the date of maturity or earlier expiration, termination or cancellation
of the Revolving Credit Facility Commitment), of three-eighths of one percent
per annum (0.375%) on the amount by which the Revolving Credit Facility
Commitment (as such amount may be reduced upon any permanent reduction in the
Revolving Credit Facility Commitment) exceeds the aggregate outstanding
principal amount of the Revolving Loan (plus the Letter of Credit Usage)
(calculated daily).
(b) Borrower shall pay to the Agent for the account of the Lenders
a fee which shall accrue from and after the Closing Date until the date of the
expiration, termination or cancellation of the Acquisition Term Loan A Facility
commitment, payable quarterly in arrears beginning on March 31, 1999, and on
each December 31, March 31, June 30 and September 30 occurring thereafter (and
on the date of maturity or earlier expiration, termination or cancellation of
the Acquisition Term Loan A Facility Commitment), of three-eighths of one
percent (0.375%) per annum on the amount by which the Acquisition Term Loan A
Facility Commitment (as such amount may be reduced upon any permanent reduction
in the Acquisition Term Loan A Facility Commitment) exceeds the aggregate
outstanding principal amount of the Acquisition Term Loan A Loan (calculated
daily).
SEC. 6.6. AGENCY FEE. Quarterly in advance on the first Business
Day of each calendar quarter, commencing on January 3, 1999 (which is the
first Business Day of the calendar quarter immediately following the Closing
Date), so long as any Advance, any portion of the Revolving Credit Facility
Commitment, any Letter of Credit or, any portion of the Acquisition Term Loan
Facility Commitment remains outstanding, Borrower shall pay to the Agent for
its own account an agency fee of $10,000 per quarter. Borrower will not be
entitled to a credit to the agency fee for the pro-rata portion of the
unexpired period of the existing period for which the agency fee was paid
under the Existing Agreement.
SEC. 6.7. CLOSING FEE. Borrower shall pay to the Agent for the
account of the Lenders, a closing fee equal to One Hundred Twenty-Five
Thousand Dollars ($125,000).
SEC. 6.8. PREPAYMENTS TO INCLUDE INTEREST. All prepayments
pursuant to this Section 6, except optional prepayments on Advances, shall be
made together with accrued interest to the date of such prepayment on the
principal amount prepaid.
SECTION 7. LETTERS OF CREDIT.
SEC. 7.1. LETTERS OF CREDIT. (a) Borrower may request, subject to
the terms and conditions herein set forth (including, without limitation, the
conditions set forth in Section 10 hereof and the definitions contained in
Section 1 hereof), from time to time prior to the termination of the Revolving
Credit Facility Commitment and upon five (5) Business Days' Written Notice
(which Written Notice shall be deemed repeated on the date of issuance of each
Letter of Credit issued in response thereto), that NBC (or any other Lender
approved by NBC) issue, and NBC (or any such other Lender) shall, subject to
such conditions, issue (each such Lender, upon issuance of a Letter of Credit,
being an "Issuing Lender" in respect of such Letter of Credit) Letters of
Credit; provided, however, that (i) the aggregate undrawn amount of all Letters
of Credit at any time outstanding, together with the amount of unreimbursed
drawings thereunder, shall not exceed the Letter of Credit Sublimit; and (ii)
the aggregate undrawn amount of all Letters of Credit at any time outstanding,
together with the amount of unreimbursed drawings thereunder and the then
aggregate unpaid principal amount of the Revolving Loan, shall not exceed the
Revolving Loan Borrowing Limit; provided, further, that in no event shall NBC
or any other Lender issue any Letter of Credit if the sum of the original
undrawn amount thereof (less amounts in respect of which any Lender is
obligated to NBC or such other Lender under Section 16.18 hereof), plus the
aggregate undrawn and unreimbursed amounts immediately prior to the time of
such issuance of all other Letters of Credit issued by such Lender (less
amounts in respect of which any Lender is obligated to NBC or such other Lender
under Section 16.18 hereof) plus such Lender's pro rata portion of the
aggregate unpaid principal amount of the Revolving Loan, exceeds such Lender's
Revolving Commitment. For purposes of determining the aggregate amount of
undrawn and unreimbursed Letters of Credit as at any date, the undrawn and
unreimbursed amounts under Letters of Credit that are denominated in foreign
currency shall be converted into U.S. Dollars at the rate of exchange for
cable transfers (as determined by the Agent) in effect on the date of
determination.
(b) Each Letter of Credit shall be a standby Letter of Credit
or a documentary Letter of Credit, shall be in form, scope and substance
satisfactory to the Agent, and shall be issued pursuant to a Letter of Credit
Agreement. Each Letter of Credit that is a standby Letter of Credit shall
expire no later than the earlier of (i) the Maturity Date and (ii) the date
one year following the date of issuance thereof. Each Letter of Credit that
is a documentary Letter of Credit shall expire no later than the earlier of
the Maturity Date and the date ninety (90) days following the date of
issuance thereof.
(c) Borrower shall reimburse the Issuing Lender of each Letter of
Credit issued hereunder for any draft paid under such Letter of Credit within
one (1) Business Day following the date of such payment. Borrower shall, to
the extent of availability under the Revolving Credit Facility Commitment,
effect such payment with the proceeds of a Revolving Credit Advance (which
shall be entirely a Base Rate Advance) made to Borrower in the amount of such
payment (whether or not any request therefor has been made by Borrower), which
Revolving Credit Advance shall at such time be made and applied to payment of
reimbursement of such drawing without any notice by or consent of Borrower
(except that no such Revolving Credit Advance shall be required to be made by
the Lenders to the extent prevented by applicable law or following any Event
of Default of the type described in Section 14.1(f) or 14.1(g) hereof), and
shall be repayable, together with interest thereon, in accordance with the
provisions of Section 2 hereof. The Issuing Lender shall promptly notify the
Agent, the other Lenders and Borrower in writing or by telephone confirmed
promptly in writing of any such drawing under a Letter of Credit and the making
of such Revolving Credit Advance. Any payments by an Issuing Lender of drawings
under any Letter of Credit in foreign currency shall be reimbursed by Borrower
in U.S. Dollars at the rate of exchange for cable transfers in effect on the
date of payment by such Issuing Lender.
(d) Notwithstanding anything contained in Section 7.1(c) hereof,
the obligation of Borrower to reimburse a drawing under a Letter of Credit
shall not be affected or impaired by any failure of any Lender to fund a
Revolving Credit Advance under Section 7.1(c) hereof unless Borrower shall have
satisfied all conditions to the making of such Revolving Credit Advance (other
than notice requirements and the delivery of a Borrower's
Certificate).
(e) Upon not less than one (1) Business Day's prior Written Notice
to the Agent, the Borrower may terminate or cause to be terminated any Letter
of Credit, provided that the Borrower has obtained the prior written consent
of each beneficiary of such Letter of Credit to such termination.
(f) The face amounts of issued and outstanding documentary and
standby letters of credit issued for the account of Borrower shall be 100%
reserved against availability on the Revolving Loan Borrowing Limit.
SEC. 7.2. LETTER OF CREDIT FEES. Borrower shall pay to Agent, for
the account of Lenders, a fee on the average face amount of each standby and
documentary Letter of Credit issued by an Issuing Lender in an amount equal to
the applicable Letter of Credit Fee, payable quarterly in advance on the first
Business Day of each calendar quarter. In addition, Borrower shall pay to each
Issuing Lender, in respect of each standby and documentary Letter of Credit
issued by such Issuing Lender hereunder, on demand, all standard fees and other
charges charged by such Issuing Lender with respect to the issuance and
maintenance of any Letter of Credit including, without limitation, in the case
of each standby Letter of Credit, an amount equal to one-fourth of one percent
(0.25%) of the face amount of such standby Letter of Credit.
SEC. 7.3. INDEMNITY. Borrower agrees to indemnify each Issuing
Lender, each of its correspondents, and the Lenders and hold them harmless from
and against any and all claims, damages, losses, liabilities, costs and
expenses whatsoever which they may incur or suffer by reason of or in
connection with the execution and delivery or assignment of or payment or
presentation under or in respect of any Letter of Credit issued by such
Issuing Lender or any action taken or omitted to be taken with respect to any
Letter of Credit issued by such Issuing Lender, except only if, and to the
extent that, any such claims, damages, losses, liabilities, costs or expenses
shall be caused by the willful misconduct or gross negligence of such Issuing
Lender or such correspondent in making payment against any draft presented
under any Letter of Credit which does not substantially comply with the terms
thereof, or in failing to make payment against any such draft which strictly
complies with the terms of such Letter of Credit, it being understood that (a)
in making such payment, such Issuing Lender's or such correspondent's exclusive
reliance in good faith on the documents presented to and believed to be
genuine by it in accordance with the terms of such Letter of Credit as to any
and all matters set forth therein, including, without limitation, reliance in
good faith on any affidavit presented pursuant to such Letter of Credit and
on the amount of any sight draft presented pursuant to any Letter of Credit,
whether or not any statement or any other document presented pursuant to such
Letter of Credit proves to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein proves to be untrue or inaccurate in any
respect whatsoever, and (b) any such noncompliance in a non-material respect
shall, in each case, not be deemed willful misconduct or gross negligence of
such Issuing Lender or such correspondent. Upon demand by any Issuing Lender,
such correspondent or any Lender at any time, Borrower shall reimburse such
Issuing Lender, such correspondent or such Lender for any legal or other
expenses incurred in connection with investigating or defending against any
of the foregoing, except if the same is due to such Issuing Lender's or such
correspondent's gross negligence or willful misconduct as aforesaid. The
indemnities contained herein shall survive the expiration or termination of
the Letters of Credit and this Agreement and shall be payable upon demand.
SEC. 7.4. REIMBURSEMENT OF CERTAIN COSTS. (a) Unless at the time
prohibited by an order of a court of competent jurisdiction, the obligations
of Borrower hereunder with regard to Letters of Credit are absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which Borrower may have against any Person,
including, without limitation, the beneficiary of such Letter of Credit and
any Issuing Lender, and all sums payable by Borrower hereunder with respect
to any such Letter of Credit, whether of principal, interest, fees, expenses
or otherwise, shall be paid in full, without any deduction or withholding
whatsoever. In the event that Borrower is compelled by applicable law to make
any such deduction or withholding, then, unless prohibited by applicable law,
it shall pay to each Issuing Lender such additional amount as will result in
the receipt by each Issuing Lender of a net sum equal to the sum it would have
received if no such deduction or withholding had been required to be made.
(b) In the event that any change in conditions or the adoption of
any law, regulation or directive or any change in applicable law, regulation
or directive, or interpretation thereof (including any request, guideline or
policy whether or not having the force of law and including, without limitation,
Regulation D promulgated by the Board as now and from time to time hereafter
in effect) by any authority charged with the administration or interpretation
thereof, occurs which:
(i) subjects any Issuing Lender to any tax with respect to any amount
paid or to be paid by such Issuing Lender as the issuer of any Letter of
Credit (other than any Excluded Tax) or its commitment under any Letter
of Credit; or
(ii) changes the basis of taxation of payments to any Issuing Lender
with respect to any Letter of Credit or such commitment (other than any
Excluded Tax); or
(iii) imposes, modifies, requires, makes or deems applicable any
reserve, deposit, insurance assessment or similar requirements against
any assets held by, deposits with or for the account of, or loans or
commitments by, an office of any Issuing Lender in connection with
payments by such Issuing Lender under any Letter of Credit or commitments
under any Letter of Credit; or
(iv) imposes any condition upon or causes in any manner the addition
of any supplement to or an increase of any kind to any Issuing Lender's
capital or cost base for issuing any Letter of Credit which results in
an increase in the capital requirement supporting such Letter of Credit; or
(v) imposes, modifies, requires, makes or deems applicable to any
Issuing Lender any capital requirement, increased capital requirement or
similar requirement such as, without limitation, the deeming of any Letter
of Credit to be an asset held by such Issuing Lender for capital
calculation or other purposes;
and the result of any of the foregoing is to reduce the after-tax rate of
return on such Issuing Lender's capital, increase the cost to any Issuing
Lender of making any payment under, or maintaining its commitment under, any
Letter of Credit, or to reduce the amount of any payment (whether of principal,
interest or otherwise) or benefit received or receivable by such Issuing Lender
with respect to any Letter of Credit or to require such Issuing Lender to make
any payment on or calculated by reference to the gross amount of any sum
received by it with respect to any Letter of Credit, in each case by an amount
which such Issuing Lender in its sole judgment deems material (including,
without limitation, such Issuing Lender's cost of taking action in anticipation
of the effectiveness of any event referred to above in order to enable such
Issuing Lender to be in compliance therewith upon effectiveness), then and in
any such case:
(x) such Issuing Lender shall promptly notify Borrower, the
Agent and the other Lenders in writing of the happening of such event;
(y) such Issuing Lender shall promptly deliver to Borrower, the
Agent and the other Lenders a certificate stating the change which has
occurred or the reserve requirements or other conditions which have been
imposed on such Issuing Lender or the request, directive or requirement
with which it has complied, together with the date thereof and the amount
of such increased cost, reduction or payment; and
(z) Borrower shall pay to such Issuing Lender, upon demand, after
delivery of the notice referred to in clause (x) above, such amount or
amounts as will compensate for such additional cost, reduction or payment,
to the extent permitted by law.
A certificate delivered by an Issuing Lender pursuant to clause (y) above as
to the additional amounts payable pursuant to this paragraph shall, in the
absence of manifest error, be conclusive evidence of the amount thereof. The
protection of this Section 7.4 shall be available to each Issuing Lender
regardless of any possible contention of invalidity or inapplicability of the
law, regulation, directive or condition which has been imposed. In the event
that after Borrower shall have paid any additional amount under this Section
7.4 with respect to any Letter of Credit, an Issuing Lender shall have
successfully contested such law, regulation, treaty, directive or condition
then, to the extent that such Issuing Lender does not incur any increased cost
or reduction in payment (as to which such Issuing Lender is entitled to
indemnification hereunder) with respect to any Letter of Credit for which
Borrower has paid such additional amount, such Issuing Lender shall refund,
on an after-tax basis, to Borrower such additional amount.
SEC. 7.5. PAYMENT OF DRAFTS. Delivery to the Agent, any Issuing
Lender or their correspondents of any documents purporting to comply with the
requirements of any Letter of Credit shall be sufficient evidence of the
validity, genuineness, and sufficiency thereof and of the good faith and
proper performance of the drawers and/or users of any Letter of Credit, their
agents and assignees, and the Agent, such Issuing Lender and their
correspondents may rely and act thereon without liability or responsibility
with respect thereto or with respect to the correctness or condition of any
shipment of merchandise to which the same may relate. Upon receipt by the Agent
or any Issuing Lender of written approval thereof from Borrower, the Agent or
any such Issuing Lender, as the case may be, may (but shall not be required to)
accept or pay overdrafts or irregular drafts or drafts with irregular documents
attached or with respect to which time limits have been extended, and no such
acceptance or payment shall impair any rights of the Agent or any Issuing
Lender under this Agreement. In case of any variation between the documents
called for by any Letter of Credit and the documents accepted by the Agent,
an Issuing Lender or their correspondents, Borrower shall be conclusively
deemed to have waived any right to object to such variation with respect to any
action of the Agent, such Issuing Lender or such correspondents relating to
such documents and to have ratified and approved such action as having been
taken on the direction of Borrower, unless Borrower within ten (10) Business
Days of the receipt of such documents or acquisition of knowledge of such
variation files an objection with the Agent or such Issuing Lender in writing.
No Issuing Lender (nor the Agent) shall be liable for any delay in giving, or
failing to give, notice of the arrival of any goods or any other notice, or
for any error, neglect or default of any of its correspondents; nor shall any
Issuing Lender (or the Agent) be responsible for the non-fulfillment of any
requirement of any Letter of Credit that (a) drafts bear appropriate reference
to any Letter of Credit, (b) the amount of any draft be noted on the reverse
of any Letter of Credit, (c) any Letter of Credit be surrendered or taken up
or (d) documents be forwarded apart from any drafts; and the Agent, each
Issuing Lender and their correspondents may, if they see fit, waive any such
requirements.
SEC. 7.6. ISSUING LENDER'S ACTIONS. Any Letter of Credit may, in
the discretion of the Issuing Lender thereof or such Issuing Lender's
correspondents, be interpreted by it or any such correspondent (to the extent
not inconsistent with such Letter of Credit) in accordance with the Uniform
Customs and Practice for Documentary Credits of the International Chamber of
Commerce, as adopted or amended from time to time, or any other rules,
regulations and customs prevailing at the place where any Letter of Credit is
available or the drafts are drawn or negotiated. An Issuing Lender and its
correspondents may accept and act upon the name, signature or act of any party
purporting to be the executor, administrator, receiver, trustee in bankruptcy
or other legal representative of any party designated in any Letter of Credit
issued by such Issuing Lender in the place of the name, signature or act of
such party.
SECTION 8. SECURITY AND GUARANTY.
As security for the full and timely payment and performance of the
Lender Debt, whether now existing or hereafter arising, subject, however, to
the provisions of Section 8.8 hereof:
SEC. 8.1. SECURITY AGREEMENTS. (a) Each of the Credit Parties shall
duly execute and deliver to the Agent one or more security agreements, pledges
or assignments, substantially in the form of Exhibit 8.1 hereto (each as
amended, supplemented or otherwise modified from time to time in accordance
with its terms, a "Security Agreement" and, together with the Mortgages, the
Collection Account Agreements, the Concentration Account Agreement, the Lock-
Box Agreements, and any other agreement now existing or hereafter created
providing collateral security for the payment or performance of any Lender
Debt, in each case, as amended, modified or supplemented from time to time,
collectively referred to as the "Security Documents"), and all consents of
third parties necessary to permit the effective granting of the Liens created
in such security agreements, in form and substance satisfactory to the Agent,
as may be required by the Agent to grant to the Agent for the benefit of the
Agent and the Lenders, except to the extent otherwise permitted under Section
13.2 hereof, a valid, perfected and enforceable first priority lien on and
security interest in all present and future Collateral, including but not
limited to, Inventory, accounts (to the extent arising from the sale or lease
of Inventory or the providing of services) ("Pledged Accounts"), in each case,
of such Credit Party or such Credit Party's Subsidiaries, wherever located,
and all proceeds thereof, and a valid perfected second priority security
interest in all cash registers and scanning systems, and all books and records,
including, without limitation, computer records, disks, tapes and other media
in which any information relating to Inventory, inventory control systems or
such accounts is stored or recorded and all computer software, management
information systems and other systems and copies of every kind thereof
relating to Inventory, inventory controls or such accounts and all customer
lists ("Records and Other Property"), in each case, of such Credit Party or
such Credit Party's Subsidiaries, wherever located, and all proceeds thereof,
in each case to the extent a Lien therein is granted in such Security
Documents, together with:
(i) evidence of the completion of all recordings and filings
of or with respect to the Security Documents that the Agent may deem
necessary or desirable in order to perfect and protect the Liens created
thereby,
(ii) evidence of the insurance required by the terms of any
Security Document,
(iii) copies of each assigned agreement, if any, referred to
in any Security Document, together with a consent to such assignment in
form and substance satisfactory to the Lenders, duly executed by each
party to such assigned agreements other than Borrower, and
(iv) evidence that all other action that the Agent may deem
necessary or desirable in order to perfect and protect the Liens created
by the Security Documents has been taken.
(b) The Agent shall have received acknowledgment copies or stamped
receipt copies of proper financing statements, duly filed on or before the
day of the initial borrowing hereunder under the UCC of all jurisdictions that
the Agent may deem necessary or desirable in order to perfect and protect the
Liens created by the Security Documents, covering the collateral described in
the Security Documents.
SEC. 8.2. MORTGAGES. (a) Each of the Credit Parties shall duly
execute and deliver to the Agent one or more mortgages or deeds of trust, as
appropriate for the applicable jurisdiction in which the real property
encumbered thereby is located, substantially in the form of Exhibit 8.2
hereto (each as amended, supplemented or otherwise modified from time to time
in accordance with its terms, a "Mortgage" and, as amended, modified or
supplemented from time to time, collectively referred to as the "Mortgages"),
and all consents of third parties necessary to permit the effective granting
of the Liens created in such mortgages and deeds of trust, in form and
substance satisfactory to the Agent, as may be required by the Agent to grant
to the Agent for the benefit of the Agent and the Lenders, except to the
extent otherwise permitted under Section 13.2 hereof, a valid, perfected and
enforceable first priority lien on and security interest in all present and
future Real Property of such Credit Party or such Credit Party's Subsidiaries,
wherever located, and all proceeds thereof, together with:
(i) evidence of the insurance required by the terms of any
Mortgage,
(ii) copies of each assigned agreement, if any, referred to
in any Mortgage, together with a consent to such assignment in form and
substance satisfactory to the Lenders, duly executed by each party to
such assigned agreements other than Borrower, and
(iii) evidence that all other action that the Agent may deem
necessary or desirable in order to perfect and protect the Liens created
by the Mortgages has been taken.
(b) Each of the Credit Parties shall provide, at the Credit
Parties' expense, such additional documentation as the Agent and the Lenders'
would ordinarily require in connection with real estate collateral, including
without limitation, the following for each parcel of Real Property owned by
a Credit Party (other than Excluded Properties): (i) an appraisal performed
in accordance with applicable law; (ii) a mortgagee's policy of title
insurance naming Agent for the benefit of the Lenders as insured; (iii) an
environmental audit or such other due diligence or investigation as may be
acceptable to the Agent and Lenders; and (iv) additionally with respect to
all Real Properties (other than Excluded Properties), whether owned or leased
by a Credit Party, such other certificates, consents, estoppel letters and
third party documents as the Agent and Lenders may request.
SEC. 8.3. FILING AND RECORDING. (a) Borrower shall, at its cost
and expense (except where otherwise prohibited by applicable law), cause all
instruments and documents given as security pursuant to this Agreement to be
duly recorded and/or filed or otherwise perfected in all places necessary, in
the opinion of the Agent, to perfect and protect the Lien of the Agent in the
property covered thereby.
(b) Each of the Credit Parties hereby authorizes the Agent to
file one or more financing statements or continuation statements or amendments
thereto or assignments thereof in respect of any Lien created pursuant to this
Agreement and the Security Documents which may at any time be required or
which, in the opinion of the Agent, may at any time be desirable without the
signature of such Credit Party where permitted by law.
(c) In the event that any re-recording or refiling of any
financing statement (or the filing of any statements of continuation or
amendment or assignment of any financing statement) or Mortgage is required
to protect and preserve such Lien, Borrower shall, at its cost and expense,
cause the same to be recorded and/or refiled at the time and in the manner
requested by the Agent (except where otherwise prohibited by applicable law).
SEC. 8.4. INTERPRETATION OF SECURITY DOCUMENTS AND MORTGAGES. In
the case of any conflict between the terms and provisions of a Security
Document and this Agreement, the terms and provisions of this Agreement shall
control, unless the terms of such Security Document expressly provide
otherwise.
SEC. 8.5. GUARANTEES. (a) On or prior to the Closing Date, Parent
and each Subsidiary of Borrower in existence on the Closing Date shall execute
and deliver to the Agent an amended and restated guaranty, substantially in
the form of Exhibit 8.5 hereto, of all present and future Lender Debt.
Parent's obligations under the guaranty will be secured by a pledge of 100%
of the issued and outstanding capital stock of Borrower.
(b) Upon the formation or acquisition, after the Closing Date, of
any Subsidiary of Borrower, such Subsidiary shall execute and deliver to the
Agent a guaranty, substantially in the form of Exhibit 8.5 hereto, of all then
existing or thereafter incurred Lender Debt. Nothing contained in this Section
8.5 shall permit Borrower or any Subsidiary thereof to form or acquire any
Subsidiary which is otherwise prohibited by this Agreement.
SEC. 8.6. RELEASE OF MORTGAGES. Upon any full and final payment
of the Term Loan arising from a re-financing of the Term Loan, the Agent and
the Lenders will release the Liens on the Real Properties, so long as
satisfactory third-party agreements covering each of the Real Properties (e.g.,
landlord's waivers, mortgagee waivers, etc.) have been delivered to the Agent
and no Default or Event of Default has occurred and is continuing at the time
of such payment. If Borrower repays the Term Loan in the ordinary course of
payments and pre-payments with Borrower's own assets, exclusive of sources
other than a re-financing of the Term Loan, then the Liens on the Real
Properties will remain in favor of the Agent and the Lenders. Nothing in this
Section 8.6 shall be construed to modify or waive the provisions of Section
13.3 of this Agreement; and any re-financing of the Term Loan, along with any
obligation of the Agent and the Lenders to release the Liens on any of the
Real Properties, will be subject to compliance with the other provisions of
this Agreement, in general, and Section 13, in particular.
