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$60,000,000
REVOLVING CREDIT AND GUARANTEE AGREEMENT
among
THE GRAND UNION COMPANY, a Debtor-in-Possession,
as Borrower,
The Subsidiaries of the Borrower Parties Hereto,
The Several Lenders
from Time to Time Parties Hereto,
XXXXXX BROTHERS INC.,
as Advisor and Arranger
and
XXXXXX COMMERCIAL PAPER INC.,
as Administrative Agent
Dated as of October 3, 2000
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS.........................................................................................-2-
1.1 Defined Terms.....................................................................................-2-
1.2 Other Definitional Provisions....................................................................-16-
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS...................................................-17-
2.1 Revolving Credit Commitments.....................................................................-17-
2.2 Procedure for Revolving Credit Borrowing.........................................................-17-
2.3 Repayment of Loans; Evidence of Debt.............................................................-18-
2.4 Revolving Credit Commitment Fees, etc. ..........................................................-18-
2.5 Termination or Reduction of Revolving Credit Commitments.........................................-19-
2.6 Optional Prepayments.............................................................................-19-
2.7 Mandatory Prepayments and Revolving Credit Commitment Reductions.................................-19-
2.8 Interest Rates and Payment Dates.................................................................-20-
2.9 Computation of Interest and Fees.................................................................-20-
2.10 Pro Rata Treatment and Payments.................................................................-20-
2.11 Taxes...........................................................................................-21-
2.12 Change of Lending Office........................................................................-23-
SECTION 3. LETTERS OF CREDIT..................................................................................-24-
3.1 L/C Commitment...................................................................................-24-
3.2 Procedure for Issuance of Letter of Credit.......................................................-24-
3.3 Fees and Other Charges...........................................................................-25-
3.4 L/C Participations...............................................................................-25-
3.5 Reimbursement Obligation of the Borrower.........................................................-26-
3.6 Obligations Absolute.............................................................................-26-
3.7 Letter of Credit Payments........................................................................-27-
3.8 Applications.....................................................................................-27-
SECTION 4. PRIORITY AND LIENS.................................................................................-27-
4.1 Priority and Liens...............................................................................-27-
4.2 Security Interest in L/C Cash Collateral Account.................................................-28-
4.3 Payment of Obligations...........................................................................-29-
4.4 No Discharge; Survival of Claims.................................................................-29-
SECTION 5. REPRESENTATIONS AND WARRANTIES.....................................................................-29-
5.1 Financial Condition..............................................................................-29-
5.2 No Change........................................................................................-29-
5.3 Corporate Existence; Compliance with Law.........................................................-30-
5.4 Corporate Power; Authorization; Enforceable Obligations..........................................-30-
5.5 No Legal Bar.....................................................................................-30-
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5.6 No Material Litigation...........................................................................-30-
5.7 No Default.......................................................................................-31-
5.8 Ownership of Property; Liens.....................................................................-31-
5.9 Intellectual Property............................................................................-31-
5.10 Taxes...........................................................................................-31-
5.11 Federal Regulations.............................................................................-31-
5.12 Labor Matters...................................................................................-31-
5.13 ERISA...........................................................................................-32-
5.14 Investment Company Act; Other Regulations.......................................................-32-
5.15 Subsidiaries....................................................................................-32-
5.16 Use of Proceeds.................................................................................-32-
5.17 Environmental Matters...........................................................................-33-
5.18 Accuracy of Information, etc....................................................................-34-
SECTION 6. CONDITIONS PRECEDENT...............................................................................-34-
6.1 Conditions to Initial Extension of Credit........................................................-34-
6.2 Conditions to Each Extension of Credit...........................................................-36-
SECTION 7. AFFIRMATIVE COVENANTS..............................................................................-37-
7.1 Financial Statements.............................................................................-37-
7.2 Certificates; Other Information..................................................................-37-
7.3 Payment of Obligations...........................................................................-39-
7.4 Conduct of Business and Maintenance of Existence, etc. ..........................................-39-
7.5 Maintenance of Property; Insurance...............................................................-39-
7.6 Inspection of Property; Books and Records; Discussions; Collateral Audit.........................-39-
7.7 Notices..........................................................................................-40-
7.8 Environmental Laws...............................................................................-40-
7.9 Further Assurances...............................................................................-41-
SECTION 8. NEGATIVE COVENANTS.................................................................................-41-
8.1 Limitation on Indebtedness.......................................................................-41-
8.2 Limitation on Liens..............................................................................-42-
8.3 Limitation on Fundamental Changes................................................................-43-
8.4 Limitation on Disposition of Property............................................................-43-
8.5 Limitation on Restricted Payments................................................................-43-
8.6 Limitation on Capital Expenditures...............................................................-44-
8.7 Limitation on Investments........................................................................-44-
8.8 Limitation on Transactions with Affiliates.......................................................-44-
8.9 Limitation on Sales and Leasebacks...............................................................-45-
8.10 Limitation on Changes in Fiscal Periods.........................................................-45-
8.11 Limitation on Negative Pledge Clauses...........................................................-45-
8.12 Limitation on Restrictions on Subsidiary Distributions..........................................-45-
8.13 Limitation on Lines of Business.................................................................-45-
8.14 Chapter 11 Claims; Payment of Pre-Petition Date Claims..........................................-45-
8.15 Achievement of Milestones.......................................................................-46-
8.16 Reclamation Claims; Bankruptcy Code Section 546(g) Agreements...................................-46-
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8.17 Rejection of Certain Unexpired Leases............................................................-46-
SECTION 9. EVENTS OF DEFAULT..................................................................................-46-
SECTION 10. THE ADMINISTRATIVE AGENT..........................................................................-49-
10.1 Appointment.....................................................................................-49-
10.2 Delegation of Duties............................................................................-49-
10.3 Exculpatory Provisions..........................................................................-49-
10.4 Reliance by Administrative Agent................................................................-50-
10.5 Notice of Default...............................................................................-50-
10.6 Non-Reliance on Administrative Agent and Other Lenders..........................................-51-
10.7 Indemnification.................................................................................-51-
10.8 Administrative Agent in Its Individual Capacity.................................................-52-
10.9 Successor Administrative Agent..................................................................-52-
10.10 Authorization to Release Liens.................................................................-52-
10.11 Arranger.......................................................................................-52-
SECTION 11. GUARANTEE ........................................................................................-53-
11.1 Guarantee.......................................................................................-53-
11.2 No Impairment of Guarantee......................................................................-54-
11.3 Subrogation.....................................................................................-54-
SECTION 12. REMEDIES; APPLICATION OF PROCEEDS.................................................................-54-
12.1 Remedies; Obtaining the Collateral Upon Default.................................................-54-
12.2 Remedies; Disposition of the Collateral.........................................................-55-
12.3 Application of Proceeds.........................................................................-56-
12.4 WAIVER OF CLAIMS................................................................................-57-
12.5 Remedies Cumulative.............................................................................-57-
12.6 Discontinuance of Proceedings...................................................................-58-
SECTION 13. MISCELLANEOUS.....................................................................................-58-
13.1 Amendments and Waivers..........................................................................-58-
13.2 Notices.........................................................................................-59-
13.3 No Waiver; Cumulative Remedies..................................................................-60-
13.4 Survival of Representations and Warranties......................................................-60-
13.5 Payment of Expenses.............................................................................-60-
13.6 Successors and Assigns; Participations and Assignments..........................................-61-
13.7 Adjustments; Set-off............................................................................-63-
13.8 Counterparts....................................................................................-64-
13.9 Severability....................................................................................-64-
13.10 Integration....................................................................................-64-
13.11 GOVERNING LAW..................................................................................-64-
13.12 Submission To Jurisdiction; Waivers............................................................-65-
13.13 Acknowledgments................................................................................-65-
13.14 Absence of Prejudice with Respect to Matters Before the Bankruptcy Court.......................-66-
13.15 Confidentiality................................................................................-66-
13.16 WAIVERS OF JURY TRIAL..........................................................................-66-
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SCHEDULES:
1.1A Commitments
1.1B Maximum Outstanding Amounts
1.1C Milestones
5.1 Dispositions of Property Since April 1, 2000
8.1(c) Existing Indebtedness
8.2(f) Existing Liens
8.7(f) Existing Investments
8.17 Unexpired Leases to be Rejected
EXHIBITS:
A Form of Interim Order
B Form of Closing Certificate
C Form of Compliance Certificate
D Form of Assignment and Acceptance
E Form of Revolving Credit Note
F Form of Borrowing Certificate
G Form of Exemption Certificate
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REVOLVING CREDIT AND GUARANTEE AGREEMENT, dated as of
October 3, 2000, among THE GRAND UNION COMPANY, a Delaware corporation (the
"Borrower"), the subsidiaries of the Borrower party to this Agreement (the
"Subsidiary Guarantors"), each a debtor-in-possession in a case pending under
Chapter 11 of the Bankruptcy Code, the several banks and other financial
institutions or entities from time to time parties to this Agreement (the
"Lenders"), XXXXXX BROTHERS INC., as advisor and arranger (the "Arranger"), and
XXXXXX COMMERCIAL PAPER INC., as administrative agent (in such capacity, the
"Administrative Agent").
W I T N E S S E T H:
--------------------
WHEREAS, on October 3, 2000 (the "Petition Date"), the
Borrower and the Subsidiary Guarantors filed voluntary
petitions under Section 301 of the Bankruptcy Code with the United States
Bankruptcy Court for the District of New Jersey (the "Bankruptcy Court")
initiating their Chapter 11 cases (the "Cases") and have continued in the
possession of their assets and in the management of their businesses pursuant to
Sections 1107 and 1108 of the Bankruptcy Code;
WHEREAS, the Borrower requested that the Lenders make
available a revolving credit and letter of credit facility in an aggregate
principal amount not to exceed $60,000,000, under which all of the Borrower's
obligations are guaranteed by the Subsidiary Guarantors, and the proceeds of
which will be used (i) to finance the working capital needs of the Borrower and
the Subsidiary Guarantors in the ordinary course of business, (ii) for payment
of Chapter 11 expenses, including professional fees and (iii) for general
corporate purposes, in all cases subject to the terms of this Agreement and the
Orders;
WHEREAS, to provide security for the repayment of the
Revolving Credit Loans, the reimbursement of any draft drawn under the Letters
of Credit and the payment of the other Obligations of the Borrower hereunder and
under the other Loan Documents, the Borrower and each Subsidiary Guarantor shall
provide to the Administrative Agent and the Lenders, pursuant to this Agreement
and the Orders, the following (each as more fully described herein):
(a) with respect to the Obligations of the Borrower
hereunder, an allowed administrative expense claim in the Cases
pursuant to Section 364(c)(1) of the Bankruptcy Code having priority
over all administrative expenses of the kind specified in Sections
503(b) and 507(b) of the Bankruptcy Code;
(b) a perfected first priority Lien, pursuant to Section
364(c)(2) of the Bankruptcy Code, upon all unencumbered property
(including without limitation real and tangible personal property
subject to liens or security interests which may be avoided pursuant to
the Bankruptcy Code, but only to the extent so avoided) of the Borrower
and the
Subsidiary Guarantors and all cash and cash equivalents in the L/C
Cash Collateral Account;
(c) a perfected second priority Lien, pursuant to Section
364(c)(3) of the Bankruptcy Code, upon all property of the Borrower and
the Subsidiary Guarantors other than property subject to Liens securing
the Prepetition Obligations that is subject to Permitted Liens,
including valid and perfected Liens in existence on the Petition Date
and Liens perfected (but not granted) after the Petition Date pursuant
to Bankruptcy Code Section 546(b), junior to such Permitted Liens
(except as otherwise provided in Section 4.1(a) and the Orders); and
(d) a perfected first priority priming Lien, pursuant to
Section 364(d)(1) of the Bankruptcy Code, upon all property of the
Borrower and the Subsidiary Guarantors (including, without limitation,
accounts receivable, chattel paper, contracts, documents, equipment,
general intangibles, instruments, inventory, trademarks and trademark
licenses and real property) that is subject to the Liens securing the
Prepetition Obligations, which Liens in favor of the Administrative
Agent and the Lenders shall be senior in all respects to all of the
Liens securing the Prepetition Obligations, to any Lien that is junior
to the liens securing the Prepetition Obligations and to any Liens
granted after the Petition Date to provide adequate protection in
respect thereof;
WHEREAS, all of the claims and the Liens granted hereunder
and pursuant to the Orders in the Cases to the Administrative Agent and the
Lenders shall be subject to the Carve-Out and the Permitted Liens, in each case
to the extent provided in Section 4.1 and the Orders; and
WHEREAS, the Lenders are willing to make such credit
facility available upon and subject to the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms
defined in the Introductory Statement or the Recitals shall have the respective
meanings assigned thereto and the terms listed in this Section 1.1 shall have
the respective meanings set forth in this Section 1.1.
"Accounts": as to any Person, all rights to receive
payment for goods sold or leased by such Person or for services
rendered in the ordinary course of business of such Person to the
extent not evidenced by an instrument or chattel paper, together with
all interest, finance charges and other amounts payable by an account
debtor in respect thereof.
"Adequate Protection Obligations": all obligations and
liabilities of the Borrower and the Subsidiary Guarantors to the
Prepetition Agent and the Prepetition Lenders in respect of adequate
protection granted pursuant to the Orders.
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"Affiliate": as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, either
to (a) vote 10% or more of the securities having ordinary voting power
for the election of directors (or persons performing similar functions)
of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
"Agreement": this Revolving Credit and Guarantee
Agreement, as amended, supplemented or otherwise modified from time to
time.
"Application": an application, in such form as a Issuing
Lender may specify from time to time, requesting such Issuing Lender to
open a Letter of Credit.
"Asset Sale": any Disposition of Property or series of
related Dispositions of Property (excluding any such Disposition
permitted by clause (a) or (b) of Section 8.4) which yields gross
proceeds to the Borrower or any of its Subsidiaries (valued at the
initial principal amount thereof in the case of non-cash proceeds
consisting of notes or other debt securities and valued at fair market
value in the case of other non-cash proceeds) in excess of $10,000.
"Assignee": as defined in Section 13.6(c).
"Assignor": as defined in Section 13.6(c).
"Available Revolving Credit Commitment": as to any Lender
at any time, an amount equal to the excess, if any, of (a) such
Lender's Revolving Credit Commitment then in effect over (b) such
Lender's Revolving Extensions of Credit then outstanding.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978, as
heretofore and hereafter amended, and codified as 11 U.S.C.ss.ss.101 et
seq.
"Bankruptcy Court": as defined in the Recitals.
"Base Rate": for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate"
shall mean the rate of interest per annum publicly announced from time
to time by Citibank, N.A. ank as its prime or base rate in effect at
its principal office in New York City (the Prime Rate not being
intended to be the lowest rate of interest charged by Citibank N.A. in
connection with extensions of credit to debtors); "Base CD Rate" shall
mean the sum of (a) the product of (i) the Three-Month Secondary CD
Rate and (ii) a fraction, the numerator of
4
which is one and the denominator of which is one minus the C/D Reserve
Percentage and (b) the C/D Assessment Rate; and "Three-Month Secondary
CD Rate" shall mean, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect on such
day (or, if such day shall not be a Business Day, the next preceding
Business Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate will, under
the current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day), or,
if such rate shall not be so reported on such day or such next
preceding Business Day, the average of the secondary market quotations
for three-month certificates of deposit of major money center banks in
New York City received at approximately 10:00 A.M., New York City time,
on such day (or, if such day shall not be a Business Day, on the next
preceding Business Day) by Citibank N.A. from three New York City
negotiable certificate of deposit dealers of recognized standing
selected by it. Any change in the Base Rate due to a change in the
Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the
effective day of such change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate, respectively.
"Benefitted Lender": as defined in Section 12.7.
"Board": the Board of Governors of the Federal Reserve
System of the United States (or any successor).
"Borrowing Date": any Business Day specified by the
Borrower as a date on which the Borrower requests the relevant Lenders
to make Loans hereunder.
"Budget": the budget of the Borrower and its subsidiaries
delivered pursuant to Section 6.1(f) and thereafter updated in
accordance with Section 7.2(c).
"Business": as defined in Section 5.17(b)
"Business Day": for all purposes, a day other than a
Saturday, Sunday or other day on which commercial banks in New York
City are authorized or required by law to close.
"Capital Expenditures": for any period, with respect to
any Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing (pursuant to a capital
lease) of fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements during such period)
which should be capitalized under GAAP on a consolidated balance sheet
of such Person and its Subsidiaries.
"Capital Lease Obligations": as to any Person, the
obligations of such Person to pay rent or other amounts under any lease
of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required
5
to be classified and accounted for as capital leases on a balance sheet
of such Person under GAAP, and, for the purposes of this Agreement, the
amount of such obligations at any time shall be the capitalized amount
thereof at such time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests,
participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests in a
Person (other than a corporation) and any and all warrants, rights or
options to purchase any of the foregoing.
"Carve-Out": as defined in Section 4.1.