SEC. 8.7. POWER OF ATTORNEY. Borrower hereby appoints the Agent
or any other Person whom the Agent may designate as Borrower's attorney, with
power to: (i) endorse Borrower's name on any checks, notes, acceptances, money
orders, drafts or other forms of payment or security that may come into the
Agent's or any Lender's possession; (ii) sign Borrower's name on any invoice
or xxxx of lading relating to any Receivables and drafts against customers;
(iii) verify the validity, amount or any other matter relating to any
Receivable by mail, telephone, telegraph or otherwise with account debtors;
(iv) do all things necessary to carry out this Agreement and any Security
Documents; and (v) on or after the occurrence and during the continuation of
an Event of Default, notify the post office authorities to change the address
for delivery of Borrower's mail to an address designated by the Agent, and
to receive, open and dispose of all mail addressed to Borrower. Borrower
hereby ratifies and approves all acts of the attorney. Neither the Agent nor
the attorney will be liable for any acts or omissions or for any error of
judgment or mistake of fact or law. This power, being coupled with an interest,
is irrevocable so long as any Receivable which is assigned to the Bank or in
which the Bank has a security interest remains unpaid and until the Lender
Debt has been fully satisfied.
SEC. 8.8. LIMITATION ON LENDER DEBT SECURED BY SECURITY DOCUMENTS.
Notwithstanding anything to the contrary contained in this Agreement or in the
Security Documents, and so long as the Indenture, in general, and the
provisions of the Indenture which limit indebtedness securing "Purchase Money
Obligations" (as such term is defined in the Indenture), in particular, are
and remain in force and effect, then (a) the Liens on Collateral that secure
the Acquisition Term Loan B Facility shall secure only the Acquisition Term
Loan B Facility, and (b) the Liens on the Collateral that Borrower did not
acquire with proceeds of an Acquisition Term Loan B Advance, which secure or
purport to secure all of the Lender Debt, shall secure the Lender Debt
exclusive of the Acquisition Term Loan B.
SECTION 9. CONDITIONS PRECEDENT TO INITIAL BORROWING AND ISSUANCE
OF LETTERS OF CREDIT.
No Advance shall be made and no Letter of Credit shall be issued
hereunder until the fulfillment (or waiver in writing by the Required Lenders)
of the following conditions precedent on or prior to the Closing Date:
SEC. 9.1. OPINIONS OF COUNSEL. The Agent shall have received on
or before the day of such initial borrowing, from Messrs. Xxxxx & Xxxxxxx, a
professional corporation, special counsel to the Credit Parties, in sufficient
copies for each Lender, opinions addressed to the Lenders and the Agent and
dated the Closing Date, substantially in the form of Exhibit 9.1 hereto.
SEC. 9.2. AUDIT RESULTS. The Agent and the Lenders shall have
performed such audits of Borrower's Receivables and Inventory as the Agent and
the Lenders shall have required, and the results thereof shall have been
satisfactory to the Agent and the Lenders.
SEC. 9.3. MATERIAL ADVERSE CHANGE. In the judgment of the Agent,
(a) no material adverse change shall have occurred in the business, operations,
liabilities, assets, properties, prospects or condition (financial or otherwise)
of Borrower since November 7, 1998, as reflected in the unaudited financial
information contained in the November 7, 1998 financial statements of Borrower,
and (b) the Agent shall not have become aware of any previously undisclosed
materially adverse information with respect to Borrower and there shall not
have occurred any disruption or adverse change in the financial or capital
markets generally which the Agent, in its reasonable discretion, deems material.
SEC. 9.4. QUALIFICATION. Each Credit Party shall be duly qualified
and in good standing in each jurisdiction in which it owns or leases property
or in which the conduct of its business requires it to so qualify, except where
the failure to so qualify could not reasonably be expected to have a Material
Adverse Effect.
SEC. 9.5. SECURITY DOCUMENTS AND INSTRUMENTS. The Agent shall have
received, in sufficient copies for each Lender, all the instruments and
documents then required to be delivered pursuant to Section 8 hereof or any
other provision of this Agreement or pursuant to the instruments and documents
referred to in Section 8 hereof and the same shall be in full force and effect
and shall grant, create or perfect the Liens, rights, powers, priorities,
remedies and benefits contemplated herein or therein, as the case may be.
SEC. 9.6. EVIDENCE OF INSURANCE. The Agent shall have received,
in sufficient copies for each Lender, evidence, in form, scope and substance
and with such insurance carriers reasonably satisfactory to the Agent, of all
insurance policies required pursuant to Section 12.3(a) hereof.
SEC. 9.7. EXAMINATION OF BOOKS. The Agent and all Lenders shall
have had the opportunity to examine the material contracts, properties, books
of account, records, leases, Leases, contracts, pension plans, insurance
coverage and properties of Borrower and of each Credit Party, and to perform
such other due diligence regarding Borrower and each Credit Party as the Agent
or any Lender shall have requested, the results of all of which shall have been
satisfactory to the Agent and all Lenders in all material respects.
SEC. 9.8. CORPORATE STRUCTURE. The Lenders shall be satisfied with
the corporate structure and capitalization of each of the Credit Parties and
SLB Marketing, Inc. and all documentation relating thereto, including without
limitation, the ownership of assets thereby and the terms and conditions of
each charter, bylaws and each class of capital stock of each Credit Party and
SLB Marketing, Inc.
SEC. 9.9. NOTES. Each Lender shall have received its Note, each
duly completed, executed and delivered in accordance with Sections 2.3, 3.2
and 4.3 hereof.
SEC. 9.10. FEES TO AGENT AND LENDERS. All fees payable to the
Agent and the Lenders with respect to the financing hereunder on or prior to
the Closing Date shall have been paid in full in immediately available funds.
SEC. 9.11. MANAGEMENT; OWNERSHIP. The Agent and all Lenders shall
be reasonably satisfied with the management and board of directors of each of
the Credit Parties, and the arrangements and agreements by and among each of
the Credit Parties and such management.
SEC. 9.12. DISBURSEMENT AUTHORIZATION. The Agent shall have
received a disbursement authorization letter, substantially in the form of
Exhibit 9.12 hereto, duly executed and delivered by Borrower as to the
disbursement on the Closing Date of the proceeds of the initial Advance.
SEC. 9.13. LITIGATION. There shall be no pending or, to the
knowledge of any Credit Party, threatened litigation with respect to any of the
Credit Parties or any of their Subsidiaries or (relating to the transactions
contemplated herein) with respect to the Agent or any of the Lenders, which
challenges or relates to the financing arrangements to be provided hereunder,
or to the business, operations, liabilities, assets, properties, prospects or
condition (financial or otherwise) of any of the Credit Parties or their
Subsidiaries, which pending or threatened litigation could, in the Agent's
reasonable judgment, be expected to have a Material Adverse Effect. There shall
exist no judgment, order, injunction or other similar restraint prohibiting
any transaction contemplated hereby.
SEC. 9.14. COMPLIANCE WITH LAW. The Agent shall be satisfied that
each Credit Party (a) has obtained all authorizations and approvals of any
governmental authority or regulatory body required for the due execution,
delivery and performance by such Credit Party of each Loan Document to which
it is or will be a party and for the perfection of or the exercise by the Agent
and each Lender of their respective rights and remedies under the Loan
Documents, and (b) shall be in compliance with, and shall have obtained
appropriate approvals pertaining to, all applicable laws, rules, regulations
and orders, including, without limitation, all governmental, environmental,
ERISA and other requirements, regulations and laws, the violation or failure
to obtain approvals for which could reasonably be expected to have a Material
Adverse Effect.
SEC. 9.15. PROCEEDINGS; RECEIPT OF DOCUMENTS. All requisite
corporate action and proceedings in connection with the borrowings and the
execution and delivery of the Loan Documents and the issuance of the Letters
of Credit shall be satisfactory in form and substance to the Agent, and the
Agent shall have received, on or before Closing Date, all information and
copies of all documents, including, without limitation, records of requisite
corporate and/or partnership action and proceedings, which the Agent may have
requested in connection therewith, such documents where requested by the Agent
to be certified by appropriate corporate Persons or governmental authorities.
Without limiting the generality of the foregoing, the Agent shall have received
on or before the Closing Date the following, each dated such day (unless
otherwise specified), in form and substance satisfactory to the Agent (unless
otherwise specified) and, except for the Notes, in sufficient copies for each
Lender:
(a) a copy of the certificate of incorporation of Borrower,
and all amendments thereto, certified (as of a date reasonably near the
date of the initial borrowing), by the Secretary of State of the State of
Delaware as being a true and correct copy thereof;
(b) a copy of the articles or certificate of incorporation,
as the case may be, of each other Credit Party and all amendments thereto,
in each case certified (as of a date reasonably near the date of the
initial borrowing), by the Secretary of State of the state of formation
or incorporation of each such Credit Party;
(c) certified copies of the resolutions of the Board of
Directors of each of Borrower and each Credit Party approving this
Agreement, the Notes, and each other Loan Document to which it is a
party or by which it is bound, and of all documents evidencing other
necessary corporate action and governmental approvals, if any, with
respect to this Agreement, the Notes, and each other Loan Document;
(d) a copy of a certificate of the Secretary of State of each
State listed on Schedule 9.15 hereto, dated a date reasonably near the
date of the initial Advance, stating that Borrower and each Credit Party,
as the case may be, is duly qualified and in good standing as a foreign
entity in such State;
(e) a certificate of each Credit Party signed on behalf of
such Person by an appropriate officer of such Person, certifying as to
(i) the absence of any amendments to the charter of such Person since
the date of the Secretary of State's certificate for such Person referred
to above, (ii) a true and correct copy of the bylaws of such Person as in
effect on the date of the initial borrowing;
(f) a certificate of the Secretary or an Assistant Secretary
of each Credit Party certifying the names and true signatures of the
officers of such Person authorized to sign, on behalf of such Person,
this Agreement, the Notes and each other Loan Document, to which such
Person is a party or by which it is bound; and
(g) copies of the Subordinated Note Documents to be entered
into on or about the Closing Date, which shall be satisfactory in form,
scope and substance to the Agent, which shall be certified by an
appropriate officer of Borrower to be true and complete in all respects.
SEC. 9.16. APPROVAL OF SUBORDINATED NOTES; CAPITALIZATION, ETC.
The Agent and all Lenders shall have approved (which approval shall not be
unreasonably withheld) all terms and conditions of the Subordinated Notes and
the Subordinated Note Documents, including, without limitation, any and all
amendments and other modifications thereto entered into as of the Closing Date,
and, without in any way limiting the scope and generality of the foregoing
approval requirement (which applies to all terms and conditions), in any event,
there shall be no prepayment required under the terms of any Subordinated Note
Document from cash flow, excess cash flow or the like while any Advance or
Letter of Credit Usage (other than fully cash-collateralized undrawn Letters
of Credit) is outstanding, provided that prepayment from such sources may be
required to effect a prepayment of Subordinated Notes if, on the date when
notice of such prepayment is first mailed to holders of the Subordinated Notes
as contemplated by the Indenture (so long as such notice is mailed within five
(5) Business Days following the earliest date that such notice can be mailed
under the Indenture and provides the earliest date for prepayment which can be
set under the Indenture, in each case as such Indenture is in effect on the
Closing Date), a prepayment could be made in compliance with this Section
9.16.
SEC. 9.17. COLLECTION AND CONCENTRATION ACCOUNTS; LOCK-BOX
ACCOUNTS; CASH MANAGEMENT AGREEMENT. (a) Prior to the Closing Date, Borrower
shall have established one or more collection Accounts into which the cash
receipts for each store operated by Borrower or a Subsidiary of Borrower (to
the extent such cash receipts constitute proceeds of any Collateral) shall
be deposited.
(b) Borrower shall have established a Concentration Account at
NBC or another financial institution acceptable to the Agent and shall have
delivered to the Agent on or before the day of such initial borrowing, with
respect to such Concentration Account, a concentration account agreement in the
form of Exhibit 9.17(b) hereto (as amended, modified or supplemented from time
to time, a "Concentration Account Agreement"), duly executed and delivered by
Borrower and duly acknowledged by the bank at which such Concentration
Account is established.
(c) Borrower shall have established one or more Lock-Box Accounts
and shall have delivered to the Agent on or before the day of such initial
borrowing, with respect to each such Lock-Box Account, an executed Lock-Box
Agreement duly executed and delivered by Borrower and duly acknowledged by the
bank at which such Lock-Box Account is established.
(d) Borrower shall have established one or more Pharmaceutical
Collection Accounts and shall have delivered to the Agent on or before the day
of the initial borrowing following the Closing Date, with respect to each such
Pharmaceutical Collection Account, an executed pharmaceutical collection account
agreement in the form of Exhibit 9.17(d) hereto (as amended, modified or
supplemented from time to time, a "Pharmaceutical Collection Account Agreement")
duly executed and delivered by Borrower and duly acknowledged by the bank at
which such Pharmaceutical Collection Account is established.
(e) Borrower shall have established its general disbursements
account with the Agent on or before the day of the initial borrowing.
SEC. 9.18. NO MARKET DISRUPTION. There shall have occurred no
disruption or adverse change in the financial or capital markets generally
which the Agent, in its reasonable discretion, deems material.
SEC. 9.19. LANDLORDS' LIENS. None of the Collateral shall be
subject to any contractual or statutory Lien or Liens in favor of any lessor
under any Lease, except such Liens as the Agent, in its sole discretion, shall
deem not material, and except such Liens that have been waived or subordinated
to the Liens in favor of Agent and the Lenders in a manner satisfactory to the
Agent, in its sole discretion.
SEC. 9.20. UCC SEARCH RESULTS. The Agent shall have received the
completed requests for information referred to and in compliance with the
requirements of Section 12.20 hereof.
SEC. 9.21. NO DEFAULT. There shall exist no material default or
Event of Default in any of the Companies' obligations to the Agent and the
Lenders under (a) any applicable legal requirements, (b) the Existing
Agreement, or (c) the Indenture.
SECTION 10. CONDITIONS PRECEDENT TO EACH BORROWING AND ISSUANCE
OF LETTERS OF CREDIT.
The obligation of the Lenders to make any Advance and issue any
Letter of Credit is subject to fulfillment (or prior waiver in writing by the
Required Lenders) of the following conditions precedent to the satisfaction
of the Agent:
SEC. 10.1. BORROWER'S CERTIFICATE; OTHERS. (a) Except in the case
of Advances for reimbursement of Letters of Credit described in Section 7.1(c)
hereof, Borrower delivers to the Agent a Borrower's Certificate.
(b)(i) All representations and warranties made by each of the
Credit Parties contained herein or otherwise made in any Loan Document
(including, without limitation, each Borrower's Certificate), officer's
certificate or any agreement, instrument, certificate, document or other
writing delivered to the Agent or any Lender in connection herewith or
therewith, shall be true and correct in all material respects with the
same effect as though such representations and warranties had been made
on and as of the date of such borrowing or issuance of such Letter of
Credit (unless any such representation or warranty speaks as of a
particular date, in which case it shall be deemed repeated as of such
date), and, with respect to Permitted Acquisitions, after giving effect
to the Schedules as supplemented or amended to reflect the effect of the
Permitted Acquisition;
(ii) on the date of such borrowing or issuance there shall
exist no Default or Event of Default;
(iii) if Borrower is requesting a Letter of Credit, the Agent
on behalf of any Issuing Lender shall have (to the extent requested by
any Issuing Lender) received a duly executed and delivered Letter of
Credit Agreement with respect thereto;
(iv) Borrower shall have complied with all procedures and
given all certificates, notices and other documents required hereunder
for such advance or issuance;
(v) the Agent shall have received such other approvals,
opinions or documents as any Lender through the Agent may reasonably
request;
(vi) if the Advance is a Revolving Credit Advance, then the
making of such Advance or issuance of such Letter of Credit shall not
cause the Revolving Loan, Letter of Credit Usage or any combination
thereof to exceed the Revolving Loan Borrowing Limit, the Revolving
Credit Facility Commitment, any other limit on availability contained in
this Agreement, or any limit contained in the Indenture; and
(vii) if the Advance is an Acquisition Term Loan Advance, then
the making of such Advance shall not cause the Acquisition Term Loan to
exceed the Acquisition Term Loan A Borrowing Limit, the Acquisition Term
Loan B Borrowing Limit, the Acquisition Term Facility Commitment, any
other limit on availability contained in this Agreement, or any limit
contained in the Indenture.
SEC. 10.2. WRITTEN NOTICE. Except as otherwise provided in Section
7.1 hereof, prior to the time of each Advance or the renewal or conversion of
any Advance, or portion thereof, the Agent shall have received Written Notice
of such Advance or the renewal or conversion of such Advance, or portion
thereof, as the case may be, in accordance with Sections 2, 3, 4, and 5 hereof.
SECTION 11. USE OF PROCEEDS.
(a) The proceeds of the Revolving Credit Facility shall be used
solely to fund Borrower's working capital needs and other general
corporate purposes. Borrower's acquisition of Inventory, including
Inventory acquired in a Permitted Acquisition, shall be made only with
proceeds of the Revolving Credit Facility.
(b) The proceeds of the Term Loan, subject to the Term Commitment,
shall be used solely to renew, extend and modify the principal balance of
the 1996 Term Loan outstanding as of the Closing Date.
(c) The proceeds of the Acquisition Term Loan Facility shall be used
solely for Permitted Acquisitions.
SECTION 12. AFFIRMATIVE COVENANTS.
Each of Borrower and Parent hereby covenants and agrees that, so long
as any Advance or any Letter of Credit is outstanding or any Lender has any
Revolving Commitment, Term Commitment, or Acquisition Term Commitment hereunder,
unless specifically waived by the Required Lenders in writing:
SEC. 12.1. FINANCIAL STATEMENTS AND OTHER INFORMATION.
Borrower shall furnish or cause to be furnished to the Agent and
each Lender:
(a) as soon as practicable and in any event within forty-five (45)
days after the close of each Fiscal Quarter of each Fiscal Year of Borrower:
(i) a consolidated balance sheet of Parent and its Subsidiaries;
(ii) from and after the formation of any Subsidiary of Borrower,
a consolidating balance sheet of Parent and its Subsidiaries;
(iii) a consolidated statement of income of Parent and its
Subsidiaries;
(iv) from and after the formation of any Subsidiary of Borrower,
a consolidating statement of income of Parent and its Subsidiaries;
(v) a consolidated statement of cash flows of Parent and its
Subsidiaries;
(vi) from and after the formation of any Subsidiary of Borrower,
a consolidating statement of cash flows of Parent and its
Subsidiaries; and
(vii) a statement that the information on Schedule 12.26 of this
Agreement is still accurate or, if not accurate, an update of the
list of each Person with whom Borrower engaged in transactions
involving an aggregate transactional amount of $25,000 or more
and who is a seller of either perishable agricultural commodities
or livestock;
in each case, as at the end of and for the period commencing at
the end of the previous Fiscal Year and ending with such quarter
just closed and for the period commencing at the end of the previous
quarter and ending with such quarter just closed, setting forth for
each such period in comparative form, (x) the corresponding figures
for the applicable quarter and year to date of the preceding Fiscal
Year and (y) budgets of Parent and its Subsidiaries for such quarter
and year to date previously delivered under Section 12.1(l) hereof,
all in reasonable detail and certified by the chief executive or
financial officer of Parent to have been prepared in accordance with
GAAP, subject to normal recurring year-end audit adjustments,
together with a schedule in form satisfactory to the Agent, (1)
setting forth the Companies' EBITDA for such quarter, actual Net
Capital Expenditures made by Parent and its Subsidiaries during such
quarter and indicating that such capital expenditures were made in
compliance with Section 13.1 hereof, and (2) showing the computations
used by Parent in determining compliance with the covenants
contained in Section 12.16 hereof;
(b) as soon as practicable and in any event within one hundred
twenty (120) days after the close of each Fiscal Year of Parent:
(i) an audited consolidated balance sheet of Parent and its
Subsidiaries;
(ii) from and after the formation of a Subsidiary of Borrower,
an audited consolidated balance sheet of Parent and its Subsidiaries;
(iii) an audited consolidated statement of operations of Parent
and its Subsidiaries;
(iv) from and after the formation of a Subsidiary of Borrower,
an audited consolidated statement of operations of Parent and its
Subsidiaries;
(v) an audited consolidated statement of cash flows of Parent
and its Subsidiaries; and
(vi) from and after the formation of a Subsidiary of Borrower,
an audited consolidating statement of cash flows of Parent and its
Subsidiaries;
in each case, as at the end of and for the Fiscal Year just closed,
(x) setting forth in comparative form the corresponding figures for
the preceding Fiscal Year and (y) accompanied by a separate report
certified by the chief financial officer of Parent, which shall not
be subject to the certification or statement of the accountants set
forth below, setting forth the budgets of Parent and its Subsidiaries
for such Fiscal Year previously delivered under Section 12.1(l)
hereof, all in reasonable detail and (except for such budgets and
comparisons with such budgets) certified (with qualifications or
exceptions deemed acceptable to the Agent) by independent public
accountants selected by Parent and satisfactory to the Agent; and
concurrently with such financial statements, a certificate, in form
satisfactory to the Agent, signed by such independent accountants
(1) stating that in making the examination necessary for their
certification of such financial statements, they have not obtained
any knowledge of the existence of any Default or Event of Default
or, if such independent accountants shall have obtained from such
examination any such knowledge, they shall disclose in such written
statement the Default or Event of Default and the nature thereof,
it being understood that such independent accountant shall be under
no liability, directly or indirectly, to anyone for failure to
obtain knowledge of any such Default or Event of Default and (2)
showing in detail the calculations supporting such certificate in
respect of compliance with the covenants set forth in Sections 12.16
and 13.1 hereof and setting forth the calculations (in detail
acceptable to the Agent) underlying such compliance.