"Cases": as defined in the Recitals.
"Cash Collateral": the meaning set forth in Section 363(a)
of the Bankruptcy Code.
"Cash Equivalents": (a) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States
Government or issued by any agency thereof and backed by the full faith
and credit of the United States, in each case maturing within one year
from the date of acquisition; (b) certificates of deposit, time
deposits, eurodollar time deposits or overnight bank deposits having
maturities of one year or less from the date of acquisition issued by
any Lender or by any commercial bank organized under the laws of the
United States of America or any state thereof having combined capital
and surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-2 by Standard & Poor's Ratings Services ("S&P")
or P-2 by Xxxxx'x Investors Service, Inc. ("Moody's"), or carrying an
equivalent rating by a nationally recognized rating agency, if both of
the two named rating agencies cease publishing ratings of commercial
paper issuers generally, and maturing within six months from the date
of acquisition; (d) repurchase obligations of any Lender or of any
commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than 30 days with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the
date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or
A by Moody's; (f) securities with maturities of six months or less from
the date of acquisition backed by standby letters of credit issued by
any Lender or any commercial bank satisfying the requirements of clause
(b) of this definition; or (g) shares of money market mutual or similar
funds which invest exclusively in assets satisfying the requirements of
clauses (a) through (f) of this definition.
6
"C/D Assessment Rate": for any day as applied to any
Revolving Credit Loan, the annual assessment rate in effect on such day
which is payable by a member of the Bank Insurance Fund maintained by
the Federal Deposit Insurance Corporation (the "FDIC") classified as
well-capitalized and within supervisory subgroup "B" (or a comparable
successor assessment risk classification) within the meaning of 12
C.F.R. ss. 327.4 (or any successor provision) to the FDIC (or any
successor) for the FDIC's (or such successor's) insuring time deposits
at offices of such institution in the United States.
"C/D Reserve Percentage": for any day as applied to any
Revolving Credit Loan, that percentage (expressed as a decimal) which
is in effect on such day, as prescribed by the Board, for determining
the maximum reserve requirement for a Depositary Institution (as
defined in Regulation D of the Board as in effect from time to time) in
respect of new non-personal time deposits in Dollars having a maturity
of 30 days or more.
"Closing Date": the date on which the conditions precedent
set forth in Section 6.1 shall have been satisfied.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all Property of the Loan Parties (other than
property constituting the proceeds of "perishable agricultural
commodities" as defined in PACA), now owned or hereafter acquired, upon
which a Lien is purported to be created by the Order (or either of
them).
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit C.
"Confirmation Order": an order of the Bankruptcy Court
confirming a Plan of Reorganization in any of the Cases.
"Contractual Obligation": as to any Person, any
post-Petition Date provision of any security issued by such Person or
of any agreement, instrument or other undertaking to which such Person
is a party or by which it or any of its Property is bound.
"Default": any of the events specified in Section 9,
whether or not any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
7
"Disposition": with respect to any Property, any sale,
lease, sale and leaseback, assignment, conveyance, transfer or other
disposition thereof; the terms "Dispose" and "Disposed of" shall have
correlative meanings.
"Dollars" and "$": dollars in lawful currency of the
United States of America.
"Environmental Laws": any and all laws, rules, orders,
regulations, statutes, ordinances, codes, decrees, guidelines or
requirements of any Governmental Authority, or other Requirements of
Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health
or the environment, or of employee health and safety, as has been, is
now or may at any time hereafter be, in effect.
"ERISA": the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Event of Default": any of the events specified in Section
9, provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for
the day of such transactions received by Citibank N.A. from three
federal funds brokers of recognized standing selected by it.
"Final Order": an order of the Bankruptcy Court entered in
the Cases after a final hearing under Bankruptcy Rule 4001(c)(2)
granting final approval of this Agreement and the other Loan Documents
and granting the Liens and Super-Priority Claims in favor of the
Administrative Agent for itself and the benefit of the Lenders,
substantially in the form of the Interim Order, and otherwise in form
and substance reasonably satisfactory to the Administrative Agent.
"First Day Orders": as defined in Section 6.1(c).
"Funded Debt": as to any Person, all Indebtedness of such
Person that matures more than one year from the date of its creation or
matures within one year from such date but is renewable or extendible,
at the option of such Person, to a date more than one year from such
date or arises under a revolving credit or similar agreement that
obligates the lender or lenders to extend credit during a period of
more than one year from such date, including, without limitation, all
current maturities and current sinking fund payments in respect of such
Indebtedness whether or not required to be paid within one
8
year from the date of its creation and, in the case of the Borrower,
Indebtedness in respect of the Loans.
"Funding Office": the office specified from time to time
by the Administrative Agent as its funding office by notice to the
Borrower and the Lenders.
"GAAP": generally accepted accounting principles in the
United States of America as in effect from time to time, except that
for purposes of Section 8.1, GAAP shall be determined on the basis of
such principles in effect on the date hereof and consistent with those
used in the preparation of the most recent audited financial statements
delivered pursuant to Section 5.1(b). In the event that any "Accounting
Change" (as defined below) shall occur and such change results in a
change in the method of calculation of financial covenants, standards
or terms in this Agreement, then the Borrower and the Administrative
Agent agree to enter into negotiations in order to amend such
provisions of this Agreement so as to equitably reflect such Accounting
Changes with the desired result that the criteria for evaluating the
Borrower's financial condition shall be the same after such Accounting
Changes as if such Accounting Changes had not been made. Until such
time as such an amendment shall have been executed and delivered by the
Borrower, the Administrative Agent and the Required Lenders, all
financial covenants, standards and terms in this Agreement shall
continue to be calculated or construed as if such Accounting Changes
had not occurred. "Accounting Changes" refers to changes in accounting
principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of
the American Institute of Certified Public Accountants or, if
applicable, the Securities and Exchange Commission (or successors
thereto or agencies with similar functions).
"Governmental Authority": any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government (including, without
limitation, the National Association of Insurance Commissioners).
"Guarantee Obligation": as to any Person (the
"guaranteeing person"), any obligation of (a) the guaranteeing person
or (b) another Person (including, without limitation, any bank under
any letter of credit) to induce the creation of which the guaranteeing
person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary
obligations" of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation,
any obligation of the guaranteeing person, whether or not contingent,
(i) to purchase any such primary obligation or any Property
constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase Property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of
9
the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of
any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an amount
equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum
amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless
such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in
which case the amount of such Guarantee Obligation shall be such
guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Hedge Agreements": all interest rate swaps, caps or
collar agreements or similar arrangements entered into by the Borrower
providing for protection against fluctuations in interest rates or
currency exchange rates or the exchange of nominal interest
obligations, either generally or under specific contingencies.
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money,
(b) all obligations of such Person for the deferred purchase price of
Property or services (other than current trade payables incurred in the
ordinary course of such Person's business), (c) all obligations of such
Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to
Property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such Property), (e) all Capital
Lease Obligations of such Person, (f) all obligations of such Person,
contingent or otherwise, as an account party under acceptance, letter
of credit or similar facilities, (g) all obligations of such Person,
contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value any Capital Stock of such Person, (h) all Guarantee
Obligations of such Person in respect of obligations of the kind
referred to in clauses (a) through (g) above; (i) all obligations of
the kind referred to in clauses (a) through (h) above secured by (or
for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on Property
(including, without limitation, accounts and contract rights) owned by
such Person, whether or not such Person has assumed or become liable
for the payment of such obligation, (j) all obligations of such Person
in respect of Hedge Agreements and (k) the liquidation value of any
mandatorily redeemable preferred Capital Stock of such Person or its
Subsidiaries held by any Person other than such Person and its Wholly
Owned Subsidiaries.
"Indemnified Liabilities": as defined in Section 13.5.
"Indemnitee": as defined in Section 13.5.
10
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including, without limitation, copyrights, copyright
licenses, patents, patent licenses, trademarks, trademark licenses,
technology, know-how and processes, and all rights to xxx at law or in
equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.
"Interest Payment Date": as to any Revolving Credit Loan,
the last day of each calendar month to occur while such Loan is
outstanding and the final maturity date of such Loan.
"Interim Order": an order of the Bankruptcy Court entered
in the Cases after an interim hearing under Bankruptcy Rule 4001(c)(2)
granting interim approval of this Agreement and the other Loan
Documents and granting the Liens and Super-Priority Claims in favor of
the Administrative Agent for itself and the benefit of the Lenders,
substantially in the form of Exhibit A, and otherwise in form and
substance reasonably satisfactory to the Administrative Agent.
"Investments": as defined in Section 8.7.
"Issuing Lender": a financial institution reasonably
acceptable to the Borrower and the Administrative Agent that agrees to
act as issuer of Letters of Credit hereunder.
"L/C Cash Collateral Account": the account established by
the Borrower under the sole and exclusive control of the Administrative
Agent maintained at the office of the Administrative Agent designated
as "The Grand Union Company, Debtor-in-Possession L/C Cash Collateral
Account" or other similar title which shall be used solely for the
purposes set forth in Sections 3.1(b) and 4.2.
"L/C Commitment": $6,800,000.
"L/C Fee Payment Date": the last day of each month to
occur while Letters of Credit are outstanding and the Termination Date.
"L/C Obligations": at any time, an amount equal to the sum
of (a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit
11
and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to Section 3.5.
"L/C Participants": with respect to any Letter of Credit,
the collective reference to all the Lenders other than the Issuing
Lender of such Letter of Credit.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any capital lease having substantially the same
economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, the Applications, the
Notes and any certificates, documents or other agreements (each as
subsequently amended, supplemented or otherwise modified from time to
time) delivered pursuant to Section 6 hereof.
"Loan Parties": the Borrower and each Subsidiary
Guarantor.
"Material Adverse Effect": a material adverse effect on
(a) the business, assets, property, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole or
(b) the validity or enforceability of this Agreement or any of the
other Loan Documents or the rights or remedies of the Administrative
Agent or the Lenders hereunder or thereunder, in each case, other than
such effects as result solely from the commencement of the Cases.
"Material Environmental Amount": an amount payable or
sustainable by the Borrower and/or its Subsidiaries in excess of
$1,000,000 for remedial costs, compliance costs, compensatory damages,
punitive damages, fines, penalties, lost revenues or any combination
thereof.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Maturity Date": April 3, 2001.
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"Maximum Outstanding Amount": as to any calendar week, the
amount of Revolving Credit Loans and Letters of Credit, respectively,
set forth opposite such week on Schedule 1.1B.
"Milestones": any of the events described on Schedule
1.1C.
"Multiemployer Plan": a Plan which is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale or Recovery Event, net of (i) investment
banking fees, (ii) amounts required to be applied to the repayment of
Indebtedness secured by a Lien expressly permitted hereunder on any
asset which is the subject of such Asset Sale or Recovery Event and
which Lien is senior to the Liens securing the Obligations and (iii)
transfer, recording or other transaction-specific taxes (expressly
excluding income taxes) paid or reasonably estimated to be payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements).
"New Lending Office": as defined in Section 2.11(d).
"Non-Excluded Taxes": as defined in Section 2.11(a).
"Non-U.S. Lender": as defined in Section 2.11(d).
"Notes": the collective reference to any promissory note
evidencing Loans.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of
the Loans and Reimbursement Obligations) the Loans and all other
obligations and liabilities of the Borrower and the Subsidiary
Guarantors to the Administrative Agent or to any Lender (or, in the
case of Hedge Agreements, any affiliate of any Lender), whether direct
or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in
connection with, this Agreement, any other Loan Document, the Letters
of Credit, any Hedge Agreement entered into with any Lender or any
affiliate of any Lender or any other document made, delivered or given
in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees, charges and disbursements of
counsel to the Administrative Agent or to any Lender that are required
to be paid by the Borrower pursuant hereto) or otherwise.
"Orders": the collective reference to the Interim Order
and the Final Order.
13
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to,
this Agreement or any other Loan Document.
"PACA": the Perishable Agricultural Commodities Act of
1930, as amended from time to time.
"Participant": as defined in Section 13.6(b).
"Payment Office": the office specified from time to time
by the Administrative Agent as its payment office by notice to the
Borrower and the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA (or any
successor).
"Permitted Liens": Liens permitted to exist under Section
8.2.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Petition Date": as defined in the Recitals.
"Plan": at a particular time, any employee benefit plan
which is covered by ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an "employer"
as defined in Section 3(5) of ERISA.
"Plan of Reorganization": a plan of reorganization in any
of the Cases.
"Prepetition Agent": Xxxxxx Commercial Paper Inc. in its
capacity as administrative agent for the Prepetition Lenders under the
Prepetition Credit Agreement.
"Prepetition Credit Agreement": the Credit Agreement,
dated as of August 17, 1998, among the Borrower, the Prepetition
Lenders, and the Prepetition Agent, as amended, supplemented or
otherwise modified prior to the Petition Date.
"Prepetition Collateral": all Property securing the
Prepetition Obligations.
"Prepetition Lenders": collectively, the several banks,
financial institutions and other entities from time to time parties to
the Prepetition Credit Agreement.
14
"Prepetition Obligations": the aggregate outstanding
principal amount of the loans and other financial accommodations made
(including letters of credit outstanding as of the Petition Date) under
or pursuant to the Prepetition Credit Agreement, and all accrued but
unpaid interest and fees, costs and other charges payable to the
Prepetition Agent or the Prepetition Lenders under or pursuant to the
Prepetition Credit Agreement.
"Properties": as defined in Section 5.17(a).
"Property": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible
or intangible, including, without limitation, Capital Stock.
"Recovery Event": any settlement of or payment in respect
of any property or casualty insurance claim or any condemnation
proceeding relating to any asset of the Borrower or any of its
Subsidiaries.
"Register": as defined in Section 13.6(d).
"Regulation U": Regulation U of the Board as in effect
from time to time.
"Reimbursement Obligation": the obligation of the Borrower
to reimburse Issuing Lenders pursuant to Section 3.5 for amounts drawn
under Letters of Credit.
"Reorganization": with respect to any Multiemployer Plan,
the condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .27, .28, .29, .30, .31, .32,
.34 or .35 of PBGC Reg. ss. 4043.
"Required Lenders": at any time, the holders of more than
50% of the Total Revolving Credit Commitments then in effect or, if the
Revolving Credit Commitments have been terminated, the Total Revolving
Extensions of Credit then outstanding.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its Property or to which such Person or any of its Property is
subject.
"Responsible Officer": the chief executive officer or
chief financial officer of the Borrower, but in any event, with respect
to financial matters, the chief financial officer or the treasurer of
the Borrower.
15
"Restricted Payments": as defined in Section 8.5.
"Revolving Credit Commitment": as to any Lender, the
obligation of such Lender to make Revolving Credit Loans and
participate in Letters of Credit, in an aggregate principal and/or face
amount not to exceed the amount set forth under the heading "Revolving
Credit Commitment" opposite such Lender's name on Schedule 1.1A, as the
same may be changed from time to time pursuant to the terms hereof. The
original amount of the Total Revolving Credit Commitments is
$60,000,000.
"Revolving Credit Commitment Fee Rate":1/2of 1% per annum.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to the Termination Date.
"Revolving Credit Loans": as defined in Section 2.1.
"Revolving Credit Percentage": as to any Lender at any
time, the percentage which such Lender's Revolving Credit Commitment
then constitutes of the Total Revolving Credit Commitments (or, at any
time after the Revolving Credit Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such
Lender's Revolving Extensions of Credit then outstanding constitutes of
the aggregate amount of the Total Revolving Extensions of Credit then
outstanding).
"Revolving Extensions of Credit": as to any Lender at any
time, an amount equal to the sum of (a) the aggregate principal amount
of all Revolving Credit Loans made by such Lender then outstanding and
(b) such Lender's Revolving Credit Percentage of the L/C Obligations
then outstanding.
"Single Employer Plan": any Plan which is covered by Title
IV of ERISA, but which is not a Multiemployer Plan.
"Subsidiary": as to any Person, a corporation,
partnership, limited liability company or other entity of which shares
of stock or other ownership interests having ordinary voting power
(other than stock or such other ownership interests having such power
only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the management of
which is otherwise controlled, directly or indirectly through one or
more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in
this Agreement shall refer to a Subsidiary or Subsidiaries of the
Borrower.
"Subsidiary Guarantor": as defined in the preamble hereto.
16
"Super-Priority Claim": a claim, pursuant to Section
364(c)(1) of the Bankruptcy Code, against each of the Loan Parties and
in their respective Cases which is an administrative expense claim
having priority over any or all administrative expenses of the kind
specified in Sections 503(b) or 507(b) of the Bankruptcy Code.
"Termination Date": the earliest to occur of (i) the
Maturity Date, (ii) the effective date of a Plan of Reorganization
confirmed by the Bankruptcy Court pursuant to the Confirmation Order,
or (iii) the termination of the Total Revolving Credit Commitment in
accordance with the terms hereof.
"Total Revolving Credit Commitments": at any time, the
aggregate amount of the Revolving Credit Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Lenders
outstanding at such time.