(c) as soon as practicable and in any event within forty-five (45)
days after the close of each calendar month:
(i) a consolidated balance sheet of Parent and its
Subsidiaries;
(ii) from and after the formation of a Subsidiary of Borrower,
a consolidated balance sheet of Parent and ts Subsidiaries;
(iii) a consolidated statement of income of Parent and its
Subsidiaries;
(iv) from and after the formation of a Subsidiary of Borrower,
a consolidated statement of income of Parent and its Subsidiaries;
(v) a consolidated statement of cash flows of Parent and
its Subsidiaries; and
(vi) from and after the formation of a Subsidiary of Borrower,
a consolidating statement of cash flows of Parent and its
Subsidiaries as at the end of and for the period commencing at the
end of the previous Fiscal Year and ending with such month just
closed and for the period commencing at the end of the previous
month and ending with such month just closed;
in each case prepared by management of Parent, setting forth in
comparative form (x) the corresponding figures for the appropriate month
and year to date of the previous Fiscal Year and (y) the budgets of Parent
and its Subsidiaries for such month and year to date previously delivered
under Section 12.1(l) hereof, all in reasonable detail (including,
without limitation, stating the amount of interest expensed on each of the
Revolving Loan, the Letters of Credit, the Term Loan, the Acquisition Term
Loan, and all other Indebtedness for Borrowed Money of Parent and its
Subsidiaries for such calendar month, and the depreciation, amortization
and rental expenses of Parent and its Subsidiaries for such calendar month)
and certified by the chief executive or financial officer of Parent to
have been prepared in accordance with GAAP, subject to normal year-end
adjustments;
(d) as soon as practicable and in any event within forty-five
(45) days after the close of each calendar month, a statement of cash
balances for the Concentration Account (unless any such account is
maintained at NBC) and, upon the request of the Agent, a statement of
cash balances for any one or more of the Special Accounts permitted
pursuant to Section 12.17(c) hereof, together, in each case, if requested
by the Agent, with a copy of the bank statements in respect thereof and
all canceled checks and advances of credit and debits in respect of the
Concentration Account or such Special Account (except to the extent that
any such account is maintained at NBC);
(e) promptly upon receipt thereof, copies of all financial reports
(including, without limitation, management letters), if any, submitted to
Parent or any of its Subsidiaries by its auditors, in connection with each
annual or interim audit or review of its books by such auditors, to the
extent reasonably requested by the Agent;
(f) promptly upon the issuance thereof, copies of all reports, if
any, to or other documents filed by Parent or any of its Subsidiaries with
the Securities and Exchange Commission under the Securities Act or the
Securities Exchange Act (other than on Form S-8 or 8-A or similar forms),
and all reports, notices or statements sent or received by Parent or any
of its Subsidiaries to or from the holders of any Indebtedness for Borrowed
Money of Parent or any such Subsidiary or to or from the trustee under any
indenture under which the same is issued;
(g)(i) concurrently with the delivery of the financial statements
required to be furnished by Sections 12.1(a), 12.1(b), and 12.1(c) hereof,
a certificate signed by the chief executive or financial officer of Parent,
(x) stating that a review of the activities of Parent and its Subsidiaries
during such quarter or Fiscal Year, as the case may be, has been made
under his immediate supervision with a view to determining whether Parent
and its Subsidiaries have observed, performed and fulfilled all of its
respective obligations under each Loan Document to which it is a party,
and (y) demonstrating, in a format satisfactory to the Agent, the
compliance by Parent and its Subsidiaries with the financial covenants
contained herein and stating that there existed during such month, quarter
or Fiscal Year no Default, or Event of Default or if any such Default or
Event of Default existed, specifying the nature thereof, the period of
existence thereof and what action Parent or any of its Subsidiary proposes
to take, or has taken, with respect thereto, and (ii) promptly upon the
occurrence of any Event of Default, a certificate signed by the chief
executive or financial officer of Parent, specifying the nature thereof
and the action Parent or any of its Subsidiaries proposes to take or has
taken with respect thereto;
(h) promptly upon the commencement thereof, Written Notice of any
litigation, including arbitrations, and of any proceedings before any
governmental agency which could, if successful, reasonably be expected
to have a Material Adverse Effect or where the amount involved exceeds
$250,000;
(i) with reasonable promptness, such other information respecting
the business, operations and financial condition of Parent or any of its
Subsidiaries as any Lender may from time to time reasonably request;
(j) not later than fifteen (15) calendar days after the end of
each calendar month, a certificate dated the last day of such calendar
month just ended, from Parent, in substantially the form of Exhibit 12.1(j)
hereto and signed by the chief executive officer, chief financial officer
or chief accounting officer of Parent (each such certificate, a "Borrowing
Base Certificate");
(k) not later than ten (10) Business Days after the end of each
fiscal month, a certificate dated as of the last day of such fiscal month
just ended from Borrower substantially in the form of Exhibit 12.1(k)
hereto and signed by the chief executive officer, chief financial officer
or chief accounting officer of Parent setting forth (i) a schedule of
Receivables and a detail aging of such Receivables as of the date of such
certificate, (ii) a schedule of Borrower's accounts payable and a detail
aging of such accounts payable, and (iii) a listing of Inventory as of the
date of such certificate;
(l) not later than forty-five (45) days after the commencement of
each Fiscal Year of Parent beginning with the Fiscal Year commencing on
January 3, 1999, a one Fiscal-Year budget of the financial condition and
results of operations of Parent and its Subsidiaries for such Fiscal Year
(covering in any event balance sheets, statements of cash flow and of
income for each quarter and calendar month); in all instances in form,
scope and substance reasonably satisfactory to the Agent; and Borrower
shall cause such budget to be updated from time to time as material changes
in the financial condition and results of operations of Parent and its
Subsidiaries necessitate and shall promptly furnish or cause to be
furnished to the Agent and each Lender a copy of any such updated budget;
(m) promptly, and in any event within ten (10) Business Days of
the date that Borrower obtains knowledge thereof, notice of any of the
following events, to the extent that any of such events is reasonably
expected to cause cost and expense to Borrower and its Subsidiaries of
$500,000 or more:
(i) receipt by a Credit Party or any Subsidiary thereof,
or any tenant or other occupant of any property of a Credit Party or
Subsidiary thereof, of any claim, complaint, charge or notice of a
violation or potential violation of any Environmental Law;
(ii) the occurrence of a spill or other Release of a
Hazardous Material upon, under or about or affecting any of the
properties of a Credit Party or Subsidiary thereof, or Hazardous
Materials at levels or in amounts that may have to be reported,
remedied or responded to under any Environmental Law are detected
on or in the soil or groundwater;
(iii) that a Credit Party or Subsidiary thereof is or may
be liable for any costs of cleaning up or otherwise responding to a
Release of Hazardous Materials;
(iv) that any part of the properties of a Credit Party or
any Subsidiary thereof is or may be subject to a Lien under any
Environmental Law; and
(v) that a Credit Party or Subsidiary will undertake or
has undertaken any cleanup or other response action with respect to
any Hazardous Material; and
(n) within ten (10) days following the occurrence thereof, any loss,
damage or other event which can reasonably be expected to result in an
insurance claim by Borrower or any Subsidiary of $250,000 or more;
(o) promptly upon receipt thereof, copies of any correspondence
received from Medicare/Medicaid Account Debtors or their agents or any
other governmental entity or any Third Party Payor relating to any audit,
investigation or statutorily-authorized inquiry relating to Borrower and
any Pharmaceutical Receivable;
(p) not later than fifteen (15) days after the end of each calendar
month, a certificate dated the last day of such calendar month just ended,
from Borrower, substantially in the form of Exhibit 12.1(p) hereto and
signed by the chief executive officer, chief financial officer or chief
accounting officer of Borrower, setting forth (i) the aggregate redemption
value of Coupons forwarded to the Processing Agent during such calendar
month, and (ii) the amount of payments actually received by Borrower from
the Processing Agent during such calendar month for redemption of Coupons;
Borrower hereby agrees to forward all Coupons to the Processing Agent for
processing, on a weekly basis, in accordance with the terms of the
Processing Agreement and to deposit or cause to be deposited all proceeds
of Coupons in a Collection Account established pursuant to Section 9.18(a)
hereof or otherwise in accordance with Agent's written instructions;
(q) not later than ffifteen (15) days after the end of each calendar
month, a certificate dated the last day of such calendar month just ended
from the Borrower, substantially in the form of the of Exhibit 12.1(q)
hereto and signed by the chief executive officer, chief financial officer
or chief accounting officer of Borrower, setting forth (i) the amount of
outstanding Pharmaceutical Receivables as of the beginning of such calendar
month, (ii) the amount of new Pharmaceutical Receivables generated during
such calendar month, (iii) the amount of payments received on outstanding
Pharmaceutical Receivables during such calendar month, and (iv) a
reconciliation of the foregoing;
(r) with reasonable promptness, information regarding Inventory as
Agent may from time to time reasonably request; and
(s) with reasonable promptness, information regarding Vendor
Receivables as Agent may from time to time reasonably request, including,
without limitation, copies of Vendor Rebate Agreements.
Sec. 12.2. TAXES AND CLAIMS. Each of Parent and Borrower shall,
and shall cause each of Borrower's Subsidiaries, to, pay and discharge when due
(except to the extent that (a) any such taxes, assessments, governmental charges
or claims are diligently contested in good faith by appropriate proceedings and
proper reserves are established on the books of Parent, Borrower or any such
Subsidiary, and (b) any Liens arising from the non-payment thereof when due
have not attached to any of the Collateral in a manner which could have priority
over the Lien of the Agent thereon or risk the sale of or foreclosure on such
Collateral, or (c) Parent and Borrower are permitted to defer paying any such
taxes, assessments, governmental charges or claims by applicable provisions of
the Federal Bankruptcy Code or pursuant to the Plan) (i) all taxes, assessments
and governmental charges upon or against it or its properties or assets prior
to the date on which penalties attach thereto and (ii) all lawful claims,
whether for labor, materials, supplies, services or anything else, which might
or could, if unpaid, become a Lien or charge upon its properties or assets.
Sec. 12.3. INSURANCE. (a) Borrower shall, and shall cause each of
its Subsidiaries to, (i) keep all its properties, including Real Properties,
Inventory and Equipment, adequately insured at all times with responsible
insurance carriers, in amounts and pursuant to insurance policies reasonably
acceptable to the Agent, against loss or damage by fire and other hazards and,
(ii) maintain adequate insurance at all times with responsible insurance
carriers, in amounts and pursuant to insurance policies reasonably acceptable
to the Agent, against liability on account of damage to Persons and property and
under all applicable workers' compensation laws and (iii) maintain adequate
insurance covering such other risks as the Agent may reasonably request. For
purposes of complying with this Section 12.3(a), adequate insurance shall in
any event prevent Borrower and its Subsidiaries from becoming a co-insurer
(excluding any deductibles thereunder reasonably acceptable to the Agent).
(b) Except as otherwise agreed in writing by the Agent, each
liability policy and each hazard policy on Collateral required pursuant to this
Section 12.3 shall name the Agent and each Lender as additional insured or first
loss payee, as appropriate, and shall be primary without right of contribution
from any other insurance which is carried by the Lenders or the Agent to the
extent that such other insurance provides it with contingent and/or excess
liability insurance with respect to its interest as such in the Collateral and
shall expressly provide that all of the provisions thereof, except the limits
of liability (which shall be applicable to all insureds as a group) and except
liability for premiums (which shall be solely a liability of Borrower or its
Subsidiaries, as the case may be), shall operate in the same manner as if there
were a separate policy covering each insured.
(c) Borrower shall, and shall cause each of its Subsidiaries to,
from time to time upon request of the Agent, promptly furnish or cause to be
furnished to the Agent (1) evidence, in form and substance reasonably
satisfactory to the Agent, of the maintenance of all insurance required to be
maintained by this Section 12.3, including, but not limited to, such copies
as the Agent may request of policies, certificates of insurance, riders and
endorsements relating to such insurance and proof of premium payments, and,
(2) a written report, satisfactory to Agent in form and substance, from an
insurance broker acceptable to the Agent confirming that the amount of
insurance obtained under such policies, and the terms and conditions thereof,
are substantially similar to policies customarily maintained by companies
similarly situated to Borrower and engaged in the same in similar business as
Borrower.
Sec. 12.4. BOOKS AND RESERVES. Each of Parent and Borrower shall
and shall cause each of Borrower's Subsidiaries to:
(a) maintain, at all times, true and complete books, records and
accounts in which true and correct entries shall be made of its
transactions, all in accordance with GAAP; and
(b) by means of appropriate entries, reflect in its accounts and
in all financial statements furnished pursuant to Section 12.1 proper
liabilities and reserves for all taxes and proper provision for
depreciation and amortization of its properties and bad debts, all in
accordance with GAAP.
Sec. 12.5. PROPERTIES IN GOOD CONDITION. Borrower shall keep, and
shall cause each of its Subsidiaries to keep, its properties (including
properties subject to Equipment Leases) in good repair, working order and
condition, ordinary wear and tear excepted, and, from time to time, make all
necessary and proper repairs, renewals, replacements, additions and improvements
thereto, so that the business carried on may be properly and advantageously
conducted at all times in accordance with prudent business management.
Sec. 12.6. MAINTENANCE OF EXISTENCE, ETC. Each of Parent and
Borrower shall preserve and maintain, and cause each of Borrower's Subsidiaries,
to preserve and maintain, their respective statutory existence, rights,
franchises and governmental permits and licenses.
Sec. 12.7. INSPECTION BY THE AGENT. Each of Parent and Borrower
shall allow, and shall cause each of Borrower's Subsidiaries to allow, any
representative of the Agent or Lenders, in conjunction with the Agent, to visit
and inspect any of Borrower's properties, to examine its books of account and
other records and files, to make copies thereof and to discuss its affairs,
business, finances and accounts with its officers and employees and independent
accountants (and each of Parent and Borrower hereby irrevocably authorizes its
independent accountants to discuss with the Agent the financial affairs of each
of Parent and Borrower and Borrower's Subsidiaries), all at such reasonable
times during normal business hours and as often as the Agent or Lenders, in
conjunction with Agent, may reasonably request upon reasonable notice (or,
during the continuance of a Default or Event of Default, at such times and as
often as the Agent or Lenders, in conjunction with the Agent, may request).
Any representative of the Agent or Lenders, in conjunction with the Agent may
at any time verify Borrower's Receivables utilizing an audit control company
or any other agent of the Agent or Lenders, which verification may include
direct requests for verifications from Borrower's customers and account debtors.
At any time following the occurrence and continuance of an Event of Default,
the Agent or the Agent's designee may notify customers or account debtors of
the Agent's and the Lenders' security interest in Receivables, collect them
directly and charge the collection costs and expenses to Borrower's account,
but, unless and until the Agent does so or gives Borrower other instructions,
Borrower shall collect all Receivables for the Lenders, receive all payments
thereon for the Lenders' benefit in trust as the Lenders' trustee and
immediately deliver them to the Bank in the original form with all necessary
endorsements or, as directed by the Bank, deposit such payments as directed
by the Lenders. Borrower shall furnish, at the Agent's request, copies of
contracts, invoices or the equivalent, and any original shipping and delivery
receipts for all merchandise sold or services rendered and such other documents
and information as the Agent may require. Borrower agrees to bear the cost of,
and reimburse Agent for any and all reasonable expenses incurred by Agent,
prior to the occurrence of a Default, in connection with the inspections,
examinations, verifications and discussions referred to in this Section 12.7.
Borrower agrees to bear the cost of, and reimburse Agent and Lenders for any
and all reasonable expenses incurred by Agent and Lenders, after the occurrence
and during the continuance of a Default or an Event of Default, in connection
with, the inspections, examinations, verifications and discussions referred
to in this Section 12.7.
Sec. 12.8. PAY INDEBTEDNESS TO LENDERS AND PERFORM OTHER COVENANTS.
Borrower shall (a) make full and timely payment of all payments required to be
made by Borrower in respect of the Lender Debt, including without limitation,
the Revolving Loan, the Term Loan and the Acquisition Term Loan, whether now
existing or hereafter arising, (b) strictly comply, and cause each of its
Subsidiaries to strictly comply, with all the terms and covenants contained
in each Loan Document to which it is a party, all at the times and places and
in the manner set forth therein, and (c) except for the filing of continuation
statements and the making of other filings by the Agent as secured party or
assignee, at all times take all action necessary to maintain the Liens provided
for under or pursuant to this Agreement or any Security Document as valid and
perfected Liens on the property intended to be covered thereby (subject to no
other Liens except those liens expressly permitted under Section 13.2) and
supply all information to the Agent or the Lenders necessary for such
maintenance.
Sec. 12.9. NOTICE OF DEFAULT. Borrower shall promptly (and in any
event within five (5) Business Days) notify the Agent in writing of any Default
or Event of Default or a default under any other agreement (other than any
Capitalized Lease involving an aggregate notional principal amount of less
than $500,000) in respect of Indebtedness for Borrowed Money to which Borrower
or any of its Subsidiaries is a party, in each case describing the nature
thereof and the action Borrower proposes to take with respect thereto.
Sec. 12.10. REPORTING OF MISREPRESENTATIONS. In the event that
Borrower or any Subsidiary of Borrower discovers that any representation or
warranty made in any Loan Document by any Credit Party was incorrect in any
material respect when made and such incorrectness is continuing and remains
material, Borrower shall promptly report, or shall cause such Subsidiary
promptly to report, the same to the Agent and take, or cause to be taken, all
available steps to correct such misrepresentation or breach of warranty.
Sec. 12.11. COMPLIANCE WITH LAWS, ETC. Each of Parent and Borrower
shall comply, and shall cause each of Borrower's Subsidiaries to comply, in
all material respects, with all applicable laws, rules, regulations and orders,
and each of Parent and Borrower shall duly observe, and cause each of Borrower's
Subsidiaries to duly observe, in all material respects, all valid requirements
of applicable governmental authorities and all applicable statutes, rules and
regulations, including, without limitation, all applicable statutes, rules and
regulations relating to public and employee health and safety in any case and
the sale of alcoholic beverages, the non-observance of which could reasonably
be expected to have a Material Adverse Effect, involves criminal penalties or
could expose the Agent or any Lender to any civil or criminal penalties.
Sec. 12.12. ERISA. (a) Each of Parent and Borrower shall pay and
discharge, and shall cause each of Borrower's Subsidiaries to pay and discharge,
when due any material liability which is imposed upon it pursuant to the
provisions of Title IV of ERISA, unless the amount, applicability or validity
of such liability is being diligently contested in good faith by appropriate
proceedings and proper reserves are established on its books in accordance
with GAAP.
(b) Borrower shall deliver to the Agent promptly, and in any event
within ten (10) days in the case of clauses (ii), (iii), (vi) and (viii)
below, or twenty (20) days in the case of clauses (i), (iv), (v) and (vii)
below, after
(i) Borrower knows, or has reason to know, of the occurrence
of any Reportable Event with respect to any Pension Benefit Plan, a copy
of the materials that are filed by the applicable plan administrator with
the PBGC;
(ii) a Credit Party or an ERISA Affiliate thereof or an
administrator of any Pension Benefit Plan files with participants,
beneficiaries or the PBGC a notice of intent to terminate any Pension
Benefit Plan under Section 4041 of ERISA, a copy of any such notice;
(iii) the receipt of notice by a Credit Party or any ERISA
Affiliate thereof or an administrator of any Pension Benefit Plan from
the PBGC of the PBGC's intention to terminate such Plan or to appoint a
trustee to administer such Plan, a copy of such notice;
(iv) the filing thereof with the Internal Revenue Service,
copies of each annual report that is filed on Treasury Form 5500 with
respect to any Pension Benefit Plan subject to Title IV, together with
any actuarial statements on Schedule B to such Form 5500;
(v) a Credit Party or any ERISA Affiliate thereof knows or
has reason to know of any event or condition which could reasonably be
expected to constitute grounds under the provisions of Section 4042 of
ERISA for the termination of (or the appointment of a trustee to
administer) any Pension Benefit Plan, an explanation of such event or
condition;
(vi) the receipt by a Credit Party or any ERISA Affiliate
thereof of an assessment of withdrawal liability under Section 4201 of
ERISA from a Multiemployer Plan, a copy of such assessment;
(vii) a Credit Party or any ERISA Affiliate knows or has
reason to know of the termination or insolvency (under Sections 4241 or
4245 of ERISA) of any Multiemployer Plan, a notice of such event; or
(viii) an application has been made to the Secretary of the
Treasury for a waiver of the minimum funding standard under the provisions
of Section 412 of the Code with respect to any Pension Benefit Plan, a
copy of such application; and
in each case described above, together with a statement signed by an
appropriate officer of such Credit Party setting forth details as to such
reportable event, notice event or condition and the action that will be taken
with respect thereto.
Sec. 12.13. FURTHER ASSURANCES. (a) Each of Parent and Borrower
shall, and shall cause each of Borrower's Subsidiaries to, at its cost and
expense, upon request of the Agent from time to time, duly execute and deliver,
or cause to be duly executed and delivered, to the Agent such further
instruments and do and cause to be done such further acts as may be necessary
or proper in the reasonable opinion of the Agent to carry out more effectually
the provisions and purposes of this Agreement or any other Loan Document or to
enable the Agent and the Lenders to exercise and enforce their rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, Borrower will: (i) at the request of the Agent,
xxxx conspicuously each chattel paper included in the Collateral and each of
its records pertaining to the Collateral with a legend, in form and substance
satisfactory to the Agent, indicating that such chattel paper is subject to
the security interest granted hereby; (ii) if any account shall be evidenced
by a promissory note or other instrument or chattel paper, deliver and pledge
to the Agent hereunder such note, instrument or chattel paper duly endorsed
and accompanied by duly executed instruments of transfer or assignment, all in
form and substance satisfactory to the Agent; and (iii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Agent may
request, in order to create, evidence perfect or preserve the security interests
granted or purported to be granted hereby.
(b) Each of Borrower and Parent hereby authorizes the Agent to file one
or more financing or continuation statements, and amendments thereto, relative
to all or any part of the Collateral without the signature of Borrower or
Parent where permitted by law. Borrower and Parent hereby agree that a carbon,
photographic, photostatic or other reproduction of any Security Document or of
a financing statement is sufficient as a financing statement where permitted
by law.
(c) Borrower and Parent will furnish to the Agent from time to time, in
addition to the information required to be delivered to the Agent by the other
provisions of this Agreement, such statements and schedules further identifying
and describing the Collateral and such other reports in connection with the
Collateral as the Agent may reasonably request, all in reasonable detail.
Sec. 12.14. AUDITS AND APPRAISALS. (a) Borrower shall, at its
expense, cause its auditors to supervise and review a physical inventory of
Inventory and Pledged Accounts of Borrower and its Subsidiaries once each
Fiscal Year, to be conducted in the normal course of Borrower's audit process,
and shall deliver to the Agent promptly, and in any event within thirty (30)
days after the same becomes available, the results of such audit. Borrower
shall, at Agent's request not more than once each Fiscal Year, engage auditors
to confirm and report inventory classifications and other information reasonably
requested by Agent, based upon inventory procedures agreed upon by Agent and
the auditors.
(b) In addition to audits referred to in paragraph (a) of this
Section 12.14, each of Parent and Borrower shall allow, and shall cause each
of Borrower's Subsidiaries to allow, the Agent or Lenders, in conjunction with
the Agent, or their designees to enter any locations of Borrower, at any
reasonable time or times during regular business hours, to inspect the
Collateral and to inspect, audit and to make copies or extractions from the
books, records, journals, orders, receipts, correspondence and other data
relating to the Collateral. Further, each of Parent and Borrower shall allow,
and shall cause each of Borrower's Subsidiaries to allow, the Agent or Lenders,
in conjunction with the Agent, or their designees to enter any locations at
which assets and properties that either are proposed to be transferred to
Borrower or have been transferred to Borrower, in anticipation of a Permitted
Acquisition, are located, at any reasonable time or times during regular
business hours and, subject to the consent of the seller, a point in time
reasonably in advance of the Permitted Acquisition, to inspect such assets
and properties and to inspect, audit and to make copies or extractions from the
books, records, journals, orders, receipts, correspondence and other data
relating to such assets and properties for the purpose of determining, prior
to the consummation of the Permitted Acquisition, the eligibility of such
assets and properties for inclusion in the Borrowing Base. Borrower agrees to
use reasonable, good faith efforts to obtain the consent of the seller, so as
to provide such entry and opportunity to inspect to the Agent or Lenders, in
conjunction with the Agent, or their designees.
(c) At Agent's request at any time, on no more than one occasion
per calendar year (unless a Default or an Event of Default has occurred and
is continuing, in which event Section 14.6 shall apply) allow a third-party
appraiser acceptable to Agent to perform an appraisal of the Inventory, copies
of which shall be made available to Borrower, Agent and Lenders.
(d) Borrower agrees to bear the cost of, and reimburse Agent for
any and all reasonable expenses incurred by Agent, prior to the occurrence of
a Default, in connection with, the audits and appraisals referred to in this
Section 12.14. Borrower agrees to bear the cost of, and reimburse Agent and
Lenders for any and all reasonable expenses incurred by Agent and Lenders,
after the occurrence and during the continuance of a Default or an Event of
Default, in connection with, the audits and appraisals referred to in this
Section 12.14. For informational purposes and not in limitation thereof,
Agent's auditor expenses as of the Closing Date are $450.00 per auditor per
day, plus any and all out-of-pocket expenses.
Sec. 12.15. ENVIRONMENTAL MATTERS, ETC. (a) Each of Parent and
Borrower shall, and shall cause each of Borrower's subsidiaries to, comply,
in all material respects, with the provisions of all Environmental Laws and
all applicable Federal, state and local occupational health, safety and
sanitation laws, ordinances, codes, rules and regulations, permits, licenses
and interpretations and orders of regulatory and administrative authorities
with respect thereto in any case, the non-compliance with which could
reasonably be expected to have a Material Adverse Effect, involves criminal
penalties or could expose the Agent or any Lender to any civil or criminal
penalties, and shall keep its properties and the properties of its Subsidiaries
free of any Lien imposed pursuant to any Environmental Law other than any Lien
which will not attach to any of the Collateral in a manner which would (or
could) have priority over the Lien of the Agent thereon or risk the sale or
foreclosure on such Collateral or is in an amount material to Borrower.
Neither Parent nor Borrower shall, nor shall Parent or Borrower suffer or
permit, any of Borrower's Subsidiaries to cause or suffer or permit, the
property of Parent, Borrower or such Subsidiary, to be used for the generation,
production, processing, handling, storage, transporting or disposal of any
Hazardous Material except the removal or the taking of remedial action in
response to Hazardous Materials on or about the properties of Parent, Borrower
or any of Borrower's Subsidiaries and except in the ordinary course of
Borrower's business as conducted as of the Closing Date.
(b) Each of Parent and Borrower shall supply to the Agent copies
of all submissions by Parent or Borrower or any of Borrower's Subsidiaries to
any governmental authority and of the reports of all environmental audits and
of all other environmental tests, studies or assessments (including the data
derived from any sampling or survey of asbestos, soil, or subsurface or other
materials or conditions) that may be conducted or performed (by or on behalf
of Parent, Borrower or any of Borrower's Subsidiaries) on or regarding the
properties of Parent, Borrower or any of Borrower's Subsidiaries or regarding
any conditions that might have been affected by Hazardous Materials on or
Released or removed from such properties. Each of Parent and Borrower shall
also permit and authorize, and shall cause Borrower's Subsidiaries to permit
and authorize, the consultants, attorneys or other persons that prepare such
submissions or reports or perform such audits, tests, studies or assessments
to discuss non-privileged portions of such submissions or reports with the
Agent and the Lenders.
(c) Borrower shall timely undertake and complete any cleanup or
other response actions required by (i) any governmental authority, or (ii) any
Environmental Law if, in the case of this clause (ii) only, failure so to
undertake or complete could have a Material Adverse Effect, involves criminal
penalties or could expose the Agent or any Lender to any civil or criminal
penalties or is required under such Environmental Law to safeguard the health
of any persons.
(d) Without in any way limiting the scope of Section 5.8 hereof and
in addition to any obligations thereunder, Borrower hereby indemnifies and
agrees to hold the Agent and the Lenders harmless from and against any
liability, loss, damage, suit, action or proceeding arising out of its business
or the business of its Subsidiaries pertaining to Hazardous Materials,
including, but not limited to claims of any Federal, state or municipal
government or quasi-governmental agency or any third person, whether arising
under CERCLA, RCRA, or any other Environmental Law, or tort, contract or
common law.
Sec. 12.16. FINANCIAL COVENANTS. The Companies covenant and
agree to the following financial covenants:
(a) Minimum EBITDA. The Companies shall not permit their EBITDA,
for the four (4)-Fiscal Quarter period ending at the end of each Fiscal Quarter
occurring during or at the end of the Fiscal year indicated below to be less
than the amount indicated below for such Fiscal Year:
Minimum EBITDA
Fiscal Year
Fiscal Year 1998 through $19,500
Fiscal Year 2000
Fiscal Year 2001 $22,000
Fiscal Quarter Year 2002 and thereafter $23,500
The Companies will also disclose to Agent and Lenders, in writing, their
EBITDA with each calculation of EBITDA, and will also provide an itemization
of the Reorganization Costs, in detail reasonably satisfactory to Agent. The
calculation of EBITDA for Fiscal Quarter-4 of each Fiscal Year will be made on
the basis of the audited financial statements required to be furnished pursuant
to Section 12.1(b) hereof.
(b) Minimum Fixed Charge Coverage. Borrower shall not permit its
Consolidated Fixed Charge Coverage Ratio for the four (4) Fiscal Quarter period
ending at the end of each Fiscal Quarter to be less than the ratio of 1.00 to
1.0
The calculation of the Consolidated Fixed Charge Coverage Ratio for Fiscal
Quarter-4 of each Fiscal Year will be made on the basis of the audited financial
statements required to be furnished pursuant to Section 12.1(b) hereof.
(c) Funded Debt-to-EBITDA Ratio. The Companies shall not permit
their Funded Debt-to-EBITDA Ratio ending at the end of each Fiscal Quarter to
be greater than the ratio of 5.00 to 1.0.
The calculation of the Funded Debt-to-EBITDA Ratio for Fiscal Quarter-4 of
each Fiscal Year will be made on the basis of the audited financial statements
required to be furnished pursuant to Section 12.1(b) hereof.
(d) Minimum Current Ratio. The Companies shall not permit their
Consolidated Current Ratio at the end of each Fiscal Quarter to be less than
1.00 to 1.0. The calculation of the Consolidated Current Ratio for Fiscal
Quarter-4 of each Fiscal Year will be made on the basis of the audited financial
statements required to be furnished pursuant to Section 12.1(b) hereof.
Sec. 12.17. COLLECTION AND CONCENTRATION ACCOUNTS; LOCK-BOX
ACCOUNTS. (a) Borrower shall (i) cause all cash proceeds (as defined in Article
9 of the UCC) of Pledged Accounts to be deposited directly by the account debtor
thereof into a Lock-Box Account, (ii) except as otherwise permitted under
subsection (d) or subsection (e) of this Section 12.17, deposit or cause to be
deposited all cash proceeds (as defined in Article 9 of the UCC) of Inventory
and Pledged Accounts into a Collection Account, (iii) deposit or cause to be
deposited all Gross Proceeds of an Asset Sale into a Collection Account, (iv)
deposit or cause to be deposited all cash proceeds (as defined in Article
9 of the UCC) of Coupons into a Collection Account, (v) deposit or cause to be
deposited all cash proceeds (as defined in Article 9 of the UCC) of
Pharmaceutical Receivables into a Pharmaceutical Collection Account, and (vi)
on each Business Day, except as otherwise permitted under subsection (f) of this
Section 12.17, transfer all collected balances from all Collection Accounts
and Lock-Box Accounts to the Concentration Account.
(b) Borrower shall, except as otherwise permitted under subsection
(d) or subsection (e) of this Section 12.17, cause all cash receipts of all
stores operated by Borrower and its Subsidiaries (to the extent such cash
receipts constitute proceeds of any Collateral) to be deposited daily (except
Sundays, holidays, and Saturdays, but only if the bank into which Borrower
would otherwise deposit cash proceeds of Inventory and Pledged Accounts is
closed on Saturdays) into a Collection Account; provided that the failure to
cause such cash receipts to be so deposited shall not constitute a default
hereunder if such late deposit results solely from good faith human error and
is made promptly following discovery of such error.
(c) Notwithstanding the provisions of subsections (a)(ii) and (b)
of this Section 12.17, the Borrower may:
(i) cause a portion of the cash proceeds of Pledged Accounts
or of Inventory generated by one of the stores listed on Schedule
12.17(c) hereto, as may be amended from time to time with the prior
written consent of the Agent, to be deposited directly to a deposit
account maintained at a local bank for such store which is not a
Collection Account (each, a "Local Bank Special Account"); provided
that:
(A) except as permitted in this Section 12.17(c), the
Borrower shall not be permitted to write checks or otherwise
draw funds from such Local Bank Special Account, except that
the Borrower may debit such Local Bank Special Account for
change orders and it may agree with the bank at which such Local
Bank Special Account is maintained that such bank may debit the
Local Bank Special Account for such bank's servicing fees and
charges for return items;
(B) an amount (the "Store Deposit") equal to the amount
deposited in such Local Bank Special Account (less change orders,
servicing fees and charges for return items) for each store's
business day (as reasonably determined by the Borrower) is
transferred to a Collection Account on the same day or the
relevant banks' next business day after such deposit;
(C) the failure to make a Store Deposit for each store's
business day shall not constitute a default hereunder if such
late Store Deposit results solely from good faith human error
and is made promptly following discovery of such error; and
(D) the transfer of any Store Deposit to a Collection
Account on a day other than the same day or the relevant banks'
next business day after such Store Deposit shall not constitute
a default hereunder if such late transfer results solely from
good faith human error and is made promptly following discovery
of such error;
(ii) cause a portion of the cash proceeds of Pledged Accounts
or of Inventory to be deposited directly to a checking account at
Liberty Bank and Trust Company of Oklahoma City, N.A., or another
financial institution acceptable to the Agent, that is not a
Collection Account, for the sole purpose of having access to funds
for sight drafts to purchase alcoholic beverages for resale or to
cover returned checks (each such checking account being a "Sight Draft
Special Account", and together with each Local Bank Special Account,
being a "Special Account"); provided that no more than $70,000 may
be on deposit in any Sight Draft Special Account and no more than
$70,000 may be on deposit in all Sight Draft Special Accounts at the
end of any relevant bank's business day (after deducting all
offsetting debits for sight drafts and returned checks at the end of
the relevant banks' business day);
(iii) permit such debits to a Collection Account as may be
specified in a Collection Account Agreement; and
(iv) maintain, at store number 145, located in Dodge City,
Kansas, a portion of the cash proceeds of Pledged Accounts or of
Inventory in an amount not to exceed $150,000 solely for the purpose
of providing funds for check-cashing services to customers and
potential customers of Borrower.
The Borrower shall, at the request of the Agent, use its best efforts
to cause each bank at which one or more Special Accounts are
maintained to execute and deliver to the Agent an agreement, in form
and substance satisfactory to the Agent, pursuant to which such bank
expressly waives any right of set-off such bank may have against such
account and covering such other matters as may be required by the
Agent; provided, however, that the Agent and the Lenders agree that
such efforts shall not require the Borrower to confer any economic
benefit upon any such bank in order to cause such bank to execute
such agreement.
(d) Notwithstanding the provisions of subsections (a)(ii) and (c)
of this Section 12.17, the Borrower may make payments to (i) EFS, Inc. ("EFS")
pursuant to the Supermarket Industry Merchant Agreement, Electronic
Authorization and Payment, dated as of May 1, 1992 between EFS and the Borrower,
and the related letter dated May 6, 1992 from the Borrower to Xx. Xx Xxxxx of
EFS, and (ii) one or more other credit or charge card service providers in
connection with arrangements enabling the Borrower to accept payment for
merchandise by credit or charge card, including, without limitation, deductions
by EFS or such other credit or charge card service providers from amounts
otherwise payable to the Borrower under their servicing arrangements with the
Borrower; provided, that on and after the Closing Date, all documentation with
respect to such arrangements mentioned in clause (ii) above shall be in form
and substance reasonably satisfactory to the Agent.
(e) Notwithstanding anything to the contrary in subsection (a)(iv)
of this Section 12.17, the Borrower shall be permitted to exempt from the
transfers required by such subsection on any day a maximum of (i) $100,000
of collected balances on deposit in the Collection Account maintained by the
Borrower with Liberty Bank and Trust Company of Oklahoma City, N.A., or another
financial institution acceptable to the Agent, (ii) $5,000 of collected
balances on deposit in the Collection Account maintained by the Borrower
with Bank of Oklahoma, N.A., or another financial institution acceptable to
the Agent, and (iii) $5,000 of collected balances on deposit in the Collection
Account maintained by the Borrower with Amarillo National Bank, or another
financial institution acceptable to the Agent.
Sec. 12.18. ENVIRONMENTAL REPORTS. If so requested, Borrower shall
deliver to the Agent an environmental report of a qualified third party engineer
in form and substance satisfactory to the Agent (a) on any one or more of the
stores listed on Schedule 12.18 hereto or (b) with respect to any event for
which Borrower supplied a notice under Section 12.1(m) hereof.
Sec. 12.19. COUNSEL FEES. Borrower shall pay in full, within ten
(10) days following the Closing Date, all reasonable fees, costs and expenses
of Xxxxxx & Xxxx, L.L.P., counsel to the Agent and the Lenders, billed on or
prior to the Closing Date.
Sec. 12.20. LANDLORDS' LIENS. Borrower shall provide to Lenders a
waiver of landlord lien for all Real Properties leased by Borrower,
substantially in the form and substance of the form of Landlord's Waiver
attached as Exhibit 12.20 hereto.
Sec. 12.21. OVERDUE LEASE. Borrower shall disclose to the Lenders
all leases with regard to which the payments are or become, at any time and
from time to time, more than thirty (30) days past due. Such disclosure shall
include the name of the lessor, the store number, the location of the store,
the amount of the monthly lease payments and the total amount of past due
payments with respect to each such lease. The leases with regard to which the
payments are more than thirty (30) days past due as of the Closing Date are
set forth in Schedule 15.5(c) to this Agreement.
Sec. 12.22. COMPLIANCE WITH EQUIPMENT LEASES. Each of Parent and
Borrower shall comply, and shall cause each of Borrower's Subsidiaries to
comply, in all material respects, with all Equipment Leases; and each of Parent
and Borrower shall duly observe, and cause each of Borrower's Subsidiaries to
duly observe, in all material respects, all valid requirements of applicable
Equipment Leases, the non-observance of which could reasonably be expected to
have a Material Adverse Effect.
Sec. 12.23. COMPLIANCE WITH VENDOR REBATE AGREEMENTS. Each of
Parent and Borrower shall comply, and shall cause each of Borrower's
Subsidiaries to comply, in all material respects, with all Vendor Rebate
Agreements; and each of Parent and Borrower shall duly observe, and cause each
of Borrower's Subsidiaries to duly observe, in all material respects, all
valid requirements of applicable Vendor Rebate Agreements, the non-observance
of which could reasonably be expected to have a Material Adverse Effect.
Sec. 12.24 AGREEMENTS REGARDING PERMITTED ACQUISITIONS. Borrower
covenants as follows in connection with each Permitted Acquisition:
(a) Prior to or simultaneously with consummation of any Permitted
Acquisition, Borrower shall deliver to Agent all of the following, in form and
substance satisfactory to Agent:
(i) Security Documents And Instruments. All of the instruments
and documents then required to be delivered pursuant to Section 8 of
this Agreement or any other provision of this Agreement or pursuant
to the instruments and documents referred to in Section 8 of this
Loan Agreement with regard to the assets and properties being acquired
by Borrower pursuant to the Permitted Acquisition (including
specifically, but without limitation, a waiver of landlord's lien as
required by Section 12.20, if the assets and properties being
acquired are or will be located on Real Properties leased by
Borrower); and the same shall be in full force and effect and shall
grant, create or perfect the Liens, rights, powers, priorities,
remedies and benefits contemplated herein or therein, as the case
may be.
(ii) Evidence Of Insurance. Evidence, in form, scope and
substance and with such insurance carriers reasonably satisfactory
to the Agent, of all insurance policies required pursuant to Section
12.3(a) of this Agreement with regard to the assets and properties
being acquired by Borrower pursuant to the Permitted Acquisition.
(iii) Additional Information. Such additional documents,
instruments and information as Agent or its legal counsel, special
counsel to the Agent, and all local counsel to the Agent, may
reasonably request.
(b) Litigation. As of the consummation of the Permitted Acquisition,
there shall be no pending or, to the knowledge of any Company, threatened
litigation with respect to the Permitted Acquisition, which challenges or
relates to the Permitted Acquisition, which pending or threatened litigation
could be expected to have a Material Adverse Effect. There shall exist no
judgment, order, injunction or other similar restraint prohibiting any
transaction contemplated by the Permitted Acquisition.
(c) Landlord's Liens. None of the assets or properties to be acquired
pursuant to the Permitted Acquisition shall be subject to any contractual or
statutory Lien or Liens in favor of any lessor under any Lease, except such
Liens as the Agent, in its sole discretion, shall deem not material, and except
such Liens that have been waived or subordinated to the Liens in favor of
Agent and the Lenders in a manner satisfactory to the Agent, in its sole
discretion.
(d) Collection Account. If applicable, Borrower shall have established
one or more Collection Accounts into which the cash receipts for each store,
if any, to be acquired pursuant to the Permitted Acquisition (to the extent
such cash receipts constitute proceeds of any Collateral) shall be deposited.
(e) No Default. No Default or Event of Default shall have occurred and
be continuing.
(f) Representations and Warranties. The representations and warranties
contained herein and in all other Loan Documents shall be true and correct as
of the date hereof as if made on the date of the Permitted Acquisition, after
giving effect to the Schedules as supplemented or amended to reflect the effect
of the Permitted Acquisition.
(g) Delivery of Documents. All agreements, documents and instruments
executed and/or delivered pursuant hereto, and all legal matters incident
thereto, shall be satisfactory to Agent and its legal counsel.
(h) Permitted Acquisition Certificate. Borrower shall have delivered
to Agent a certificate pertaining to the Permitted Acquisition, in the form
as set forth in Exhibit 12.24 attached hereto.
Sec. 12.25 MILLENNIUM COMPLIANT.
(a) Borrower and Parent shall be Millennium Compliant, except to the
extent that noncompliance will not have a Material Adverse Effect. As set forth
herein, "Millennium Compliant" means that software, hardware, embedded
microchips and other processing capabilities utilized by, and material to, the
business operations of Borrower and Parent function accurately and consistently
accept date input, provide date output and perform calculations on dates before,
during and after January 1, 2000, without interruption and without any change
in operations associated with the advent of the year 2000.
(b) Each Fiscal Quarter during the term of this Agreement, concurrently
with the submission of the financial statements required to be submitted under
Section 12.1(a), Borrower shall provide to the Agent and each Lender status
reports on the implementation of Borrower's and Parent's plan to become
Millennium Compliant, or such other information which is sufficient to
demonstrate that Borrower and Parent will be Millennium Compliant.
SECTION 12.26. NOTICE OF VENDORS OF PERISHABLE AGRICULTURAL
COMMODITIES. Borrower shall promptly (and in any event within five (5)
Business Days after the occurrence of a transaction involving a Person
described in this Section 12.26 and involving an aggregate annual transactional
amount of $25,000 or more notify the Agent in writing of any Person who would
be characterized as a seller of either (A) perishable agricultural commodities,
as such term is defined under the Perishable Agricultural Commodities Act of
1930, as amended (7 U.S.C. Sec. 499(e)), and the regulations thereunder, or
any comparable state of local laws, or (B) livestock under the Packer and
Stockyards Act (7 U.S.C. Sec. 196) and the regulations thereunder, or under
any comparable state or local laws. Each Person with whom Borrower presently
engages in transactions involving an aggregate annual transactional amount of
$25,000 or more and who is a seller of either perishable agricultural
commodities or livestock is listed on Schedule 12.26 attached hereto.
SECTION 13. NEGATIVE COVENANTS.
Each of Parent and Borrower covenants and agrees that, so long any
Advance or any Letter of Credit or reimbursement obligation for a Letter of
Credit is outstanding or any Lender has any Revolving Commitment, Term
Commitment, or Acquisition Term Commitment hereunder, each of Parent and
Borrower shall not, and shall not suffer or permit any of Borrower's
Subsidiaries (and, in the case of Section 13.10 hereof, any ERISA Affiliate)
to, without the prior written consent of the Required Lenders:
Sec. 13.1. CAPITAL EXPENDITURES. (a) The Companies shall not
suffer or permit Net Capital Expenditures of the Parent and its Subsidiaries
during any Fiscal Year to exceed the sum of (a) $13,000,000, plus (b) the
Carryover Capital Expenditures Amount, if any.
(b) In no event shall Parent, Borrower or any Subsidiary of Borrower
assume or incur any Indebtedness in connection with the acquisition of a fixed
or capital asset (including, without limitation, under a Capitalized Lease) if
the fair market value (as determined by an independent appraisal or as
determined in good faith by management of Borrower) of such asset does not
exceed the aggregate principal (or notional principal, in the case of
Capitalized Lease Obligations, which notional principal amount shall be
calculated in accordance with GAAP but assuming an implicit interest rate of
the higher of 15% or the market rate of interest available to the Company, as
determined by the Company in its good faith judgment) amount of such
Indebtedness so incurred or assumed.
Sec. 13.2. LIENS. Create, incur, assume or suffer to exist any
Lien upon or defect in title to or restriction upon the use of any of its
property or assets of any character, whether owned at the Closing Date or
hereafter acquired, or hold or acquire any property or assets of any character
under conditional sales, finance lease or other title retention agreements,
other than:
(a) (i) Liens in favor of the Agent or the Lenders pursuant to
this Agreement or the Security Documents; and
(ii) Liens described in clause (vi) of the definition of
"Eligible Inventory";
(b) (i) Liens, other than in favor of the PBGC, arising out of
judgments or awards in respect of which Borrower or any of its
Subsidiaries shall in good faith be prosecuting an appeal or proceedings
for review and in respect of which it shall have secured a subsisting
stay of execution pending such appeal or proceedings for review, provided
it shall have set aside on its books adequate reserves, in accordance
with GAAP, with respect to such judgment or award;
(ii) Liens for taxes, assessments or governmental charges or
levies, provided payment thereof shall not at the time be required in
accordance with the provisions of Section 12.2 hereof;
(iii) deposits, Liens or pledges to secure payments of
workmen's compensation and other payments, unemployment and other
insurance, old-age pensions or other social security obligations, or the
performance of bids, tenders, leases, contracts (other than contracts
for the payment of money), public or statutory obligations, surety,
stay or appeal bonds, or other similar obligations arising in the
ordinary course of business;
(iv) mechanics', workmen's, repairmen's, warehousemen's,
vendors' or carriers' Liens, or other similar Liens arising in the
ordinary course of business and securing sums which are not past due, or
are being contested in good faith (so long as there is no risk of the
sale or forfeiture of the property subject to such Lien or enforcement
of such Lien has been stayed), or deposits or pledges to obtain the
release of any such Liens;
(v) (i) Statutory landlord's Liens on property located in
Texas under Leases or of mortgagees of any such landlord, in each case,
to which Borrower or any of its Subsidiaries is a party and (ii) Liens
described in Section 9.20 hereof existing as of the date of the first
Advance or Letter of Credit issued hereunder and deemed not material by
the Agent under Section 9.20 hereof;
(vi) zoning restrictions, easements, licenses, covenants,
restrictions on the use of real property or minor irregularities in
title thereto, which do not materially impair the use of such property
in the normal operation of the business of Borrower or any of its
Subsidiaries; and
(vii) deposits, Liens or pledges up to an aggregate of
$1,000,000 to secure payments due to public utilities for services
provided in the ordinary course of business;
(c) existing Liens set forth in Schedule 13.2(c) hereto and any
renewals thereof, but not any increase in amount thereof and not any
extension thereof to other property;
(d) purchase money mortgages or other purchase money Liens
(including Capital Leases) upon any fixed or capital assets hereafter
acquired, or purchase money mortgages or other purchase money Liens
(including Capital Leases), on any such assets hereafter acquired or
existing at the time of acquisition of such assets, whether or not the
related Indebtedness is recourse to Borrower, in each case, to the extent
that any such Lien does not exist on the Closing Date, so long as
(w) such Lien does not extend to or cover any other asset of
Borrower or any of its Subsidiaries,
(x) such Lien secures the obligation to pay the purchase price
of such asset and interest thereon and other customary obligations
relating thereto only,
(y) the principal amount of the aggregate Indebtedness
incurred from and after the Closing Date and secured by all such
purchase money Liens (including Capital Leases) does not exceed
$12,000,000 in the aggregate; and
(z) if the asset acquired is Real Property, then Agent shall
have received the agreement of the mortgagee to give the Agent
reasonable notice of any default and an opportunity to cure the
default, and an agreement to allow Agent reasonable access to the
Real Property for the purpose of protecting the Agent's and the
Lenders' interest in Collateral that may be located on such Real
Property, all of such agreements to be in form acceptable to the
Agent and its counsel.
(e) at any time, Liens covering consigned Inventory received by
Borrower as part of a consignment arrangement between Borrower and the
vendor of such Inventory so long as the most recent Borrowing Base
Certificate delivered to the Agent under Section 12.1(j) hereof prior to
such time has set forth the total dollar value of consigned Inventory of
Borrower;
(f) Liens on any property or asset, other than the Collateral,
acquired by Borrower or any Subsidiary of Borrower which are in existence
on the date of acquisition of such property or asset and, in the case of
a Person which becomes a Subsidiary of Borrower, Liens on its property or
capital stock in existence on the date such Person becomes a Subsidiary
of Borrower;
(g) Liens on AWG Equity owned or hereafter acquired by Borrower to
secure Borrower's obligations to AWG under the Supply Agreement and the
Membership Sign-Up Documents;
(h) Liens consisting of the Use Restrictions; and
(i) Liens consisting of the First Offer Rights.
Sec. 13.3. INDEBTEDNESS. Create, incur, assume or suffer to exist,
contingently or otherwise, any Indebtedness, other than:
(a) Indebtedness under the Loan Documents;
(b) unsecured Current Liabilities incurred in the ordinary course
of business other than unsecured Current Liabilities for Indebtedness for
Borrowed Money or which are evidenced by bonds, debentures, notes or
other similar instruments;
(c) Indebtedness for Borrowed Money and Contingent Obligations set
forth on Schedule 13.3(c) hereto;
(d) Indebtedness (not overdue) secured by Liens permitted by
Section 13.2(d) hereof;
(e) Indebtedness under the Subordinated Note Documents not exceeding
$60,000,000 in aggregate principal amount, less any repayments of principal
or redemptions of Subordinated Notes, and any replacement or refinancing
of such Indebtedness on terms acceptable to the Agent in its sole
discretion;
(f) payments constituting Permitted Transactions;
(g) Indebtedness in respect of obligations owed to AWG by Borrower
under the Supply Agreement and the Membership Sign-Up Documents;
(h) Priority Tax Claims, as defined and described in the Plan;
(i) Indebtedness of Borrower existing under the employee stock
bonus plan trust, which is established on behalf of Borrower's unionized
employees, as more fully described in the Disclosure Statement; and
(j) Unsecured Indebtedness incurred or assumed in connection with
Permitted Acquisitions, but only so long as the incurrence or assumption
of such Indebtedness does not cause a breach of any other provision or
covenant of this Agreement.