"Transferee": as defined in Section 13.15.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"Wholly Owned Subsidiary": as to any Person, any other
Person, all of the Capital Stock of which (other than directors'
qualifying shares required by law) is owned directly or indirectly by
such Person directly and/or through other Wholly Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary
Guarantor that is a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the
defined meanings when used in the other Loan Documents or any
certificate or other document made or delivered pursuant hereto or
thereto.
(b) As used herein and in the other Loan Documents, and
any certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP.
(c) 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, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
17
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS
2.1 Revolving Credit Commitments. Subject to the terms and
conditions hereof, each Lender severally agrees to make revolving credit loans
("Revolving Credit Loans") to the Borrower from time to time during the
Revolving Credit Commitment Period in an aggregate principal amount at any one
time outstanding which, when added to such Lender's Revolving Credit Percentage
of the sum of the L/C Obligations then outstanding, does not exceed the amount
of such Lender's Revolving Credit Commitment then in effect; provided that no
Lender shall make any Revolving Credit Loan if, after giving effect thereto,
such Lender's Revolving Credit Percentage of the then outstanding Revolving
Credit Loans would exceed such Lender's Revolving Credit Percentage of the then
applicable Maximum Outstanding Amount of Revolving Credit Loans. During the
Revolving Credit Commitment Period the Borrower may use the Revolving Credit
Commitments by borrowing, prepaying the Revolving Credit Loans in whole or in
part, and reborrowing, all in accordance with the terms and conditions hereof.
2.2 Procedure for Revolving Credit Borrowing. The Borrower
may borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 12:00 Noon, New York City time, one Business Day
prior to the requested Borrowing Date, specifying (i) the amount of Revolving
Credit Loans to be borrowed and (ii) the requested Borrowing Date. Each
borrowing under the Revolving Credit Commitments shall be in an amount equal to
$1,000,000 or a whole multiple thereof (or, if the then aggregate Available
Revolving Credit Commitments are less than $1,000,000, such lesser amount). Upon
receipt of any such notice from the Borrower, the Administrative Agent shall
promptly notify each Lender thereof. Each Lender will make the amount of its pro
rata share of each borrowing available to the Administrative Agent for the
account of the Borrower at the Funding Office prior to 12:00 Noon, New York City
time, on the Borrowing Date requested by the Borrower in funds immediately
available to the Administrative Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent crediting the account of
the Borrower on the books of the Funding Office with the aggregate of the
amounts made available to the Administrative Agent by the Lenders and in like
funds as received by the Administrative Agent. With respect to loans of
$5,000,000 or less, the Borrower may request borrowings under the Revolving
Credit Commitments in an amount equal to $500,000 or a whole multiple thereof
(or, if the then aggregate Available Revolving Credit Commitments are less than
$500,000, such lesser amount), and the Administrative Agent shall make such
Revolving Credit Loans available to the Borrower by 4:00 p.m., New York City
time, on the same Business Day that the Borrower gives notice to the
Administrative Agent of such borrowing by 12:00 noon, New York City time;
provided, that the Administrative Agent has notified the Lenders thereof by 2:00
p.m., New York City time, on such day.
18
2.3 Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the appropriate Lender, the then unpaid principal amount of each
Revolving Credit Loan of such Lender on the Termination Date (or such earlier
date on which the Loans become due and payable pursuant to Section 9). The
Borrower hereby further agrees to pay interest on the unpaid principal amount of
the Loans from time to time outstanding from the date hereof until payment in
full thereof at the rates per annum, and on the dates, set forth in Section 2.8.
(b) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the Borrower to
such Lender resulting from each Loan of such Lender from time to time, including
the amounts of principal and interest payable and paid to such Lender from time
to time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower,
shall maintain the Register pursuant to Section 13.6(e), and a subaccount
therein for each Lender, in which shall be recorded (i) the amount of each Loan
made hereunder and any Note evidencing such Loan, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) both the amount of any sum received
by the Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the Register and the accounts of
each Lender maintained pursuant to Section 2.3(b) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
the Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a Note of the Borrower evidencing any Revolving Credit Loans of such
Lender, substantially in the form of Exhibit E, with appropriate insertions as
to date and principal amount.
2.4 Revolving Credit Commitment Fees, etc. (a) The
Borrower agrees to pay to the Administrative Agent for the account of each
Lender a commitment fee for the Revolving Credit Commitment Period, computed at
the Revolving Credit Commitment Fee Rate on the average daily amount of the
Available Revolving Credit Commitment of such Lender during the period for which
payment is made, payable monthly in arrears on the last day of each month and on
the Termination Date.
(b) The Borrower agrees to pay to the Administrative Agent
the fees in the amounts and on the dates from time to time agreed to in writing
by the Borrower and the Administrative Agent.
19
2.5 Termination or Reduction of Revolving Credit
Commitments. The Borrower shall have the right, upon not less than three
Business Days' notice to the Administrative Agent, to terminate the Revolving
Credit Commitments or, from time to time, to reduce the amount of the Revolving
Credit Commitments; provided that no such termination or reduction of Revolving
Credit Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans made on the effective date thereof,
the Total Revolving Extensions of Credit would exceed the Total Revolving Credit
Commitments. Any such reduction shall be in an amount equal to $1,000,000, or a
whole multiple thereof, and shall reduce permanently the Revolving Credit
Commitments then in effect.
2.6 Optional Prepayments. The Borrower may at any time and
from time to time prepay the Loans, in whole or in part, upon irrevocable notice
delivered to the Administrative Agent at least one Business Day prior thereto,
which notice shall specify the date and amount of prepayment. Upon receipt of
any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein. Partial prepayments of
Revolving Credit Loans shall be in an aggregate principal amount of $1,000,000
or a whole multiple thereof.
2.7 Mandatory Prepayments and Revolving Credit Commitment
Reductions. (a) If, at any time during the Revolving Credit Commitment Period,
the Total Revolving Extensions of Credit exceed (i) the amount of the Total
Revolving Credit Commitments or (ii) the Maximum Outstanding Amount then in
effect, the Borrower shall, without notice or demand, immediately prepay the
Revolving Credit Loans in an aggregate principal amount equal to such excess,
together with interest accrued to the date of such payment or prepayment;
provided that if the aggregate principal amount of Revolving Credit Loans then
outstanding is less than the amount of such excess (because L/C Obligations
constitute a portion thereof), the Borrower shall, to the extent of the balance
of such excess, replace outstanding Letters of Credit and/or deposit an amount
in cash equal to 105% of the amount of such excess in the L/C Cash Collateral
Account.
(b) If on any date the Borrower or any of its Subsidiaries
shall receive Net Cash Proceeds from any Asset Sale or Recovery Event (including
for purposes hereof, any amounts relating to reimbursement of Capital
Expenditures relating to store no. 3572 located in Toms River, New Jersey), then
on such date the Borrower shall apply an amount equal to such Net Cash Proceeds
first to the prepayment in full of the Revolving Credit Loans, second to the
payment of L/C Obligations constituting unreimbursed drawings under Letters of
Credit and third, to the cash collateralization of outstanding and undrawn
Letters of Credit by depositing into the L/C Cash Collateral Account an amount
equal to 105% of the amount by which the aggregate outstanding Letters of Credit
exceeds the amount of cash held in the L/C Cash Collateral Account. Unless
otherwise agreed by the Required Lenders, the Revolving Credit Commitment of
each Lender shall be permanently and ratably reduced by the aggregate amount
applied pursuant to clauses first, second and third above.
20
2.8 Interest Rates and Payment Dates. (a) Each Revolving
Credit Loan shall bear interest at a rate per annum equal to the Base Rate plus
2%.
(b) (i) If all or a portion of the principal amount of any
Loan or Reimbursement Obligation or a portion of any interest payable on any
Loan or Reimbursement Obligation or any commitment fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), all outstanding Loans and Reimbursement Obligations
(whether or not overdue) and such overdue amount shall bear interest at a rate
per annum which is equal to the Base Rate plus 4%, from the date of such
non-payment until such amount is paid in full (as well after as before
judgment).
(c) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (b) of this
Section 2.8 shall be payable from time to time on demand.
2.9 Computation of Interest and Fees. (a) Interest, fees
and commissions payable pursuant hereto shall be calculated on the basis of a
365- (or 366-, as the case may be) day year for the actual days elapsed. Any
change in the interest rate on a Loan resulting from a change in the Base Rate
shall become effective as of the opening of business on the day on which such
change becomes effective. The Administrative Agent shall as soon as practicable
notify the Borrower and the relevant Lenders of the effective date and the
amount of each such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to Section
2.9(a).
2.10 Pro Rata Treatment and Payments. (a) Each borrowing
by the Borrower from the Lenders hereunder, each payment by the Borrower on
account of any commitment fee and any reduction of the Revolving Credit
Commitments of the Lenders shall be made pro rata according to the Revolving
Credit Percentages of the relevant Lenders. Each payment in respect of principal
or interest in respect of the Revolving Credit Loans, each payment in respect of
fees payable hereunder, and each payment in respect of Reimbursement
Obligations, shall be applied to the amounts of such obligations owing to the
Lenders pro rata according to the respective amounts then due and owing to the
Lenders.
(b) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Payment Office, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
21
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day. In the case
of any extension of any payment of principal pursuant to the preceding sentence,
interest thereon shall be payable at the then applicable rate during such
extension.
(c) Unless the Administrative Agent shall have been
notified in writing by any Lender prior to a borrowing that such Lender will not
make the amount that would constitute its share of such borrowing available to
the Administrative Agent, the Administrative Agent may assume that such Lender
is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available to
the Administrative Agent. A certificate of the Administrative Agent submitted to
any Lender with respect to any amounts owing under this paragraph shall be
conclusive in the absence of manifest error. If such Lender's share of such
borrowing is not made available to the Administrative Agent by such Lender
within three Business Days of such Borrowing Date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
per annum applicable to Revolving Credit Loans, on demand, from the Borrower.
(d) Unless the Administrative Agent shall have been
notified in writing by the Borrower prior to the date of any payment being made
hereunder that the Borrower will not make such payment to the Administrative
Agent, the Administrative Agent may assume that the Borrower is making such
payment, and the Administrative Agent may, but shall not be required to, in
reliance upon such assumption, make available to the Lenders their respective
pro rata shares of a corresponding amount. If such payment is not made to the
Administrative Agent by the Borrower within three Business Days of such required
date, the Administrative Agent shall be entitled to recover, on demand, from
each Lender to which any amount which was made available pursuant to the
preceding sentence, such amount with interest thereon at the rate per annum
equal to the daily average Federal Funds Effective Rate. Nothing herein shall be
deemed to limit the rights of the Administrative Agent or any Lender against the
Borrower.
2.11 Taxes. (a) All payments made by the Borrower under
this Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding taxes based on or measured by net income and
franchise taxes (imposed in lieu thereof) imposed on the Administrative Agent or
any Lender as a result of a present or former connection between the
Administrative Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from the
Administrative Agent or such Lender having executed, delivered or performed its
obligations or
22
received a payment under, or enforced, this Agreement or any other Loan
Document). If any such non-excluded taxes, levies, imposts, duties, charges,
fees, deductions or withholdings ("Non-Excluded Taxes") are required to be
withheld from any amounts payable to the Administrative Agent or any Lender
hereunder, the amounts so payable to the Administrative Agent or such Lender
shall be increased to the extent necessary to yield to the Administrative Agent
or such Lender (after payment of all Non-Excluded Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or paragraph (e) of this Section 2.11 or (ii) to
the extent that the obligation to withhold amounts with respect to United States
federal withholding tax existed on the date such Lender became a party to this
Agreement (or, in the case of a Participant, on the date such Participant became
a Participant hereunder) or, with respect to payments to a New Lending Office,
the date such Lender designated such New Lending Office with respect to a Loan,
except to the extent that such Lender's assignor (if any) was entitled, at the
time of assignment or such Lender was entitled at the time the New Lending
Office was designated, to receive additional amounts from the Borrower with
respect to such Non-Excluded Taxes pursuant to this Section 2.11(a).
(b) In addition, the Borrower shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are
payable by the Borrower, as promptly as possible thereafter the Borrower shall
send to the Administrative Agent for the account of the relevant Agent or
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure. The agreements in this Section 2.11 shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
(d) Each Lender (or Transferee) that is not a United
States person as defined in Section 7701(a)(30) of the Code (a "Non-U.S.
Lender") shall timely deliver to the Borrower and the Administrative Agent (or,
in the case of a Participant, to the Lender from which the related participation
shall have been purchased) (x) two copies of either U.S. Internal Revenue
Service Form W-8BEN or Form W-89ECI, or, in the case of a Non-U.S. Lender
claiming exemption from U.S. federal withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of "portfolio interest" a statement
substantially in the form of Exhibit G and a Form W-8BEN, or any subsequent
versions thereof or successors thereto properly completed and duly executed by
such Non-U.S. Lender claiming complete exemption from, or a reduced rate of,
U.S. federal withholding tax on all payments by the Borrower under this
Agreement and the other Loan Documents and (y) any other related documents
reasonably requested by the Borrower.
23
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation) and on or
before the date, if any, such Non-U.S. Lender changes its applicable lending
office by designating a different lending office (a "New Lending Office"). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
(e) A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate, provided that such
Lender is legally entitled to complete, execute and deliver such documentation
and in such Lender's reasonable judgment such completion, execution or
submission would not materially prejudice the legal position of such Lender.
(f) If the Administrative Agent or any Lender determines
that it has received a refund in respect of any Non-Excluded Taxes or Other
Taxes as to which indemnification has been paid by the Borrower pursuant to this
Section 2.11, it shall promptly remit such refund (including any interest) to
the Borrower, net of all out-of-pocket expenses of the Administrative Agent or
such Lender); provided, however, that the Borrower, upon the request of the
Administrative Agent or such Lender, agrees promptly to return such refund (plus
any interest) to such party in the event such party is required to repay such
refund to the relevant taxing authority requiring prepayment or such refund. The
Administrative Agent or such Lender shall provide the Borrower with a copy of
any notice or assessment from the relevant taxing authority (deleting any
confidential information contained therein) requiring repayment of such refund.
2.12 Change of Lending Office. Each Lender agrees that,
upon the occurrence of any event giving rise to the operation of Section 2.11(a)
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the good faith judgment of such Lender,
cause such Lender and its lending office(s) to suffer no economic, legal or
regulatory disadvantage, and provided, further, that nothing in this Section
2.12 shall affect or postpone any of the obligations of the Borrower or the
rights of any Lender pursuant to Section 2.11(a).
24
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and
conditions hereof, each Issuing Lender, in reliance on the agreements of the
other Lenders set forth in Section 3.4(a), agrees to issue letters of credit
("Letters of Credit") for the account of the Borrower on any Business Day during
the Revolving Credit Commitment Period in such form as may be approved from time
to time by such Issuing Lender; provided that no Issuing Lender shall have any
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the L/C Obligations would exceed the lesser of (x) the L/C
Commitment or (y) unless otherwise agreed by the Administrative Agent, the then
applicable Maximum Outstanding Amount of Letters of Credit or (ii) the aggregate
amount of the Available Revolving Credit Commitments would be less than zero.
(b) Each Letter of Credit shall (i) be denominated in
Dollars, (ii) be available to support the obligations of the Borrower or any
Guarantor under self insurance or workers' compensation insurance programs,
including renewal of existing letters of credit, and for other purposes
reasonably satisfactory to the Administrative Agent and (iii) expire no later
than the date that is 60 days after the Maturity Date (subject to certain
extension provisions acceptable to the Administrative Agent and the applicable
Issuing Lender; provided, that if the Termination Date occurs prior to the
expiration of any Letter of Credit, the Borrower shall, on or prior to the
Termination Date, (x) cause all such Letters of Credit to be returned to the
applicable Issuing Bank undrawn and marked "cancelled" or (y) to the extent that
the Borrower is unable to replace and return any such Letter of Credit, deposit
cash in the L/C Cash Collateral Account in an amount equal to 105% of the face
amount of all such Letters of Credit, as collateral security for the Borrower's
reimbursement obligations in connection therewith, such cash to be remitted to
the Borrower upon the expiration, cancellation or other termination or
satisfaction of the Borrower's reimbursement obligations in respect of all such
Letters of Credit and all other Obligations then outstanding under this
Agreement.
(c) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
(d) No Issuing Lender shall at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause such Issuing Lender or any L/C Participant to exceed any limits imposed
by, any applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The
Borrower may from time to time request that an Issuing Lender issue a Letter of
Credit by delivering to such Issuing Lender at its address for notices specified
herein an Application therefor, completed to the satisfaction of such Issuing
Lender, and such other certificates, documents and other papers and information
as such Issuing Lender may request. Upon receipt of any Application, such
Issuing Lender will process such Application and the certificates, documents and
other papers and information delivered to it in connection therewith in
accordance with its customary procedures
25
and shall promptly issue the Letter of Credit requested thereby (but in no event
shall such Issuing Lender be required to issue any Letter of Credit earlier than
three Business Days but no later than five Business Days after its receipt of
the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed to by such
Issuing Lender and the Borrower. Such Issuing Lender shall furnish a copy of
such Letter of Credit to the Borrower promptly following the issuance thereof.
Such Issuing Lender shall promptly furnish to the Administrative Agent, which
shall in turn promptly furnish to the Lenders, notice of the issuance of each
Letter of Credit (including the amount thereof).
3.3 Fees and Other Charges. (a) The Borrower shall pay a
fee on the daily average undrawn amount of all outstanding Letters of Credit at
a per annum rate equal to 4% shared ratably among the Lenders and payable
monthly in arrears on each L/C Fee Payment Date after the issuance date. In
addition, the Borrower shall pay to the each Issuing Lender for its own account
a fronting fee of 1/8 of 1% per annum, payable monthly in arrears on each L/C
Fee Payment Date after the issuance date.
(b) In addition to the foregoing fees, the Borrower shall
pay or reimburse each Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by such Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.
3.4 L/C Participations. (a) As to each Letter of Credit
issued by it, each Issuing Lender irrevocably agrees to grant and hereby grants
to each L/C Participant, and, to induce each Issuing Lender to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase
and hereby accepts and purchases from each Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant's own account and risk
an undivided interest equal to such L/C Participant's Revolving Credit
Percentage in each Issuing Lender's obligations and rights under each Letter of
Credit issued hereunder and the amount of each draft paid by the Issuing Lender
thereunder. Each L/C Participant unconditionally and irrevocably agrees with
each Issuing Lender that, if a draft is paid under any Letter of Credit for
which the applicable Issuing Lender is not reimbursed in full by the Borrower in
accordance with the terms of this Agreement, such L/C Participant shall pay to
such Issuing Lender upon demand at such Issuing Lender's address for notices
specified herein an amount equal to such L/C Participant's Revolving Credit
Percentage of the amount of such draft, or any part thereof, which is not so
reimbursed.
(b) If any amount required to be paid by any L/C
Participant to an Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by such Issuing Lender under any Letter
of Credit is paid to such Issuing Lender within three Business Days after the
date such payment is due, such L/C Participant shall pay to such Issuing Lender
on demand an amount equal to the product of (i) such amount, times (ii) the
daily average Federal Funds Effective Rate during the period from and including
the date such payment is required to the date on which such payment is
immediately available to such Issuing Lender,
26
times (iii) a fraction the numerator of which is the number of days that elapse
during such period and the denominator of which is 360. If any such amount
required to be paid by any L/C Participant pursuant to Section 3.4(a) is not
made available to such Issuing Lender by such L/C Participant within three
Business Days after the date such payment is due, such Issuing Lender shall be
entitled to recover from such L/C Participant, on demand, such amount with
interest thereon calculated from such due date at the rate per annum equal to
the Base Rate plus 2%. A certificate of such Issuing Lender submitted to any L/C
Participant with respect to any amounts owing under this Section 3.4 shall be
conclusive in the absence of manifest error.
(c) Whenever, at any time after an Issuing Lender has made
payment under a Letter of Credit and has received from any L/C Participant its
pro rata share of such payment in accordance with Section 3.4(a), such Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
by such Issuing Lender), or any payment of interest on account thereof, such
Issuing Lender will distribute to such L/C Participant its pro rata share
thereof; provided, however, that in the event that any such payment received by
such Issuing Lender shall be required to be returned by such Issuing Lender,
such L/C Participant shall return to such Issuing Lender the portion thereof
previously distributed by such Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse each Issuing Lender on each date on which such Issuing
Lender notifies the Borrower of the date and amount of a draft presented under
any Letter of Credit and paid by such Issuing Lender for the amount of (a) such
draft so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by such Issuing Lender in connection with such payment. Each such
payment shall be made to such Issuing Lender at its address for notices
specified herein in lawful money of the United States of America and in
immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this Section 3.5 from the date such
amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the rate set forth in (i) until the second
Business Day following the date of the applicable drawing, Section 2.8(b) and
(ii) thereafter, Section 2.8(c). Each drawing under any Letter of Credit shall
constitute a request by the Borrower to the Administrative Agent for a borrowing
pursuant to Section 2.2 of Revolving Credit Loans in the amount of such drawing.
The Borrowing Date with respect to such borrowing shall be the date of such
drawing.
3.6 Obligations Absolute. The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower may have or have had against each Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. The Borrower also agrees
with each Issuing Lender that no Issuing Lender shall be responsible for, and
the Borrower's Reimbursement Obligations under Section 3.5 shall not be affected
by, among other things, the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any
27
beneficiary of such Letter of Credit or any such transferee. No Issuing
Lender shall be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Issuing Lender. The Borrower agrees that any action taken or omitted by
each Issuing Lender under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards of care specified in the
Uniform Commercial Code of the State of New York, shall be binding on the
Borrower and shall not result in any liability of such Issuing Lender to the
Borrower.
3.7 Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, such Issuing Lender shall
promptly notify the Borrower of the date and amount thereof. The responsibility
of such Issuing Lender to the Borrower in connection with any draft presented
for payment under any Letter of Credit shall, in addition to any payment
obligation expressly provided for in such Letter of Credit, be limited to
determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are substantially in
conformity with such Letter of Credit.
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. PRIORITY AND LIENS.
4.1 Priority and Liens. (a) The Borrower and the
Subsidiary Guarantors hereby covenant, represent and warrant that, upon entry of
the Interim Order or Final Order, as applicable, the Obligations of each of the
Loan Parties hereunder and under the other Loan Documents, (i) pursuant to
Section 364(c)(1) of the Bankruptcy Code, shall at all times constitute allowed
Super-Priority Claims, (ii) pursuant to Section 364(c)(2) of the Bankruptcy
Code, shall at all times be secured by a perfected first priority Lien on all
Collateral, including without limitation, all cash maintained in the L/C Cash
Collateral Account and any direct investments of the funds contained therein,
that is otherwise not encumbered by a valid and perfected Lien as of the
Petition Date, (iii) pursuant to Section 364(c)(3) of the Bankruptcy Code, shall
be secured by a perfected second priority Lien upon all Collateral (other than
the Prepetition Collateral, as to which the Lien in favor of the Administrative
Agent and the Lenders will be as described in clause (iv) of this sentence) that
is subject to a Permitted Lien, including, without limitation, valid and
perfected Liens in existence on the Petition Date or valid Liens perfected (but
not granted) thereafter to the extent such post-Petition Date perfection in
respect of a pre-Petition Date claim is expressly permitted under the Bankruptcy
Code, junior to such Permitted Liens, provided that the Liens granted in favor
of the Administrative Agent and the Lenders shall be senior to any Permitted
Lien which is expressly stated herein to be junior to the Liens in favor of the
Administrative Agent and the Lenders, and (iv) pursuant to Section 364(d)(1) of
the
28
Bankruptcy Code, shall be secured by a perfected first priority, senior
priming Lien on all of the Prepetition Collateral and any Property of the
Borrower and the Subsidiary Guarantors on which a Lien is granted after the
Petition Date to provide adequate protection in respect of the Prepetition
Obligations, subject and subordinate in each case with respect to subclauses (i)
through (iv) above, only to (x) following the occurrence and during the
continuance of a Default or an Event of Default, the payment of professional
fees and disbursements incurred by the professionals retained by the Borrower
and the Subsidiary Guarantors and the statutory committee of unsecured creditors
appointed in the Cases and allowed by the Bankruptcy Court in an aggregate
amount not to exceed $1,500,000 (in addition to fees and expenses previously
incurred to the extent ultimately allowed by the Bankruptcy Court) and (y) the
payment of unpaid fees pursuant to 28 U.S.C. ss. 1930 and any fees payable to
the Clerk of the Bankruptcy Court (collectively, the "Carve-Out"), provided,
further, that following the Termination Date amounts in the L/C Cash Collateral
Account shall not be subject to the Carve-Out. Without prejudice to any Lender's
right to object to the interim or final allowance of any compensation or
reimbursement of expenses, the Lenders agree that so long as no Default or Event
of Default shall have occurred and be continuing, the Borrower shall be
permitted to pay compensation and reimbursement of expenses allowed and payable
under Sections 330 and 331 of the Bankruptcy Code and pursuant to any order of
the Bankruptcy Court, as the same may be payable, and the amounts so paid shall
not reduce the Carve-Out.
(b) As to all Collateral, including without limitation,
all real property the title to which is held by the Borrower or any Subsidiary
Guarantor or the possession of which is held by the Borrower or any Subsidiary
Guarantor pursuant to leasehold interests, the Borrower and each of the
Subsidiary Guarantors, subject to the Carve-Out, hereby assigns and conveys as
security, grants a security interest in, hypothecates, mortgages, pledges and
sets over unto the Administrative Agent all of the right, title and interest of
the Borrower and each of the Subsidiary Guarantors in all of such Collateral,
including without limitation, all owned real property and in all such leasehold
interests, together in each case with all of the right, title and interest of
the Borrower and each of the Subsidiary Guarantors in and to all buildings,
improvements, and fixtures related thereto, any lease or sublease thereof, all
general intangibles relating thereto and all proceeds thereof. The Borrower and
each of the Subsidiary Guarantors acknowledges that, pursuant to the Orders, the
Liens granted in favor of the Administrative Agent (on behalf of the
Administrative Agent and the Lenders) in all of the Collateral shall be
perfected without the recordation of any Uniform Commercial Code financing
statements, notices of Lien or other instruments of mortgage or assignment. The
Borrower further agrees that if requested by the Administrative Agent, the
Borrower and the Subsidiary Guarantors shall enter into separate security
agreements, pledge agreements and fee and leasehold mortgages with respect to
such Collateral on terms reasonably satisfactory to the Administrative Agent.
4.2 Security Interest in L/C Cash Collateral Account.
Pursuant to Section 364(c)(2) of the Bankruptcy Code, the Borrower and the
Subsidiary Guarantors hereby assign and pledge to the Administrative Agent (for
the benefit of the Administrative Agent and the Lenders), and hereby grants to
the Administrative Agent (for the benefit of the Administrative Agent and the
Lenders) a first priority security interest, senior to all other Liens, if any,
in all of
29
the Borrower's and the Subsidiary Guarantors' right, title and interest in and
to the L/C Cash Collateral Account and any direct investment of the funds
contained therein.
4.3 Payment of Obligations. Upon the maturity (whether by
acceleration or otherwise) of any of the Obligations under this Agreement or any
of the other Loan Documents, the Lenders shall be entitled to immediate payment
of such Obligations without further application to or order of the Bankruptcy
Court.
4.4 No Discharge; Survival of Claims. The Borrower and
each Subsidiary Guarantor agrees that to the extent the Obligations hereunder
are not satisfied in full, (i) the Obligations arising hereunder shall not be
discharged by the entry of a Confirmation Order (and the Borrower and each
Subsidiary Guarantor pursuant to Section 1141(d)(4) of the Bankruptcy Code
hereby waives any such discharge) and (ii) the Super-Priority Claim granted to
the Administrative Agent and the Lenders pursuant to the Orders and described in
Section 4.1 and the Liens granted to the Administrative Agent pursuant to the
Orders and described in Section 4.1 shall not be affected in any manner by the
entry of a Confirmation Order.
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to
enter into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, the Borrower and the Subsidiary Guarantors represent and
warrant to each Agent and each Lender that:
5.1 Financial Condition. The audited consolidated balance
sheets of the Borrower and its Subsidiaries as at April 1, 2000 and April 3,
1999, and the related consolidated statements of income and of cash flows for
the 52-week period ended on April 1, 2000 and the 33-week period ended on April
3, 1999, reported on by and accompanied by a report from PricewaterhouseCoopers
LLP, present fairly the consolidated financial condition of the Borrower as at
such date, and the consolidated results of its operations and its consolidated
cash flows for the respective fiscal periods then ended. All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by the aforementioned firm of accountants and
disclosed therein). The Borrower and its Subsidiaries do not have any material
Guarantee Obligations, contingent liabilities and liabilities for taxes, or any
long-term leases or unusual forward or long-term commitments, including, without
limitation, any interest rate or foreign currency swap or exchange transaction
or other obligation in respect of derivatives, which are not reflected in the
most recent financial statements referred to in this paragraph. During the
period from April 1, 2000 to and including the date hereof there has been no
Disposition by the Borrower of any material part of its business or Property,
except as described on Schedule 5.1.
5.2 No Change. Since the Petition Date there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect, other than (a) those which customarily occur as a
result of events leading up to and following the
30
commencement of a proceeding under Chapter 11 of the Bankruptcy Code, and (b)
the commencement of the Cases.
5.3 Corporate Existence; Compliance with Law. Each of the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate its
Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of Property or the conduct of its business
requires such qualification and (d) is in compliance with all Requirements of
Law, except to the extent that the failure to comply therewith or to be so
qualified could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
5.4 Corporate Power; Authorization; Enforceable
Obligations. Upon entry by the Bankruptcy Court of the Interim Order and the
Final Order, as applicable, each Loan Party shall have the corporate power and
authority, and the legal right, to make, deliver and perform the Loan Documents
to which it is a party and, in the case of the Borrower, to borrow hereunder.
Each Loan Party has taken all necessary corporate action to authorize the
execution, delivery and performance of the Loan Documents to which it is a party
and, in the case of the Borrower, to authorize the borrowings on the terms and
conditions of this Agreement and the Interim Order or Final Order, as
applicable. No consent or authorization of, filing with, notice to or other act
by or in respect of, any Governmental Authority (other than entry of the Interim
Order or Final Order, as applicable) or any other Person is required in
connection with the transactions and the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the Loan Documents. Each Loan Document has been duly executed and
delivered on behalf of each Loan Party thereto. This Agreement constitutes, and
each other Loan Document upon execution will constitute, a legal, valid and
binding obligation of each Loan Party thereto, enforceable against each such
Loan Party in accordance with its terms and the Interim Order or Final Order, as
applicable, except, with respect to the Subsidiary Guarantors.
5.5 No Legal Bar. The execution, delivery and performance
of this Agreement and the other Loan Documents, the issuance of Letters of
Credit, the borrowings hereunder and the use of the proceeds thereof will not
violate any Requirement of Law or any Contractual Obligation of the Borrower (to
the extent such Contractual Obligation has been entered into after the Petition
Date) or any of its Subsidiaries and will not result in, or require, the
creation or imposition of any Lien on any of their respective properties or
revenues pursuant to any Requirement of Law or any such Contractual Obligation
(other than the Liens created by the Orders). No Requirement of Law or
Contractual Obligation applicable to the Borrower or any of its Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
5.6 No Material Litigation. Except with respect to the
Cases, no litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
of their respective properties or revenues (a) with respect to any of the
31
Loan Documents or any of the transactions contemplated hereby or thereby, or (b)
which could reasonably be expected to have a Material Adverse Effect.
5.7 No Default. Except as may result from the commencement
of the Cases and except for existing defaults under the Prepetition Credit
Agreement (without regard to waivers thereof), neither the Borrower nor any of
its Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
5.8 Ownership of Property; Liens. Each of the Borrower and
its Subsidiaries has title in fee simple to, or a valid leasehold interest in,
all its real property, and good title to, or a valid leasehold interest in, all
its other Property, and none of such Property is subject to any Lien except
Permitted Liens.
5.9 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted. No material claim has
been asserted and is pending by any Person challenging or questioning the use of
any Intellectual Property or the validity or effectiveness of any Intellectual
Property, nor does the Borrower know of any valid basis for any such claim. The
use of Intellectual Property by the Borrower and its Subsidiaries does not
infringe on the rights of any Person in any material respect.
5.10 Taxes. Each of the Borrower and each of its
Subsidiaries has filed or caused to be filed all Federal, state and other
material tax returns which are required to be filed and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its Property and all other material taxes, fees or other charges imposed
on it by any Governmental Authority (other than (i) with respect to any taxes
discharged in a prior bankruptcy of the Borrower or its Subsidiaries and (ii)
any the amount or validity of which are currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the Borrower or any of its Subsidiaries,
as the case may be).
5.11 Federal Regulations. No part of the proceeds of any
Loans will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect or for any purpose which violates the
provisions of the Regulations of the Board. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form U-1 referred to in Regulation U.
5.12 Labor Matters. There are no strikes or other labor
disputes against the Borrower or any of its Subsidiaries pending or, to the
knowledge of the Borrower, threatened that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse
32
Effect. Hours worked by and payment made to employees of the Borrower
and its Subsidiaries have not been in violation of the Fair Labor Standards Act
or any other applicable Requirement of Law dealing with such matters that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect. All payments due from the Borrower or any of its
Subsidiaries on account of employee health and welfare insurance that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect if not paid have been paid or accrued as a liability on
the books of the Borrower or the relevant Subsidiary.