Sec. 13.4. LOANS, INVESTMENTS AND GUARANTEES. Lend or advance
money or credit to any Person, or invest in (by capital contribution, creation
of Subsidiaries or otherwise), or purchase or repurchase the stock or
Indebtedness, or all or a substantial part of the assets or properties, of any
Person, or enter into any exchange of securities with any Person, or guarantee,
assume, endorse or otherwise become responsible for (directly or indirectly or
by any instrument having the effect of assuring any Person's payment or
performance or capability) the Indebtedness, performance, obligations, stock
or dividends of any Person (each of the foregoing, an "Investment"), or agree
to do any of the foregoing, other than:
(a) endorsement of negotiable instruments for deposit or collection
in the ordinary course of business;
(b) (i) Investments in securities issued, or that are directly and
fully guaranteed or insured, by the United States Government or any agency
or instrumentality thereof having maturities of not more than six months
from the date of acquisition, (ii) time deposits and certificates of
deposit having maturities of not more than six months from the date of
acquisition of (x) any Lender or (y) any other domestic commercial bank
having capital and surplus in excess of $100,000,000, the holding company
of which has outstanding commercial paper meeting the requirements
specified in clause (iv) below, (iii) repurchase agreements with a term
of not more than seven (7) days for underlying securities of the types
described in clauses (i) and (ii) above (provided that the underlying
securities of the type described in clause (i) may have maturities of
more than six months from the date of acquisition) entered into with any
Lender or any other bank meeting the qualifications specified in clause
(ii) above or with securities dealers of recognized national standing,
provided that the terms of such agreements comply with the guidelines set
forth in the Federal Financial Institutions Examination Council Supervisory
Policy Repurchase Agreements of Depository Institutions With Securities
Dealers and Others as adopted by the Comptroller of the Currency on
October 31, 1985 (the "Supervisory Policy"), and provided, further, that
possession or control of the underlying securities is established as
provided in the Supervisory Policy, and (iv) commercial paper rated (as
of the date of acquisition thereof) at least A-1 or the equivalent thereof
by Standard & Poor's Corporation and P-1 or the equivalent thereof by
Xxxxx'x Investors Service, Inc. and in either case maturing within six
(6) months after the date of its acquisition;
(c) Investments representing stock or obligations issued to
Borrower or any of its Subsidiaries in settlement of claims against any
other Person by reason of a composition or readjustment of debt or a
reorganization of any debtor of Borrower or such Subsidiary;
(d) Investments representing the Indebtedness of any Person owing
as a result of the sale by Borrower or any of its Subsidiaries in the
ordinary course of business of products or services (on customary trade
terms);
(e) Investments in the stock of any present Subsidiary, but not
any additional investments therein;
(f) Guaranties in favor of the Agent or in favor of any one or
more Lenders, in each case, of all or any portion of Lender Debt;
(g) Guaranties by Parent or any Subsidiaries of the "Obligations"
(as such term is defined in the Indenture as of the Closing Date);
(h) Investments and guaranties outstanding on the Closing Date and
described on Schedule 13.4 hereto;
(i) (i) Investments in the Collection Accounts, the Lock-Box
Accounts, the Concentration Account and the Special Accounts permitted
pursuant to Section 12.17(c) hereof, so long as the same are maintained
in accordance with Sections 12.17 and 13.15 hereof and (ii) other deposit
accounts maintained by Borrower or Parent;
(j) Investments in Indebtedness for Borrowed Money arising from
any sale or disposition permitted under Section 13.5(a), (b) or (d)
hereof;
(k) Investments in interest rate caps purchased by Borrower;
(l) Investments that are Permitted Transactions;
(m) Investments in the form of cash deposits to secure payments
described in Section 13.2(b)(iii); provided, that no such cash deposit
shall exceed an amount equal to 55% of the face amount of any Letter of
Credit that the Borrower is permitted to cause to be issued to support
the applicable payment, and provided, further, that the aggregate
outstanding amount of all such cash deposits shall not at any time
exceed $3,500,000;
(n) Investments consisting of (i) the purchase by Borrower of 15
shares of AWG Membership Stock and (ii) AWG members deposit certificates,
patronage refund certificates or similar types of AWG Equity received or
earned by Borrower from time to time based on Borrower's gross purchases
from AWG pursuant to the Supply Agreement or in lieu of receiving cash
rebates or refunds from AWG; and
(o) Investments that are Permitted Acquisitions.
Sec. 13.5. MERGER, SALE OF ASSETS, DISSOLUTION, ETC. Without the
prior written consent of the Agent and the Required Lenders, (i) enter into
any transaction of merger or consolidation, (ii) change its name, (iii)
acquire all or a substantial portion of the assets of any Person, or (iv)
transfer, sell, assign, lease, or otherwise dispose of all or any part of its
properties or assets, or any of its notes or Receivables, or any stock of
Borrower or any of its Subsidiaries, or wind up, liquidate or dissolve, or
agree to do any of the foregoing, except:
(a) sales, not exceeding $1,000,000 in aggregate book value, in
the ordinary course of business of assets and properties of Borrower or
a Subsidiary of Borrower no longer necessary for the proper conduct of
its business;
(b) sales or other dispositions by Borrower, Guarantor or any
Subsidiary thereof of worn out or obsolete property (including motor
vehicles and inventory) in the ordinary course of business;
(c) sales of Inventory in the ordinary course of business;
(d) sales or other dispositions (including leases) of Excluded
Properties at a price with respect to each such Excluded Property at
least equal to its fair market value, as determined by the President of
Borrower in good faith.
(e) the abandonment of any assets and properties of Borrower or
any Subsidiary thereof which are no longer useful in its business and
cannot be sold;
(f) the sale of any asset (other than any Collateral) pursuant to
a transaction in which such asset is, concurrently with such sale, leased
by Borrower as lessee for use in the business of Borrower;
(g) the exchange of assets leased pursuant to Capital Leases for
other assets ("exchanged assets") to be leased pursuant to such leases
(or other leases on substantially the same terms), provided, however, that
such exchanged assets are acquired within forty-five days of the
disposition of such leased assets.
Sec. 13.6. DIVIDENDS, REDEMPTIONS AND OTHER PAYMENTS.
(a) Declare or pay any distributions or dividends on any of its
shares of capital stock of any class, or purchase, redeem, cancel or
acquire any of its capital stock or capital stock of any of its
Subsidiaries or any option, warrant, or other right to acquire such capital
stock, or apply or set apart any of its assets therefor, or make any
distribution (by reduction of capital or otherwise) in respect of any
such shares of capital stock or any such option, warrant or other right,
except that in any Fiscal Year of Borrower any Subsidiary of Borrower may
pay dividends to its direct parent; or
(b) make any optional prepayment or optional redemption of or
purchase or repurchase any Indebtedness for Borrowed Money or give any
notice thereof (other than (i) the Advances and the Funded Debt described
in Schedule 13.6(b) hereto, (ii) prepayments up to an aggregate of
$1,000,000 of Capitalized Lease Obligations solely in connection with the
exchange of assets leased pursuant to Capital Leases for other assets
("exchanged assets") to be leased pursuant to such leases (provided,
however, that such exchanged assets are acquired within forty-five (45)
days of the disposition of such leased assets), (iii) prepayments,
optional redemptions, purchases or repurchases of Indebtedness for
Borrowed Money relating to assets to be purchased by Borrower, and
thereafter sold to AWG, in connection with the AWG Purchase Agreement,
or in connection with stores to be closed;
provided, however, that nothing contained in this Section 13.6 shall
prohibit any Permitted Transaction.
Sec. 13.7. TRANSACTIONS WITH AFFILIATES. Except for transactions
specifically required or permitted by the terms of this Agreement, enter into
or perform any transaction, including, without limitation, the purchase,
leasing, sale or exchange of property or assets or the rendering of any
service, with any Affiliate of Parent, Borrower or any Subsidiary thereof,
except for any transaction which is in the ordinary course of its business,
and which transaction is, in the good faith determination of the board of
directors of Borrower, upon fair and reasonable terms no less favorable to it
than it could obtain in a comparable arm's length transaction with a Person
not an Affiliate of Parent, Borrower or a Subsidiary of Borrower; provided,
however, that nothing contained in this Section 13.7 shall prohibit any
Permitted Transaction or any other transaction specifically permitted under
this Agreement.
Sec. 13.8. MANAGEMENT FEES AND OTHER PAYMENTS. Pay, directly or
indirectly, during any Fiscal Year of Parent, any management, consulting or
similar fees to, or make any other payments of any kind to (a) Parent or (b)
in respect of employment, management, consulting, servicing or similar services
or in respect of any non-competition or similar agreement, any officers,
directors, general or limited partners of, or other management of, or any
stockholders of, Parent, Borrower or any Affiliate of Parent or Borrower, in
each case, other than any payment constituting a Permitted Transaction.
Sec. 13.9. COMPROMISE OF PLEDGED ACCOUNTS. Compromise or adjust
any of the Pledged Accounts (or extend the time for payment thereof) or grant
any discounts, allowances or credits thereon, other than discounts of Pledged
Accounts in the ordinary course of business.
Sec. 13.10. NON-COMPLIANCE WITH ERISA. (a) Engage in any
transaction in connection with which a Credit Party or any of its ERISA
Affiliates could be subject to either a material civil penalty assessed pursuant
to the provisions of Section 502(i) of ERISA or a material tax imposed under
the provisions of Section 4975 of the Code;
(b) adopt an amendment to any Pension Benefit Plan requiring the
provision of security under Section 307 of ERISA or Section 401(a)(29) of the
Code;
(c) terminate any Pension Benefit Plan in a "distress termination"
under Section 4041(c) of ERISA; or
(d) fail to make payment when due of all material amounts which,
under the provisions of any Pension Benefit Plan or Multiemployer Plan, it is
required to pay as contributions thereto or, with respect to any Pension Benefit
Plan, permit to exist any "accumulated funding deficiency" (within the meaning
of Section 302 of ERISA and Section 412 of the Code).
Sec. 13.11. AMENDMENTS AND MODIFICATIONS. (a) Directly or
indirectly, amend, modify, supplement, waive compliance with, seek a waiver
under, or assent to noncompliance with (i) any of the Subordinated Note
Documents or any document relating thereto, if the effect of any such
amendment, waiver, modification, supplement, or assent is to (u) increase the
interest rate or increase or add any fee or other amount payable thereunder,
(v) advance to an earlier date any payment of principal (by prepayment or
redemption or otherwise) thereunder, (w) add any covenant, make any covenant
as in effect on the Closing Date thereunder more burdensome, more difficult to
achieve or comply with or otherwise more adverse to Borrower, (x) add any
event of default or change in a manner more adverse to Borrower any event of
default as in effect on the Closing Date, or (z) make any term or provision
thereof more adverse to Borrower than those in effect on the Closing Date, or
(ii) any instrument, document or agreement evidencing, creating, guaranteeing
or governing any Indebtedness for Borrowed Money permitted under Section 13.3(c)
hereof or entered into in connection therewith, other than amendments,
modifications, supplements or waivers of Capital Leases but solely to the
extent that the Agent has received prior written notice of such amendments,
modifications, supplements or waivers and such amendments, modifications,
supplements or waivers are not adverse to the Borrower.
(b) Amend, modify or supplement the charter or by-laws of Borrower,
Parent or any of Borrower's Subsidiaries.
Sec. 13.12. FISCAL YEAR. Change for financial reporting purposes
hereunder its Fiscal Year from a period of fifty-two (52) or fifty-three (53)
consecutive weeks beginning on the first day following the end of the previous
Fiscal Year and ending on the Saturday on or closest to the next December 31.
Sec. 13.13. CHANGE OF BUSINESS. Alter the nature of its business
or engage in any business other than the supermarket business. No change or
amendment shall occur in any of the material supplier contracts and related
arrangements of Borrower (including without limitation the Supply Agreement
and the Membership Sign-Up Documents) which would have a Material Adverse
Effect on the financial condition or operations of Borrower; and Borrower
shall not permit there to exist any default in Borrower's obligations under
such material supplier contracts and related arrangements of Borrower (including
without limitation the Supply Agreement and the Membership Sign-Up Documents).
Sec. 13.14. NO NEGATIVE PLEDGES. Except under the Subordinated
Note Documents, the Supply Agreement as in effect on the Closing Date, and the
Membership Sign-Up Documents as in effect on the Closing Date, enter into or
become subject to, directly or indirectly, including, without limitation, as
a non-party Subsidiary of a party to any agreement,
(a) any agreement prohibiting or restricting, in any manner
(including, without limitation, by way of covenant, representation or
event of default),
(i) the incurrence, creation or assumption of any Indebtedness,
or any Lien upon any property of any Credit Party other than, in the case
of an agreement for a purchase money financing (including a Capitalized
Lease Obligation), the asset subject to such financing,
(ii) the sale, disposition or pledge of any asset of any Credit
Party other than, in the case of an agreement for a purchase money
financing (including a Capitalized Lease Obligation), the asset subject
to such financing,
(iii) the incurrence or existence of any Contingent Obligations
of any Credit Party,
(iv) any investments of any Credit Party,
(v) any capital expenditures by any Credit Party,
(vi) any acquisition, merger or consolidation involving any
Credit Party,
(vii) any change in control of any Credit Party, or
(viii) any amendment or supplement to or waiver under this
Agreement or any other Loan Document or other document relating to the
Lender Debt, or
(b) which provides that any default by any Credit Party which is
not a party to such agreement of any obligation not arising under such
agreement is a default under such agreement.
Sec. 13.15. COLLECTION AND CONCENTRATION ACCOUNTS; LOCK-BOX
ACCOUNTS. (a) Deposit, or cause to be deposited, into any Collection Account
any funds other than funds constituting proceeds of Inventory or Pledged
Accounts, miscellaneous income not arising from Asset Sales, and as may be
specified in a Collection Account Agreement, funds from another Collection
Account at the time of such deposit; or
(b) deposit, or cause to be deposited, into any Lock-Box
Account any funds other than funds constituting proceeds of Pledged
Accounts at the time of such deposit; or
(c) deposit, or cause to be deposited, into the Concentration
Account any funds other than funds from a Collection Account or a Lock-Box
Account; or
(d) withdraw or transfer funds from any Lock-Box Account or
Collection Account except to the Concentration Account or as may be
specified in a Collection Account Agreement other than to
(1) repay the Term Loan or the Acquisition Term Loan,
(2) prepay the Revolving Loan, or if no Revolving Loan
is then outstanding, provide Letter of Credit Cash Collateral, or
(3) to the extent not required to be applied under (1)
above, the Concentration Account (to the extent representing proceeds
of Collateral) and thereafter as otherwise determined by Borrower;
or
(e) make any change in its instructions to account debtors
regarding payments to be made to any Lock-Box Account; or
(f) suffer or permit, except with the prior written consent
of the Agent, any Collection Account, Lock-Box Account, or the
Concentration Account to be closed or terminated, or the Collection Account
Agreement, Lock-Box Agreement, or Concentration Account Agreement relating
thereto, as the case may be, to be terminated or no longer in full force
and effect.
Sec. 13.16. TAX SHARING AGREEMENTS. Enter into any tax sharing
agreement pursuant to which (a) Borrower's provision for taxes would be
greater than such provision would be in the absence of such agreement or (b)
Borrower would not be promptly reimbursed in the amount of any refunds received
by the consolidated group which are attributable to Borrower.
Sec. 13.17. COVENANT OF PARENT. Parent will not engage in any type
of business activity other than (in each case, subject to any restriction
contained herein):
(a) maintenance of its corporate existence and compliance with
applicable law;
(b) the issuance of equity securities to any Person;
(c) the issuance of debt securities unsecured by any assets of
Parent;
(d) any guarantee of any obligation of Borrower or any of its
Subsidiaries not otherwise prohibited by this Agreement, including, without
limitation, any guarantee of the obligations under this Agreement and the
Indenture;
(e) the registration of any of its securities under the Securities
Act, the Securities Exchange Act or any state or local securities law;
(f) the listing of any securities with any securities exchange, any
interdealer quotation system or the National Association of Securities
Dealers, Inc. or its successor;
(g) the ownership and disposition of the common stock of Borrower;
(h) accounting, legal, public relations, investor relations,
financial or management activities (including the employment of employees,
counsel, accountants, consultants, bankers, advisors or other
professionals) in connection with, or which are reasonably incidental to,
any of the foregoing activities;
(i) entering into, performing its obligations and exercising its
rights under this Agreement; or
(j) activities in connection with, required by, or reasonably
incidental to, any of the foregoing.
Sec. 13.18. MAXIMUM RETURNED INVENTORY. The Borrower shall not
suffer or permit the Inventory of the Borrower and its subsidiaries that
Borrower or its Subsidiaries returns to AWG, for whatever reason (other than
manufacturer recalls), to exceed $350,000, in the aggregate, during any calendar
month.
Sec. 13.19. THIRD PARTY PAYORS. Borrower shall not suffer or
permit any certificate of need, provider number or contract listed on Schedule
15.16 to be amended, altered, suspended, terminated or made provisional, in any
material way, without giving immediate written notice to Agent. Borrower shall
immediately notify Agent in writing of any new provider number or any execution
by Borrower of any contract with any Third Party Payor. Borrower shall give
immediate written notice to Agent if any existing certificate of need is
amended, altered, suspended, or made provisional, or any new certificate of need
or other governmental consent is applied for by Borrower, if such amendment,
alteration, suspension, or being made provisional, or such new certificate of
need or other governmental consent, would have a material effect on Borrower
or Agent hereafter requests that it be notified of such circumstances.
SECTION 14. DEFAULTS AND REMEDIES.
Sec. 14.1. EVENTS OF DEFAULT. If any one or more of the following
events (herein called "Events of Default") shall occur for any reason whatsoever
(and whether such occurrence shall be voluntary or involuntary or come about
or be effected by operation of law or pursuant to or in compliance with any
judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(a) default shall be made in the due and punctual payment of the
principal of any of the Revolving Loan, the Term Loan, the Acquisition
Term Loan, or the reimbursement of any drawings under Letters of Credit,
when and as the same shall become due and payable whether pursuant to
Section 2 hereof, at maturity, by acceleration or otherwise (other than
any failure to reimburse a Letter of Credit drawing to the extent that
such failure is caused by the failure of any Lender to fund its pro rata
share of a Advance in respect of which Borrower shall have satisfied all
conditions to the making of such Advance (other than notice requirements
and the delivery of a Borrower's Certificate)); or
(b) default shall be made in the due and punctual payment of any
amount of interest on the Revolving Loan, the Term Loan, the Acquisition
Term Loan, or other Lender Debt or of any fee owing to any Lender or the
Agent pursuant to any of the Loan Documents, when and as such amount of
interest or fee shall become due and payable and such default shall
continue unremedied for five (5) Business Days; or
(c) default shall be made in the due and punctual payment of any
expense owing to any Lender or the Agent pursuant to any of the Loan
Documents, when and as such expense shall become due and payable or default
shall be made by any Credit Party in the performance or observance of, or
shall occur under, any covenant, agreement or provision (other than as
described in clause (a) or (b) above) contained in this Agreement or any
other Loan Document or in any instrument or document evidencing or creating
any obligation, guaranty or Lien in favor of the Agent or delivered to the
Lenders or the Agent in connection with or pursuant to this Agreement or
any Lender Debt, and, except in the case of the agreements and covenants
contained in Sections 12.1(a), 12.1(b), 12.1(c), 12.1(g)(i), 12.1(j),
12.1(k), 12.1(l), 12.6, 12.7, 12.8, 12.14, 12.16, 12.17 and Section 13 (as
to each of which no notice or grace period, except as otherwise set forth
in this Section 14.1, shall apply), continuance of such default for a
period of thirty (30) days after there has been given Written Notice of
such default to any of the Credit Parties by the Agent, or if this
Agreement or any other Loan Document or any such other instrument or
document shall terminate, be terminable or be terminated or become void
or unenforceable for any reason whatsoever without the written consent of
the Agent; or
(d) (i) one or more defaults shall occur in the payment of any
principal, interest or premium with respect to any Indebtedness for
Borrowed Money or any obligation which is the substantive equivalent of
Indebtedness for Borrowed Money (including, without limitation, obligations
under conditional sales contracts, finance leases and the like but
excluding trade payables incurred in the ordinary course of business) of
which any Credit Party is principal, guarantor, or other surety,
outstanding in a principal amount of at least $1,000,000 in the aggregate,
or (ii) one or more defaults shall occur under any agreement or instrument
under or pursuant to which any such Indebtedness for Borrowed Money or
obligation may have been issued, evidenced, created, assumed, guaranteed
or secured by any Credit Party and, in the case of either clause (i) or
(ii) of this Subsection 14.1(d), such default shall continue for more than
the period of grace, if any, therein specified or any holder of any such
Indebtedness for Borrowed Money (or any agent or trustee therefor) shall
be entitled to take any action to realize upon any Lien on any property
securing same, or (iii) any such Indebtedness for Borrowed Money or
obligation shall be declared due and payable prior to the stated maturity
thereof; or
(e) any representation, warranty or other statement of fact given
herein or in any writing, certificate, report or statement at any time
furnished by or on behalf of any Credit Party to any Lender or the Agent
pursuant to or in connection with this Agreement (including, without
limitation, any Borrower's Certificate) or any other Loan Document, shall
be false or misleading in any material respect when given and shall remain
false and misleading in any material respect; or
(f) any Credit Party shall (i) be unable to pay its debts generally
as they become due or is generally not paying its debts as they become due;
(ii) file a petition to take advantage of any insolvency act; (iii) make
an assignment for the benefit of its creditors; (iv) commence a proceeding
for the appointment of a receiver, trustee, liquidator or conservator of
itself or of a whole or any substantial part of its property; (v) file
a petition or answer seeking reorganization or arrangement or similar
relief under the Federal Bankruptcy Code or any other applicable law or
statute of the United States of America or any state; or (vi) by
appropriate proceedings of the board of directors of any Credit Party or
other governing body, authorize the filing of any such petition, making
of such assignment or commencement of such a proceeding; or
(g) a court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee, liquidator
or conservator of any Credit Party or of the whole or any substantial
part of its properties, or approve a petition filed against any Credit
Party seeking reorganization or arrangement or similar relief under the
Federal Bankruptcy Code or any other applicable law or statute of the
United States of America or any state; or if, under the provisions of any
other law for the relief or aid of debtors, a court of competent
jurisdiction shall assume custody or control of any Credit Party or of
the whole or any substantial part of its properties; or if there is
commenced against any Credit Party any proceeding for any of the foregoing
relief and such proceeding or petition remains undismissed for a period
of sixty (60) days; or if any Credit Party by any act indicates its consent
to or approval of any such proceeding or petition; or
(h) (i) a final judgment shall be rendered against any Credit
Party which, with other outstanding final judgments against such Credit
Party, to the extent not covered by insurance, by itself or together with
all other such judgments, exceeds in the aggregate $1,000,000 and if,
within thirty (30) days after entry thereof, such judgment shall not have
been discharged or execution thereof stayed pending appeal, or if, within
thirty (30) days after the expiration of any such stay, such judgment shall
not have been discharged; or (ii) any of the assets of a Credit Party or
any Subsidiary thereof shall be attached, seized, levied upon or subject
to an injunction, execution, writ or distress warrant and shall remain
unstayed or undismissed for a period of thirty (30) days, which by itself
or together with all other attachments, seizures, levies, injunctions,
executions, writs or distress warrants against properties of such Credit
Party or Subsidiary remaining unstayed or undismissed for a period of
thirty (30) days is for an amount in excess of $1,000,000; or
(i) (i) a Reportable Event shall have occurred with respect to
a Pension Benefit Plan;
(ii) any Credit Party or any ERISA Affiliate thereof, or an
administrator of any Pension Benefit Plan, shall have filed a notice of
intent to terminate a Pension Benefit Plan in a "distress termination"
under the provisions of Section 4041(c) of ERISA;
(iii) any Credit Party or any ERISA Affiliate thereof, or an
administrator of a Pension Benefit Plan shall have received a notice that
the PBGC has instituted proceedings to terminate (or appoint a trustee to
administer) a Pension Benefit Plan;
(iv) any other event or condition exists which, in the
reasonable opinion of the Required Lenders, constitutes grounds under the
provisions of Section 4042 of ERISA for the termination of (or the
appointment of a trustee to administer) any Pension Benefit Plan by the
PBGC;
(v) any Credit Party or any ERISA Affiliate has incurred a
liability under the provisions of Section 4063, 4064 or 4201 of ERISA;
(vi) any Person shall engage in any transaction in connection
with which any Credit Party will, in the reasonable opinion of the
Required Lenders, be subject to either a civil penalty assessed pursuant
to the provisions of Section 502(i) of ERISA or a tax imposed under the
provisions of Section 4975 of the Code; or
(vii) any Credit Party or any ERISA Affiliate fails to pay the
full amount of any installment due under Section 412(m) of the Code or any
"accumulated funding deficiency" (within the meaning of Section 302 of
ERISA and Section 412 of the Code) shall exist with respect to any Pension
Benefit Plan;
and in each case in clauses (i) through (vii) above, in the reasonable
opinion of the Required Lenders, such event or condition, together with
all other such events or conditions, if any, will subject a Credit Party
to any tax, penalty or other liability which, in the aggregate, after
giving effect to any available indemnity or bond, will be in excess of
$1,000,000; or
(j) a Change of Control shall occur; or
(k) a default by any Credit Party under any provision of any Lease
which, together with other Leases in default, involve annual base rent of
$600,000 or more, shall occur and continue beyond any applicable grace
period which would permit the lessor thereunder to (i) terminate the Lease
or (ii) exercise any other rights under such Lease which would have an
adverse effect on the Lenders' interest in any Collateral located on the
premises in respect of such Lease; or
(l) a materially adverse change, as determined by the Agent in
good faith, occurs in the financial condition of either Borrower or
Parent;
then, and in any such event and at any time thereafter, if such or any other
Event of Default shall then be continuing:
(A) either or both of the following actions may be taken:
(i) the Agent shall, at the direction of all Lenders, (x) declare any
obligation to lend hereunder terminated, and/or (y) declare any obligation
to issue Letters of Credit hereunder terminated, whereupon such obligation
to make further Advances or issue Letters of Credit hereunder shall
terminate immediately and (ii) the Agent may, at its option, or, the Agent
shall, upon the direction of the Required Lenders, declare any or all of
the Lender Debt to be due and payable, and the same shall forthwith
become due and payable without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived, anything contained
herein or in any instrument evidencing the Lender Debt to the contrary
notwithstanding; provided, however, that notwithstanding the above, if
there shall occur an Event of Default under clause (f) (other than
subclause (f) (i)) or clause (g) above, then the obligation of the Lenders
to lend and issue Letters of Credit hereunder shall automatically terminate
and any and all of the Lender Debt shall be immediately due and payable
without any action by the Agent or any Lender;
(B) the Agent, at the direction of all Lenders, shall
have and may exercise all rights and remedies of a secured party under
the UCC in effect in the State of New York at such time, whether or not
applicable to the affected Collateral, and otherwise, including, without
limitation, the right to foreclose the Liens granted herein or in any of
the Security Documents by any available judicial procedure and/or to take
possession of any or all of the Collateral, the other security for the
Lender Debt and the books and records relating thereto, with or without
judicial process; for the purposes of the preceding sentence, the Agent
may enter upon any or all of the premises where any of the Collateral,
such other security or books or records may be situated and take
possession and remove the same therefrom; and
(C) the Agent, at the direction of all Lenders, shall
have the right, in its sole discretion, to determine which rights, Liens
or remedies it shall at any time pursue, relinquish, subordinate, modify
or take any other action with respect thereto, without in any way modifying
or affecting any of them or any of the Lenders' rights hereunder; and any
moneys, deposits, Pledged Accounts, balances or other property which may
come into any Lender's or the Agent's hands at any time or in any manner,
may be retained by such Lender or the Agent and applied to any of the
Indebtedness of the Credit Parties to the Agent
and the Lenders hereunder.