5.13 ERISA. Except for the commencement of the Cases and
the voluntary petition filed by the Borrower in the Bankruptcy Court for the
District of New Jersey in 1998, neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan which has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any material liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. To the knowledge of
the Borrower, no such Multiemployer Plan is in Reorganization or Insolvent.
5.14 Investment Company Act; Other Regulations. No Loan
Party is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
5.15 Subsidiaries. The Subsidiary Guarantors constitute
all the Subsidiaries of the Borrower at the date hereof.
5.16 Use of Proceeds. The proceeds of the Revolving Credit
Loans and the Letters of Credit, shall be used (i) to finance the working
capital needs of the Borrower and the Subsidiary Guarantors in the ordinary
course of business, (ii) for payment of Chapter 11 expenses, including
professional fees and (iii) for general corporate purposes, in all cases subject
to the terms of this Agreement, the Orders and the Budget.
33
5.17 Environmental Matters.
(a) The facilities and properties owned, leased or
operated by the Borrower or any of its Subsidiaries (the "Properties") do not
contain, and have not previously contained, any Materials of Environmental
Concern in amounts or concentrations or under circumstances which (i) constitute
or constituted a violation of, or (ii) could give rise to liability under, any
Environmental Law, except in either case insofar as such violation or liability,
or any aggregation thereof, could not reasonably be expected to result in the
payment of a Material Environmental Amount.
(b) The Properties and all operations at the Properties
are in material compliance, and have in the last five years been in material
compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business operated by the
Borrower or any of its Subsidiaries (the "Business") which could materially
interfere with the continued operation of the Properties taken as a whole or
materially impair the fair saleable value of the Properties taken as a whole.
Neither the Borrower nor any of its Subsidiaries has assumed any liability of
any other Person under Environmental Laws.
(c) Neither the Borrower nor any of its Subsidiaries has
received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the Properties or
the Business, nor does the Borrower have knowledge or reason to believe that any
such notice will be received or is being threatened, except insofar as such
notice or threatened notice, or any aggregation thereof, does not involve a
matter or matters that could reasonably be expected to result in the payment of
a Material Environmental Amount.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a manner
or to a location which could give rise to liability under, any Environmental
Law, nor have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Properties in violation of, or
in a manner that could give rise to liability under, any applicable
Environmental Law, except insofar as any such violation or liability referred to
in this paragraph, or any aggregation thereof, could not reasonably be expected
to result in the payment of a Material Environmental Amount.
(e) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of the Borrower,
threatened, under any Environmental Law to which the Borrower or any Subsidiary
is or will be named as a party with respect to the Properties or the Business,
nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to the
Properties or the Business, except insofar as such proceeding, action, decree,
order or other requirement, or any aggregation thereof, could not reasonably be
expected to result in the payment of a Material Environmental Amount.
34
(f) There has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or arising from or
related to the operations of the Borrower or any Subsidiary in connection with
the Properties or otherwise in connection with the Business, in violation of or
in amounts or in a manner that could give rise to liability under Environmental
Laws, except insofar as any such violation or liability referred to in this
paragraph, or any aggregation thereof, could not reasonably be expected to
result in the payment of a Material Environmental Amount.
5.18 Accuracy of Information, etc. No statement or
information contained in this Agreement, any other Loan Document, or any other
document, certificate or statement furnished to the Arranger, the Administrative
Agent, the Lenders, the Bankruptcy Court or any of them, by or on behalf of any
Loan Party for use in connection with the transactions contemplated by this
Agreement or the other Loan Documents, contained as of the date such statement,
information, document or certificate was so furnished, any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances under which such statements are made. The Budget is based upon
good faith estimates and assumptions believed by management of the Borrower to
be reasonable at the time made, it being recognized by the Lenders that to the
extent it relates to future events the Budget is not to be viewed as fact and
that results during the period or periods covered by the Budget may differ from
the projected results set forth therein by a material amount. There is no fact
first arising after the Petition Date known to any Loan Party that could
reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents or in any other
documents, certificates and statements furnished to the Arranger, the
Administrative Agent or the Lenders for use in connection with the transactions
contemplated hereby and by the other Loan Documents.
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions to Initial Extension of Credit. The
agreement of each Lender to make the initial extension of credit requested to be
made by it is subject to the satisfaction, prior to or concurrently with the
making of such extension of credit on the Closing Date, of the following
conditions precedent:
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly
authorized officer of the Borrower and each Subsidiary Guarantor and
(ii) for the account of each relevant Lender, a Note conforming to the
requirements hereof and executed and delivered by a duly authorized
officer of the Borrower.
(b) Interim Order. The Administrative Agent shall have
received a copy of the Interim Order approving this Agreement and the
other Loan Documents and the transactions contemplated hereby and
thereby and granting the Super-Priority Claim status and Liens
described in Section 4.1 and finding that the Lenders are extending
credit
35
to the Borrower in good faith within the meaning of Section 364(e) of
the Bankruptcy Code, which Interim Order (i) shall be in form and
substance reasonably satisfactory to the Administrative Agent, (ii)
shall have been entered upon an application of the Borrower reasonably
satisfactory in form and substance to the Administrative Agent, (iii)
shall be in full force and effect and (iv) shall not have been stayed,
reversed, vacated, rescinded, modified or amended in any respect.
(c) First Day Orders. All orders submitted to the
Bankruptcy Court on or about the Petition Date (the "First Day Orders")
shall be in form and substance reasonably satisfactory to the
Administrative Agent.
(d) Related Agreements. The Administrative Agent shall
have received (in a form reasonably satisfactory to the Administrative
Agent), with a copy for each Lender, true and correct copies, certified
as to authenticity by the Borrower, of such documents or instruments as
may be reasonably requested by the Administrative Agent, including,
without limitation, a copy of any other debt instrument, security
agreement or other material contract to which the Loan Parties may be a
party.
(e) Fees. The Lenders, the Arranger and the Administrative
Agent shall have received all fees required to be paid, and all
expenses for which invoices have been presented (including reasonable
fees, disbursements and other charges of counsel and other advisors to
the Administrative Agent) on or before the Closing Date. All such
amounts will be paid with proceeds of Loans made on the Closing Date
and will be reflected in the funding instructions given by the Borrower
to the Administrative Agent on or before the Closing Date.
(f) Budget. The Administrative Agent and the Lenders shall
have received the Budget for the period from the Closing Date to the
Maturity Date detailing the receipts and disbursements of the Borrower
and its Subsidiaries and borrowings of Loans on a weekly basis for such
period, in form and substance reasonably satisfactory to the
Administrative Agent and the Lender.
(g) Lien Searches. The Administrative Agent shall have
received the results of a recent lien search in each of the
jurisdictions where assets of the Loan Parties are located, and such
search shall reveal no liens on any of the assets of the Borrower or
its Subsidiaries except for (i) Permitted Liens, and (ii) such liens as
may be reasonably satisfactory to the Administrative Agent.
(h) Closing Certificate. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of
each Loan Party, dated the Closing Date, substantially in the form of
Exhibit B, with appropriate insertions and attachments.
(i) Insurance. The Administrative Agent shall have
received insurance certificates satisfying the requirements of Section
7.5.
36
6.2 Conditions to Each Extension of Credit. The agreement
of each Lender to make any extension of credit requested to be made by
it on any date (including, without limitation, its initial extension of
credit) is subject to the satisfaction of the following conditions
precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant to
the Loan Documents shall be true and correct in all material respects
on and as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
(c) Bankruptcy Court Approval. The Interim Order shall be
in full force and effect and shall not have been stayed, reversed,
vacated, rescinded, modified or amended in any respect or, if the date
of such requested Revolving Extension of Credit is more than 30 days
after the Petition Date or the amount of such Revolving Extension of
Credit, when added to the Revolving Extensions of Credit outstanding on
such date, would exceed the maximum amount authorized under the Interim
Order, the Final Order shall have been entered, be in full force and
effect and shall not have been stayed, reversed, vacated, rescinded,
modified or amended in any respect and shall be in form and substance
satisfactory to the Administrative Agent.
(d) Borrowing Certificate. The Administrative Agent shall
have received, with a copy for each Lender, a certificate executed by a
Responsible Officer of the Borrower, substantially in the form of
Exhibit F, certifying that (i) the requested Revolving Extension of
Credit and the intended use thereof are consistent with the terms of
this Agreement and is necessary, after utilization and application of
the available cash (allowing for reasonable operating cash balances) of
the Borrower and its Subsidiaries, in order for the Borrower and the
Subsidiary Guarantors to satisfy their obligations in the ordinary
course of business or as otherwise permitted under this Agreement, (ii)
all of the representations and warranties contained in Section 5 are
true and correct in all material respects as required by Section
6.2(a), (iii) the Borrower and the Subsidiary Guarantors have observed
and performed in all material respects all applicable covenants and
agreements contained herein and in the other Loan Documents and the
Orders (as applicable), and satisfied each condition to the making of
such Revolving Extension of Credit contained herein or in the other
Loan Documents or in the Orders (as applicable), to be observed,
performed or satisfied by the Borrower or the Subsidiary Guarantors,
(iv) the making of the requested Revolving Extension of Credit would
not cause the Total Revolving Extensions of Credit then outstanding at
such time to exceed the lesser of (A) the aggregate Revolving Credit
Commitments then in effect or (B) the then applicable Maximum
Outstanding Amount and (v) such Responsible Officer has no knowledge of
any Default or Event of Default.
37
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 6.2 have been satisfied.
SECTION 7. AFFIRMATIVE COVENANTS
The Borrower and the Subsidiary Guarantors hereby agree
that, so long as the Revolving Credit Commitments remain in effect, any Letter
of Credit remains outstanding or any Loan or other amount is owing to any Lender
or the Administrative Agent hereunder, the Borrower shall and shall cause each
of its Subsidiaries to:
7.1 Financial Statements. Furnish to the Administrative
Agent and each Lender:
(a) as soon as available, but in any event not later than
45 days after the end of each of the first three quarterly periods of
each fiscal year of the Borrower, the unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end
of such quarter and the related unaudited consolidated statements of
income and of cash flows for such quarter and the portion of the fiscal
year through the end of such quarter, setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments); and
(b) as soon as available, but in any event not later than
30 days after the end of each month (other than the third, sixth and
ninth months) occurring during each fiscal year of the Borrower, the
unaudited consolidated balance sheets of the Borrower and its
Subsidiaries as at the end of such month and the related unaudited
consolidated statements of income and of cash flows for such month and
the portion of the fiscal year through the end of such month, setting
forth in each case in comparative form the figures for the previous
year, certified by a Responsible Officer as being fairly stated in all
material respects (subject to normal year end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
7.2 Certificates; Other Information. Furnish to the
Administrative Agent and each Lender, or, in the case of clause (i), to the
relevant Lender:
(a) concurrently with the delivery of any financial
statements pursuant to Section 7.1, (i) a certificate of a Responsible
Officer stating that, to the best of each such
38
Responsible Officer's knowledge, each Loan Party during such period has
observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement and the other
Loan Documents to which it is a party to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in
such certificate and (ii) a Compliance Certificate containing all
information necessary for determining compliance by the Borrower and
its Subsidiaries with the provisions of this Agreement referred to
therein as of the last day of the applicable fiscal period of the
Borrower, as the case may be.
(b) no later than five days before the end of each fiscal
period following the Closing Date, an update to the Budget detailing
the receipts and disbursements of the Borrower and its Subsidiaries and
the borrowing of Loans on a weekly basis for the succeeding fiscal
period in the form of the initial Budget or otherwise in a format
reasonably satisfactory to the Administrative Agent;
(c) on the Friday of every calendar week, commencing with
the first Friday to occur after the Closing Date, before 5:00 p.m., New
York City time, an updated treasury forecast, in form and substance
reasonably satisfactory to the Administrative Agent, including the cash
flows, cash balances and borrowing availability of the Borrower and its
Subsidiaries for the period of 4 consecutive calendar weeks beginning
in the week in which such Friday occurs, together with a comparison of
the actual cash flows and cash balances of the Borrower and its
Subsidiaries for the immediately preceding week to the most recently
forecasted cash flows of the Borrower and its Subsidiaries for such
week as set forth in the most recently delivered treasury forecast,
with an explanation of any significant variances;
(d) on the Friday of every calendar week, commencing with
the first Friday to occur after the Closing Date, before 5:00 p.m., New
York City time, (i) a report, in form and substance reasonably
acceptable to the Administrative Agent, of the sales of the Borrower
and its Subsidiaries for the preceding calendar week and for the
portion of the fiscal quarter through the end of such calendar week
together with (A) a comparison of sales for the corresponding calendar
week and portion of the corresponding fiscal quarter of the previous
fiscal year and (B) a comparison of sales set forth in or underlying
the projections for such calendar week and the portion of the fiscal
quarter through the end of such calendar week; and (ii) a weekly report
(A) prepared by, and with respect to service level percentages for
orders and deliveries from, C&S Wholesale Grocers, Inc., if such report
is received by the Borrower (B) of customer counts and (C) of average
order size.
(e) to counsel to the Administrative Agent, promptly after
the same is available, copies of all pleadings, motions, applications,
judicial information, financial information or other documents filed by
or on behalf of the Borrower with the Bankruptcy Court or the United
States Trustee in the Cases, or distributed by or on behalf of the
Borrower to any official committee appointed in the Cases;
39
(f) within five days after the same are sent, copies of
all financial statements and reports which the Borrower sends to the
holders of any class of its debt securities or public equity securities
and, within five days after the same are filed, copies of all financial
statements and reports which the Borrower may make to, or file with,
the Securities and Exchange Commission or any successor or analogous
Governmental Authority; and
(g) promptly, such additional financial and other
information as any Lender may from time to time reasonably request.
7.3 Payment of Obligations. Except in accordance with the
Bankruptcy Code or by an applicable order of the Bankruptcy Court, pay,
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its material operating obligations as
contemplated by the Budget (other than reclamation claims) that constitute
administrative expenses under Section 503(b) of the Bankruptcy Code in the
Cases, except, so long as no material Property or assets (other than money for
such obligation and the interest or penalty accruing thereon) of the Borrower or
any of its Subsidiaries is in danger of being lost or forfeited as a result
thereof, no such obligation need be paid if the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower or its Subsidiaries, as the case may be.
7.4 Conduct of Business and Maintenance of Existence, etc.
(a) (i) Preserve, renew and keep in full force and effect its corporate
existence and (ii) take all reasonable action to maintain all rights, privileges
and franchises necessary or desirable in the normal conduct of its business,
except, in each case, as otherwise permitted by Section 8.3 and except, in the
case of clause (ii) above, to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (b) subject to the
effect of the Cases, comply with all Contractual Obligations (unless otherwise
not required as a result of the Cases) and Requirements of Law except to the
extent that failure to comply therewith could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.
7.5 Maintenance of Property; Insurance. (a) Keep all
Property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted and (b) maintain with financially
sound and reputable insurance companies insurance on all its Property in at
least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption) as are usually
insured against in the same general area by companies engaged in the same or a
similar business.
7.6 Inspection of Property; Books and Records;
Discussions; Collateral Audit. (a) Keep proper books of records and account in
which full, true and correct entries in conformity with GAAP and all
Requirements of Law shall be made of all dealings and transactions in relation
to its business and activities, (b) permit representatives of any Lender
40
to visit and inspect any of its properties and examine and make abstracts from
any of its books and records at any reasonable time and as often as may
reasonably be desired and to discuss the business, operations, properties and
financial and other condition of the Borrower and its Subsidiaries with officers
and employees of the Borrower and its Subsidiaries and with its independent
certified public accountants and (c) permit employees, representatives and/or
agents of the Lenders, from time to time at the Administrative Agent's
reasonable request, during normal business hours, to enter into the premises of
the Borrower and its Subsidiaries to conduct an audit of the Collateral, the
reasonable cost and expense of which shall be borne by the Borrower.
7.7 Notices. Promptly give notice to the Administrative
Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
Contractual Obligation of the Borrower (to the extent such Contractual
Obligation has been entered into after the Petition Date) or any of its
Subsidiaries or (ii) litigation, investigation or proceeding which may
exist at any time between the Borrower or any of its Subsidiaries and
any Governmental Authority, which in either case, if not cured or if
adversely determined, as the case may be, could reasonably be expected
to have a Material Adverse Effect;
(c) except for the Cases, any litigation or proceeding
affecting the Borrower or any of its Subsidiaries in which the amount
involved is $250,000 or more and not covered by insurance or in which
injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any
event within 30 days after the Borrower knows or has reason to know
thereof: (i) the occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal
from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking
of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of,
any Plan; and
(e) any development or event which has had or could
reasonably be expected to have a Material Adverse Effect, other than
changes which result solely from the Cases.
Each notice pursuant to this Section 7.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary proposes
to take with respect thereto.
7.8 Environmental Laws. (a) Comply in all material
respects with, and undertake all reasonable efforts to ensure compliance in all
material respects by all tenants and
41
subtenants, if any, with, all applicable Environmental Laws, and obtain and
comply in all material respects with and maintain, and undertake all reasonable
efforts to ensure that all tenants and subtenants obtain and comply in all
material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws.
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
7.9 Further Assurances. From time to time execute and
deliver, or cause to be executed and delivered, such additional instruments,
certificates or documents, and take all such actions, as the Administrative
Agent may reasonably request, for the purposes of implementing or effectuating
the provisions of this Agreement, the other Loan Documents and the Orders, or of
more fully perfecting or renewing the rights of the Administrative Agent and the
Lenders with respect to the Collateral (or with respect to any additions thereto
or replacements or proceeds thereof or with respect to any other property or
assets hereafter acquired by the Borrower or any Subsidiary Guarantor which may
be deemed to be part of the Collateral) pursuant hereto or thereto. Upon the
exercise by the Administrative Agent or any Lender of any power, right,
privilege or remedy pursuant to this Agreement, the other Loan Documents or
Orders which requires any consent, approval, recording, qualification or
authorization of any Governmental Authority, the Borrower will execute and
deliver, or will cause the execution and delivery of, all applications,
certifications, instruments and other documents and papers that the
Administrative Agent or such Lender may be required to obtain from the Borrower
or any of its Subsidiaries for such governmental consent, approval, recording,
qualification or authorization.
SECTION 8. NEGATIVE COVENANTS
The Borrower and the Subsidiary Guarantors hereby agree
that, so long as the Revolving Credit Commitments remain in effect, any Letter
of Credit remains outstanding or any Loan or other amount is owing to any Lender
or the Administrative Agent hereunder, the Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly:
8.1 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness of the Borrower to any Subsidiary and of
any Wholly Owned Subsidiary Guarantor to the Borrower or any other
Subsidiary; provided that any such Indebtedness shall be evidenced by a
promissory note which shall be pledged collaterally to the
Administrative Agent;
(c) Indebtedness outstanding on the date hereof and listed
on Schedule 8.1(c) and the Prepetition Obligations, but excluding the
refinancing of any such Indebtedness; and
(d) Capital Lease Obligations with respect to vehicles and
office equipment leased in the ordinary course of the Borrower's or its
Subsidiaries' business, but only to the extent that such Capital Lease
Obligations were first incurred prior to the Petition Date.
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8.2 Limitation on Liens. Create, incur, assume or suffer
to exist any Lien upon any of its Property, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due (or that have become due
but are thereafter payable without penalty) or which are being
contested in good faith by appropriate proceedings, provided that
adequate reserves with respect thereto are maintained on the books of
the Borrower or its Subsidiaries, as the case may be, in conformity
with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or
which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business which,
in the aggregate, are not substantial in amount and which do not in any
case materially detract from the value of the Property subject thereto
or materially interfere with the ordinary conduct of the business of
the Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on
Schedule 8.2(f), securing Indebtedness permitted by Section 8.1(c) and
the Liens securing the Prepetiton Obligations, provided that no such
Lien is spread to cover any additional Property after the Closing Date
and that the amount of Indebtedness secured thereby is not increased;
(g) Liens created pursuant to this Agreement and the
Orders;
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(h) any interest or title of a lessor under any lease
entered into by the Borrower or any other Subsidiary in the ordinary
course of its business and covering only the assets so leased;
(i) with the consent of the Administrative Agent, Liens in
respect of deposits with utilities in the ordinary course of business;
provided, however, that (i) the Borrower shall use its best efforts not
to make any such deposits with utilities, (ii) the Borrower shall use
its best efforts to terminate all such deposit arrangements and (iii)
the aggregate amount of such deposits at any time shall not exceed
$6,000,000; and
(j) statutory trust fund and similar obligations arising
in the ordinary course of business pursuant to PACA.
8.3 Limitation on Fundamental Changes. Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or Dispose of all or substantially
all of its Property or business, except that:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
Subsidiary Guarantor (provided that the Subsidiary Guarantor shall be
the continuing or surviving corporation); and
(b) any Subsidiary of the Borrower may Dispose of any or
all of its assets (upon voluntary liquidation or otherwise) to the
Borrower or any Subsidiary Guarantor.
8.4 Limitation on Disposition of Property. Dispose of any
of its Property (including, without limitation, receivables and leasehold
interests), whether now owned or hereafter acquired, or issue or sell any shares
of Capital Stock to any Person, except:
(a) the sale of inventory in the ordinary course of
business or in connection with the closure of stores;
(b) Dispositions permitted by Section 8.3(b);
(c) the Disposition of assets (including, without
limitation, the surrender or termination of leases or the non-exercise
of lease extensions having a fair market value not to exceed $5,000 in
the aggregate) having a fair market value not to exceed $25,000 with
respect to any individual asset or $250,000 in the aggregate; provided
that the Net Cash Proceeds arising from such Disposition are applied in
accordance with Section 2.7(b) in connection therewith.
8.5 Limitation on Restricted Payments. Declare or pay any
dividend (other than dividends payable solely in common stock of the Person
making such dividend) on, or make any payment on account of, or set apart assets
for a sinking or other analogous fund for, the
44
purchase, redemption, defeasance, retirement or other acquisition of, any
Capital Stock of the Borrower or any Subsidiary, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of the Borrower or
any Subsidiary (collectively, "Restricted Payments"), except that any Subsidiary
may make Restricted Payments to the Borrower or any Subsidiary Guarantor.
8.6 Limitation on Capital Expenditures. Make or commit to
make any Capital Expenditure other than for maintenance in an amount not to
exceed $75,000 during the week ending October 21, 2000 and $150,000 during each
week thereafter; provided, that any amount not used during a particular week may
be carried over to any succeeding week.
8.7 Limitation on Investments. Make any advance, loan,
extension of credit (by way of guaranty or otherwise) or capital contribution
to, or purchase any Capital Stock, bonds, notes, debentures or other debt
securities of, or any assets constituting an ongoing business from, or make any
other investment in, any other Person (all of the foregoing, "Investments"),
except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) ordinary course advances to employees for travel,
entertainment and relocation expenses in an aggregate amount for the
Borrower and the Subsidiaries of the Borrower not to exceed $100,000 at
any one time outstanding;
(d) Investments pursuant to the Loan Documents and the
Orders;
(e) Investments by the Borrower or any of its Subsidiaries
in the Borrower or any Person that, prior to such investment, is a
Subsidiary Guarantor;
(f) Investments in existence on the date hereof listed on
Schedule 8.7(f); and
(g) debt or equity securities received in connection with
the bankruptcy or reorganization of suppliers and/or customers and in
settlement of delinquent obligations of, and other disputes with,
customers and/or suppliers in the ordinary course of business.
8.8 Limitation on Transactions with Affiliates. Enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the
Borrower or any Subsidiary Guarantor) unless such transaction is (a) otherwise
permitted under this Agreement, (b) in the ordinary course of business of the
Borrower or such Subsidiary, as the case may be, and (c) upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary, as the
case may be, than it would obtain in a comparable arm's length transaction with
a Person which is not an Affiliate.
45
8.9 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary.
8.10 Limitation on Changes in Fiscal Periods. Permit the
fiscal year of the Borrower to end on a day other than the Saturday closest to
the last day in March or change the Borrower's method of determining fiscal
periods.
8.11 Limitation on Negative Pledge Clauses. Enter into or
suffer to exist or become effective any post-Petition Date agreement which
prohibits or limits the ability of the Borrower or any of its Subsidiaries to
create, incur, assume or suffer to exist any Lien upon any of its Property or
revenues, whether now owned or hereafter acquired, to secure the Obligations or
other than this Agreement, the other Loan Documents and the Orders.
8.12 Limitation on Restrictions on Subsidiary
Distributions. Enter into or suffer to exist or become effective any
post-Petition Date consensual encumbrance or restriction on the ability of any
Subsidiary to (a) make Restricted Payments in respect of any Capital Stock of
such Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any
other Subsidiary, (b) make Investments in the Borrower or any other Subsidiary
or (c) transfer any of its assets to the Borrower or any other Subsidiary,
except for such encumbrances or restrictions existing under or by reason of (i)
any restrictions existing under the Loan Documents and (ii) any restrictions
with respect to a Subsidiary imposed pursuant to an agreement which has been
entered into in connection with the Disposition of all or substantially all of
the Capital Stock or assets of such Subsidiary.
8.13 Limitation on Lines of Business. Enter into any
business, either directly or through any Subsidiary, except for those businesses
in which the Borrower and its Subsidiaries are engaged on the date of this
Agreement or which are reasonably related thereto.
8.14 Chapter 11 Claims; Payment of Pre-Petition Date
Claims. (a) Except for the Carve-Out, incur, create, assume, suffer to exist or
permit any other Super-Priority Claim or Lien which is pari passu with or senior
to the claims of (i) the Administrative Agent and the Lenders granted pursuant
to Section 4.1 and the Orders and (ii) the Prepetition Agent and the Prepetition
Lenders in respect of the Adequate Protection Obligations.
(b) Make any payments of Indebtedness relating to
pre-Petition Date obligations other than (i) as permitted under the Orders, (ii)
as permitted by the Bankruptcy Court, pursuant to the First Day Orders,
including pre-petition wages and benefits and other employee-related claims, in
amounts not to exceed the amounts contemplated by the Budget, (iii) payments in
respect of claims arising under PACA and (iv) as otherwise permitted under this
Agreement.
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8.15 Achievement of Milestones. Fail to achieve any of the
Milestones.
8.16 Reclamation Claims; Bankruptcy Code Section 546(g)
Agreements. (a) Make any payments or transfer any property on account of claims
asserted by any vendors of the Borrower or any Subsidiary Guarantor for
reclamation in accordance with Section 2-702 of the Uniform Commercial Code and
Section 546(c) of the Bankruptcy Code.
(b) Enter into any agreements or file any motion seeking a
Bankruptcy Court order for the return of Property of the Borrower or any
Subsidiary Guarantor to any vendor pursuant to Section 546(g) of the Bankruptcy
Code.
8.17 Rejection of Certain Unexpired Leases. Fail to file
by October 16, 2000, a motion seeking the approval of the Bankruptcy Court to
reject, pursuant to Section 365(b) of the Bankruptcy Code, the unexpired leases
set forth on Schedule 8.17.
8.18 Supply and Distribution. At any time after October
11, 2000, fail to maintain arrangements reasonably satisfactory to the
Administrative Agent for the supply of inventory and the distribution of
inventory to stores operated by the Borrower or any Subsidiary Guarantors.
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and be
continuing:
(a) The Borrower shall fail to pay any principal of any
Loan or Reimbursement Obligation when due in accordance with the terms
hereof; or the Borrower or any other Loan Party shall fail to pay any
interest on any Loan or Reimbursement Obligation, or any other amount
payable hereunder or under any other Loan Document, within five days
after any such interest or other amount becomes due in accordance with
the terms hereof; or
(b) Any representation or warranty made or deemed made by
any Loan Party in any Loan Document or which is contained in any
certificate, document or financial or other statement furnished by it
at any time under or in connection with this Agreement or any such
other Loan Document shall prove to have been inaccurate in any material
respect on or as of the date made or deemed made; or
(c) Any Loan Party shall default in the observance or
performance of any agreement contained in Section 7.4(a) (with respect
to the Borrower only), Section 7.7(a) or Section 8; or
(d) Any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Loan Document (other than as
47
provided in paragraphs (a) through (c) of this Section 9), and such
default shall continue unremedied for a period of 30 days; or
(e) (i) Any of the Cases shall be dismissed or converted
to a case under Chapter 7 of the Bankruptcy Code or (ii) an order of
the Bankruptcy Court shall be entered in any of the Cases appointing a
trustee under Chapter 11 of the Bankruptcy Code; or
(f) (i) Except for the Carve-Out, or as provided in the
Orders, an order of the Bankruptcy Court shall be entered granting
another Super-Priority Claim or Lien pari passu with or senior to that
granted (x) to the Administrative Agent and the Lenders pursuant to
this Agreement or the Orders, (y) to the Prepetition Lenders pursuant
to the Orders (other than pursuant to clause (x) above), (ii) an order
of a court of competent jurisdiction shall be entered staying,
reversing, vacating or otherwise modifying either of the Orders without
the Administrative Agent's and the Required Lenders' consent, or (iii)
an order of a court of competent jurisdiction shall be entered
terminating the use of the Prepetition Lenders' Cash Collateral; or
(g) An order of the Bankruptcy Court shall be entered in
the Cases appointing an examiner having enlarged powers (beyond those
set forth under Sections 1106(a)(3) and (4) of the Bankruptcy Code)
under Section 1106(b) of the Bankruptcy Code; or
(h) The entry of an order granting relief from the
automatic stay so as to allow a third party or third parties to proceed
against any asset or assets of the Borrower or any Guarantor which have
a value in excess of $50,000 in the aggregate; or
(i) An order of the Bankruptcy Court shall be entered in
the Cases authorizing the assumption of any executory contract or
unexpired lease without the consent of the Required Lenders; or
(j) Except for the "Application for an Order Authorizing
the Assumption of Employment Agreements, Sale Bonus Agreements, Amended
Employee Retention Agreements and for the Making of Severance Payments
in Accordance With Existing Severance Plans" to be filed on or about
the Petition Date, the filing of any pleading by the Borrower or any of
its Subsidiaries seeking, or otherwise consenting to, any of the
matters set forth in paragraphs (e) through (i); or
(k) The Borrower or any of its Subsidiaries files any
pleading seeking, or otherwise consenting to, (i) the invalidation,
subordination or other challenging of the Liens granted to secure the
Obligations or (ii) any relief under Section 506(c) of the Bankruptcy
Code with respect to any Property which secures the Obligations; or
(l) There shall occur any event, including, without
limitation, any change in the financial condition of the Borrower and
its Subsidiaries, taken as a whole, after the Petition Date which
results in, or could have, a Material Adverse Effect; or
48
(m) The entry of the Final Order shall not have occurred
within 30 days after the Petition Date; or
(n) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such
events or conditions, if any, could, in the sole judgment of the
Required Lenders, reasonably be expected to have a Material Adverse
Effect; or
(o) One or more post-Petition Date judgments or decrees
shall be entered against the Borrower or any of its Subsidiaries
involving in the aggregate a liability (not paid or fully covered by
insurance as to which the relevant insurance company has acknowledged
coverage) of $100,000 or more, and all such judgments or decrees shall
not have been vacated, discharged, stayed or bonded pending appeal
within 30 days from the entry thereof; or
(p) Any Lien created by this Agreement or the Orders shall
cease to be enforceable and of the same effect and priority purported
to be created thereby.
then, and in every such event and at any time thereafter during the continuance
of such event, and without further order of or application to the Bankruptcy
Court, the Administrative Agent may, and, at the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower (with a copy
to counsel for any statutory committee of unsecured creditors appointed in the
Cases and to the United States Trustee), take one or more of the following
actions, at the same or different times (provided, that with respect to clause
(iv) below and the enforcement of Liens or other remedies with respect to the
Collateral under clause (v) below, the Administrative Agent shall provide the
Borrower (with a copy to counsel for any statutory committee of unsecured
creditors appointed in the Cases and to the United States Trustee) with five
Business Days' written notice prior to taking the action contemplated thereby):
(i) terminate forthwith the Revolving Credit Commitments; (ii) declare the
Revolving Credit Loans then outstanding to be
49
forthwith due and payable, whereupon the principal of the Revolving Credit
Loans, any Letter of Credit outstandings constituting then drawn and
unreimbursed Letters of Credit, together with accrued interest thereon and any
unpaid accrued fees and all other Obligations of the Borrower accrued hereunder
and under any other Loan Document, shall become forthwith due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein or
in any other Loan Document to the contrary notwithstanding; (iii) require the
Borrower upon demand to forthwith deposit in the L/C Cash Collateral Account
cash in an amount equal to 105% of the face amount of each outstanding and
undrawn Letter of Credit and, to the extent the Borrower shall fail to furnish
such funds as demanded by the Administrative Agent, the Administrative Agent
shall be authorized to debit the accounts of the Borrower or any Subsidiary
Guarantor maintained with the Administrative Agent or any Lender in such amount
for the deposit of such amounts in the L/C Cash Collateral Account; (iv) set-off
amounts in the L/C Cash Collateral Account or any other accounts of the Borrower
or any Subsidiary Guarantor and apply such amounts to the Obligations hereunder
and under the other Loan Documents; and (v) exercise any and all remedies under
this Agreement, the Orders, and applicable law available to the Administrative
Agent and the Lenders. After all such Letters of Credit shall have expired or
been fully drawn upon, all Reimbursement Obligations shall have been satisfied
and all other obligations hereunder and under the other Loan Documents shall
have been paid in full, the balance, if any, in such L/C Cash Collateral Account
shall be returned to the Borrower (or such other Person as may be lawfully
entitled thereto).