Sec. 14.2. SUITS FOR ENFORCEMENT. In case any one or more Events
of Default shall occur and be continuing, the Agent, at the direction of all
Lenders, on behalf of the Agent and the Lenders may proceed to protect and
enforce their rights or remedies either by suit in equity or by action at law,
or both, whether for the specific performance of any covenant, agreement
or other provision contained herein or in any document or instrument delivered
in connection with or pursuant to this Agreement or any other Loan Document,
or to enforce the payment of the Lender Debt or any other legal or equitable
right or remedy.
Sec. 14.3. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy
herein conferred upon the Lenders or the Agent is intended to be exclusive of
any other right or remedy contained herein or in any instrument or document
delivered in connection with or pursuant to this Agreement or any other Loan
Document, and every such right or remedy shall be cumulative and shall be in
addition to every other such right or remedy contained herein and therein or
now or hereafter existing at law or in equity or by statute, or otherwise.
Sec. 14.4. RIGHTS AND REMEDIES NOT WAIVED. No course of dealing
between any of the Credit Parties and any Lender or the Agent or any failure
or delay on the part of any Lender or the Agent in exercising any rights or
remedies hereunder shall operate as a waiver of any rights or remedies of the
Lenders or the Agent and no single or partial exercise of any rights or
remedies hereunder shall operate as a waiver or preclude the exercise of any
other rights or remedies hereunder or of the same right or remedy on a future
occasion.
Sec. 14.5. APPLICATION OF PROCEEDS. After the occurrence of an
Event of Default and acceleration of the Lender Debt, the proceeds of the
Collateral, other collections received from the Credit Parties and proceeds of
property of Persons other than the Credit Parties securing the Lender Debt and
collections from each Guaranty shall be applied by the Agent to payment of the
Lender Debt in the following order, unless a court of competent jurisdiction
shall otherwise direct:
(a) FIRST, to payment of all costs and expenses of the Agent
and the Lenders incurred in connection with the preservation, collection
and enforcement of the Lender Debt or any Guaranties, or of any of the
Liens granted to the Agent pursuant to the Security Documents or otherwise,
including, without limitation, any amounts advanced by the Agent or the
Lenders to protect or preserve the Collateral;
(b) SECOND, to payment of that portion of the Lender Debt
constituting accrued and unpaid interest, fees and indemnities payable
under Section 4, to the extent applicable to Acquisition Term Loan
Advances, Section 5 hereof, ratably amongst the Agent and the Lenders in
accordance with the proportion which the accrued interest, fees and
indemnities payable under Section 4, and, to the extent applicable to
Acquisition Term Loan Advances, Section 5 hereof constituting the Lender
Debt owing to the Agent and each such Lender at such time bears to the
aggregate amount of accrued interest, fees and indemnities payable under
Section 4, and, to the extent applicable to Acquisition Term Loan Advances,
Section 5 hereof constituting the Lender Debt owing to the Agent and all
of the Lenders at such time, until such interest, fees and indemnities
shall be paid in full;
(c) THIRD, to payment of that portion of the Lender Debt
constituting accrued and unpaid interest, fees and indemnities payable
under Section 3, and, to the extent applicable to Term Loan Advances,
Section 5 hereof, ratably amongst the Agent and the Lenders in accordance
with the proportion which the accrued interest, fees and indemnities
payable under Section 3, to the extent applicable to Term Loan Advances,
Section 5 hereof constituting the Lender Debt owing to the Agent and each
such Lender at such time bears to the aggregate amount of accrued interest,
fees and indemnities payable under Section 3 and, to the extent applicable
to Term Loan Advances, Section 5 hereof constituting the Lender Debt owing
to the Agent and all of the Lenders at such time, until such interest,
fees and indemnities shall be paid in full;
(d) FOURTH, to payment of that portion of the Lender Debt
constituting accrued and unpaid interest, fees and indemnities payable
under Section 2, and, to the extent applicable to Revolving Credit
Advances, Section 5, hereof, ratably amongst the Agent and the Lenders in
accordance with the proportion which the accrued interest, fees and
indemnities payable under Section 2, to the extent applicable to Revolving
Credit Advances, Section 5 hereof constituting the Lender Debt owing to
the Agent and each such Lender at such time bears to the aggregate amount
of accrued interest, fees and indemnities payable under Section 2, to the
extent applicable to Revolving Credit Advances, Section 5 hereof
constituting the Lender Debt owing to the Agent and all of the Lenders at
such time, until such interest, fees and indemnities shall be paid in
full;
(e) FIFTH, to each Issuing Lender to reimburse the Issuing
Lender for that portion of any payments made by it with respect to Letters
of Credit for which a Lender, as a participant in such Letter of Credit,
failed to pay its pro rata share thereof as required pursuant to Section
16.18 hereof;
(f) SIXTH, to payment of the principal of the Acquisition
Term Loan B Advances, ratably amongst the Lenders in accordance with the
proportion which the principal amount of the Acquisition Term Loan B
Advances owing to each such Lender bears to the aggregate principal amount
of the Acquisition Term Loan B Advances owing to all of the Lenders, until
such principal of the Acquisition Term Loan B Advances shall be paid in
full;
(g) SEVENTH, to payment of the principal of the Acquisition
Term Loan A Advances, ratably amongst the Lenders in accordance with the
proportion which the principal amount of the Acquisition Term Loan A
Advances owing to each such Lender bears to the aggregate principal amount
of the Acquisition Term Loan A Advances owing to all of the Lenders, until
such principal of the Acquisition Term Loan A Advances shall be paid in
full;
(h) EIGHTH, to payment of the principal of the Term Loan
Advances, ratably amongst the Lenders in accordance with the proportion
which the principal amount of the Term Loan Advances owing to each such
Lender bears to the aggregate principal amount of the Term Loan Advances
owing to all of the Lenders until such principal of the Term Loan Advances
shall be paid in full;
(i) NINTH, to payment of the principal of the Revolving Credit
Advances (excluding the aggregate undrawn amount of any then outstanding
Letters of Credit), ratably amongst the Lenders in accordance with the
proportion which the principal amount of the Revolving Credit Advances
owing to each such Lender bears to the aggregate principal amount of the
Revolving Credit Advances owing to each such Lender bears to the aggregate
principal amount of the Revolving Credit Advances (excluding the aggregate
undrawn amount of any then outstanding Letters of Credit) owing to all of
the Lenders until such principal of the Revolving Credit Advances shall
be paid in full;
(j) TENTH, to the extent, with respect to Letters of Credit,
that the collateral, if any, held by the Agent as security for the Letters
of Credit outstanding at the time of distribution hereunder is
insufficient, to the Agent to be held by the Agent as additional
collateral therefor;
(k) ELEVENTH, to the payment of all other Lender Debt, ratably
amongst the Lenders in accordance with the proportion which the amount of
such other Lender Debt owing to each such Lender bears to the aggregate
principal amount of such other Lender Debt owing to all of the Lenders
until such other Lender Debt shall be paid in full; and
(l) TWELFTH, the balance, if any, after all of the Lender
Debt has been satisfied, shall, except as otherwise provided in the
Security Documents, be deposited by the Agent in an operating account of
Borrower with the Agent designated by Borrower, or paid over to such other
Person or Persons as may be required by law.
The Credit Parties acknowledge and agree that they shall remain
liable to the extent of any deficiency between the amount of the proceeds of
the Collateral and collections under the Guaranties and the aggregate amount
of the sums referred to in the first through sixth clauses above.
Sec. 14.6 INVENTORY COUNTING AND APPRAISAL. After the occurrence
of a Default or an Event of Default, the Agent has the right to engage a third
party, acceptable to the Agent in its sole discretion, and at Borrower's
expense, to (a) provide directly to the Agent and the Lenders sampling counts
of Borrower's Inventory at times acceptable to the Agent and the Lenders, and
(b) provide directly to the Agent and the Lenders appraisals of the Borrower's
Inventory at times acceptable to the Agent and the Lenders.
SECTION 15. REPRESENTATIONS AND WARRANTIES.
Each of Parent and Borrower hereby represents and warrants as
follows (which representations and warranties shall survive the execution and
delivery of this Agreement and shall be deemed to be incorporated in each
officer's certificate submitted to the Agent pursuant to Section 10.1 hereof,
and shall be deemed repeated and confirmed with respect to, and as of the date
of, each borrowing and each issuance of a Letter of Credit hereunder, provided
that any representation or warranty which is made as of a specified date shall
be deemed repeated as of such date):
Sec. 15.1. CORPORATE STATUS. (a) Each Credit Party is a duly
organized and validly existing corporation in good standing under the laws of
the state of its incorporation with perpetual corporate existence, and has the
corporate power and authority to own its properties and to transact the business
in which it is engaged or presently proposes to engage.
(b) Each Credit Party is qualified as a foreign corporation and in
good standing in each other jurisdiction in which it owns or leases property
of a nature, or transacts business of a type, that would make such qualification
necessary, except where the failure to so qualify could not reasonably be
expected to have a Material Adverse Effect.
(c) The capital stock of each Credit Party is owned as set forth
on Schedule 15.1 hereto (which shall be updated from time to time upon the
formation of any new Subsidiary of Borrower and delivered to the Agent and each
Lender), which Schedule 15.1 correctly sets forth all Liens encumbering the
equity interests of Parent in the capital stock of Borrower.
(d) None of the Credit Parties has any Subsidiaries except as set
forth in Schedule 15.1 hereto (which shall be updated from time to time upon
the formation of any new Subsidiary of Borrower and delivered to the Agent and
each Lender), which Schedule 15.1 correctly sets forth the name of each such
Subsidiary, its jurisdiction of incorporation and a statement of the outstanding
capitalization of each such Subsidiary as of the date of delivery of such
Schedule 15.1.
Sec. 15.2. POWER AND AUTHORITY. Each of the Credit Parties has the
corporate power and authority to execute, deliver and perform the terms and
provisions of this Agreement and the other Loan Documents, in each case, to
which it is a party, and all instruments and documents delivered by it pursuant
thereto and hereto and each of the Credit Parties has duly taken or caused to
be duly taken all necessary corporate action (including, without limitation, the
obtaining of any consent of stockholders required by law or its certificate of
incorporation or bylaw), to authorize the execution, delivery and performance
of this Agreement and each other Loan Document, in each case, to which it is a
party, and the instruments and documents delivered by it pursuant thereto and
hereto. Each of this Agreement and the other Loan Documents, and each of the
other instruments and documents executed and delivered by any of the Credit
Parties, pursuant hereto and thereto to which it is a party constitute a legal,
valid and binding obligation of such Person, and is enforceable in accordance
with its terms.
Sec. 15.3. NO VIOLATION OF AGREEMENTS. None of the Credit Parties is
in violation of any provision of its certificate or articles of incorporation,
as the case may be, or its bylaws or is in default under any lease, indenture,
mortgage, deed of trust, agreement or other instrument, in any case, involving
total payments to or total payments by, Borrower or Parent of $1,000,000 or
more, to which any of them is a party or by which any of them may be bound.
Neither the execution and delivery of this Agreement, the other Loan Documents
or any of the instruments and documents to be delivered pursuant hereto or
thereto, the consummation of the transactions herein and therein contemplated,
compliance with the provisions hereof or thereof, nor the execution, delivery
and performance by any Credit Party of this Agreement, the other Loan Documents
or any of such instruments or documents, nor compliance with the provisions
hereof or thereof, will violate any provision of the certificate of
incorporation or bylaws of any Credit Party or any law or regulation, or any
order or decree of any court or governmental instrumentality, or will (a)
conflict with, or result in the breach of, or constitute a default or permit
termination under, any lease, indenture, mortgage, deed of trust, agreement or
other instrument, in any case, involving total payments to or total payments
by Borrower of $1,000,000 or more, to which any Credit Party is a party or by
which any of them or their respective properties may be bound, or (b) except
as contemplated under this Agreement or under any other Loan Document, result
in the creation or imposition of any Lien upon any property of any Credit Party.
Sec. 15.4. NO LITIGATION. (a) Except as set forth in Schedule 15.4
hereto, there are no actions, suits or proceedings pending or, to the best
knowledge of Borrower, threatened against any of the Credit Parties or any of
their respective Subsidiaries before any court, arbitrator or governmental or
administrative body or agency which challenge the validity or propriety of the
transactions contemplated under this Agreement, the other Loan Documents or the
documents, instruments and agreements executed or delivered in connection
herewith, therewith or related thereto, or which, if adversely determined,
could reasonably be expected to have a Material Adverse Effect.
(b) No Credit Party or any Subsidiary thereof is in default in any
material respect under any applicable statute, rule, order, decree or regulation
of any court, arbitrator or governmental body or agency having jurisdiction over
such Credit Party or Subsidiary.
(c) No judgment, order, injunction or other similar restraint with
respect to any Credit Party or any Subsidiary thereof exists which prohibits
any of the other transactions contemplated hereby or in connection herewith.
Sec. 15.5. GOOD TITLE TO PROPERTIES. (a) Each Credit Party and i
ts Subsidiaries has good and marketable title to all the material properties
and assets reflected on its balance sheet and valid leasehold interests in the
property it leases, including, without limitation, the Collateral, subject to
no Liens, except such as would be permitted under Section 13.2 of this
Agreement. All real property owned by or leased to any Credit Party or any
Subsidiary thereof is described on Schedule 15.5(a) annexed hereto.
Notwithstanding the foregoing, this Section 15.5 specifically excludes any
representation or warranty with respect to Excluded Properties.
(b) Each Lease described on Schedule 15.5(a) hereto is in full force
and effect, is valid and binding and is enforceable in accordance with its
terms. There exists no default by any Credit Party, or to the best knowledge
of Borrower by any other Person, under any provision of any Lease which would
permit the lessor thereunder to terminate the Lease or to exercise any other
rights under such Lease which would have an adverse effect on the Lenders'
interest in any Collateral located on the premises in respect of any Lease.
(c) No payment due on any Lease described on Schedule 15.5(a) is
more than thirty (30) days past due, except for those Leases described on
Schedule 15.5(c) annexed hereto and except for contested rental payments not
required to be paid under the Plan.
Sec. 15.6. FINANCIAL STATEMENTS AND CONDITION. (a) The audited
financial statements of Parent and its Subsidiaries for the year ended January
3, 1998, present fairly in accordance with GAAP (i) the financial position of
Borrower as of the date of such financial statements and (ii) the results of
operations of Borrower for such period. Borrower had no direct or indirect
contingent liabilities as of the date of such financial statements which are
not reserved for therein or which in accordance with GAAP would have to be
included in footnotes thereto, such financial statements have been prepared
in accordance with GAAP applied on a basis consistently maintained throughout
the period involved (subject to normal year end adjustments), and there has
been no material adverse change in the business, operations, liabilities,
assets, properties, prospects or condition (financial or otherwise) of Borrower
since December 31, 1997. There has been no material adverse change in the
business, operations, liabilities, assets, properties, prospects or condition
(financial or otherwise) of any Credit Party since November 7, 1998.
(b) The Agent has been furnished projections of the future
performance of Borrower and its Subsidiaries. The projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by Borrower to be reasonable at the time
made, it being recognized by the Lenders that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by such projections may differ from the projected results.
No fact is known to any Credit Party which could reasonably be expected to have
a Material Adverse Effect, that has not been set forth in the financial
statements referred to in this Section 15.6 or disclosed herein or otherwise
disclosed to the Agent in writing prior to the most recent date on which the
representation contained in this Section 15.6 is made or repeated.
(c) The budget dated as of October 12, 1998, a copy of which is
attached hereto as Exhibit 15.6(c), is the budget of the financial condition
and results of operations of Parent and its Subsidiaries for the Fiscal Year
ending January 2, 1999, required to be delivered pursuant to Section 12.1(l).
Sec. 15.7. TRADEMARKS, PATENTS, ETC. Each of the Credit Parties
possesses all the trademarks, trade names, copyrights, patents, licenses or
rights in any thereof adequate for the conduct of its business, without
conflict with the rights of others.
Sec. 15.8. TAX LIABILITY. Each of the Credit Parties and their
respective Subsidiaries has filed all tax returns which are required to be
filed, and, except as otherwise permitted by Section 12.2 hereof, has paid
all taxes which have become due pursuant to such returns or pursuant to any
assessment received by it.
Sec. 15.9. GOVERNMENTAL ACTION. No action of, or filing with, any
governmental or public body or authority (other than normal reporting
requirements or filing as to Collateral under the provisions of Section 8
hereof) is required to authorize, or is otherwise required in connection with,
the execution, delivery or performance of this Agreement, the Security
Documents, the Guaranties, the Notes, the other Loan Documents, or any of the
instruments or documents to be delivered pursuant hereto or thereto, except
such as have been made or will be made as contemplated by such agreements.
Sec. 15.10. DISCLOSURE. Neither the Schedules hereto, nor the
financial statements referred to in Section 15.6 hereof, nor the certificates,
statements, reports or other documents furnished to any Lender or the Agent by
or on behalf of any of the Credit Parties in connection herewith or in
connection with any transaction contemplated hereby, nor this Agreement or any
other Loan Document, at the time furnished, contained any untrue statement of
a material fact or omitted to state any material fact (known to any such Person
in the case of any document not furnished by it) necessary in order to make
the statements contained herein or therein not misleading in light of the
circumstances in which the same were made.
Sec. 15.11. REGULATION U. None of the Credit Parties or any of their
respective Subsidiaries owns any "margin stock" as such term is defined in
Regulation U, as amended (12 C.F.R. Part 221), of the Board. The proceeds of
the borrowings made hereunder will be used only for the purposes set forth in
Section 11 hereof. None of the proceeds will be used, directly or indirectly,
for the purpose of purchasing or carrying any margin stock or for the purpose
of reducing or retiring any Indebtedness which was originally incurred to
purchase or carry margin stock or for any other purpose which might constitute
the Revolving Loan under this Agreement a "purpose credit" within the meaning
of said Regulation U or Regulation X (12 C.F.R. Part 224) of the Board. None
of the Credit Parties or any of their respective Subsidiaries or any agent
acting in its behalf has taken or will take any action which might cause this
Agreement or any of the documents or instruments delivered pursuant hereto to
violate any regulation of the Board or to violate the Securities Exchange Act
or any applicable state securities laws.
Sec. 15.12. INVESTMENT COMPANY. None of the Credit Parties or any
of their respective Subsidiaries is an "investment company," or an "Affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940,
as amended (15 U.S.C. Sec. 80a-1, et seq.). None of the transactions
contemplated by this Agreement, the other Loan Documents or the Subordinated
Note Documents will violate such Act.
Sec. 15.13. EMPLOYEE BENEFIT PLANS. (a) Except as set forth on
Schedule 15.13(a) hereto, no Reportable Event has occurred with respect to any
Pension Benefit Plan.
(b) No Credit Party has engaged in, or has any knowledge of, any
non-exempt prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) with respect to any Employee Plan.
(c) All of the Employee Plans comply currently both as to form (to
the extent required by Section 401(b) of the Code) and operation, in all
material respects, with their terms (to the extent consistent with the currently
applicable provisions of the Code) and with the provisions of ERISA and the
Code, and all other applicable laws, rules and regulations. A favorable
determination as to the qualification under Section 401(a) of the Code has been
made by the Internal Revenue Service with respect to each Pension Benefit Plan
and, to the best knowledge of each of the Credit Parties, nothing has occurred
since the date of such determination that would adversely affect such
qualification.
(d) The amount for which the Credit Parties or any of their
respective ERISA Affiliates would be liable pursuant to the provisions of
Sections 4062, 4063 or 4064 of ERISA if each Pension Benefit Plan were
terminated as described therein could not reasonably be expected to have a
Material Adverse Effect.
(e) Except as set forth on Schedule 15.13(e) hereto, none of the
Credit Parties nor any of their respective ERISA Affiliates is now, or has been
during the preceding five (5) years, a contributing employer to a Multiemployer
Plan. None of the Credit Parties nor any of their respective ERISA Affiliates
has:
(i) ceased operations at a facility so as to become subject
to the provisions of Section 4062(e) of ERISA,
(ii) withdrawn as a substantial employer so as to become
subject to the provisions of Section 4063 of ERISA,
(iii) ceased making contributions to any Pension Benefit Plan
subject to the provisions of Section 4064(a) of ERISA to which any
of the Credit Parties or any of their respective ERISA Affiliates
made contributions,
(iv) incurred or caused to occur a "complete withdrawal"
(within the meaning of Section 4203 of ERISA) or a "partial
withdrawal" (within the meaning of Section 4205 of ERISA) from a
Multiemployer Plan so as to incur withdrawal liability under Section
4201 of ERISA (without regard to subsequent reduction or waiver
of such liability under Sections 4207 or 4208 of ERISA) which could
reasonably be expected to have a Material Adverse Effect, or
(v) been a party to any transaction or agreement under which
the provisions of Section 4204 of ERISA were applicable and which
could reasonably be expected to result in liability for any Credit
Party.
(f) The potential withdrawal liability to the Multiemployer Plans,
in the aggregate, (i) at the Closing Date does not exceed $1,000,000, based
on the most recent estimate of such liability provided to the Credit Parties
by each such Plan and (ii) at any time thereafter, will not exceed an amount
that would have a Material Adverse Effect if imposed.
(g) (i) No notice of intent to terminate a Pension Benefit Plan
under Section 4041(c) of ERISA has been filed by any of the Credit Parties or
any of their respective ERISA Affiliates, (ii) no Pension Benefit Plan been
terminated, pursuant to the provisions of Section 4041(e) of ERISA and (iii)
no Credit Party has any outstanding liability as a result of any other
termination of a Pension Benefit Plan subject to Title IV of ERISA which could
reasonably be expected to have a Material Adverse Effect.