SECTION 10. THE ADMINISTRATIVE AGENT
10.1 Appointment. Each Lender hereby irrevocably
designates and appoints the Administrative Agent as the agent of such Lender
under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes the Administrative Agent, in such capacity, to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Administrative Agent shall have no duties or
responsibilities, except those expressly set forth herein, and no fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
10.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other 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 Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
50
10.3 Exculpatory Provisions. Neither the Administrative
Agent nor any of its respective 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
this Agreement or any other Loan Document (except to the extent that any of the
foregoing are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from its or such Person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
any Loan Party or any officer thereof contained in this Agreement or any other
Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under or
in connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document or for any failure of any Loan Party a
party thereto to perform its obligations hereunder or thereunder. The
Administrative 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, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
10.4 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation 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 Loan
Parties), independent accountants and other experts selected by the
Administrative Agent. The Administrative 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
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders (or, if so specified by this Agreement, all 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 Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance with a request
of the Required Lenders (or, if so specified by this Agreement, all 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 Loans.
10.5 Notice of Default. The Administrative Agent shall be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower 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 Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required
51
Lenders (or, if so specified by this Agreement, all Lenders); provided that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
10.6 Non-Reliance on Administrative Agent and Other
Lenders. Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its respective officers, directors, employees, agents,
attorneys-in-fact or affiliates have made any representations or warranties to
it and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of a Loan Party or any affiliate of a Loan Party, shall be
deemed to constitute any representation or warranty by the Administrative Agent
to any Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative 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 the
Loan Parties and their affiliates 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 Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Loan Parties and their affiliates. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, the Administrative Agent shall
have no duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of any Loan Party or any affiliate
of a Loan Party which may come into the possession of the Administrative Agent
or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
10.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Revolving Credit Percentages in effect on
the date on which indemnification is sought under this Section 10.7 (or, if
indemnification is sought after the date upon which the Revolving Credit
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with such Revolving Credit Percentages immediately prior
to such date), 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 Loans) be imposed on, incurred by or
asserted against the Administrative Agent in any way relating to or arising out
of, the Revolving Credit Commitments, this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Administrative Agent under or in connection with
52
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 which are found by a
final and nonappealable decision of a court of competent jurisdiction to have
resulted from the Administrative Agent's gross negligence or willful misconduct.
The agreements in this Section 10.7 shall survive the payment of the Loans and
all other amounts payable hereunder.
10.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with any Loan Party as though the
Administrative Agent was not the Administrative Agent. With respect to its Loans
made or renewed by it and with respect to any Letter of Credit issued or
participated in by it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not the Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its individual
capacity.
10.9 Successor Administrative Agent. The Administrative
Agent may resign as Administrative Agent upon 10 days' notice to the Lenders and
the Borrower. If the Administrative Agent shall resign as Administrative Agent
under this Agreement and the other Loan Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 9(a) with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent's rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. After the Administrative Agent's resignation, the
provisions of this Section 10 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent under this
Agreement and the other Loan Documents.
10.10 Authorization to Release Liens. The Administrative
Agent is hereby irrevocably authorized by each of the Lenders to release any
Lien covering any Property of the Borrower or any of its Subsidiaries that is
the subject of a Disposition which is permitted by this Agreement or which has
been consented to in accordance with Section 13.1.
10.11 Arranger. The Arranger, in its capacity as such,
shall have no duties or responsibilities, and shall incur no liability, under
this Agreement and the other Loan Documents.
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SECTION 11. GUARANTEE
11.1 Guarantee. (a) Each of the Subsidiary Guarantors
unconditionally and irrevocably guarantees the due and punctual payment and
performance by the Borrower of the Obligations. Each of the Subsidiary
Guarantors further agrees that the Obligations may be extended or renewed, in
whole or in part, without notice to or further assent from it, and it will
remain bound upon this guarantee notwithstanding any extension or renewal of any
of the Obligations. The Obligations of the Subsidiary Guarantors shall be joint
and several.
(b) Each of the Subsidiary Guarantors waives presentation
to, demand for payment from and protest to the Borrower or any other Subsidiary
Guarantor, and also waives notice of protest for nonpayment. The obligations of
the Subsidiary Guarantors hereunder shall not be affected by (i) the failure of
either the Administrative Agent or a Lender to assert any claim or demand or to
enforce any right or remedy against the Borrower or any other Subsidiary
Guarantor under the provisions of this Agreement or any other Loan Document or
otherwise; (ii) any extension or renewal of any provision hereof or thereof;
(iii) any rescission, waiver, compromise, acceleration, amendment or
modification of any of the terms or provisions of any of the Loan Documents;
(iv) the release, exchange, waiver or foreclosure of any security held by the
Administrative Agent for the Obligations or any of them; (v) the failure of
either of the Administrative Agent or a Lender to exercise any right or remedy
against any other Subsidiary Guarantor; or (vi) the release or substitution of
any Subsidiary Guarantor.
(c) Each of the Subsidiary Guarantors further agrees that
this guarantee constitutes a guarantee of performance and of payment when due
and not just of collection, and waives any right to require that any resort be
had by either of the Administrative Agent or a Lender to any security held for
payment of the Obligations or to any balance of any deposit, account or credit
on the books of either of the Administrative Agent or a Lender in favor of the
Borrower or any other Subsidiary Guarantor, or to any other Person.
(d) Each of the Subsidiary Guarantors hereby waives any
defense that it might have based on a failure to remain informed of the
financial condition of the Borrower and of any other Subsidiary Guarantor and
any circumstances affecting the ability of the Borrower to perform under this
Agreement and the other Loan Documents.
(e) Each Subsidiary Guarantor's guarantee shall not be
affected by the genuineness, validity, regularity or enforceability of the
Obligations, this Agreement, the Notes or any other instrument evidencing any
obligations, or by the existence, validity, enforceability, perfection, or
extent of any collateral therefor or by any other circumstance relating to the
Obligations which might otherwise constitute a defense to this guarantee.
Neither the Administrative Agent, nor any of the Lenders makes any
representation or warranty in respect to any such circumstances or shall have
any duty or responsibility whatsoever to any Subsidiary Guarantor in respect of
the management and maintenance of the Obligations.
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(f) Subject to the grace periods provided by Section 9,
upon the Obligations becoming due and payable (by acceleration or otherwise),
the Lenders shall be entitled to immediate payment of such Obligations by the
Subsidiary Guarantors upon written demand by the Administrative Agent, without
further application to or order of the Bankruptcy Court.
11.2 No Impairment of Guarantee. The obligations of the
Subsidiary Guarantors hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than payment in
full), including, without limitation, any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense or set-off,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Obligations. Without limiting the
generality of the foregoing, the obligations of the Subsidiary Guarantors
hereunder shall not be discharged or impaired or otherwise affected by the
failure of either the Administrative Agent or a Lender to assert any claim or
demand or to enforce any remedy under this Agreement or any other agreement, by
any waiver or modification of any provision thereof, by any default, failure or
delay, willful or otherwise, in the performance of the Obligations, or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of the Subsidiary
Guarantors or would otherwise operate as a discharge of the Subsidiary
Guarantors as a matter of law, unless and until the Obligations are paid in
full.
11.3 Subrogation. Until the Obligations guaranteed hereby
have been paid in full, each Subsidiary Guarantor hereby waives all rights of
subrogation or contribution, whether arising by contract or operation of law.
SECTION 12. REMEDIES; APPLICATION OF PROCEEDS
12.1 Remedies; Obtaining the Collateral Upon Default. Upon
the occurrence and during the continuance of an Event of Default, to the extent
any such action is not inconsistent with the Orders and Section 9, the
Administrative Agent, in addition to any rights now or hereafter existing under
applicable law, and without application to or order of the Bankruptcy Court,
shall have all rights as a secured creditor under the Uniform Commercial Code in
all relevant jurisdictions and may:
(a) personally, or by agents or attorneys, immediately
retake possession of the Collateral (including all cash) or any part
thereof, from the Borrower, the Subsidiary Guarantors or any other
Person who then has possession of any part thereof with or without
notice or process of law (but subject to any Requirements of Law), and
for that purpose may enter upon the Borrower's or any Subsidiary
Guarantor's premises where any of the Collateral is located and remove
the same and use in connection with such removal any and all services,
supplies, aids and other facilities of the Borrower or the Subsidiary
Guarantors;
55
(b) instruct the obligor or obligors on any agreements,
instrument or other obligation constituting the Collateral to make any
payment required by the terms of such instrument or agreement directly
to the L/C Cash Collateral Account;
(c) withdraw all monies, securities and instruments in the
L/C Cash Collateral Account for application to the Obligations;
(d) sell, assign or otherwise liquidate, or direct the
Borrower or any Subsidiary Guarantor to sell, assign or otherwise
liquidate, any or all of the Collateral or any part thereof, and take
possession of the proceeds of any such sale or liquidation;
(e) take possession of the Collateral or any part thereof,
by directing the Borrower or any Subsidiary Guarantor in writing to
deliver the same to the Administrative Agent at any place or places
designated by the Administrative Agent, in which event the Borrower or
any Subsidiary Guarantor shall at its own expense:
(i) forthwith cause the same to be moved to the place or
places so designated by the Administrative Agent and there
delivered to the Administrative Agent,
(ii) store and keep any Collateral so delivered to the
Administrative Agent at such place or places pending
further action by the Administrative Agent as provided in
Section 10.2, and
(iii) while the Collateral shall be so stored and kept,
provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain
them in good condition;
it being understood that the Borrower's and each Subsidiary Guarantor's
obligation so to deliver the Collateral is of the essence of this Agreement and
that, accordingly, upon application to the Bankruptcy Court, the Administrative
Agent shall be entitled to a decree requiring specific performance by the
Borrower or any Subsidiary Guarantor of such obligation.
12.2 Remedies; Disposition of the Collateral. Upon the
occurrence and during the continuance of an Event of Default, and to the extent
not inconsistent with the Orders and Section 9, without application to or order
of the Bankruptcy Court, any Collateral repossessed by the Administrative Agent
under or pursuant to Section 12.1 or the Orders or otherwise, and any other
Collateral whether or not so repossessed by the Administrative Agent, may be
sold, assigned, leased or otherwise disposed of under one or more contracts or
as an entirety, and without the necessity of gathering at the place of sale the
property to be sold, and in general in such manner, at such time or times, at
such place or places and on such terms as the Administrative Agent may, in
compliance with any Requirements of Law, determine to be commercially
reasonable. Any of the Collateral may be sold, leased or otherwise disposed of,
in the condition in which the same existed when taken by the Administrative
Agent or after any
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overhaul or repair which the Administrative Agent shall determine to be
commercially reasonable. Any such disposition which shall be a private sale or
other private proceeding permitted by applicable Requirements of Law shall be
made upon not less than 10 days' written notice to the Borrower and the
Subsidiary Guarantors specifying the time at which such disposition is to be
made and the intended sale price or other consideration therefor, and shall be
subject, for the 10 days after the giving of such notice, to the right of the
Borrower, the Subsidiary Guarantors or any nominee thereof to acquire the
Collateral involved at a price or for such other consideration at least equal to
the intended sale price or other consideration so specified. Any such
disposition which shall be a public sale permitted by applicable Requirements of
Law shall be made upon not less than 10 days' written notice to the Borrower and
the Subsidiary Guarantors specifying the time and place of such sale and, in the
absence of applicable Requirement of Law, shall be by public auction (which may,
at the Administrative Agent's option, be subject to reserve), after publication
of notice of such auction not less than 10 days prior thereto in two newspapers
in general circulation in New York City and Wayne, New Jersey. Subject to
Section 12.4, to the extent permitted by any such Requirement of Law, the
Administrative Agent on behalf of the Lenders may bid for and become the
purchaser of the Collateral or any item thereof, offered for sale in accordance
with this subsection 12.2 without accountability to the Borrower, the Subsidiary
Guarantors or the Prepetition Lenders (except to the extent of surplus money
received). If, under mandatory Requirements of Law, the Administrative Agent
shall be required to make disposition of the Collateral within a period of time
which does not permit the giving of notice to the Borrower and the Subsidiary
Guarantors as hereinabove specified, the Administrative Agent need give the
Borrower and the Subsidiary Guarantors only such notice of disposition as shall
be reasonably practicable.
12.3 Application of Proceeds. (a) Notwithstanding anything
to the contrary contained in this Agreement or any other Loan Document, (i) if
the Administrative Agent takes action under clause (i) or (ii) of Section 9 upon
the occurrence and during the continuance of an Event of Default, any payment by
the Borrower or Subsidiary Guarantors on account of principal of and interest on
the Loans and any proceeds arising out of any realization (including after
foreclosure) upon the Collateral shall be applied, subject to the Carve-Out, as
follows: first, to the payment in full of all costs and expenses (including
without limitation, reasonable attorneys' fees and disbursements) paid or
incurred by the Administrative Agent or any of the Lenders in connection with
any such realization upon the Collateral, second, as a permanent reduction of
the Revolving Credit Commitments, pro rata to the payment in full of the
Revolving Credit Loans (including any accrued and unpaid interest thereon, and
any fees and other Obligations in respect thereof), third, as a permanent
reduction of the Revolving Credit Commitments, to the payment in full of Letter
of Credit outstandings constituting unreimbursed drawings under any Letter of
Credit, fourth, as a permanent reduction of the Revolving Credit Commitments, to
cash collateralize Letters of Credit in an amount equal to 105% of the aggregate
amount of all Letter of Credit outstandings constituting undrawn Letters of
Credit in the manner set forth in Section 3.1(b), fifth, except as otherwise
provided for in or contemplated by the Orders, to the payment in full of the
Adequate Protection Obligations, and sixth, except as otherwise provided for in
or contemplated by the Orders, to the payment in full of the Prepetition
Obligations and (ii) any payments or distributions of any kind or character,
whether in cash, property or securities, made
57
by the Borrower or the Subsidiary Guarantors or otherwise in a manner
inconsistent with clause (i) of this Section 12.3(a) shall be held in trust and
paid over or delivered to the Administrative Agent so that the priorities and
requirements set forth in such clause (i) are satisfied.
(b) It is understood that the Borrower and the Subsidiary
Guarantors shall remain jointly and severally liable to the extent of any
deficiency between the amount of the proceeds of the Collateral and the amount
of the Obligations.
12.4 WAIVER OF CLAIMS. EXCEPT AS OTHERWISE PROVIDED IN
THIS AGREEMENT, THE BORROWER AND EACH SUBSIDIARY GUARANTOR HEREBY WAIVE, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION
WITH THE ADMINISTRATIVE AGENT'S TAKING POSSESSION OR THE ADMINISTRATIVE AGENT'S
DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL
PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH
RIGHT WHICH THE BORROWER OR SUCH SUBSIDIARY GUARANTOR WOULD OTHERWISE HAVE UNDER
ANY REQUIREMENT OF LAW AND THE BORROWER AND EACH SUBSIDIARY GUARANTOR HEREBY
FURTHER WAIVE, TO THE EXTENT PERMITTED BY LAW:
(a) all damages occasioned by such taking of possession
except any damages which are the direct result of the Administrative
Agent's or any Lender's gross negligence or wilful misconduct;
(b) all other requirement to the time, place and terms of
sale or other requirements with respect to the enforcement of the
Administrative Agent's rights hereunder; and
(c) all rights of redemption, appraisement, valuation,
stay, extension or moratorium now or hereafter in force under any
applicable law in order to prevent or delay the enforcement of this
Agreement or the absolute sale of the Collateral or any portion
thereof, and the Borrower and each Subsidiary Guarantor, for itself and
all who may claim under it, insofar as it now or hereafter lawfully
may, hereby waive the benefit of all such laws.
12.5 Remedies Cumulative. Each and every right, power and
remedy hereby specifically given to the Administrative Agent shall be in
addition to every other right, power and remedy specifically given under this
Agreement, Orders or the other Loan Documents or now or hereafter existing at
law or in equity, or by statute and each and every right, power and remedy
whether specifically herein given or otherwise existing may be exercised from
time to time or simultaneously and as often and in such order as may be deemed
expedient by the Administrative Agent. All such rights, powers and remedies
shall be cumulative and the exercise or the beginning of exercise of one shall
not be deemed a waiver of the right to exercise of any other or others. No delay
or omission of the Administrative Agent in the exercise of any such right,
58
power or remedy and no renewal or extension of any of the Obligations shall
impair any such right, power or remedy or shall be construed to be a waiver of
any Default or Event of Default or an acquiescence therein. In the event that
the Administrative Agent shall bring any suit to enforce any of their rights
hereunder and shall be entitled to judgment, then in such suit the
Administrative Agent may recover reasonable expenses, including attorney's fees,
and the amounts thereof shall be included in such judgment.
12.6 Discontinuance of Proceedings. In case the
Administrative Agent shall have instituted any proceeding to enforce any right,
power or remedy under this Agreement by foreclosure, sale, entry or otherwise,
and such proceeding shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Administrative Agent, then and in
every such case the Borrower, the Subsidiary Guarantors, the Administrative
Agent and each holder of any of the Obligations shall be restored to their
former positions and rights hereunder with respect to the Collateral subject to
the security interest created under this Agreement, and all rights, remedies and
powers of the Administrative Agent and the Lenders shall continue as if no such
proceeding had been instituted.