(h) The PBGC has not instituted proceedings to terminate (or
appoint a trustee to administer) a Pension Benefit Plan, and no event has
occurred or condition exists which could reasonably be expected to constitute
grounds under the provisions of Section 4042 of ERISA for the termination of
(or the appointment of a trustee to administer) any such Plan.
(i) None of the Credit Parties has any reason to believe that,
with respect to each Pension Benefit Plan that is subject to the provisions
of Title I, Subtitle B, Part 3 of ERISA, the funding method used in connection
with such Plan is not acceptable under ERISA, and the actuarial assumptions
and methods used in connection with funding such Pension Benefit Plan are not
reasonable. No such Pension Benefit Plan has incurred any "accumulated funding
deficiency" (as defined in Section 412 of the Code), whether or not waived.
(j) There are no actions, suits or claims pending (other than
routine claims for benefits) or, to the knowledge of any of the Credit Parties,
which could reasonably be expected to be asserted, against any Employee Plan
maintained for employees or the assets of any such Employee Plan. No civil or
criminal action brought pursuant to the provisions of Title I, Subtitle B,
Part 5 of ERISA is pending or, to the best knowledge of any Credit Party,
threatened against any fiduciary or any Employee Plan.
Sec. 15.14. PERMITS, ETC. (a) Each Credit Party and each
Subsidiary thereof possesses all permits, licenses, approvals and consents of
Federal, state and local governments and regulatory authorities required to
conduct properly its business as presently conducted and proposed to be
conducted, except to the extent failure to have any such permit, license,
approval or consent could not be reasonably be expected to have a Material
Adverse Effect.
(b) Each such permit, license, approval and consent is and will
be in full force and effect, and no event has occurred which permits (or with
the passage of time would permit) the revocation or termination of any such
permit, license, approval or consent or the imposition of any restriction
thereon of such nature as may materially limit the operation of the business
covered thereby.
(c) All approvals, applications, filings, registrations, consents
or other actions required of any local, state or Federal authority to enable
each Credit Party and the Subsidiaries thereof to exploit any such permit,
license, approval or consent has been obtained or made.
(d) No Credit Party nor any Subsidiary of any Credit Party (i) is
in violation of any duty or obligation required by law or any rule or regulation
applicable to the operation of any of its businesses, which violation could
reasonably be expected to have a Material Adverse Effect, or (ii) has received
any notice from the granting body or any other governmental authority with
respect to any material breach of any covenant under, or any material default
with respect to, any such permit, license, approval or consent.
(e) Before and upon giving effect to this Agreement, the Notes and
the other Loan Documents, no material default shall have occurred and be
continuing under any such permit, license, approval or consent.
(f) All consents and approvals of, filings and registrations with,
and all other actions in respect of, all governmental agencies, authorities or
instrumentalities required to maintain any such permit, license, approval or
consent in full force and effect prior to the scheduled date of expiration
thereof has been, or, prior to the time when required, will have been, obtained,
given, filed or taken and are or will be in full force and effect.
(g) There is not pending or, to the best knowledge of any Credit
Party or Subsidiary thereof, threatened, any action to revoke, cancel, suspend,
modify or refuse to renew any such permit, license, approval or consent and
each business covered by each such permit, license, approval or consent is
being operated in compliance with such permit, license, approval or consent.
(h) There is not now issued or outstanding or, to the best knowledge
of any Credit Party or Subsidiary thereof, threatened any notice of any hearing,
violation or complaint against such Credit Party or Subsidiary thereof with
respect to any such permit, license, approval or consent and no Credit Party
or Subsidiary thereof has any knowledge that any Person intends to contest the
renewal of any such permit, license, approval or consent.
Sec. 15.15. ENVIRONMENTAL STATUS. (a) Except as described on
Schedule 15.15 hereto, none of the Credit Parties or any of their respective
Subsidiaries is in violation of any applicable Environmental Law, nor are any
of the Credit Parties or any of their respective Subsidiaries under
investigation or under review by any governmental agency or authority with
respect to compliance therewith or with respect to the generation, use,
treatment, storage or Release of any Hazardous Material in any case, except
as to any such violation, investigation or review existing as of the Closing
Date, which could reasonably be expected to have a Material Adverse Effect,
involve criminal penalties or could expose the Agent or any Lender to civil or
criminal penalties.
(b) None of the Credit Parties nor any of their respective
Subsidiaries has any liability or contingent or potential liability in
connection with the past generation, use, treatment, storage, or Release of any
Hazardous Material in any case, (i) which exists as of the Closing Date and
which could reasonably be expected to cause cost and expense to Borrower and
its Subsidiaries of in excess of $500,000 individually or in the aggregate,
except as set forth on Schedule 15.15 hereto, or (ii) which does not exist on
the Closing Date and which (x) was required to be disclosed to the Agent under
Section 12.1(m) hereof and which has not been disclosed in writing to the Agent
or (y) could reasonably be expected to have a Material Adverse Effect, involve
criminal penalties or could expose the Agent or any Lender to civil or criminal
penalties.
(c) Except as described on Schedule 15.15 hereto, there is no
Hazardous Material that may pose any material risk to safety, health, or the
environment, or that is defined or regulated as a hazardous, toxic or dangerous
waste or other substance under any Environmental Law on, under or about any
property owned, leased or operated by any Credit Party or any Subsidiary thereof
except any such Hazardous Material that is required in the ordinary course of
Borrower's business as conducted as of the Closing Date and that is adequately
protected or contained in accordance with applicable Environmental Laws, and
there has been no Release of any such Hazardous Material on, under or about
such property in any case, (i) which exists as of the Closing Date and which
could reasonably be expected to cause cost and expense to Borrower and its
Subsidiaries of in excess of $500,000 individually or in the aggregate, except
as set forth on Schedule 15.15 hereto, or (ii) which does not exist on the
Closing Date and which (x) was required to be disclosed to the Agent under
Section 12.1(m) hereof and which has not been disclosed in writing to the Agent
or (y) could reasonably be expected to have a Material Adverse Effect, involve
criminal penalties or could expose the Agent or any Lender to civil or criminal
penalties.
Sec. 15.16. MEDICARE/MEDICAID AND THIRD PARTY PAYOR AGREEMENTS.
Borrower has obtained and currently has in place valid and binding provider
agreements or other written agreements necessary to enable Borrower to receive
payment form Medicare/Medicaid Account Debtors, Third Party Payors or other
governmental entities. All written agreements between Borrower and such
Medicare/Medicaid Account Debtors, Third Party Payors and other governmental
entities, and all provider numbers which Borrower is required to have in its
own name in order to operate its business as presently conducted are listed on
the attached Schedule 15.16.
Sec. 15.17. VALIDITY OF RECEIVABLES. (a) Except with respect to
Receivables, the aggregate amount of which would not constitute a material
percentage of all Receivables at any given time and Receivables the failure
of which to satisfy the following requirements, would not have a material
adverse effect on the value of the Collateral, each Receivable existing on the
Closing Date is, and each future Receivable will be, at the time of its
creation, a genuine obligation enforceable against the account debtor thereof
in accordance with its terms, and represents an undisputed and bona fide
indebtedness owing to Borrower by an account debtor, without defense, setoff
or counterclaim, free and clear of all Liens other than the security interest
in favor of the Agent under the Security Documents; and no payment has been
received with respect to any Receivable and no Receivable is subject to any
credit or extension or agreement therefor.
(b) No Receivable is evidenced by any note, draft, trade acceptance
or other instrument for the payment of money.
Sec. 15.18. COLLECTION AND CONCENTRATION ACCOUNTS; LOCK-BOX
ACCOUNTS. (a) The names and addresses of all the banks holding one or more
Collection Accounts, Lock-Box Accounts, and/or Pharmaceutical Collection
Accounts, and the name and address of the bank holding the Concentration
Account, together with the account numbers of the Collection Accounts, the
Lock-Box Accounts, the Pharmaceutical Collection Accounts, and the Concentration
Account at such banks, are specified in Schedule 15.18(a) hereto, as amended
from time to time with the prior written consent of the Agent.
(b) The names and addresses of all the banks holding one or more
Special Accounts, together with the account numbers of such Special Accounts
at such banks, are specified in Schedule 15.18(b) hereto, as amended from time
to time with the prior written consent of the Agent.
Sec. 15.19. PARENT. Parent neither owns nor controls access to
(a) inventory or accounts or (b) books or records relating to Collateral of
Borrower.
Sec. 15.20. VALIDITY OF PHARMACEUTICAL RECEIVABLES. (a) Except with
respect to Pharmaceutical Receivables, the aggregate amount of which would not
constitute a material percentage of all Pharmaceutical Receivables at any given
time and Pharmaceutical Receivables the failure of which to satisfy the
following requirements, would not have a material adverse effect on the value
of the Collateral, each Pharmaceutical Receivable existing at the Closing Date
is, and each future Pharmaceutical Receivable will be, at the time of its
creation, a genuine obligation enforceable against the account debtor thereof
in accordance with its terms, and represents an undisputed and bona fide
indebtedness owing to borrower by an account debtor, without defense, setoff
or counterclaim, free and clear of all Liens other than the security interest
in favor of the Agent under the Security Documents; and no payment has been
received with respect to any Pharmaceutical Receivable and no Pharmaceutical
Receivable is subject to any credit or extension or agreement therefor.
(b) No Pharmaceutical Receivable is evidenced by any note, draft,
trade acceptance or other instrument for the payment of money.
Sec. 15.21. VALIDITY OF VENDOR RECEIVABLES. (a) Except with respect
to Vendor Receivables, the aggregate amount of which would not constitute a
material percentage of all Vendor Receivables at any given time and Vendor
Receivables the failure of which to satisfy the following requirements, would
not have a material adverse effect on the value of the Collateral, each Vendor
Receivable existing on the Closing Date is, and each future Vendor Receivable
will be, at the time of its creation, a genuine obligation enforceable against
the Vendor who is the account debtor thereof in accordance with the terms of
the Vendor Rebate Agreement applicable to such Vendor Receivable, and represents
an undisputed and bona fide indebtedness owing to Borrower by the Vendor
identified as being so indebted to Borrower in the applicable Vendor Rebate
Agreement, without defense, setoff or counterclaim, free and clear of all Liens
other than the security interest in favor of the Agent under the Security
Documents; and no payment has been received with respect to any Vendor
Receivable and no Vendor Receivable is subject to any credit or extension or
agreement therefor.
(b) No Vendor Receivable is evidenced by any note, draft, trade
acceptance or other instrument for the payment of money.
Sec. 15.22. COMPLIANCE WITH INDENTURE. After giving effect to the
Revolving Credit Facility Commitment, the Term Loan Facility Commitment, the
Acquisition Term Loan Facility Commitment, and all Advances made thereunder,
Borrower will at all times during the term of this Agreement be in compliance
with the terms and conditions of the Indenture, in general, and the terms and
conditions dealing with Permitted Indebtedness (as such term is defined in the
Indenture), in particular.
SECTION 16. MISCELLANEOUS.
Sec. 16.1. COLLECTION COSTS. If an Event of Default occurs, the
Credit Parties, jointly and severally, shall pay all court costs and costs of
collection, including, without limitation, reasonable fees, expenses and
disbursements of counsel employed in connection with any and all collection
efforts. The attorney's fees arising from such services, including those of any
appellate proceedings, and all reasonable out-of-pocket expenses, costs, charges
and other fees incurred by such counsel in any way or with respect to or arising
out of or in connection with or relating to any of the events or actions
described in this Section 16.1 shall be payable by the Credit Parties to the
Agent or the Lenders, as the case may be, on demand, and shall be additional
obligations under this Agreement. Without limiting the generality of the
foregoing, such expenses, costs, charges and fees may include: recording costs,
appraisal costs, paralegal fees, costs and expenses; accountants' fees, costs
and expenses; court costs and expenses; photocopying and duplicating expenses;
court reporter fees, costs and expenses; long distance telephone charges; air
express charges; telegram charges; telecopier charges; secretarial overtime
charges; and expenses for travel, lodging and food paid or incurred in
connection with the performance of such legal services.
Sec. 16.2. AMENDMENT, MODIFICATION AND WAIVER. (a) No amendment,
modification or waiver of any provision of the Loan Documents and no consent
by the Agent or the Lenders to any departure therefrom by any of the Credit
Parties shall be effective unless such amendment, modification or waiver shall
be in writing and signed by a duly authorized officer of the appropriate Credit
Party, the Agent, the Lenders or the Required Lenders, as the case may be (as
more fully described below), and the same shall then be effective only for the
period and on the conditions and for the specific instances and purposes
specified in such writing.
(b) No notice to or demand on any of the Credit Parties in any
case shall entitle any of the Credit Parties to any other or further notice or
demand in similar or other circumstances.
(c) Any term or provision of any Loan Document may be amended or
modified and the observance of any provision of any Loan Document may be waived
with the written consent of the Credit Parties being a party to such Loan
Document and the Required Lenders; provided, however, that no such amendment,
modification or waiver shall, without the prior written consent of the Agent,
amend or waive any of the provisions of Section 5.8, 6.7, 16.13, 16.14 or 16.15
hereof, or otherwise change any of the rights or obligations of the Agent under
any of the Loan Documents; provided, further, that no amendment, modification
or waiver of any of the provisions of Section 7, 16.14, 16.15 or 16.18 hereof
shall be effective without the prior written consent of the Agent and, in the
case of any amendment to any of the provisions of (x) Section 7 or Section 16.18
hereof or (y) any other provision relating to Letters of Credit which adversely
affects any Issuing Lender, with the prior written consent of such Issuing
Lender; provided, further, that no such amendment, modification or waiver shall,
without the prior written consent of all of the Lenders:
(i) extend the due date of the principal of or interest on the
Revolving Loan, the Term Loan, the Acquisition Term Loan, or any other
amount payable hereunder, or portion thereof, change the rate of interest
on the Revolving Loan, the Term Loan, the Acquisition Term Loan, or portion
thereof, or reduce the amount of any principal payable on the Revolving
Loan, the Term Loan, the Acquisition Term Loan, or portion thereof, or
reduce the fees payable to the Lenders hereunder or extend the time of
payment thereof;
(ii) substitute, discharge, release or surrender any material
portion of the Collateral or use any portion of the Collateral to secure
any Indebtedness for Borrowed Money other than Lender Debt, except as
permitted in such Loan Document (it being understood that a release of
Collateral under circumstances where the Net Proceeds of the disposition
of such Collateral are applied to Lender Debt shall not require unanimous
consent, but shall be governed under Section 13.5 and Section 6.1(b)
hereof) or amend the terms of any Guaranty or release any such Guaranty;
(iii) except as provided in Section 16.14 hereof, change the
dollar amount or percentage of either the Revolving Commitment, the Term
Commitment, or the Acquisition Term Commitment of any Lender;
(iv) modify any provision of this Section 16.2 or any other
provision which expressly requires the consent of all Lenders;
(v) amend the definition of "Required Lenders";
(vi) amend Section 14.5 hereof;
(vii) amend or modify the definition of "Borrowing Base" to
increase the percentage advance rates against the Net Amount of Eligible
Inventory, the Net Amount of Eligible Pharmaceutical Inventory, the Net
Amount of Eligible Coupons, the Net Amount of Eligible Pharmaceutical
Receivables, the Net Amount of Eligible Vendor Receivables, or the Net
Amount of Eligible Real Property; or
(viii) amend or modify the definition of "Acquisition Term Loan
Borrowing Base" to increase the percentage advance rate against the Net
Amount of Eligible Real Estate.
The Agent, the Lenders other than NBC, and the Credit Parties hereby agree to
cooperate with NBC to effectuate the provisions of Section 16.14 hereof,
including, without limitation, with respect to the execution of one or more
amendments of this Agreement or any other Loan Document.
Sec. 16.3. NEW YORK LAW. THIS AGREEMENT AND THE NOTES SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
Sec. 16.4. NOTICES. All notices, requests, demands or other
communications provided for herein shall be in writing (unless otherwise
expressly provided herein) and shall be deemed to have been given (a) if by
registered or certified mail, return receipt requested, four (4) Business Days
following the date when sent, (b) if by telex, when sent and answer-back
received, (c) if by overnight courier, when received, (d) if by telecopier,
when sent, or (e) if personally delivered or delivered by messenger, when
receipted for, in each case, addressed to the appropriate Credit Party or to
the Agent or any Lender, at its respective office under its name on the
signature pages of this Agreement and to the attention of the Person so
designated, or to such Person or address as any party hereto shall designate
to the other from time to time in writing forwarded in like manner.
Sec. 16.5. FEES AND EXPENSES. Whether or not any Advances or other
financial accommodations are made hereunder, Borrower shall pay all expenses
paid or incurred by the Agent in connection with the transactions contemplated
hereunder including but not limited to appraisal fees, syndication fees, title
insurance fees, audit fees, recording fees, computer fees, duplication fees,
telephone and telecopier fees, travel and transportation fees, search and filing
fees, and the reasonable fees and expenses of Xxxxxx & Xxxx, L.L.P., counsel
to the Agent and the Lenders, and all local counsel to the Agent. Borrower shall
also pay all reasonable costs and expenses paid or incurred by the Agent, at any
time, or any Lender, after the occurrence of a Default, in connection with any
waivers, amendments, modifications, extensions, renewals, internal assessments,
renegotiations or "work-outs" of this Agreement or any instrument or document
delivered in connection herewith and any consents or approvals provided
hereunder or otherwise requested by any Credit Party. Without limiting the
generality of the foregoing, such expenses, costs, charges and fees may include:
recording costs, appraisal costs, paralegal fees, costs and expenses;
accountants' or other consultants' fees, costs and expenses; photocopying and
duplicating expenses; long distance telephone charges; air express charges;
telegram charges; telecopier charges; secretarial overtime charges; and expenses
for travel, lodging and food paid or incurred in connection with the performance
of such legal services.
Sec. 16.6. STAMP OR OTHER TAX. Should any stamp or excise tax
become payable in respect of this Agreement, any Note, any other Loan Document,
the Lender Debt, the Collateral or any modification hereof or thereof, each of
the Credit Parties shall pay, the liability of which is joint and several, the
same (including interest and penalties, if any) and shall hold the Lenders and
the Agent harmless with respect thereto.
Sec. 16.7. WAIVER OF JURY TRIAL AND SET-OFF. IN ANY LITIGATION
IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS
AGREEMENT, ANY OF THE ADVANCES, ANY OF THE NOTES OR OTHER LOAN DOCUMENTS, THE
COLLATERAL, OR ANY INSTRUMENT OR DOCUMENT DELIVERED PURSUANT TO THIS AGREEMENT,
OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF,
OR ANY OTHER CLAIM OR DISPUTE HOWSOEVER ARISING, BETWEEN ANY CREDIT PARTIES AND
THE LENDERS OR THE AGENT, EACH OF THE CREDIT PARTIES HEREBY, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO, (A) WAIVES THE RIGHT TO INTERPOSE ANY SETOFF,
RECOUPMENT, COUNTERCLAIM OR CROSS-CLAIM IN CONNECTION WITH ANY SUCH LITIGATION,
IRRESPECTIVE OF THE NATURE OF SUCH SETOFF, RECOUPMENT, COUNTERCLAIM OR CROSS-
CLAIM, UNLESS SUCH SETOFF, RECOUPMENT, COUNTERCLAIM OR CROSS-CLAIM COULD NOT,
BY REASON OF ANY APPLICABLE FEDERAL OR STATE PROCEDURAL LAWS, BE INTERPOSED,
PLEADED OR ALLEGED IN ANY OTHER ACTION AND (B) WAIVES TRIAL BY JURY IN
CONNECTION WITH ANY SUCH LITIGATION. EACH OF THE CREDIT PARTIES AGREES THAT
THIS SECTION 16.7 IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND
ACKNOWLEDGES THAT THE LENDERS WOULD NOT EXTEND TO BORROWER ANY FINANCIAL
ACCOMMODATIONS HEREUNDER IF THIS SECTION 16.7 WERE NOT PART OF THIS AGREEMENT.
Sec. 16.8. TERMINATION OF AGREEMENT. (a) Subject to the Agent's
and Borrower's rights to terminate this Agreement earlier as set forth below,
Lender's commitment to make Advances hereunder shall be for an original period
extending from the Closing Date through the Maturity Date.
(b) The Agent on behalf of the Lenders shall have the right to,
upon the direction of the Required Lenders, terminate this Agreement
immediately, at any time, during the continuance of an Event of Default under
Section 14 hereof.
(c) Borrower may terminate this Agreement at any time when no
Letters of Credit are outstanding upon not less than five (5) days' prior
Written Notice (which shall be irrevocable) to the Agent (which shall promptly
notify each Lender thereof in writing or by telephone confirming immediately
in writing) of termination and by prepaying the Revolving Loan in whole,
terminating the Revolving Credit Facility Commitment and paying all other
amounts payable hereunder and all applicable penalties, fees, charges, premiums
and costs, all as provided hereunder.
(d) The termination of this Agreement shall not affect any rights
of the Credit Parties, the Lenders or the Agent or any obligation of any of the
Credit Parties, the Lenders or the Agent to the others, arising on or prior to
the effective date of such termination, and the provisions hereof shall continue
to be fully operative until all Lender Debt and obligations of the Credit
Parties and their Subsidiaries hereunder incurred on or prior to such
termination have been paid and performed in full.
(e) Upon the giving of notice of termination of this Agreement,
all Lender Debt shall be due and payable on the date of termination specified
in such notice.
(f) The Liens and rights granted to the Agent on behalf of the
Agent and the Lenders hereunder shall continue in full force and effect,
notwithstanding the termination of this Agreement, until all of the Lender Debt
has been indefeasibly paid in full.
(g) All representations, warranties, covenants, waivers and
agreements contained herein shall survive termination hereof unless otherwise
provided.
(h) Notwithstanding the foregoing, if after receipt of any payment
of all or any part of the Lender Debt, the Agent or any Lender is for any
reason compelled to surrender such payment to any Person or entity because such
payment is determined to be void or voidable as a preference, an impermissible
setoff, a diversion of trust funds or for any other reason, this Agreement shall
continue in full force, and the Credit Parties, as appropriate, shall be liable
to, and shall indemnify and hold such Lender or the Agent harmless for, the
amount of such payment surrendered until such Lender or the Agent, as the case
may be, shall have been finally and irrevocably paid in full. The provisions
of the foregoing sentence shall be and remain effective notwithstanding any
contrary action which may have been taken by the Lenders or the Agent in
reliance upon such payment, and any such contrary action so taken shall be
without prejudice to the Lenders' or the Agent's rights under this Agreement
and shall be deemed to have been conditioned upon such payment having become
final and irrevocable.
(i) All indemnities provided for under this Agreement and the other
Loan Documents, including, without limitation, under Sections 5.8 and 16.5,
shall survive the termination of this Agreement and the payment in full of the
Lender Debt.
Sec. 16.9. CAPTIONS. The captions of the various sections and
paragraphs of this Agreement have been inserted only for the purposes of
convenience; such captions are not a part of this Agreement and shall not be
deemed in any manner to modify, explain, enlarge or restrict any of the
provisions of this Agreement.
Sec. 16.10. LIEN; SETOFF BY LENDERS. Each of the Credit Parties
hereby grants to each Lender and the Agent a continuing Lien for all Lender
Debt upon any and all monies, securities and other property of such Credit Party
and the proceeds thereof, now or hereafter held or received by, or in transit
to, such Lender or the Agent from or for such Credit Party, whether for
safekeeping, custody, pledge, transmission, collection or otherwise, and also
upon any and all deposits (general or special) and credits of such Credit Party
with, and any and all claims of such Credit Party against, any Lender or the
Agent, at any time existing (which shall constitute part of the Collateral).
Upon the occurrence and during the continuance of an Event of Default, each
Lender and the Agent is hereby authorized at any time and from time to time,
without notice to such Credit Party, to setoff, appropriate and apply any or
all items hereinabove referred to against all Lender Debt. After any such setoff
by the Agent or any Lender, the Agent or such Lender shall notify the Credit
Party against which it setoff of the exercise by it of such right of setoff,
provided that the failure of the Agent or such Lender to so notify such Credit
Party shall not affect the validity of such setoff or create a cause of action
against the Agent or such Lender.
Sec. 16.11. PAYMENT DUE ON NON-BUSINESS DAY. Whenever any payment
to be made hereunder or under any other Loan Document or on the Revolving Loan
shall be stated to be due and payable, or whenever the last day of any Interest
Period would otherwise occur, on a day which is not a Business Day, such payment
shall be made and the last day of such Interest Period shall occur on the next
succeeding Business Day and such extension of time shall in such case be
included in computing interest on such payment; provided, however, if such
extension would cause a payment of a Eurodollar Advance to be made, or the last
day of such Interest Period for a Eurodollar Advance to occur, in the next
following calendar month, such payment shall be made and the last day of such
Interest Period shall occur on the next preceding Business Day.