SECTION 13. MISCELLANEOUS
13.1 Amendments and Waivers. Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 13.1. The Required Lenders and each Loan Party party to the relevant
Loan Document may, or (with the written consent of the Required Lenders) the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Loan Parties hereunder or thereunder
or (b) waive, on such terms and conditions as the Required Lenders, or the
Administrative Agent, as the case may be, may specify in such instrument, any of
the requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall (i) forgive the
principal amount or extend the final scheduled date of maturity of any Loan,
reduce the stated rate of any interest or fee payable hereunder or extend the
scheduled date of any payment thereof, or increase the amount or extend the
expiration date of any Revolving Credit Commitment or modify the Super-Priority
Claim status of any Lender, in each case without the consent of each Lender
directly affected thereby; (ii) amend, modify or waive any provision of this
Section 13.1 or reduce any percentage specified in the definition of Required
Lenders, consent to the assignment or transfer by the Borrower or any Subsidiary
Guarantor of any of its rights and obligations under this Agreement and the
other Loan Documents or release all or substantially all of the Collateral, in
each case without the consent of all Lenders; (iii) amend, modify or waive any
provision of Section 10 without the consent of the Administrative Agent; (iv)
amend, modify or waive any provision of Section 2.10 without the consent of each
Lender directly affected thereby; or (v) amend, modify or waive any
59
provision of Section 3 without the consent of each Issuing Lender. Any such
waiver and any such amendment, supplement or modification shall apply equally to
each of the Lenders and shall be binding upon the Loan Parties, the Lenders, the
Administrative Agent and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Administrative Agent shall be
restored to their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon. Any
such waiver, amendment, supplement or modification shall be effected by a
written instrument signed by the parties required to sign pursuant to the
foregoing provisions of this Section 13.1; provided, that delivery of an
executed signature page of any such instrument by facsimile transmission shall
be effective as delivery of a manually executed counterpart thereof.
13.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed (a) in the case of the Borrower, the Subsidiary Guarantors
and the Administrative Agent, as follows and (b) in the case of the Lenders, as
set forth on Schedule 1.1A or, in the case of a Lender which becomes a party to
this Agreement pursuant to an Assignment and Acceptance, in such Assignment and
Acceptance or (c) in the case of any party, to such other address as such party
may hereafter notify to the other parties hereto:
The Borrower and the The Grand Union Company
Subsidiary Guarantors: 000 Xxxxxxxxxxx Xxxxxxxxx
Xxxxx, Xxx Xxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to: Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Administrative Agent: Xxxxxx Commercial Paper Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
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with a copy to: Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
provided that any notice, request or demand to or upon the either Agent or any
Lender shall not be effective until received.
13.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder under the other Loan
Documents or the Orders shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
13.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
13.5 Payment of Expenses. The Borrower agrees (a) to pay or
reimburse the Administrative Agent for all its reasonable out-of-pocket costs
and expenses incurred in connection with syndication of the Revolving Credit
Facility (other than fees payable to syndicate members) and the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby (including the on-going monitoring
by the Administrative Agent of the Cases, including attendance by the
Administrative Agent and the Administrative Agent's counsel at hearings or other
proceedings and the on-going review of documents filed with the Bankruptcy
Court), including, without limitation, the reasonable fees and disbursements and
other charges of counsel, consultants and other experts to the Administrative
Agent, (b) to pay or reimburse each Lender and the Administrative Agent for all
their costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, the fees and
disbursements of counsel (including the allocated fees and disbursements and
other charges of in-house counsel), consultants and other experts to each Lender
and of counsel to the Administrative Agent, (c) to pay, indemnify and hold each
Lender and the Administrative Agent harmless from, or reimburse each Lender and
the Administrative Agent for any and all recording and filing fees and any and
all liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
61
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold each Lender and the Administrative Agent and their
respective officers, directors, employees, affiliates, agents and controlling
persons (each, an "Indemnitee") harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, any of the foregoing relating to the use of proceeds of the
Loans or the violation of, noncompliance with or liability under, any
Environmental Law in connection with the Borrower, any of its Subsidiaries or
any of the Properties, and the fees and disbursements and other charges of legal
counsel in connection with claims, actions or proceedings by any Indemnitee
against the Borrower hereunder (all the foregoing in this clause (d),
collectively, the "Indemnified Liabilities""), provided, that the Borrower shall
have no obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities to the extent such Indemnified Liabilities are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnitee. Without
limiting the foregoing, and to the extent permitted by applicable law, the
Borrower agrees not to assert and to cause its Subsidiaries not to assert, and
hereby waives and agrees to cause its Subsidiaries so to waive, all rights for
contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature, under or related to Environmental Laws, that any of
them might have by statute or otherwise against any Indemnitee. All amounts due
under this Section shall be payable not later than 10 days after written demand
therefor. Statements payable by the Borrower pursuant to this Section shall be
submitted to the Borrower at the address set forth in Section 13.2, or to such
other Person or address as may be hereafter designated by the Borrower in a
written notice to the Administrative Agent. The agreements in this Section 13.5
shall survive repayment of the Loans and all other amounts payable hereunder.
13.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Administrative Agent, all future holders of the Loans
and their respective successors and assigns, except that the Borrower may not
assign or transfer any of its rights or obligations under this Agreement without
the prior written consent of the Administrative Agent and each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
in any Loan owing to such Lender, any Revolving Credit Commitment of such Lender
or any other interest of such Lender hereunder and under the other Loan
Documents. In the event of any such sale by a Lender of a participating interest
to a Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under
62
this Agreement and the other Loan Documents, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement and
the other Loan Documents. In no event shall any Participant under any such
participation have any right to approve any amendment or waiver of any provision
of any Loan Document, or any consent to any departure by any Loan Party
therefrom, except to the extent that such amendment, waiver or consent would
reduce the principal of, or interest on, the Loans or any fees payable
hereunder, or postpone the date of the final maturity of the Loans, in each case
to the extent subject to such participation. The Borrower agrees that if amounts
outstanding under this Agreement and the Loans are due or unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement, provided that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in Section 13.7(a) as fully as if it
were a Lender hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of Section 2.11 with respect to its participation in
the Revolving Credit Commitments and the Loans outstanding from time to time as
if it was a Lender; provided, that no Participant shall be entitled to receive
any greater amount pursuant to any such Section than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
(c) Any Lender (an "Assignor") may, in accordance with
applicable law, at any time and from time to time assign to any Lender or any
Affiliate thereof or, with the consent of the Administrative Agent and each
Issuing Lender, which, in each case, shall not be unreasonably withheld or
delayed, to a bank, financial institution or other entity that is also a
Prepetition Lender (an "Assignee") all or any part of its rights and obligations
under this Agreement pursuant to an Assignment and Acceptance, substantially in
the form of Exhibit D, executed by such Assignee and such Assignor and delivered
to the Administrative Agent for its acceptance and recording in the Register;
provided that (i) no such assignment to an Assignee shall be in an aggregate
principal amount of less than $1,000,000 and (ii) after giving effect to such
assignment, such Assignor shall remain a Prepetition Lender (other than in each
case with respect to an assignment of all of a Lender's interests under this
Agreement). Upon such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such Assignment and Acceptance,
(x) the Assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Revolving Credit Commitment and/or Loans as set forth therein,
and (y) the Assignor thereunder shall, to the extent provided in such Assignment
and Acceptance, be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all of an Assignor's rights
and obligations under this Agreement, such Assignor shall cease to be a party
hereto).
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(d) The Administrative Agent shall maintain at its address
referred to in Section 13.2 a copy of each Assignment and Acceptance delivered
to it and a register (the "Register") for the recordation of the names and
addresses of the Lenders and the Revolving Credit Commitment of, and principal
amount of the Loans owing to, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders shall treat each Person whose
name is recorded in the Register as the owner of the Loans and any Notes
evidencing such Loans recorded therein for all purposes of this Agreement. Any
assignment of any Loan, whether or not evidenced by a Note, shall be effective
only upon appropriate entries with respect thereto being made in the Register
(and each Note shall expressly so provide). The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an Assignor and an Assignee (and, in any case where the consent of any other
Person is required by Section 13.6(c), by each such other Person) together with
payment to the Administrative Agent of a registration and processing fee of
$3,500 (except that no such registration and processing fee shall be payable (y)
in connection with an assignment involving Xxxxxx Commercial Paper Inc. or (z)
in the case of an Assignee which is already a Lender or is an affiliate of a
Lender or a Person under common management with a Lender), the Administrative
Agent shall (i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Lenders and the Borrower. On or prior to such effective date, the Borrower,
at its own expense, upon request, shall execute and deliver to the
Administrative Agent (in exchange for the Note of the assigning Lender) a new
Note to the order of such Assignee in an amount equal to the Revolving Credit
Commitment assumed or acquired by it pursuant to such Assignment and Acceptance
and, if the Assignor has retained a Revolving Credit Commitment, upon request, a
new Note to the order of the Assignor in an amount equal to the Revolving Credit
Commitment retained by it hereunder. Such new Note or Notes shall be dated the
Closing Date and shall otherwise be in the form of the Note or Notes replaced
thereby.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 13.6 concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
13.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement provides for payments to be allocated to a particular Lender, if any
Lender (a "Benefitted Lender") shall at any time receive any payment of all or
part of the Obligations owing to it, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Obligations, such Benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Obligations,
64
or shall provide such other Lenders with the benefits of any such collateral, as
shall be necessary to cause such Benefitted Lender to share the excess payment
or benefits of such collateral ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) Subject to (i) the Carve-Out and (ii) the giving of the
notice as described in Section 9, notwithstanding the provisions of Section 362
of the Bankruptcy Code and any other rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to the Borrower,
any such notice being expressly waived by the Borrower to the extent permitted
by applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise), to set
off and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower, as the case may be. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.
13.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Agreement by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Agreement signed by all
the parties shall be lodged with the Borrower and the Administrative Agent.
13.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
13.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
65
THE LAW OF THE STATE OF NEW YORK AND, TO THE EXTENT APPLICABLE, THE BANKRUPTCY
CODE.
13.12 Submission To Jurisdiction; Waivers. The Borrower
and each Subsidiary Guarantor hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
Bankruptcy Court and, if the Bankruptcy Court does not have (or
abstains from) jurisdiction, to the non-exclusive general jurisdiction
of the courts of the State of New York, the courts of the United States
of America for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower, as the case may be at its address set forth
in Section 13.2 or at such other address of which the Administrative
Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section 13.12 any special, exemplary, punitive or
consequential damages.
13.13 Acknowledgments. The Borrower and each Subsidiary
Guarantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has
any fiduciary relationship with or duty to the Borrower or any
Subsidiary Guarantor arising out of or in connection with this
Agreement or any of the other Loan Documents, and the relationship
between the Administrative Agent and Lenders, on one hand, and the
Borrower or any
66
Subsidiary Guarantor, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower, the
Subsidiary Guarantors and the Lenders.
13.14 Absence of Prejudice with Respect to Matters Before the
Bankruptcy Court. The Borrower and each Subsidiary Guarantor acknowledge that
the Bankruptcy Code and Bankruptcy Rules require it to seek Bankruptcy Court
authorization for certain matters that may also be addressed in this Agreement.
The Borrower and each Subsidiary Guarantor will not mention in any pleading or
argument before the Bankruptcy Court in support of, or in any way relating to, a
position that Bankruptcy Court authorization should be granted on the ground
that such authorization is permitted by this Agreement (unless a Person opposing
any such pleading or argument relies on this Agreement to assert or question the
propriety of such).
13.15 Confidentiality. Each of the Administrative Agent and
the Lenders agrees to keep confidential all non-public information provided to
it by any Loan Party pursuant to this Agreement that is designated by such Loan
Party as confidential; provided that nothing herein shall prevent the
Administrative Agent or any Lender from disclosing any such information (a) to
the Administrative Agent, any other Lender or any affiliate of any Lender, (b)
to any Participant or Assignee (each, a "Transferee") or prospective Transferee
which agrees to comply with the provisions of this Section 13.15, (c) any of its
employees, directors, agents, attorneys, accountants and other professional
advisors, (d) upon the request or demand of any Governmental Authority having
jurisdiction over it, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with any
litigation or similar proceeding, (g) which has been publicly disclosed other
than in breach of this Section 13.15, (h) to the National Association of
Insurance Commissioners or any similar organization or any nationally recognized
rating agency that requires access to information about a Lender's investment
portfolio in connection with ratings issued with respect to such Lender or (i)
in connection with the exercise of any remedy hereunder or under any other Loan
Document.
13.16 WAIVERS OF JURY TRIAL. THE BORROWER, THE SUBSIDIARY
GUARANTORS, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
67
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
THE GRAND UNION COMPANY
By:
-----------------------------------------------
Name:
Title:
GRAND UNION STORES, INC. OF VERMONT
By:
-----------------------------------------------
Name:
Title:
GRAND UNION STORES OF NEW HAMPSHIRE, INC.
By:
-----------------------------------------------
Name:
Title:
SPECIALTY MERCHANDISING SERVICES, INC.
By:
-----------------------------------------------
Name:
Title:
68
XXXXXX BROTHERS INC.,
as Advisor and Arranger
By:
--------------------------------------------
Name:
Title:
XXXXXX COMMERCIAL PAPER INC., as
Administrative Agent and as a Lender
By:
--------------------------------------------
Name:
Title:
SCHEDULE 1.1A
COMMITMENTS: LENDING OFFICES AND ADDRESSES
Name of Lender and Revolving Credit
Information for Notices Commitments
------------------------ -----------------
Xxxxxx Commercial Paper Inc. $60,000,000
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
SCHEDULE 1.1B
Maximum Outstanding Amounts
---------------------------
Maximum Outstanding Amount
----------------------------------------------
Week Ending Revolving Credit Loans Letters of Credit
----------- ---------------------- -----------------
October 7, 2000 $15,700,000 $1,850,000
October 14, 2000 $13,600,000 $1,850,000
October 21, 2000 $17,700,000 $1,850,000
October 28, 2000 $22,000,000 $1,850,000
November 4, 2000 $31,100,000 $1,850,000
November 11, 2000 $38,400,000 $1,850,000
November 18, 2000 $46,400,000 $1,850,000
November 25, 2000 $46,000,000 $1,850,000
December 2, 2000 $47,000,000 $1,850,000
December 9, 2000 $51,700,000 $1,850,000
December 16, 2000 $56,300,000 $1,850,000
December 23, 2000 $56,800,000 $1,850,000
December 30, 2000 $55,400,000 $1,850,000
January 6, 2001 $58,150,000 $1,850,000
January 13, 2001 $53,400,000 $1,850,000
January 20, 2001 $53,500,000 $1,850,000
January 27, 2001 $53,000,000 $1,850,000
February 3, 2001 $56,500,000 $1,850,000
February 10, 2001 $51,900,000 $1,850,000
February 17, 2001 $50,100,000 $1,850,000
February 24, 2001 $49,500,000 $1,850,000
March 3, 2001 $54,400,000 $1,850,000
March 10, 2001 $58,150,000 $1,850,000
March 17, 2001 $58,150,000 $1,850,000
March 24, 2001 $58,150,000 $1,850,000
March 31, 2001 $58,150,000 $1,850,000
SCHEDULE 1.1C
Milestones
1. The Borrower will file a motion (the "Motion"), in form and substance
reasonably acceptable to the Administrative Agent, to establish bidding
procedures (the "Bidding Procedures") for, and authorize the sale of
all or substantially all of, the Borrower's and its Subsidiaries'
assets pursuant to Section 363 of the Code by October 16, 2000 (the
"Motion Date").
2. An order approving the Bidding Procedures, in form and substance
reasonably acceptable to the Administrative Agent, shall be entered by
the Bankruptcy Court within 14 days of the Motion Date.
3. The Borrower shall deliver to the Administrative Agent and the Lenders
one or more definitive purchase agreements, in form and substance
reasonably satisfactory to the Administrative Agent, for the
disposition of all or substantially all of the Debtors' assets by
November 10, 2000.
4. An order (the "Sale Order") approving the sale(s) of all or
substantially all of the Borrower's and its Subsidiaries' assets, in
form and substance reasonably acceptable to the Administrative Agent,
shall be entered by the Bankruptcy Court by December 1, 2000.
5. The closing(s) in respect of the asset sale(s) approved by the Sale
Order shall occur within 45 days of the entry of the Sale Order.
6. The consideration due to the Lenders shall be paid in full, as part of
the Motion approved by the Administrative Agent, within one day of the
closing(s) referenced in Milestone 5.
SCHEDULE 5.1
DISPOSITIONS OF PROPERTY SINCE APRIL 1, 2000
SCHEDULE 8.1(c)
EXISTING INDEBTEDNESS
SCHEDULE 8.2(f)
EXISTING LIENS
SCHEDULE 8.7(f)
EXISTING INVESTMENTS
SCHEDULE 8.17
UNEXPIRED LEASES TO BE REJECTED