Sec. 16.12. SERVICE OF PROCESS. Each of the Credit Parties hereby
irrevocably consents to the jurisdiction of the courts of the State of New York
and of any Federal Court located in the City of New York in connection with
any action or proceeding arising out of or relating to this Agreement, any
Guaranty, any of the Security Documents, all or any of the Lender Debt, the
Collateral, all or any of the Notes, any other Loan Document or any document
or instrument delivered pursuant to this Agreement. In any such litigation,
each of the Credit Parties waives, to the fullest extent it may effectively do
so, personal service of any summons, complaint or other process and agrees
that the service thereof may be made by certified or registered mail directed
to any Credit Party at its address set forth in Section 16.4 hereof. Within
thirty (30) days after such mailing, such Credit Party shall appear, answer or
move in respect of such summons, complaint or other process. Should such Credit
Party fail to appear or answer within said thirty (30)-day period, such Credit
Party shall be deemed in default and judgment may be entered by the Agent on
behalf of the Lenders against such Credit Party for the amount as demanded in
any summons, complaint or other process so served. Each of the Credit Parties
hereby waives, to the fullest extent it may effectively do so, the defenses of
forum non conveniens and improper venue.
Sec. 16.13. NATIONAL BANK OF CANADA, AS AGENT. (a) Each Lender
hereby irrevocably designates and appoints NBC as the agent of such Lender under
each of the Loan Documents in which NBC is named as agent, and each such Lender
hereby irrevocably authorizes NBC, as the agent for such Lender, to take such
action on behalf of each Lender under the provisions of the Loan Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Agent by the terms of the Loan Documents, together with such other powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in the Loan Documents, the Agent shall not have any duties
or responsibilities except those expressly set forth in the Loan Documents, nor
any fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into the
Loan Documents or otherwise exist against the Agent.
(b) The Agent may execute any of its duties under the Loan Documents
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Agent shall not
be responsible for the negligence or misconduct of any agents or attorneys-in-
fact selected by it with reasonable care.
(c) Neither the Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with the Loan Documents (except for its or such Person's own gross
negligence or willful misconduct), or (ii) responsible in any manner to any
Lender for any recitals, statements, representations or warranties made by any
of the Credit Parties or any of their respective Subsidiaries or any officer
thereof contained in the Loan Documents or in any certificate, report, statement
or other document referred to or provided for in, or received by the Agent under
or in connection with the Loan Documents, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of the Loan Documents
or for any failure of any of the Credit Parties or any of their respective
Subsidiaries to perform its obligations under the Loan Documents. The Agent
shall not be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, the Loan Documents, or to inspect the properties, books or
records of any of the Credit Parties or any of their respective Subsidiaries.
(d) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation reasonably believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Credit Parties), independent
accountants and other experts selected by the Agent. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
Written Notice of assignment, negotiation or transfer thereof shall have been
filed with the Agent.
(e) The Agent shall be fully justified in failing or refusing to
take any action under the Loan Documents unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under the Loan Documents
in accordance with a request of the Required Lenders (or where required by the
terms of this Agreement, the Lenders), and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders and
all future holders of the Notes.
(f) The Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default hereunder unless the Agent
shall have received notice from a Lender or one of the Credit Parties referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Agent receives such
a notice, or if the Agent has actual knowledge of the occurrence of any Default
or Event of Default, the Agent shall give prompt notice thereof to the Lenders.
The Agent shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Lenders; provided that,
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.
(g) Each Lender expressly acknowledges that neither the Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act by
the Agent hereinafter taken, including any review of the affairs of any of the
Credit Parties or any of their respective Subsidiaries, shall be deemed to
constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation
into the business, operations, property, financial and other condition and
creditworthiness of each of the Credit Parties and their respective
Subsidiaries, and made its own decision to make its loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently
and without reliance upon the 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 credit analysis, appraisals and decisions in taking or not
taking action under this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, operations, liabilities, assets,
properties and condition (financial or otherwise) and creditworthiness of each
of the Credit Parties and their respective Subsidiaries. Except for notices,
reports and other documents expressly required to be furnished to the Lenders
by the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of any
of the Credit Parties or any of their respective Subsidiaries which may come
into the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
(h) Each Lender agrees to indemnify the Agent in its capacity as
such (to the extent not reimbursed by the Credit Parties and without limiting
the obligation of the Credit Parties to do so), ratably according to such
Lender's pro rata share of the Revolving Credit Facility Commitment, the Term
Loan Facility Commitment, and the Acquisition Term Loan Facility Commitment
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including without limitation at any time
following the payment of the Notes) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of the Loan Documents
or the transactions contemplated thereby or any action taken or omitted by the
Agent under or in connection with any of the foregoing; provided that no Lender
shall be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or willful misconduct.
The agreements in this Section 16.13(h) shall survive the payment of the Notes
and the Lender Debt.
(i) The Agent and its Affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Credit Parties as
though the Agent were not the Agent hereunder. With respect to its pro rata
share of the Advances made or renewed by it and any Note issued to it, the Agent
shall have the same rights and powers under this Agreement as any Lender and
may exercise the same as though it were not the Agent. The terms "Lender" and
"Lenders" shall include the Agent in its individual capacity.
(j) The Agent may resign as Agent upon thirty (30) days' Written
Notice to the Lenders. In the event that the Agent shall enter receivership,
then the Lenders (other than the Lender which is an acting as Agent, if
applicable) may by unanimous consent of such Lenders, remove the Agent under
this Agreement. If the Agent shall give a notice of its intention to resign as
Agent under this Agreement or the Agent shall be removed, then the Required
Lenders shall, within such thirty (30)-day period, appoint a successor agent
for the Lenders, whereupon such successor agent shall succeed to the rights,
powers and duties of the Agent, and the term "Agent" shall mean such successor
agent effective upon its appointment, and the former Agent's rights, powers
and duties as Agent shall be terminated, without any other or further act or
deed on the part of such former Agent or any of the parties to this Agreement
or any holders of the Notes. After any retiring Agent's resignation hereunder
as Agent or any Agent's removal, the provisions of this Section 16.13 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.
(k) Each Lender agrees that (i) all obligations of the Credit
Parties to each Lender under this Agreement and under the Notes rank pari passu
in all respects with each other, and (ii) if any Lender shall, through the
exercise of a right of banker's lien, setoff, counterclaim or otherwise,
obtain payment with respect to any portion of the Revolving Loan, the Term Loan,
or the Acquisition Term Loan which results in its receiving more than its pro
rata share of the aggregate payments in respect of the Revolving Loan, the Term
Loan, or the Acquisition Term Loan, as the case may be, then (A) such Lender
shall be deemed to have simultaneously purchased from each of the other Lenders
a share in the portion of the Revolving Loan, the Term Loan, or the Acquisition
Term Loan advanced by the other Lenders so that the portions of the Revolving
Loan and the Term Loan advanced by each Lender shall be pro rata and (B) such
other adjustments shall be made from time to time as shall be equitable to
ensure that all Lenders share such payments ratably. If all or any portion of
any such excess payment is thereafter recovered from the Lender which received
the same, the purchase provided in this Section 16.13(k) shall be deemed to have
been rescinded to the extent of such recovery, without interest. Each of the
Credit Parties expressly consents to the foregoing arrangements and agrees that
each Lender so purchasing a portion of the Revolving Loan, the Term Loan, or
the Acquisition Term Loan advanced by another Lender may exercise all rights
of payment (including, without limitation, all rights of setoff, banker's lien
or counterclaim) with respect to such portion as fully as if such Lender were
the direct holder of such portion.
(l) The Agent agrees that it shall promptly deliver to each Lender
copies of all notices, demands, statements and communications which the Agent
receives from or gives to the Credit Parties, except for routine notices of
payments due under the Loan Documents and other miscellaneous notices, demands,
statements and communications, which are not material to the interests of any
Lender. The Agent shall have no liability to any Lender, nor shall a cause of
action arise against the Agent, as a result of the failure of the Agent to
deliver to any Lender any such notice, demand, statement or communication.
(m) The Agent shall endeavor to exercise the same care in
administering the Loan Documents as it exercises with respect to similar
transactions in which it is involved and where no other co-lenders or
participants are involved; provided that the liability of the Agent for failing
to do so shall be limited as provided in the preceding paragraphs of this
Section 16.13.
(n) (i) If at any time or times it shall be necessary or prudent
in order to conform to any law of any jurisdiction in which any of the
Collateral shall be located, or the Agent shall be advised by counsel, that it
is so necessary or prudent in the interest of the Lenders, or the Agent shall
deem it necessary for its own protection in the performance of its duties
hereunder, the Agent and (to the extent required by the Agent) each Credit
Party shall execute and deliver all instruments and agreements reasonably
necessary or proper to constitute another bank or trust company, or one or more
individuals approved by the Agent (to the extent necessary or requested by the
Agent) (each an "Approved Delegate"), either to act as co-agent or co-agents
or trustee of all or any of the Collateral, jointly with the Agent originally
named herein or any successor, or to act as separate agent or agents or trustee
of any such Collateral. In the event that any of the Credit Parties shall not
have joined in the execution of such instruments or agreements with any Approved
Delegate within thirty (30) Business Days after the receipt of a written
request from the Agent to do so, or in case an Event of Default shall have
occurred and be continuing, each of the Credit Parties hereby irrevocably
appoints the Agent as its agent and attorney to act for it under the foregoing
provisions of this Section 16.13(n) in such contingency.
(ii) Every separate agent and every co-agent and every trustee,
other than any agent which may be appointed as successor to the Agent,
shall, to the extent permitted by applicable law, be appointed to act and
be such, subject to the following provisions and conditions, namely:
(A) except as otherwise provided herein, all rights,
remedies, powers, duties and obligations conferred upon, reserved or
imposed upon the Agent in respect of the custody, control and
management of moneys, paper or securities shall be exercised solely
by the Agent hereunder;
(B) all rights, remedies, powers, duties and obligations
conferred upon, reserved to or imposed upon the Agent hereunder shall
be conferred, reserved or imposed and exercised or performed by the
Agent except to the extent that the instrument appointing such
separate agent or separate agents or co-agent or co-agents or trustee
shall otherwise provide, and except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be
performed, the Agent shall be incompetent or unqualified to perform
such act or acts, in which event such rights, remedies, powers, duties
and obligations shall be exercised and performed by such separate
agents or co-agent or co-agents to the extent specifically directed
in writing by the Agent;
(C) no power given hereby to, or which it is provided
hereby may be exercised by, any such separate agent or separate agents
or co-agent or co-agents or trustee shall be exercised hereunder by
such separate agent or separate agents or co-agent or co-agents or
trustee except jointly with, or with the consent in writing of, the
Agent, anything herein contained to the contrary notwithstanding;
(D) no separate agent or co-agent or trustee constituted
under this Section 15.13(n) shall be personally liable by reason of
any act or omission of any other agent, separate agent, co-agent or
trustee hereunder; and
(E) the Agent, at any time by an instrument in writing,
executed by it, may accept the resignation of or remove any such
separate agent or co-agent or trustee, and in that case, by an
instrument in writing executed by the Agent and the Credit Parties
(to the extent necessary or requested by the Agent) jointly, may
appoint a successor to such separate agent or co-agent or trustee,
as the case may be, anything herein contained to the contrary
notwithstanding. In the event that any of the Credit Parties shall
not have joined in the execution of any such instrument with a
Person or entity within ten (10) days after the receipt of a written
request from the Agent to do so, or in the case an Event of Default
shall have occurred and be continuing, the Agent, acting alone, may
appoint a successor and may execute any instrument in connection
therewith, and the Credit Parties hereby irrevocably appoint the
Agent its agent and attorney to act for it in such connection in
either or such contingencies.
Sec. 16.14. SALE, ASSIGNMENT OR TRANSFER TO ADDITIONAL LENDERS.
(a) Without limiting any additional rights which NBC may have as a Lender
under Section 16.13 hereof, NBC may:
(i) in its individual capacity, from time to time after
consultation with Borrower, sell, assign or transfer one or more portions
of its pro rata share of any Revolving Credit Advance, Term Loan Advance,
Acquisition Term Loan Advance, the Revolving Credit Facility Commitment,
the Term Loan Facility Commitment, or the Acquisition Term Loan Facility
Commitment to any one or more banks or other financial institutions of
its choosing, in its sole discretion (the "Additional Lenders") without
the consent of any other party; provided, however, if Xxxxxx or IBJ is a
Lender at such time hereunder, and if a Default or an Event of Default
has occurred and is continuing, then NBC must obtain the consent (which
consent shall not be unreasonably withheld or delayed) of Xxxxxx and IBJ,
respectively, to any sale, assignment or transfer by NBC of a portion of
its pro rata share of the Revolving Credit Facility Commitment, the Term
Loan Facility Commitment, or the Acquisition Term Loan Facility Commitment,
as the case may be, if, after giving effect thereto, (A) with regard to
Xxxxxx, NBC's pro rata share of the Revolving Credit Facility Commitment,
the Term Loan Facility Commitment, or the Acquisition Term Loan Facility
Commitment would be less than Xxxxxx'x pro rata share of the Revolving
Credit Facility Commitment, the Term Loan Facility Commitment, or the
Acquisition Term Loan Facility Commitment, as the case may be, and (B)
with regard to IBJ, NBC's pro rata share of the Revolving Credit Facility
Commitment, the Term Loan Facility Commitment, or the Acquisition Term
Loan Facility Commitment would be less than IBJ's pro rata share of the
Revolving Credit Facility Commitment, the Term Loan Facility Commitment,
or the Acquisition Term Loan Facility Commitment, as the case may be; and
(ii) in its capacity as Agent and in accordance with Section
16.2 hereof, execute one or more amendments of this Agreement or any other
Loan Document so that each Additional Lender shall be a named party
thereof with all of the rights and obligations of any Lender hereunder
(to the extent sold, assigned or transferred by NBC).
(b) Each Credit Party hereby agrees that it shall execute and
deliver, at the request of NBC:
(i) if part of NBC's pro rata share of any Revolving Loan,
Term Loan, Acquisition Term Loan, the Revolving Credit Facility Commitment,
the Term Loan Facility Commitment, or the Acquisition Term Loan Facility
Commitment is sold, assigned or transferred to any Lender or Additional
Lender, to the extent requested by NBC, one or more Notes to the order of
NBC and such Lender and/or Additional Lender to evidence the portions of
the Revolving Loan and/or the Revolving Credit Facility Commitment, the
Term Loan and/or the Term Loan Facility Commitment, or the Acquisition
Term Loan and/or the Acquisition Term Loan Facility Commitment retained
and sold; and
(ii) any amendment to any Loan Document to effectuate this
Section 16.14 (without limiting the right of the Agent as set forth in
Section 16.2 to execute an amendment in connection with this Section
16.14). The terms "sale," "assignment" or "transfer" shall include a
novation or assumption by any Additional Lender of all or any portion
of the obligations and commitments of NBC hereunder.
Sec. 16.15. BENEFIT OF AGREEMENT. (a) This Agreement shall be
binding upon and inure to the benefit of the parties hereto, and their
respective successors and assigns, except that the obligation of the Lenders
to make Advances and other financial accommodations hereunder shall not inure
to the benefit of any successors and assigns of Borrower.
(b) No Credit Party may assign or transfer any of its interest
hereunder without the prior written consent of the Lenders. Each of the Lenders
may make, carry or transfer its pro rata share of the Revolving Loan, the Term
Loan, or the Acquisition Term Loan at, to or for the account of any of its
branch offices or the office of one or more of its Affiliates.
(c) Each Lender may, with the prior written consent of the Agent,
which consent shall not be unreasonably withheld, and after consultation with
Borrower, assign its rights and delegate its obligations under this Agreement
and may, with the prior written consent of the Agent, assign, sell, or without
the consent of the Agent grant participation in, all or any part of its pro
rata share of the Revolving Loan, its Revolving Commitment, the Term Loan, its
Term Commitment, the Acquisition Term Loan, its Acquisition Term Commitment,
or any other interest herein or in its Notes to another bank or other entity,
in which event:
(i) in the case of an assignment, upon notice thereof by
such Lender to Borrower, the assignee shall have, to the extent of such
assignment (unless otherwise provided therein), the same rights and
benefits as it would have if it were such Lender hereunder and the holder
of a Note, and
(ii) in the case of a participation, the participant shall not
have any rights under this Agreement or any Note or any other Loan Document
(the participant's rights against such Lender in respect of such
participation to be those set forth in the agreement executed by such
Lender in favor of the participant relating thereto which agreement shall
not, in any event, grant to the participant the right of consent as to any
matter under the Loan Documents other than those which require the consent
of all Lenders).
(d) Each Lender may furnish any information concerning the Credit
Parties and their respective Subsidiaries in the possession of such Lender from
time to time to assignees and participants (including prospective assignees and
participants).
(e) In the event that any Lender shall assign or sell its Notes,
such Lender shall, at the time of such assignment or sale, (i) give Written
Notice to the Agent of the name and address of the assignee (including the
name of the account officer if applicable), (ii) make all endorsements to the
grid schedule attached thereto to make the information contained therein
accurate, and (iii) pay to the Agent a processing fee in the amount of $3,500.
(f) Each Credit Party hereby agrees that it shall execute and
deliver, at the request of: any Lender if part of such Lender's pro rata share
of any Revolving Loan, Term Loan, or Acquisition Term Loan and/or the Revolving
Credit Facility Commitment, the Term Loan Facility Commitment, or the
Acquisition Term Loan Facility Commitment is sold, assigned or transferred, to
the extent requested by such Lender, one or more Notes to the order of such
Lender and/or purchasers, assignees or transferees to evidence the portions of
the Revolving Loan, Term Loan, or Acquisition Term Loan and/or the Revolving
Credit Facility Commitment, the Term Loan Facility Commitment, or the
Acquisition Term Loan Facility Commitment retained and sold.
Sec. 16.16. COUNTERPARTS; FACSIMILE SIGNATURE. (a) This Agreement
may be executed by the parties hereto individually or in any combination, in
one or more counterparts, each of which shall be an original and all of which
shall together constitute one and the same agreement.
(b) Delivery of an executed counterpart of a signature page to
this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement.
Sec. 16.17. INVALIDITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under all applicable laws and regulations. If, however, any provision of this
Agreement shall be prohibited by or invalid under any such law or regulation,
it shall be deemed modified to conform to the minimum requirements of such law
or regulation, or, if for any reason it is not deemed so modified, it shall be
ineffective and invalid only to the extent of such prohibition or invalidity
without the remainder thereof or any of the remaining provisions of this
Agreement being prohibited or invalid.
Sec. 16.18. LETTER OF CREDIT PARTICIPATIONS AND CERTAIN PAYMENTS.
(a) Each Lender agrees that upon any acceleration of the Lender Debt as
provided in Section 14 hereof or upon the occurrence of any Event of Default
under clause (f) or (g) of Section 14.1 hereof, each such Lender shall and
hereby does, without any further action, take as of the date of issuance of
each Letter of Credit an undivided participating interest from each Issuing
Lender in all Letters of Credit outstanding at such time and the Letter of
Credit Agreements relating thereto in a percentage equal to such Lender's pro
rata share of the Revolving Credit Facility Commitment. Each Lender shall hold
the relevant Issuing Lender harmless and indemnify such Issuing Lender for such
Lender's pro rata share of any drawing under any Letter of Credit in which it
has taken such an undivided participating interest under this Section 16.18.
(b) The obligation of each Lender to make payments to an Issuing
Lender with respect to any Letter of Credit after having taken a participation
therein as provided above shall be irrevocable and shall not be subject to any
qualification or exception whatsoever and shall be made in accordance with the
terms and conditions of this Agreement under all circumstances, including
without limitation any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement,
any of the Loan Documents, and all other documents and instruments
executed by any of the Credit Parties or any Affiliate thereof and
delivered to the Agent, NBC, the Issuing Lender of a Letter of Credit or
any other Lender in connection with or related to the Revolving Loan,
the Letters of Credit or the Collateral, together with any and all
amendments, extensions, renewals and modifications thereof;
(ii) the existence of any claim, set-off, defense or other
right which Borrower may have at any time against NBC or any claim, set-
off, defense or other right which any Credit Party may have at any time
against the beneficiary named in any Letter of Credit or any transferee
of any Letter of Credit (or any person for whom any such transferee
may be acting), the Agent, NBC, the Issuing Lender of a Letter of Credit,
any other Lender or any other person, whether in connection with this
Agreement, a Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying transactions between
any Credit Party or any Subsidiary thereof and the beneficiary named in
a Letter of Credit);
(iii) any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of this Agreement or
any of the Loan Documents; or
(v) the occurrence of any Default or Event of Default.
Sec. 16.19. DISCLOSURE OF FINANCIAL INFORMATION. Each Lender shall
hold all non-public information obtained pursuant to the requirements of this
Agreement which has been identified as such by Borrower in writing in
accordance with its customary procedure for handling confidential information
of this nature and in accordance with safe and sound banking practices;
provided, however, that the Agent and each Lender are each hereby authorized
to deliver a copy of any financial statement or any other information relating
to the business, operations or financial condition of Borrower and each of its
Subsidiaries which may be furnished to it hereunder or otherwise, to any other
Lender, any court, regulatory body or agency having jurisdiction over the Agent
or such Lender, to any Person which shall, or shall have any right or obligation
to, succeed to all or any part of the Agent's or such Lender's interest in any
of the Advances, the Letters of Credit, this Agreement and any Collateral or
to any actual or prospective participant therein or assignee thereof.
Sec. 16.20. AMENDMENT AND RESTATEMENT. This Agreement is given in
amendment, modification, supplementation, restatement and renewal (and not in
extinguishment or satisfaction) of the Existing Agreement. Likewise, the
Existing Agreement was given in amendment, modification, supplementation,
restatement and renewal (and not in extinguishment or satisfaction) of the
Amended and Restated Revolving Credit Agreement dated as of April 21, 1995,
made by and among Borrower, Parent, Xxxxxx and NBC, individually and as agent
for Xxxxxx and NBC, as previously amended by that certain Ratification and
Amendment Agreement dated as of May 10, 1996. All rights, titles, liens,
security interests and priorities under the Existing Agreement are preserved,
maintained and carried forward under this Agreement, subject, however, to the
terms of this Agreement.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
HOMELAND STORES, INC.
By:
Xxxxx X. Xxxxxxxx,
Senior Vice President, Finance,
Chief Financial Officer, and Secretary
Address for Notice:
0000 Xxxxxxxxx Xxxxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
HOMELAND HOLDING CORPORATION
By:
Xxxxx X. Xxxxxxxx,
Senior Vice President, Finance,
Chief Financial Officer, and Secretary
Address for Notice:
0000 Xxxxxxxxx Xxxxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
NATIONAL BANK OF CANADA,
a Canadian chartered bank, as Agent
By:
Xxxxx X. Xxxxx
Vice President and Manager
By:
Xxxxxxx X. Xxxxxxx
Vice President
Address for Notice:
0000 Xxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopier No. (000) 000-0000
LENDERS:
IBJ XXXXXXXX BUSINESS CREDIT
CORPORATION
By:
Xxxxx X. Xxxxxx,
Vice President
Address for Notice:
IBJ Xxxxxxxx Business Credit Corporation
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
Domestic Lending Office:
IBJ Xxxxxxxx Bank & Trust Company
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
Eurodollar Lending Office:
IBJ Xxxxxxxx Bank & Trust Company
Cayman Branch
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
XXXXXX FINANCIAL, INC.
By:
Xxxxxxxxx Xxxxxxxxxxx,
Vice President
Address for Notice:
c/o Heller Financial, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: HBC Portfolio Manager
Telecopier No.: (000) 000-0000
Domestic Lending Office:
Xxxxxx Financial, Inc.
x/x Xxxxxx Xxxxxxxx Xxxxxx - Xxxxxxx Xxxxxx
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: HBC Portfolio Manager
Eurodollar Lending Office:
Xxxxxx Financial, Inc.
x/x Xxxxxx Xxxxxxxx Xxxxxx - Xxxxxxx Xxxxxx
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: HBC Portfolio Manager
NATIONAL BANK OF CANADA,
a Canadian chartered bank
By:
Xxxxx X. Xxxxx,
Vice President and Manager
By:
Xxxxxxx X. Xxxxxxx,
Vice President
Address for Notice:
0000 Xxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopier No. (000) 000-0000
Domestic Lending Office:
National Bank of Canada
000 Xxxx 00xx
Xxx Xxxx, Xxx Xxxx 00000
Eurodollar Lending Office:
National Bank of Canada
000 Xxxx 00xx
Xxx Xxxx, Xxx Xxxx 00000
